# Dump it Here



## Skate (17 December 2018)

Sometimes you feel like dumping stuff & this thread might be the perfect place.

*Helping Others*
You might want to dump stuff here to help others

*Unload*
You might want to unload & dump something off your chest

*Gems*
You might even want to dump some gems here

*Let it go*
Sometimes you can't let somethings go till you dump it on paper

*Dump it here*
If you want to dump it, dump it here

Skate.


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## Skate (17 December 2018)

Skate said:


> Sometimes you feel like dumping stuff & this thread might be the perfect place.
> 
> *Helping Others*
> You might want to dump stuff here to help others
> ...






Is our mind our worst enemy - knowing that these two tables are the same size yet our mind won't let them be.

Our mind deceives us.

*GEM*
Perception = reaction

Skate.


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## Skate (17 December 2018)

*A serious design flaw - faulty thinking*

People experience genuine pleasure—a rush of dopamine—when processing information that supports their beliefs.

“It feels good to ‘stick to our guns’ even if we are wrong,”

Skate.


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## Skate (17 December 2018)

*WHY FACTS DON’T CHANGE OUR MINDS*

*Fact*

Even after the evidence “for their beliefs has been totally refuted, people fail to make appropriate revisions in those beliefs,”

*Confirmation bias*

Consider what’s become known as “confirmation bias,” the tendency people have to embrace information that supports their beliefs and reject information that contradicts them. Of the many forms of faulty thinking that have been identified, confirmation bias is among the best.

If reason is designed to generate sound judgments, then it’s hard to conceive of a more serious design flaw than confirmation bias.

Skate.


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## Skate (17 December 2018)

*Blind spots*

There are over ninety biases related to judgment and decision making (there are also biases that operate specifically in social situations and others that are relevant in memory recall).

You could drive yourself crazy if you tried to learn all of the biases psychologists have discovered. Fortunately, for trading this isn’t necessary. It is important, however, that you understand the more common ones and how they can undermine your trading.

Skate.


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## Skate (17 December 2018)

*Confirmation Bias*

Once an assumption is made, people tend to seek confirmation of their assumption, rather than look to disprove it. We have a strong need to be right and tend to look to confirm what we already know or believe.

Skate.


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## Skate (17 December 2018)

*Hindsight Bias*

*20‐20 vision*
Looking back is always with 20‐20 vision. Hindsight bias is sometimes called the “I‐knew‐it‐all‐along effect,” suggesting that people view events after they happened as more predictable than they were before they occurred.

*Selectively recall*
In succumbing to hindsight bias, we tend to selectively recall only certain information that validates what we now know to be true and then create a story about it to make sense out of the event as we attempt to explain it to ourselves.

*Biases*
Biases are mental blind spots, it takes special effort to avoid falling into their traps. Often, we realize our errors after the fact and it is too late.

Skate.


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## Skate (17 December 2018)

*How We All Think*
When under the influence of emotions, we may surrender our emotional intelligence and this is why trading is such a difficult endeavour.

*Being hijacked*
We all feel that sinking feeling in our guts after we enter a trade and that trade go slightly against us our emotions kick in and if the fear is strong enough, we might cut the trade short to escape the unpleasantness, hijacked by our emotions encouraging us to do the wrong thing at the wrong time.

*Relieve distress*
The simple and effective solution to alleviate the internal discomfort is to exit the trade, which the trader does. Note carefully that closing the trade is done solely to relieve distress. Cutting the trade is effective at removing distress and our brain codes it into memory.

Skate.


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## Skate (17 December 2018)

*Decision making*
When faced with a complex or difficult decision, people often simplify their task by applying an abbreviated rule set to help problem‐solve and make the decision. A simple approach produces a good enough result most times but sometimes it can lead to significant errors and inconsistencies in our judgments.

*Jumping to a conclusion*
Simply jumping to a conclusion without bothering to assess the full range of possibilities is an inbuilt weakness we all suffer.

*Our Lizard Brain*
System 1 is our Intuitive mind – it’s our fast thinking mind – Our Lizard Brain

*Our evolved brain*
System 2 is our Deliberative mind – it’s our slower thinking mind – our evolved brain

*So why all this discussion about our two types of minds? *
Well, it turns out that understanding this two‐part feature of our mind is vitally important for trading. Intuitive mind, quick and efficient, is exceptionally poor at determining probabilities, a key skill in trading.

*Thinking is hard work*
Our minds like to conserve energy and will employ deliberative mind only when necessary as “Thinking is hard work”

Skate.


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## Skate (17 December 2018)

*Losing Money*
No one likes to lose money, but it is an inescapable part of the trading. There is no method that has ever been developed that doesn’t lose money some of the time.

*Probabilities*
The simple reason for this is that trading in all of its various forms is a probabilistic endeavour. This means that for any given trade that sets up, there is a probability that it will be a winner, and there is also a probability that it will turn out to be a loser.

*Psychological hurdle*
Loss aversion is a significant psychological hurdle for traders to overcome even though loss is a natural part of the trade setup probabilities.

*Our attitude*
Trading would no doubt be easier psychologically by adopting an attitude that losses are unavoidable and natural.

*Uncertainty*
Above all else, traders must accept the facts: we are operating with incomplete and uncertain data and every trade has a definite probability of loss.

Skate.


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## Skate (17 December 2018)

*Personal beliefs – what we believe*
Consider the fact that none of us was born with any of our beliefs.

*Profound impact*
They were all acquired in a combination of ways. Many of the beliefs that have the most profound impact on our lives were not even  acquired by us as an act of free will. 

*Beliefs are instilled by other people.* 
And it probably won't come as a surprise to anyone that usually the beliefs that cause us the most difficulty are those that were acquired from others without our conscious consent. By that I mean beliefs that we acquired when we were too young and uninformed to realize the negative implications of what we were being taught.

*Perception*
They manage our perception and interpretation of environmental information in a way that is consistent with what we believe. There isn't much about the way we function that beliefs don't play a major role in. 

*They keep on keeping on*
Beliefs keep on working regardless of whether or not we are consciously aware of them.

Skate.


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## Skate (17 December 2018)

*The Wandering Mind*
Have you ever noticed how many times your mind wanders while reading?

*Thinking of other things*
While reading, you may have noticed that your mind began thinking of other things.

*Time travelers*
We are all time travelers our thoughts are either relating to the past or what may happen in the future, it is never in the present.

*Being in the present moment is rare*
Usually, this aspect of the mind goes unnoticed. We slip effortlessly into past remembrances or into future projections without even being aware it is happening and you will find your mind is rarely in the present moment.

*We are all normal*
Mind wandering is our normal, default mode. We go from one mental association to the next, often in haphazard and random ways as the paragraph above highlights. If this is new to you, you need not be alarmed by this as it’s just how the mind naturally operates.

*Unfocused*
When our mind wanders, our attention has become unfocused. Keeping focused is a real skill that requires practice to develop as it helps us to identify emotions as they arise and what they mean, a key aspect of emotional intelligence.

Skate.


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## Skate (17 December 2018)

*Thinking*
Thinking is integral to being human. It is so much a part of us that we usually don’t think much about thinking. If we pause for a moment and observe our thoughts, however, we begin to become aware of the activity of our mind.

*It never stops*
The mind is tirelessly commenting and telling us things. Unless you practice, you will find it impossible to quieten your mind and stop the flow of thoughts for all but a few seconds. Even with practice, quieting the mind for more than a few minutes before another thought involuntarily arises is elusive for most people.

*Is it reality*
Because we have experienced our mind’s chatter every day for as long as we can remember, we are accustomed to it and rely on it heavily. We tend to accept whatever our mind tells us as an accurate reflection of reality.

Skate.


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## Skate (17 December 2018)

*Lucky 13*

The 13 previous posts are to encourage you to start dumping - if you have something to say...

*DUMP IT HERE ! *

Skate.


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## Skate (17 December 2018)

*I’ve been asked…*

*Why do you think you need to help others?*
_So others experience an alternative point of view
In general - people stop learning_

*Why do you feel the need to force your views on other?*
_I try very hard not to force my point of view onto others.
Thinking is integral to being human.
I never tell people what to think but encourage them how to think
Thinking is so much a part of us that we usually don’t think much about thinking.
If we pause for a moment and observe our thoughts, however, we begin to become aware of the activity of our mind._

*Why do I have a need to educate?*
_Hopefully to help others
Sometimes just to get somethings off my chest
Sometimes I can't let things go till I put it down on paper or tell someone_

*Why quote Gems all the time & why do you keep repeating them?*
_Life gems are everywhere & repeating them is for reinforcement
Hearing something once usually means nothing
Repeating is conditioning_

*I’ve been told*..

*I don’t want to hear that ****.*
_From my experience- It pays to listen to everyone & than you decide if it’s relevant or helpful.
You get to decide what to keep & what to discard.
When you don’t listen you forgo the right to learn.
_
Skate.


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## Skate (17 December 2018)

*Why we shouldn't jump to a conclusion - 1*

*An example of our Lizard brain in action *
A few multiplication questions 
What is 3 X 3 = _____
What is 5 X 12 = _____

When answering questions, the majority of people show a characteristic common in many problem‐solving and trading errors: they jump to the first answer that comes to mind and spend little if any effort to assess whether or not they have arrived at the correct answer.

Skate.


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## Skate (17 December 2018)

*Why we shouldn't jump to a conclusion - 2 *

Read the question and jot down your answers before reading on.

Doing so will help give insight into an important psychological phenomenon highly relevant to your trading:
*
A question that Daniel Kahneman asked in his podcast*
A bat and a ball cost $1.10 in total. The bat costs $1.00 more than the ball. How much does the ball cost? _____ cents

Skate.


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## Skate (17 December 2018)

*Recap*

A bat and a ball cost $1.10 in total. 
The bat costs $1.00 more than the ball. 
How much does the ball cost? _____ cents

*Our Lizard brain*
Most of us jump to the first answer that comes to mind

Was your answer 10 cents?

Most people give this answer - which is incorrect..

*Inbuilt weakness*
Simply jumping to a conclusion without bothering to assess the full range of possibilities is an inbuilt weakness we all suffer.

Skate.


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## Skate (17 December 2018)

*Let’s recap the bat and ball question again..*

*Why the answer of 10 cents is incorrect*
If the bat costs $1.00 more than the ball, then the ball could not cost 10 cents because then the bat would have to cost $1.10, which would have a total cost of $1.20.

*The answer*
The ball costs 5 cents

The ball costs 5 cents and the bat, costing $1.00 more than the ball, would have to cost $1.05.
Combined, the bat and ball have a total cost of $1.10.

*Thinking*
Take a moment to think this through if you need to. 
If your answer was incorrect, don’t feel badly as most people answer incorrectly.

*An illustration of our natural limitations*
It’s less an issue of intelligence than it is an illustration of our natural limitations in thinking through complex problems.

*It's a natural preference*
An incorrect answer on this mental problems indicate that a preference for using our Lizard brain or  jumping to a conclusion is likely to produce judgment errors when in situations involving uncertainty such as trading.

Skate.


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## Skate (17 December 2018)

*There’s No Time Like Today*

“The best time to plant a tree was 20 years ago. The second best time is now.” — Chinese proverb

Meaning, it isn’t too late to start..

*Start what?*
That's for you to decide.

Skate.


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## Skate (17 December 2018)

*Quell the uncertainty*

What matters is that you quell the uncertainty and doubt that pollutes your decisions by planning ahead for all possibilities.

We all need to simplify our lives in this increasingly sedentary, medicated, and noisy world. But even more critical, we need to remind ourselves to do nothing sometimes and just think about now.

Skate.


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## Skate (17 December 2018)

*Why education is the key*

I’ve read umpteen books and trading articles, I’ve listened to more podcasts than I care to remember, keeping my eyes and ears open, hoping to learn from successful traders, finding out what sets them apart from the average investor, trying to learn the secrets of their success whilst trying not to repeat their failures.

Skate.


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## Skate (17 December 2018)

*A quote from Will Rogers*

The cowboy, Will Rogers said, “It isn’t what we don’t know that gives us trouble, it’s what we know that ain’t so.”

That is particularly true when it comes to the stock market. 

Skate.


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## Skate (17 December 2018)

*Irrational people*

Trying to guess what an irrational person might do is sometimes futile. The market illustrates that point quite often with movements that defy explanation. We often see situations where stocks continue to climb even though almost everyone would agree that it is totally unjustified. This occurs because investors are focusing more on other investors and what they might do rather than any inherent characteristic of the stock or the market itself.

Skate.


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## Skate (17 December 2018)

*Psychology*

I’ve tried to understand the psychology of the winners and how it differed from the losers and I soon realised that the psychological outlook of these trader was their most important attribute, separating the winners from the losers. 

Psychology plays the biggest part in trading as it allows you to be able to overcome and handle the pressure of trading.

Skate.


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## Skate (17 December 2018)

*Stress*

It’s vital and very important to learn how to train your mind to accept stress and how you should react when placed under stressful conditions than anything else you are going to learn. Controlling your emotions, training your mind to stay calm under pressure, controlling how and what you think is important, and how you react to stress will decide whether you’ll be a success or a failure at trading.

Skate.


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## Skate (17 December 2018)

*Learning curve*

Very few people succeed in this process as the learning curve is too steep and the correct psychology is too hard to implement. If you have any attachment to making money, and who doesn’t, it is very tough to trade successfully and correctly.

Skate.


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## Skate (17 December 2018)

*Brains*

Brains are an overrated attribute when it comes to trading. Smart people tend to think logically and have a hard time dealing with a market that ignores what should be painfully obvious. The market is very emotional and illogical at times, and if you are too analytical, you will be surprised often. Using logic to argue with a lunatic is useless, and using logic to figure what the market might do on any given day is equally useless.

Skate.


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## Skate (17 December 2018)

*Irrational and moody*

One of the key advantages we have is knowing that the stock market is irrational and moody and prone to doing unexpected things. We recognize that we can take steps to profit when the mood is unusually good or run and hide when things become dark and gloomy. Investing is like most other worthwhile things in life. If it were extremely easy to learn and do well, it wouldn’t be so potentially lucrative.

Skate.


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## Skate (17 December 2018)

*The market is fascinating*

One of the reasons that the market is so fascinating is that it combines elements of psychology, business, mathematics, and numerous other disciplines and sciences.

Skate.


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## Skate (17 December 2018)

*Investment success depends on two basic things:*

1. Picking good stocks that increase in price, and
2. Effectively managing the stocks after you buy them.

Effective management means having a plan for either cutting losses or taking gains. Managing your stocks after you buy them is what determines your level of success. Great investing results are a product of shrewd selling rather than smart buying.

Skate.


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## Skate (17 December 2018)

*Lousy picks*

All investors will buy their fair share of both good and bad stocks. Even the best investor has plenty of lousy picks along the way, but it is the manner in which you handle those investments after their purchase that ultimately determines your level of success. If you sell your good stocks too early and hold on to your bad stocks too long, it doesn’t much matter how good your stock selection might be.

Skate.


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## Skate (17 December 2018)

*Selling*

Successful investing is largely the art of selling. Buying a stock is easy. It is determining when to cut our losses or when to take our profits that is hard. Because it is so hard to determine when it is the right time to sell, many just don’t do it.

Skate.


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## Skate (17 December 2018)

*Selling is a valuable tactical tool*

Selling a stock is by far the most valuable tactical tool that the individual investor has at their disposal. Selling is cheap and easy and can be undone in the blink of an eye. Too many seem to think that if they sell a stock, they are somehow prevented from buying it back again. Not so..

Skate.


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## Skate (17 December 2018)

*Luck*
To a great degree, our success or failure in the market is a function of our luck. We like to think that our results are a direct consequence of our insight and efforts, but the reality is that luck plays a big part in how we do. 

*Punching Bag*
No matter how smart we are, or how hard we work, we will regularly be hit by news, circumstances, and developments that are unforeseen and unknowable. The stock market gods will periodically use us for their entertainment, and there is nothing we can do to prevent it, so we have to be ready and mentally prepared.

Skate.


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## Skate (17 December 2018)

*The Key to Success*

The key to stock market success is properly managing your investments after you buy them. The way to do that is fairly simple.

1. Don’t be afraid to sell.
2. Have a methodology that clearly establishes exit points.
3. Diversify by having a parcel of stocks.

Investing is not a rigid, structured approach to the stock market with an unvarying set of rules and what works best is highly subjective.

Skate.


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## Skate (17 December 2018)

*Your feelings*

Good investors tend to be amateur psychologists. Not only can they understand the emotions that are driving the market, they also can objectively consider their own emotions and feelings when the impulse to act occurs. When you are trying to make decisions about the market based on your view of the prevailing mood, sentiment, and/or psychology, you have to be particularly aware of how your feelings affect your thought process. This is true whether you are making money, struggling with big losses, or riding a long winning or losing streak.

Skate.


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## Skate (17 December 2018)

*Emotions colour your attitude*

Emotions colour your attitude toward the market and often push you to act when feelings of fear or greed overcome logic. Self-awareness is a valuable trait to cultivate in many areas of life. Investing is no different. The role of emotions becomes even more important when the market has been trending down.

Skate.


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## Skate (17 December 2018)

*Success*

It is my belief that to succeed in the financial markets you need to have some kind of trading system in place. Trading systems protect the trader from his ‘inner child‘– the limbic side of the brain that relies heavily on emotions and gut instinct (the Lizard brain)

Skate.


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## Skate (17 December 2018)

*The inner child - the Lizard Brain*

The inner child is quick to react and respond to incoming dangers. It often makes snap decisions based on emotion or a feeling. Thus, the inner child is crucial for human survival but is not so useful in trading where more rational, evidence-based decisions are best. 

Unfortunately, the child part of the brain runs about five times faster than the rational side of the brain, which is why it’s important to try and recognise your inner child and pull back when you notice it taking over. In trading, systems are the best way to combat the inner child and trading systems will make more calculated investment decisions.

Skate.


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## Skate (17 December 2018)

*Being afraid*

People are afraid of things they don’t understand. It’s a shame, because trading shares is a lot less complex than most people think. Investing and trading in the stock market has some risk, as do all asset classes that offer good long term returns, however, risks can be minimised and returns can be magnified with the right strategy. Anyone can buy and sell shares, it’s how we choose these shares and then how we manage our position that dictates how successful we will be.

Skate.


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## Skate (17 December 2018)

*The Trading Game*

Trading is a mathematics game, a game of probabilities and not percentages.

Skate.


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## Skate (17 December 2018)

*Words of Wisdom*

I'm a firm believer that the difference between successful traders and all others is how one handles themselves during difficult periods.

Skate.


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## Skate (17 December 2018)

*I'm feeling better now..
*
Dumping has been very therapeutic for me.

I'll dump some gems tomorrow.

Skate.


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## Skate (17 December 2018)

*Why should I keep reading?
*
It may save you many years of self-education if you have a slight interest in trading. I want to point out the dangers and pitfalls associated with trading and to inform you about the emotional roller coaster you will soon start experiencing once you start trading.
*
Gems are still penciled in for tomorrow... 
*
Skate


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## Skate (17 December 2018)

*Stimulation*
I know I'm talking to the converted but there are new members joining every day - seeking the basics we all take for granted.

@Joe Blow wanted to stimulate the forum & my minor contribution may help (who knows)

Skate.


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## Skate (17 December 2018)

*Why start trading*
It should not matter how much money you have or how old you are. It also doesn’t matter how much you know about trading, or whether you’re worried about what the markets are going to do, or whether you’ve never even heard of the “share market.”

*Your freedom is at Stake*
Trading isn’t about getting rich, but more about one day having the financial independence of being able to support yourself without an income. Your financial freedom is at stake here, and there is no better time to start creating it than right now.

Skate.


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## Skate (17 December 2018)

*It Doesn’t Matter If You Mess Up*

Many people never start trading because they’re worried about losing their money. It feels like you have to spend a lot of time and energy to get it right and if you don’t, then you might lose all of your money.

*Getting started*
So don’t let fear or self-doubt keep you from getting started. The very act of getting started is much more important than getting it right.

Skate.


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## Skate (17 December 2018)

*Practice Makes Perfect*

With that said, it is critical to make smart trading decisions. You can learn as you go by trading small positions and if you make a mistake small loses are bearable. Making small mistakes now will giving you the skills and experience you need to make the right decisions later on.

Skate.


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## Skate (17 December 2018)

*Starting to trade can be easy*

Trading doesn’t have to be super complicated or time consuming. Also, you don’t have to be rich either. There are plenty of easy ways to get started without having a ton of money and without being the world’s foremost trading expert.

Skate.


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## Skate (17 December 2018)

*All Your Emotions Belong to You*

Trading psychology is something most people don’t think about when dealing with their investments. However when trading for yourself, your emotions will have an unavoidable impact on your outcome.

*Chart reading*
Every price in the market is the sum of all our hopes, fear, pride and greed. There are some great (and I mean great) chart readers on ASF. When they talk don't contest their ideas. 

Be smarter than the average bear & just say 3 little words..

Tell me more..

Skate.


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## Skate (17 December 2018)

*Trading - the typical beginner*

The typical beginner will usually be worried more about when to enter a trade than anything else. They think little of risk management, or even bother to plan when to sell. Because of this, when a trade begins to turn against them, they hold with the hope of coming back to even or their former profit level. Worse off, they may average down, in effect doubling down on a loser.

Skate.


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## Skate (17 December 2018)

*Now I'm torn..
*
I want to keep my dumps to elements that concern trading. In particular the psychology, the business, the mathematics, and numerous other disciplines and sciences behind it.

I want to keep it simple.

Skate.


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## Skate (17 December 2018)

*How long are you going to live?*

How would you invest if you knew you could live another 30 years after retiring?

Skate.


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## Skate (17 December 2018)

*Investment decisions are normally based on your age.*

Humans have been on earth for around 100,000 years and of all the humans who have ever lived to age 65, half are alive today. Average global life expectancy has doubled in the past 100 years, and Australia is one of the longest living nations.

Once you retire at 65 all the current advice is to invest conservatively but if you’re planning on living for another 30 years investing conservatively may not be the best advice. 

Skate.


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## Skate (17 December 2018)

*Official statistics underestimate longevity*

Many of us think we’ll live as long as our grandparents or parents did, which is a major perception problem. We don’t realise how long we’re going to live and we consistently underestimate our remaining years.

This is the very reason why trading conservatively may not be the smartest move.

Skate.


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## Skate (17 December 2018)

*Overestimating*

New traders usually start out overestimating their ability because they have had success at work, at sport or generally been good at something and most new traders believe they should be successful at trading with minimal effort. People study for years to become doctors, lawyers, nurses, and teachers, yet for some strange reason new traders believe they can do a weekend trading course, read a book or two and be a successful trader in a very short period of time.

Skate.


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## Skate (17 December 2018)

*Experience*

Therefore the hardest part of trading is learning from experience or time in the market, its learning how to control your emotions and how to keep persisting even when your account suffers a few losses. It’s about being realistic and having an understanding that we are probably only an average trader at best but that’s OK.

Skate.


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## Skate (17 December 2018)

*A tip for new traders*

Forget about the money and focus on the process of successful trading. The more you obsess about the money the more likely it will derail you as success is not our overnight objective, success is the equivalent of drips in a bucket, slow steady and methodical trading will win the race.

Skate.


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## Skate (17 December 2018)

*The Holy Grail of investing*

Most investors spend a tremendous amount of time and energy seeking “the answer.”

They are convinced that there is one simple and easy approach to the stock market that guarantees riches if they can just find it, understand it, and apply it. The truth is that there is no Holy Grail 

Skate.


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## Skate (17 December 2018)

*Exercise* *in psychology*

Many people make the mistake of thinking that what move the market are financial statements, economic reports, and news. Those things may all have some impact, but ultimately the market is primarily an exercise in psychology. 

Skate.


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## Skate (17 December 2018)

*Profiting from the stock market*

Profiting from the stock market is exceedingly difficult to do consistently over a long period of time because the market is irrational and emotional. It moves in a manner that has little appreciation for what we might think is reasonable.

Skate.


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## Skate (17 December 2018)

*Human Emotion is the driving force*

A single human emotion is primarily responsible for the course of the market. That emotion is fear. We either fear that we will lose money, or we fear that we will not make enough. 

Skate.


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## Skate (17 December 2018)

*FOMO*
We have all read about FOMO - the Fear Of Missing Out..

*Another Fear most don't consider*
Don’t underestimate the fear of not making enough money. It manifests itself differently than the fear of losing money, but it’s a potent force that does not evaporate quickly. Fear is always the primary driving force in the stock market. But like all human emotions, it can rise to extreme levels and then suddenly shift. That is why we must always be ready to move quickly.

Skate.


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## Skate (17 December 2018)

*Punching bag*

It can feel like you are a punching bag but that’s the nature of the trading game. Even after you learnt how to trade successfully, you will still take your hits. 

Skate.


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## Skate (17 December 2018)

*Learning curve*

Very few people succeed in this process as the learning curve is too steep and the correct psychology is too hard to implement. If you have any attachment to making money, and who doesn’t, it is very tough to trade successfully and correctly.

Skate.


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## Skate (17 December 2018)

*I’ll let you into a little secret.*

Everything we do to secure our financial future involves money

Skate.


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## Skate (17 December 2018)

*It's taken 68 posts to make a Disclaimer*

I want to be up front and let you know my dump thread is about money. 

*I also want to highlight a few things:*

1.      Opinions are like ar$eholes, everyone has one and some smell worse than others
2.      Not all advice is helpful to your situation
3.      Others do the best for themselves and not what’s in your best interest
4.      Decent Parents will always do the best for their children and they want their children to have a better life than they had. 
5.      Our education system needs a shake up - financial education at school should be a given.

Skate.


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## Skate (17 December 2018)

*Communal spirit*

We are communal animals and we need a communal spirit but what should be foremost in our mind is to do what’s best for our family, we need to constantly push to secure our financial freedom, we need to think about it all the time and doing so will make it happen, but first we need a plan to force our wealth creation into the right direction thus assuring success. Your plan and your decision will shape the outcome.

Education is up to you and education is you’re first step in making wealth creation happen.

Skate.


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## Skate (17 December 2018)

*2 Handy hints*

1.      What decisions you make – shapes your future

2.      What you think and how you think makes a difference.

Skate.


----------



## Skate (17 December 2018)

*WII-FM - it sounds like a FM radio station

WII-FM *is an acronym for “What’s in it for me” (WII-FM)

Every decision we make are normally base on this one premise (WII-FM)

*So is it bad to make decisions using the WII-FM Strategy?*

Nope - its human nature to do the very best for yourself and it’s even better if it can pass the 3 rules I use to make all my decisions:

1.      Is it right or wrong
2.      How does it affect someone else
3.      What’s the worst case scenario and can I accept it

Ask & answer these three little questions & you'll be on your way to make a half decent decision.

Skate.


----------



## Skate (17 December 2018)

*Personal structure*

I know a little bit about human nature, people are just like water and as water tracks the easiest path so do people, they always take the easiest path, personal structure is something that is lacking in most people today, they want everything and I mean everything handed to them.

Skate.


----------



## Skate (17 December 2018)

*With the passing of time we forget to plan for a rainy day*

Everyone needs to plan for a rainy day, most don’t. You are the only one who decides whether you are on the poverty line or not. If you want to achieve financial security you have to make it happen as it’s not going to fall into your lap.

Skate.


----------



## Skate (17 December 2018)

*I'm starting to drift away from trading.*

Everyone wants to be better off, most don’t know how to make it happen or if they do they are too lazy to do it. The others are just plain stupid and selfish living for today and not setting up their future or more importantly not setting up their family’s future.

Skate.


----------



## Skate (17 December 2018)

*Want to be well off?*

If you want to be fat, think about food all the time, if you want to be fit, think about exercising all the time, and if you want to be in a better financial position, think about saving & investing money all the time. Take it from me, if you think about something constantly it will happen but only if you are committed.

Skate.


----------



## Skate (17 December 2018)

*What about DEBT, that must be bad.*

Not all debt is bad, some debt is even beneficial. Let me explain what good debt is and what bad debt as I explained in another thread.

1.      Good debt appreciates in value.
2.      Bad debt depreciates in value.

A simple example of good debt – buying a home, or making home improvements, they both add to the value of your asset, your asset appreciates in value.

A simple example of bad debt – buying a car, we all know the value of a car depreciates thus losing the value of the asset and over time it devalues to junk status.

Skate.


----------



## Skate (17 December 2018)

*The simple equation for debt in a nutshell *

1.      If you buy an asset and over time it increases in value – it’s a good debt.
2.      If you buy an asset and over time it decreases in value – it’s a bad debt.

Skate


----------



## Skate (17 December 2018)

*Failing to plan*

People spend more time researching a car purchase then they spend setting up their future, most don’t even research how they can grow their wealth for financial freedom.

Today most people don’t plan anything, they just let one day roll into the next, meaning their life is the same as yesterday and tomorrow will be the same as today, that’s if nothing unexpected happens. 

If the unexpected happens, this is when the $hit will hit the fan.

Skate.


----------



## Skate (17 December 2018)

*My views*

My dumps are written to pass on my views keeping them as generic as possible. I'm sharing the experience I’ve gained over the years showing that there is an alternative view or a different way of thinking about issues that may be beneficial to you.

Skate.


----------



## Skate (17 December 2018)

*What is life all about?*

Life is like playing pool, it not about sinking the ball, but lining up the next shot.

Skate.


----------



## sptrawler (17 December 2018)

Keep them coming, there isn't one I disagree with.
It may end up worth publishing, life's lessons on wealth creation.


----------



## Skate (17 December 2018)

Hi @sptrawler 

Thank you for your kind words.

Skate.


----------



## jbocker (17 December 2018)

Great work Skate. Each message is food for thought.


----------



## Skate (17 December 2018)

jbocker said:


> Great work Skate. Each message is food for thought.



Hi @jbocker 

Thank you - I’m glad you have taken the time to read the thread or a few post.

Skate.


----------



## Skate (17 December 2018)

*Apologies for re-posting *

I'm going to dump some of my previous posts to correlate them in one thread.

Skate.


----------



## Skate (17 December 2018)

*When do we sell a position*

Investors frequently wrestle with whether they should dump a weak position or wait it out and hope for a rebound

Selling is one of the most underrated and unappreciated tactical tool any trader has. 

Skate


----------



## Skate (17 December 2018)

*Have you ever told yourself this story..*

“I’ve held on to this stock for this long, so I might as well continue to hold.”

Ultimately, that logic leads to giving back big gains and incurring big losses. Investors are often paralysed into inaction by concluding that it is too late to sell a stock that is already down substantially. This thinking keeps you emotionally and financially tied to under performing stocks and can cost you substantially while you wait and hope for a recovery.

Skate.


----------



## Skate (17 December 2018)

*It’s never too late*

It is almost never too late to sell a stock in which you have a large loss. You should consider that something has probably changed. If you bought for technical reasons, you probably were undisciplined and let a loss get out of hand.

Skate.


----------



## Skate (17 December 2018)

*Misery of selling a large loss*

When the misery of a big loss is suddenly removed by selling the position you'll feel a surge of energy - the weight will be lifted and you might be surprised at how readily you can find other opportunities that will help you make up your loss. 

Skate.


----------



## Skate (17 December 2018)

*Outperforming the market*

Cutting losses quickly and protecting capital is the key to outperforming the market over the long run. The market will always offer us opportunities in which to profit, so we need to make sure we always have capital handy and that it isn’t tied up in under performing stocks.

Skate.


----------



## Skate (17 December 2018)

*Be a good loser*

We all know that draw downs and losses are part of the trading process, so take it on the chin and be the ‘best loser’ you can possible be.

Skate.


----------



## Skate (17 December 2018)

*Selling is easy*
Selling is cheap and easy and can be undone in the blink of an eye.

*A stumbling block*
Too many seem to think that if they sell a stock, they are somehow prevented from buying it back again. Not so. For most investors, the biggest stumbling blocks to selling are mental.

Skate.


----------



## Skate (17 December 2018)

*Wimps
*
In fact, I’ll go so far as to claim that a smart wimp who runs and hides when the going gets tough generally produces better results than brave souls who are proud of their ability to suffer great monetary pains while they wait for their convictions to be rewarded.

Skate.


----------



## Skate (17 December 2018)

*Being macho
*
The problem with the “macho” approach to the markets is that the consequences of being wrong are so onerous. The stronger your convictions and beliefs, the more invested and braver you are, and the greater the chance for a backbreaking loss. The wimpy investor knows that the key to success is staying in the game for the very long term.

Skate.


----------



## Skate (17 December 2018)

*Bravery
*
Bravery can pay off nicely at times, but it can also cause you some grave injuries. Don’t be too fast to discount your feelings and emotions. Good investing requires a healthy emotional state.

Skate.


----------



## Skate (17 December 2018)

*The market is not a level playing field*

The stock market is not a level playing field, but most individuals invest as if it is. They assume they have the same information as everyone else, so they focus on the facts that are readily available to them and ignore how a stock is actually moving.

Skate.


----------



## Skate (17 December 2018)

*Someone out there always knows more than you do*

We don’t consider that maybe someone out there knows a lot more than they do and perhaps that might account for why a stock is moving the way it is. We have all seen a situation in which a stock suddenly starts making big moves up or down, and then a short time later significant news is released that explains why that move took place. 

Someone out there always knows more than you do, and you shouldn’t assume otherwise.

Skate.


----------



## Skate (17 December 2018)

*Foolish*

It is just plain foolish to think that it is an even playing field when it comes to receiving valuable information. There is absolutely no way small individual traders like us has superior knowledge about a company. But the good news is that small Investors don’t need an informational edge. They make up for it by moving fast and being reactive.

The stock market is not an even playing field, and rather than complain about that fact, we must use it to our advantage by paying close attention to those who do have inside information.

Skate.


----------



## Skate (17 December 2018)

*How to Read a Bar Chart*

Apologies for posting something so simple as a Bar Chart - it maybe help someone (you never know)

Bar charts are often called OHLC Bar charts.
The Bar includes information on the Open (O), High (H), Low (L) and Close (C) price.
Here is how to read a bar chart, and what each part of the bar mean.






*Open *- The open is the first price traded during the bar, and is indicated by the horizontal foot on the left side of the bar.
*High *- The high is the highest price traded during the bar and is indicated by the top of the vertical bar.
*Low* - The low is the lowest price traded during the bar, and is indicated by the bottom of the vertical bar.
*Close* - The close is the last price traded during the bar and is indicated by the horizontal foot on the right side of the bar.
*Direction* - The direction the price has moved during the bar is indicated by the locations of the opening and closing feet.
*Up Bar- * If the closing foot is above the opening foot then the price made upward progress during the bar.
*Down Bar* - If the closing foot is below the opening foot then the price made downward progress during the bar.

Skate.


----------



## Skate (17 December 2018)

*Final Word on Reading a Bar Chart*

It takes a bit of practice to get used to reading a bar chart, especially when the price is moving very quickly.

Remember the open is always on the left, and close always on the right (like how you read: right to left, because the open always comes before the close).

The vertical part of the bar represents how high and low the price went during the interval of the bar – in our case each Bar represents a week’s worth of Trading.

Skate.


----------



## Skate (17 December 2018)

*Not sure what the economy's up to? *

Nor are the experts

There are times when the world’s economists think they’ve got everything figured and times when they know they haven’t. The latter is where we are now, with the entire profession scratching their heads wondering what’s causing the economy to behave as it is but it simply boils down to slow economic growth but mainly fear.

Skate


----------



## Skate (17 December 2018)

*So why is market acting the way it is? *

That’s anybody’s guess.

Trying to guess what the market is doing or what’s causing the market to behave in such a way is sometimes futile and will eventually drive you mad thinking about it. 

I'm looking forward to @peter2 summary after he spends some time reviewing the top200 charts seeing where the money has gone.

Another explanation is that investors are focusing on what other investors are doing and they will do much the same.

Fear is always the primary driving force in the stock market but like all human emotions, it can rise to extreme levels and then suddenly shift.

Skate.


----------



## Skate (17 December 2018)

*A walk down memory lane*

Remember placing your first buy order? 

You were either exuberant when the share price increases or you felt despondent experiencing a white knuckle ride to the bottom.

I remember being so nervous the first time I hit the [Buy] button.

Skate.


----------



## Skate (17 December 2018)

*I digress..
*
While down memory lane - I vividly remember my first kiss - my first girlfriend..

Things were going so well, I lent over and whispered in her ear.

I'll never forget her answer..

Skate.


----------



## Skate (17 December 2018)

*I posted before I told you what she said..

"YOU WANT ME TO SUCK WHAT?"
*
Well my first trade didn't end well - neither did that night !

Skate.


----------



## Skate (17 December 2018)

*The markets haven’t been this low for 12 months.*

Everyone itches to start trading and we all have impulses to do things, and many times they are not in our best interest. 

Skate.


----------



## Skate (17 December 2018)

*Trading*

Trading is just about selecting companies that you believe will increase in price over time.

Once you place your buy order, just hang on for the ride as its all you can do from here on, the only thing left for you to do is manage you sell orders as everything is in the lap of the gods.

Trading is an emotional roller coaster and how you manage your psychology really matters even more than your stock selection.

Skate.


----------



## Skate (17 December 2018)

*I hope trading* *is beneficial to you.*

Hopefully my thread goes someway explaining the financial stress of trading - if not, my next hope is that you achieve personal growth and education.

Skate.


----------



## Skate (17 December 2018)

*Horror stories*

I've heard of some horror stories over the years and I'm sure you know a few people as well who have been through the ringer with some bad experiences. Perhaps they've been duped by a Bank or they simply just didn't have any plan or strategy when it came to trading.

Stories like these are not uncommon, in fact it's all too common.

Skate.


----------



## Skate (17 December 2018)

*Why do traders lose at trading?* 

The answer is that they are humans not machines. 

When it comes to trading you need to be clinical, resist being emotional and irrational. We are human, and that's the problem. 

Humans are not wired to invest successfully and to overcome that weakness you have to have a system. Having a system or strategy to trigger an action without debate adds value and certainty but more importantly allows you as a trader to be impassioned and also sleep at night.

Skate.


----------



## Skate (18 December 2018)

*Tags*

So much said, so little words.

The tags are in no particular order

@satanoperca  - "GFC 2 is at the door for Aus, knocking, will not be long until you have to open the door"
@Garpal Gumnut - "I refuse to join any club that would have me as a member."
@Trav. - "Some traders hunt elephants, others rabbits. Rabbit hunting is a much more reliable pursuit"
@bigdog - "DYOR, I am not a financial advisor"
@sptrawler - "Allow for the worst, hope for the best"
@wayneL - "I think, therefore I am......not a Guardian reader"
@stefan - "Try not to become a man of success, but rather try to become a man of value"
@tech/a - "Live LARGE"
@barney  - "Don't bite the hand that feeds you ... and don't bite off more than you can chew!"
@fiftyeight - "The speculator's deadly enemies are: Ignorance, greed, fear and hope"
@Value Collector - "Inter Hastas et Hostes" a motto roughly translated ("Between Spears and Enemies")
@ducati916 - "jog on - duc"  (http://leduc998.wordpress.com/)
@kid hustlr - "On the way"
@jbocker - "A lacky-band gun removed from an algebra class because it was a weapon of math disruption"

These are but a few.

Skate.


----------



## Skate (18 December 2018)

*Conviction*

A person with a conviction is a hard person to change. Tell him you disagree and he turns away. Show him facts or figures and he questions your sources. Appeal to logic and he fails to see your point.

Skate.

@Ann 
@Sdajii 
@Smurf1976


----------



## Skate (18 December 2018)

*So deeply ingrained*

Our belief system is so deeply ingrained in us, but if people are open to the idea of altering their belief system there would be change for the better in them by moving out negative mental beliefs and replacing them with positive ones.

Skate.


----------



## Skate (18 December 2018)

*Fact*

Humans reject information right in front of their eyes because it is contrary to what they want to believe.

Skate.


----------



## Skate (18 December 2018)

*Fact*

People believe what it pleases them to believe

Skate.


----------



## Skate (18 December 2018)

*Solution*

There is no solution if people can't see the problem...

Skate.


----------



## Skate (18 December 2018)

*Life*

"Life is not complicated, we complicate life"

Skate.


----------



## Skate (18 December 2018)

tech/a said:


> What’s going on!
> 
> Skate dump
> Now you!
> ...




Here is an example of a dump.

Skate.


----------



## Skate (18 December 2018)

*Ideas*

ASF as the name suggest is a Stock Forum but @Joe Blow has kindly allowed the forum to incorporate a discussion of ideas.

Skate.


----------



## Skate (18 December 2018)

*Misinformation
*
There is so much misinformation & fanciful stories on the internet, remembering journalists make most stuff up - I want to draw your attention to this fact as some investors will make financial decisions on what they read.

Skate.


----------



## Skate (18 December 2018)

*Integrity
*
When forum members with integrity post articles or hyperlinks it gives those article more weight than sometimes they deserve.

Skate.


----------



## Skate (18 December 2018)

*Forum members
*
All forum members should prosecute their case forcefully with conviction & civility - members would be well served to remember to meter their responses "If you don't have something nice to say, don't say anything at all."

Skate.


----------



## Skate (18 December 2018)

*A worthy dump*

@Ann I am sure we all have our favourite posters and subjects and that is how I see a living vibrant community, Joe has achieved a remarkable forum by tending the tiller with a very deft hand.

Skate.


----------



## Skate (18 December 2018)

*Another worthy dump
*
An extension by @Ann on how members prosecute their case.

@Ann 

_"I totally concur with you Skate, and I will also extend it further to add the style and implication of responses also can appear slightly less than civil. However that can be quite a tricky thing on a forum where the reader adds their own accentuation and interpretation to comments and phrases"_

Skate.


----------



## Skate (18 December 2018)

*A few members with conviction*

I've listed a few forum members I enjoy reading who prosecute their case forcefully and with conviction.

@Darc Knight
@luutzu
@tech/a
@Ann
@Tink 
@tinhat 
@noirua 
@dutchie 
@Sdajii 
@SirRumpole 
@bellenuit 
@PZ99 
@No Trust 
@bigdog 

Your belief system defines whether you agree or disagree with them but if you don’t listen you forgo the right to understand their point of view..

Skate.


----------



## Skate (18 December 2018)

*A successful person*

The very first step towards success in any occupation is to become interested in it.

Skate.


----------



## Skate (18 December 2018)

*Winners & Losers*

Winners take responsibility. Losers place blame.

Skate.


----------



## Skate (18 December 2018)

*It pays to listen.*

From my experience - It pays to listen to everyone & than you decide if it’s relevant or helpful.

You get to decide what to keep & what to discard.

Skate.


----------



## Skate (18 December 2018)

*Being wise*

Many receive advice only the wise profit from it.

Skate.


----------



## Skate (18 December 2018)

*The law of least effort*

You will think as little as possible.

Skate.


----------



## luutzu (18 December 2018)

Skate said:


> *The law of least effort*
> 
> You will think as little as possible.
> 
> Skate.




Maybe Tech/A is right... have you been puffing the magic dragon Skate? Why have you been hiding all these wisdom from us?


----------



## Skate (18 December 2018)

*This dump has been repeated & repeated*

@bigdog says - "DUMP TRUMP"

Skate.


----------



## Skate (18 December 2018)

luutzu said:


> Maybe Tech/A is right... have you been puffing the magic dragon Skate? Why have you been hiding all these wisdom from us?




Hi @luutzu  - I'm a lurker.

I appreciate reading your posts & making your software free for others - this tells me exactly who you are.

I've listed a few members who have shown me a window to their soul -  it allows me to understand their point of view.

My dump thread hopefully helps new members learn or at least stay awhile.. (its something different IMHO)

I'm 100% cash at the moment & I have the time so why not make some comments that will linger for quite some time.

Skate.


----------



## Skate (18 December 2018)

*Thinking*

The important thing in science is not so much to obtain new facts as to discover new ways of thinking about them.

Skate.


----------



## Skate (18 December 2018)

luutzu said:


> Maybe Tech/A is right... have you been puffing the magic dragon Skate? Why have you been hiding all these wisdom from us?




@luutzu 

There is lots of things I would like to say but my posts have to be metered & remain on point.

Rapid posting is annoying & consume a lot of energy for me & the reader. 

I know keeping a readers interest will be short lived so my post have to engaging, hopefully entertaining if not at least have an educational value.

Skate.


----------



## Skate (18 December 2018)

*Ideas*

Be less curious about people and more curious about ideas.

Skate.


----------



## Skate (18 December 2018)

*Gratitude*

I have an attitude of gratitude to each & every member that has liked my post or in some way made a reference to or been included in my thread.

@explod 
@Darc Knight
@luutzu
@Gringotts Bank 
@jbocker
@sptrawler 
@Joe Blow
@myrtie100 
@cynic
@bigdog
@Wyatt
@kid hustlr 
@Commons 
@barney 
@Trav. 
@tech/a
@Ann 

Skate.


----------



## Skate (18 December 2018)

*Personal Responsibility *

There are so many that refuse to take responsibility when things go wrong, the problem is always caused by someone or something else.

Skate.


----------



## Skate (18 December 2018)

*Probability*

Life is a school of probability.

Skate.


----------



## Skate (18 December 2018)

*My dump on our Educational system will be metered so I don't offend teachers.*

Education rears disciples, imitators, not pioneers of new ideas and creative geniuses. The schools are not nurseries of progress and improvement, but conservatories of tradition and unvarying modes of thought.

Skate


----------



## Skate (18 December 2018)

*Our Education system *

For most of our lives, many of us spend our time listening to someone else feed us information. Then we are judged on how well we can regurgitate that information back to whomever offered it in the first place.

*Engage other to learn*
Learning must be engaging, if it’s not engaging learning will not take place

Skate.


----------



## Skate (18 December 2018)

*Decision Making*

By honest I don’t mean that you only tell what’s true. But you make clear the entire situation. You make clear all the information that is required for somebody else who is intelligent to make up their mind.

Skate.


----------



## Skate (18 December 2018)

*Let me have a dump on what it means to be a Human being*

Human beings never think for themselves, they find it too uncomfortable. For the most part, members of our species simply repeat what they are told, believe what they are told and become upset if they are exposed to any different view.

Skate.


----------



## Skate (18 December 2018)

*Human beings*

The characteristic human trait is not awareness but conformity. Other animals fight for territory or food - but, uniquely in the animal kingdom, human beings fight for their ‘beliefs’...

Skate.


----------



## Skate (18 December 2018)

*Being Human *

The reason is that our beliefs guide our behaviour, which has evolutionary importance among human beings. But at a time when our behaviour may well lead us to extinction, I see no reason to assume we have any awareness at all.

Skate.


----------



## Skate (18 December 2018)

*We are conformists*

We are stubborn, self- destructive conformists. Any other view of our species is just delusional.

*Warning*
I'm going to have to self censor & curb posting - I'm starting to get on my soapbox & moving well off topic.

Skate


----------



## Skate (18 December 2018)

*Thanks..*

Dumping has been therapeutic.

I have two major failing & one of them is rising to the surface..

Skate.


----------



## Ann (18 December 2018)

Skate said:


> *Thanks..*
> 
> Dumping has been therapeutic.
> 
> ...



Whales do it regularly, clearly not just Skate!


----------



## luutzu (18 December 2018)

Skate said:


> *Our Education system *
> 
> For most of our lives, many of us spend our time listening to someone else feed us information. Then we are judged on how well we can regurgitate that information back to whomever offered it in the first place.
> 
> ...




Formal education is for the indoctrination of the young. 

It is to weed out non-conformists, award the obedient. Certified the mediocre to be good enough servants and managers of state affairs. 

Those weeded out will often not realise they've been had. Those selected will often deny they're mediocre.


----------



## qldfrog (18 December 2018)

Ann said:


> Whales do it regularly, clearly not just Skate!



You do not mean "dumping" Ann?
I know ...but how could i resist
Anyway that thread was interested.. usually my own raan falls on my family or friends ears..i pity them..
I should use that thread for their own sake


----------



## Skate (18 December 2018)

Hi @qldfrog 

Thanks for dropping in..

The thread is open for anyone to dump anything in here - as they say “one man's trash is another man's treasure”

Skate.


----------



## greggles (18 December 2018)

*Roll the Dice*

if you're going to try, go all the
way.
otherwise, don't even start.

if you're going to try, go all the
way.
this could mean losing girlfriends,
wives, relatives, jobs and
maybe your mind.

go all the way.
it could mean not eating for 3 or 4 days.
it could mean freezing on a
park bench.
it could mean jail,
it could mean derision,
mockery,
isolation.
isolation is the gift,
all the others are a test of your
endurance, of
how much you really want to
do it.
and you'll do it
despite rejection and the worst odds
and it will be better than
anything else
you can imagine.

if you're going to try,
go all the way.
there is no other feeling like
that.
you will be alone with the gods
and the nights will flame with
fire.

do it, do it, do it.
do it.

all the way
all the way.

you will ride life straight to
perfect laughter, its
the only good fight
there is.

Charles Bukowski


----------



## explod (18 December 2018)

The most inner feeling thread of the soul ever on ASF. 

Treasure the absolute moment of your own thinking and love the fact that you are able.

Sorry Skate have not been able to cover all your posts yet but love you.


----------



## Skate (18 December 2018)

Hi @greggles 

The class of the thread just lifted..

I was hoping for others to dump it here !

Thank you for your post, it just may encourage others to do something similar.

Skate.


----------



## Skate (18 December 2018)

Skate said:


> *Tags*
> 
> So much said, so little words.
> 
> ...




*An Update*
@explod - "Just party"

Skate.


----------



## Skate (18 December 2018)

explod said:


> The most inner feeling thread of the soul ever on ASF.
> 
> Treasure the absolute moment of your own thinking and love the fact that you are able.
> 
> Sorry Skate have not been able to cover all your posts yet but love you.




Hi @explod thanks for your kind words..

The good thing about ASF posts they hang around and they can be referenced at any time.

Skate.


----------



## Gringotts Bank (18 December 2018)

Skate... did you sell the farm and go short in October?  Or is it the Yuletide spirit?  Or maybe you met someone, like our friend Wayne.  Either way, I'm happy for you!  Some good content here.


----------



## Skate (18 December 2018)

Skate said:


> *An Update*
> @explod - "Just party"
> 
> Skate.




*TAG update
*
Another great tag..

@Gringotts Bank - "_I'm it..."
_
Skate.


----------



## Skate (18 December 2018)

Gringotts Bank said:


> Skate... did you sell the farm and go short in October? Or is the Yuletide spirit? Or maybe you met someone, like our friend Wayne. Either way, I'm happy for you! *Some good content *here.




Hi @Gringotts Bank - thank you for your kind comment about the content - I know there is nothing new here for you but at least it maybe considered a pep talk to enthuse others.

We have so many ASF members with a wealth of trading knowledge & life experiences - I was trying to encourage members to dump their wisdom in here.

 I just kept posting till I got the thread up & running.

This thread will be short lived, nobody reads yesterdays news..

Skate.


----------



## Skate (18 December 2018)

Skate said:


> *A few members with conviction*
> 
> I've listed a few forum members I enjoy reading who prosecute their case forcefully and with conviction.
> 
> ...




*Update - members with conviction*

I have the need to update the list of members who prosecute their case forcefully and with conviction - when these members post they are worthy to be listened to, they have a habit of dropping gems..

include @sptrawler to the list.

Skate.


----------



## Gringotts Bank (18 December 2018)

Communication is so difficult, isn't it?  It's extremely hard to understand and be understood when the topic has any degree of complexity or subtlety.

Someone makes a statement like: "technical analysis is better than fundamental".  And before you can reply meaningfully, a hundred assumptions need to be unpacked and just as many terms need to be _defined in detail_.  That's if you want to take part in a proper debate.  Such a statement as the one above could take a few hours to unpack, but who could be bothered?  Even a very astute reply is likely to be met with "yeh but I still think it's better...", and then you realize you've wasted your time trying to help.

I have a few books that I've had to read 10 times before I really got the message.  So yeh, change is hard and it happens slowly!  One has to be willng to make oneself uncomfortable...over and over again.  Inertia equates with safety, so there's some in-built evolutionary resistance.


----------



## Skate (18 December 2018)

Gringotts Bank said:


> Communication is so difficult, isn't it?  It's extremely hard to understand and be understood when the topic has any degree of complexity or subtlety.
> 
> Someone makes a statement like: "technical analysis is better than fundamental".  And before you can reply meaningfully, a hundred assumptions need to be unpacked and just as many terms need to be _defined in detail_.  That's if you want to take part in a proper debate.  Such a statement as the one above could take a few hours to unpack, but who could be bothered?  Even a very astute reply is likely to be met with "yeh but I still think it's better...", and then you realize you've wasted your time trying to help.
> 
> I have a few books that I've had to read 10 times before I really got the message.  So yeh, change is hard and it happens slowly!  One has to be willng to make oneself uncomfortable...over and over again.  Inertia equates with safety, so there's some in-built evolutionary resistance.




Hi @Gringotts Bank

I want to follow my own advice..

Tell me more..

There is always a contest of ideas on ASF but when someone offers value it’s in our best interest to listen.

I’m not saying everyone should agree, we should be civil & just say “tell me more”

Your post displays complexity & value..

Your dump will resonate with so many members..

@Gringotts Bank - tell me more..

Skate.


----------



## Gringotts Bank (18 December 2018)

Skate said:


> Hi @Gringotts Bank
> 
> I want to follow my own advice..
> 
> ...




If you want to communicate effectively and get your message across, these would be some pointers.  You're sort of already doing them!

1.  show _genuine _interest in others - tick
2.  add some _genuine _recognition of others' contributions - tick
3.  have a positive and easy going vibe - tick
4.  be trustworthy*
5.  keep it brief or break it into bite size chunks - tick
6.  make it relevant (trading) - tick
7.  begin with easy-to-digest facts to create a 'yes set' - tick, everyone is nodding along
8.  insert the thing you really want to say as if it's just another fact (aka 'bury the lead').
9.  quickly add more uncontestable and easily digested facts

Points 7-9 are manipulative, so will tend to backfire in multiple ways.  Points 1-6 are do-able if one can be bothered.

*Point 4 is a huge topic in itself and is by far the most important.  You can actually do the whole thing with number 4 alone, imo.


----------



## Skate (18 December 2018)

Gringotts Bank said:


> If you want to communicate effectively and get your message across, these would be some pointers.  You're sort of already doing them!
> 
> 1.  show _genuine _interest in others - tick
> 2.  add some _genuine _recognition of others' contributions - tick
> ...




Hi @Gringotts Bank 

You have hit the nail on the head - trust & being trustworthy is our most precious gift we can give anyone.

Are you up for an example ?

Skate.


----------



## Gringotts Bank (18 December 2018)

Skate said:


> Are you up for an example ?



Yes.  Let's hear it.


----------



## Skate (18 December 2018)

Let’s set the scene..

The daughter is jumping from the lounge into dad arm, the bond is trust is strong.

Image if her Dad was distracted & failed to catch his daughter - do you think her trust in her dad would be broken?

It sure would.

Skate.


Gringotts Bank said:


> Yes.  Let's hear it.




Let’s set the scene..

The daughter is jumping off the lounge into dad arm, the bond & trust is strong.

Image if her Dad was distracted & failed to catch his daughter - do you think the daughters trust in her dad would be broken?

It sure would.

Skate.


----------



## Skate (18 December 2018)

Hi @Gringotts Bank I want to dump another..

Imagine this..

Every time you break someone’s trust - go & hammer a nail into a piece of wood.

When you restore that trust - go & pull the nail out.

You will notice there will be a hole left in the piece of wood - trust can never be fully repaired.

Skate.


----------



## Skate (18 December 2018)

Gringotts Bank said:


> 4. be trustworthy*




Rome wasn’t built in a day...

I’ll do my best to gain yours.

Skate.


----------



## Skate (18 December 2018)

*Stress*

It’s worth remembering..

“Sometimes good enough is good enough”

Skate.


----------



## explod (18 December 2018)

Skate said:


> *Exercise* *in psychology*
> 
> Many people make the mistake of thinking that what move the market are financial statements, economic reports, and news. Those things may all have some impact, but ultimately the market is primarily an exercise in psychology.
> 
> Skate.



True but sentiment (yeeeehaar) is the real driver which to my mind is just excited the feeling of the day.  Psychology is implanted, sentiment is more the infection of the moment.  True however one could write a book just on this single point.


----------



## Gringotts Bank (18 December 2018)

Skate said:


> Hi @Gringotts Bank I want to dump another..
> 
> Imagine this..
> 
> ...




My way of repairing broken trust is to punish them and let them know why.  Withdrawal is a good punishment.  Then I look at why they did what they did, which is usually out of some buried fear.  When I know the reason, it's much easier to be ok with trusting again.  And I might question them about it later to see if they actually have any insight about it. If there's no insight, look out!... because it's going to be repeated.

But I'm starting to sound like a school teacher here, and that bothers me.  I just don't want to be f'd around - that's all.


----------



## Skate (18 December 2018)

explod said:


> True but sentiment (yeeeehaar) is the real driver which to my mind is just excited the feeling of the day.  Psychology is implanted, sentiment is more the infection of the moment.  True however one could write a book just on this single point.




Hi @explod 

Now that’s a deep dump..

You have expressed your views so succinctly and so accurately.

Traders are so moody at the moment - @peter2 will give his summary shortly about the drivers of the recent yo-yo volatility..

Members will read your post and if they take the trouble to read it again - they will unpack some gems.

You & @Gringotts Bank have hit on a topic of being tribal, without realizing it.

Now that’s a subject you could fill a book with. (Our beliefs are very tribal)

Im sure your post will encourage others to start to dumping their gems.

Thank you..

Skate.


----------



## Skate (18 December 2018)

Gringotts Bank said:


> My way of repairing broken trust is to punish them and let them know why.  Withdrawal is a good punishment.  Then I look at why they did what they did, which is usually out of some buried fear.  When I know the reason, it's much easier to be ok with trusting again.  And I might question them about it later to see if they actually have any insight about it.
> 
> But I'm starting to sound like a school teacher here, and that bothers me.  I just don't want to be f'd around - that's all.




Hi @Gringotts Bank 

Now that’s a strong passage, thank you for expressing your view that’s what this thread is all about.

Trust is a precious gift but there is one gift that carries more value..

Do you want me to tell you what is the most precious gift you can give someone?

Skate.


----------



## explod (18 December 2018)

Skate said:


> *When do we sell a position*
> 
> Investors frequently wrestle with whether they should dump a weak position or wait it out and hope for a rebound
> 
> ...



A very bloody difficult situation, though "when in doubt get out"


----------



## Gringotts Bank (19 December 2018)

Skate said:


> Hi @Gringotts Bank
> 
> Now that’s a strong passage, thank you for expressing your view that’s what this thread is all about.
> 
> ...




Lurve.  Not the kind you clean up with a mop and bucket, but the other kind.  I don't walk to talk about it though... too shy.


----------



## explod (19 December 2018)

Skate said:


> *Exercise* *in psychology*
> 
> Many people make the mistake of thinking that what move the market are financial statements, economic reports, and news. Those things may all have some impact, but ultimately the market is primarily an exercise in psychology.
> 
> Skate.



Interesting point here,  is sentiment, "everyone pushing behind a flowing ball", psychological (mind imprint from experience) or just follow the trend, as it goes.  Hard to categorise this in my view.


----------



## Skate (19 December 2018)

Hi @explod 

I don’t want to overstep the mark but stickybeak Skate would like to ask if your avatar is a photo of you?

Avatars go along way to express who you are..

Skate.


----------



## explod (19 December 2018)

Skate said:


> *Personal structure*
> 
> I know a little bit about human nature, people are just like water and as water tracks the easiest path so do people, they always take the easiest path, personal structure is something that is lacking in most people today, they want everything and I mean everything handed to them.
> 
> Skate.



Don't agree.  From a child my path was hard, as a result I couldn't stop trying to ease the path of others.  In the end my sociological understanding cleared my head/heart.


----------



## Skate (19 December 2018)

Gringotts Bank said:


> Lurve.  Not the kind you clean up with a mop and bucket, but the other kind.  I don't walk to talk about it though... too shy.




Hi @Gringotts Bank 

I don't walk to talk about it though... too shy.  [/QUOTE]

This is the thread you can dump whatever you want & feel comfortable doing so.

The most precious gift you can give to another is your time.

Skate,


----------



## Skate (19 December 2018)

explod said:


> Don't agree.  From a child my path was hard, as a result I couldn't stop trying to ease the path of others.  In the end my sociological understanding cleared my head/heart.




Hi @explod 

I’m tempted to say “tell me more”  but it’s package in something so personal.

Skate.


----------



## explod (19 December 2018)

Skate said:


> Hi @explod
> 
> I’m tempted to say “tell me more”  but it’s package in something so personal.
> 
> Skate.



Personal experience yes, secret does not repair or impart, and to learn we must share.  The eldest of 8, my Father ill from war, my Mother out of her depth, alone, isolated, I became a leader early in life,  It led to enormous success for me down the track in my path but not financially.  Success is in how you can help.


----------



## explod (19 December 2018)

Skate said:


> *This dump has been repeated & repeated*
> 
> @bigdog says - "DUMP TRUMP"
> 
> Skate.



We really do not know.  Having closely studied Edgar J Hoover, head of FBI and controller of 7 past presidents and knowing the absolute lawlessness of previous electoral precedents, Trump (though in my view for himself first, and a ******** IMHV) may be much better than the corrupt (in my view) alternative in Hillary.


----------



## explod (19 December 2018)

Skate said:


> *Integrity
> *
> When forum members with integrity post articles or hyperlinks it gives those article more weight than sometimes they deserve.
> 
> Skate.



Elaboration desirable for clarity her Skate (IMHO)


----------



## Skate (19 December 2018)

explod said:


> Personal experience yes, secret does not repair or impart, and to learn we must share.  The eldest of 8, my Father ill from war, my Mother out of her depth, alone, isolated, I became a leader early in life,  It led to enormous success for me down the track in my path but not financially.  Success is in how you can help.




Hi @explod 

Yes, somethings in life never repair - it the analogy of hammering a nail in a piece of wood that I posted to @Gringotts Bank earlier.

Even if you manage to remove the nail from the piece of wood it leaves a hole forever

My deep appreciation for sharing something so personal that etched Into your life.

You would be one interesting dude to sit down & have chat with for sure.

Skate.


----------



## Skate (19 December 2018)

explod said:


> Elaboration desirable for clarity her Skate (IMHO)




Hi @explod 

You question deserves a measured answer & I'm happy to do so.

I’ll take the liberty and answer it tomorrow - the bedbugs are calling.

Skate.


----------



## explod (19 December 2018)

Skate said:


> *Let me have a dump on what it means to be a Human being*
> 
> Human beings never think for themselves, they find it too uncomfortable. For the most part, members of our species simply repeat what they are told, believe what they are told and become upset if they are exposed to any different view.
> 
> Skate.



No, many of us rebel, it's why we have demonstrations and repeats of the idea of the real start of public control as with the bastille cutting off of heads.  Of course the system is trying to beat that with entertainment such as sports, political diversions, religion and yaar hoo entertainments.  The young ones killing each other on stream.


----------



## Smurf1976 (19 December 2018)

Only if you are the actual decision maker can you be certain as to what was considered in making the decision.

In any other situation, which is the overwhelming majority of all circumstances, you know only what the decision maker chooses to share and which intermediaries have chosen to report.

What is not said is often more relevant than what is said.


----------



## Tink (19 December 2018)

The Greens sing the praises of murderers..
anti life, anti family, anti children.

Faith, Family, Truth and Freedom.
Not Government and bureaucracy


----------



## Skate (19 December 2018)

explod said:


> No, many of us rebel, it's why we have demonstrations and repeats of the idea of the real start of public control as with the bastille cutting off of heads.  Of course the system is trying to beat that with entertainment such as sports, political diversions, religion and yaar hoo entertainments.  The young ones killing each other on stream.




*Rethink & alteration*

*Human beings*

Most Human beings never think for themselves, they find it too uncomfortable. For the most part, members of our species simply repeat what they are told, believe what they are told and become upset if they are exposed to any different view.

Skate.


----------



## Skate (19 December 2018)

Tink said:


> The Greens sing the praises of murderers..
> anti life, anti family, anti children.
> 
> Faith, Family, Truth and Freedom.
> Not Government and bureaucracy




Hi @Tink 

Tell me more..

Feel free to dump it here..

Some subjects are very interesting to others.

Skate


----------



## Skate (19 December 2018)

Smurf1976 said:


> Only if you are the actual decision maker can you be certain as to what was considered in making the decision.
> 
> In any other situation, which is the overwhelming majority of all circumstances, you know only what the decision maker chooses to share and which intermediaries have chosen to report.
> 
> What is not said is often more relevant than what is said.




*When asking someone to make a decision*

Make clear the entire situation to them. 

It's your responsibility to make clear all the information that is required for somebody else who is intelligent to make up their mind.

Skate.


----------



## Skate (19 December 2018)

explod said:


> Elaboration desirable for clarity her Skate (IMHO)





Skate said:


> Hi @explod
> 
> You question deserves a measured answer & I'm happy to do so.
> 
> ...



 Hi @explod 

*Clarity
*
It's a given that we are all tribal.

Rather than agree to disagree, a large number of members are increasingly caught up in a kind of *tribal* fight where both sides make the sense of anger worse by reacting to everything

When a member from our tribe express a view we tend to elevate their position because of what we perceive.

@Ann summed it up perfectly -  _"Any comment or opinion should be fairly scrutinized by others in my opinion"_

Skate.


----------



## tech/a (19 December 2018)

Skate said:


> *When asking someone to make a decision*
> 
> Make clear the entire situation to them.
> 
> ...




I could spend the next month commenting on dumps.
But don't have a month.
This one though not entirely agree.

Mate of mines wife found out he had a girlfriend 25 yrs younger and residing in an apartment he
set up for her.
Much venting to me which I listened to.

But in the end she has choices.
Other than pointing them out I cannot be entirely clear on all she needs
to know. Me Id walk. She wont! I have asked her to make a decision one
way or the other and there is a third option I pointed out.--Open marriage.

But her decision I can only go so far.


----------



## Skate (19 December 2018)

https://www.aussiestockforums.com/threads/dump-trump.34328/


Skate said:


> *This dump has been repeated & repeated*
> 
> @bigdog says - "DUMP TRUMP"
> 
> Skate.




https://www.aussiestockforums.com/threads/dump-trump.34328/

It appears everyone has an opinion about President Trump that has divided into two camps - the middle is rapidly evaporating  

@bigdog holds the view that the US is sliding towards disaster that impacting us.

Skate.


----------



## Darc Knight (19 December 2018)

I like little words of Wisdom. I like the Wisdom Skate is posting. I just need to take the time to read the rest. Thank you Skate!


----------



## Skate (19 December 2018)

tech/a said:


> I could spend the next month commenting on dumps.
> But don't have a month.
> This one though not entirely agree.
> 
> ...




*Decisions*

Hi@tech/a

When you have something to say, I'll be the first to shut & listen.

I'll be the first to say - Tell me more..

IMHO you wear the title of ELDER proudly & when an elder speaks we should all prick our ears.

Thank you 

Skate


----------



## Skate (19 December 2018)

Darc Knight said:


> I like little words of Wisdom. I like the Wisdom Skate is posting. I just need to take the time to read the rest. Thank you Skate!




It takes time & effort to read an entire thread - that's unless the subject engages you.

What I dump today may get a glance from members - my previous posts they won't get a look in.

Skate.


----------



## Skate (19 December 2018)

tech/a said:


> I could spend the next month commenting on dumps.
> But don't have a month.
> This one though not entirely agree.
> 
> ...




*Personal Responsibility *
There are so many that refuse to take responsibility when things go wrong, the problem is always caused by someone or something else.

*When in doubt*
When people are in doubt, they tend to look to others to confirm their behaviour. Some people would rather adopt others’ opinions rather than form their own.

Skate


----------



## Skate (19 December 2018)

tech/a said:


> I could spend the next month commenting on dumps.
> But don't have a month.
> This one though not entirely agree.
> 
> ...




*My decision making process
*
1.      Is it right or wrong
2.      How does it affect someone else
3.      What’s the worst case scenario and can I accept it

Your mate must use a completely different decision making process than I.

Skate.


----------



## Skate (19 December 2018)

Skate said:


> https://www.aussiestockforums.com/threads/dump-trump.34328/
> 
> 
> https://www.aussiestockforums.com/threads/dump-trump.34328/
> ...




The speed of the internet sometimes is the “enemy of common sense and restraint” and in a nanosecond, an insignificant news story can go viral then immediately millions of people use it to drum up the evils or virtues of either progressivism or conservatism with regards to President Trump.

Whether you like President Trump or not, I think it’s something we can easily ascertain — the way the leader is conducting himself is quite unique that has an impact and can be quite chilling.

Skate.


----------



## Skate (19 December 2018)

*Another who can proudly wear the badge of Elder*

https://www.aussiestockforums.com/threads/nyse-dow-jones-finished-today-at.5608/page-326

@bigdog - It’s been 11 Years, 11 Months & 4 Days since you started your thread - a total of 3,254 posts.

What a mile stone - well done @bigdog !

@bigdog has managed to complete his post even when he has been overseas, his thread I've come to enjoy & appreciate.

@Joe Blow remarked: 
_"This thread is the greatest single act of long term commitment and dedication that I've ever seen on a forum" 
"Come rain, hail or shine, bigdog will be there to update you on the US and other international markets"

"Thank you bigdog for your tireless efforts in keeping ASF members and visitors informed every day!"

Skate._


----------



## Skate (19 December 2018)

Skate said:


> *TAG update
> *
> Another great tag..
> 
> ...




*TAG*

I would like to add a TAG but the meaning wouldn't be clear.

I was asked once at a conference "if you were to give someone only one piece of advice - what would it be?"

My answer got a reflective nod in return.

Skate.


----------



## Skate (19 December 2018)

*Alienation *

People who are upset constantly seem to engage in outcry, and that outcry comes with emotion that easily boil over and lead to overstepping certain boundaries and all that does is alienate your opponent, so to speak and that extreme is on both sides.

Skate.


----------



## Skate (19 December 2018)

*Not a Tag*

@captain black has used the term “Carpe diem”

(Carpe diem is a Latin for "seize the day")

Now that a great piece of advice - more than worthy to dump it here !.

Skate.


----------



## Skate (19 December 2018)

*Risky behaviour*

Courier Mail - Monday, 29 Oct 2018 - Page 14

_"Male traders are much more likely to make recklessly optimistic buys in stocks and shares after having sex the night before, according to a new study"
_
I'm prepared to take that risk..

Skate.


----------



## Skate (19 December 2018)

*Schadenfreude*

I would like to enlightened others about the German word schadenfreude, but that would be digressing from the theme of the thread..

We don't have an English equivalent.

Skate.


----------



## tech/a (19 December 2018)

Skate said:


> *My decision making process
> *
> 1.      Is it right or wrong
> 2.      How does it affect someone else
> ...




*Strangely* its not my mate seeking advice its his wife!

Right or wrong--in who's view, and for whom?
How does it effect someone else. This decision in my view must
be for one person only--her.
What's the worst case scenario and can I accept it.
Acceptance in theory and that of reality often conflict.

*BUT.*
I like you are black and white. As soon as Grey steps in life
is dragged into the mud.
Clearing mud can be an endless task!


----------



## Skate (19 December 2018)

*Human trait*

Why do we get pleasure from another person's misfortune.

Tickles our funny-bone I guess (but only when its funny)

Skate.


----------



## tech/a (19 December 2018)

No one has asked (not surprised!)
*Skate*
What is your background/or is it interest.
Psychology?

Oh I'm going to make it a task to comment on every
topic I think I have something to add to.
Should take a few years!


----------



## Skate (19 December 2018)

tech/a said:


> *Strangely* its not my mate seeking advice its his wife!
> 
> Right or wrong--in who's view, and for whom?
> How does it effect someone else. This decision in my view must
> ...




Hi @tech/a 

_*"Strangely* its not my mate seeking advice its his wife!"_

May I make a further comment..

*1. Is it right or wrong *
We all have a morals - they are ingrained from birth and using those would be a starting point
*2. How does it affect someone else*
Foremost in our mind is to do what’s best for our family & people we cherish
*3. What’s the worst case scenario and can I accept it*
This didn't come into his decision process

*Finally*
When someones seeks your advice it's a reflection they value your opinion..

Skate.


----------



## Skate (19 December 2018)

tech/a said:


> *Skate*
> What is your background




I get asked this question all the time..

I always respond without hesitation.

I fix bicycles..

Not an answer that sits well with my wife.

Skate.


----------



## Skate (19 December 2018)

tech/a said:


> *I think I have something to add*




@tech/a you certainly do have a lot to offer- I read all your posts with interest

You hold a wealth of lived experiences - dumping them here would be priceless 

Your posts have slowed down to a trickle of late which is a great loss to our community.

Skate.


----------



## Skate (19 December 2018)

*Life
*
My oldest friend tags every email with this saying..

“Life is a journey not a destination"

Skate.


----------



## Skate (19 December 2018)

*Decisions
*
What do we base our decision making process on these day – it’s usually the news we consume either by  Radio, TV, Print or the internet – sometimes it’s the words of others.

Skate.


----------



## Skate (19 December 2018)

*A Gem
*
@Gringotts Bank dumped a gem: 
_
"Communication is so difficult, isn't it? It's extremely hard to understand and be understood when the topic has any degree of complexity or subtlety"_

Skate.


----------



## Skate (19 December 2018)

*Information*

Most people really aren't smart enough to deal with the information overload which now exists and even intelligent people with good critical thinking skills, suffer the same fate..

Skate.


----------



## Skate (19 December 2018)

*Here we go - a "back in my day" comment*

In days gone by the information available was smaller in volume and more difficult to access, but it was more accurate IMHO.

Skate.


----------



## Skate (19 December 2018)

*Stupid
*
I'm wondering if I'm overstepping the mark by using certain words?

Some people are stupid and just believe the first thing they hear or what their trusted sources tell them. (friends, family, teachers, media, etc.)

Skate


----------



## Skate (19 December 2018)

*Information*

Most people have almost no ability to discern genuine information from false information and today there is a huge amount of information easily available to everyone.

Skate.


----------



## Skate (19 December 2018)

*Confirmation bias*

Virtually any information you want is available, literally any information true or false.

Come up with a crazy or insane idea, google it, and you will find information 'confirming' it.

Skate.


----------



## Skate (19 December 2018)

*Personal beliefs – what we believe*

@Sdajii 
@Ann 

Whatever political or crazy scientific falsehoods you ever hear about or whatever insane psychological ideas or conspiracy theories, just google it and you will get more information than you could possibly read which 'confirms' it, whichever side of the debate you are on.

So it is now impossible for most people to become informed.

What they consume simply reinforces whatever beliefs they happen to already have or want.

Skate.


----------



## Skate (19 December 2018)

*OFF Topic*

Stephen Hawking dismissed the existence of a god from beyond the grave in a brutal smack down.

Stephen Hawking goes on to say:

1.      “There is no God” 
2.      “There is no afterlife”
3.      “ There is only wishful thinking”

Getting members to dump it here is harder than I thought possible

Should I be controversial?

Skate.


----------



## Skate (19 December 2018)

*Atheists*

“Atheists” have no faith - all they have are opinions that align with a TRIBE that simply reinforces whatever they believe – it’s known as confirmation bias..

Skate.


----------



## Skate (19 December 2018)

*Tribe*

We make all our decisions based on the TRIBE we align ourselves with..

Skate.


----------



## Skate (19 December 2018)

*Thinking*

My wife hates it when I say..
*
"I’ve been thinking"*

Come up with a crazy or insane idea, google it, and you will find information 'confirming' it. 

Skate.


----------



## Skate (19 December 2018)

*TRIBE mentality*

I've been thinking for sometime to write a paper on TRIBE mentality & the effects it has on our decision making process.

Skate.


----------



## Skate (19 December 2018)

*TRIBE mentality 2*

Tribe mentality sounds simple but it’s very complex subject to get your head around knowing we all make decisions depending on which tribe we associate that colours our thought process.

Skate.


----------



## Skate (19 December 2018)

*Life's short.* 

Make sure you spend as much time as possible on the Internet arguing with strangers about nothing.

Well nothing that makes a difference anyway..

Skate.


----------



## Skate (19 December 2018)

*A question from a reader
*
I'm posting a letter from one of my readers hoping other to dump it here:

_“A question - as I read your latest version, I am wondering why the section on ‘Nihilism’, followed by ‘Religion in General’ and beyond is included in the book ? It would seem that this may belong in another book by the same award-winning author (“Phil’s Philosophical Ponderings” ??). From a commercial point of view, removing this more controversial subject from a book on Trading, may also increase your readership base. As you know, some Christians can be a little prejudiced”_

Skate.


----------



## Skate (19 December 2018)

*Gambling* 

I was a Bookmaker for many decades & that's a subject that holds a lot of stories.

The most popular question I receive goes something like this: "_Trading is simply gambling and very risky at that - isn't it?"_

*My automated response*
Life in general is one big gamble made up of a lot of little gambles and a millions decisions along the way – it’s just human nature that people are afraid of things they don’t understand.

Skate.


----------



## Skate (19 December 2018)

*Money*

Money dictates the quality our life and It’s a shame more people don’t take a greater interest because trading shares is a lot less complex than most people think. Investing and trading in the stock market has some risk, as do all asset classes that offer good long term returns, however, risks can be minimised and returns can be magnified with the right strategy.

Skate


----------



## Skate (19 December 2018)

*Quality of life*

Financial independence is really about creating an extraordinary quality of life that can have a significant effect on everything from our psychology, to our health, to our relationships.

Skate.


----------



## Skate (19 December 2018)

*Live an extraordinary life*

Without financial independence it’s impossible to live an extraordinary life if you don’t master the financial game along the way.

My views are not for everyone, but other should realise that their decisions ultimately control the quality of their lives – that’s the message I try to pass on to one & all.

Skate.


----------



## Skate (19 December 2018)

*Views *

By @Joe Blow allowing me the opportunity express my views gives others an alternative perspective.

Skate.


----------



## Skate (19 December 2018)

*Stop*

I'm starting to feel like a broken Record on loop..

Skate.


----------



## Skate (19 December 2018)

*Anyone
*
Anyone what to dump it here on the topic of non-dualistic thinking?

Others may find the topic entertaining with a direct reference to trading..

Skate.


----------



## Skate (19 December 2018)

*Self praise*

"Self praise is no recommendation"

Skate.


----------



## Skate (19 December 2018)

*Correspondence*
"I feel honoured to have some of my humble thoughts incorporated into your amazing work - thank you"

*Another*
The revised layout is great, and from my perspective, much more reader-friendly. Well done. 

Skate.


----------



## Skate (19 December 2018)

*Advice given freely*

_"One further suggestion - would it be possible to include your gems of wisdom into the main body of the book, i.e include the relevant gem in the section titled “Why your emotions belong to you”, or “Biases”, etc."_

Skate.


----------



## Skate (19 December 2018)

*Scams
*
Somethings you may not know..

In a previous life one of my business was to train "The Sales Trainers" in the art of selling.

Sales professionals use the same toolbox as scammers

The only difference is what the sales professional says today, tomorrow & well into the future is true.

Skate.


----------



## Skate (19 December 2018)

*Why we don't like reading
*
I've never met a client who enjoyed accepting a 1,000 page sales manual 

Skate.


----------



## Skate (19 December 2018)

*Smart-arses*

I've met plenty & they don't come any bigger than the know-all-know-nothing sales people.

I had to dump it here or it wouldn't leave my mind.

Skate.


----------



## Skate (19 December 2018)

*A topic
*
Anyone want to dump it here about how the Mind affect trading?

What influence the Mind has in relation to trading?

That's a topic if I can get it started - there a wealth of traders in here.

Skate.


----------



## Skate (19 December 2018)

Skate said:


> *Self praise*
> 
> "Self praise is no recommendation"
> 
> Skate.




*Kind words*

_“I gained much from reading the addendum I particularly enjoyed the humorous slant on the world’s most important financial institution, and reflected on the impact that emotional confidence has on the world’s economy”_

Skate.


----------



## Skate (19 December 2018)

*Why we should embrace the kindness of others*
_
“While “annoyance and exhaustion” are a little harsh in terms of your self-reflection, having a link to such items does have a positive psychological impact on the reader (a similar phenomenon to the stock market), and entices one to read further - this certainly worked in my case. Your kindness is appreciated”_

Everything written is to engage others to keep reading.

Skate.


----------



## Skate (19 December 2018)

*It's a fine line*

My thread depends on whether it’s interesting & engaging before exhaustion set in and the reader stop reading.

Skate.


----------



## sptrawler (19 December 2018)

If being successful at anything, was easy, everyone would be successful.
Which is why most get out, what they put in.


----------



## Skate (19 December 2018)

*Too much?
*
I’ve chunk the posts knowing full well that if I break my posts into chunks it may encourage members to keep reading. 

The chunks are given interesting titles to encourage that.

Maybe a break is in order..

Skate


----------



## Skate (19 December 2018)

sptrawler said:


> If being successful at anything, was easy, everyone would be successful.
> Which is why most get out, what they put in.




@sptrawler - you nailed it 

I'm impressed..

Skate.


----------



## Skate (19 December 2018)

sptrawler said:


> If being successful at anything, was easy, everyone would be successful.
> Which is why most get out, what they put in.




@sptrawler we all need a plan to force our wealth creation into the right direction thus assuring success. 

Your plan and your decisions will shape the outcome.

Skate.


----------



## sptrawler (19 December 2018)

Skate said:


> @sptrawler we all need a plan to force our wealth creation into the right direction thus assuring success.
> 
> Your plan and your decisions will shape the outcome.
> 
> Skate.



It isn't just wealth, it applies to most facets of life. IMO


----------



## Skate (19 December 2018)

sptrawler said:


> If being successful at anything, was easy, everyone would be successful.
> Which is why most get out, what they put in.




@sptrawler - Education is up to you and education is you’re first step in making wealth creation happen.

Nobody is going to give you the money you need to support yourself without an income - it’s all on you to save up as much as you need. Therefore, your financial freedom is at stake here, and there is no better time to start creating it than right now.

Skate.


----------



## Skate (19 December 2018)

sptrawler said:


> It isn't just wealth, it applies to most facets of life. IMO




*Relationship counseling
*
Speaking from experience most relationship fall apart because of the family finances.

I've never experienced having too much money as a cause.

Having too little & the financial stress tears people apart.

Speaking to @tech/a earlier I was hesitant to approach a sensitive subject as to what drives a guy to use the wrong head to make suh an important decision. 

Skate.


----------



## Skate (19 December 2018)

*Business counseling
*
One thing I do know about owning your own business. The quickest way to bring it undone is to have a "Soft heart or a Hard Prick"

Skate.


----------



## sptrawler (19 December 2018)

Skate said:


> *Relationship counseling
> *
> Speaking from experience most relationship fall apart because of the family finances.
> 
> ...



When money walks out the door, love flies out of the window.

I had better get to work and leave you to it. Keep up the good work.


----------



## Skate (19 December 2018)

tech/a said:


> No one has asked (not surprised!)
> *Skate*
> What is your background/or is it interest.
> Psychology?




@tech/a like you a business owners, well multiple business.

You have a staff of 20 odd - try dealing with multiples of that.

Retired at 46 set for a more peaceful existence but bloody staff given authority just won't leave you alone.

I shouldn't dump personal stuff here as most don't like others talking about themselves. 

Skate.


----------



## Gringotts Bank (19 December 2018)

Skate said:


> *A topic
> *
> Anyone want to dump it here about how the Mind affect trading?
> 
> ...




The hand appears to click buy/sell according to factors decided 'reasonable and logical' by the conscious mind.  In reality, the subconscious decides every click.  It decides according to a whole bunch of beliefs - beliefs of which we can be largely unaware.

George Soros' son is perhaps smarter than his dad, though might never be able to make the big bucks himself.  He noticed his dad's back always became very sore when an investement was on the brink of going bad.  And George would exit with perfect timing.  What made the back sore at the right time? 

People who are very skilled and successful rarely have deep insight into the game they're playing, however they are *always *in touch with what they feel.  They always rank highly in emotional IQ.  It used to be called 'street smarts' as opposed to 'book smarts'.  'Street smarts' is about having a clear path between the subconscious and conscious minds.  'Book smarts' is overrated, but at the same time you can't do without it.  You need both.


----------



## Smurf1976 (19 December 2018)

The ability to engage in independent thought is a vital skill which many lack.

The most common method of doing something, anything, is not necessarily the best method.

Common beliefs are not necessarily true.

Think for yourself.


----------



## luutzu (19 December 2018)

Skate said:


> *Personal beliefs – what we believe*
> 
> @Sdajii
> @Ann
> ...




Maybe try the library or "I'm feeling lucky" mode. 

But I do appreciate google's YT recommending videos of half-naked babes now and then.


----------



## Skate (19 December 2018)

tech/a said:


> No one has asked (not surprised!)
> *Skate*
> What is your background/or is it interest.
> Psychology?




*Degrees & diplomas*

Yep they are pretty common & they look good on your office wall 

What impresses me are the successful business owner - they have all the same qualification that assured success.

PHD - what an acronym that builds  a successful business.

Skate.


----------



## Skate (19 December 2018)

Skate said:


> *Degrees & diplomas*
> 
> Yep they are pretty common & they look good on your office wall
> 
> ...




*PHD*

*P*ersistence, *H*ard-work & *D*etermination (PHD)

@tech/a I have never met a successful business owner who didn't have these qualities & qualifications.

Skate


----------



## Skate (19 December 2018)

luutzu said:


> Maybe try the library or "I'm feeling lucky" mode.
> 
> But I do appreciate google's YT recommending videos of half-naked babes now and then.




*I'm feeling lucky*

@luutzu  "I'm feeling lucky" was my mantra going on a date.

Disappoint & reality quickly kicks in.

Do you want to know what upsets me about dating?

You only need to ask.

Skate.


----------



## Skate (19 December 2018)

Skate said:


> *I'm feeling lucky*
> 
> "I'm feeling lucky" was my mantra going on a date.
> 
> ...




*When out of luck - begging works for me*

@luutzu - I failed to realise you may not be interested - but others may..

"When you go on a date you never know if you will be lucky - BUT she does"

Skate.


----------



## Skate (19 December 2018)

sptrawler said:


> When money walks out the door, love flies out of the window.
> 
> I had better get to work and leave you to it. Keep up the good work.




@sptrawler something I learnt early in life..

"Working took up a lot of my spare time"

And you can take that to the Bank from someone who worked 7 days a week.

Have 5 days of the year where I was restricted from working - really pissed me off.

Skate.


----------



## Skate (19 December 2018)

*Suggestions*

Anyone want to dump it here about topics that interest me? (suggestions below)

If I'm interest others will certainly be - maybe you have a great story to dump that will be beneficial to others

1.       Having the right attitude and mindset.
2.       Human Emotion
3.       Psychology
4.       A bit about Brains
5.       Why emotions can be our worst enemy.
6.       Luck - @luutzu briefly touched on the subject
7.       Longevity and how long we are going to live
8.       Why FOMO is such a driving force in trading

Skate.


----------



## Skate (19 December 2018)

*Humorous slant*

Another comments from a reader

_"I particularly enjoyed the humorous slant on the world’s most important financial institution, and reflected on the impact that emotional confidence has on the world’s economy" _

Resorting to humour in trying times?

Maybe another topic of interest to dump on..

Skate


----------



## Skate (19 December 2018)

*OTT
*
_"Your words of wisdom continue to impress and edify, along with the insights into the fellow members of humankind who attract your admiration" _

Now that over the top - I wonder what he was on when he sent the email to me?

Skate.


----------



## Skate (19 December 2018)

*You need to associate with good people*

_"I am also keen to assist in developing a format for your words of wisdom that will attract the attention of the large audience which they deserve (again to avoid the ‘annoyance and exhaustion’ factor with so many words strung together).  Perhaps they could be shared in a weekly insight article in a journal of some repute"_

Skate.


----------



## Skate (19 December 2018)

*Muddling words make a difference
*
_“a wise friend of ours once reminded us that “happiness is appreciating what you have” _

So close - My definition of happiness is ‘desiring’ what you have !! 

Skate.


----------



## Skate (19 December 2018)

*Comma's make a difference as well
*
A comma can make the difference if you get a horse or not.

*For sale*
Horse, saddle & bridle (you get a horse)

*For sale*
Horse saddle & bridle (sorry no comma - no horse)

Skate.


----------



## Skate (19 December 2018)

*Donald Trump*

Straight from the horses mouth.. 
_“China had enormous respect for DT, and his incredibly large brain” !!!_

That reminds me of an old saying - “It’s better to remain silent & be thought a fool than open your mouth & remove all doubt”.

Skate.


----------



## Skate (19 December 2018)

*Teachers*

Too often, schools become dumping grounds for every societal ailment, and teachers are expected to fix them all, often without any support. That’s not to mention mandatory five-point reporting from years earlier, along with a bevy of what are now referred to as ‘curriculum persepctives’. 

You just gotta feel for teachers.

Been there done that - I took up a two offer to teach a specialised course at Tafe (students were adults not children)

Best thing to come from that was getting a really top solicitor (he was one of my students)

Skate.


----------



## Skate (19 December 2018)

*Money*

In our adult life MONEY is important – this is why school should teach Financial Education, is so important.

Skate.


----------



## Skate (19 December 2018)

*Targeted teaching*

Functions of Trigonometry, Sine, Cosine and Tangent are important when it comes to coding a Trading algorithm-  most trading strategies used in technical analysis are based on advanced mathematics that indicates if a market is trending or in a cycle, whether I should buy or sell.

Trigonometry has turned out to be important to me but to the majority of students less so.

Whereas Financial Educations is important to every student – they are basic life skills.

Skate.


----------



## Skate (19 December 2018)

*Scott Pape*

1.       “Arming kids with basic financial skills will help set them up for a much brighter financial future must start now”
2.       “Most kids don’t have any financial confidence because they are not taught about it in schools,’’ he said.
3.       “When you leave school if your parents don’t teach you anything about money the cycle repeats.”

Rubbing shoulders with other who share your view feels good. 

Skate.


----------



## Smurf1976 (19 December 2018)

Understand the concept of news.

Some news is simply passive reporting of factual events. This applies mostly to things beyond human influence or which are inconsequential. Natural occurrences, sports results and an article saying that 10,000 people attended a concert last night generally fall into this category. The facts are stated along with some photos and that's it really.

A considerable volume of news is actively produced however and this falls into two categories:

1. Where whoever is making the announcement wishes to gain maximum attention so as to promote themselves, a business, political party etc.

2. Where those announcing it wish to receive as little attention as possible since the content of the announcement is something they would prefer not to be known, it being announced publicly only because of some obligation to do so.

News of type 1 will contain the maximum possible amount of positive information, will usually completely omit any negative information or uncertainty, and will be announced at a time determined as likely to gain maximum attention.

News of the latter type 2 will contain only the required minimum of information and is typically announced when most people are distracted by other events. For example immediately prior to Christmas, on the weekend of a major sporting event or when some international drama has caught the public's attention.

Government media releases sent out at 4pm on the 24th of December are a classic example of the latter approach of seeking to avoid attention. These are, of course, the sort of announcements you'd be very wise to pay attention to.


----------



## Skate (19 December 2018)

Smurf1976 said:


> Understand the concept of news




*Understand the concept of news*

@Smurf1976 nicely written article

1. Discerning fact from fiction is getting harder & harder
2. Discerning news from fiction - confuses the best of us
3. News was once news - now it's used as a tool

Skate.


----------



## Skate (19 December 2018)

*Probability*

Life is a school of probability.

Skate.


----------



## Skate (19 December 2018)

*Ideas*

Be less curious about people and more curious about ideas.

Skate.


----------



## Gringotts Bank (19 December 2018)

Skate, take a break from thinking.  You're going to overheat.


----------



## sptrawler (19 December 2018)

The ability to reason, comes with knowledge and experience, many people only have one or none.

A person with knowledge can earn a lot of money, a person with common sense can usually relieve them of it.


----------



## Skate (19 December 2018)

Gringotts Bank said:


> Skate, *take a break from thinking*.  You're going to overheat.




@Gringotts Bank thanks for the good advice..

Skate.


----------



## Smurf1976 (19 December 2018)

Skate said:


> News was once news - now it's used as a tool



The statements issued by central banks are a good example of that.

They're reported as "news" but are a policy tool in themselves intended to affect markets.


----------



## Garpal Gumnut (19 December 2018)

G'day Skate.

Can you fix door locks?

gg


----------



## Skate (19 December 2018)

Garpal Gumnut said:


> G'day Skate.
> 
> *Can you fix door locks?*
> 
> gg




Hmmm...

@Garpal Gumnut that's a funny question..

Is that question in regards to my engineering background ?
Or
Is it a question in regards to being a debt collector ?

Have I fixed locks - YES
Have I had training to pick locks - YES
Have I picked locks to enter - YES

Skate.


----------



## Skate (19 December 2018)

Skate said:


> *Gratitude*
> 
> I have an attitude of gratitude to each & every member that has liked my post or in some way made a reference to or been included in my thread.
> 
> ...




My gratitude is extended to @Garpal Gumnut for liking my post & adding value to the thread.

I've made the remark "No one reads yesterdays news" by making a comment keeps this thread active - something I appreciate..

Thank you.

Skate


----------



## Wyatt (19 December 2018)

Picked up a gem watching The Big Short this afternoon, first time & loved it

*Truth *is like poetry
And most people f@#king hate poetry


----------



## tech/a (19 December 2018)

And frankly there is so much here I can’t be bothered
Information overload.


----------



## Skate (19 December 2018)

tech/a said:


> And frankly there is so much here I can’t be bothered
> Information overload.




@tech/a the information posted in this thread is not aimed for your consumption - I wanted to stimulate other to dump words of wisdom that may help other.

I said to myself “Ill keep dumping till the thread kicks off”

@tech/a it hasn’t panned out as expected.

Skate.


----------



## greggles (19 December 2018)

Skate said:


> @tech/a it hasn’t panned out as expected.




Skate, it's a great thread. There's a ton of wisdom in here already and much more to come I'm sure. I, for one, appreciate your efforts. Communities like ASF need to be positive places where we support each other and help each other. Isn't that what communities are for? Let's not let negativity sneak in and spoil things.


----------



## Skate (19 December 2018)

greggles said:


> Skate, it's a great thread. There's a ton of wisdom in here already and much more to come I'm sure. I, for one, appreciate your efforts. Communities like ASF need to be positive places where we support each other and help each other. Isn't that what communities are for? Let's not let negativity sneak in and spoil things.




@greggles our community has a wealth of quality posters, unlocking their knowledge would be to the betterment of all our members.

I had 3 years of constant study before placing my first trade & ASF was the first point of call to ask questions that I struggled to find answers to..

Over the last 5 years quality posters are missing in action but there are still some quality member in here.

@tech/a starts a thread of great interest, packed with value to boot - so what do we do - members become confrontational & then his attitude of helping changes, he remembers why he stopped posting in mid-stream before, I feel his frustration.

Today @tech/a confines himself to short snappy answers.

There are a lot of smart people in our community & when they start to speak the majority of us are not mart enough to listen.

@tech/a developed a trading system, his son is developing the trading software of the future (IMHO) - are we interested ?

Then we have @peter2 - there's a quality poster - my ears prick when he posts.

There's more than those two but they are examples everyone would relate to.

Skate.


----------



## sptrawler (19 December 2018)

You are spot on Skate, today people have all the answers, yet are too busy talking to hear the question.

People are born with two ears and one mouth, they should use them accordingly.


----------



## Skate (19 December 2018)

@sptrawler let me give you an example of the science behind the art of selling. I apologise for the lengthy reply, I hope you make to the end.

*Salesperson:* _I know everything about selling and there is nothing new you could teach me._

This is the typical attitude & mindset (I've heard it many times before)

* This how the conversation normally goes..

*Me:* (staring at him) Yep, selling is all about product knowledge - isn't it ?

*Salesperson:* '_nods' in agreement._

*Me:* I teaches people how to sell a circle. ((with a 1,000 page sales manual)) 

*Salesperson:* _(with a confused look) what do you mean a circle ?_

*Me:* You know what a circle is - don't you ?

*Salesperson:* _WHAT ? just a circle_

*Me:* YES, a plain old circle

*Salesperson:* YES, I know what a circle is (said with arrogance)

*Me:* Than, I consider you to have product knowledge - is that CORRECT ?

*Salesperson:* _YES_

*Me:* Well, Sell me one

*Salesperson:* _A circle, (he just keep mumbling to himself) a circle, a circle _(He has no idea)

*Me:* (looking him straight in the eyes I say) Don't feel bad - if was easy, you wouldn't need me.

Skate


----------



## Skate (19 December 2018)

*Feel free to ask me any question
*
I'll restrain from making further comments..

I'll do my best to answer more succinctly than the last.

Skate.


----------



## tech/a (19 December 2018)

Salesman complaining to me he isn’t making budget 25 years ago.

Trouble is nobody knows who we are 

Me

How goods that! Nobody knows who we are !


----------



## tech/a (19 December 2018)

So to all of you reading here

Chances are nobody knows who you are
Nobody that matters.
Lovers,potential wives,Employers,Potential prospects,
Banks,colleagues,the list goes on.

And - that - is really really exciting!


----------



## Wyatt (19 December 2018)

Skate, you've given followers of your thread some insights into your interesting world, I would like to know more about your trading experiences. 

From what i have gather, you use a self developed trend following/momentum approach to stocks with strong discipline and timing model to achieve your goals. 

How has this part of your life panned out for you.


----------



## Skate (19 December 2018)

Wyatt said:


> Skate, you've given followers of your thread some insights into your interesting world, I would like to know more about your trading experiences.
> 
> From what i have gather, you use a self developed trend following/momentum approach to stocks with strong discipline and timing model to achieve your goals.
> 
> How has this part of your life panned out for you.




@Wyatt I've been a trader for the last 3 1/2 years & consider myself to be lucky. 

I trade a large account (in excess of 7 figures)

My equity curve represent the last 3 years - August to now has been painful (every dip is painful) but that's the nature of trading.

Skate.


----------



## tech/a (19 December 2018)

Not bad for a bicycle mechanic!

You must be a well known bicycle mechanic!


----------



## Skate (19 December 2018)

@Wyatt without the knowledge freely supplied from the ASF community I doubt I would have been successful.

Skate.


----------



## Skate (19 December 2018)

tech/a said:


> Not bad for a bicycle mechanic!




Hey @tech/a you have no idea how instrumental you have been in my success.

Skate.


----------



## Skate (19 December 2018)

@captain black is another member who helped me immensely.

Skate.


----------



## Skate (19 December 2018)

*Some background information*

One of the first major shocks you will learn is that 98% of Traders lose their money and some investors lose their entire capital, blowing up their account as it is known in the trading circles.

Skate.


----------



## Skate (19 December 2018)

*Learning*

Learning this was very disheartening and distressing, I had a choice of accepting this fact and cease the idea of trading or take a stance and realise if I was going to play with the big boys I had to educate myself thoroughly as I wanted to be in the top 2%.

Skate.


----------



## Skate (19 December 2018)

*Motivation*

Another motivation for me to be in the top 2% was the fear of having that dreaded conversation with my wife, explaining how I lost our funds set aside for our retirement.

Could you imagine that talk?

Skate.


----------



## Skate (19 December 2018)

*Education is the key
*
I’ve read many books and trading articles, I’ve listened to more podcasts than I care to remember, keeping my eyes and ears open, hoping to learn from successful traders, finding out what sets them apart from the average investor, trying to learn the secrets of their success whilst trying not to repeat their failures.

Skate.


----------



## Skate (19 December 2018)

*Technology*

Technology now makes it possible for anyone who is willing to put forth the effort to be an Investor. In the past, the average investor had no choice but to rely on brokers, financial advisors, and the media for insight into and advice about the investing process. That is no longer the case.

Skate.


----------



## Skate (19 December 2018)

*Tools*

Investors simply don’t know that investment tools exist let alone how to use investment tools effectively.

Skate.


----------



## tech/a (19 December 2018)

Skate said:


> Hey @tech/a you have no idea how instrumental you have been in my success.
> 
> Skate.




Your right I don’t.


----------



## Skate (19 December 2018)

*What do I need ?*

I've included this as new members seek out the basics & as this thread will hang around - I'll explain what is needed.

This is what you’ll need if you want to start trading:

• A computer with Internet access. You must be able to access charts and brokers and do research.  All the information you need is readily and easily accessible on the Internet.
• An online brokerage account such as CommSec.
• A good charting program such as Amibroker.
• A Data supplier such as Norgate Premium Data. (NPU)

Skate.


----------



## Skate (19 December 2018)

tech/a said:


> Your right I don’t.




@tech/a - that's great, you have added greatly to my wealth (means I won't have to share any of my gains with you)

Honestly @tech/a without your posts I wouldn't known where to start.

I'm the first to admit, I didn't know enough to ask the right questions.

Skate.


----------



## tech/a (19 December 2018)

Above all you will need a decent account size 
I’d suggest 50k minimum 
Running a business —-and it is a business is
Impossible if it’s under funded.

Good night!


----------



## Skate (19 December 2018)

Skate said:


> @tech/a - that's great, you have added greatly to my wealth (means I won't have to share any of my gains with you)
> 
> Honestly @tech/a without your posts I wouldn't known where to start.
> 
> ...




@tech/a you have helped me immensely & I'm positive you have helped many others, you have no realisation of the wealth of knowledge you have dumped here over the years.

This thread was to reclaim what we had in the past.

Skate.


----------



## Wyatt (19 December 2018)

Nice work there Skate. Kudos to you, although it looks like you are currently in your biggest DD, I thought you mentioned you were 100% cash recently


----------



## Skate (19 December 2018)

tech/a said:


> Above all you will need a decent account size
> I’d suggest 50k minimum
> Running a business —-and it is a business is
> Impossible if it’s under funded.
> ...




@tech/a before you go, have you another second?

Skate.


----------



## Skate (19 December 2018)

*Trading is a business*

Truth #1 - You need money to make money

Forget about taking a $1000 account and turn it into millions.

That is achieved through gambling, not trading.

Instead, you should look to make an average of 25% per year (this depends on your risk appetite and trading style).

On a $1000 account, you're looking at an average of $250 per year.
On a $20,000 account, you're looking at an average of $5,000 per year.
On a $600,000 account, you're looking at an average of $150k per year.
On a $1m account, you're looking at an average of $250k per year.

@tech/a you know this but others may not.

This is extremely important point & I wanted to make it before you went to bed.

Most traders don’t get it.

Skate


----------



## Skate (19 December 2018)

Wyatt said:


> Nice work there Skate. Kudos to you, although it looks like you are currently in your biggest DD, I thought you mentioned you were 100% cash recently




Yes, my trading account is 100% cash

My investment account still ticking over.  (this is a long term strategy)


Yep, I'm in a big DD at the moment that's the nature of trading. (DD = Draw Down)

Skate.


----------



## Skate (19 December 2018)

*The Key to Success*

The key to stock market success is properly managing your investments after you buy them. The way to do that is fairly simple.

• Don’t be afraid to sell.
• Have a methodology that clearly establishes exit points.
• Diversify by having a parcel of stocks.

Investing is not a rigid, structured approach to the stock market with an unvarying set of rules and what works best is highly subjective.

What works best for me might not work best for you, and vice versa.

Skate.


----------



## Skate (19 December 2018)

Skate said:


> *Feel free to ask me any question
> *
> I'll restrain from making further comments..
> 
> ...




*I couldn't help myself
*
@Wyatt I remarked that I'll restrain from making further comments..

Well that didn't last long..

I'll take @tech/a lead & head off to bed.

Skate.


----------



## Xendragon (20 December 2018)

Skate said:


> *Education is the key
> *
> I’ve read many books and trading articles, I’ve listened to more podcasts than I care to remember, keeping my eyes and ears open, hoping to learn from successful traders, finding out what sets them apart from the average investor, trying to learn the secrets of their success whilst trying not to repeat their failures.
> 
> Skate.




Can you name a few good podcasts? I'm looking for some decent ones to listen to.

Thanks
Xen


----------



## Skate (20 December 2018)

Xendragon said:


> Can you name a few good podcasts? I'm looking for some decent ones to listen to.
> 
> Thanks
> Xen




Hi @Xendragon welcome to our community.

*Education is the key.*
“As the saying goes, if what you learn leads to knowledge, you become a fool; but if what you learn leads to action, you can become wealthy”

*New to Trading*
@Xendragon if you are new to trading a good place for you to start is to read this thread - It will be exhausting but most certainly be worth the effort

Before you listen to a podcast I’m suggesting you watch two short videos (each are only 6 & 7 minutes in duration)

1.      The first video is a window into behavioural science & the 7 minute video revolves around a simple question - Would You Take This Bet ?



2.      The 2nd Video is a great song by Ed Seykota who is a world class Trend Trader based on technical analysis & is considered the world's best trader in his field. (you will be able to code a full trading strategy from his song - which I have)



*Can you name a few good podcasts? - *Yes I can..
As your question was a little vague I've decided to hyperlink you to a series of system trading podcasts

*A heads up*
Listening to podcasts takes a high level of concentration & it takes another skill to control your mind from wandering.
*
Better System Trader*
Andrew Swanscott, the founder of Better System Trader is dedicated to helping system traders of all levels improve their trading.

*Trading is hard*
Trading successfully is hard, REALLY hard, which is why the majority of people who try to make money from trading fail. You could read hundreds of books, spend thousands of dollars on seminars, watch the market for years and still not be profitable.

http://bettersystemtrader.com/category/podcast/page/11/

Skate.


----------



## jbocker (20 December 2018)

Skate said:


> Listening to podcasts takes a high level of concentration & it takes another skill to control your mind from wandering.




It does and I enjoy it as a major distraction when walking. I walk around a large lake 3.5kms (Mongers Lake Perth), no roads, get exercise and pass the time enjoyably. Podcasts and Walking.. perfect.


----------



## jbocker (20 December 2018)

Skate said:


> 2. The 2nd Video is a great song by Ed Seykota who is a world class Trend Trader based on technical analysis & is considered the world's best trader in his field. (you will be able to code a full trading strategy from his song - which I have)



That there song says (sung) it all.
Classic. I wont get it out of my head (hopefully).


----------



## qldfrog (20 December 2018)

explod said:


> True but sentiment (yeeeehaar) is the real driver which to my mind is just excited the feeling of the day.  Psychology is implanted, sentiment is more the infection of the moment.  True however one could write a book just on this single point.



But for the sharemarket, how many of the trades are now purely automated or influenced by non emotional  reactions: eofy bonus, covering shorts etc.would be interesting to know with the rise of robot traders
On the other end, a small change on the margin is often enough to give a trend....


----------



## Skate (20 December 2018)

qldfrog said:


> But for the sharemarket, how many of the trades are now purely automated or influenced by non emotional  reactions: eofy bonus, covering shorts etc.would be interesting to know with the rise of robot traders
> On the other end, a small change on the margin is often enough to give a trend....




@qldfrog every price in the market is the sum of all our hopes, fear, pride and greed. Even if a system is completely automated, it was still built by emotional human beings who apply their biases to their art, whether they realize it or not.

It’s the same with High Frequency Traders (HFT) they make waves so it our job to catch the splashes and remember, don’t get greedy.

Skate.


----------



## Smurf1976 (20 December 2018)

Understand that most people fail to apply even the most basic maths to real life situations.

They may seek "professional" advice, a term very loosely applied, or some published study but will not attempt to themselves calculate something which is easily worked out using readily available information and simple maths that everyone in this country at least was taught at school.

Anyone who does apply maths to common dilemmas has gained an advantage over the majority simply by availing themselves of accurate figures on which to base a decision.


----------



## Skate (20 December 2018)

Smurf1976 said:


> Understand that most people fail to apply even the most basic maths to real life situations.
> 
> They may seek "professional" advice, a term very loosely applied, or some published study but will not attempt to themselves calculate something which is easily worked out using readily available information and simple maths that everyone in this country at least was taught at school.
> 
> Anyone who does apply maths to common dilemmas has gained an advantage over the majority simply by availing themselves of accurate figures on which to base a decision.




*The Trading Game*
Trading is a mathematics game, a game of probabilities and not percentages.

@Smurf1976 I would imagine most ASF members would have a high degree of literacy in applied mathematics, there are a few smart bunnies in here - lots of coders.

*A lost art*
@qldfrog & you may be interested in how Egyptians did complex mathematics. (This short 6 minute video is a must watch)    



Skate.


----------



## Wyatt (20 December 2018)

Looks like Santa is only dishing out *Pain* and *Fear* to punters following the ASX this Xmas


----------



## tech/a (20 December 2018)

*Trading Game

Discretionary
*
To me its about Mitigated risk.
So my numbers are skewed to diminish R
Diminished R gives me greater Reward to Risk if profitable.
Less loss if losing!

*Systems
*
Totally different. Set of inputs returning a set of metrics
resulting in profit provided the landscape of the Live data
doesn't alter enough to change the results of my testing
in the system I have adopted.

I just buy sell and hold based upon the blueprint returned
in design.

Even if my discretionary skills tell me that its time to buy
OR time to sell!

My systems are continually on the search for changed conditions
which render them obsolete


----------



## Skate (20 December 2018)

@tech/a thank you for posting. 

Quality posts will lift the level of this thread. I know you are skilled with both forms of trading that why your words carry value.

I personally lack the skills to be a Discretionary trader so I'll add a few words..
*
High level of skill needed*
I’m not a proponent of discretionary trading as lack those skills, but I do use a mechanical weekly trend trading strategy, a mechanical trading system, keeping me away from making any emotional decisions.

*Discretionary Investors*
Discretionary Investors buy when they think the price of the stock will increase, this can be from a multitude of different information gathered to make a buying decision and that take a high level of skill & commitment.

*Discretionary Skills*
Discretionary traders decisions are either based on a recommendation, studying the details about a company (fundamental analysis) or from the study of the stock chart (technical analysis)

*It's up to you*
Whatever combination of information you use, whether it media reports, fundamental or technical analysis or a combination of all of those it really depends on you.

Skate.


----------



## qldfrog (20 December 2018)

Skate said:


> *A lost art*
> Skate.



much appreciated your link.learning every day


----------



## qldfrog (20 December 2018)

If there is one think i have learnt from tech/a, it is risk control /mitigation.
In its simplest form, a trailing stop loss.i stiil sell too early, buy based on pure instinct etc but the basis tech/a taught me via his posts limited my losses, let some win run longer than i would have on my own.i definitively owe tech/a a drink or a coffee
And this wisdom is still there in historical posts for any taker


----------



## Skate (20 December 2018)

qldfrog said:


> much appreciated your link.learning every day




@qldfrog my views are not for everyone - some might appreciate another persons point of view, some might find the snappiness of the post entertaining, but my main hope is that new members find a wealth of knowledge & educational value here on ASF & decide to stay.

Seasons traders will find little value in my post but they might enjoy a pep talk every now & again - pep talks never goes astray.

Skate.


----------



## Skate (20 December 2018)

qldfrog said:


> If there is one think i have learnt from tech/a, it is risk control /mitigation.
> In its simplest form, a trailing stop loss.i stiil sell too early, buy based on pure instinct etc but the basis tech/a taught me via his posts limited my losses, let some win run longer than i would have on my own.i definitively owe tech/a a drink or a coffee
> And this wisdom is still there in historical posts for any taker




@tech/a & @captain black were the two drivers of my trading success.

Skate.


----------



## Skate (20 December 2018)

*Risks*
@qldfrog trading is fun, rewarding and exciting, but there are risks as @tech/a has pointed out & you are aware of. 

The more you read and learn from others the better prepared you will be.

Skate.


----------



## Skate (20 December 2018)

*Professionals traders*
I have spoken with professionals traders and gained a broad understanding of how the big players operate, and how they move funds in and out of the market.

Anyone can buy and sell shares, it is how we choose these shares and then how we manage our position that dictates how successful we will be.

Skate.


----------



## Skate (20 December 2018)

*Everyone needs a plan*
I learned about the common pitfalls and hurdles people encounter whilst trading, I studied the techniques used by different investors and noticed which worked, and which didn’t.

It’s a fair bet to say that any trend following methodology is likely to succeed over time if you follow your trading plan while handling the psychological gymnastics you will be experiencing luck will fall your way.

Skate.


----------



## Skate (20 December 2018)

*My trading style*
My trading investments are made using technical analysis as I understood the concept and the benefits of having a robust mechanical trading system other than the fundamental aspect of trading.

Mechanical trend trading concepts resonated with me as I had a very hard time simply buying into the proverbial “Buy and Hold” the very essence of the fundamentalists.

Skate.


----------



## Skate (20 December 2018)

*The markets have changed*
I often hear that markets have changed and new rules are needed for the new game, well the markets do change but the underlying fundamental rules for success don’t seem to.

*Trading System*
It is my belief that to succeed in the financial markets you need to have some kind of trading system in place.

*We all make mistakes but that's ok.*
I don't claim to be an expert, far from it and I've made my fair share of mistakes along the way, but the important thing is that I have learned from my mistakes and have become a better trader.

I don’t overtrade, I’m patient and disciplined, but I’m still learning to control my emotions.

Skate.


----------



## Garpal Gumnut (20 December 2018)

Skate said:


> Hmmm...
> 
> @Garpal Gumnut that's a funny question..
> 
> ...




I can always pick a person who knows locks. 

I admire and will follow you. 

gg


----------



## sptrawler (20 December 2018)

Wyatt said:


> Looks like Santa is only dishing out *Pain* and *Fear* to punters following the ASX this Xmas



One wonders, if those who decried the missed opportunity last time, will avail themselves of it this time?
Or just wait to demean those, who do take the opportunity, as happened every other time.
As Skate says, the market is driven by emotion, the trick is controlling yours.


----------



## Skate (20 December 2018)

sptrawler said:


> One wonders, if those who decried the missed opportunity last time, will avail themselves of it this time?
> Or just wait to demean those, who do take the opportunity, as happened every other time.




@sptrawler most wimpy traders are locked & loaded waiting for the tide to change, itching to get back in (well I am)

Skate.


----------



## Skate (20 December 2018)

*Wimps*
@sptrawler I'm a wimp when it comes to trading - I’ll go so far as to claim that a smart wimp who runs and hides when the going gets tough generally produces better results than brave souls who are proud of their ability to suffer great monetary pains while they wait for their convictions to be rewarded.

*Being macho*
The problem with the “macho” approach to the markets is that the consequences of being wrong are so onerous. The stronger your convictions and beliefs, the more invested and braver you are, and the greater the chance for a backbreaking loss. The wimpy investor knows that the key to success is staying in the game for the very long term.

Skate.


----------



## sptrawler (20 December 2018)

Once the herd starts running, it is hard to change its direction, I personally feel this has a way to go yet.


----------



## Skate (20 December 2018)

sptrawler said:


> Once the herd starts running, it is hard to change its direction, *I personally feel this has a way to go yet.*




@sptrawler I'm with you - traders are very moody at the moment..

*Being a wimp I use a lot of protection*

Traders who are wimps will use a variety of tools for their protection - I'll list some of those tools:
1. An Index Filter
2. A Turnover Filter
3. A Volume Filter
4. A ROC Strength Filter (ROC = Rate Of Change)
5. A Price Filter
6. A Trend Filter
7. A variable trailing stop
8. A momentum ROC stale stop Filter

I use all of them..

Skate.


----------



## sptrawler (20 December 2018)

I must get started on researching trading, I have been a lazy buy and hold, with a big chunk of cash as a backstop.
Time to get off my ar$e and do some study, thanks for all the info Skate, it gives me somewhere to start.
Do you need a special comsec account, to run a trailing stop, or is the facility available on all accounts?


----------



## Skate (20 December 2018)

Hi @explod you have dropped some gem in this thread already & I was wondering what trading style you prefer ?

Skate.


----------



## Skate (20 December 2018)

sptrawler said:


> I must get started on researching trading, I have been a lazy buy and hold, with a big chunk of cash as a backstop.
> Time to get off my ar$e and do some study, thanks for all the info Skate, it gives me somewhere to start.
> Do you need a special comsec account, to run a trailing stop, or is the facility available on all accounts?




@sptrawler trailing stops are normally coded into a trading strategy

A standard CommSec account allows you to "Place Conditional Orders"

*Two examples of a conditional order*
1. 'Trades at or Below' for Falling Sell and Falling Buy
2. 'Trades at or Above' for Rising Sells and Rising Buys

Skate.


----------



## mcgrath111 (20 December 2018)

Skate said:


> @sptrawler trailing stops are normally coded into a trading strategy
> 
> A standard CommSec account allows you to "Place Conditional Orders"
> 
> ...



Unless information is released pre market and **** hits the fan #Vocus got me good


----------



## Skate (20 December 2018)

mcgrath111 said:


> Unless information is released pre market and **** hits the fan #Vocus got me good




@mcgrath111 someone out there will always know more than you or I - perhaps that might account for why a stock move the way it does. 

Even after you’ve learnt how to trade successfully, you will still take your hits - that's the trading game.

Skate.


----------



## Skate (21 December 2018)

Value Collector said:


> When I was 18, the Army seemed like the quickest way to earn a what to me was a “high wage”, from which I could save and get the compounding started.
> 
> I wouldn’t say I was a “genius” in my teens, but I was having a go and learning as I went along, if anything I did could be considered genius, it was simply that I relised early the benefits of spending less that you earn, and I understood compound growth.




This is pure gold...

@Value Collector remarked there are benefits of spending less that you earn !

Great advice..

Skate


----------



## Skate (21 December 2018)

*What I’ve learned about the concept of compounding money!*

I learned the power of reasonable returns, time, and compounding of money can lead to extreme wealth.
I have applied these principles in the management of our net worth.
Reasonable Returns + Time + Compounding of Money = Extreme Wealth.

Pretty simple formula but not especially easy to do!

Skate.


----------



## Skate (21 December 2018)

*Compounding*

Compounding wealth over time is a slow process but when it starts it will snowball.

Skate.


----------



## Skate (21 December 2018)

*Compound Interest*

“Money makes money. And the money that money makes, makes more money.” –Ben Franklin

The power of compound interest is that your money will make more money without you having to do anything, your money keeps earning more and more money all on its own.

Skate.


----------



## Value Collector (21 December 2018)

Skate said:


> *What I’ve learned about the concept of compounding money!*
> 
> I learned the power of reasonable returns, time, and compounding of money can lead to extreme wealth.
> I have applied these principles in the management of our net worth.
> ...



Yep, this short video shows exactly how much a difference starting early can make.


----------



## Skate (21 December 2018)

mcgrath111 said:


> Unless information is released pre market and **** hits the fan *#Vocus got me good*




@mcgrath111 I feel your pain...

*Big Loss*
This is what a big loss looks like for me (a picture paints 1,000 words) 41.83% of my investment gone in two weeks



*Big Win*
This is what a big win looks like for me (a picture paints 1,000 words) a gain of 41.83% on my investment - it took 44 weeks (meaning the enjoyment lasted 44 weeks)





Skate.


----------



## Skate (21 December 2018)

Value Collector said:


> Yep, this short video shows exactly how much a difference starting early can make.





@Value Collector that short video is pure gold..

Thank you for your wonderful share - I recommend every member to view the power of compounding..

Skate.


----------



## mcgrath111 (21 December 2018)

Skate said:


> @mcgrath111 I feel your pain...
> 
> *Big Loss*
> This is what a big loss looks like for me (a picture paints 1,000 words) 41.83% of my investment gone in two weeks
> ...



Know when to hold em.
Know when to sell them.
Know when to ignore the broker reports.


----------



## tech/a (21 December 2018)

Skate said:


> This is pure gold...
> 
> @Value Collector remarked there are benefits of spending less that you earn !




Or earning more than you need.
Depends on how you look at creating surplus.


----------



## Skate (21 December 2018)

I would like to endorse @Value Collector post.

*Albert Einstein*
Albert Einstein famously stated: “Compound interest is the eighth wonder of the world. He who understands it, earns it... he who doesn’t... pays it.”

Skate


----------



## Skate (21 December 2018)

tech/a said:


> Or earning more than you need.
> Depends on how you look at creating surplus.




@tech/a they say "money doesn't buy you happiness" but it sure keeps my kids close.

Skate.


----------



## Skate (21 December 2018)

tech/a said:


> Or earning more than you need.
> Depends on how you look at creating surplus.




@tech/a I've rubbed shoulders with some really wealthy people & money is not the main motivator, they use it as a score card.

Skate.


----------



## Skate (21 December 2018)

Skate said:


> I would like to endorse @Value Collector post.
> 
> *Albert Einstein*
> Albert Einstein famously stated: “Compound interest is the eighth wonder of the world. He who understands it, earns it... he who doesn’t... pays it.”
> ...




*Albert Einstein speaking about a powerful force*
Albert Einstein once joked that the most powerful force in the universe is neither mass nor energy. It's compound interest, which is what happens when you earn interest on your money and on the interest that it's already earned. While some investments have compounding built in, others don't automatically do it.

Skate.


----------



## Skate (21 December 2018)

Value Collector said:


> Yep, this short video shows exactly how much a difference starting early can make.





@Value Collector video - the presenter infers that there’s "No Time Like Today" to start making compounding work for you..

“The best time to plant a tree was 20 years ago. The second best time is now.” — Chinese proverb

Meaning, it isn’t too late to start..

Skate


----------



## Skate (21 December 2018)

mcgrath111 said:


> Know when to hold em.
> Know when to sell them.
> Know when to ignore the broker reports.




@mcgrath111 as usual you nailed it perfectly..

*Underestimate*
Market participants tend to underestimate the importance of their emotions when making market decisions. If you have a totally mechanical or mathematical approach to the market, you don’t have to worry too much about pesky emotions. But they are still there in some degree.

Skate


----------



## tech/a (21 December 2018)

Skate said:


> @tech/a they say "money doesn't buy you happiness" but it sure keeps my kids close.
> 
> Skate.




Being free from financial shackles (being financially secure) sure helps the happiness factor.
By either embracing or NEVER embracing the money trap.
You should reside at either end you should avoid the middle (Class).



Skate said:


> @tech/a I've rubbed shoulders with some really wealthy people & money is not the main motivator, they use it as a score card.
> 
> Skate.




Initially money can be a motivator.
Eventually it becomes a consequence.
Hardly ever discussed or mentioned.

Its only discussed when you want it or
haven't got it (Financial freedom).


----------



## Skate (21 December 2018)

mcgrath111 said:


> Know when to hold em.
> Know when to sell them.
> Know when to ignore the broker reports.




@mcgrath111 I use a mechanical weekly trend trading strategy, a mechanical trading system, keeping me away from making any emotional decisions.

I am a strong believer of the 50/50/80 rule, meaning when you are confronted with a 50/50 choice you will certainly always be wrong 80% of the time.

*Image This*
Could you imagine leaving a trading decision in my hands ?

Skate.


----------



## Skate (21 December 2018)

tech/a said:


> Being free from financial shackles (being financially secure) sure helps the happiness factor.
> By either embracing or NEVER embracing the money trap.
> You should reside at either end you should avoid the middle (Class).
> 
> ...




@tech/a I want to endorse every word you posted & take the liberty to add a few more words..

*Financial independence*
Happiness is really about is creating an extraordinary quality of life—life on our terms.
Money and financial independence can have a significant effect on everything from our psychology, to our health, to our relationships.
But it’s important to remember that it’s impossible to live an extraordinary life if you don’t also master the game of relationships, the game of fulfillment, and the game of health.

Skate


----------



## Skate (21 December 2018)

*I want to apologise*

*Apology to all members*
I don't proof read before I post - I know if I get most of the post correct, whats not I'm sure members will work it out.

*Why don't I proof read*
"Ain't Nobody Got Time for That"

Its much better expressed by Ms Sweet Brown - who would of 'thunk' you could make a ton of money from this ? 





Skate.


----------



## Skate (21 December 2018)

Skate said:


> Great Idea @jbocker  A place to drop random thoughts that don't need a thread title
> 
> Hmm...
> 
> ...





*I'm asking for help*

This thread is designed to be different a place to dump helpful information that may help other traders but the thread lacks traction.

*Reasons*
1. The content is not interesting
2. The content has no perceived value
3. The 'Thread Title' is just plain wrong

The *BIGGEST* Prize ever has been offered here on ASF - The competition is a thread name change

I'm reaching out for a name change. I'm prepared to do most things if it's for the betterment of other members. (I've been told to ease up on posting, even though its been hard - I've done my best to comply)

I can't accept item #1 or #2 to be the reason for the lack of traction

*#3*
It must be item #3

The members below listed below in "alphabetical order" have been referenced in this thread so I'm asking for help with a name change for the thread.

If that's not possible something better still - post some gems that you hold related to trading or investing that will help others ?

Every member listed below has something of value to offer - just have a look at the impressive list.

@Ann
@barney
@bigdog
@captain black
@Commons
@cynic
@Darc Knight
@explod
@Garpal Gumnut
@greggles
@Gringotts Bank
@jbocker
@Joe Blow
@kid hustlr
@luutzu
@mcgrath111
@myrtie100
@qldfrog
@Sdajii
@Smurf1976
@sptrawler
@tech/a
@Tink
@Trav.
@Value Collector
@Wyatt

Skate.


----------



## Skate (21 December 2018)

*Tag*

@Joe Blow - how did I ever miss this..

*My apologies for missing an important tag*
@Joe Blow - Be kind and respectful to others at all times and help them if you can.

Skate.


----------



## Skate (21 December 2018)

*A response to a reader

Background*
I've written 3 religious books referencing  *'The Bible' *

1. Translation of the Old Testament
2. Translation of the New Testament

The third book is about the 'The Bible & a Bit More' (6 1/2 years 14 hour days research - I was retired & plenty of time)
*
Generic answers*
"All religions create their own Gods because they are seeking to explain what they do not know"

"God didn't make man in HIS image - but - Man made God in OUR image is closer to the truth"

*Summary of the Bible (if interested)*

1. The Old Testament - "Do unto others as you want done unto you" - the rest of The Old Testament is filler.
2. The New Testament - The 11th Commandment - Jesus said "This is my commandment, that ye love one another, as I have loved you" (John 15:12) and the rest of The New Testament is filler.

*Why reference 'The Bible' in a trading thread ?
*
1. The summary #2 sums up the tag of @Joe Blow
2. I personally trade a large account (well to me it is) and like most traders I pray a lot

*I just had an idea*
I should post about grief and the stages of grief & relate it to trading

Skate


----------



## Skate (21 December 2018)

*Grief
*
When investors have large unrealized losses in a poor market environment, this can greatly impair their objectivity. They struggle to reassure themselves about why they bought a particular stock. They can bring themselves to admit defeat only when the final stage of grief kicks in ‘Acceptance’ and sell only when the losses are so big they can’t bear to take the pain any longer.

Skate.


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## Skate (21 December 2018)

*On Mourning and the Market*

A useful application of psychological principles to the stock market is to consider major changes in the trend of the market in the context of the emotions that someone goes through when mourning a loss.

In other words, what do investors think and feel when a steadily rising market suddenly starts to die?

In 1969, Dr. Elisabeth Kubler-Ross wrote On Death and Dying, which set forth the five stages of mourning that individuals go through when confronted with a loss:

1. Denial
2. Anger
3. Bargaining
4. Depression
5. Acceptance

When the market undergoes a breakdown, many market participants go through this same series of emotions. At first, when the market shows signs of weakening, widespread *denial *occurs.

Market participants simply ignore the possibility that the status quo could possibly change. When the weakness persists, the feeling shifts to anger.

Individuals are mad at themselves for not taking action sooner to prevent losses, and they become mad at those who warned them of the developing problems.

The next phase is where we start making deals with ourselves. “If the market will just hold steady or bounce back a little, I will quit fighting and shift my thinking” is something I have found myself saying to myself on occasion.

When that doesn’t work and the market continues to do something other than what we hoped, we become depressed and feel hopeless: “I really messed up. Now there’s no chance I can make any money.”

Skate.


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## Skate (21 December 2018)

So_Cynical said:


> Merry Xmas & HNY to all.
> 
> 2018 was a great year right up until October, lucky i did a little bit of selling, should of done a lot more..




@So_Cynical will a pep talk help ?
*
Patience*
You need to have patience, discipline and realise drawdowns and losses are part of the trading process, so take it on the chin, be the ‘best loser’ you can possible be.

Skate.


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## Skate (21 December 2018)

*General advice*

You also need to understand your own psychology, where you are mentally strong and weak and how you will deal with the stressful situations, the roller coaster of emotions, particularly fear and greed will decide your trading fate.

Skate.


----------



## Skate (21 December 2018)

Skate said:


> *Tag*
> 
> @Joe Blow - how did I ever miss this..
> 
> ...



*
TAG*
My apologies are in order once again - what a great tag..

@CanOz - Life is a magnificent, exhilarating show, its a pity that those of us born into freedom and democracy don't realise it until the last act...

Skate.


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## sptrawler (21 December 2018)

Skate a lot of investment boils back to personality, a friend of mine is a great believer in the market and has been all in for 10 years.
I'm much more conservative and always carry enough cash, to be able to afford to lose everything in the market.
ATM he is braking out in hives, I'm enjoying Chrismas.
Like I said it boils back to personalities, you still have to be able to sleep at night.
Having said that, my new year resolution is to become more proactive, and that is due to your thread.
So thankyou, it has been a great Xmas present.


----------



## Skate (21 December 2018)

Skate said:


> *TAG*
> My apologies are in order once again - what a great tag..
> 
> @CanOz - Life is a magnificent, exhilarating show, its a pity that those of us born into freedom and democracy don't realise it until the last act...
> ...




There will be no more apologies for missing great TAGS

*Sorry*
Instead I would like to sorry to two great ASF members who both have great tags..

@barney - Don't bite the hand that feeds you ... and don't bite off more than you can chew!
@fiftyeight - The speculator's deadly enemies are: Ignorance, greed, fear and hope.

Skate.


----------



## Skate (21 December 2018)

sptrawler said:


> Skate a lot of investment boils back to personality, a friend of mine is a great believer in the market and has been all in for 10 years.
> I'm much more conservative and always carry enough cash, to be able to afford to lose everything in the market.
> ATM he is braking out in hives, I'm enjoying Chrismas.
> Like I said it boils back to personalities, you still have to be able to sleep at night.
> ...




@sptrawler I'm so happy that you have been motivated by my thread.

Let me quote an old saying "your kind words warms the cockles of my heart"

Skate.


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## Skate (21 December 2018)

sptrawler said:


> Skate a lot of investment boils back to personality, a friend of mine is a great believer in the market and has been all in for 10 years.
> I'm much more conservative and always carry enough cash, to be able to afford to lose everything in the market.
> ATM he is braking out in hives, I'm enjoying Chrismas.
> Like I said it boils back to personalities, you still have to be able to sleep at night.
> ...




@sptrawler may I quote & echo your words please. 

I would like members not to flipantly read your post without unpacking the gems you just dropped in here.

*Gems to remember*
1. Investment boils back to personality
2. Your positions should be at a size where you able to sleep at night
3. Be proactive when it comes to the markets & thread carefully at first.

Skate.


----------



## Skate (21 December 2018)

*Why start trading
*
@sptrawler it should not matter how much money you have or how old you are. It also doesn’t matter how much you know about trading, or whether you’re worried about what the markets are going to do, you have made a plan - a News Years resolution.

*Caution*
Only be proactive when the market is heading in the right direction. Otherwise be a wimp like me.

Skate.


----------



## Skate (21 December 2018)

@sptrawler I forgot to mention the freedom you can achieve by being an active participant in the markets.

*Freedom*
Trading isn’t about getting rich, but more about having the financial independence, being able to support yourself without an income. 

I've only been trading for 3 1/2 years & I've been lucky. I studied for 3 years before making my first trade and it was with the help of others giving their advice so freely without expecting anything in return made the difference for me.

Skate.


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## barney (21 December 2018)

Skate said:


> *A response to a reader
> 
> Background*
> I've written 3 religious books referencing  *'The Bible' *




You are an interesting Chap indeed Mr. @Skate


----------



## barney (21 December 2018)

And may I add … a really fast typist!!


----------



## Gringotts Bank (21 December 2018)

As a _partially_ reformed thinker, I'd recommend Alan Watts on 'stopping excessive thinking'.  YT.

In my chosen field of work, I thought a lot.  I gained incredible insight, and I can debate professors and 'experts' under the table...easily.  But the pinnacle of my insight was this: *I must stop thinking*.  Not stop altogether, but cut it right back.  Wisdom, peace, connection and creativity are far more valuable than insight, no matter how profound the insight.  And these good things only appear when thinking stops.


----------



## Skate (21 December 2018)

Gringotts Bank said:


> As a _partially_ reformed thinker, I'd recommend Alan Watts on 'stopping excessive thinking'.  YT.
> 
> In my chosen field of work, I thought a lot.  I gained incredible insight, and I can debate professors and 'experts' under the table...easily.  But the pinnacle of my insight was this: *I must stop thinking*.  Not stop altogether, but cut it right back.  Wisdom, peace, connection and creativity are far more valuable than insight, no matter how profound the insight.  And these good things only appear when thinking stops.




@Gringotts Bank I have trouble letting thoughts go and till I put them on paper they won't leave me.

I can't control my thinking & the mental gymnastics is indescribable. 

When I write I don't even have time to read what I've written.

I'm compulsive about most things & I study & write everyday - Dumping it here has been therapeutic - it's been a release.

Skate.


----------



## Gringotts Bank (21 December 2018)

Skate said:


> @Gringotts Bank I have trouble letting thoughts go and till I put them on paper they won't leave me.
> 
> I can't control my thinking & the mental gymnastics is indescribable.



yeh, addiction.  Not a metaphor for addiction, but a true representation of it.  No judgment here, btw.  I have the same tendency.

I wouldn't call it a release to write it down.  What you get (and what I'm getting right now as I type), is a _misniscule_ hit of feelgood brain neurotransmitters in response to _yet another_ thought which says "well aren't I clever!".  And you are clever, but at what cost?  Thinking uses up massive amounts of energy and will always have a negative bias.  The reason for the negative bias is that most excessive thinking revolves around problem solving.  Focussing on 'what's wrong' or 'what needs fixing' or 'what needs to be understood' will overload your processor pretty quickly.


----------



## Skate (21 December 2018)

barney said:


> You are an interesting Chap indeed Mr. @Skate




@barney I measure everything I say here on ASF.

I've pulled right back..

If this wasn't a trading tread I would start to post about other topics
1. Religion (Religious views are similar to what people think about Trump - you are on one side or another - there is no middle ground) 
2. Boxing & fighting (they are two different sports - two different type of people)
3. Debt collecting (people are always interested in that profession, but relating stories - some find it a bit too much) Most want to know if anything bad ever happened - Knife pilled on me, Pistol in the face, some prick put a slug in my back, but that was another life. I had to give it away, it was put to me that the job was too dangerous for myself & others)
4. Back in the 80's litigation was so bad the NSW Courts system backlogged. 

Imagine from a Debt collector to being a Financial Judge (similar to Judge Judy - her cases had a limit of $5k - my limit was restricted to $25k & under (I was know as the Maverick) I normally made my decisions on the brief - heck it wasn't rocket science to established who had been wronged.

I'm a Jack of all trades master of none - I'm got a ton of qualifications to prove that.

Skate


----------



## Skate (21 December 2018)

Gringotts Bank said:


> yeh, addiction.  Not a metaphor for addiction, but a true representation of it.  No judgment here, btw.  I have the same tendency.
> 
> I wouldn't call it a release to write it down.  What you get (and what I'm getting right now), is a tiny hit of feel good neurotransmitters in response to _yet another_ thought which says "well aren't I clever!".  And you are clever, but at what cost?  Thinking uses up massive amounts of energy and will always have a negative bias.  The reason for the negative bias is that most excessive thinking revolves around problem solving.




*Let me talk about the bad Skate if I may
*
Some jobs I've had required extreme communication skills - its the only tool in the toolbox. (my communication skills)

Like any profession you had to train & train to hone those skills. I call it the skill of Conditioning people - other see it as manipulation.

I'm thinking if I should tell you about my training exercise..

Let me think ..

Skate.

*
*


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## barney (21 December 2018)

Without "thinkers" we would still be clubbing Bisons to death for a feed …… 

For example, I'm damn sure my maths ability wouldn't put a man on the Moon …. 

… even though I got a grade 1 in Maths  ….. "knowledge evolves from thinkers thinking"


----------



## Skate (21 December 2018)

@Gringotts Bank as no one reads this thread let me indulge..

*Exercise #1*
I purposely offend & upset some, I'll bring them to a rage (I'll milk that rage for all its worth)
Then I set out to condition them & have them apologise for misunderstanding me.
After a fair bit of their grovelling - I gracefully accept there apology while letter them know how hurt I was.

Now that takes skill.

I won't bore you with the others examples..

Skate.


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## barney (21 December 2018)

Skate said:


> @barney
> 1. Religion
> 2. Boxing & fighting
> 3. Debt collecting
> ...




I repeat (repeat) myself …… You are a very interesting Chap indeed ….. ASF is currently blessed to have your input ….. please continue!


----------



## Skate (21 December 2018)

barney said:


> I repeat (repeat) myself …… You are a very interesting Chap indeed ….. ASF is currently blessed to have your input ….. please continue!




@barney are you using one of my tricks..

Tell me more 

Skate.


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## barney (21 December 2018)

Skate said:


> [B][COLOR=#000000]Exercise #1[/COLOR][/B]
> [COLOR=#000000]I purposely offend & upset some, I'll bring them to a rage (I'll milk that rage for all its worth)
> Then I set out to condition them & have them apologise for misunderstanding me.
> After a fair bit of their grovelling - I gracefully accept there apology while letter them know how hurt I was.Skate.[/COLOR]





[COLOR=#000000]Curiously …. Is there a typical type of person you will try and administer this process to?[/COLOR]

[COLOR=#000000]And is there an underlying reason for your manipulation … ie. Their benefit or yours?[/COLOR]

PS No idea why the above came up as Bold … not intended lol ….


----------



## Skate (21 December 2018)

@barney another job I've had - Relief Resort Managers (now that's a profession in big demand - but boring, I don't know how It did it for 5 stints)

*Management Rights*
Know anything about management rights - I've advised & written software for that industry. That was a creamy job.

*I turned sales people in to sales professionals*
In another life I was a Sales Trainer - I didn't train the company staff, I trained the business owners directly or I trained their head trainer. (Train the trainer is a real title - go figure)

*Ford Motor Company*
I've fix two major issues for the Ford Motor Company (diagnostic engineer is my field) - they appreciated my input to solve two issues that escaped them.

I master somethings then I get weary/bored then move on.

Skate.


----------



## barney (21 December 2018)

Still curious about the type of person you might purposely offend and bring to a rage … and why


----------



## Skate (21 December 2018)

barney said:


> [COLOR=#000000]Curiously …. Is there a typical type of person you will try and administer this process to?[/COLOR]
> 
> [COLOR=#000000]And is there an underlying reason for your manipulation … ie. Their benefit or yours?[/COLOR]
> 
> PS No idea why the above came up as Bold … not intended lol ….




@barney its a means to an end.

Its not a want its a must (people must do what I want them to do without them knowing - its in my best interest)

If people realise what I do, I lose, its that simple (people don't feel the conditioning)

*Formula*
Perception = Reaction

So..

I setup their perception & get the reaction I want (simple formula)

It's all about money..

Honing my skills - sometimes I do it for fun but mostly so I keep on top of my game.

Skate.


----------



## Skate (21 December 2018)

barney said:


> Still curious about the type of person you might purposely offend and bring to a rage … and why




@barney I'll do it to anyone, there isn't a demographic - I do it to males & females (females I enjoy - their apologies are so much better & so heartfelt) 

Skate.


----------



## Skate (21 December 2018)

@barney thanks for letting me get something off my chest - I'm feeling better now

Off to watch some TV.

Skate.


----------



## barney (21 December 2018)

Skate said:


> @barney thanks for letting me get something off my chest - I'm feeling better now
> 
> Off to watch some TV.
> 
> Skate.



All good … family commitments as well …. will digest and no doubt regurgitate further over the next X days … Cheers


----------



## Gringotts Bank (21 December 2018)

"To be stupid, selfish, and have good health are three requirements for happiness, though if stupidity is lacking, all is lost". 

Gustave Flaubert

What he's saying is:

1- give up excessive thinking.  It's a disease.  (be "stupid")
2- look after yourself  (be "selfish", rather than pandering to others or trying to win praise).
3- good health looks after itself.  So it's really only 2 points.


----------



## luutzu (21 December 2018)

Skate said:


> I would like to endorse @Value Collector post.
> 
> *Albert Einstein*
> Albert Einstein famously stated: “Compound interest is the eighth wonder of the world. He who understands it, earns it... he who doesn’t... pays it.”
> ...




Jesus said it's a sin. 

Compound is so powerful that ancient empires put into law and custom to forgive all personal debt every 49 or 50 years. Debt Jubilee. 

Countries that don't find their social fabric being torn between the few that have much and many that have little to nothing. Then soon enough a more violent debt jubilee heads get lopped off and big buildings get burnt to the ground.


----------



## luutzu (21 December 2018)

Skate said:


> @tech/a I've rubbed shoulders with some really wealthy people & money is not the main motivator, they use it as a score card.
> 
> Skate.




Na, those who use money as a score card is bs you when they say money isn't the motivator. 

It's like rich people saying money doesn't matter and they don't care about it.


----------



## Value Collector (21 December 2018)

luutzu said:


> Jesus said it's a sin.
> 
> Compound is so powerful that ancient empires put into law and custom to forgive all personal debt every 49 or 50 years. Debt Jubilee.
> 
> Countries that don't find their social fabric being torn between the few that have much and many that have little to nothing. Then soon enough a more violent debt jubilee heads get lopped off and big buildings get burnt to the ground.




Compounding doesn’t have to be debt based, and any way the Bible has heaps of silly rules, it’s best not to use it as a source of morality.


----------



## luutzu (22 December 2018)

Value Collector said:


> Compounding doesn’t have to be debt based, and any way the Bible has heaps of silly rules, it’s best not to use it as a source of morality.




Yea, true.


----------



## Ann (22 December 2018)

Skate please let me start by saying, looking at your 'post' count, your 'likes' count and the time you have been posting here no-one could possibly accuse you of over-posting! If they did so, check their post count and likes. Then you may well have a basis to tell them to go and get..........well, whatever tickles your fancy at the time. 



Skate said:


> *Exercise #1*
> I purposely offend & upset some, I'll bring them to a rage (I'll milk that rage for all its worth)
> Then I set out to condition them & have them apologise for misunderstanding me.
> After a fair bit of their grovelling - I gracefully accept there apology while letter them know how hurt I was.
> ...




Wouldn't have worked on me Skate. Rage happens when one is in a state of defense. I have never felt a need to defend my position. My position may be wrong/not quite right, therefore to listen to another view or opinion may well give me an answer I have been looking for. If not an answer, then a question which will yield an answer at some later stage. I would quickly have realized what you were trying to do and would spend the rest of my time with you (days, weeks,months) very subtly winding you up until you lost your cool. I would then have given you my mona lisa smile and we both would then know who was playing whom.  



Skate said:


> *I turned sales people in to sales professionals*
> In another life I was a Sales Trainer - I didn't train the company staff, I trained the business owners directly or I trained their head trainer. (Train the trainer is a real title - go figure)




Many years ago I was a sales professional and was always in the top three (mostly number 1) of all the teams I worked with. In those days there was the first and best sales incentivization company called EF McDonald (nothing to do with hamburgers). They ran campaigns with a catalogue of the most desirable items a person could want and the catalogues were cutting edge design, years ahead of any catalogues of the day.  These catalogues were given to the salesmen and points could be achieved which in turn could be redeemed for goods. Most of the items had a female orientation to them, which was a subtle way to get the good lady wife to push her husband that little bit harder to make enough points for the goods she so dearly wanted. 
The boss of the company, I think his name was David Simonds or something like that, asked me to have dinner with himself and another and discuss incentivation with him as he knew my sales ability. Clearly for him and his company he had to continue to come up with items which would spur the salesforce to greater achievement, this is why he invited me to dinner to discuss what items would make me achieve greater results. I listened closely and felt obligated to think how I could give him the best and most honest answer. I searched inside my entire being (guts) and the only answer I could give him was to have on offer the most beautiful and tasteful object that said words to the effect 'Number One'. All other stuff in the catalogue I could buy. Being the best at something is beyond dollars.



Skate said:


> @barney I'll do it to anyone, there isn't a demographic - I do it to males & females (females I enjoy - their apologies are so much better & so heartfelt)
> 
> Skate.




This speaks volumes to me about you Skate.



Gringotts Bank said:


> "To be stupid, selfish, and have good health are three requirements for happiness, though if stupidity is lacking, all is lost".
> 
> Gustave Flaubert
> 
> ...




Gringotts Bank, I haven't heard this before. I totally agree with number 1 and 2 but number three is the most important point, good health can be lost if you listen to others while ignoring your own body. Good health can never look after itself, it needs to be nurtured and listened to as a child who is at your mercy.

Now Skate, back to the current topic of this thread, a possible name change. My suggestion would be.....

"Fanfare of a Common Man"


----------



## Skate (22 December 2018)

Ann said:


> Wouldn't have worked on me Skate. Rage happens when one is in a state of defense. I have never felt a need to defend my position. My position may be wrong/not quite right, therefore to listen to another view or opinion may well give me an answer I have been looking for. If not an answer, then a question which will yield an answer at some later stage. I would quickly have realized what you were trying to do and would spend the rest of my time with you (days, weeks,months) very subtly winding you up until you lost your cool. I would then have given you my mona lisa smile and we both would then know who was playing whom.




@Ann woman don't know their place - and your post highlights that fact.

Skate.


----------



## tech/a (22 December 2018)

luutzu said:


> Na, those who use money as a score card is bs you when they say money isn't the motivator.
> 
> It's like rich people saying money doesn't matter and they don't care about it.




Your belief perhaps from your experience.

Mine is that those who have no use for money are not motivated by money
Those who have much more than they need pay no regard to money either.

Those that want money and don’t have it have the highest regard and motivation 
Toward money


----------



## Skate (22 December 2018)

luutzu said:


> Jesus said it's a sin.
> 
> Compound is so powerful that ancient empires put into law and custom to forgive all personal debt every 49 or 50 years. Debt Jubilee.
> 
> Countries that don't find their social fabric being torn between the few that have much and many that have little to nothing. Then soon enough a more violent debt jubilee heads get lopped off and big buildings get burnt to the ground.




@luutzu  thank you for the dopamine and endorphin rush the feeling was priceless

*Eye of a needle*
Jesus said "It is easier for a camel to pass through the eye of a needle than for a rich man to enter the Kingdom of Heaven," 

This passage goes a long way towards why the ‘The Bible’ needed a new translation.

*Our mind makes up stories*
Jesus was referring to one thing & our mind creates another.

Skate


----------



## luutzu (22 December 2018)

tech/a said:


> Your belief perhaps from your experience.
> 
> Mine is that those who have no use for money are not motivated by money
> Those who have much more than they need pay no regard to money either.
> ...




I don't think I ever like money. Just that I know for sure as heck I need to have money. So there's nothing special about that. Most people work for money because bills got to be paid.

As to those who use money as a scorecard. I sure have heard of people who, with lots of money, say that they don't care for money but want lots of it to score how their achievement is against others...

I never believe their bs. 

People who doesn't care for money will never use money as a scorecard for anything. The only reason they think they don't care for money is because they already have plenty of it so doesn't think money is important. But deep down they're as greedy as fark.

Nothing wrong with wanting to have lots of money. Just don't expect others to believe you're above it when you aren't.

Those who truly doesn't care for money will often doesn't have much of it. They just have "enough". Enough to pay the bills, a roof over their family, send the kids to school, some savings for a rainy day... But most often they spend their spare time, or their life, volunteering or donating or teaching or helping. They would never use money as a measure of their worth, or anyone's worth.


----------



## SirRumpole (22 December 2018)

How many people sold out into cash before the downturn started ?

How many kept their investments and watched them decline, hoping for a recovery ?

The psychology would be interesting to know.


----------



## Skate (22 December 2018)

Ann said:


> *time*




@Ann as you have raised the word time, I would like to take the opportunity to discuss another exercise I use.  

*Exercise #2*
I won't explain the exercise in detail but it's directly related to time.

*Hint*
Do you know why movies run between 1.40 minutes to 2hrs 10 minutes on average?

Skate


----------



## luutzu (22 December 2018)

Skate said:


> @luutzu  thank you for the dopamine and endorphin rush the feeling was priceless
> 
> *Eye of a needle*
> Jesus said "It is easier for a camel to pass through the eye of a needle than for a rich man to enter the Kingdom of Heaven,"
> ...




It was from a recent interview with some American Marxist economist/historian. 

Apparently the commandment to not covet thy neighbour's wife and property was in relation to lending with interest.

That is, if you lend and expect interest, when the neighbour cannot repay both, you'd be "forced to" take his wife or daughter into slavery... then his farm too. 

Nowadays, from the gov't to the big managed funds on down to the local investors... people are hyped into debt, excessive consumption, inflated properties that'll take either a big lottery win or a lifetime or two to pay off. Since we all only have one lifetime, those "silly" enough to get into the trap will either work their azzes off to pay for the sins of their youthful ignorance, or work and pay off until they can no longer keep up then hand over everything. 

Hence, there's no Heaven and greed is good. If it ain't, lots of "fine" people will go to hell.


----------



## Skate (22 December 2018)

SirRumpole said:


> How many people sold out into cash before the downturn started ?
> 
> How many kept their investments and watched them decline, *hoping for a recovery* ?
> 
> The psychology would be interesting to know.




@SirRumpole that's a great question that I'm sure will motivate members to reflect on their strategy

*Trade and invest*
Everyone finds their own style of trading, or investing. I personally choose to Trade and invest

*Investments*
My investments are time driven - meaning minor blip don't really effect quality long term investments

*Trading*
Trading is another -I use a mechanical weekly trend trading strategy, a mechanical trading system, keeping me away from making any emotional decisions. My strategy makes those decisions for me.

I just follow the plan & pull the trigger.

@SirRumpole good traders don't *hope for a recovery* - we pray a lot (I've posted about that)

Skate.


----------



## Skate (22 December 2018)

luutzu said:


> It was from a recent interview with some American Marxist economist/historian.
> 
> Apparently the commandment to not covet thy neighbour's wife and property was in relation to lending with interest.
> 
> ...




@luutzu after you made a religious post my mind quickly turned to a strategy how to play tennis with you – what regime I would use to score the match.

I settled on pin pulls, (Pin pulls are like key changes to a singer) I would control the tempo & the direction of our chat.

I would use the pin pulls frequency rate to be the deciding factor for my personal score (all this went through my mind in a heartbeat)

That’s when I decided to switch off my Lizard brain.

Skate.


----------



## tech/a (22 December 2018)

luutzu said:


> But deep down they're as greedy as fark.




This is an emotive reaction.

So people who employ a lot of staff and as a consequence of running a good business 
looking after their staff with income well above the norm to an extent that a large majority 
have long service leave and make as a consequence way more than they will ever need
are as Greedy as Fark?


----------



## Ann (22 December 2018)

Skate said:


> @Ann as you have raised the word time, I would like to take the opportunity to discuss another exercise I use.
> 
> *Exercise #2*
> I won't explain the exercise in detail but it's directly related to time.
> ...



Probably related to shift times for theatre staff 7.30 shift start, 10.30 shift finish. Get people seated, get the rubbish picked up after the show is over. 

Although when I had a second job for 10 years as an usherette we worked till the film finished and we were paid per session, not per hour and no Sunday over time. I always got the extra Sunday shift because I didn't care about double time and a different movie was playing on a Sunday. Sometimes we used to run marathons so my shift could last from about 7.30 to midnight. I just liked getting to see movies for free and be paid at the same time, love win/win!


----------



## Wyatt (22 December 2018)

Money money money, its the root of all evil, apparently.

Money and power hang out together, but power has so many variations, from controlling other people to what I favour and that is the power to choose what to do with my time. Particularly as in getting up early and working too many hours for someone else as you get older and less interested. 

The power of choice is what motivates many.


----------



## tech/a (22 December 2018)

Skate said:


> @Ann woman don't know their place - and your post highlights that fact.
> 
> Skate.




Nor at times do men!


----------



## Ann (22 December 2018)

Skate said:


> @Ann woman don't know their place - and your post highlights that fact.
> 
> Skate.



...and that place would be Skate? (Damn this is going to be fun! )


----------



## luutzu (22 December 2018)

tech/a said:


> This is an emotive reaction.
> 
> So people who employ a lot of staff and as a consequence of running a good business
> looking after their staff with income well above the norm to an extent that a large majority
> ...




Employers who does what you describe.. anyone who set out to build a business, serve their customers, create value... make enough to pay their workers a fair wage... earn themselves a profit... Sure. That's not greed at all.

But those people do not measure their wealth as a reflection of who they are. They do not consider cash as a scorecard. It's just money and they deserve it.

If they pay their workers a decent wage; bring value to customers... the profit earned fairly... Sure, have a nice car, a big house, holidays and good school for the kids etc. 

Not all business people are as you described though. 

I just read yesterday how some company in, I think, Melbourne just shuttered its factory. Leaving hundreds of their employees without pay for this week's work; without their sick leaves, superannuation... All this now as the management systematically shifted the company's assets into a different shell company throughout the year. 

That's greed. 

People who see fair play, value creation wouldn't do that kind of stuff. They can try to make money, lots of it. BUt if it doesn't work out, they fall with it. Not screw others who worked for them. 

People who see money as a measure of their worth... they'd do stuff like that because those with the most money are obviously the better people.


----------



## Skate (22 December 2018)

Skate said:


> @Ann woman don't know their place - and your post highlights that fact.
> 
> Skate.




@Ann I can't wait any longer to say I'm so sorry

*Explanation*
1. That post is not a reflection of who I am
2. It was a quick & dirty example to evoke an emotion that's ingrained in all women from birth

@Ann you said: _"Rage happens when one is in a state of defense. I have never felt a need to defend my position"_

*Respect*
Defending from a women's perspective is another.

*Appreciation*
I really appreciated your post, the time & effort that went into its construction didn't go unnoticed.

@Ann you always prosecute your case from a strong position especially when your beliefs are challenged.

*So Sorry*
I'm so sorry (I wanted to repeat it once again) - I'm grovelling & it's coming from someone who is an expert in the field

Skate


----------



## Wyatt (22 December 2018)

So Skate tell us more about your trading system, I'm interested. 

Throw us a bit of meat, as in some backtests, trade lists or something else to assist this thread. Did you code it yourself or did you get your concepts coded up?

And tell us more about your ability to follow your system without question, this point seems to be critical.


----------



## Skate (22 December 2018)

Ann said:


> ...*and that place would be Skate?* (Damn this is going to be fun! )




@Ann I expected CAPITALS - I've taken the liberty to bold your question to me for the required affect..

*Thanks for the reply*
I need your reply to demonstrate to other how 5 little words can invoke an emotion.

I'm so sorry to use you to demonstrate this point. 

Skate.


----------



## barney (22 December 2018)

Skate said:


> @Ann
> *I'm so sorry* (I wanted to repeat it once again) - I'm grovelling & it's coming from someone who is an expert in the field
> 
> Skate




Don't fall for it @Ann ……. Skate is working an angle to enrage you ….. 

PS Anne didn't bite very hard Skate …. you may have to work harder than normal here


----------



## Skate (22 December 2018)

Wyatt said:


> So Skate tell us more about your trading system, I'm interested.
> 
> Throw us a bit of meat, as in some backtests, trade lists or something else to assist this thread. Did you code it yourself or did you get your concepts coded up?
> 
> And tell us more about your ability to follow your system without question, this point seems to be critical.




@Wyatt what a quality question & I would be more than happy to give you an answer from my perspective.

Quality questions deserve a measured answer - I'll write one up rather than you give you bunch of throwaway lines if that's okay with you.

But if you would prefer I'll shoot from the hip (its up to you)

@Wyatt trading & life in general is about making choices - I have given you one.

Skate.


----------



## Wyatt (22 December 2018)

Maybe you've got your hands full atm, please take your time


----------



## Skate (22 December 2018)

barney said:


> Don't fall for it @Ann ……. Skate is working an angle to enrage you …..
> 
> PS Anne didn't bite very hard Skate …. you may have to work harder than normal here




@barney I keep mental score cards & if @Ann or yourself knew what I'm doing I'd lose.

*Hint*
I'm not in a losing position - the game hasn't even started (I will admit, I'm smiling at the moment)

ASF is not the place for useless banter - I'm not going to play with people in here.

Skate.


----------



## Skate (22 December 2018)

Wyatt said:


> Maybe you've got your hands full atm, please take your time




@Wyatt a detailed answer it will be - you have made a good decision (IMHO)

Long post bore people so I'll take my time to address each of your question succinctly as possible

Skate.


----------



## barney (22 December 2018)

Skate said:


> @barney
> 
> ASF is not the place for useless banter - I'm not going to play with people in here.
> 
> Skate.




 … The banter, whether it be determined as useless or otherwise, is enjoyable for all.

I'm out for the arv but will drop in again later to adjudicate said banter  Cheers.


----------



## Ann (22 December 2018)

Ann said:


> ...and that place would be Skate? (Damn this is going to be fun! )




Bugger, I was hoping for a bit of fun and stimulation here....all I got was....



Skate said:


> @Ann I can't wait any longer to say I'm so sorry.
> @Ann you always prosecute your case from a strong position especially when your beliefs are challenged.
> *So Sorry*
> I'm so sorry (I wanted to repeat it once again) - I'm grovelling & it's coming from someone who is an expert in the field
> Skate




Now it sounds more like you are looking for a Dominatrix in a black leather corsette to play with Skate!  Not my thing sorry!


----------



## Skate (22 December 2018)

tech/a said:


> Nor at times do men!




@tech/a women strive for equality every day - men shouldn't allow women to have equality they deserve better.

I gave @Ann an example - I fumblingly expressed that a "woman didn't know their place" 

@Ann perceived I was putting her down & putting all women down in general - I was lifting her up, I was lifting all women up & I was deeply upset & hurt @Ann got that impression from me. 

I was saddened & my feeling were deeply hurt by @Ann's response.

I was so deeply remorseful that @Ann interpreted my comments other than intended so I was forced to say sorry more than once. 

Men holding outdated views reflect poorly on us as a society.

Skate


----------



## Skate (22 December 2018)

Ann said:


> Bugger, I was hoping for a bit of fun and stimulation here....all I got was....
> 
> 
> 
> Now it sounds more like you are looking for a Dominatrix in a black leather corsette to play with Skate!  Not my thing sorry!




@Ann I'm sorry you jumped to the wrong conclusion with regards to my original post.

I've explained to @tech/a that you were wrong to form your opinion so quickly & apparently @tech/a jump to the same conclusion as you as reflected in his post.

Let me say sorry once again - I'm so sorry you jumped to the wrong conclusion & I forgive you.

The discussion has now ended on this topic.

Skate.


----------



## SirRumpole (22 December 2018)

Skate said:


> I was so deeply remorseful that @Ann interpreted my comments other than intended so I was forced to say sorry more than once.
> 
> Men holding outdated views reflect poorly on us as a society.




Oh dear, going down PC road again.

Ann sounds like a good egg who would enjoy an argument not a raging feminist who wants an apology from a man for opening a door for a woman.

Feminism has men running down the humble road far too much. If women want "equality" then sometimes they need to take the rough with the smooth, and I emphasise I'm talking verbally only not about violence of any sort.

Anyway if this comment is too controversial for this forum, Joe has my permission to delete it at any time.


----------



## Skate (22 December 2018)

SirRumpole said:


> Oh dear, going down PC road again.
> 
> Ann sounds like a good egg who would enjoy an argument not a raging feminist who wants an apology from a man for opening a door for a woman.
> 
> ...




@SirRumpole I value your opinion & I value the opinions others. Its not the point whether I agree or disagree with them but it does give me an insight to what others believe.

Skate.


----------



## willy1111 (22 December 2018)

Skate said:


> @tech/a women strive for equality every day - men shouldn't allow women to have equality they deserve better.
> 
> I gave @Ann an example - I fumblingly expressed that a "woman didn't know their place"
> 
> ...




What makes you think @Ann perceived you to be putting her and all women down in general?  Her response didn't indicate that to me.


----------



## Skate (22 December 2018)

willy1111 said:


> What makes you think @Ann *perceived you to be putting her and all women down in general? * Her response didn't indicate that to me.




@willy1111 forget the words @Ann used but concentrate on context.

@willy1111 you said _"Her response didn't indicate that to me" _well that's nice (reference to Mrs Browns Boys)

I trust you are taking an interest in my posts & enjoying the thread.

I don't want to have to repeat myself - I've posted the formula for perception its a few posts back. (you need to read it)

Whether your right or wrong isn't important - whats more important is that this thread gives you the ability to express your views without being ridiculed or challenged.  

Thank you @willy1111 for expressing yours.

Skate.


----------



## Skate (22 December 2018)

Wyatt said:


> So Skate tell us more about your trading system, I'm interested.
> 
> Throw us a bit of meat, as in some backtests, trade lists or something else to assist this thread. Did you code it yourself or did you get your concepts coded up?
> 
> And tell us more about your ability to follow your system without question, this point seems to be critical.




So not to exhaust readers - I'll post in bursts..

@Wyatt you wanted to know more about my trading system

*My trading system*

My personal trend trading strategy trades the top 500 companies, the All Ordinaries on the ASX markets, I only trade with the trend and if the Index filter turns on I trade and if the index filter turns off I don’t trade.

The Index Filter is a safety device that keeps me in and out of the market at just the right time.

When the market is not trending in an upward direction the filter turns off and my strategy won’t generate buys signals, thus protecting my capital.

I only trade when the (ASX) the ‘All Ordinaries’ is buoyant.

A single line of code generates my buy and sell signals and this is done without any emotional involvement.

The index filter also alters our trailing stoploss settings, our stoploss settings are more aggressive (very aggressive) when the index filter is on and our stoploss shortens considerably when the index filter turns off.

The index filter is a simple moving average over a set time frame.

Once the trailing stoploss has been hit a sell is generated and it is actioned without hesitation.

The mathematical advantage of any profitable system is driven by riding the winners as long as you can and cutting the losers quickly. This has been quoted many times before and its worth remembering

Skate


----------



## Skate (22 December 2018)

Skate said:


> So not to exhaust readers - I'll post in bursts..
> 
> @Wyatt you wanted to know more about my trading system
> 
> ...




@Wyatt you wanted a bit of meat ?
*
You said: "*_Throw us a bit of meat, as in some backtests"_

I’m not sure what you are after with that comment so I’ll vaguely answer in a 2 part theme that may help others save some money

*Theme 1*
Advice that may help

This is the best piece of advice I can give you

*Repeating*
Please don’t gloss over this piece of advice but take time to unpack it – this is so important it’s a life skill well adaptable to trading & it will be in your best interest to remember it:

"Don’t react, respond. Responding gives you time to think"

*Scammers*
* Don’t fall for scam artists.
* Scammers will suck you in to pay thousands of Dollars for courses about some new secret information that have been publicly available for years.
*There isn't anything new under the sun and there isn't any special secret out there that I’m aware of
*Almost everything is publicly known and information is constantly being sold as new information its just becomes repetitive.
*As a general comment - there isn't anything new under the sun out there.

Read my post on being a wimp - you will learn a lot from that post alone.

Skate.


----------



## Skate (22 December 2018)

Skate said:


> @Wyatt you wanted a bit of meat ?
> *
> You said: "Throw us a bit of meat"*
> 
> ...





Skate said:


> @Wyatt you wanted a bit of meat ?
> *
> You said: "*_Throw us a bit of meat, as in some backtests"_
> 
> ...




@Wyatt this is theme 2 

*Backtesting*
You need to do your own backtesting and most off-the-shelf trading software has this backtesting feature these days. I learnt to code using Metastock (its a charting program that @tech/a used to develop his trading strategy)

Metastock had its limitations as far as backtesting goes so I made the switch to Amibroker. I had to learn a new language as Amibroker Formula Language (AFL) is a mixture of C & C++

Learning to write in a new code was a challenge but with help & guidance from ASF members the transition was made easier. 

Everyone must trade a style that fits their personality as you will not follow a system that does not suit you.

Regardless, you cannot develop the confidence to pull the trigger after multiple losses in a row without having done the required backtesting yourself - this I can guarantee you.

Skate.


----------



## Skate (22 December 2018)

Skate said:


> @Wyatt this is theme 2
> 
> *Backtesting*
> You need to do your own backtesting and most off-the-shelf trading software has this backtesting feature these days. I learnt to code using Metastock (its a charting program that @tech/a used to develop his trading strategy)
> ...



@Wyatt you went on to ask - Trade lists or something else to assist this thread (I'll break your question up and answer them as theme groupings)

Group 1

*What market do we trade?*
Trading is not limited to the Australian Securities Exchange (ASX) as the world is your oyster, trading is not limited to the country of your residence.

Trading in different countries adds complexities due to their taxation and capital gains laws and how they are appropriated.

Most western countries have reciprocal Investment and tax treaties between participating governments assuring investors don’t circumvent their financial obligations in regard to meeting those taxation requirements.

More to come.

Skate


----------



## Skate (22 December 2018)

Skate said:


> @Wyatt you went on to ask - Trade lists or something else to assist this thread (I'll break your question up and answer them as theme groupings)
> 
> *What market do we trade?*
> Trading is not limited to the Australian Securities Exchange (ASX) as the world is your oyster, trading is not limited to the country of your residence.
> ...




@Wyatt The second part to explain: Trade lists or something else to assist this thread 

Group 2

*Within the market how do we choose which Index to trade?*

If you decide to invest locally in the ASX you need to evaluate the level of risk that you are willing to absorb to determine which index or combination of indexes that are suitable for you to trade

The All Ordinaries (ASX: XAO) comprises of the top 500 companies by market cap and it has a mix of safe, stable and aggressive companies that enjoys more volatility than all the indexes listed above.

*XAO*
The All Ordinaries for me has the right risk/reward combination for a growth portfolio & is well suited to any Trend Trading Strategy – it’s a bit of a roller coaster but the rewards are larger with the corresponding disadvantage of higher risk.

*Nail biting*
Indexes above the All Ordinaries have nail biting volatility and it’s akin to hanging on to a cliffs edge just by your fingertips, meaning trading an Index above the All Ordinaries you’ll require nerves of steel or at the very least you need to be a very hardened punter.

Skate.


----------



## Skate (22 December 2018)

Skate said:


> @Wyatt The second part to explain: Trade lists or something else to assist this thread
> 
> Group 2
> 
> ...




@Wyatt you went on to say: tell us more about your ability to follow your system without question this point seems to be critical

*Confidence is the key*
Backtesting gives  you the confidence not the ability to follow your system.

*Effort*
I know it’s a big ask but if you would be kind enough to read all my post they will answer most of your question without you knowing & I’ve written them hopefully in a fashion for you to want to read another after another. When it comes to trading there are no short cuts & no free lunches.

*The market is not logical or reasonable*
The simple truth is that the market is not logical or reasonable. It is emotional and unstable. A market is nothing more than a crowd of people that has absolutely no regard for what any one person may think and most times rational people make irrational decisions.

*Nothing new*
I often hear that markets have changed and new rules are needed for the new game, well the markets do change but the underlying fundamental rules for success don’t seem to.

*You need a trading system*
It is my belief that to succeed in the financial markets you need to have some kind of trading system in place.

Skate.


----------



## Skate (22 December 2018)

Skate said:


> @Wyatt you went on to say: tell us more about your ability to follow your system without question this point seems to be critical
> 
> *Confidence is the key*
> Backtesting gives  you the confidence not the ability to follow your system.
> ...




@Wyatt asked another question: Did you code it yourself or did you get your concepts coded up

Fist let me make a general comment if I may..

*Dump it here*
My intention for starting a ‘Dump it here” thread was to share my experiences in the hope it may help newcomers understand some of the challenges traders face and endeavour to smooth out the learning curve.

*Educational information*
I covered the most important articles I could think of & posted them in a lighthearted way. Others may gain an understanding of what is required & expected of them having been informed of the emotional roller coaster they will experience with the associated the financials risk going forward - the views are from my experiences & perspective.

Skate.


----------



## SirRumpole (22 December 2018)

This is also a very educational thread.

Well done Skate.


----------



## Skate (22 December 2018)

Skate said:


> @Wyatt asked another question: Did you code it yourself or did you get your concepts coded up
> 
> Fist let me make a general comment if I may..
> 
> ...




A further response to @Wyatt question: Did you code it yourself or did you get your concepts coded up

*Did you code it yourself ? *- YES 
Rome wasn't built in a day - coding is always a work in progress (ask a artist [painter] when his work is finished - it never is & they are never happy with their results) With the assistance of a great coder pointing me in the right direction & answering my questions I have a half decent code.

*{where} Did you get your concepts ?*
I've never had an original idea of my own when it comes to trading - I've stood on the shoulders of others who came before me. Why invent the wheel, there is nothing new out there.

*Technology*
For all the advancements in technology the market itself hasn’t changed much. It is still driven by the same two opposing forces, fear and greed.

*Booms and busts*
There will always be share market booms and busts, but the share market has consistently out preformed most other investment classes.

*Speculating*
These moves affect the various market participants in different ways, but one thing is true, the worst affected are those who are randomly speculating without a sound trading system or the right tools.

*Simple methods are the best*
By following some simple tried and tested methods, we can learn to protect our capital and improve our overall investment returns.

Skate.


----------



## Skate (22 December 2018)

SirRumpole said:


> This is also a very educational thread.
> 
> Well done Skate.




well thank you kind Sir..

Skate.


----------



## Skate (22 December 2018)

Skate said:


> A further response to @Wyatt question: Did you code it yourself or did you get your concepts coded up
> 
> *Did you code it yourself ? *- YES
> Rome wasn't built in a day - coding is always a work in progress (ask a artist [painter] when his work is finished - it never is & they are never happy with their results) With the assistance of a great coder pointing me in the right direction & answering my questions I have a half decent code.
> ...




@Wyatt are you asking a deeper question when you ask about my concepts. 

I'm reading between the lines here - I'm guessing you want to know the nuts & bolts of my strategy is that correct?

If so, you only need to ask - if not, that's Okay..

I hope I've answered your questions to your satisfaction

Skate.


----------



## Wyatt (22 December 2018)

Thanks Skate for your detailed response. 

This thread is an excellent point of reference for new traders.


----------



## Smurf1976 (23 December 2018)

Never judge books by their covers. It's an old saying but a very true one. 

Don't assume whoever's driving the truck or working on the factory floor doesn't understand the business. 

That concept applies to everything. Not having a degree or not owning an expensive car means nothing more than that. It doesn't mean the person is incapable of obtaining a degree or an expensive car, it only tells you that they have not done so and there's a huge difference there.

Put aside the stereotypes and preconceived ideas and you'll learn many things from seemingly unlikely people.


----------



## luutzu (23 December 2018)

Smurf1976 said:


> Never judge books by their covers. It's an old saying but a very true one.
> 
> Don't assume whoever's driving the truck or working on the factory floor doesn't understand the business.
> 
> ...




The story of Theranos illustrate this very well.

If you haven't, it's quite a read. *Bad Blood* by John Carreyrou goes behind the scenes. He uncovered the fraud and scam Theranos founder pulled for some 13 years. Costing "sophisticated investors" about $1B... and a heck of a lot of people their health, possibly life.

Basically, Theranos founder was a 19 year old female Standford dropout who claimed she discovered a new tech of diagnosing pretty much all the blood tests known to man with a few drops of blood pricked from your fingertip - as opposed to the current vials and vials of it. 

Got a few millions to kick off; then got herself former US Sec.of State on board; got a famous Silicone Valley VC investor - guy who brought Oracle to the world... then got Henry Kissinger, former Sec of Defense etc. etc.

With these big names, new investors assume they must know what they're doing; with military/pentagon ties they assume lies about the tests being used in the military to be true. On and on until Rupert Murdoch, the Waltons heirs, Carlos Slim etc., all invested because, again... they assume big names mean it must be true and good. 

Ended up losing close to $1B.


----------



## Skate (23 December 2018)

Smurf1976 said:


> Never judge books by their covers. It's an old saying but a very true one.
> 
> Don't assume whoever's driving the truck or working on the factory floor doesn't understand the business.
> 
> ...




*In one of my courses*
@Smurf1976 in one of my courses I have a whole section devoted to: "Why you should never qualify people"

*Decisions*
Qualifying people leads to poor decision making.

*Disclaimer*
I don't practice what I preach/teach - I qualify everyone (just to see if I was right or wrong)

Skate.


----------



## Skate (23 December 2018)

Wyatt said:


> Money money money, its the root of all evil, apparently.
> 
> Money and power hang out together, but power has so many variations, from controlling other people to what I favour and that is the power to choose what to do with my time. Particularly as in getting up early and working too many hours for someone else as you get older and less interested.
> 
> The power of choice is what motivates many.




*Learning leads to Knowledge or Action*
@Wyatt as the saying goes, if what you learn leads to knowledge, you become a fool - but if what you learn leads to action, you can become wealthy.

A successful person
The difference between a successful person and others is not a lack of strength, not a lack of knowledge, but rather a lack of will.

*Knowledge*
Knowledge is not power, execution is.

Skate.


----------



## Wysiwyg (23 December 2018)

Smurf1976 said:


> Put aside the stereotypes and preconceived ideas and you'll learn many things from seemingly unlikely people.



There be a wise quote.


----------



## Skate (23 December 2018)

Skate said:


> @willy1111 forget the words @Ann used but concentrate on context.
> 
> @willy1111 you said _"Her response didn't indicate that to me" _well that's nice (reference to Mrs Browns Boys)
> 
> ...




*Civility when expressing an opinion *
I've replied to @willy1111 explaining when members express an opinion it's not whether they are right or wrong or whether you’re right or wrong that's not what is important.

What is important - is the words you use to express an alternative point of view or express an opinion from your experience.

This thread gives you the ability to express your views without being ridiculed or challenged.

*Appreciation*
I appreciate every view expressed on ASF, I don't agree with some but others I take on board & feel wealthier for it.

*Acceptance*
We can all agree to disagree - we can all contest our ideas but to express those views in a manner that's unacceptable is not on.

*Belief*
Your belief system defines whether you agree or disagree with a members post but if you don’t listen you forgo the right to understand their point of view..

*A few members with conviction*
I've listed a few forum members I enjoy reading who prosecute their case forcefully with conviction and when they have something to say it pays to listen. Some posts I re-read to pickup the gems they causally scatter.

*@Ann*
@barney
@bigdog
@captain black
@Commons
@cynic
@Darc Knight
@explod
@Garpal Gumnut
@greggles
@Gringotts Bank
@jbocker
@Joe Blow
@kid hustlr
@luutzu
@mcgrath111
@myrtie100
@qldfrog
@Sdajii
@Smurf1976
@sptrawler
@tech/a
@Tink
@Trav.
@Value Collector
@Wyatt
@Wysiwyg


----------



## Skate (23 December 2018)

TAG

@Wysiwyg - Reality is when an indeterminable number of minds agree on something.

I should have named 'TAG' - GEMS (the description would be more apt)

Skate.


----------



## barney (23 December 2018)

Skate said:


> I've listed a few forum members I enjoy reading who prosecute their case forcefully with conviction and when they have something to say it pays to listen.




The Devil in the detail is often the most helpful indeed


----------



## barney (23 December 2018)

Skate said:


> *Reality is when an indeterminable number of minds agree on something*.




And often times the exact opposite


----------



## Wysiwyg (24 December 2018)

barney said:


> And often times the exact opposite



 Or, one man's reality is another man's disbelief.


----------



## Skate (24 December 2018)

Smurf1976 said:


> Never judge books by their covers. It's an old saying but a very true one.
> 
> Don't assume whoever's driving the truck or working on the factory floor doesn't understand the business.
> 
> ...




*Words of Wisdom*
The original idea behind the 'Dump it here' thread was to give a voice so others may express their views when it comes to trading with the sole purpose of helping others.

A few members have dropped a few gems, some have dropped quotes - both have been welcomed & appreciated.

Skate.


----------



## Skate (24 December 2018)

Skate said:


> *Comma's make a difference as well
> *
> A comma can make the difference if you get a horse or not.
> 
> ...




*Muddling words*
I've posted about muddling words & how they can totally change the meaning/message or what was originally intended. (Dump it here thread - Page 27 Post #269)

*Do I get a horse*
I've posted how a Comma decides if you get a horse or not. (Dump it here thread - Page 27 Post #270)

*Suppository*
I don't want this thread to become a "suppository of all wisdom" (AS Tony Abbott famously once said) This is a another example of muddling words.

*From the mouth of a Rhodes scholar*
Tony Abbott - _"however smart, however well-educated, however experienced.. is the suppository of all wisdom."
_
Not quite the same as a repository - "the repository of all wisdom." but so close..

*Where to stick Tony's quote*
It would rude to say where & too obvious..

Skate.


----------



## Skate (24 December 2018)

Darc Knight said:


> I know old Footballers suffer from head knocks (memory loss etc) as they age, but I've been knocked out or chooked out over a dozen times but never was I told I couldn't post on an internet forum. Just jump back up, run back into the defensive line or keep on swinging
> 
> This new generation, too much cotton wool
> 
> i better go check how WSI is doing




*I want to make a comment & Dump it here.

Boxing & trading*
Trading is like being a punching Bag (Dump it here thread - Page 4 Post #35)
No matter how good you are you still take hits (Dump it here thread -Page 7 Post #65)

*We all feel pain at some stage*
Even when you are skilled at trading/fighting at some stage you will experience pain.

*The next post is for @Darc Knight *
@Darc Knight I've been knocked out but I've never been choked out, I've never taken an American beating but have experienced an Aussie bashing.

The American way = They use a Baseball bat
The Aussie way = A cricket stump is their choice of weapon

There are other heading I could have used 'sporting equipment' or 'hand tools' (the cricket stump, the squash racket - both required stitches & dental work)

@Darc Knight you said _"This new generation, too much cotton wool" 
_
Your comment is valid & is highly subjective - it depends on the people you associate with.

It cracks me up every time a Doctor says _"this is going to hurt"_

Skate.


----------



## Darc Knight (24 December 2018)

One of the reasons "more mature" folk such as yourself Skate, and others, deserve respect isn't just the Wisdom you have and the contribution you've made to this great land, but the fact there was less "cotton wool wrapping".
Not that kids don't have it tough now, just that it's not that honest Aussie Battler thing as much anymore IMO.


----------



## tech/a (24 December 2018)

Skate said:


> *I want to make a comment & Dump it here.
> 
> Boxing & trading*
> Trading is like being a punching Bag (Dump it here thread - Page 4 Post #35)
> ...




From a long association with Martial Arts I have finally come to rest with Krav Maga
Similar to trading ——it is lethal ,it appears to have no rules , there are many alternatives available during a fight.
Pain is always present and welcomed,much is learned as you go through pain. You can be taught how to minimise pain.


----------



## Skate (24 December 2018)

tech/a said:


> From a long association with Martial Arts I have finally come to rest with Krav Maga
> Similar to trading ——it is lethal ,it appears to have no rules , there are many alternatives available during a fight.
> Pain is always present and welcomed,much is learned as you go through pain. You can be taught how to minimise pain.




@tech/a people struggle with the markets because of the very reason you touched on about rules:

*Rules*
There are no RULES in the markets and most people like ‘rules’ and like to be told what to do. People are conditioned from childhood to listen to authority and follow ‘rules’.

*Excess freedom*
The problem is that 'excess freedom' cause people to become overwhelmed and fearful and lose money because they do not 'know' what to do.

*The constant*
Human Nature never changes, the Markets and players change, but human nature remains constant.

*Pain*
@tech/a  you said: _"Pain is always present and welcomed,much is learned as you go through pain. You can be taught how to minimise pain" _

*The great motivator*
I've never welcomed pain and from experience the avoidance of pain is a motivator to hone your skills..

@tech/a I'm not disagreeing with what you have written about pain - but - I align more with the quote from 'The Bible'

*Let me quote 'The Bible'*
Acts 20:35 King James Version (KJV)
"It is more blessed to give than to receive"

I live by that premise.

Skate.


----------



## Darc Knight (24 December 2018)

Skate said:


> *Pain*
> 
> @tech/a I'm not disagreeing with what you have written about pain - but - I align more with the quote from 'The Bible'
> 
> ...






Pain, better to give than to recieve! 
Pure GOLD Skate!


----------



## Skate (24 December 2018)

Darc Knight said:


> Pain, better to give than to recieve!
> Pure GOLD Skate!




@Darc Knight I feel like 'dick' at the moment, I spent over 6 years of my life translating 'The Bible' & I replied to @tech/a by quoting from one of my reference papers the (KJV) version.

I should have quoted the verse from my book.

*Acts 20:35 Easy Speak Version (an extract from my book)*
20:35 By all these things, I have shown you that by working in this way we must help the weak, and remember the words of the Lord Jesus that he himself said, ‘It is more blessed to give than to receive.’

Below is an extract from an early draft of my book, the Easy Speak Version (an Aussie translation)

*Introduction
*
From December 1999 to May 2006 I was consumed with examining a book that I had little understanding of, other than the stories from my childhood – I thought if I wanted to know more about this book so would others - but I found this not to be the case.

Over a 6 year period it allowed me to better understand ‘the book’ a book I had only glanced at in my youth as I’ve always been curious to know what was written.

Learning and trying to understand ‘The Bible’ I decided to write a modified version of the book and I translated it into an easy speak version so anyone who read it would have an easy read and have a better understanding of what it contained.

Before you think - how can someone alter the word of God, many ‘before me’ have done exactly that.

It was a struggle to translate the words and even harder to absorb the meaning of the words into an acceptable meaning we understand today.

The translation was a long and complicated one.

One of the most important English translations of the twentieth century I believe is the Bible you are about to read.

The ‘Easy Speak Version’ is a revision of the KJV and ASV which many consider to be the first of the “modern” Australian translations.

Skate.


----------



## Gringotts Bank (24 December 2018)

Mark Twain.  chapter 11 Mysterious Stranger.  I like short cuts and this is a ripper. 
--------------------------------------------------------------------------------------------------

For as much as a year Satan continued these visits, but at last he came less often, and then for a long time he did not come at all. This always made me lonely and melancholy. I felt that he was losing interest in our tiny world and might at any time abandon his visits entirely. When one day he finally came to me I was overjoyed, but only for a little while. He had come to say good-by, he told me, and for the last time. He had investigations and undertakings in other corners of the universe, he said, that would keep him busy for a longer period than I could wait for his return.

"And you are going away, and will not come back any more?"

"Yes," he said. "We have comraded long together, and it has been pleasant--pleasant for both; but I must go now, and we shall not see each other any more."

"In this life, Satan, but in another? We shall meet in another, surely?"

Then, all tranquilly and soberly, he made the strange answer, "There is no other."

A subtle influence blew upon my spirit from his, bringing with it a vague, dim, but blessed and hopeful feeling that the incredible words might be true--even must be true.

"Have you never suspected this, Theodor?"

"No. How could I? But if it can only be true--"

"It is true."

A gust of thankfulness rose in my breast, but a doubt checked it before it could issue in words, and I said, "But--but--we have seen that future life--seen it in its actuality, and so--"

"It was a vision--it had no existence."

I could hardly breathe for the great hope that was struggling in me. "A vision?--a vi--"

"Life itself is only a vision, a dream."

It was electrical. By God! I had had that very thought a thousand times in my musings!

"Nothing exists; all is a dream. God--man--the world--the sun, the moon, the wilderness of stars--a dream, all a dream; they have no existence. Nothing exists save empty space--and you!"

"I!"

"And you are not you--you have no body, no blood, no bones, you are but a thought. I myself have no existence; I am but a dream--your dream, creature of your imagination. In a moment you will have realized this, then you will banish me from your visions and I shall dissolve into the nothingness out of which you made me....

"I am perishing already--I am failing--I am passing away. In a little while you will be alone in shoreless space, to wander its limitless solitudes without friend or comrade forever--for you will remain a thought, the only existent thought, and by your nature inextinguishable, indestructible. But I, your poor servant, have revealed you to yourself and set you free. Dream other dreams, and better!

"Strange! that you should not have suspected years ago--centuries, ages, eons, ago!--for you have existed, companionless, through all the eternities. Strange, indeed, that you should not have suspected that your universe and its contents were only dreams, visions, fiction! Strange, because they are so frankly and hysterically insane--like all dreams: a God who could make good children as easily as bad, yet preferred to make bad ones; who could have made every one of them happy, yet never made a single happy one; who made them prize their bitter life, yet stingily cut it short; who gave his angels eternal happiness unearned, yet required his other children to earn it; who gave his angels painless lives, yet cursed his other children with biting miseries and maladies of mind and body; who mouths justice and invented hell--mouths mercy and invented hell--mouths Golden Rules, and forgiveness multiplied by seventy times seven, and invented hell; who mouths morals to other people and has none himself; who frowns upon crimes, yet commits them all; who created man without invitation, then tries to shuffle the responsibility for man's acts upon man, instead of honorably placing it where it belongs, upon himself; and finally, with altogether divine obtuseness, invites this poor, abused slave to worship him!...

"You perceive, now, that these things are all impossible except in a dream. You perceive that they are pure and puerile insanities, the silly creations of an imagination that is not conscious of its freaks--in a word, that they are a dream, and you the maker of it. The dream-marks are all present; you should have recognized them earlier.

"It is true, that which I have revealed to you; there is no God, no universe, no human race, no earthly life, no heaven, no hell. It is all a dream--a grotesque and foolish dream. Nothing exists but you. And you are but a thought--a vagrant thought, a useless thought, a homeless thought, wandering forlorn among the empty eternities!"

He vanished, and left me appalled; for I knew, and realized, that all he had said was true.

---------------------------

It's brilliant, and like anything brilliant is very easy to misinterpret.  Some of it is literal (and will be misinterpreted as metaphorical), some metaphorical (and will be misinterpreted as literal). But it's all there, summed up in a single chapter.


----------



## Skate (24 December 2018)

Gringotts Bank said:


> It's brilliant, and like anything brilliant is very easy to misinterpret. Some of it is literal (and will be misinterpreted as metaphorical), some metaphorical (and will be misinterpreted as literal). But it's all there, summed up in a single chapter.




@Gringotts Bank I would like to quote @Darc Knight & say "PURE GOLD"

There's enough information in your post to write a dozens books.

I've read a lot of books & gained so much pleasure in reading them.

*Last minute Christmas suggestion *
If you are looking for that last minute gift for your wife/partner/girlfriend - I can recommend a book that's given me so much pleasure even though I have not read a single word, but my wife has.

It got to the stage where I had to ask my wife to read slower, my stamina was failing, I couldn't keep it up.

*Quote*
"Once a King always a King but once a K*night* is enough"

*Book suggestion*
"Fifty Shades of Grey"

Or any in the series of erotic novels by E. L. James.

The trilogy consists of "Fifty Shades of Grey", "Fifty Shades Darker" and "Fifty Shades Freed"

Don't forget to like my post after she reads them (That's if you have the energy)

Skate.


----------



## qldfrog (24 December 2018)

Skate said:


> @Gringotts Bank I would like to quote @Darc Knight & say "PURE GOLD"
> 
> There's enough information in your post to write a dozens books.
> 
> ...



Worst writing ever but as you pointed, YOU do not have to read it to appreciate ....by the way, who's gift is it..your partner's?


----------



## Skate (24 December 2018)

qldfrog said:


> Worst writing ever but as you pointed, YOU do not have to read it to appreciate ....by the way, who's gift is it..your partner's?




@qldfrog I can't comment on E. L. James writing style or the contents of any of the books in his erotic trilogy.

All I can say about E. L. James novels is this: "I gained a lot of pleasure from my wife reading them"

I don't think a man would enjoy reading an erotic novel. (I could stand to be corrected)

The last minute gift suggestion is for your wife/partner/girlfriend.

*Better still*
I suggest you buy any one of the books in E. L. James trilogy and give them as an additional present for your wife/partner/girlfriend. Your Christmas break will be more than enjoyable.

*Personal Recommendation*
Any of E. L. James series of books is a gift that keeps on giving..

Skate.


----------



## barney (24 December 2018)

Skate said:


> [
> Any of E. L. James series of books is a gift that keeps on giving..
> Skate.




I suspect you may not be as old as your Avatar/Comments might suggest


----------



## Xendragon (24 December 2018)

Whipsaw Revisited ..
Came across this http://www.newtraderu.com/2011/12/11/ed-seykotas-6-rules-from-the-whipsaw-song/
Fleshes out a bit more the concepts in the song.


----------



## Skate (24 December 2018)

barney said:


> I suspect you may not be as old as your Avatar/Comments might suggest




@barney I wanted to make another comment if I may - its Christmas after all..

*Charles Darwin*
My avatar is of Charles Darwin.

My wife knows I've been posting on ASF & noticed my avatar, questioning why I would use a photo of myself without my glasses on..

*Long story short* 
It took some convincing but my wife now accepts the photo is not of me (you know how people say you grow to look like your pet - well it appears I've grown to look like my hero) I've never shave in my life & the design of my beard changes with the image I want to project. (my wife prefers the Judge/Doctor/Professional image - short & well groomed rather than the rough & rugged look) 

*Santa*
I'm 65 & If I had a dollar for every time someone called me Santa - I wouldn't need to trade, I would be one wealthy guy. My beard may be a fraction longer than in the avatar & snow white.

Put a pair of rimless glasses on Charles Darwin & that's what I look like exactly..

The reason I'm telling you this is three fold..

So you can put a face to the person posting. (a picture paints a thousand words)
My posts are honest, open & frank - if you haven't noticed (I have nothing to hide)
It's Christmas and children love me this time of the year (I look like the real deal in a Santa suit)
I've had a colorful life & the looks to match.

Skate.


----------



## Skate (24 December 2018)

Xendragon said:


> Whipsaw Revisited ..
> Came across this http://www.newtraderu.com/2011/12/11/ed-seykotas-6-rules-from-the-whipsaw-song/
> Fleshes out a bit more the concepts in the song.




@Xendragon I'm impressed that you have taken notice of my post & followed through to understand a Trend Trading Strategy a little better.

My aim is to educate & help others - I'm always working an angle (what is the angle?)

*I'm trying to affect readers behaviour*
If my posts affect your behaviour I'm a winner - that's my end game..

Skate.


----------



## Skate (24 December 2018)

barney said:


> Don't fall for it @Ann ……. Skate is working an angle to enrage you …..
> 
> PS Anne didn't bite very hard Skate …. you may have to work harder than normal here




@barney you said - _"Don't fall for it @Ann , Skate is working an angle" (_you're correct @barney - I'm always working an angle)

*What's my angle*
If one of my posts "*affect your behaviour"* I'm a winner..

Skate


----------



## barney (25 December 2018)

Skate said:


> @barney
> *Santa*
> I'm 65 & If I *had a dollar for every time someone called me Santa* - I wouldn't need to trade
> 
> ...




I have known a "couple of Santas", and invariably they have always been totally likeable, approachable and generally straight shooters ….. I suspect from your postings that you fit the Santa tag perfectly, and, we would likely get along very well especially if chewing the fat around a BBQ or similar …  Although I suspect I would do the bulk of the listening and learning .... which is what I prefer anyway

Cheers M8 and I'm sure you will have the Christmas you deserve


----------



## Skate (26 December 2018)

tech/a said:


> BLG
> DNA
> GAS
> TER
> ...




@tech/a I'm interested in one of your picks in the Tipping Competition for 2019 (TER) Terracom Ltd 

Would you care to explain the reason behind your pick (TER) if you have the time or desire that is, Terracom Ltd was kind to me once.

The other picks a mean reversion guesstimate comes to mind - I'm not saying a 'Mean Reversion strategy' is the reason for your picks its the story that my mind created.

Skate.


----------



## Skate (26 December 2018)

*Re-posted without permission
*
2nd Feb 2011 (Equititrust? thread - Page 7 Post #62)

@No Trust posted a 'Gem' & it a worthy to Dump it here..
_"A few words of interest for those with mortgage fund investments. When a mortgage fund tries to act like a bank and lend funds to developers, there is a fundamental flaw in the model"_

Skate.


----------



## Skate (26 December 2018)

Vale @pixel

*Respect*
I respected @pixel and remember him fondly. (I enjoyed @pixel's posts & ASF is poorer from his passing)

*Personal*
I re-post members TAG's & Dump it here, tags are sometimes a reflection of beliefs but all tags have a personal attachment.

@pixel's *TAG*
_"DYOR! In life as in trading, I follow two rules that were inspired by Carl Sagan:
(1) There are no sacred truths. All assumptions must be critically examined. Assertions from authority are worthless. (2) Anything inconsistent with observed facts must be discarded or revised. We must understand the World as it is, not confuse how it is with how we wish it to be"_

If I was considering using a tag it would be the last paragraph of @pixel's. (Words of wisdom)

*Personal endorsement *(for what its worth)
"We must understand the World as it is, not confuse how it is with how we wish it to be"

Skate.


----------



## Smurf1976 (26 December 2018)

Skate said:


> @No Trust posted a 'Gem' & it a worthy to Dump it here..
> _"A few words of interest for those with mortgage fund investments. When a mortgage fund tries to act like a bank and lend funds to developers, there is a fundamental flaw in the model"_




Which brings to mind a related point.

When any business moves outside its area of competency, thinking that the same approach which has worked thus far ought to work in another market or industry, that's when major stuff ups tend to occur.

The smart ones start with a small trial, typically making no fuss about it, and see if the concept is valid or not. An example of that would be the launch of a new product in a few country towns or in the NT or Tas to see if it sells or not whilst drawing no attention to it in the major cities.

Those who jump in head first often lose serious money. Plenty have done that over the years especially with expansion offshore.


----------



## luutzu (26 December 2018)

Smurf1976 said:


> Which brings to mind a related point.
> 
> When any business moves outside its area of competency, thinking that the same approach which has worked thus far ought to work in another market or industry, that's when major stuff ups tend to occur.
> 
> ...




Similarly, when a new CEO from a totally different industry takes over management of an established one. Say one from retailing takes over an engineering and construction business - and run it the same way as a retailer. 

Not saying that an able manager couldn't do it. But if they don't change or adapt priorities and such, things will start collapsing. 

Retreading a recent example from Theranos with its 19 year old Standford drop-out CEO starting a medical/healthcare company the way her idol Steve Jobs did Apple.

Jobs, like most IT/tech guys, tend to bs about their system being ready. Get the contract and the cash to then cramp it up, debug as they go.

Jobs also have that eye for design. What with that 1 single button to control everything on the iPhone.

Theranos CEO just put a demand that the blood sample must be a few drops and be able to diagnose every disease and illness known to man. She eventually caved in to the "nanoTube" being only 1.5cm high.

Why? Because it looks cool.


----------



## qldfrog (27 December 2018)

I dis not realise @pixel passed away.a sad day.


----------



## Skate (27 December 2018)

*Volume Spread Analysis*

Calling all traders who use the concepts of VSA

*Concept*
If you use or understand the concept of VSA analysis & you have something to share would you please Dump it here for the educational value explaining why VSA works so others may understand.

*Richard Wyckoff*
Richard Wyckoff may have come up with the idea but Tom Williams coined the phrase "Volume Spread Analysis" to describe this unique method of analysis.

*Simple Explanation *(How does VSA work)
VSA focuses on price and volume and seeks to find the actions and movements of the bigger traders

I personally find VSA difficult to master as traders interpret various VSA concepts differently making it difficult for me to grasp.

Skate.


----------



## Skate (27 December 2018)

*Personal milestone*
I have now completed my 500th post & it's a personal milestone - it's a low post count compared to others (that's a given) but every post that I've made goes a long way to explain who I am.
*
My Statistic*
I joined the ASF community on: 28th December 2013
After 3 years of education I placed my first Trade on: 31st August 2015 (My first trade consisted in buying 10 positions)
I started my first thread on: 17th December 2018 (long time lurker)
The 'Likes' I've received: 434  (I have an attitude of gratitude for each I've received)

*A BIG thank you*
To each & every member that took the time to read my post, making me feel happy - thank you.
To the members who have (& you know who you are) after reading my post have gone on to hit the 'Like' button - thank you.
To the members who have engaged in this thread - thank you.
To the members who have freely shared an experience or expressed an opinion here - thank you

*The end game*
If my posts affect your behaviour, I'm a winner - that's my end game..

The 'Dump it here thread' is *10 days old* *today* - it seems to me its been going a lot longer. (I'm fist to admit reading my thread is exhausting)


*################    You can finish reading here as the rest of the post is nostalgia    ################*


*Recapping my First post*
Sometimes you feel like dumping stuff & this thread might be the perfect place.

*Helping Others*
You might want to dump stuff here to help others

*Unload*
You might want to unload & dump something off your chest

*Gems*
You might even want to dump some gems here

*Let it go*
Sometimes you can't let somethings go till you dump it on paper

*Dump it here*
If you want to dump it, dump it here

Skate.


----------



## Skate (27 December 2018)

Smurf1976 said:


> Which brings to mind a related point.
> 
> When any business moves outside its area of competency, thinking that the same approach which has worked thus far ought to work in another market or industry, that's when major stuff ups tend to occur.
> 
> ...




@Smurf1976 I 'Liked' your post & I wanted to draw attention to it by making an additional comment (other may have already read it already) but they may not have understood the business strategy & I encourage others to re-read it again.

Skate.


----------



## tech/a (27 December 2018)

Skate said:


> *Volume Spread Analysis*
> 
> Calling all traders who use the concepts of VSA
> 
> ...




There are a number of threads on VSA 
already
I will however make a comment on one which may help you Skate and others like you “grasp “ it


----------



## Skate (27 December 2018)

luutzu said:


> Similarly, when a new CEO from a totally different industry takes over management of an established one. Say one from retailing takes over an engineering and construction business - and run it the same way as a retailer.
> 
> Not saying that an able manager couldn't do it. But if they don't change or adapt priorities and such, things will start collapsing.
> 
> ...




@luutzu thank you for your post & I hang on your every word.

I enjoy reading your posts & one thing that amazes me is how consistent your views are.

*Your consistency leads me to a 'segue'*
I always control the temp & direction of any conversation & I tend to change the topic so smoothly that people might not even notice (so see how I go this time)

*Personal statement*
I love Scottish food. (McDonalds - A business founded in 1940)

I appreciate their business model & their food is consistent around the world - no wonder the business enjoys success.

*McDonald's business model   *
1. Most don't realise the business model of McDonalds is not food - but Realestate)
2. Most don't understand what McDonalds really sell & its not food - but Convenience)

Skate.


----------



## Skate (27 December 2018)

tech/a said:


> There are a number of threads on VSA
> already
> I will however make a comment on one which may help you Skate and others like you “grasp “ it




@tech/a I can't wait for you to tell me more..

Thanks.

Skate.


----------



## luutzu (27 December 2018)

Skate said:


> @luutzu thank you for your post & I hang on your every word.
> 
> I enjoy reading your posts & one thing that amazes me is how consistent your views are.
> 
> ...




Thanks for the kind words Skate.

Great points about McDonalds.

A quote from Ray Kroc - McDonalds' "founder" [or was it keeper?] - regarding success. Though I think, judging by the movie, he also stole this too... Or maybe he lived it so he owned it.

The secret to success? *Persistence*.

I know what you're thinking. How the heck does a 52 year old, over the hill, milkshake maker salesman build a fast food empire.... One word: Persistence.


----------



## tech/a (27 December 2018)

Don’t know that you can sum things up in a word or two.

I’m as persistent as anyone when it comes to golf 
My handicap doesn’t get much better!


----------



## Darc Knight (27 December 2018)

luutzu said:


> Thanks for the kind words Skate.
> 
> Great points about McDonalds.
> 
> ...





I thought he just saw an emerging market or way of servicing a market and got a sort of first mover advantage?

Sorry to interrupt your thread @Skate and @tech/a  pls continue!


----------



## Skate (27 December 2018)

luutzu said:


> Thanks for the kind words Skate.
> 
> Great points about McDonalds.
> 
> ...





You are so correct @luutzu - the first secret to success is *Persistence *& there are two others (IMHO) I explained it to @tech/a (Dump it here, Page 27 - Post #261)

*Lets recap *
For the benefits of others who have not read the entire thread.

*What does PHD mean ? *
Its an acronym explained below
*
P*ersistence*, H*ard-work* & D*etermination* (PHD)
*
_Skate said: @tech/a I have never met a successful business owner who didn't have these qualities & qualifications._
*
Skate*


----------



## luutzu (27 December 2018)

tech/a said:


> Don’t know that you can sum things up in a word or two.
> 
> I’m as persistent as anyone when it comes to golf
> My handicap doesn’t get much better!




Maybe persistence in the context of working at it but try not to repeat what doesn't work?


----------



## Skate (27 December 2018)

Darc Knight said:


> I thought he just saw an emerging market or way of servicing a market and got a sort of first mover advantage?
> 
> Sorry to interrupt your thread @Skate and @tech/a  pls continue!




@Darc Knight you should never feel the need to apologise - your comments are always welcomed.

*Recap*
@Darc Knight I want to say a BIG thank you to you...

*To all the other members*
1. To each & every member that took the time to read my post, making me feel happy - thank you.
2. To the members who have (& you know who you are) after reading my post have gone on to hit the 'Like' button - thank you.
3. To the members who have engaged in this thread - thank you.
4. To the members who have freely shared an experience or expressed an opinion here - thank you

(The recap is from the Dump it here thread, Page 49 - Post #486) 

@Darc Knight I'm seeking to have this thread sound & feel different - by you being a participant with the others posters above you has achieved my desire.

Skate.


----------



## Skate (27 December 2018)

luutzu said:


> Maybe persistence in the context of working at it but try not to repeat what doesn't work?




@luutzu I wish I said that..

@luutzu you have just added value to the meaning of the word Persistence & clarified its meaning for others.

Well done & thank you..

Skate.


----------



## luutzu (27 December 2018)

Darc Knight said:


> I thought he just saw an emerging market or way of servicing a market and got a sort of first mover advantage?
> 
> Sorry to interrupt your thread @Skate and @tech/a  pls continue!




I read "McDonalds: Behind the Arches" by something Lowe [?]. While Kroc was among the first to move in on the fast food industry back then, his success was the ingenious way he go about benefiting both the franchisee, the customer and ultimately himself. 

There's the real estate business Skate pointed to. There's those thousands of innovation, fast service etc. that he/they introduced.

But a big lesson I took away from it, and one I still hear are not being followed from not just the listed franchiser [Retail Foods Group? The one owning OZ Dunkin Donuts, Gloria Coffee etc... nearing collapse]... and a small time franchiser who's a son of a dad's friend... which they brag on a lot not realising that that's not how you make long term profit.

Anyway... most franchisers back in Kroc's day doesn't care to do what he does. They just buy a state or major territory franchise and profit by selling regions off. 

Or they bulk buy the products/supplies, on sell to the franchisee at a mark-up... and doesn't care if those franchisee of theirs survive or not as their model was profiting from supplying to the franchisee more than the profit sharing. 

McDonalds profit by, one... getting the rent where the franchisee operates. That also help them control quality and operation, kicking out underperforming operators. IT also mean their people get to decide where it's best to operate a Macca. i.e. working class neighbourhood. And not over do the stores opening.

So that provide the cashflow they need.

Most important, they actually did not markup the supplies they sell to their franchisee. Letting them be profitable and that in turn make McDonald profitable and consistent.


----------



## luutzu (27 December 2018)

Skate said:


> @luutzu I wish I said that..
> 
> @luutzu you have just added value to the meaning of the word Persistence & clarified its meaning for others.
> 
> ...




Persistence... I also learn it from Homer [sptrawler] to "keep hammering". 

From the VNese proverb, roughly translated to "persistently grind away and metal can be turn to a needle"... Though the word metal and needle have two meaning... work at it and it'll turn to precious stone.

Or the Chinese proverb, based on a true story, apparently... of a man spending his life digging away at the mountain until he moved it.


----------



## Skate (27 December 2018)

luutzu said:


> I read "McDonalds: Behind the Arches" by something Lowe [?]. While Kroc was among the first to move in on the fast food industry back then, his success was the ingenious way he go about benefiting both the franchisee, the customer and ultimately himself.
> 
> There's the real estate business Skate pointed to. There's those thousands of innovation, fast service etc. that he/they introduced.
> 
> ...




@luutzu it was the lack of quality posts for the reason this thread lacked traction. (thank you)

Members will read your post with interest, your posts never fail to engage.

*This leads me to a 'segue'*
I've owned multiple retail stores & many other business at the one time & if I may pass on a small piece of business advice that may help others. I'll give my advice using an analogy to the game of Pool.

*Business as in playing Pool*
The game is not sinking the ball, the game is all about lining up the next shot.

Skate.


----------



## jbocker (27 December 2018)

luutzu said:


> I read "McDonalds: Behind the Arches" by something Lowe [?]. While Kroc was among the first to move in on the fast food industry back then, his success was the ingenious way he go about benefiting both the franchisee, the customer and ultimately himself.
> 
> There's the real estate business Skate pointed to. There's those thousands of innovation, fast service etc. that he/they introduced.
> 
> ...



I must read the book. I enjoyed the movie.
To me it was the discovery of the McDonalds brothers original burger bar and the efficiencies they had set up.. with the convenience to the customer being rapid delivery.
I might be wrong but Kroc really discovered the real estate factor as a work around because he had problems dealing with one of the brothers? ...Ahh not sure ... I must watch it again


----------



## Darc Knight (27 December 2018)

luutzu said:


> I read "McDonalds: Behind the Arches" by something Lowe [?]. While Kroc was among the first to move in on the fast food industry back then, his success was the ingenious way he go about benefiting both the franchisee, the customer and ultimately himself.
> 
> There's the real estate business Skate pointed to. There's those thousands of innovation, fast service etc. that he/they introduced.
> 
> ...




Yep, same book I read. Kroc bought the Store off the McDonald brothers.

I read another analysis mid 90s saying McDonalds was now a Real Estate business 

They trimmed down their stores somewhere around 2000 I think.


----------



## Smurf1976 (27 December 2018)

Contracts.

That something is written on paper (or its electronic equivalent) either formally or informally does not mean it will necessarily occur.

In order that any business plan, contract, planned response to a scenario, etc, actually takes place physically requires that:

It is physically possible to do it in the intended time.

Finance is available from whatever source.

All necessary arrangements have been made.

Required approvals from any government or other authority have been obtained.

All relevant parties, including contractors and sub-contractors, actually intend and desire to implement it.

None of those can be assumed simply because something has been written. It certainly wouldn't be the first time that a response plan or other document was produced with no idea as to whether or not it could be implemented in practice and with no intention of doing so anyway.

That which actually exists is worth far more than that which is proposed.


----------



## Darc Knight (27 December 2018)

Favorite food Skate?


----------



## Darc Knight (27 December 2018)

Favorite drink Skate?


----------



## Darc Knight (27 December 2018)

Favorite song Skate?


----------



## Darc Knight (27 December 2018)

Favorite Book Skate?


----------



## Skate (27 December 2018)

Darc Knight said:


> Favorite drink Skate?




@Darc Knight my favorite is Sco


Darc Knight said:


> Favorite food Skate?




@Darc Knight I really don't have a favorite food but in a previous post I made a reference to Scottish food, I enjoy Scottish Food (McDonalds - my wife of 44 yrs restricts that treat to once a year) I love Chinese.

I personally restrict my carbohydrates intake & I eat healthy - I was a vegetarian for the past 5 years (it was a life style choice) - I'm not a big meat eater - I tend to eat more protein.

One of the larger retail stores that's I've owned was a supplier of Fitness Equipment & to be successful in that industry you need to project the correct image.

*Reformed vegetarian*
As a reformed vegetarian I may be able to pass something on that you may not know.
1. Never wonder if a person is a vegetarian or not, you don't even have to ask - they will tell you.
2. Vegetarian have a deep appreciation of Butchers because they kill the animals that eat our food.

Skate.


----------



## Skate (27 December 2018)

Darc Knight said:


> Favorite drink Skate?




Scotch is an issue for me - I have it with ice but I know my limit. (I restrict my drinking to social gathering now)

Skate.


----------



## Skate (27 December 2018)

Darc Knight said:


> Favorite song Skate?




*Favourite song*
"Don't eat the yellow snow" Frank Zappa 

*Forgive me the lyrics are from memory*
I dreamed I was an Eskimo
frozen wind began to blow
under my boots and around my toes
the frost that bit the ground below
it was a hundred degrees below zero

Don't be a naughty Eskimo
save your money, don't go to the show

and the northern lights commenced to glow
and she said, with a tear in her eye
watch out where the huskies go, and don't you eat that yellow snow

*Poet*
Frank Zappa would have made a great poet - died young & experienced a painful passing. (Frank Zappa is a acquired taste)

*Well worth a listen*
If I could have two favourite songs the other would be: 
Arlo Guthrie - Alice's Restaurant (the song goes for about 20 minutes)

Skate.


----------



## Skate (27 December 2018)

Darc Knight said:


> Favorite Book Skate?




@Darc Knight like most I reader my fair share of books but if I could recommend one book for you it would be:

*The Richest Man in Babylon*
The Richest Man in Babylon by George Samuel Clason.

*Copyright*
The book is so old it's out of copyright - it was compulsory reading for Financial Uni Courses back in the 'good old days' of the USA. 

The book gives advice through a collection of parables set in ancient Babylon. I have given away quite a few copies to staff & friends over the years & I always received a thank you, some needed it explained.

*First principle*
If you understand the principle of paying yourself first it will set you up for financial freedom. 

*Financial freedom*
Financial freedom allows you to live your life on your terms

*Parables*
The parables that you will learn are simple lessons in financial wisdom.

Skate.


----------



## Darc Knight (27 December 2018)

Skate said:


> @Darc Knight like most I reader my fair share of books but if I could recommend one book for you it would be:
> 
> *The Richest Man in Babylon*
> The Richest Man in Babylon by George Samuel Clason.
> ...




Yes, a good little Book Skate. A book of principles.


----------



## Skate (27 December 2018)

Darc Knight said:


> Yes, a good little Book Skate. A book of principles.




@Darc Knight I've wasted a book suggestion, may I recommend another please.

*Fooled by Randomness*
Fooled by Randomness by Nassim Nicholas Taleb

This book explains why some people are successful where others aren't so lucky.

Skate


----------



## Darc Knight (27 December 2018)

Skate said:


> @Darc Knight I've wasted a book suggestion, may I recommend another please.
> 
> *Fooled by Randomness*
> Fooled by Randomness by Nassim Nicholas Taleb
> ...




Yes I remember you recommended that in another thread. I searched online and found a summary of it. Certainly seemed a well researched and worthwhile read.


----------



## luutzu (27 December 2018)

Darc Knight said:


> Yep, same book I read. Kroc bought the Store off the McDonald brothers.
> 
> I read another analysis mid 90s saying McDonalds was now a Real Estate business
> 
> They trimmed down their stores somewhere around 2000 I think.




Yea, it's a fascinating business. Would make a good case study I reckon. 

I think I got its annual reports from 1986. Before that the database the uni account I got didn't subcribed for... guess who'll be doing a financial study of Maccas soon?


----------



## luutzu (27 December 2018)

jbocker said:


> I must read the book. I enjoyed the movie.
> To me it was the discovery of the McDonalds brothers original burger bar and the efficiencies they had set up.. with the convenience to the customer being rapid delivery.
> I might be wrong but Kroc really discovered the real estate factor as a work around because he had problems dealing with one of the brothers? ...Ahh not sure ... I must watch it again




From the movie it was Kroc's second in command that figured McDonalds was more a real estate business than a simple fast food. But from Kroc's autobiography, I think he had a falling out with the guy some years later... and his explanation was that he wanted McDonalds to be more of a food business whereas the other guy wanted it to be predominantly real estate.

So the guy quit, sold all his shares... and without saying, missed a fortune or ten as Maccas takes over the world. 

But beyond that, I don't remember much detail. I should re-read Lowe's book again actually. 

Also from the book, some contractor outside the industry figured out a way to quickly bag them chips but didn't patent it. I think he also discovered and manufactured how to dispense the sauce, but again failed to patent. 

If it was patented, he could license the two thing to the fast growing fast food industry and retire very happy.


----------



## Mitek27 (27 December 2018)

Hi, I recently turned 18 and have invested in some shares in ANZ. I wanted to also experiment with day-trading using about $1000 and was wondering if anyone could recommended any companies to do this in that have fluctuation or any techniques for this? Thanks


----------



## Darc Knight (27 December 2018)

luutzu said:


> Yea, it's a fascinating business. Would make a good case study I reckon.
> 
> I think I got its annual reports from 1986. Before that the database the uni account I got didn't subcribed for... guess who'll be doing a financial study of Maccas soon?




You at or going to University Luu?

Doing something in Accounting or Finance or something?


----------



## captain black (27 December 2018)

Great thread Skate, well done 



Skate said:


> @tech/a & @captain black were the two drivers of my trading success.




For me this is what a forum is all about. I answered a few questions Skate had on the Amibroker FAQ thread a couple of years ago and we've been in touch via email since then and I've enjoyed watching his progress to becoming a successful trader.  

It's always the hope that someone you help out comes back and not only helps others out but teaches you as well in the process. 

I'm sure anyone reading Skate's words of wisdom in this thread knows the knowledge I've imparted has been returned threefold.


----------



## luutzu (27 December 2018)

Darc Knight said:


> You at or going to University Luu?
> 
> Doing something in Accounting or Finance or something?




No, was at uni a long time ago. Though got my sister's uni library access to to database before.


----------



## Skate (27 December 2018)

captain black said:


> Great thread Skate, well done
> 
> 
> 
> ...




@captain black thanks for the kind words - I've been posting the knowledge gained from you.

@captain black thank you for posting in the 'Dump it here' thread as it allows me the opportunity to publicly acknowledge the help & friendship shown to me over the last 3 years. 

I have been a lucky trader & a successful trader and my luck started meeting you. 

Skate.


----------



## Skate (27 December 2018)

Mitek27 said:


> Hi, I recently turned 18 and have invested in some shares in ANZ. I wanted to also experiment with day-trading using about $1000 and was wondering if anyone could recommended any companies to do this in that have fluctuation or any techniques for this? Thanks




@Mitek27 I've been hanging back as there a ton of skilled poster in the ASF community & I'm sure you will get an answer to your question in due time, but in the mean times let me make a comment.

*Day Trading*
If you are considering Day Trading then be Very, Very, Careful.

There are sharks in them waters!

*Education is the key*
In the mean time read this 'Dump it here' thread from the start to the finish it will be educational and education is the key

Skate.


----------



## Skate (28 December 2018)

*Have you ever told yourself this ?*

“If I only took the profits here, and here, and here I could have done better”

*Mindset*
If so that mindset will make you a terrible trader !
I know, been there done that!

In those times ya just gotta 'hang tough'!

*Trust your strategy*
Hands off!

Skate.


----------



## Skate (28 December 2018)

*Simple message*

If you are a system trader keep the system as simple as possible, validate it (robust backtesting) and trade it with confidence !

Skate.


----------



## Skate (28 December 2018)

*Sometimes we forget *

Periods of high volatility will always come and go, always has and always will ! 

Don't jump at shadows - just roll with it

Skate.


----------



## Skate (28 December 2018)

*Volatility *

It doesn’t matter what system you are trading - the best way to handle volatility is to just accept it.

Skate.


----------



## Skate (28 December 2018)

*Trading*

Nothing works perfect in trading !

So the next best thing is to accept 'that sometimes it works well and other times not so well'. 

Those that can handle that tend to do well.

Skate.


----------



## Skate (28 December 2018)

*Seeking a response*

The words of Howard Bandy has kept ringing in my ears.

*Howard Bandy Suggests*
(a) holding a few days at most and
(b) Holding longer than about three days increases risk considerably.

*Howard Bandy back in Dec 2016 made these comments*
“Stocks have tendency to revert to the mean and breakouts usually do not last very long. I estimate risk of drawdown based on recent performance, then trade in such a way that I can manage drawdown. That is -- holding a few days at most whether long or short. Again and again. The sweet spot is high accuracy and short holding period. Holding longer than about three days increases risk considerably, as does accuracy below about 65%”

*From my perspective*
Having a short holding period is easier said than done but in reality it’s very hard to achieve and so far it has eluded me.

*Stay with what you know - is that good advice ?*
Howard Bandy confirms he trades this method successfully - but I’ve never been able to code a Daily Strategy anywhere near profitable that I would trade with confidence – that’s why I’m sticking with my Weekly Trend Following System till something better comes along that proves to be more profitable.

*I'm seeking an alternative view*
Howard knows what he talking about, he's smarter than the average bunny but has any member have an alternative view or opinion ?

Skate.


----------



## Skate (28 December 2018)

*Metaphor for life* – posted with permission

A quote from Bodhi in the movie "Point Break"

"This was never about the money, this was about us against the system.
That system that kills the human spirit. We stand for something. We are
here to show those guys that are inching their way on the freeways in
their metal coffins that the human spirit is still alive."

Skate.


----------



## Skate (28 December 2018)

*For day traders* 

“Fear causes hesitation, and hesitation will cause your worst fears to come true.”

Skate.


----------



## Skate (28 December 2018)

*Anyone have a quote to dump ?*

“If you want the ultimate, you’ve got to be willing to pay the ultimate price. It’s not tragic to die doing what you love.”

Skate.


----------



## Darc Knight (28 December 2018)

Skate said:


> *Anyone have a quote to dump ?*
> 
> “If you want the ultimate, you’ve got to be willing to pay the ultimate price. It’s not tragic to die doing what you love.”
> 
> Skate.




That was actually a great Movie.

You're a Man of wise quotes Skate. Here's a favourite of mine:

_"I firmly believe that any man’s finest hours – his greatest fulfillment of all that he holds dear – is that moment when he has worked his heart out in good cause and lies exhausted on the field of battle – victorious."
_
Another one from the same Man, with relevance to us as a Community:

"_The achievements of an organization are the results of the combined effort of each individual.”
“People who work together will win, whether it be against complex football defenses, or the problems of modern society.”
“Individual commitment to a group effort – that is what makes a team work, a company work, a society work, a civilization work.”_


----------



## qldfrog (28 December 2018)

Darc Knight said:


> That was actually a great Movie.
> 
> You're a Man of wise quotes Skate. Here's a favourite of mine:
> 
> ...



So where does australia or the west stand on that last quote ?
Please also note the use of "effort"


----------



## Darc Knight (28 December 2018)

qldfrog said:


> So where does australia or the west stand on that last quote ?
> Please also note the use of "effort"




Not real sure what you're getting at. It's also not a thread for political debate I guess.
The community I was referring to was us at ASF.


----------



## Skate (28 December 2018)

Darc Knight said:


> That was actually a great Movie.
> 
> You're a Man of wise quotes Skate. Here's a favourite of mine:
> 
> ...




*Let me channel Bob Katter* (Katter's Australian Party)

@Darc Knight Bob Katter summed it up better than I could:  "I support everything he said - 1000 percent" - "what was said was solid gold"

Skate.


----------



## Skate (28 December 2018)

Darc Knight said:


> Not real sure what you're getting at. *It's also not a thread for political debate *I guess.
> The community I was referring to was us at ASF.




@Darc Knight expressed it perfectly when he said "*It's also not a thread for political debate" - *Thank you for expressing this again for me.

*My I repeat myself*
The 'Dump it here' thread (Page 50   Post #496)
@Darc Knight I'm seeking to have this thread sound & feel different - by you being a participant with the others posters above you has achieved my desire.

*Opinions are welcomed *(please don't ridicule or challenge it serves no purpose - express your alternative point of view)
The 'Dump it here' thread (Page 44   Post #438)
Thank you @willy1111 for expressing yours.
Whether your right or wrong isn't important - whats more important is that this thread gives you the ability to express your views without being ridiculed or challenged. 

Skate.


----------



## Skate (28 December 2018)

qldfrog said:


> So where does australia or the west stand on that last quote ?
> Please also note the use of "effort"




@qldfrog I enjoy reading what you have to say - I was wondering if you have an alternative view you wish to share ?

The 'Dump it here' thread is about ideas - not a contest of ideas.

Skate.


----------



## ducati916 (28 December 2018)

_"Many shall be restored that now are fallen and many
Shall fall that are now in honour."_

Ars Poetica: Horace

jog on
duc


----------



## Skate (28 December 2018)

ducati916 said:


> _"Many shall be restored that now are fallen and many
> Shall fall that are now in honour."_
> 
> Ars Poetica: Horace
> ...




Another gem - thank you @ducati916 - my deep appreciation.

Gems/quotes are very educational & I like them immensely.

Skate.


----------



## qldfrog (28 December 2018)

Skate said:


> @qldfrog I enjoy reading what you have to say - I was wondering if you have an alternative view you wish to share ?
> 
> The 'Dump it here' thread is about ideas - not a contest of ideas.
> 
> Skate.



no problem my apologies


----------



## Skate (28 December 2018)

qldfrog said:


> no problem my apologies




@qldfrog you should never feel the need to apologise - your comments are always welcomed & at no time did you step over the mark.

*Expressing views*
@Darc Knight knows what I'm trying to achieve with this thread knowing that all posts expressing another view are always welcomed & appreciated - sometimes I politely asked others for help to keep this thread on track.

*Post with confidence*
I've included in the body of the post information that others may not have read. Members who read this post will be reassured that they can post with confidence without being challenged or ridiculed.

*Experience*
Every member enjoys a different level of experience & expertise, there is never a reason to display your level of knowledge by making others feel inferior.

This thread is for information to help others.

*Knee-jerk response*
Some posts may inadvertently cause an upset invoking an emotional or knee-jerk response from other posters. I’ve been around long enough to have notice at times personal attacks - repeating of previous posts cause an emotional outburst.

*Friendly atmosphere*
Such posts undermine the friendly atmosphere and often result in long running feuds between opposing groups by picking one side over the other.

*Offending someone*
Offending someone on a forum site is hardest thing to detect, simply because it really is in the eye of the beholder – what offends one the other finds amusing.

*Express an alternative point of view*
It’s even harder to ask a member politely to express an alternative point of view without disagreeing with another poster - this thread is different in content and at the moment it feels comfortable making a post. Whether you agree with the view expressed or if the view is right or wrong isn't important.

If you have an alternate point of view feel free to 'Dump it here'

Skate


----------



## Skate (29 December 2018)

Gringotts Bank said:


> Communication is so difficult, isn't it?  It's extremely hard to understand and be understood when the topic has any degree of complexity or subtlety.
> 
> Someone makes a statement like: "technical analysis is better than fundamental".  And before you can reply meaningfully, a hundred assumptions need to be unpacked and just as many terms need to be _defined in detail_.  That's if you want to take part in a proper debate.  Such a statement as the one above could take a few hours to unpack, but who could be bothered?  Even a very astute reply is likely to be met with "yeh but I still think it's better...", and then you realize you've wasted your time trying to help.
> 
> I have a few books that I've had to read 10 times before I really got the message.  So yeh, change is hard and it happens slowly!  One has to be willng to make oneself uncomfortable...over and over again.  Inertia equates with safety, so there's some in-built evolutionary resistance.




*@Gringotts Bank* ‘Dump it here’ thread (Page 17  Post #161)

*Let me recap the post*
_"Communication is so difficult, isn't it?  It's extremely hard to understand and be understood when the topic has any degree of complexity or subtlety.

Someone makes a statement like: "technical analysis is better than fundamental".  And before you can reply meaningfully, a hundred assumptions need to be unpacked and just as many terms need to be defined in detail.  That's if you want to take part in a proper debate.  Such a statement as the one above could take a few hours to unpack, but who could be bothered?  Even a very astute reply is likely to be met with "yeh but I still think it's better...", and then you realize you've wasted your time trying to help.

I have a few books that I've had to read 10 times before I really got the message.  So yeh, change is hard and it happens slowly!  One has to be willng to make oneself uncomfortable...over and over again.  Inertia equates with safety, so there's some in-built evolutionary resistance"_

*Why repost*
I wanted to repost @Gringotts Bank post in full not because it was a brilliant post (which it was) but to segue to @tech/a new thread. "Tech/a on Technical Analysis"

https://www.aussiestockforums.com/threads/tech-a-on-technical-analysis.34448/

I encourage everyone to take an interest in @tech/a thread - he has made me a bucket load of money.

Skate.


----------



## Skate (29 December 2018)

*Statement of Facts *(about two very important ASF members)

*First is @tech/a*
‘Dump it here’ thread (Page 31  Post #301)
*@tech/a*  had no idea how instrumental he had been in my success as a trader.

*Technical Analysis*
*@tech/a* posts pointed in the correct direction of trading with Technical Analysis.

*TechTrader*
TechTrader, the trading strategy that *@tech/a* developed & personally traded has been widely discussed, freely distributed, his software code started me on the path of Technical Analysis & as they say the rest is history

*The Second is @captain black *(my mentor)
*@captain black* has helped me immensely over the last three years & I'm happy to say I still enjoy the benefits of his wisdom, his coding ability. (but more importantly I enjoy his ongoing friendship)

*@captain black* kindly explained how to turn a piece of technical analysis into a code, formulating a strategy that became a complete trading system - a money making machine for me.

*Recapping
@tech/a *pointed me in the direction of technical analysis - Thank you tech/a
*@captain black* showed me how to turn technical analysis techniques into a money making machine - Thank you Captain.

Skate.


----------



## Skate (29 December 2018)

*My trading style*
My trading investments are made using technical analysis as I understood the concept and the benefits of having a robust mechanical trading system other than the fundamental aspect of trading.

*Trading System*
It is my belief that to succeed in the financial markets you need to have some kind of trading system in place.

*Trading algorithm* 
Most trading strategies used in technical analysis are based on advanced mathematics that indicates if a market is trending or in a cycle

*It's up to you*
Whatever combination of information you use, whether it media reports, fundamental or technical analysis or a combination of all of those it really depends on you.

*Trading is hard*
Trading successfully is hard, REALLY hard, which is why the majority of people who try to make money from trading fail.

Skate.


----------



## Skate (29 December 2018)

*Do I have any Trading Regrets* – (yes I have 2 regrets)

1. I regret not getting into trading sooner.
2. I regret not following one piece of advice given to me by *@captain black* - by not following his advice cost me over $64K of cold hard cash, an amount I’ve never forgotten, when the Captain speaks I listen.

Skate.


----------



## Skate (29 December 2018)

*What is the best - Technical or Fundamental Analysis ?*

It’s really all up to you, for you to decide between Technical and Fundamental Analysis and of which camp you feel would give you a trading edge, both analysis processes may give you the confidence to lay your money down.

Some traders feel more aligned to one style than the other, so it all depends on your personal preference and comfort level as to which one you choose in selecting stock to buy.

Skate.


----------



## Skate (29 December 2018)

*What is Technical Analysis?*

Definition: Technical Analysis is a form of market analysis that studies demand and supply for securities and commodities based on trading volume and price studies.

*Charting*
Technical Analysis is basically charting based studies.

*Market activity*
Technical analysis is a method of evaluating securities by analysing statistics generated by market activity, such as past prices and volume.

Skate.


----------



## Skate (29 December 2018)

*Technical analysts allows charts to tell a story*

Technical analysts do not attempt to measure a security's intrinsic value, but instead use charts and other tools to identify patterns that can suggest future activity.

*Historical performance*
Technical analysts believe that the historical performance of stocks and markets are indications of future performances. Technical analysis is also a method for analysing what’s occurring currently in the financial markets and for evaluating the trading action of any given security. It reveals the actual buying and selling decisions of financial market participants.

*Statistics*
Technical analysis is a method of evaluating securities by analysing statistics generated by market activity, such as past prices and volume.

Skate.


----------



## Skate (29 December 2018)

*More on Technical analysts*

Critics of technical analysis think that chart patterns work until they fail, and the failure of the pattern may not always be predictable from following the past pattern, especially if there is an unforeseen shock.

*What about using both Technical and Fundamental Analysis.*
One way to curtail the shortcomings of the two methods is to use them together to capture the best aspects of both. Fundamental analysis should be used to determine which stocks or sectors are most likely to perform well based on a strong economic environment and company or sector-specific operations.

*How to decide when to buy or when to sell*
Technical analysis can then be used to decide when to buy or sell by giving entry and exit points based on moving averages, volume and price trends.

Skate.


----------



## Skate (29 December 2018)

*What is Technical Analysis in a nutshell ?*

*Psychology*
Technical Analysis is basically the study of psychology. Its value lies in its ability to help you understand behavioural trends in individual stocks as well as the broad market. People have fairly predictable emotional responses as stocks become cheaper or more expensive and their profits, losses, and available entry point’s change. 

*Stocks are just like people*
If you understand investors’ past behaviour, you can predict their future behaviour. Stocks are just like people, because that is who makes them look the way they do, by buying and selling creates an emotional ebb and flow pattern.

Just like people, stocks can be unpredictable, but certain emotions and behaviours do occur regularly.

Skate.


----------



## Skate (29 December 2018)

I'm not going to keep posting on the subject of Technical Analysis I'll leave that to @tech/a someone very skill in that area
*
"Tech/a on Technical Analysis" 
https://www.aussiestockforums.com/threads/tech-a-on-technical-analysis.34448/

Two camps – Fundamental and Technical Analysis*
Trading is normally broken into two camps, fundaments or technical analysis, there are those from the school of fundamental analysis and those from a technical background.

*It doesn't matter*
Whether you use Fundamental Analysis or Technical Analysis it doesn't matter - one is not right & the other is wrong that's not the point in discussing them.

*Technical analysis*
Technical analysis is often portrayed as a complex set of tools, composed of intricate calculations. However, it can be easily employed it can also be used as a simple money management tool that can dramatically increase your returns by helping you avoid substantial losses.

Skate.


----------



## tech/a (29 December 2018)

Much I would add to Skates observations

I do see in his musings what I see in all traders on their path.
It is important to point out and clear up —- well I think it is 
I’ll be back as time allows


----------



## Skate (29 December 2018)

tech/a said:


> Much I would add to Skates observations
> 
> I do see in his musings what I see in all traders on their path.
> It is important to point out and clear up —- well I think it is
> I’ll be back as time allows




@tech/a is an elder & when he has something to say we should all listen. By listening to @tech/a may set you on a path to financial freedom. (it worked for me)

Skate.


----------



## Darc Knight (29 December 2018)

What are your thoughts on Index Funds that blindly buy an Index such as the ASX 200. Moody's say Index Funds will be 50% of the market by 2021.
That's billions of dollars blindly buying up shares just because they are in the top 200 market cap wise. That's a lot of over inflation of share prices I would thought. Thanks Skate


----------



## tech/a (29 December 2018)

Skate
Thank you for the accolades, But you can *stop* now!



Skate said:


> *My trading style*
> My trading investments are made using technical analysis as I understood the concept and the benefits of having a robust mechanical trading system other than the fundamental aspect of trading.
> 
> *Trading System*
> ...





Unfortunately as humans we (excluding those who know better) believe that complexity in some way is related to the quality and
Veracity of a concept presented. Trading is no harder than any profession or sport, many will fail some will be proficient and others
a very small % will excel way above all others.




Skate said:


> *Do I have any Trading Regrets* – (yes I have 2 regrets)
> 
> 1. I regret not getting into trading sooner.
> 2. I regret not following one piece of advice given to me by *@captain black* - by not following his advice cost me over $64K of cold hard cash, an amount I’ve never forgotten, when the Captain speaks I listen.
> ...





I myself started at 40. Never had enough to invest before, never had enough to lose!
Regrets --None--the journey has enlightened me in so many un related areas of business.
*You have to learn what you dont know before you can know what you dont need to know.*




Skate said:


> *What is the best - Technical or Fundamental Analysis ?*
> 
> It’s really all up to you, for you to decide between Technical and Fundamental Analysis and of which camp you feel would give you a trading edge, both analysis processes may give you the confidence to lay your money down.
> 
> ...






Skate said:


> *Technical analysts allows charts to tell a story*
> 
> Technical analysts do not attempt to measure a security's intrinsic value, but instead use charts and other tools to identify patterns that can suggest future activity.
> 
> ...






Skate said:


> *More on Technical analysts*
> 
> Critics of technical analysis think that chart patterns work until they fail, and the failure of the pattern may not always be predictable from following the past pattern, especially if there is an unforeseen shock.
> 
> ...




I've grouped this lot together. This is where many and including myself have been and we all have to get here (Beliefs,findings in our experience).
ALL analysis is about DATA. The analysis of that data and then the implementation of the information that analysis has given us.
The *QUALITY* of the analysis makes *ALL THE DIFFERENCE*. For pretty well ALL of us the quality at best is passable. Show it to those who truly
understand the analysis of data (EG those who study cancer research data--Engineering Data and advanced financial data or Avionics data) and what we decide to invest $1000s of our hard earned into becomes to them highly risky. Because the tools we have at our disposal are no more than a Bicycle on a freeway.
Gets from A-B but-----there are far better options. (Plane !). We all have access to the tools they have --- spread all over the Net. Soon there will be a new *CAR* available for us in one place for use on your freeway.



Skate said:


> *What is Technical Analysis in a nutshell ?*
> 
> *Psychology*
> Technical Analysis is basically the study of psychology. Its value lies in its ability to help you understand behavioral trends in individual stocks as well as the broad market. People have fairly predictable emotional responses as stocks become cheaper or more expensive and their profits, losses, and available entry point’s change.
> ...




Just to add an important point to this.
It is the study of *GROUP BEHAVIOR

Shout Fire in a building full of people and they will in the large majority run for the exits.

Drop 1000s of $50 or even $10 notes on the ground and people will come out of no where to pick them up.

Sit around watching something we all enjoy together and the crowd will do very little but watch what happens when it gets boring or exciting!
*
So we look for indication that these things are going to happen.
We test the data to see if we can take advantage of these indications.
We trade excellent results and continue testing in case the data changes
enough to alter the results of testing.


----------



## Skate (29 December 2018)

@Darc Knight let me take a few moments as your question is so good it deserves a measured answer.

I'll post in such a way that others who read my answer may find value for themselves.

Skate.


----------



## Skate (29 December 2018)

Darc Knight said:


> What are your thoughts on Index Funds that blindly buy an Index such as the ASX 200. Moody's say Index Funds will be 50% of the market by 2021.
> That's billions of dollars blindly buying up shares just because they are in the top 200 market cap wise. That's a lot of over inflation of share prices I would thought. Thanks Skate




@Darc Knight Index funds, index trackers, overtime add wealth to many - the value of a share, is subjective. Traders only buy stocks for one reason - in the expectation of an increase in price. 

Index Funds & LIC's (Licenced Investment Companies) are the only conservatively stress-free ways I've found to invest (IMHO)

@captain black explained the issues of liquidity & the complexities of moving large sums in & out of the market. 

*Liquidity & slippage *
Understanding the issues associated with liquidity & slippage we now chose to invest half of our capital into separate investment trading companies known as ‘closed’ Licenced Investment Companies (LIC’s) to compound our funds over the next ten years or so.

The strategy to invest half our funds in LIC’s hopefully secures our financial freedom in the future, the second half of our retirement phase. (Living life on our terms)

*Dividend reinvestment*
By having half our funds invested in this manner, locking away a chunk of our funds into LIC’s for ten years, being vigilant and refraining from touching any part of those funds with dividend reinvestment, letting time and compound interest ‘the eighth wonder of the world’ do its thing.

Reinvesting the dividend plus compounding gives us a great degree of comfort knowing we have planned and prepared for the second half of our retirement, the latter stages of our life.

The only conservatively stress-free way I’ve found to compound money is to invest in managed investment funds (LIC’s) who are professional money managers rather than Index Funds, Index trackers.

*Professional managers*
If we let the professional managers and have patience letting compounding do its thing I’m sure our investment will mature with a capital increase placing our faith in this strategy.

*2 LIC's I would recommend*
There are two ‘closed’ Investment Companies’ (LIC’s) with great long term performance figures that are tradable on the Australian market (ASX) & both companies have a long track record of capital growth and consistent dividend payments – those companies are:

1. (ASX: AFI) The Australian Investment Company

2. (ASX: ARG) Argo Investment Company

Both of these LIC’s will handle any long term investment strategy just nicely.

Skate.


----------



## Darc Knight (29 December 2018)

Skate said:


> @Darc Knight Index funds, index trackers, overtime add wealth to many - the value of a share, is subjective. Traders only buy stocks for one reason - in the expectation of an increase in price.
> 
> Index Funds & LIC's (Licenced Investment Companies) are the only conservatively stress-free ways I've found to invest (IMHO)
> 
> ...




Cheers Skate. Thanks for the detailed, very informative post and continuance of a great thread


----------



## Skate (29 December 2018)

*Freedom at Stake*

Trading isn’t about getting rich, I've posted this many times, it's more about financial independence supporting yourself without an income, being able to choose to live your life on your terms.

*Who decides*
The only person who can make sure you’re able to do it on your terms is you...

*The measure*
Living life on your terms is what life is all about.

*Bodhi summed it up perfectly*
"We are here to show those guys that are inching their way on the freeways in their metal coffins that the human spirit is still alive."

*Sun Tzu*
To use another wise quote from Sun Tzu's "The Art of War":
“Victorious warriors win first and then go to war, while defeated warriors go to war first and then seek to win”

Skate.


----------



## Skate (29 December 2018)

Darc Knight said:


> Cheers Skate. Thanks for the detailed, very informative post and continuance of a great thread




@Darc Knight thank you for "liking" my posts it's a great motivator.

Skate.


----------



## Smurf1976 (29 December 2018)

Skate said:


> It’s really all up to you, for you to decide between Technical and Fundamental Analysis and of which camp you feel would give you a trading edge



It is also possible to use a combined approach.

For example, choosing shares based on fundamentals but then using technical analysis to time the actual buying and selling.


----------



## ducati916 (29 December 2018)

Smurf1976 said:


> It is also possible to use a combined approach.
> 
> For example, choosing shares based on fundamentals but then using technical analysis to time the actual buying and selling.





And the combined approach makes you the most money, unless, the stock goes straight up.

jog on
duc


----------



## Skate (29 December 2018)

@sptrawler made a New Years resolution _"My resolution is going to be, to stop trying to change peoples minds" _(I like it)

If I may, I would like to dump a few quotes in the same vein..

*Idiots*
When you can't educate an idiot I usually say "I could agree with you, but then we'd both be wrong" & leave it at that. 

*Clouds*
I find some people are like clouds. When they go away, it's a brighter day.

*Happiness*
All guest make you happy some when they arrive & some when they leave

Skate.


----------



## Gringotts Bank (29 December 2018)

tech/a said:


> humans .... believe that complexity in some way is related to the quality and veracity of a concept presented.
> 
> *You have to learn what you dont know before you can know what you dont need to know.*




Unecessary complexity and conceptual proliferation is becoming commonplace, and not just in trading.  It makes me angry when I have to wade through thousands of pages of padding to find the one thing that is useful, but that's how people sell stuff nowadays.  Universities should have that bolded sentence as their motto, since they specialize in teaching stuff which has no real life relevance.


----------



## Skate (29 December 2018)

Gringotts Bank said:


> Unecessary complexity and conceptual proliferation is becoming commonplace, and not just in trading.  It makes me angry when I have to wade through thousands of pages of padding to find the one thing that is useful, but that's how people sell stuff nowadays.  Universities should have that bolded sentence as their motto, since they specialize in teaching stuff which has no real life relevance.




@Gringotts Bank I really like your post, our time is our most precious gift, no one can afford the luxury of wasting it - let alone let someone waste it for us.

'The Dump it here' thread has a new bold & proudly displayed new motto:
*"You have to learn what you don't know before you can know what you don't need to know"*

Thanks you @Gringotts Bank , I'll give you the accolade (@tech/a prefers not to receive credit where credit is due)

Skate.


----------



## fiftyeight (29 December 2018)

Been a while since you hijacked a thread @Gringotts Bank 

Who pulled this post, you or someone else?


----------



## Smurf1976 (29 December 2018)

Gringotts Bank said:


> Unecessary complexity and conceptual proliferation is becoming commonplace, and not just in trading.



Unnecessary complexity is either a failure to understand or an attempt to deceive.

Where that is being used it is wise to consider which applies and if deception, who is deceiving who?

In particular, make sure you are not the one being deceived.


----------



## Gringotts Bank (30 December 2018)

Smurf1976 said:


> Unnecessary complexity is either a failure to understand or an attempt to deceive.
> 
> Where that is being used it is wise to consider which applies and if deception, who is deceiving who?
> 
> In particular, make sure you are not the one being deceived.




Academics are even worse than salespeople and politicians, because it's harder to see through the schtick.  They seem honest and trustworthy in their demeanor, yet they routinely use complexity to deceive.  "This is a very complex issue" is a favourite statement.  Along with the use of special terminology, such statements can be used to place non-academics in a position of powerlessness.  If you can't speak the lingo, your argument will sound very weak indeed.  If things are allowed to be simple, the academic will tend to create complexity to protect his position.  Committees, meetings, special language, unecessary complexity and endless delay - the life of an academic.


----------



## rogue1 (30 December 2018)

Skate said:


> *Muddling words make a difference
> *
> _“a wise friend of ours once reminded us that “happiness is appreciating what you have” _
> 
> ...




Most people think they will be grateful when they are happy, but really it’s the other way around...


----------



## Skate (30 December 2018)

rogue1 said:


> Most people think they will be grateful when they are happy, but really it’s the other way around...




@rogue1 words of wisdom are always appreciated.

When people are happy they are always grateful (I like it)

@rogue1 if you take the time to read this thread you will find some members have dumped some really good gems..

Skate.


----------



## Smurf1976 (30 December 2018)

Gringotts Bank said:


> Academics are even worse than salespeople and politicians, because it's harder to see through the schtick.  They seem honest and trustworthy in their demeanor, yet they routinely use complexity to deceive.



Very true.

I have explained technical things (mostly relating to electricity) to many people from all sorts of backgrounds and one thing has always stood out.

If the person genuinely wants to understand, that is they are not playing politics etc and looking for problems that don't exist, then it is always possible to explain to them the concepts in layman's terms.

Things which do involve genuine complexity like power system inertia or the decision making process as to which sources of generation are kept running when demand is low and which are switched off does take some explaining since there really is a lot of complexity involved with those concepts but it can be done most certainly.

My view is very simple really. *If you can't explain something in layman's terms to a person of reasonable intelligence who is willing to listen then either you don't understand it yourself or you are deliberately choosing to not explain it to others*.

Even NASA can and do explain to random members of the public how things were / are done in easily understandable terms and that really is rocket science.


----------



## Skate (30 December 2018)

Smurf1976 said:


> Very true.
> 
> I have explained technical things (mostly relating to electricity) to many people from all sorts of backgrounds and one thing has always stood out.
> 
> ...




@Smurf1976 your words have resonated with me, succinctly expressed. 

*GEM of a quote..*
_"If you can't explain something in layman's terms to a person of reasonable intelligence who is willing to listen then either you don't understand it yourself or you are deliberately choosing to not explain it to others"_

Skate.


----------



## rogue1 (31 December 2018)

Gringotts Bank said:


> Mark Twain.  chapter 11 Mysterious Stranger.  I like short cuts and this is a ripper.
> --------------------------------------------------------------------------------------------------
> 
> For as much as a year Satan continued these visits, but at last he came less often, and then for a long time he did not come at all. This always made me lonely and melancholy. I felt that he was losing interest in our tiny world and might at any time abandon his visits entirely. When one day he finally came to me I was overjoyed, but only for a little while. He had come to say good-by, he told me, and for the last time. He had investigations and undertakings in other corners of the universe, he said, that would keep him busy for a longer period than I could wait for his return.
> ...




Life is a brief dream in our long sleep...


----------



## Smurf1976 (31 December 2018)

Many concepts apply across multiple fields.

For example efficiency is a concept commonly applied in engineering and also in management. It also has relevance in biology and can be applied to investing. Put simply, efficiency is output per unit of input, the rest being detail (what the inputs and outputs actually are).

There are many concepts with broad application. The details need to be changed to suit the purpose but the concept as such is the same.


----------



## rogue1 (31 December 2018)

Skate said:


> @sptrawler made a New Years resolution _"My resolution is going to be, to stop trying to change peoples minds" _(I like it)
> 
> If I may, I would like to dump a few quotes in the same vein..
> 
> ...




Smart people really know their s***.
Stupid people rarely know they're s***...


----------



## Skate (31 December 2018)

@sptrawler made a New Years resolution _"My resolution is going to be, to stop trying to change peoples minds" _(I like it)

*Chit Chat*
Over a drink yesterday I referenced @sptrawler New Years resolution, going on to say "I can't ever remember making a New Years resolution"

*Lost Memories*
Thinking about it, I must have made a New Years resolution in my youth, but for the life of me I can't remember

*I asked a question*
I said - "are you going to make a New Years resolution this year"

*His reply*
NO, I'm going to stay an ar$ehole for another year (never a truer word said in jest)

Skate.


----------



## Skate (31 December 2018)

I made a post in the "The Education of an Investor" thread & I have decided to post it here as well (The reason: some members read some threads & pass over others)
*
Financial statements *
Understanding a company’s financial statements will help shape your research, as it will allow you to become aware of certain facts.

*Revenue flow*
You may think you know how Capilano Honey Ltd (CZZ) operates because you buy their product from Woolworths or you may even think you know how Woolworths Group Ltd (WOW) operates, because you buy your groceries there, but can you clearly articulate how one dollar of revenue flows through either business?

*Investment risk*
The more you understand how a business operates, the more you become aware of how little you understand which further ads to the investment’s risk.

Skate.


----------



## Wyatt (31 December 2018)

Anonymous (not the hacktivist group) quote

After decades trading the markets almost every successful trader develops a '*ZERO* loyalty to stocks mindset'. Amateurs on the other hand, 'fall in love with their stocks'. 
The good news is: You do have a choice!


----------



## Skate (31 December 2018)

@Wyatt you remarked that "Amateurs on the other hand, 'fall in love with their stocks'"
*
New suckers*
New batches of suckers are entering the markets every day who fail to educate themselves before buying stocks they know or have fallen in love with..

*Cruel, Unkind and Dangerous*
The Financial Markets are a Cruel, Unkind and Dangerous playing field, one place where the newest amateurs are generally fleeced the most brutally, usually by those who know the rules of trading.

Skate.


----------



## Skate (31 December 2018)

*Risk*
Nothing can be guaranteed when entering the market and the risk is very real. Smart traders/investors do not forget this, and that is why they use every means at their disposal to minimize the elements of risk by investing in the most efficient way.

*The end game*
The idea is to get the maximum return for the amount of risk taken for each dollar spent.

Skate.


----------



## Skate (31 December 2018)

Skate said:


> *Risk*
> Nothing can be guaranteed when entering the market and the risk is very real. Smart traders/investors do not forget this, and that is why they use every means at their disposal to minimize the elements of risk by investing in the most efficient way.
> 
> *The end game*
> ...




*Risk*
Risk is all about surprises that can spoil the party.

Skate.


----------



## rogue1 (31 December 2018)

Skate said:


> @Wyatt you remarked that "Amateurs on the other hand, 'fall in love with their stocks'"
> *
> New suckers*
> New batches of suckers are entering the markets every day who fail to educate themselves before buying stocks they know or have fallen in love with..
> ...




When you look around a poker table, if you can't tell who the sucker is, it's you..!


----------



## Skate (31 December 2018)

@rogue1 when you 'like' one of my posts (I encourage you to 'like' as many as possible) I get an "Alert" and those 'Likes' gives me a direction for future posts.

*Meaning*
I would rather post on subject that others find interesting rather than what interest me.

Skate.


----------



## rogue1 (31 December 2018)

This thread title reminds me of the advice Dr Spooner gave to his wife...


----------



## Skate (31 December 2018)

Skate said:


> @rogue1 when you 'like' one of my posts (I encourage you to 'like' as many as possible) I get an "Alert" and those 'Likes' gives me a direction for future posts.
> 
> *Meaning*
> I would rather post on subject that others find interesting rather than what interest me.
> ...




@rogue1 like many other members on ASF I have an opinion - sometimes you may not like my opinion if so don't worry - I have plenty more.

Skate.


----------



## Skate (31 December 2018)

rogue1 said:


> This thread title reminds me of the advice Dr Spooner gave to his wife...




*'Dump it here'*
@rogue1 the title 'Dump it here' was a named in the hope that members could "Dump" their knowledge in one thread that would benefit others, as you have done in the past - "posted a quote" now that whats this thread is all about.

*Your quote*
_"When you look around a poker table, if you can't tell who the sucker is, it's you..!"_

While some would have heard that quote before, there are others who haven't - @rogue1 thank you for 'Dumping it here'

Skate.


----------



## Skate (31 December 2018)

Skate said:


> I made a post in the "The Education of an Investor" thread & I have decided to post it here as well (The reason: some members read some threads & pass over others)
> *
> Financial statements *
> Understanding a company’s financial statements will help shape your research, as it will allow you to become aware of certain facts.
> ...




*Investment risk*
More on Capilano Honey, Woolworths & investment risk
*
Familiarity*
One myth that many investors find particularly hard to resist is “Buy what you know.” Many fall into the trap of buying a company’s stock simply because they are familiar with it and like the product. Typically they fail to understand that good products or services don’t necessarily correlate to a good stock. However, they are comforted by the familiar. Familiarity can be a dangerous thing.

Skate.


----------



## Smurf1976 (31 December 2018)

Skate said:


> *The end game*
> The idea is to get the maximum return for the amount of risk taken for each dollar spent.



Time may also be a constraint for an individual investor due to other committments eg work or family.

So their aim may be to get the maximum return on money which can be achieved with not more than x amount of time spent on an ongoing basis.


----------



## Skate (31 December 2018)

*Why the share market is so efficient*

The share market is so efficient, the stock price is always right, thousands even many thousands of investors set a fair price and when the sellers and buys are in complete agreement the true value for that stock is established, a ‘Doji’ in the Japanese candlestick lingo.

The market is like a Ouija board & if you master the game it will spell "PROFIT" (pun intended)

Skate.


----------



## Skate (31 December 2018)

Skate said:


> *Investment risk*
> More on Capilano Honey, Woolworths & investment risk
> *
> Familiarity*
> ...




*Smart Investors & Woolworths *

*No one knows if a price is high or low*
With trading no one knows if a price is high or low, picking the top or the bottom even eludes the best professional so we have no chance picking the top or the bottom of any market.

*Smart Investors*
The smart Investors are like ‘Woolworths’, they want to buy at the very lowest price and sell at a much higher price to make money and if they have to screw the little guy along the way, well so be it.

Skate.


----------



## barney (31 December 2018)

tech/a said:


> Skate
> Thank you for the accolades, *But you can stop now*!










tech/a said:


> Shout Fire in a building full of people and they will in the large majority run for the exits.



​


tech/a said:


> Drop 1000s of $50 or even $10 notes on the ground and people will come out of no where to pick them up.​




Good examples and both Trending scenarios ……. 

It gets a bit harder to read when you are in the same building and …

"Drop the cash *just after* you call "Fire" 
​


----------



## Skate (31 December 2018)

barney said:


> Good examples and both Trending scenarios …….
> 
> It gets a bit harder to read when you are in the same building and "Drop the cash *just after* you call "Fire"
> ​




Barney, they are two very good simplistic examples of human nature that everyone can relate to.

*It’s funny how human nature often gets it wrong.*
We act so impatiently with the stocks that are moving in the right direction by selling them straight away, yet we reward the falling stocks with endless patience.

*Human nature*
1. It’s human nature to sell profitable stocks too early so we can feel good about our decisions.
2. Its human nature not to admit when we have made a wrong decision

*Our worst enemy*
Sometimes Human Nature can be our worst enemy.

Skate.


----------



## Skate (31 December 2018)

*Secret to success *

*Mature traders*
Mature traders, those who’ve been around the block or two, realise that the secret to success is being there for the long term, not necessarily making a lot of money quickly but making money gradually and compounding their wealth over time.

*Mature Traders analogy*
Using a car as an analogy – it’s not the speed of the car that matters but the distance a car can travel.

Skate


----------



## tech/a (31 December 2018)

Mature Trader
Me!

Take all opportunities long or short term 

Cars 

Don’t get into one unless you know the destination.


----------



## Skate (31 December 2018)

tech/a said:


> Mature Trader
> Me!
> 
> Take all opportunities long or short term
> ...




*Elder*
That's why I have called you an Elder tech/a.

*Advice*
I have expressed many times when you talk it's advisable to shut up & for us to listen.

*I'm loving it*
I'm loving your thread "Tech/a on Technical Analysis" (that's not an accolade tech/a but a statement of fact)

Skate.


----------



## Skate (31 December 2018)

tech/a said:


> Mature Trader
> Me!
> 
> Take all opportunities long or short term
> ...




*Cars*
I said to a girlfriend once "you either fork it or walk it"

*Her reply*
"Well I ain't walking"

*Memories*
tech/a you sparked a fond memory for me..

Skate.


----------



## tech/a (31 December 2018)

Skate said:


> *Cars*
> I said to a girlfriend once "you either fork it or walk it"
> 
> *Her reply*
> ...




A bird crapped over my bonnet once!

I never took her out again!


----------



## tech/a (1 January 2019)

tech/a said:


> A bird crapped over my bonnet once!
> 
> I never took her out again!




Hahahaha 
Just noticed the thread title is very apt to 
This post!


----------



## Skate (1 January 2019)

Darc Knight said:


> Happy New Year everyone!
> 
> I feel we need an inspiring quote to get us off on the right foot:
> _“There are no great men – only great challenges, which ordinary men are forced by circumstances to meet.”_
> ...




Darc Knight made an inspiring quote to get us off on the right foot for 2019

*First inspiring quote for 2019*
_“There are no great men – only great challenges, which ordinary men are forced by circumstances to meet.”_

Skate.


----------



## Skate (1 January 2019)

*One quote that made a difference*
My life has revolved around one quote & it has stood me in good stead.

*Motivation*
Many receive advice, only the wise profit from it and those who read the quote below more than once, unpack it, will find words of motivation.

*My Inspiring quote*
"Life is like a dogsled team. If you ain't the lead dog, the scenery never changes"

Skate.


----------



## Wyatt (1 January 2019)

Skate, your inspiring quote could be even valid for a bobsled team.




+ a couple more well known quotes trend followers live by.

"I came to the conclusion that the only stocks which would be of real interest to me would be those that were breaking all previous records: stocks not merely rising in price, but actually in their highest boxes ever." - Nicolas Darvas

"What seems too high in price and risky to the majority usually goes higher." -William O'Neil


----------



## Skate (1 January 2019)

Wyatt said:


> Skate, your inspiring quote could be even valid for a bobsled team.
> 
> View attachment 91081
> 
> ...




How I Made $2,000,000 in the Stock Market (1960)

*Darvas box system*
Wyatt, Nicolas Darvas trained as an economist & during his time as a dancer, went on to develop what we know as the Darvas box system. Even if you lack the interest in trading it an excellent book to read nevertheless.

I actively trade a modified version of the Darvas Box system it forms a part of my Hybrid Strategy.

*My Motto*
Why invent the wheel

Skate.


----------



## Skate (2 January 2019)

*Bad decisions*

Behavioural errors create bad decisions

Skate.


----------



## Gringotts Bank (2 January 2019)

What would [insert favourite trader] do here?


----------



## Gringotts Bank (2 January 2019)

What elite looks like.  Inaccessible, small footprint, low publicity. 

https://www.renfund.com/


----------



## Skate (2 January 2019)

Gringotts Bank said:


> What would [insert favourite trader] do here?




Gringotts Bank I'm confused - I'm unsure if you are making a statement even though it's posed as a question.

*Explanation*
To pose a question, or make a statement disguised as a question, is one way of bring attention to a problem. Then again I may be overthinking your post.

[insert favourite trader] = Captain Black, Nicholas Darvas & John Bollinger (I have 3 favourites traders & they are listed order of preference)

*My trading Strategy*
I actively trade a 'Hybrid Strategy' that is such named as it encapsulates & combines the methodology of each trader I have listed.

*Why invent the wheel*
My trading results stands on the shoulders of those three men.

Skate.


----------



## Skate (2 January 2019)

Gringotts Bank said:


> What elite looks like.  Inaccessible, small footprint, low publicity.
> 
> https://www.renfund.com/




Gringotts Bank are you recommending that I sign up ?

Let me make a quote about the 'elite'.

*Overconfidence.* 
Overconfidence is perhaps the most common behavioural mistake, and while it’s pretty easy to spot by someone who is overconfident, it’s almost impossible for the trader to recognize it in himself.

Skate.


----------



## Gringotts Bank (2 January 2019)

Even with a few billion to invest, you might find it's still a closed shop.  He's that good.  Even better that no one has ever heard of him (Simons).


----------



## Skate (2 January 2019)

Gringotts Bank said:


> Even with a few billion to invest, you might find it's still a closed shop.  He's that good.  Even better that no one has ever heard of him (Simons).




*How does Simons make money trading*
The smart Investors, the professionals, screw the little guy who lacks the education on the topic – that’s how.

Everyone who trade knows the risk or they should. (trading is a Zero Sum Game)

Skate.


----------



## Skate (2 January 2019)

Skate said:


> *How does Simons make money trading*
> The smart Investors, the professionals, screw the little guy who lacks the education on the topic – that’s how.
> 
> Everyone who trade knows the risk or they should. (trading is a Zero Sum Game)
> ...




Let me go one step further..

*Complex system*
The financial market is a complex system, but that doesn’t mean it requires a complex strategy. Information is important, but understanding what drives the market is the key that leads to making a better decision.

Skate.


----------



## Skate (2 January 2019)

Skate said:


> Let me go one step further..
> 
> *Complex system*
> The financial market is a complex system, but that doesn’t mean it requires a complex strategy. Information is important, but understanding what drives the market is the key that leads to making a better decision.
> ...




*Another comment*
I would like to make another comment about success & its application to trading & business.

*Success*
Nothing kills success like success.

Skate.


----------



## Gringotts Bank (2 January 2019)

Skate said:


> Let me go one step further..
> 
> *Complex system*
> The financial market is a complex system, but that doesn’t mean it requires a complex strategy. Information is important, but understanding what drives the market is the key that leads to making a better decision.
> ...




I mentioned him for his performance and elite status in trading.  He uses complex models, but I agree with you that complexity isn't necessary.  I'd say the level of complexity has almost no bearing on performance.


----------



## Skate (2 January 2019)

Gringotts Bank said:


> I mentioned him for his performance and elite status in trading.  He uses complex models, but I agree with you that complexity isn't necessary.  I'd say the level of complexity has almost no bearing on performance.




Sorry Gringotts Bank I'm stealing your quote and I'm going to 'Dump it here' I hope others don't just read your quote but think about it's simplicity.

"I'd say the level of complexity has almost no bearing on performance"

Skate.


----------



## Skate (2 January 2019)

Gringotts Bank said:


> I mentioned him for his performance and elite status in trading.  He uses complex models, but I agree with you that complexity isn't necessary.  I'd say the level of complexity has almost no bearing on performance.




*Application of a quote*
Gringotts Bank I often hear that markets have changed and new rules are needed, well the markets do change but the underlying fundamental rules for success don’t seem to & "_I'd say the level of complexity has almost no bearing on performance"._

Skate.


----------



## Skate (2 January 2019)

*What a great TAG*

Joules MM1 - practice perfectly, to make what you do, a perfect expression of yourself.

Skate.


----------



## Joules MM1 (3 January 2019)

Skate said:


> *What a great TAG*
> 
> Joules MM1 - practice perfectly, to make what you do, a perfect expression of yourself.
> 
> Skate.



"Never trust a man who, when left alone in a room with a tea cosy, doesn't try it on." — *Billy Connolly*


----------



## Skate (3 January 2019)

Joules MM1 said:


> "Never trust a man who, when left alone in a room with a tea cosy, doesn't try it on." — *Billy Connolly*




Joules there are some great tags on ASF but yours is right up there. Your tag has motivated me to be a better person. (a wish I’ve made daily for the last 22 years)

There will be others who will find inspiration in your tag whilst so many will skim over it.

Skate,


----------



## tech/a (3 January 2019)

Skate said:


> *Another comment*
> I would like to make another comment about success & its application to trading & business.
> 
> *Success*
> ...




Business cannot remain profitable without some modicum of success.
You won’t trade long without consistent success.

Complacency——-kills success in my view.


----------



## Skate (3 January 2019)

tech/a said:


> Business cannot remain profitable without some modicum of success.
> You won’t trade long without consistent success.
> 
> Complacency——-kills success in my view.




Tech/a nothing kills success like success - let me rephrase.

*Success*
Success can lead to complacency which kills success.

Skate.


----------



## tech/a (3 January 2019)

But it’s stll complacency.

Complacency doesn’t naturally follow Success.

Success can lead to many things including more larger successes.

But I get it———it’s an often touted “Trueism”

You have started a great thread Skate but many truisms you have posted I don’t agree with 
Just don’t have the time to go through them

Many truisms related to trading are just so off the mark!


----------



## Skate (4 January 2019)

*When you talk*

When you talk, you are only repeating what you already know.
But if you listen, you may learn something new.

Skate


----------



## Skate (4 January 2019)

kahuna1 said:


> There is of COURSE no excuse for violence and NONE whatsoever for it, or abuse, or hidden abuse.




*A perfect tag to remember*
Joe Blow has a perfect life tag - _"Be kind and respectful to others at all times and help them if you can"_

Skate.


----------



## Skate (4 January 2019)

kahuna1 said:


> Some, WILL NEVER be convinced




*Conviction*
A person with a conviction is a hard person to change. Tell him you disagree and he turns away. Show him facts or figures and he questions your sources. Appeal to logic and he fails to see your point.

Skate.


----------



## Skate (4 January 2019)

kahuna1 said:


> *NEVER underestimate stupidity .... NEVER ....*
> Oh and conspiracy is Conspiring .... planning to do something ... and I rarely is EVER talk about things that have NOT already happened .... markets rise 200% on hot air IS not a conspiracy its a reality and same for THEORY .... Theory is a polite way of saying IDIOTIC crap ....




*Something important to remember about the markets*

Usually there’s a good explanation to explain the sentiment of the market but we should be wary when the stock market moved for no apparent reason.

If the data is really strong, a decline in the market cannot be justified. When you can’t explain why the market is moving, you should be suspicious of the moves the market makes.

Skate.


----------



## Skate (4 January 2019)

*Tribal views*

Wrong does not cease to be wrong because the majority share in it

Skate.


----------



## Skate (4 January 2019)

Skate said:


> *Conviction*
> A person with a conviction is a hard person to change. Tell him you disagree and he turns away. Show him facts or figures and he questions your sources. Appeal to logic and he fails to see your point.
> 
> Skate.




*Idiots*

Its hard to educate an idiot, so don't even try.

Skate.


----------



## captain black (4 January 2019)

Skate said:


> *When you talk*
> 
> When you talk, you are only repeating what you already know.
> But if you listen, you may learn something new.
> ...




Good quote @Skate 

Here's one along similar lines I heard this morning:



> “_Education is something that is done to you_. _Learning is something you do for yourself_."




(I seem to have sand under my "Q" button on this laptop, I keep typing "uote" instead of "quote"  )


----------



## Skate (4 January 2019)

Skate said:


> *Idiots*
> 
> Its hard to educate an idiot, so don't even try.
> 
> Skate.



*
Fact*
Even after the evidence “for their beliefs has been totally refuted, people fail to make appropriate revisions in those beliefs,”

Skate.


----------



## Skate (4 January 2019)

captain black said:


> Good quote @Skate
> 
> Here's one along similar lines I heard this morning:
> 
> ...




*What a great quote *(wish I posted it)
“_Education is something that is done to you_. _Learning is something you do for yourself_."

Captain black quote is designed to generate logical thinking by applying sound judgment, it’s hard to conceive of a more serious design flaw than the failure to learn.

Captain black thank you for your quote..

*Disclaimer*
I have posted many of "Captain black" quotes on the 'Dump it here' thread.

Skate


----------



## jbocker (4 January 2019)

Today I will be with an idiot, so thanks for the advice. It would seem the best I could do is try to get him to learn, rather than educate him.
Thinking more on it though I think it might to better not to try to educate anyone but try to get them to learn for themselves. When they achieve that you may then be able to educate.


----------



## Skate (4 January 2019)

jbocker said:


> *Today I will be with an idiot, so thanks for the advice*. It would seem the best I could do is try to get him to learn, rather than educate him.
> Thinking more on it though I think it might to better not to try to educate anyone but try to get them to learn for themselves. When they achieve that you may then be able to educate.




jbocker if I may make another general quote 
*
Masturbating in public*
"Satisfying your urge to call someone stupid is like masturbating in public. It may feel good to you, but it looks disgusting to everyone else and it just makes the other person work harder to find ways to disagree with you"

Skate.


----------



## jbocker (4 January 2019)

Skate said:


> jbocker if I may make another general quote
> *
> Masturbating in public*
> "Satisfying your urge to call someone stupid is like masturbating in public. It may feel good to you, but it looks disgusting to everyone else and it just makes the other person work harder to find ways to disagree with you"
> ...



I get that. But I think you got me wrong, I am being serious. I hopefully never name anyone stupid, but seriously I am talking about someone who really could rate as an 'idiot' (using the term in your quote 'educating an idiot') and I no longer argue with him and never called him that and often in the past I would try to educate. It has mostly proven fruitless, From here, I will only encourage him to learn first. It was a timely bit of advice by Captain black which led me to think, and suggest that your quote on educating idiots could be extended to all levels of intelligence.


----------



## Darc Knight (4 January 2019)

Arrogance comes before a fall.


----------



## kahuna1 (4 January 2019)

Love the thread,

Great advice, I struggle ... at times against people who are wolves dressed as lambs. Older, wiser, I choose and of late not often to go specific on a stock, you often are talking to PR company or even the CEO ...

I must admit, I blurted recently at someone ... *"your an idiot"*  not a good look on my part, but their view, all be, as I learnt and really took the time to learn WHY they did think that, came from a vested interest company and was presented as factual via the media on a topic ... VAPING and since I struggle with the addiction ... and YEP vape so I don't tear someones head off missing the nicotine which my brain got used to age 14 ,,,, the fact that the cancer causing stuff is INSIDE tobacco and TAR and inhaling smoke with 200 odd impurities ... of which 20 or so cause cancer ... VAPING glycerol with nicotine and in fact, vaping anything is less than perfect ... however smelling cooking is about the same .,,, and it doesn't coat your lungs in tar and NICOTINE is NOT the cancer causing agent in smokes its the smoke and the ground up match heads that keep it alight v going out that are just part of the goodies.

I blurted ... from first hand experience and UK studies on the topic. Whilst VAPING is NEVER advised, as a tool to STOP smoking or MINIMIZE damage and issues with lungs, well ... within a day ,... NO smokers cough ... NO asthma ... NO short of breath ...No stink .... and a lot of other things and for 1% the COST ...

Will it cause long term issues ? well for me and my blurting ... the issue was breathing .... actually BREATHING without a plastic bag over my head to improve it and my looks .... the studies all came out were supposedly scientific and if one take the time to dig, funded by the like of the cigarette companies themselves who wish to produce something that does the SAME ... will be costing the same as smokes and heats up nasty tobacco and you get the good stuff all over again not just the actual drug.

I do know, I was wrong to call the person lecturing me on how stupid I was because VAPING was worse than smoking, but .... if one does not have the nasty cough, your lungs function like  when you were 20 despite 30 years of fags, well ... so be it !! Opinion .... YEP .... Scientific .... NOPE .... or partially on the bad stuff in SMOKED tobacco ... unknown the Vaping one and like many things, funding for one is 100 times more than the other. Saying VAPING leads kids to smoking may be true, POT ... which is ... for some about 1/1000 a very bad idea ... its sends them nuts ... even a heavy user, a stoner of you have ever worked with one, or hired one, operates in slow motion as if stoned ... even hours and days after it has passed. Now its legal in 20 plus USA states.

Normally putting something like Valium in the drinking water was used, but to combat people NOT accepting the party line .., they must be sedated .... its NOW legal a drug that 1/1000 users has their mind rewired and becomes permanently injured via paranoid issues or bipolar or worse. ICE the pure form of it, the damage that does, well its 5% messed up forever and the addiction is ... well worse than smoking by a factor of 100. Kicking that one, the masturbating in public above ... comment , if you ever counsel or visit an see a big emergency department they have a padded room with bullet proof glass for them to come down ....   a sad common sight is masturbation over and over and over and over again to the point they damage themselves.

VAPING .... geee .... Valium and POT I think maybe not enough .... here have a nice ICE water for that hot day.

Whoops there I bloody go again BLURTING ....
Cheers Mark K.


----------



## Skate (4 January 2019)

jbocker said:


> I get that. But *I think you got me wrong*, I am being serious. I hopefully never name anyone stupid, but seriously I am talking about someone who really could rate as an 'idiot' (using the term in your quote 'educating an idiot') and I no longer argue with him and never called him that and often in the past I would try to educate. It has mostly proven fruitless, From here, I will only encourage him to learn first. It was a timely bit of advice by Captain black which led me to think, and suggest that your quote on educating idiots could be extended to all levels of intelligence.




jbocker, my posts are general in nature & it's rare that they are directed at anyone.

Skate.


----------



## Skate (4 January 2019)

kahuna1 said:


> Love the thread,
> 
> Great advice, I struggle ... at times against people who are wolves dressed as lambs. Older, wiser, I choose and of late not often to go specific on a stock, you often are talking to PR company or even the CEO ...
> 
> ...




Hi Mark, if at any time you want to express an opinion or have something to say, I encourage you to 'Dump it here'

*Learning from others*
The more you read and learn from others the better prepared you will be. I hope you'll enjoy posting in this thread as it appears you have plenty to say that others find interesting.

*Ideas*
The 'Dump it here' thread is about ideas - not a contest of ideas. 

*Right or wrong*
Whether your right or wrong isn't important - whats more important is that this thread gives you the ability to express your views without being ridiculed or challenged. 

Thank you Mark for expressing yours.

Skate.


----------



## ducati916 (4 January 2019)

The soundness of a conclusion, may, not infrequently, be tested by its consequences.

jog on
duc


----------



## Skate (4 January 2019)

ducati916 said:


> The soundness of a conclusion, may, not infrequently, be tested by its consequences.
> 
> jog on
> duc




*Tested by its consequences*
ducati916 quoted that _"The soundness of a conclusion, may, not infrequently, be tested by its consequences" _(I like it)

*Conclusion*
When faced with a complex or difficult decision, people often simplify their task by applying an abbreviated rule set to help problem‐solve and make the decision. A simple approach produces a good enough result most times but sometimes it can lead to significant errors and inconsistencies in our judgments.

*Range of possibilities*
Simply jumping to a conclusion without bothering to assess the full range of possibilities is an inbuilt weakness we all suffer.

*Tested by its consequences*
“As the saying goes, if what you learn leads to knowledge, you become a fool, but if what you learn leads to action, you can become wealthy”

Skate.


----------



## barney (4 January 2019)

Darc Knight said:


> *Arrogance comes before a fall*.




And the longer the arrogance has been manifest … the bigger the fall!

Interestingly enough however …. The arrogant one will likely be the last to admit the fall, if ever … and likely blame someone else anyway


----------



## Skate (4 January 2019)

barney said:


> And the longer the arrogance has been manifest … the bigger the fall!
> 
> Interestingly enough however …. The arrogant one will likely be the last to admit the fall, if ever … and likely blame someone else anyway




barney, you are spot on - _"The arrogant one will likely be the last to admit the fall, if ever … and likely blame someone else anyway"_
*
Winners & Losers*
Winners take responsibility. Losers place blame.

Skate.


----------



## Skate (4 January 2019)

luutzu said:


> Confucius says, the journey of a thousand mile begin with a single step.



*
A Chinese proverb*
“A journey of a thousand miles must begin with a single step”

*The true meaning*
People never fully appreciate or grasp the true meaning, given the wrong first step begins a journey that could end as far as two thousand miles from where they want to be. 

*First step*
"Make sure your first step is not a misstep.”

Skate


----------



## barney (4 January 2019)

Skate said:


> b*
> Winners take responsibility. Losers place blame.*
> 
> Skate.




Indeed …..  My trading choices improved a lot when I started taking responsibility rather than feeling "unlucky" most of the time


----------



## Skate (4 January 2019)

barney said:


> Indeed …..  My trading choices improved a lot when I started taking responsibility rather than feeling "unlucky" most of the time




barney, when people are in doubt, they tend to look to others to confirm their behaviour. Some people would rather adopt others’ opinions rather than form their own.

*Fear of failure*
Everybody has a fear of failure at some level - at times we’ve all been fearful that perhaps we are not enough. Even when we know what to do, our fear can keep us from executing our plans. 

Skate.


----------



## luutzu (4 January 2019)

Skate said:


> *A Chinese proverb*
> “A journey of a thousand miles must begin with a single step”
> 
> *The true meaning*
> ...




The first step is often a misstep. The first few hundred miles could very well be heading the wrong way. 

That's where U-turn, crosscroads, new shoes and final destinations are for 

I always took the proverb to mean that no journey was ever accomplished "over night", nor done in a single step. Just have to have an idea of where you want to go and start walking.


----------



## Skate (4 January 2019)

luutzu said:


> The first step is often a misstep. The first few hundred miles could very well be heading the wrong way.
> 
> That's where U-turn, crosscroads, new shoes and final destinations are for
> 
> *I always took the proverb to mean that no journey was ever accomplished "over night", nor done in a single step*. Just have to have an idea of where you want to go and start walking.




*My Definition*
Endeavour = is an attempt to achieve a goal or achieve something

*A Chinese proverb is cryptic*
“A journey of a thousand miles must begin with a single step”

Luutzu, the real meaning is left up to the reader to interpret the proverb - my take is:to start any '_endeavour_' you must first start.

*The message in my previous post was this: *
"Make sure your first step is not a misstep.”

Luutzu, thanks for the alternative spin.

Skate.


----------



## luutzu (4 January 2019)

Skate said:


> *My Definition*
> Endeavour = is an attempt to achieve a goal or achieve something
> 
> *A Chinese proverb is cryptic*
> ...




English as a second language speaker here 

In recent interpretation with slightly different phrasing, Confucius said, the journey of a thousand miles lay under your feet.

Or as Nike put it, Just Do It [trade marked].


----------



## Skate (4 January 2019)

luutzu said:


> English as a second language speaker here
> 
> In recent interpretation with slightly different phrasing, Confucius said, the journey of a thousand miles lay under your feet.
> 
> Or as Nike put it, Just Do It [trade marked].




Luutzu, that's what this thread is all about, alternative views & interpretations of the facts..

*We come up with stories. *
Our mind creates stories why we’re not where we want to be. Usually it starts off as, we’re not smart enough, successful enough, thin enough, rich enough, loved or loving enough.

*Outside our control*
Our stories almost always relate to something outside our control, or our lack of some natural talent or ability its those stories that hold us back most times.

Motivational quotes such as the one you have posted might just be the catalyst for change, well here's hoping.

Thanks Luutzu..

Skate.


----------



## luutzu (4 January 2019)

Skate said:


> Luutzu, that's what this thread is all about, alternative views & interpretations of the facts..
> 
> *We come up with stories. *
> Our mind creates stories why we’re not where we want to be. Usually it starts off as, we’re not smart enough, successful enough, thin enough, rich enough, loved or loving enough.
> ...




When in doubt, turn to old word of wisdom 

On the theme of journey....

Lao Tzu says, great talent blossom late. Great ships takes the longest to be built. 

Ben Franklin's Poor Richard says, those who dine on hope and prayers die famish.


----------



## Gringotts Bank (4 January 2019)

Skate said:


> *We come up with stories. *
> Our mind creates stories why we’re not where we want to be. Usually it starts off as, we’re not smart enough, successful enough, thin enough, rich enough, loved or loving enough.




The mind is designed (and conditioned) to value negativity because negativity ensures survival.  Therein, all of humanity's problems.  Ask god why it would do such a peverse thing because I don't have the answer.  The trick - as everyone knows - is to overcome that basic tendency.


----------



## Skate (4 January 2019)

Gringotts Bank said:


> *The mind is designed (and conditioned) to value negativity because negativity ensures survival. * Therein, all of humanity's problems.  Ask god why it would do such a peverse thing because I don't have the answer.




Gringotts Bank, now I understand why I'm a wimpy trader - its because "*negativity ensures survival"
*
I'm first to admit I'm a wimpy trader - I always run and hide when the going gets tough, I've found it generally produces better results than the brave souls who are proud of their ability to suffer great monetary pains while they wait for their convictions to be rewarded.

Skate.


----------



## jbocker (4 January 2019)

Skate said:


> jbocker, my posts are general in nature & it's rare that they are directed at anyone.
> 
> Skate.



Sorry Skate  I was being too sensitive. I have returned from my catchup. Which was his wedding at a registry. I was his witness. 
All good.


----------



## Darc Knight (6 January 2019)

"I've travelled down some lonely roads,
Both crooked tracks and straight.
An' I've learned life's noblest creed,
Summed up in one word … "Mate".
I'm thinking back across the years,
(a thing I do of late)
An' this word sticks between me ears;
You've got to have a "Mate".
Someone who'll take you as you are,
Regardless of your state,
An' stand as firm as Ayres Rock
Because 'e is your mate.
My mind goes back to '42,
To slavery and hate,
When man's one chance to stay alive
Depended on 'is Mate
With bamboo for a billy-can
An' bamboo for a plate.
A bamboo paradise for bugs
Was bed for me and "Mate".
You'd slip and slither through the mud
And curse your rotten fate,
But then you'd 'ear a quiet word:
"Don't drop your bundle Mate."
And though it's all so long ago,
This truth I 'ave to state:
A man don't know what lonely means
Til 'e has lost his "Mate".
If there's a life that follers this, If there's a Golden Gate,
The welcome I just want to 'ear
Is just, "Good on y' Mate."
An' so to all that ask me why
We keep these special dates,
Like "Anzac Day" …
I answer: "WHY??!  - We're thinking of our MATES."

An' when I've left the driver's seat,
An' handed in me plates,
I'll tell ol' Peter at the door,
"I've come to join me Mates."


----------



## Skate (6 January 2019)

Darc Knight said:


> "I've travelled down some lonely roads,
> Both crooked tracks and straight.
> An' I've learned life's noblest creed,
> Summed up in one word … "Mate".
> ...




Darc Knight what an excellent post, pulled at every heart sting.

I must admit, there is nothing nicer than to hear "G'day mate"

*Meaning* 
G'day, means 'hello' and mate means 'friend'

Thanks mate..

Skate.


----------



## barney (6 January 2019)

Darc Knight said:


> "
> I'll tell ol' Peter at the door,
> "I've come to join me Mates."




Written by Corporal Duncan Butler who was an ex POW.

_Corporal Butler was captured by the Japanese at Tjamplong in Timor in February 1942, moved to Java in September 1942, then to Singapore in January 1943 and Changi, before being sent to Thailand to work on the railway. He was repatriated and returned to Australia in October 1945.
_
He would have known a thing or two about hardship and the value of Mates __


----------



## barney (6 January 2019)

*Japan, September 1945.  Released Australian soldiers from Naoetsu POW Camp display their flag - hand-sewn from coloured American supply-parachutes.  
*
The smiles say it all !!


----------



## Skate (8 January 2019)

Darc Knight said:


> I like little words of Wisdom. I like the Wisdom Skate is posting. I just need to take the time to read the rest. Thank you Skate!




*I've been thinking*
Our word, our bond, our morals have changed & not for the better. This got me thinking, what are the values we hold so dear ?
*
Our values*
We don’t base our values on moral excellence anymore we base them on meaning.

*Meaningful life*
People are always saying they want to lead a meaningful life. They want to do things that have “meaning.”

*Emotions you already have*
One great thing about meaning is it’s all about the emotions you already have. 

*You define meaning*
The other great thing about meaning is that everybody gets to define meaning in his or her own way.
*
Frank Sinatra* (My Way)
I faced it all and I stood tall
And did it my way

*It feels good*
How about a simple silly idea and just do things that give you good feelings!

Skate.


----------



## Skate (8 January 2019)

Darc Knight said:


> I like little words of Wisdom. I like the Wisdom Skate is posting. I just need to take the time to read the rest. Thank you Skate!




*I get to chose*
The first thing I do when I wake up is "put a smile on my dial" because it sets the tone for the rest of my day.

*Staying Positive*
Staying Positive doesn’t mean you have to be happy all the time, it means that even on the hard days you know that there are better ones coming.

Skate.


----------



## Skate (8 January 2019)

jbocker said:


> Sorry Skate  I was being too sensitive. I have returned from my catchup. Which was his wedding at a registry. I was his witness.
> All good.




jbocker, this post is not directed at you but I'm using your post to express a view I have about habits & emotions

*Habits*
Some habits can be quite positive, other times just plain irritating but when you fail to see them in yourself, they can be extremely dangerous.

*Emotions*
Emotions drive our reactions on what we perceive

Skate.


----------



## Skate (8 January 2019)

*Success*
Success is actually a short race—a sprint fueled by discipline just long enough for habit to kick in and take over.

Skate.


----------



## Skate (8 January 2019)

*How to make a good habit*
Essentially training yourself to act in a specific way. Stay with this long enough and it becomes routine—in other words, a habit.

*The journey*
Put up with the discipline long enough to turn it into a habit, and the journey feels different.

*Mindset*
Like any habit, you set your mind to it until the right mindset becomes routine.

Skate.


----------



## Darc Knight (8 January 2019)

Skate said:


> *Success*
> Success is actually a short race—a sprint fueled by discipline just long enough for habit to kick in and take over.
> 
> Skate.




^This is actually one of those pearls of wisdom that can be Life changing. I once read an article that a habit takes 30-60 days to form, depending on the complexity of the habit.

Bravo and thank you to you Skate


----------



## Skate (8 January 2019)

Wyatt said:


> Nice work there Skate. Kudos to you, although it looks like you are currently in your biggest DD, I thought you mentioned you were 100% cash recently




(IMHO) My trading account is at the moment 100% cash & shopping for me is about to start..

*Buying stocks*
The problem is that we tend to think about buying stocks in much the same way we buy ordinary products. Usually when we go shopping for things, we want to pay less for that item than what someone else paid. If you buy “cheaper” than everyone else, you can take comfort in finding the ultimate bargain.
*
Big mistake*
However, it is a mistake to apply that same logic to the stock market. Stocks aren’t like a new pair of pants or a Tee shirt. Their real worth changes dramatically over time.

Skate


----------



## sptrawler (8 January 2019)

Effort should always be applauded, but care should be taken when rewarding mediocrity, lest it becomes the goal.


----------



## Skate (8 January 2019)

sptrawler said:


> Effort should always be applauded, but care should be taken when rewarding mediocrity, lest it becomes the goal.




Yep, good is not good when better is expected.

Skate


----------



## sptrawler (8 January 2019)

Skate said:


> Yep, good is not good when better is expected.
> 
> Skate




Good is not good, when better is required.
What was that old saying, something like, if you want to climb a mountain don't aim for half way up, because that is what you will achieve.


----------



## Skate (8 January 2019)

sptrawler said:


> Good is not good, when better is required.
> What was that old saying, something like, if you want to climb a mountain don't aim for half way up, because that is what you will achieve.




sptrawler, is that the correct quote "Good is not good, when better is required"

I'm just shooting from the hip, quoting from memory & most times just mouthing off.

Skate.


----------



## Skate (8 January 2019)

sptrawler said:


> Good is not good, when better is required.
> What was that old saying, something like, if you want to climb a mountain don't aim for half way up, because that is what you will achieve.



*
Being impulsive*
We all have impulses to do things, and many times they are not in our best interest.

*Motto*
Live & learn.

Skate


----------



## sptrawler (8 January 2019)

Skate said:


> sptrawler, is that the correct quote "Good is not good, when better is required"
> 
> I'm just shooting from the hip, quoting from memory & most times just mouthing off.
> 
> Skate.



I don't know I just made it up, what I was meaning was, Australia is falling behind in most academic measures.
All we seem to do is lower the standard for excellence, it is a bit like addressing the obesity crisis, by changing the numbering on clothing.


----------



## Skate (8 January 2019)

sptrawler said:


> I don't know I just made it up, what I was meaning was, Australia is falling behind in most academic measures.
> All we seem to do is lower the standard for excellence, it is a bit like addressing the obesity crisis, by changing the numbering on clothing.




*The standard for excellence*
sptrawler, to a great degree you are correct, but our success or failure in life is a function of our luck. We like to think that our results are a direct consequence of our insight and efforts, but the reality is that luck plays a big part in how we do. No matter how smart we are, circumstances, and developments along the way shape us into who we are.

Skate.


----------



## tech/a (8 January 2019)

Skate.

All of the above becomes instinct

*IF*

Your taught it as a Child.
Its a school culture and

Your circle has the same values.   

This should be a responsibility of *ALL Parents*!  

This will set your Kids on the right path.
If you instil it at home
Place your kids in schools where its common place
You wont have to care to much about their circle.

Its starts and Finishes in my view with *YOU *


----------



## Skate (8 January 2019)

sptrawler said:


> *I don't know I just made it up*, what I was meaning was, Australia is falling behind in most academic measures.
> All we seem to do is lower the standard for excellence, it is a bit like addressing the obesity crisis, by changing the numbering on clothing.




*Disclaimer*
My posts are my thoughts at the time. My opinions & quotes - I make them up or at best shoot from the hip.
*
A Failing*
Sorry I don't proof read, I punch the keys to what I'm thinking at the time. (there is no control filter, but my words are measured

Skate.


----------



## Skate (8 January 2019)

tech/a said:


> Skate.
> 
> All of the above becomes instinct
> 
> ...




"Its starts and Finishes in my view with *YOU"*

*Programmed and set in stone*
tech/a you are right and right on the money once again, our core Belief System refers to the idea that our thoughts, feelings and actions are programmed and set in stone.

We get immediate improvements in how we think, feel, act and live when learning from others.

tech/a said _"Its starts and Finishes in my view with _*YOU" *( IMHO - its always up to you)

Our belief system is so deeply ingrained in us, but if people are open to new idea there would be change for the better in them by moving out negative behaviour & ideas and replacing them with positive ones.

*What pleases them*
People believe what it pleases them to believe & its the main reason most won't entertain change

Skate


----------



## sptrawler (8 January 2019)

Skate said:


> *Disclaimer*
> My posts are my thoughts at the time. My opinions & quotes - I make them up or at best shoot from the hip.
> *
> A Failing*
> ...



I work on the same principal, I just 'shoot from the hip', my own thoughts.
Right or wrong, I don't know, because they are subjective.
I feel I've grown through the school of hard knocks, so I tend to be blunt, I've never been one to use a hundred word when two will do.


----------



## tech/a (8 January 2019)

sptrawler said:


> I've never been one to use a hundred word when two will do.




My favourite Two words.

*No.*
and
*No.*

This would have to be the most time/money saving word every devised.
Try it!


----------



## Skate (8 January 2019)

tech/a said:


> My favourite Two words.
> 
> *No.*
> and
> ...




My favourite two words are:

1. Please
2. Thanks

Skate.


----------



## satanoperca (8 January 2019)

My vent : Google provides incredible reporting and analysis tools for websites/marketing and sales.

Just wish all these so called digital marketers had the brains/capability to understand how to set them up correctly.

Frustrated and pissed off that everyone calls themselves an expert in IT after working in a job of 3 years, but very few learn the skills and keep learning, to be called an expert after 15 years or 10,000 hours

Everyone is a F--king expert these days.


----------



## sptrawler (8 January 2019)

satanoperca said:


> Everyone is a F--king expert these days.




Well 50% of students go to university, we obviously have a higher percentage of very clever people these days.


----------



## Darc Knight (8 January 2019)

sptrawler said:


> I don't know I just made it up, .


----------



## Skate (8 January 2019)

satanoperca said:


> My vent : Google provides incredible reporting and analysis tools for websites/marketing and sales.
> 
> Just wish all these so called digital marketers had the brains/capability to understand how to set them up correctly.
> 
> ...




satanoperca, there lies the problem 'people don't keep learning' and the other problem as I see it (IMHO) - they don't put themselves in the shoes of others.

*Meaning*
They don't see the problem from another perspective. "they don't put themselves in the shoes of others". 

*Silver Shoes*
I gave 52 staff members a pair of miniature 'silver shoes' to remind them of this fact.

*Smile on your dial*
Another compulsory work condition, when in the company of others "put a smile on your dial"  

*More importantly*
Put a 'smile on your dial' when speaking on the phone - people can hear smiles. (its first rule in conditioning people)

Skate.


----------



## sptrawler (8 January 2019)

Darc Knight said:


>




I thought the quote, post#663 was better, I made that up also.


----------



## Skate (8 January 2019)

sptrawler said:


> I thought the quote, post#663 was better, I made that up also.




For the benefit of others..



sptrawler said:


> *Effort should always be applauded, but care should be taken when rewarding mediocrity, lest it becomes the goal.*




Skate.


----------



## SirRumpole (8 January 2019)

> *Effort should always be applauded, but care should be taken when rewarding mediocrity, lest it becomes the goal.
> *



*
*
Cricket Australia take note.


----------



## sptrawler (8 January 2019)

Skate said:


> For the benefit of others..
> 
> Skate.




As with most of the posts, found on ASF.


----------



## sptrawler (8 January 2019)

SirRumpole said:


> Cricket Australia take note.



Never a truer word said.
IMO mediocrity is rampant, through Australian society, at the moment. Being brought about by a vocal minority, who demand it be accepted as the norm.
Because it is easily achieved, the masses have no difficulty accepting it and embracing it.


----------



## Skate (8 January 2019)

sptrawler said:


> Never a truer word said.
> IMO mediocrity is rampant, through Australian society, at the moment. Being brought about by a vocal minority, who demand it be accepted as the norm.
> Because it is easily achieved, the masses have no difficulty accepting it and embracing it.




An alternative view on being mediocre – not to be confused with *Mediocrity* and the views expressed by sptrawler

Mediocre to me means “average”

*Mediocre when it comes to trading*
Being mediocre sometimes has it place, even the best investor has plenty of lousy picks along the way, but it is the manner in which you handle those investments after their purchase that ultimately determines your level of success. 

*Brains*
Brains (IMHO) are an overrated attribute when it comes to trading. Smart people tend to think logically and have a hard time dealing with a market that ignores what should be painfully obvious.

*Arguing with a lunatic is useless*
The market is very emotional and illogical at times, and if you are too analytical, you will be surprised often. Using logic to argue with a lunatic is useless, and using logic to figure what the market might do on any given day is equally useless.

*Mediocre*
Being mediocre as a trader is about being realistic and having an understanding that we are probably only an average trader at best but that’s OK.

Skate.


----------



## Skate (8 January 2019)

kahuna1 said:


> *Australians and our besties NZ ... went to war in 1914 ... and with the UK paid a horrid price .... I am respectful and thankful*




kahuna1, I have a photo in my office to remind me what the high cost of war looks like. (image included)

61,720 lives lost in WW1
39,429 lives lost in WW2
520 lives lost in Vietnam

These figures don't include the injured or who have died from those injuries.

It's sobering to look at that photo every day.

Skate


----------



## jbocker (8 January 2019)

Skate said:


> 61,720 lives lost in WW1
> 39,429 lives lost in WW2
> 520 lives lost in Vietnam




ENORMOUS Numbers. The population in Australia during WW1 was around 5 Million. It would have been difficult to find a family or settlement that would not have been touched personally.

I sat in the new Perth (optus) stadium jam packed during the AFL finals, which holds 60 000 and thought WWI deaths would have overfilled this stadium. Very sobering thought.
I did a trip to Albany ANZAC memorial, and saw the field of lights which is on till ANZAC day this year. Again a sobering display. Albany was the last of Australia many ANZACs would have seen. I learned a lot during the visit, some incredible stories have stuck with me.


----------



## Skate (8 January 2019)

jbocker said:


> ENORMOUS Numbers. The population in Australia during WW1 was around 5 Million. It would have been difficult to find a family or settlement that would not have been touched personally.
> 
> I sat in the new Perth (optus) stadium jam packed during the AFL finals, which holds 60 000 and thought WWI deaths would have overfilled this stadium. Very sobering thought.
> I did a trip to Albany ANZAC memorial, and saw the field of lights which is on till ANZAC day this year. Again a sobering display. *Albany was the last of Australia many ANZACs would have seen*. I learned a lot during the visit, some incredible stories have stuck with me.




jbocker, we called into Albany in 2016 & their remembrance wall is outstanding. 

*Albany was the last of Australia many ANZACs would have seen*
I remember standing at the wall looking out to sea contemplating (in hindsight your words) this was the last place many Australians got to see.

Skate.


----------



## Skate (8 January 2019)

I was offered a business proposition many years ago. He had flown half way across Australia for the meeting (I refused his offer, but that's not the point of this post)

*Learning something new *
I always make a habit of learning something new from everyone I meet. This guy was mega wealthy & I asked him if he would tell me his life story. (I was genuinely very interested)
*
We were now mates*
Three hours latter, now we are mates. He was from humble beginnings migrating to Australia after WW2.

*What was the takeaway from his story*
In the conversation he remarked " Australians don't appreciate their freedom"

Skate.


----------



## tech/a (8 January 2019)

Skate said:


> *What was the takeaway from his story*
> In the conversation he remarked " Australians don't appreciate their freedom"
> 
> Skate.




Nor do many refugees who are settled here!


----------



## kahuna1 (8 January 2019)

Sorry, just keep dumping in public ... on the thread.

Whilst, well, close to my heart, it is totally relevant in the extreme, Likely not short term, but longer term, it is impossible to go on beyond 5-10 years. Not the WW1/2 stuff ... the tax and drip down stuff. Wealth is fine, as long as its NOT at the expense of the vast majority. Free trade, is NOT tax free trade where ... it flows to one or very few and NO part is given or even offered for the nation actually paying for the product.

We DON'T actually need any of it and many nations either have NO or very little of various of the larger tax inverters and tax cheats. I have NO issue, NONE ... if they pay but sadly. they don't and the impacts are very clear. As to the latest rant ... and emergency ... under war powers act of I think 1933 or 36 in the USA, FDR faced with a clear and very good picture of the state of affairs globally with Japan and Germany, both post 1937 when China went down ... was faced with one side the USA population not willing to enter another war. It was so unpopular ... now we have some war being invented ... as a distraction and yet again those ... Bloody Mexicans, if they only would learn their place ... and I kid ... on that and have a deep respect and love the ex PM of Mexico and his U tube ... 

FDR ... KNEW ... what was coming and whilst able to read the Japanese communication from 1939, and increasing both open and not so open support of the UK ... pre WW2 ... it was NOT until Japan invaded after ... well a series of actions on trade and eventually freezing and confiscating all Japanese assets mid 1941, so 6 months prior to Pearl Harbor that ... things really started kick to off.  Germany, despite USA warships in UK conveys with orders to shoot to kill post 1939, Germany ordered its U boats to avoid US ships no matter what. Germany, post Pearl Harbor declared war only upon one nation in WW2 and that was .... well USA. 

Comparing FDR in the same sentence as the C grade reality show actor is absurd. Comparing the need for any fence, well ... when in 1954 when Trump still in nappies aged 8 and still being breastfed I suspect, which explains a lot of today ... he president then had yet another ... about the 10th disgraceful act against Mexico and it was called Operation Wetback and 1.3 million Mexicans were deported officially and many times that FLED ... 

Oh same old same old ... Hoover blamed 1929 crash on them ... sent them back ... WW2 ... they begged for them back to fill vacant positions of fighting me ... 1954 we dont like them .... 1970 on wards we need cheap workers ... now ... we dont ... oh and POT ... banned due to the evil it caused to Mexicans ... NOW ... legal ... a pacifier for the masses ? 

there u go  a dump xxx


----------



## explod (8 January 2019)

I'm dumping this explanation now and will follow up tomorrow with an explanation of my approach to investing which Skate requested some weeks ago:-

"
The internet is full of ‘get rich quick’ articles, books, and ‘systems’ – and they all have an angle on investing.  Actually, many of them are based on sound principles, but in order to sell them the marketers warp the message (both the front end and the back end content).  For example, a strategy used by Warren Buffet such as value investing, can be explained in 50,000 words.  But it can also be explained in a few sentences.

What none of these articles and ‘systems’ mention – none of them – is Pre IPO.  They don’t mention that initial Amazon investors made 14 Million percent returns on their money, or that the music group U2 made more money on Pre IPO than selling music.  Why won’t it say all this?  Because if everyone did it, the returns wouldn’t be so good.  That’s how secrets work.  When you ask the question “If this is so good why doesn’t everyone do it?” you have disqualified yourself as an Elite investor.  Because as soon as things become watered down for the consumer, they also become less potent.

Be aware – by following in the footsteps of Pre IPO investors it does not guarantee that you will become a billionaire.  However, if you do want to grow your wealth into a small fortune, it is the only proven path..."

https://www.zerohedge.com/news/2019-01-07/real-secret-wealth-creation


----------



## Skate (8 January 2019)

explod said:


> I'm dumping this explanation now and will follow up tomorrow with an explanation of my approach to investing which Skase requested some weeks ago:-




explod, I can’t wait till tomorrow..

Skate.


----------



## Skate (9 January 2019)

explod said:


> I'm dumping this explanation now and will follow up tomorrow with an explanation of my approach to investing which Skate requested some weeks ago:-
> 
> "
> The internet is full of ‘get rich quick’ articles, books, and ‘systems’ – and they all have an angle on investing.  Actually, many of them are based on sound principles, but in order to sell them the marketers warp the message (both the front end and the back end content).  For example, a strategy used by Warren Buffet such as value investing, can be explained in 50,000 words.  But it can also be explained in a few sentences.
> ...




explod has explained to me that "tomorrow" used in his previous post should now be substituted with the word "ASAP"



explod said:


> *UPDATED*
> I'm dumping this explanation now and will follow up *ASAP* with an explanation of my approach to investing which Skate requested some weeks ago:-




In the mean time..   

*We all know that there is NO Holy Grail*
(IMHO) there is no holy grail for an investment strategy & if there was everyone would be using it.

Skate.


----------



## Skate (9 January 2019)

*There is no “best” approach*

If you believe charts are the same as 'reading tea leaves' or using 'voodoo' or 'Ouija board', then fundamentals are for you.

Skate.


----------



## Skate (9 January 2019)

*A touchy subject*
When discussing Technical Analysis verses Fundamental Analysis it shouldn't be a debate about right or wrong but a method to achieve they same end game.
*
Respect other people’s way of thinking*
6+3=9
But so does 5+4
The way you do things isn’t always the only way to do them. 
Respect other people’s way of thinking.

*Two camps – Fundamental and Technical Analysis*
Trading is normally broken into two camps, fundamentals or technical analysis, there are those from the school of fundamental analysis and those from a technical background.

*It doesn't matter*
Whether you use Fundamental Analysis or Technical Analysis it doesn't matter - one is not right & the other is wrong that's not the point in discussing them.

Skate.


----------



## Skate (9 January 2019)

*No wonder we are confused 

Just read* 
Market Wizards, Interviews with Top Traders (Jack D. Schwager)

*Contradictory statements*
Successful professional traders make contradictory statements. 

*Example*
For example, in the book the successful professional trader Jim Rogers is quoted as saying that *“I haven’t met a rich technician.”* 
Yet in the same book an equally successful professional trader, Marty Schwartz, is quoted as saying, “*I always laugh at people who say, ‘I’ve never met a rich technician.’
*
Go figure..

Skate.


----------



## ducati916 (9 January 2019)

Skate said:


> *A touchy subject*
> When discussing Technical Analysis verses Fundamental Analysis it shouldn't be a debate about right or wrong but a method to achieve they same end game.
> *
> Respect other people’s way of thinking*
> ...





Re. your 5 + 4 = 9, so does 8 + 1 or 10 - 1 [or an infinite combination thereof].

My point: are they standalone, additive, or subtractive to one another?

Fundamental analysis, classically refers to 'time-in-the-market', whereas, technicals are 'timing' the market.

Clearly, timing the market is far more profitable than time in, if, and it is a big IF, you are any good at it.

Where the fundamentals help provide an edge to an otherwise technical holding is the ability to hold and build, over time an ever increasing position. This [obviously] can only really happen if the fundamentals of the position are sound, viz. it will not go to zero. It allows an 'average' holding to be multiples more profitable than a simple buy and hold, unless, the buy and hold goes straight up.

The answer therefore is: they can be standalone, but they can also be additive. Just make sure they are not subtractive, through user confusion.

jog on
duc


----------



## Skate (9 January 2019)

ducati916 said:


> Re. your 5 + 4 = 9, so does 8 + 1 or 10 - 1 [or an infinite combination thereof].
> 
> My point: are they standalone, additive, or subtractive to one another?
> 
> ...




*Disclaimer*
I trade using technical analysis having a robust mechanical trading system over the fundamental aspect of trading.

ducati916, made a great final remark _"The answer therefore is: they can be standalone, but they can also be additive. Just make sure they are not subtractive, through user confusion"_

I want to play the devil's advocate.

*For those who don't know the term*
The term devil's advocate describes someone who, given a certain point of view, takes a position he or she does not necessarily agree with (or simply an alternative position from the accepted norm), for the sake of debate or to explore the thought further.

Skate.


----------



## Skate (9 January 2019)

*There are different ways to profit from the markets*
1. Warren Buffet, considered the world's greatest investor, invest based on fundamental analysis only.(looking at P&L Financials)
2. Ed Seykota, considered the world's best trader, trades based on technical analysis only. (Chart reading)

So what's my point?

*My point is..*
There are different trading methods that work. You need to find something that suits your lifestyle, schedule, and personality. A mechanical trend trading concepts resonated with me rather going down the path of discretionary trading the essence of the fundamentalists.

Skate.


----------



## Skate (9 January 2019)

*Common ground between Fundamental and Technical Analysis *(Risk)
*
Risk*
Managing the risks is one of the most important issues of staying in the trading game. Most traders will trade differently however the similarity between all good traders is to keep losses small.

Skate.


----------



## Skate (9 January 2019)

*What to believe*
Everybody talks about technical or fundamental analysis as they know it's and feed it to all the amateurs. 

*Trading is not a sprint*
Like all skills, trading is a lifelong pursuit & if you are driven enough for financial freedom and accumulating wealth you better make yourself comfortable as it takes an extraordinary length of time to be good at it.

Skate.


----------



## Skate (9 January 2019)

*Technical analysis*

Technical analysis works only when you have full knowledge about it. After gaining knowledge how well you analysis depends upon the practice.

Skate.


----------



## Skate (9 January 2019)

*Fundamentals work, so does Technicals

Important *
I've seen it, have you, the fundamentals are good but stock is falling every second day. 

This is where technical’s help you staying away from cooked books.

Skate.


----------



## Skate (9 January 2019)

Technical analysis is a way to become a trader or investor. 

*Charts*
The charts make no sense until you put a moving average on it, then it makes a little more sense, then you put on an indicator, and it makes even more sense where the stock can go to, but not always,

Uncertainty is the name of the game.

Skate.


----------



## Skate (9 January 2019)

*The Fundamental case*



ducati916 said:


> Where the fundamentals help provide an edge to an otherwise technical holding is the ability to hold and build




ducati916, is correct (IMHO) making that statement above as we all know that Buffett made his money through identifying companies that he believed were worth more than their market value, investing in them and holding that investment for the long-term

*Warren Buffet’s method*
Warren Buffet’s method is to use fundamentals to buy a great company at a fair price. He doesn’t use charts, and it works very well for him. He sells the companies when someone is willing to pay 'overs' or a silly price, or when the company is no longer great.

Skate.


----------



## Skate (9 January 2019)

*So what's my point?

There are different ways to profit from the markets*
(a)  Warren Buffet, considered the world's greatest investor, invest based on fundamental analysis only. (looking at P&L Financials)
(b)  Ed Seykota, considered the world's best trader, trades based on technical analysis only. (Chart reading method)

*My point is...*
There are different trading methods that work. You need to find something that suits your lifestyle, schedule, and personality.

Skate.


----------



## Skate (9 January 2019)

*Bloody hell 'Trading is hard work'*

*The good traders & investors*
Will always follows his trading plan.
They will always know how to enter, exit and manage the trade at all times.
They will always keep records of every single trade they take.
The really, really good ones will review their trades on a regular basis.
A good trader will be open to new ideas & they never stops learning.
Good traders even finding ways to improve there trading performance.

*There are good times & bad times*
Most importantly a good trader knows there are good times & bad times and it’s how they handle the bad times determines how successful they will be.

Skate.


----------



## ducati916 (9 January 2019)

Skate said:


> *Fundamentals work, so does Technicals
> 
> Important *
> I've seen it, have you, the fundamentals are good but stock is falling every second day.
> ...




Surely if the books are 'cooked', the fundamentals are less than optimal.

jog on
duc


----------



## Skate (9 January 2019)

I don't have a theme, I'm just shooting from the hip at the moment - Beginners might find it helpful if I stick to explanations, rather than mouthing off.

*What the hell is "Fundamental analysis"*

Broadly speaking Fundamental analysis deals with financial trend of a company .

*Estimate its future value*
Fundamental Analysis is used to correctly value a stock and estimate its future business/financial performance. Based on its realistic valuation (which is still an estimate only), you would decide at what price to pick the stock.

Skate.


----------



## Skate (9 January 2019)

ducati916 said:


> Surely if the books are 'cooked', the fundamentals are less than optimal.
> 
> jog on
> duc




Let me tell you a story ducati916 why sometimes Fundamental analysis gets it wrong & technical analysis isn't Lilly white as it gets it wrong quite often, but lets concentrate on the Fundamental analysis

*Let me set the scene*
Fundamental analysis is basically a background check of how company has performed and operated in the last years and we can do future estimates using the past data. 

*I feel sorry for them*
People bought Enron as it was a fundamental good company and bought more when it went down. (Falling knife)

Millions of people bought Enron because the fundamental looked good. What I am trying to say is, that fundamental analysis can fool you just as much as technical analysis can fool you. 

Skate.


----------



## Skate (9 January 2019)

*Really what is Technical analysis ?*
Technical analysis is based on the psychology of buyers and sellers & is way easier to learn than Fundamental Analysis. ( It's easy enough that you could learn it all in a few weeks)

*The game of probability*
Technical analysis is the game of probability where chances of odd in favour of winning a trade are higher than losing.

*Pattern formation & breakouts*
Technical analysis is purely based on pattern formation & breakouts, as well as resistance and support levels

*Here's the rub*
Every analyst has a different view on the same price pattern. (go figure)

Skate.


----------



## Skate (9 January 2019)

*Whats my job as a Technical Analyst ?*
As a Technical Analyst its your job is to invest in businesses that are getting emotional response from other investors. (Simple)

*Whats my next job ?*
Be a risk manager.

*What do you mean a 'Risk Manager' ?*
Risk Management is all about the proper entry and exit points of a trade so that your losses don't eat up your profits.

Skate.


----------



## Skate (9 January 2019)

ducati916 said:


> Re. your 5 + 4 = 9, so does 8 + 1 or 10 - 1 [or an infinite combination thereof].
> 
> My point: are they standalone, additive, or subtractive to one another?
> 
> ...




I would like to take ducati916 post one step further by saying sometimes its better to combine the two methods if it leads to a better outcome.

*Combine Them*
Use fundamentals analysis to decide “What” to Buy/Sell, and use technical analysis to decide “When” to do it. Both applied together can be sometimes “most” effective!

Skate.


----------



## Skate (9 January 2019)

*Bugger*
I've decided not to use the @ facility as in (@Skate) to call a member to ask for an alternative point of view. (it's very rude & offensive to some)
*
tech/a*
I would love to hear tech/a discuss his favourite Chart pattern & how it helps him in trading
*
Ann*
I'd even be interested in what Ann has to say on Chart Patterns

These are my views as I see it...

*Chart Patterns *
Patterns looks good in the middle of the chart when you can only trade at the hard right edge. 
Patterns look good in hindsight.
*
Scary*
Some Patterns are deadly & can lead you to make a poor decision

Skate.


----------



## Skate (9 January 2019)

*Trading is a breeze *(WRONG)
*
Its worth remembering*
What makes sense is usually wrong in trading 
The simple truth is that the market is not logical or reasonable. 
The market is emotional and unstable. 
A market is nothing more than a crowd of people that has absolutely no regard for what any one person may think.
Sometimes its just 'rational' people make 'irrational' decisions.

*The markets screw us*
The market has the uncanny tendency to screw the most number of people.

*Rules*
What makes trading so difficult is this: "There are no rules"

Skate.


----------



## Skate (9 January 2019)

Does it really matter ?

*Opposing approaches*
Technical analysis and fundamental analysis are often seen as opposing approaches to analysing securities, but many investors have experienced success by combining the two techniques. 

*Whats your style ?*
Investing styles are similar to religions, only slightly less combative (although I’ve seen some discussions get quite heated)
However, just knowing all the charts and patterns won't help. You need experience as well, which comes with time.

*Time horizon*
Investment time horizon often dictates whether technical or fundamental analysis makes more sense 

My final wrap coming up next in the next post..

Skate.


----------



## Ann (9 January 2019)

Hello there Skate, haven't been here for a while, I have been busy doing business, little time to be awastin' on chatter and point scoring!  



Skate said:


> @rogue1 when you 'like' one of my posts (I encourage you to 'like' as many as possible) I get an "Alert" and those 'Likes' gives me a direction for future posts.
> *Meaning*
> I would rather post on subject that others find interesting rather than what interest me.





Skate said:


> *My Inspiring quote*
> "Life is like a dogsled team. If you ain't the lead dog, the scenery never changes"





Skate said:


> *Success*
> Success is actually a short race—a sprint fueled by discipline just long enough for habit to kick in and take over.





sptrawler said:


> Effort should always be applauded, but care should be taken when rewarding mediocrity, lest it becomes the goal.




Rightio, figured out the game......you are nearly there Skate! 



Skate said:


> *Darvas box system*
> Wyatt, Nicolas Darvas trained as an economist & during his time as a dancer, went on to develop what we know as the Darvas box system. Even if you lack the interest in trading it an excellent book to read nevertheless.




It has been many, many years since I read his book but I seem to remember he was only able to be successful with this technique when he was on the road touring and was not able to hear or read any information about the stocks other than the price. (I find a support line to be just as effective.) None of us are in this situation and probably wouldn't want to be. I surely wouldn't.



Skate said:


> *Conviction*
> A person with a conviction is a hard person to change. Tell him you disagree and he turns away. Show him facts or figures and he questions your sources. Appeal to logic and he fails to see your point.




I don't agree with this comment Skate. I try to gain as much information as possible about the subjects which are of interest to me. I then hold a conviction/strong opinion. I never turn from someone who disagrees, they can offer me one of two things, another area to explore or 
confirmation I am right by the use of an argument which has previously been over-turned by investigation. _"Show him facts and figures and he questions your sources."_ One should never accept any facts or figures without substantiation, that is a dangerous road to travel. It is the road of the gullible and foolish. _"Appeal to logic and he fails to see your point." _One man's logic is another woman's intuition.





tech/a said:


> My favourite Two words.
> *No.*
> and
> *No.*
> ...




Concure 100% tech/a. First words my children and animals ever learn is NO! Everything else falls into place perfectly after that. I find it a top word for self control as well. Please and thank you is a courtesy, no is a way of life.



Skate said:


> *Technical analysis*
> Technical analysis works only when you have full knowledge about it. After gaining knowledge how well you analysis depends upon the practice.




Yes you are right Skate, to gain full knowledge of Technical Analysis you need to know when it is going up, when it is going sideways and when it is going down. Practice getting to recognize these three things and you will be an expert technician. 



Skate said:


> *Charts*
> The charts make no sense until you put a moving average on it, then it makes a little more sense, then you put on an indicator, and it makes even more sense where the stock can go to, but not always,




Then you switch off all the indicative bullsh!t and work out is the wiggly line on the chart going up, sideways or down. 

I don't have a tag on this forum but if I did it would be one of two and as I can't decide which I prefer I leave it blank.  

Tag one... Success is going from failure to failure without losing your enthusiasm. 
Tag two... Don't blow smoke up my arse, I can smell it every time.


----------



## Skate (9 January 2019)

Let wrap this up & let me have my final say on the matter of Technical verses Fundamentals..

*The Bottom Line*
Sometimes traders & investors like to pigeon-hole themselves into one type of investment style, but being open to combining styles may provide the best opportunity to make the most profit.

Skate


----------



## Skate (9 January 2019)

Ann said:


> Hello there Skate, haven't been here for a while, I have been busy doing business, little time to be awastin' on chatter and point scoring!
> 
> 
> 
> ...




Ann, you have made some very good points, thank you.

*My views*
I've posted my views about trading & I've made a few general comments along the way to encourage dialogue. Some members have picked up on what I'm trying to achieve & all members have been kind to respond in the same spirit.

*Alternative point of view*
There is always an alternative point of view, which is understandable. Having different views expressed gives choice in choosing the view that resonates to your circumstances.

*Finally*
This 'Dump it here' thread is not about what's right or what's wrong it's a thread about a variety of differing views. A thread to help others by paying it forward.

Skate.


----------



## Skate (10 January 2019)

For those who haven't seen this cartoon..

*The market is not logical or reasonable*
The simple truth is that the market is not logical or reasonable. The economist John Maynard Keynes once said: “The market can stay irrational far longer than you can stay solvent.”


----------



## Smurf1976 (10 January 2019)

Skate said:


> *What the hell is "Fundamental analysis"*
> 
> Broadly speaking Fundamental analysis deals with financial trend of a company



There's also a more fundamental form of fundamentals.

In the case of Woolworths, for example, that would involve a sound understanding of the business of retailing and investigating WOW and its competitors to see who has the edge when it comes to to running the actual business. It may take time but ultimately the company's financial performance will be a reflection of the business unless they run some side venture which makes or breaks them.

That, in my view, is the most fundamental form of fundamentals. The business as such.


----------



## luutzu (10 January 2019)

sptrawler said:


> Effort should always be applauded, but care should be taken when rewarding mediocrity, lest it becomes the goal.




I always like a try hard though.


----------



## Skate (10 January 2019)

Smurf1976 said:


> There's also a more fundamental form of fundamentals.
> 
> *In the case of Woolworths, for example, that would involve a sound understanding of the business of retailing and investigating WOW and its competitors to see who has the edge when it comes to to running the actual business.* It may take time but ultimately the company's financial performance will be a reflection of the business unless they run some side venture which makes or breaks them.
> 
> That, in my view, is the most fundamental form of fundamentals. The business as such.



*
Revenue flow*
Smurf1976, for instance, you may think you know how Woolworths operates, because you buy your groceries there, but can you clearly articulate how one dollar of revenue flows through the business?

*Its hard to comprehend*
The more you understand how a business operates, the more you'll find that you don't know, but in the process you will become aware of other information, which further improves your understanding of the investment’s risk.

*Risk*
Trading is all about risk.

Skate.


----------



## Skate (10 January 2019)

Smurf1976 said:


> There's also a more fundamental form of fundamentals.
> 
> In the case of Woolworths, for example, that would involve a sound understanding of the business of retailing and investigating WOW and its competitors to see who has the edge when it comes to to running the actual business. It may take time but ultimately the company's financial performance will be a reflection of the business unless they run some side venture which makes or breaks them.
> 
> That, in my view, is the most fundamental form of fundamentals. The business as such.




*Woolworths are bullies*
Smurf1976, I could tell you a few stories about Woolworth that would curl your hair. They are in the habit of stiffing suppliers, but not me. They pay me in advance that gives them a line of credit.

*Unfair playing field*
The smart Investors are like ‘Woolworths’, they want to buy at the very lowest price and sell at a much higher price to make money and if they have to screw the little guy along the way, well so be it. 

Skate.


----------



## Ann (10 January 2019)

luutzu said:


> I always like a try hard though.



I know English is not your first language so just checking you know what you are saying Luu, I am sure you do! 

_*tryhard* (plural tryhards) (derogatory) A person usually of little talent who tries *hard* to succeed, especially through imitation, usually to gain fame or popularity._


----------



## Skate (10 January 2019)

Ann said:


> I know English is not your first language so just checking you know what you are saying Luu, I am sure you do!
> 
> _*tryhard* (plural tryhards) (derogatory) A person usually of little talent who tries *hard* to succeed, especially through imitation, usually to gain fame or popularity._




Ann, yesterday I posted about Technical Analysis versus Fundamental analysis in the hope you or tech/a would explain to others the advantages of charting & talk about your favourite tool of choice. (if you have the time that is)

Skate


----------



## luutzu (10 January 2019)

Skate said:


> *Woolworths are bullies*
> Smurf1976, I could tell you a few stories about Woolworth that would curl your hair. They are in the habit of stiffing suppliers, but not me. They pay me in advance that gives them a line of credit.
> 
> *Unfair playing field*
> ...




Smart investors [business operators] wouldn't screw people though. 

I don't mean they're to be saintly or "too honest", but if they know what they're doing and are in it for the long term, killing your host will sooner or later get you screwed. 

A smart business must always make sure their stakeholders makes money. If they don't, corners will be cut somewhere. And often, the cuts will come back to haunt you and crash your business.

Much like Multiplex back in the days. Screwing their subcontractors; knowing they can't make money on the job but kept pushing for lower prices, hinting they'll get another one to make up etc.

The smaller guys can go broke and that doesn't really matter to Multiplex. But soon enough more critical subbie also goes broke then delay upon delay. Penalty pay; dodgy job insolvent subbie won't fix unless you sue them real hard... went broke, pretty much.


----------



## luutzu (10 January 2019)

Ann said:


> I know English is not your first language so just checking you know what you are saying Luu, I am sure you do!
> 
> _*tryhard* (plural tryhards) (derogatory) A person usually of little talent who tries *hard* to succeed, especially through imitation, usually to gain fame or popularity._






A play on word, I think.


----------



## Skate (10 January 2019)

luutzu said:


> Smart investors [business operators] wouldn't screw people though.
> 
> I don't mean they're to be saintly or "too honest", but if they know what they're doing and are in it for the long term, killing your host will sooner or later get you screwed.
> 
> ...




luutzu, first off, I understand where you are coming from & I agree with you but some business don't play fair or by the rules.

1. A business doesn't have a heart.
2. Bigger is not always better.
3. When there are negotiations involved - it's not a level playing field.
4. Human nature - people are motivated by money.

Skate.


----------



## Skate (10 January 2019)

luutzu said:


> Smart investors [business operators] wouldn't screw people though.
> 
> I don't mean they're to be saintly or "too honest", but if they know what they're doing and are in it for the long term, killing your host will sooner or later get you screwed.
> 
> ...




*"FM Radio Station"*
luutzu, I forgot to mention why people do what they do - it boils down to an "FM Radio Station" I listen to all the time.

*"WIIFM"* 
Well it looks & sounds like a FM radio station but its an acronym that motivates nearly all decisions. (including yours)

WIIFM = *W*hats *I*n *I*t *F*or *M*e

Skate.


----------



## luutzu (10 January 2019)

Skate said:


> luutzu, first off, I understand where you are coming from & I agree with you but some business don't play fair or by the rules.
> 
> 1. A business doesn't have a heart.
> 2. Bigger is not always better.
> ...




I agree with you about human nature, and the nature of (most) business operators.

But to think about your supplier, your customer... it's not always for altruism or charity. Often it's just good, profitable, business practice. 

I mean, being fair to people doesn't mean they'll return the favour of course. Being fair doesn't mean being taken for a ride either. It's one of those places where nobody get screwed.

Business are run by people. Whether it does the right thing or not depends on the person running it.


----------



## luutzu (10 January 2019)

Skate said:


> *"FM Radio Station"*
> luutzu, I forgot to mention why people do what they do - it boils down to an "FM Radio Station" I listen to all the time.
> 
> *"WIIFM"*
> ...




Yea, human are by nature self-interested. That's fair enough.

Just the smarter ones knows that it's in their interest to not bankrupt the host, destroy their reputation, screw the wrong kind of people who know people who can come knocking.

I've seen examples of people doing the right thing, went out of their way... and get screwed for it. Also examples of jackazzes taking advantage of people and doing very well, for a while. 

Like Mencius said, it is to your interest to always be honest and good. For one, when you are honest and good, the bad will fool and take advantage of you... you may know they're trying to do it, so you won't let them; you may not know it and so will learn from it. Most important, in experiencing the dishonesty of those around you, you will stay clear of the dishonest.

Staying clear of azzholes is beneficial. 

Two, in being good and honest you attract like-minded people. 

TO be clear of scoundrels and surrounded by good people, is that not a benefit?


Not a lot of young people read philosophy. It's as though it won't get them a proper job or something


----------



## Smurf1976 (10 January 2019)

luutzu said:


> Just the smarter ones knows that it's in their interest to not bankrupt the host, destroy their reputation, screw the wrong kind of people who know people who can come knocking.



There are examples of deals in the energy industry which are very much mutually beneficial.

We'll work with you if you work with us and we'll split the benefits.

I can't give out the names but such deals exist certainly. Separate companies, finite resources, taking a combined look at how best to do things for mutual benefit.


----------



## Skate (10 January 2019)

luutzu said:


> Yea, human are by nature self-interested. That's fair enough.
> 
> Just the smarter ones knows that it's in their interest to not bankrupt the host, destroy their reputation, screw the wrong kind of people who know people who can come knocking.
> 
> ...




luutzu, “you are who you associate with”

And from my experience it’s been proven to be true 100% of the time.

Skate.


----------



## luutzu (11 January 2019)

Skate said:


> luutzu, “you are who you associate with”
> 
> And from my experience it’s been proven to be true 100% of the time.
> 
> Skate.




But what to make of people who associate with different groups of people separately? 

I know a few people, well, not know them... heard of them... who keep a few circle of friends, all separate. 

There's the work friends they're chummy with and from the same socio-economic order; the old school, riff rafts friends they're stuck with. 

So Xmas are celebrated 3 times a year.

But I'm just complaining 'cause I couldn't invite one friend to a party even if I wanted to.


----------



## Smurf1976 (11 January 2019)

Skate said:


> luutzu, “you are who you associate with”



I certainly agree that people do take on traits of those they associate with.

Not actually become them though, just take on certain traits.

.....because if I had actually become the people I associate with then among other things I'd be able to safely fly a 737, play guitar and catch fish. In practice I've never tried the first one and am no good at the other two. I would also be tall, short, slim, fat, gay and straight all at once.


----------



## Darc Knight (11 January 2019)

While I agree most people are self interest by nature, I think it's in everyone's self interest to be a bit less self interested lol.  When we do good or help good people we are creating a better culture or society which is in our self interest.

I also find people with sociopathic tendencies hate that philosophy, as they feel threatened by it.


----------



## tech/a (11 January 2019)

So I looked at the Groups I keep in contact with socially.

Long term friends---from a wide variety of walks of life from both men women and couples.
These close friends all enjoy the things we enjoy. Some not to the extent we do. But all have
very similar life values and characteristics.

Business--other business owners who are good friends but have a vast array of interests many are of no interest to myself
and as such while some are long term friends others are more distant where we catch up maybe 6 x a year.

Sport.
All are younger than I most people my age don't partake in any sport let alone full contact sport.
A very diverse group of great people who have a very wide range of views and values. Some mine
a lot not really. I'm treated with a great deal of respect both on and off the mat, just as I do them
I'm surprised at how often we are invited to join the younger people we know.

Have my groups had an impact on my life in the past and now.

Most definitely and some people very specifically.
Some of their quotes Ill never forget.

Go where the Money is and Go there often!
Do something about it.
There are 7000,000,000 fish in the ocean--go fish.
Life changing decisions should take a little longer to consider.
Climb ladders and cross bridges with least fuss--you may need to climb back down or go back across.
Radical change brings radical results!
There will always be someone tougher than you.
If someone threatens you or your family and friends---hurt them.
The effort you put into life now will materialize as reward much later.
Anyone can be a bum--look around at the 1000s of bums.
Life wasn't meant to be easy---for everyone else!
One opportunity can change your life---take as many as you can.
Go forward and create beauty---never look back at the ugliness.

From me to you.
Life is a fluke *YOU* will never be this way again in this time with these people---don't waste it!


----------



## Skate (11 January 2019)

tech/a said:


> So I looked at the Groups I keep in contact with socially.
> 
> Long term friends---from a wide variety of walks of life from both men women and couples.
> These close friends all enjoy the things we enjoy. Some not to the extent we do. But all have
> ...




tech/a what a great post, the gems needed to be repeated..

*GEMS*
Go where the Money is and Go there often!
Do something about it.
There are 7000,000,000 fish in the ocean--go fish.
Life changing decisions should take a little longer to consider.
Climb ladders and cross bridges with least fuss--you may need to climb back down or go back across.
Radical change brings radical results!
There will always be someone tougher than you.
If someone threatens you or your family and friends---hurt them.
The effort you put into life now will materialize as reward much later.
Anyone can be a bum--look around at the 1000s of bums.
Life wasn't meant to be easy---for everyone else!
One opportunity can change your life---take as many as you can.
Go forward and create beauty---never look back at the ugliness.

*tech/a say *
_Life is a fluke YOU will never be this way again in this time with these people---don't waste it!_

*I say*
"Don't waste the dash" (1953 - ?) 

*My ambition*
I'm planning to live forever - So Far So Good..

Skate.


----------



## luutzu (11 January 2019)

Smurf1976 said:


> I certainly agree that people do take on traits of those they associate with.
> 
> Not actually become them though, just take on certain traits.
> 
> .....because if I had actually become the people I associate with then among other things I'd be able to safely fly a 737, play guitar and catch fish. In practice I've never tried the first one and am no good at the other two. I would also be tall, short, slim, fat, gay and straight all at once.




I suppose you did kinda be like them, in spirit. 

I went fishing with friends once. At night. Caught myself a rat. True story. Couldn't swing the hook properly and it being dark I can't see anything. So the thing landed on the rocks a few feet in front or something.


----------



## Skate (11 January 2019)

Gems, lets 'Dump it here' for inspiration.

*A successful person*
The very first step towards success in any occupation is to become interested in it.

I'll dumps a some gems (IMHO) one at a time as most gems take time to unpack & understand them (instead of the casual glance)

Skate.


----------



## Skate (11 January 2019)

*The law of least effort*
You will think as little as possible.

Skate.


----------



## Skate (11 January 2019)

*Life*
"Life is not complicated, we complicate life"

Skate.


----------



## Skate (11 January 2019)

*Past, future, present*
Don’t cry over the past, it’s gone
Don’t stress about the future, it hasn’t arrived
Live in the present & make the most of it

Skate.


----------



## Skate (11 January 2019)

I've left my best till last..

*Wise people*
Wise people learn when they can – fools learn when they must

Skate.


----------



## tech/a (11 January 2019)

Who is the Smarter?

The person with a degree or
The person who employs those with a degree?


----------



## Skate (11 January 2019)

tech/a said:


> Who is the Smarter?
> 
> The person with a degree or
> The person who employs those with a degree?




Brains are an overrated attribute when it comes to trading.

*Trading is a process*
Trading is a process, trade, learn, trade, learn..

Skate.


----------



## Skate (11 January 2019)

tech/a you should like this one..
*
A mistake*
A mistake repeated more than once is a decision.

Skate


----------



## luutzu (11 January 2019)

tech/a said:


> Who is the Smarter?
> 
> The person with a degree or
> The person who employs those with a degree?




Neither. A degree doesn't mean you're smart or not. Just mean you went to uni and cramped well enough 

As to a boss hiring a smart employee... Both are smart. The first, smart because they know how to employ smart people; the second is also smart. 

But only one will be a lot richer out of it.


----------



## tech/a (11 January 2019)

Skate said:


> Brains are an overrated attribute when it comes to trading.
> 
> *Skate.*





I disagree
I don't see to many brains being used in trading.



Skate said:


> *Trading is a process*
> Trading is a process, trade, learn, trade, learn..




What is it you need to learn?
How often do we do the same thing day in day out and
*EXPECT* a* DIFFERENT* result?

What if we are learning things that are of little to no value?
What if the state of play alters to such a degree that what
we have learned and applied is no longer valid?

*What is it we need to learn?*


----------



## Skate (11 January 2019)

tech/a I've touched on Technical Analysis verses Fundamental Analysis.

I'll have my last say about chart reading before I move onto the topic of Coding.

*Its your Choice*
Chart reading is one tool, reading financial statements is another, the tool you pick is your choice. The financial market is a complex system, but that doesn’t mean it requires a complex strategy to be successful.

*Coding*
Coding a trading idea stands head & shoulders above all other tools in our trading tool box.(IMHO)

*The problems with Chart Patterns *(as I see it)
Patterns looks good in the middle of the chart when you can only trade at the hard right edge.

*I knew it all along*
Looking back at charts with 20‐20 vision in hindsight is sometimes called the “I‐knew‐it‐all‐along effect,” suggesting that people view events after they happened as more predictable than they were before they occurred & "most" chart readers fall into this category. (At this point I would like to reiterate that I said "MOST" & not "ALL")

*Errors*
Often, we realise our errors after the fact and it is too late.

Skate.


----------



## tech/a (11 January 2019)

My point *EXACTLY*

What happens on the right side of the chart is *ALL* that matters.
Trading the right side of the page in the Right direction is the only
thing you should be striving to do consistently.--Technically OR Fundamentally.

If markets and Stock move in *BOTH* directions it just doesn't make sense to
trade only instruments that trade in one direction!---

If you know why an instrument moves lower you certainly know that it
isn't wise to trade it with an expectancy that it will go higher!


----------



## Skate (11 January 2019)

luutzu said:


> Neither. A degree doesn't mean you're smart or not. Just mean you went to uni and cramped well enough
> 
> As to a boss hiring a smart employee... Both are smart. The first, smart because they know how to employ smart people; the second is also smart.
> 
> But only one will be a lot richer out of it.




*My beef*
Our education system develops imitators, not pioneers of new ideas but conservatories of tradition and for most of our lives, many of us spend our time listening to someone else feed us information then we are judged on how well we can regurgitate that information back to whomever offered it in the first place.

*Example*
If we are taught that mixing ‘black paint’ with ‘white paint’ makes “purple” paint, any other answer but purple would be wrong. To be correct we need to regurgitate the answer PURPLE. (Grey is just plain wrong)

*Engage other to learn*
Learning must be engaging, if it’s not engaging learning will not take place

Skate.


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## Skate (11 January 2019)

tech/a said:


> I disagree
> I don't see to many brains being used in trading.
> 
> 
> ...




*I said*
"Brains are an overrated attribute when it comes to trading"

*tech/a responded* (quote of the day & it's way too funny)
I disagree
I don't see to many brains being used in trading.

*tech/a also commented *
"What is it we need to learn?"
*
Learning leads to Knowledge or Action*
As the saying goes, if what you learn leads to knowledge, you become a fool - but if what you learn leads to action, you can become wealthy.
*
We all have a fear of failure*
Everybody has a fear of failure at some level - at times we’ve all been fearful that perhaps we are not enough. Even when we know what to do, our fear can keep us from executing our plans.

*We must learn to take responsibility *
There are so many that refuse to take responsibility when things go wrong, the problem is always caused by someone or something else.

Skate.


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## Skate (11 January 2019)

*Coding*
Most of my days are consumed with coding. Coding new strategies & refining the ones I have.

*Trading System*
It is my belief that to succeed in the financial markets you need to have some kind of trading system in place.

*My aim is to trade consistently & successfully*
Trading is easy, making money trading is the difficult part. Trading consistently & successfully is even hard, which is why the majority of people who try to make money from trading fail.

*The learning curve is steep*
You could read hundreds of books, spend thousands of dollars on seminars, watch the market for years and still not be profitable.

*Tools*
Trading system is complex set of tools, composed of intricate calculations, however, it can be easily employed it can also be used as a simple money management tool that can dramatically increase your returns by helping you avoid substantial losses.

Skate.


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## Skate (11 January 2019)

The words of Howard Bandy keeps ringing in my ears.

*Howard Bandy Suggestions*
(a) holding a few days at most and
(b) Holding longer than about three days increases risk considerably.

*December 2016*
Howard Bandy made those comments back in Dec 2016 & his position still currently stands

*Howard Bandy also said*
_“Stocks have tendency to revert to the mean and breakouts usually do not last very long. I estimate risk of drawdown based on recent performance, then trade in such a way that I can manage drawdown. That is, holding a few days at most whether long or short. Again and again. The sweet spot is high accuracy and short holding period. Holding longer than about three days increases risk considerably, as does accuracy below about 65%”_

*It's easier said than done*
Coding a profitable short holding period strategy is easier said than done & in reality it’s very hard to achieve (IMHO) and so far it has eluded me.

*Stick with what you know*
Howard Bandy confirms he trades this method successfully - but I’ve never been able to code a Daily Strategy anywhere near profitable that I would trade with confidence – that’s why I’m sticking with my Weekly Trend Following System till something better comes along that proves to be profitable.

*Howard is a smart bunny*
Howard knows what he talking about, he's smarter than the average bunny but has any member have an alternative view or opinion ?

Skate.


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## Skate (11 January 2019)

*Tools of the trade*
It's all about which tool we should use when coding a trading strategy 

*TA verses FA*
We have touched on "Fundamental Analysis" verses "Technical Analysis" (traders are divided to which is better)

*Something new*
Now it's "Decision Tree process" verses "Machine Learning process" (traders are also divided into two camps over this as well)

*The divide*
There is a divide when it comes to which camp you align with be it 'Fundamental Analysis' verses 'Technical Analysis' – now there is a a greater divide when it comes to coding platforms.

Traditional platforms (decision tree process) verses ‘Machine Learning’ programs like Python

Skate.


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## Ann (11 January 2019)

Skate said:


> Ann, yesterday I posted about Technical Analysis versus Fundamental analysis in the hope you or tech/a would explain to others the advantages of charting & talk about your favourite tool of choice. (if you have the time that is)
> 
> Skate




For a start I don't believe there should be a Technical Analysis V Fundamental Analysis. In my opinion a trader/investor should use both and to the best of that person's ability.  I am stronger at TA  as I am visual and can see patterns quickly and easily. I can recognize when a chart is going up as opposed to down. This is not as simple as it sounds. You need to practice recognizing this.

Some people look at a chart for a three month period and it looks as though it is rising. If you look at the same chart for five, ten or even fifteen years, it may be falling with a massive downward overhead trendline/resistance line which can cut your trade right out with a single blow.  I still struggle with FA but recently looking at Luu's FA charts I am bginning to see some interesting things I had never seen before. I am beginning to see what is potentially important FA information. I just needed to see that stuff on a chart.

I worry sometimes when people quote companies'  "fundamentals" and then parrot the bullsh!t story line put out to catch the gullible.

There is always an underlying reason for the price of a company at any given time. It is the entire combination of all the FA known and the insider information that is reflected in the price.
Neither FA nor TA can save you from a massive price collapse but normally a serious price collapse tends to only happen to a stock when it has been travelling sideways at a higher level or has already started falling.

My favourite TA tools - Very long historical views of a company, hand drawn support and resistance/trend lines, Positive Volume Index, MACD, volume, swing trade calculations, certain patterns and I am now beginning to look at Fibonacci levels as well.

TA does not have to be this complicated though. Just recognizing the price up ( rising support line), price top across (overhead resistance line), price down shape (falling overhead resistance line) price bottom across (support line) is good enough for a person who feels more comfortable with FA.

Short term trading is really only viable using TA. Setting entry and exit levels is critical for successful trading IMO regardless if you are going long or short.

Bottom line, I would never enter a longer term trade without doing a full TA and to the best of my abilities FA analysis. Using only one technique is like fighting a battle with only one arm.


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## Skate (11 January 2019)

Some maintain that ‘traditional platforms’ using decision trees process is adequate whereas others maintain that the new ‘Machine Learning’ programs like Python returns better results.

*Quoting Dr Howard Bandy*
“The business of trading is changing with astonishing speed. It is now about applied mathematics, machine learning, Bayesian statistics. Traders without skills in math, programming, statistical analysis, and scientifically developed trading techniques are at a severe disadvantage. Stephen and his colleagues will "eat the lunch" of unprepared traders” 

*Quoting Dr Tomasz Janeczko *(Founder of Amibroker)
“In my opinion throwing more languages (like Python) into the mix just makes things harder, not easier, and is not really necessary as everything is doable within AmiBroker itself, but Howard Bandy and others have other opinion. People have tendency to think in terms "more = better". But the truth is that in programming less is more. And less is better. So don't add complexity when it is not needed”

*Summary*
Traditional trading system platforms as AmiBroker, TradeStation & NinjaTrader uses a decision tree model. 

AmiBroker, TradeStation & NinjaTrader the traditional platforms apply an indicator, then see what happens whereas Machine learning such Python identifies something important then see what came before it.

*Have you something to add ?*
Members wishing to express a view is most welcomed - just remember both platforms are seeking to do the same job, just differently.

All trading platforms are designed to recognise patterns allowing traders to make a buying or selling decision on those results. 

Skate.


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## Skate (11 January 2019)

Ann said:


> For a start I don't believe there should be a Technical Analysis V Fundamental Analysis. In my opinion a trader/investor should use both and to the best of that person's ability.  I am stronger at TA  as I am visual and can see patterns quickly and easily. I can recognize when a chart is going up as opposed to down. This is not as simple as it sounds. You need to practice recognizing this.
> 
> Some people look at a chart for a three month period and it looks as though it is rising. If you look at the same chart for five, ten or even fifteen years, it may be falling with a massive downward overhead trendline/resistance line which can cut your trade right out with a single blow.  I still struggle with FA but recently looking at Luu's FA charts I am bginning to see some interesting things I had never seen before. I am beginning to see what is potentially important FA information. I just needed to see that stuff on a chart.
> 
> ...




Ann, reading chart patterns & researching the fundamentals of a company is subjective & is wholly in the eye of the beholder as the interpretation can differ from one trader to another.

*Fundamental analysis *(No - it's not for me)
*Fun*damental analysis is no (*fun)* to carry out & it's time consuming, basically a background check of how company has performed and operated in the past assuming the information passed on is accurate.

*The problems with Chart Patterns *(I don't know what will happen tomorrow let alone using hindsight to determine it)
Patterns looks good in the middle of the chart when you can only trade at the hard right edge. We all tend to be experts looking at chart patterns in hindsight.

*Coding *(yes, I can relate to this method of trading as it gives me confidence to place a trade - a mechanical trading system)
Coding a trading idea stands head & shoulders above all the other tools available to me in my trading tool box.(IMHO)

Coding a strategy works for me & for others it's probably a different kettle of fish.

*What's the nice thing about people *
They are all different

*What's the nice thing about traders* 
They are all different

Skate


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## Ann (11 January 2019)

Skate said:


> Ann, reading chart patterns & researching the fundamentals of a company is subjective & is wholly in the eye of the beholder as the interpretation can differ from one trader to another.




Pretty much everything in life is subjective and can be interpreted in a multitude of ways, why should TA and FA be any different Skate?  So where is the problem with this?



Skate said:


> *Fundamental analysis *(No - it's not for me)
> *Fun*damental analysis is no (*fun)* to carry out & it's time consuming, basically a background check of how company has performed and operated in the past assuming the information passed on is accurate.




One only needs to find those few critical pieces of information and have them presented in a way which can be interpreted by the individual to offer insight and value, but that will be subjective. If a person has no idea what they are looking for, they will rarely find it. One needs to work out what is being looked for and then go after that information, disregarding all else.



Skate said:


> *The problems with Chart Patterns *(I don't know what will happen tomorrow let alone using hindsight to determine it)
> Patterns looks good in the middle of the chart when you can only trade at the hard right edge. We all tend to be experts looking at chart patterns in hindsight.




Not so Skate, as long as you can draw support/resistance lines going up, across and down you will see the potential direction and there will be warning levels from which to trade regardless of which side of the mountain you are looking. You just need to practice. I can see the potential future of TLS quite easily, I bet a lot of people who can't even chart will see what I can see. But as with all things in the future, stuff happens and there are no guarantees in life, same with a chart. However if you are watching the road ahead you can see the white lines either side, or yellow in this case.


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## tech/a (11 January 2019)

Id like to comment on fear of failure.

This was something as a youngster I often faced.
I learnt why. (I had fear).

Financially it was because I was risking a very large % of net wealth.
Having chosen to work for myself and create my own future it was always with me.

Failure meant a definite change in my plan for life.
I made my own wage for many years and at 40 found the power of leverage and compounding in property.
Suddenly I had a buffer—-equity in properties so expanded infrastructure in business including premises.

Always with my safety net.

Funny thing is I never used it
Never had to 
That sense of safety in shackled me!

So now I have safety plans from insuring all projects over $100k and we do many in the 7 figure relm.To stops in trading and management plans for everything.

I’ve not felt that fear for many many years.


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## Skate (11 January 2019)

tech/a said:


> Id like to comment on fear of failure.
> 
> This was something as a youngster I often faced.
> I learnt why. (I had fear).
> ...




tech/a, this is exactly how others learn. (from your experience)

Skate.


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## Ann (11 January 2019)

tech/a said:


> Id like to comment on fear of failure.
> 
> This was something as a youngster I often faced.
> I learnt why. (I had fear).
> ...






Skate said:


> tech/a, this is exactly how others learn. (from your experience)
> 
> Skate.




What was your personal take away lesson from tech/a's comments Skate?


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## Smurf1976 (11 January 2019)

Ann said:


> For a start I don't believe there should be a Technical Analysis V Fundamental Analysis. In my opinion a trader/investor should use both and to the best of that person's ability.
> 
> I still struggle with FA but recently looking at Luu's FA charts I am bginning to see some interesting things I had never seen before. I am beginning to see what is potentially important FA information. I just needed to see that stuff on a chart.



Using any and all tools which bring benefit seems like the sensible approach to me so agreed there. It's not FA versus TA, they're not mutually exclusive.

Human minds work differently however, sometimes very differently. You see FA and visualise it on a chart. I see one of your charts, change it into words and go and think about it well away from any visual reference (eg go for a walk).

Different approaches suit different people.


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## tech/a (11 January 2019)

Fundamental or Technical
Same result according to brokers figures
Over 90% fail 

So you need something different 
Standard F/A and T/A are hopeless.


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## Ann (11 January 2019)

tech/a said:


> Fundamental or Technical
> Same result according to brokers figures
> Over 90% fail
> 
> ...




A poor workman blames his tools tech/a. How many of your trades fail?


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## Skate (11 January 2019)

Ann said:


> What was your personal take away lesson from tech/a's comments Skate?




Ann, thank you for the opportunity to unpack tech/a heartfelt post, I trust you ask with interest.

*tech/a shoes*
Most who have owned a business would be nodding in agreement when reading tech/a's post, most business owners have been his shoes.

*Crippling*
The fear of failure is crippling & no better demonstrated when venturing into business for yourself.

*Business Loan*
To be successful in securing a business loan it's needs to be secured by your family home. The first sign of worry comes from a lack of cash flow, arguments start with your suppliers, banks, you even start becoming delinquent on your rent not to mention the stress the family relationship is under - Ann, when your relationship breaks down its all over.

*What do you lose*
Your Marriage
Your family home
Your Car
You lose everything (& sometimes your own life)

*HINT*
Most marriages fall apart because of money & the lack of it, (I've never seen a relationship fall apart from having too much money) financial stress can tear the most loving relationships apart.

*Business happiness is a positive cash flow*
In business, happiness is a positive cash flow. Business revolves around money, that's it in a nutshell.

*Put yourself in tech/a shoes*
Ann, if you have started a business from scratch or even purchased a business you would have understood tech/a post, a post from this heart - if not you wouldn't understand.

*Fear of failure*
Ann, everybody has a fear of failure at some level - at times we’ve all been fearful that perhaps we are not enough. Even when we know what to do, our fear can keep us from executing our plans.

*Fear related to trading*
We all feel that sinking feeling in our guts after we enter a trade and that trade go slightly against us our emotions kick in and if the fear is strong enough, we might cut the trade short to escape the unpleasantness, hijacked by our emotions encouraging us to do the wrong thing at the wrong time.

*Fear stops us from having a go*
Many people never start trading because they’re worried about losing their money. It feels like you have to spend a lot of time and energy to get it right and if you don’t, then you might lose all of your money. So fear or self-doubt keep you from getting started. The very act of getting started is much more important than getting it right.

Ann, with additional information, please re-read tech/a post

Skate.


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## satanoperca (11 January 2019)

tech/a said:


> Id like to comment on fear of failure.
> 
> This was something as a youngster I often faced.
> I learnt why. (I had fear).
> ...




So you have never failed?

Or have reduced your fear of potentially failing?


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## Skate (11 January 2019)

Ann said:


> Pretty much everything in life is subjective and can be interpreted in a multitude of ways, why should TA and FA be any different Skate?  So where is the problem with this?
> 
> 
> 
> ...




Why I lean towards a coded strategy ?

*Removing your emotions*
Mechanically removing your emotions from your strategy is a big reason why systems trading is becoming so popular. Trading outside market hours also helps avoid the mania of the open market.

*Trendfollowing*
I use a weekly trendfollowing strategy & place my orders before the market opens hoping to be settled at the opening price of the day.

It also makes backtesting simulations much easier. There are so many more advantages of a mechanical trading system than those few points listed.

I'll be back trading on Monday, sitting on the sidelines takes its toll.

Skate.


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## Ann (11 January 2019)

Skate said:


> Why I lean towards a coded strategy ?
> 
> *Removing your emotions*
> Mechanically removing your emotions from your strategy is a big reason why systems trading is becoming so popular. Trading outside market hours also helps avoid the mania of the open market.




I don't have emotions when I trade Skate. I have my entry and exits in place before I even commit a dollar. 



Skate said:


> *Trendfollowing*
> I use a weekly trendfollowing strategy & place my orders before the market opens hoping to be settled at the opening price of the day.
> 
> It also makes backtesting simulations much easier. There are so many more advantages of a mechanical trading system than those few points listed.
> ...




I like to be in control, I would never concede my control to a mechanical program created by a third person. 

I am happy to sit and wait, patience can be its own reward. I like to circle my prey before bringing it down.


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## Skate (11 January 2019)

Ann said:


> I don't have emotions when I trade Skate. I have my entry and exits in place before I even commit a dollar.
> 
> 
> 
> ...




Ann, let me repeat myself..

*What's the nice thing about people *
They are all different

*What's the nice thing about traders* 
They are all different

Skate.


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## tech/a (11 January 2019)

Ann said:


> A poor workman blames his tools tech/a. How many of your trades fail?




Discretionary index trading short and long 30-40%

Systematic
When it’s turned on long and short 
60% for 1 and 48% the other



satanoperca said:


> So you have never failed?
> 
> Or have reduced your fear of potentially failing?




Failed heaps of times 
No fear of failure it’s expected


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## Ann (11 January 2019)

I asked a simple question of you... "What was your personal take away lesson from tech/a's comments Skate?"

I was not expecting a diatribe from you just a simple response. Addressing me by name once is sufficient, twice is permissible any more than that sounds condescending. Avoid over using someone's name, it is rude and sounds manipulative.



Skate said:


> Ann, thank you for the opportunity to unpack tech/a heartfelt post, I trust you ask with interest.




I did.



Skate said:


> *tech/a shoes*
> Most who have owned a business would be nodding in agreement when reading tech/a's post, most business owners have been his shoes.




My father owned an engineering company. It convinced me it is a fool's path.



Skate said:


> *Crippling*
> The fear of failure is crippling & no better demonstrated when venturing into business for yourself.




I learnt from my father running your own business was totally rdiculous and not worth the effort.



Skate said:


> *Business Loan*
> To be successful in securing a business loan it's needs to be secured by your family home. The first sign of worry comes from a lack of cash flow, arguments start with your suppliers, banks, you even start becoming delinquent on your rent not to mention the stress the family relationship is under - Ann, when your relationship breaks down its all over.




Loans are poison, you dance to another man and the economies tune.
When the relationship breaks down, often your family have no where else to go and no means to leave because all your assets are 'in the business'.



Skate said:


> *What do you lose*
> Your Marriage
> Your family home
> Your Car
> You lose everything (& sometimes your own life)




Unless you always seem to manage to find another line of credit, there is always a con to be had....my sociopathic father's teachings.



Skate said:


> *HINT*
> Most marriages fall apart because of money & the lack of it, (I've never seen a relationship fall apart from having too much money) financial stress can tear the most loving relationships apart.




Money has nothing to do with a good relationship. Buffet's first marriage failed, his wife complained he was too interested in making money, Amazon's owners marriage has just failed, in fact the more money one has the greater the risk for multiple marriage failures it appears....how many wives has Trump had?



Skate said:


> *Business happiness is a positive cash flow*
> In business, happiness is a positive cash flow. Business revolves around money, that's it in a nutshell.




Bingo, that is my #1 FA indicator for a strong business. See FA isn't so hard if you think about it Skate!



Skate said:


> *Put yourself in tech/a shoes*
> Ann, if you have started a business from scratch or even purchased a business you would have understood tech/a post, a post from this heart - if not you wouldn't understand.




You have no idea how much I know about the harrowing existance of running your own business, I lived in the nightmare from birth.



Skate said:


> *Fear of failure*
> Ann, everybody has a fear of failure at some level - at times we’ve all been fearful that perhaps we are not enough. Even when we know what to do, our fear can keep us from executing our plans.




There are some emotions I can't feel. Fear is one of them, it just converts to the feeling of power. I quite welcome failure, it is a great teacher.

However I do understand that fear can paralyze but maybe that is a good thing, it may be a person's protector.



Skate said:


> *Fear related to trading*
> We all feel that sinking feeling in our guts after we enter a trade and that trade go slightly against us our emotions kick in and if the fear is strong enough, we might cut the trade short to escape the unpleasantness, hijacked by our emotions encouraging us to do the wrong thing at the wrong time.




As I said before, I don't have emotions when I trade, I have an entry and a stop-loss level which I stay with. I am never too injured by a reversal. Although, these days they rarely occur unless I am just mucking around with a test trade, which I do sometimes.



Skate said:


> *Fear stops us from having a go*
> Many people never start trading because they’re worried about losing their money. It feels like you have to spend a lot of time and energy to get it right and if you don’t, then you might lose all of your money. So fear or self-doubt keep you from getting started. The very act of getting started is much more important than getting it right.




If you have fear, you clearly don't have confidence you know what you are doing. If you don't know what you are doing, don't trade. If one wants to trade, give yourself a budget of money you are prepared to commit to losing in order to train yourself. This then is not a loss it is an investment in education and should be regarded as such. If you are still not confident after you have invested your education fund, find another area of investment or just go for a LIC or an ETF.



Skate said:


> Ann, with additional information, please re-read tech/a post




I read it slowly and carefully the first time. You have given me no additional information to warrant a re-read.


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## Ann (11 January 2019)

Ann said:


> . How many of your trades fail?






tech/a said:


> Discretionary index trading short and long 30-40%
> 
> Systematic
> When it’s turned on long and short
> ...




Crikey, I would have spat the dummy and flounced off a long time ago with losses like that! More power to you for sticking with it!


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## Skate (11 January 2019)

Ann said:


> For whatever reason I find the [name/user] *feels really rude and impersonal*






Ann said:


> Avoid over using someone's name, *it is rude and sounds manipulative*




I apologies again for being really rude to you, it was never my intentions to be manipulative. 
I have refrained from using a members [name/user] in any of my posts since you brought this to my attention & in future I'll refrain from addressing you more than once.

Thank you Ann for bring this to my attention once again..

Skate.


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## tech/a (11 January 2019)

Ann said:


> Crikey, I would have spat the dummy and flounced off a long time ago with losses like that! More power to you for sticking with it!




All good.

Discretionary

6/10 at 3R wins
4/10 at .7R losses

Pretty tough I know!

Systematic

4/10 at 5.6 R wins and
6/10 a5 1 R losses

Tough again but long and short trading I’m happy.

Others may do better.

I’ve not seen any of your trades Ann so can’t comment on your trading ability.
You seem to have a good handle on vanilla T/A


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## Value Collector (12 January 2019)

jbocker said:


> I must read the book. I enjoyed the movie.
> To me it was the discovery of the McDonalds brothers original burger bar and the efficiencies they had set up.. with the convenience to the customer being rapid delivery.
> I might be wrong but Kroc really discovered the real estate factor as a work around because he had problems dealing with one of the brothers? ...Ahh not sure ... I must watch it again




The book is much better than the movie, the movie is for entertainment, but the book is educational.


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## ducati916 (12 January 2019)

While Skate, I'm sure is quite capable of defending himself if he so chose, I will do so as in my short time of reading his posts I have found him to be exceptionally polite and patient.

Also there are some rather obvious lessons to be learned.

So:

_"I was not expecting a diatribe from you just a simple response. "
_
I suggest you look up the meaning of the underlined word. 

_"Addressing me by name once is sufficient, twice is permissible any more than that sounds condescending. Avoid over using someone's name, it is rude and sounds manipulative."
_
I would disagree.

_"My father owned an engineering company. It convinced me it is a fool's path."
_
As a 'trader' you are self-employed. You are a 'business', unless you are employed to trade for someone [bank/hedge fund/etc].

On a bigger picture basis: without those who engage in business, we are back to hunting/gathering. Only through specialisation/diversification of production can we continue to consume: which by definition means someone has to create and run businesses. If you are an 'employee' you are employed by a business owner.

"_I learnt from my father running your own business was totally rdiculous and not worth the effort._"

Such a generalisation is both ill-informed and disrespectful to those that do.

_"Loans are poison, you dance to another man and the economies tune.
When the relationship breaks down, often your family have no where else to go and no means to leave because all your assets are 'in the business'."
_
A 'loan' is a tool like any other. It can be prudent, it can be dangerous. Again, simply a generalisation without merit.

_"Bingo, that is my #1 FA indicator for a strong business. See FA isn't so hard if you think about it Skate!"_

As has been demonstrated on another thread, recognising legitimate cash-flow from simply cash-flow, is not as straightforward as one might imagine.

_"There are some emotions I can't feel. Fear is one of them, it just converts to the feeling of power. I quite welcome failure, it is a great teacher."_

Possibly you are unique in the human race.

"_If you have fear, you clearly don't have confidence you know what you are doing. If you don't know what you are doing, don't trade."
_
Skate is referring to a 'business', not to trading. Even if it were 'trading' as a business, if you have quit your job, have taken your savings/loan/whatever and undertaken the business of trading, if your trade expectancy is below that initially contemplated and the rent/mortgage/bills/etc are due [as they always are], I would argue it is only natural to feel stress/fear.

I would seriously consider tendering an apology to Skate.

jog on
duc
_


_


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## Skate (12 January 2019)

ducati916 said:


> While Skate, I'm sure is quite capable of defending himself if he so chose, I will do so as in my short time of reading his posts *I have found him to be exceptionally polite and patient*.
> 
> Also there are some rather obvious lessons to be learned.
> 
> ...




ducati916, thank you for your kind words..

*William Shakespeare once said *
"The Eyes are the window to your soul"

*From my experience *
"The words people use are a window to their soul"

Skate.


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## qldfrog (12 January 2019)

"Discretionary index trading short and long 30-40%

Systematic
When it’s turned on long and short 
60% for 1 and 48% the other"
As long as you cut your loss and run your win as Tech/A highlighted so often in the past, all good

I hope Ann has some fears

Fear is the difference between the dead hero and the alive family man.
i believe this is valid for the market too.
My view is there is no place for self confidence in a game where rules are changed, cheating is allowed by and for bigger players than us.
So i manage risks more than my fears..fears lessened but still present and part of who i am


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## Darc Knight (12 January 2019)

This thread is a thread of wisdom and  learning. My takeaway lesson from all this is: don't pi$$ off Ann!


----------



## Skate (12 January 2019)

Darc Knight said:


> This thread is a thread of wisdom and  learning. My takeaway lesson from all this is: don't pi$$ off Ann!




Darc Knight, Ann understands her own demons & from what she has posted about her personal life it's heartbreaking for me to read.

Ann's responses to my posts are from her perspective which differ from mine & that's okay, we are all different & fascinating in our own special way.

Skate.


----------



## willy1111 (12 January 2019)

An early post of Skates he mentions he likes to offend people, get them worked up and angry and then by the end of the conservation have them apologising to him.

All a bit of a game, manipulation, sales, fun for him...I can't help but think maybe he is working this on Ann...he put the bait out, her post would seem a little abrupt so much so that Duc suggest she apologize. Maybe he is gaming her maybe not...having read that earlier post of Skates makes me read all his posts wondering if he is working another angle.

But all in all I have come to a similar conclusion as Skates to my approach to the markets...mechanical coded trend following strategy.

Skate have you had much exposure to Nick Radge?


----------



## willy1111 (12 January 2019)

tech/a said:


> Discretionary
> 
> 6/10 at 3R wins
> 4/10 at .7R losses
> ...




How many trades a month/year on average for each?


----------



## Skate (12 January 2019)

willy1111 said:


> Skate have you had much exposure to Nick Radge?




I have read every article, listened to every podcasts & viewed all his video's I have found on the internet & what was on his old website.

I hold Nick in highest esteem as most. I really enjoy his plain speaking approach to trading. (I have never met Nick Radge but I have spoken to him)

Skate.


----------



## willy1111 (12 January 2019)

Skate said:


> I have read every article, listened to every podcasts & viewed all his video's I have found on the internet & what was on his old website.
> 
> I hold Nick in highest esteem as most. I really enjoy his plain speaking approach to trading. (I have never met Nick Radge but I have spoken to him)
> 
> Skate.




As do I, the learnings I have taken from him have carried the greatest weight far and above any other I have encountered.

A lot of what you have posted, or beliefs adopted about trading sounded familiar


----------



## satanoperca (12 January 2019)

tech/a said:


> Failed heaps of times
> No fear of failure it’s expected




This is profound and once one understands it, the fear is no longer. Thanks for saying as it is, appreciated


----------



## willy1111 (12 January 2019)

satanoperca said:


> This is profound and once one understands it, the fear is no longer. Thanks for saying as it is, appreciated




There is minor failure and catastrophic failure... minor failure is expected ...not many take on so much risk to risk catastrophic failure, catastrophic failure is not expected.


----------



## tech/a (12 January 2019)

willy1111 said:


> How many trades a month/year on average for each?




Varies I trade discretionary spasmodically as time and conditions look ripe 
I’d say around 10 a month

Systematic 
50 ish a year




willy1111 said:


> There is minor failure and catastrophic failure... minor failure is expected ...not many take on so much risk to risk catastrophic failure.




Why would you expose yourself to catastrophic risk.


----------



## Skate (12 January 2019)

willy1111 said:


> A lot of what you have posted, or beliefs adopted about trading sounded familiar




*Disclaimer*
Nick is a business person catering to the needs of a customer base & I believe him to be honest & trustworthy, a rare commodity in our times.

*Generic Posts*
willy111, my posts are generic in nature & I use the language commonly touted by educational trainers, ideas & words commonly used stick with you after awhile because you hear them so often & they align with you beliefs.

*It sounds familiar*
Most of what Nick says sounds familiar because it is familiar, meaning most of his ideas are not his own when it comes to education, he levers off what he has learnt from others who have come before him & he repackages & presents the information in his unique style (that I enjoy)

*Regurgitated information* 
All financial educators stand on the shoulders of others who have come before them. Same information rehashed in different ways.

*Trading Ideas*
Nicks tradings ideas are nothing new either, there is nothing new when it comes to trading ideas (I've written about that as well) Nick's turnkey strategies are strategies that have been around for a long time, they are repackaged common strategies that have been doing the rounds for quite a few years.

*Not reinvented the wheel*
Nick has not reinvented the wheel & nor should he, in his defense he has formulated his own propriety parameters through his extensive backtesting & applied it to the idea of others. (FYI - Nick is not a coder)

Skate


----------



## willy1111 (12 January 2019)

tech/a said:


> Why would you expose yourself to catastrophic risk.




I wouldn't knowingly...my point was that expecting failure needs to be put into context.


----------



## willy1111 (12 January 2019)

tech/a said:


> All good.
> 
> Discretionary
> 
> ...






tech/a said:


> Varies I trade discretionary spasmodically as time and conditions look ripe
> I’d say around 10 a month
> 
> Systematic
> 50 ish a year




So help me understand this in some context, if the average risk R is 2% of capital (often widely touted in trading circles as acceptable risk per trade).

Per 10 trades Discretionary would be (6 wins x 3 x 2% risk = 36%) less (4 losses x 0.7 x 2% risk = 5.6%) = net of 30.4% return on capital per 10 trades which you say you might do per month.  Just 3 months a year of this would produce 90% return on capital per year.

And

Per 10 trades Systematic would be (4 wins x 5.6 x 2% risk = 44.8%) less (6 losses x 1 x 2% risk = 12%) = net of 32.8% return on capital per 10 trades which you say you might do 50 ish a year which  would produce 164% return on capital per year.

Have I got that right? or am I missing something?


----------



## Skate (12 January 2019)

willy1111 said:


> I wouldn't knowingly...my point was that expecting failure needs to be put into context.




***** happens*
willy1111, I'm with you, no one knowingly puts themselves in harms way but no matter how smart we are, or how hard we work, we will regularly be hit by news, circumstances, and developments that are unforeseen and the stock market gods will periodically use us for their entertainment, and there is nothing we can do to prevent it, so we have to be ready and mentally prepared to realise drawdowns and losses are part of the trading process, so take it on the chin & be the ‘best loser’ you can possible be.

Skate.


----------



## willy1111 (12 January 2019)

Skate said:


> ***** happens*
> willy1111, I'm with you, no one knowingly puts themselves in harms way but no matter how smart we are, or how hard we work, we will regularly be hit by news, circumstances, and developments that are unforeseen and the stock market gods will periodically use us for their entertainment, and there is nothing we can do to prevent it, so we have to be ready and mentally prepared to realise drawdowns and losses are part of the trading process, so take it on the chin & be the ‘best loser’ you can possible be.
> 
> Skate.




Agreed...we play the trading game in the expectation that over the long term the sum of our wins will be greater than the some of our losses. Otherwise we wouldn't play the game. 

Analogies can be drawn to many things...as it is tennis season here in Oz now... players can still win a match even though they may lose many points, games or even sets, they know that is generally part of the game.


----------



## Smurf1976 (12 January 2019)

tech/a said:


> Why would you expose yourself to catastrophic risk.



Rationally you wouldn't but avoiding catastrophic risk first requires that you understand the risk exists.

There are countless examples from history, largely in finance and engineering but also in other fields, where catastrophic outcomes occurred because either nobody understood the risk, it was dismissed as too unlikely, it was covered up for personal or corporate gain or someone knew and simply assumed that everyone else also knew and so never mentioned it.

The biggest disasters, financial, engineering or other, usually involve one or more of those elements.


----------



## Skate (12 January 2019)

willy1111 said:


> But all in all I have come to a similar conclusion as Skates to my approach to the markets...mechanical coded trend following strategy.




willy1111, do you trade a weekly or Daily strategy ?

*Breakout Strategy*
I trade a weekly strategy - a modified version of (1) Captain Black (breakout strategy), a modified version of (2) Nicholas Darvas, (Darvas box system) & (3) John Bollinger, (Bollinger Bands)

*My 3 favourites traders*
My 3 favourites traders are listed above & I trade off their ideas (I have not reinvented the wheel either)

*My trading Strategy*
I actively trade my 'Hybrid Strategy' that is such named as it encapsulates & combines the methodology of each trader I have listed above. (my Hybrid system is 3 strategies in one)

Skate.


----------



## willy1111 (12 January 2019)

Skate said:


> willy1111, do you trade a weekly or Daily strategy ?




Neither...I find monthly to be my sweet spot   it's especially great when travelling not to have to think about running scans/placing orders every day/weekend.


----------



## tech/a (12 January 2019)

willy1111 said:


> So help me understand this in some context, if the average risk R is 2% of capital (often widely touted in trading circles as acceptable risk per trade).
> 
> Per 10 trades Discretionary would be (6 wins x 3 x 2% risk = 36%) less (4 losses x 0.7 x 2% risk = 5.6%) = net of 30.4% return on capital per 10 trades which you say you might do per month.  Just 3 months a year of this would produce 90% return on capital per year.
> 
> ...




Pretty right but my risk is 1% systematic 
And at the moment .7 of a % discretionary 

The return on capital allocated to trading is a small amount 
Against net available funds.
I don’t want or need to make a living from trading.

I enjoy the challenge and most of all the continuous journey of learning,


----------



## Ann (12 January 2019)

tech/a said:


> All good.
> 
> Discretionary
> 
> ...





Happiness is what it is all about Tech/a and it sounds like you have more than enough money to play with. 

I tend not to chart or mention what I trade, I have a privacy issue as I use my real first name, If I mentioned two or three stocks I owned, it would be pretty easy to trace exactly who I am and where I live as I hold my stocks until they close me out or get bought out. One never knows these days with stalkers and what-knot. Just being prudent.

These days I get a profit from nearly 100% of my stock choices, provided I use just my 'vanilla' style. Where I risk a fail is if I want to veer from that path.  I like to test stuff and I do that with my normal trading $10,000 a trade. For instance on one occassion I decided to trade on the MACD signal alone with STO....fail, lost 10% + brokerage. I then decided to do the same thing but working with as much FA as I could understand with MRM.....fail lost about 15% +brokerage. The only bad 'vanilla' pick was AMP, I saw a flag on a flagpole, thinking it would overcome a long term overhead falling resistance line and a double top....did not! SMASH! FAIL! About 10% plus brokerage.
Never ever will I trade into a long term overhead ever, ever again, lesson learned. But I knew that already and did it anyway, deserved the kicking. I think I was bleating about it here on the AMP thread. Blaming others for my own mistake of course!


----------



## Smurf1976 (12 January 2019)

Ann said:


> I have a privacy issue as I use my real first name



Well you've beaten me.

I promise that I'm not really blue and white and wasn't marketing petrol ~40 years ago.


----------



## tech/a (12 January 2019)

Yeh I know what you mean 
Try being a Duck!

Near 100% wins from the stocks you pick.
You seriously have the holy grail keep it very
Very close - that I’m sure is a certainty.

I bow to the best results a trader has ever mentioned.
Using vanilla T/A at that.

To be honest from your postings I’d have never picked it!


----------



## Ann (12 January 2019)

ducati916 said:


> While Skate, I'm sure is quite capable of defending himself if he so chose, I will do so as in my short time of reading his posts I have found him to be exceptionally polite and patient.
> 
> Also there are some rather obvious lessons to be learned.
> 
> ...




duc I now what diatribe means, it has several meanings and Skate is sufficiently eloquent to know them as well....amongst others, _criticism, stricture, reproof, reproval, reprimand, rebuke, admonishment, admonition.    _This is how it sounded to me. A subjective interpretation based on the abnormal over-use of my name and not once answering a simple question of a few words with an equal simple response of a few words but basically saying I had no idea what I was talking about when none of the subjects where mentioned in my original simple question. 



ducati916 said:


> _"Addressing me by name once is sufficient, twice is permissible any more than that sounds condescending. Avoid over using someone's name, it is rude and sounds manipulative."
> _
> I would disagree.




Your prerogative. 



ducati916 said:


> As a 'trader' you are self-employed. You are a 'business', unless you are employed to trade for someone [bank/hedge fund/etc].
> 
> On a bigger picture basis: without those who engage in business, we are back to hunting/gathering. Only through specialisation/diversification of production can we continue to consume: which by definition means someone has to create and run businesses. If you are an 'employee' you are employed by a business owner.




I buy stocks as an over all part of my investment portfolio. I do not regard it as a business as I don't employ anyone, I don't pay anyone a dividend and I don't draw a personal income from the investments. I roll the whole thing into more investments. 
I have no problem if someone wishes to run a business for themselves. I have always loved being an employee, it is awesome. 



ducati916 said:


> "_I learnt from my father running your own business was totally rdiculous and not worth the effort._"
> 
> Such a generalisation is both ill-informed and disrespectful to those that do.




I believe I have a right to express how I feel about running a business from the experiences I went through living with my father, watching him swindle decent people out of their money and then turning his back on their pleadings.  I am speaking about myself and my own experiences, where is that ill-informed or disrespectful?



ducati916 said:


> _"Loans are poison, you dance to another man and the economies tune.
> When the relationship breaks down, often your family have no where else to go and no means to leave because all your assets are 'in the business'."
> _
> A 'loan' is a tool like any other. It can be prudent, it can be dangerous. Again, simply a generalisation without merit.




I lived with debt and its consequences all my childhood and came away with an abhorrence of debt in any form. Again I feel you are being unjust when I am explaining something to someone about my feelings and experiences to accuse me of  'a generalisation without merit'.



ducati916 said:


> _"Bingo, that is my #1 FA indicator for a strong business. See FA isn't so hard if you think about it Skate!"_
> 
> As has been demonstrated on another thread, recognising legitimate cash-flow from simply cash-flow, is not as straightforward as one might imagine.




That was simply a little follow on between Skate and myself from a previous conversation and he would have fully understood its reference, aparently unlike yourself who is reading something out of context.



ducati916 said:


> _"There are some emotions I can't feel. Fear is one of them, it just converts to the feeling of power. I quite welcome failure, it is a great teacher."_
> 
> Possibly you are unique in the human race.




No not at all. I would be one of those blokes who leaps over the wall into enemy fire to save a mate. There are ship loads of us. 



ducati916 said:


> "_If you have fear, you clearly don't have confidence you know what you are doing. If you don't know what you are doing, don't trade."
> _
> Skate is referring to a 'business', not to trading. Even if it were 'trading' as a business, if you have quit your job, have taken your savings/loan/whatever and undertaken the business of trading, if your trade expectancy is below that initially contemplated and the rent/mortgage/bills/etc are due [as they always are], I would argue it is only natural to feel stress/fear.




If a person is not 100% confident trading and finds it fearful and stressful, I would strongly recommend they get another source of income, preferably working for someone else.




ducati916 said:


> I would seriously consider tendering an apology to Skate.




Go right ahead duc!


----------



## Ann (12 January 2019)

tech/a said:


> Yeh I know what you mean
> Try being a Duck!
> 
> Near 100% wins from the stocks you pick.
> ...




It is not a holy grail tech/a it is just years and years of practice drawing support and resistance lines and deciding when an entry level is a good one, getting to know the 'feeling' of a chart. Once a support line is tested I like that as an entry point. If I try to trade on 'shapes' (AMP) I have tended not to do so well. I also look at the overall situation of the markets, I look at the sector of that particular stock I watch gold and oil as these are quite a driver for the markets, I watch the US bond price, the CRB index and a number of other things. All things are connected.

I don't want to make people think I am some sort of guru, I have seen the sort of damage gurus have done on other sites. I would rather be seen as a bit of a fool than drag anyone into this game with false hopes, it isn't easy and I don't want to make it look too easy. That is one of the reasons I tend to hang out charting in the Commodities, no one pays much attention to those. I never like to advise people on stock choices as I may be wrong for their style of trading or just wrong in general.

I will give you a for-instance with my current market investment thoughts. I was working on something most of today, the CRB Index. I feel it is about to fall, I have been watching it for many years. I went to the site to inspect who the actual stock constituents are for the CRB Index, amongst other things.  There are a number of Australian stocks which will be very negatively impacted if the CRB falls. Two stocks I had just started to watch for my own portfolio were FMG and BSL. They are included in the CRB index. Having now seen that, I am going to step back a little, I never rush at my trades, no need. There is a high risk of a rapid downside for these two if the CRB fails, if it doesn't, fine. Like trams, there is always another perfectly good one coming along shortly. I only ever buy into the markets if I am in the right mental frame of mind and in reasonable health.


----------



## tech/a (12 January 2019)

And this returns you an almost 100% hit rate
Coupled with vanilla T/A

Impressive I doubt anyone else could do that!


----------



## ducati916 (13 January 2019)

Ann said:


> 1. duc I now what diatribe means, it has several meanings and Skate is sufficiently eloquent to know them as well....amongst others, _criticism, stricture, reproof, reproval, reprimand, rebuke, admonishment, admonition.    _This is how it sounded to me. A subjective interpretation based on the abnormal over-use of my name and not once answering a simple question of a few words with an equal simple response of a few words but basically saying I had no idea what I was talking about when none of the subjects where mentioned in my original simple question.
> 
> 
> 
> ...




1. I have read [some] of Skate's posts. Invariably they are polite and well meaning. Any error of interpretation lies with the reader.

2. Unfortunately, that is not what was expressed.

3. Yes you have a right to express anything personal to yourself. No argument. That is however not what you did: you took your personal position and extrapolated it onto everyone else. That is disrespectful to those that are self-employed and run legitimate businesses.

4. Same argument as above.

5. And if you spoke to those people [most, if not all] would state that they were afraid while doing so. Bravery is overcoming the fear, not an absence of fear.

6. Which totally misses the point re. starting a business.

7. I will, apologies Skate for diluting your thread with off-topic issues.

jog on
duc


----------



## Skate (13 January 2019)

ducati916 said:


> 1. I have read [some] of Skate's posts. Invariably they are polite and well meaning. Any error of interpretation lies with the reader.
> 
> 2. Unfortunately, that is not what was expressed.
> 
> ...




ducati916, you have nothing to apologise for, on the contrary your posts adds immense value to this thread. By taking a stance it shows your mettle to carry on & continue to express what you think, also it now allows me to express my views in a generic way for others to better understand.

*First - my definition of mettle*
Mettle is all about courage. If someone wants to "test your mettle," they want to see if you have the heart to follow through when the going gets tough & Duc, you have that in spades.

We all have beliefs & we are constantly expressing our beliefs both verbally and through our actions as perfectly illustrated by the preceding posts. 

Furthermore, we are constantly interacting with other people’s beliefs as they express them. 

*What exactly does a belief do?*
Our beliefs are an intricate part of our identity, the fact is none of us was born with any of our beliefs. They were all acquired in a combination of ways & sometimes by the way of a father figure.

*Instilled by others*
Many of the beliefs that have the most profound impact on our lives were not even acquired by us as an act of free will but instilled by other people & sometimes by force.

*Negative implications*
And it probably won't come as a surprise to anyone that usually the beliefs that cause us the most difficulty are those that were acquired from others without our conscious consent. By that I mean beliefs that we acquired when we were too young and uninformed to realise the negative implications of what we were being taught.

*Our beliefs shape our lives*
In the broadest sense, our beliefs shape the way we experience our lives. 

*Beliefs are acquired*
As I have already said, we're not born with any of our beliefs. They're acquired, and as they accumulate, we live our lives in a way that reflects what we have learned to believe. 

*Perception*
They manage our perception and interpretation of environmental information in a way that is consistent with what we believe. There isn't much about the way we function that beliefs don't play a major role in.

*Reinforcement*
Having negative beliefs reinforced when we are young will have major implications in our adult lives, our mental well-being that will profoundly impact our lives.

Skate.


----------



## Skate (13 January 2019)

*Self-control*
Self-control makes everyone more productive. However, we should repress our feelings of anxiety, fear, anger or sadness when making comments.

*Biological impulses*
We must acknowledge and understand our emotions for what they are. Like animals, biological impulses drive our emotions. There is no way to escape them, but we can learn to self-regulate our feelings and, in so doing, manage them.

*Measured comments*
Self-regulation is the ongoing inner conversation that emotionally intelligent engage in to be free from being prisoners of their feelings. If we are able to engage in such a conversation, we still feel bad moods and emotional impulses just as everyone else does, but we can learn to control them and even to channel them in useful ways.

Skate.


----------



## Skate (13 January 2019)

*We come up with stories*
When our ideas or beliefs are challenged we tend to be defensive & start to make up stories confirming why you are right & everyone else is wrong. We tell ourselves the same story over & over till we tend to believe our own bull$hit. 

*Mental struggles*
Most of our stories relate  to mental struggles, the mental gymnastics we all experience at some stage & the struggles normally relate to personal issues, like "we’re not where we want to be" and "I should be doing better than this" and it always relate to something outside our control, or our lack of some natural talent or ability. But talent and skill are two key elements to success attainable by anyone who is truly committed. 

*Nothing changes if nothing changes*
You can get the skill if you can get beyond the mental limits of how hard, difficult, or “impossible” it may be to master something.

*Self doubt*
What matters is that you quell the uncertainty and doubt that pollutes your mind/decisions by planning ahead for all possibilities. We all need to simplify our lives in this increasingly noisy & cranky world. But even more critical, we need to remind ourselves to do nothing sometimes and just think about now.

Skate.


----------



## Ann (13 January 2019)

tech/a said:


> And this returns you an almost 100% hit rate
> Coupled with vanilla T/A
> 
> Impressive I doubt anyone else could do that!




They certainly could Tech/a, anyone. I have put up how I enter a stock on FMG.  https://www.aussiestockforums.com/posts/1009612/
It is pretty much always the same way, not necessarily right at the bottom of a stock, it can be anywhere along the left side of the chart, same principles apply. It is basic, simple charting sticking to the KISS principle. For short sales, go to the right and read it in reverse.


----------



## Skate (13 January 2019)

Ann said:


> They certainly could Tech/a, anyone. I have put up how I enter a stock on FMG.  https://www.aussiestockforums.com/posts/1009612/
> It is pretty much always the same way, not necessarily right at the bottom of a stock, it can be anywhere along the left side of the chart, same principles apply. It is basic, simple charting sticking to the KISS principle. For short sales, go to the right and read it in reverse.



Ann, would you please be kind enough to re-post your hyperlinked post in its entirety here in the 'Dump it here' thread please - others reading this thread would find your post very interesting, I'm sure of that. (this is what the 'Dump it here' thread is all about - educational material for beginners)

Skate.


----------



## Ann (13 January 2019)

Skate said:


> Ann, would you please be kind enough to re-post your hyperlinked post in its entirety here in the 'Dump it here' thread please - others reading this thread would find your post very interesting, I'm sure of that. (this is what the 'Dump it here' thread is all about - educational material for beginners)
> 
> Skate.



That link is its entirety Skate, it links to my post from both my post here and your post where you just quoted my post. But this whole thing appears to be turning into a pissing contest and that is something I have avoided for the last 13 odd years I have been here. There should only ever be one guru per stockmarket forum otherwise it just confuses the punters who to follow! It sure the hell isn't going to be me.


----------



## Skate (13 January 2019)

Ann said:


> That link is its entirety Skate, it links to my post from both my post here and your post where you just quoted my post. But this whole thing appears to be *turning into a pissing contest* and that is something I have avoided for the last 13 odd years I have been here. There should only ever be one guru per stockmarket forum otherwise it just confuses the punters who to follow! It sure the hell isn't going to be me.




Sorry Ann, your post is very valuable for the 'Dump it here' thread as its gives an insight how others trade - there is no right or wrong method when it comes to trading, what works for you might not work for others, it's for the reader to decide.

Instead or contesting your method of trading it would be better for others to explain an alternative, or their methodology when it comes to their trading style - as peter2 has done in his thread.

Skate.


----------



## Ann (13 January 2019)

Skate said:


> Sorry Ann, your post is very valuable for the 'Dump it here' thread as its gives an insight how others trade - there is no right or wrong method when it comes to trading, what works for you might not work for others, it's for the reader to decide.
> 
> Instead or contesting your method of trading it would be better for others to explain an alternative, or their methodology when it comes to their trading style - as peter2 has done in his thread.
> 
> Skate.



.....Love Peter2 and another great poster who was wonderfully patient trying to teach me the Elliot Wave....Porper. These guys are great! Always stop to read them if they pop up.


----------



## tech/a (13 January 2019)

Ann
If you make a claim expect to be 
Taken up on it.

No pissing contest.

I’m just looking for evidence that vanilla T/A can return near to 100%
Winning trades.
In 25 years countless hrs with Quants a fair circle of professional traders 
Directly and in directly —- your claim is at 180 degrees to everyone in the field of trading.

Your claim —— if you can’t back it up why make it in the first place?
Why make statements like you wouldn’t trade with % wins like I report or indeed 50%.

Those types of statements warrant further investigation and a trader with such an amazing result is to be revered if they can demonstrate it.

We will all learn 
So please go ahead!


----------



## Ann (13 January 2019)

tech/a said:


> Ann
> If you make a claim expect to be
> Taken up on it.
> 
> ...



The thing is Tech/a, I don't _want _to be revered. I leave that for others with a greater need than myself.


----------



## tech/a (13 January 2019)

Very disappointing.
I really thought there was another T/A
On this forum who had something of value to contribute.

Unfortunately claims like yours give T/A a bad name.
Particularly when claims/methods cannot be substantiated.

It just makes it look like bullshite.


----------



## Ann (13 January 2019)

tech/a said:


> Very disappointing.
> I really thought there was another T/A
> On this forum who had something of value to contribute.
> 
> ...



Well life is just full of little disappointments and bullsh!t Tech/a. It is up to all of us to gain from others where we may.


----------



## peter2 (13 January 2019)

@Ann Thank you for your compliment. 

Let me return the compliment by saying that I enjoy seeing your charts with longer term lines. I rarely look at yearly trend lines as I'm focused on the smaller time frames.

My "dump" for skate is to never overlook the bigger picture even if we're only trading short time frames.


----------



## ducati916 (14 January 2019)

peter2 said:


> @Ann Thank you for your compliment.
> 
> Let me return the compliment by saying that I enjoy seeing your charts with longer term lines. I rarely look at yearly trend lines as I'm focused on the smaller time frames.
> 
> My "dump" for skate is to never overlook the bigger picture even if we're only trading short time frames.




Stock/Commodity prices are essentially fractal.

An interesting read on the subject is 'Mandelbrot', "The (Mis) Behaviour of Markets".

jog on
duc


----------



## tech/a (14 January 2019)

ducati916 said:


> Stock/Commodity prices are essentially fractal.
> 
> An interesting read on the subject is 'Mandelbrot', "The (Mis) Behaviour of Markets".
> 
> ...




To add
All analysis has an expiry in its timeframe 
Look for confirmation of continuation or capitulation 
As your fractals unfold


----------



## Skate (14 January 2019)

TiminOz said:


> Hey traders!
> 
> *Could anyone recommend such a book to me?*
> (or even a (free) YouTube video series?)
> ...




*Trading successfully - the learning curve is steep*
TiminOz, you could read hundreds of books, watch the market for years and still not be profitable.

*Books are very technical*
All the excellent trading books will explain trading in very technical terms that are meaningless to the novice and they rarely mention what it takes to trade with confidence, failing to inform you about the emotional roller coaster you will soon start experiencing once you start trading.

*I wasted a lot of time reading*
Many of the books that I have read have turned out to be of little value at all, so I just wasted my time.

*Need to know - expected to know*
It’s time consuming just figuring out what you need to know and what you are expected to know, this leads to reading heaps of useless information that turns out to be irrelevant in the early stages of trading.

You have to sift through so much material to find out if you need to know that information or not.

*You don’t even know enough*
You’ll have so many thoughts floating around in your head that require answers, sometimes you don’t even know enough to ask the right questions.

*Basic questions*
Just starting out on your trading journey you’ll need answers to some basic question and my suggestion to you would be to watch a few videos instead of reading books to begin with.

*Really enjoyable*
Watching videos is my preferred way of learning & watching a video or two is really enjoyable & educational.

*Time travelers*
Whereas reading a book is exhausting & mentally draining & it’s hard to stay in ‘NOW’ because we are all time travelers in our own mind.

*Mindfulness*
The degree of concentration when reading a trading book is enormous because your mind will do everything it can to make you think in the future or into the past, mindfulness is difficult to achieve.

*Human condition*
Your mind is a time traveler & its been that way from birth & you may not even realise when it's happening to you. (mind wandering is a human condition & nothing to worry about)

*Skill to learn*
'Mindfulness' & being in the 'Now' is another fascinating topic & it's a great skill to learn.

*The video link*
Is in the next post

Skate.


----------



## Skate (14 January 2019)

*I highly recommended - Clay Trader Videos*

Clay is a full time stock trader, teacher, and blogger. Technical analysis and charts are the foundations to his success. Clay enjoys helping others become better traders. Look at a few of his videos & you’ll be hooked. 

His presentation style is unique & enjoyable but best of all its FREE.

https://www.youtube.com/user/ClayTraderVideos

Skate


----------



## Skate (14 January 2019)

*Video or a Book ?*
Trading is a process & the very first step towards success as a trader is to become interested in it.
*
Trading System*
To succeed in the financial markets you need to have some kind of trading system in place whether it’s Discretionary trading, Fundamental Analysis or Technical Analysis, you can use a Decision Tree process or Machine Learning to generate signals it’s up to you as (IMHO) it doesn’t really matter.
*
Developing your particular style.*
The amount of time you want to dedicate to investing will determine how much research you might do and how closely you monitor your holdings, will determine the length of your holdings periods.

*Your temperament*
You’re emotional and psychological makeup will help determine if you have the temperament to play fast-moving, volatile stocks or are better suited to looking for undiscovered gems that will slowly gain attention.

*Up skill*
Your skill will determine if you will dig into financial statements, study the science behind why stocks do what they do, or focus on using charts to measure emotions of the market participants.

Skate.


----------



## Skate (14 January 2019)

More on self education..
*
Starting out you have to feel comfortable*
The most important thing is to know yourself and to keep trying various methods until you arrive at an approach that works. Trading is all about trial & error.

*Bull & Bear Markets*
Unfortunately, the market often makes that quite difficult, because it is always changing, so the things that work best during one period may change.

*Perseverance*
However, that doesn’t mean that you reinvent yourself every time you struggle a bit. After you develop a style, it is important to stick with it and not give up just because you don’t make immediate progress.

*We are all different*
We all have different levels of risk tolerance, patience, activity, and emotional ups and downs. What is comfortable for one investor will drive another to distraction and if you can appreciate that fact, arriving at a style that works for you is easier.

*The Turtles*
In 1983, Richard Dennis bet his business partner Bill Eckhart that he could teach 14 novice traders a trend-following system to be great traders & the results were astounding. Bill Eckhart believed traders has an innate ability from birth.
*
In summary *
I've always wondered if anyone who is reasonably intelligent having a good work ethic could teach themselves to be a profitable trader. The scary statistic is that many don't succeed.

Skate.


----------



## ducati916 (15 January 2019)

tech/a said:


> To add
> All analysis has an expiry in its timeframe
> Look for confirmation of continuation or capitulation
> As your fractals unfold




So expanding the discussion somewhat, the 'Random Walk Theory' postulates 3 conditions:

(a) the martingale condition [that your best guess of tomorrow's price is today's price]; and
(b) independence of prices; and
(c) that all price changes in total form the Bell curve.

I don't actually agree with any of them. Rather, that the 'magnitude' of price changes depends on those of the past, that rather than independence, there is dependence. This is another way of defining volatility and that volatility clusters.

The above, also describes what we were discussing re. consolidations. Consolidations are low volatility periods. Breakouts are high volatility periods. If volatility clusters, which it does, then the breakout is the start of a high volatility period. As prices are dependent, that volatility cluster will be in the same direction [price].

Stock selection can therefore be selecting low volatility and trading a rise in volatility in 'x' direction.

Timeframes [fractals] should all be consistent in the trade.

jog on
duc


----------



## tech/a (15 January 2019)

Hmm 
Don’t know Duc
I can trade long and have a positive trade on a 5 min chart while the
Daily chart is short! The same daily to weekly and vice versa.

My point is that say a continuation pattern may signal and produce a bullish 
Price movement which has a time of expiry that being when price has either given an indication of something different to the signal that triggered it happening either positive or negatively 
OR
The original signal is negated before anything else appears on the chart.


----------



## ducati916 (15 January 2019)

tech/a said:


> Hmm
> Don’t know Duc
> 1. I can trade long and have a positive trade on a 5 min chart while the
> Daily chart is short! The same daily to weekly and vice versa.
> ...




1. Of course. No argument. My point is that big trending moves, sorts of moves techtrader might catch, are created through fractal timeframes where all timeframes are in the same phase. A recent example was the move down in oil.

2. Yes again. These are the shorter term fluctuations that we often trade, especially if day trading.

3. Which is simply a false signal.

jog on
duc


----------



## tech/a (15 January 2019)

Same page Ducster.


----------



## Gringotts Bank (15 January 2019)

ducati916 said:


> ....are created through fractal timeframes




Please explain.


----------



## ducati916 (16 January 2019)

Gringotts Bank said:


> Please explain.





Simply where all your various timeframes indicate the same direction [based on your analysis, which may of course be wrong].

Usually, each timeframe is slightly out of sync. The 5 mins chart indicates a short position, while the 1 hour chart suggests a long position, etc. Occasionally they all line up together. These are usually a strong probability of a successful trade.

The issue is more when they don't align. Which timeframe dominates, which will you trade. There is no good answer to that as it varies.

jog on
duc


----------



## Skate (16 January 2019)

*Trading is boring *(for me that is)
Trading is boring & done correctly that’s exactly how it should be – Boring.

*The way I trade*
1. On Friday I push one button to generate the Buy & Sell signals
2. Open CommSec & place those orders
3. On Monday the confirmations are place in my Portfolio Manager

That’s it – a total of 15 minute all up. Imagine you have this ‘Game’ the ‘Trading Game’ & you're limited to playing the game for 15 minutes a week – Now that's Boring…

*My trading style*
My trading investments are made using technical analysis using a Mechanical Trend Trading System

Skate.


----------



## Skate (16 January 2019)

*Series of posts*
If you're starting your investment journey - this series of posts are for you.

*Starting Can Be Easy*
Trading doesn’t have to be super complicated or time consuming. Also, you don’t have to be rich either. There are plenty of easy ways to get started without having a ton of money and without being the world’s foremost trading expert.

Skate.


----------



## Skate (16 January 2019)

*Series of posts*
If you're starting your investment journey - this series of posts are for you.

*Practice Makes Perfect*
It's critical to make smart trading decisions & you can learn as you go by trading small positions and if you make a mistake small loses are bearable. Making small mistakes now will give you the skills and experience you’ll need to make the right decisions later on. So don’t let fear or self-doubt keep you from getting started. The very act of getting started is much more important than getting it right.

Skate.


----------



## Skate (16 January 2019)

*Series of posts*
If you're starting your investment journey - this series of posts are for you.

*Investment strategy rather than trading*
Instead of trading, start investing & one way is to start investing in Index Funds or Licenced investment companies (LICs) that are tradable on the Australian Securities Exchange (ASX). It’s simple, quick and there are no minimum contribution requirements and they trade like shares.

*Investment strategy*
You can keep your investment strategy robust and straightforward by using Index Funds or LICs & the resources are out there to get started with a significant investment strategy, even without much money or knowledge.

Skate.


----------



## Skate (16 January 2019)

*Series of posts*
If you're starting your investment journey - this series of posts are for you.

*The typical beginner*
The typical beginner will usually be worried more about when to enter a trade than anything else. They think little of risk management, or even bother to plan when to sell. Because of this, when a trade begins to turn against them, they hold with the hope of coming back to even or their former profit level. Worse off, they may average down, in effect doubling down on a loser.

*Don't be a loser*
It pays to remember - "Don't be a loser by adding to a losing position"

Skate


----------



## Skate (16 January 2019)

*Series of posts*
If you're starting your investment journey - this series of posts are for you.

*New traders struggle with the markets *
There are no RULES in the markets and most people like ‘rules’ and like to be told what to do. People are conditioned from childhood to listen to authority and follow ‘rules’.

*Excess freedom*
The problem is that 'excess freedom' cause people to become overwhelmed and fearful and lose money because they do not 'know' what to do.

*Human Nature*
Human Nature never changes, the Markets and players change, but human nature remains constant.

Skate.


----------



## Skate (16 January 2019)

*Series of posts*
If you're starting your investment journey - this series of posts are for you.

*Don't break your trading rules*
This is very difficult for some people to achieve because when dealing with large amounts of money, you tend to break your rules or make new ones along the way, solely for the purpose of justifying how you feel at the moment.

Skate.


----------



## Skate (16 January 2019)

*Series of posts*
If you're starting your investment journey - this series of posts are for you.

*You need to survive as a trader*
You need survivability. If you are seeking absolute returns using a reactive approach to trading, you will always get in a little late and you’ll always get out a little late.

*Consolidation* (widely discussed on other threads)
Initial buys may go through an initial dip, this can be quite normal or you may experience a profitable position from the start that may spend a few weeks consolidating in a base (when price typically becomes range-bound after reaching a certain level).

*Don’t panic*
These motions in price will inevitably cause drawdowns in your portfolio that can last weeks or even months. Being able to sit through these periods is probably the most difficult aspect about trading.

Skate.


----------



## Skate (16 January 2019)

*Series of posts*
If you're starting your investment journey - this series of posts are for you.

*Being irrational*
In life, not just the markets, most rational people make irrational decisions.

*Oh, the pain of it all*
Every drawdown comes to an end & it always occurs when you are at your emotionally lowest, when you think it just can’t get any worse.
*
Don’t panic*
What I like about the psychology aspect of trading is that it is really universally-applicable in anything you do. I know it’s helped my life for the better and will only continue to do so.

*Change your way of thinking*
What I’ve learned so far can almost feel applicable to any situation in life where the possibilities are endless and it’s difficult to be consistently right. It can change your way of thinking, or even your outlook on life.

Skate.


----------



## Gringotts Bank (16 January 2019)

ducati916 said:


> Simply where all your various timeframes indicate the same direction [based on your analysis, which may of course be wrong].
> 
> Usually, each timeframe is slightly out of sync. The 5 mins chart indicates a short position, while the 1 hour chart suggests a long position, etc. Occasionally they all line up together. These are usually a strong probability of a successful trade.
> 
> ...



Thank you.

That's my preferred method of trading lately.  Wait for a single issue where the ducks line up on 4 time frames, check fundamentals, use a much larger portion of capital and hold for longer.  I don't like trying to manage stock positions every day on the ASX.  The liquidity is so terrible that you can spend an entire day looking for volume to sell into.


----------



## Skate (16 January 2019)

*Series of posts*
If you're starting your investment journey - this series of posts are for you.

*Dumb mistakes we all make as beginners*
(a) Trading without an edge
(b) Buying and holding
(c) Trading big positions
(d) Over-trading
(e) Holding losses too long
(f) Cutting winners short
(g) Getting emotionally involved

*You need an Edge*
The most basic thing you need to be a successful trader is an edge, an advantage in your trading that produces a positive net profit over the long-term. This edge is the culmination of all your research, planning, execution, and state of mind while managing your portfolio.

Skate.


----------



## Skate (16 January 2019)

*Series of posts*
If you're starting your investment journey - this series of posts are for you.

*Check the history*
When you want to make money over the long-run, a good way to analyse a strategy is to look at the history of its returns.

*Controlling risk *(read peter2 thread for more on risk)
One way to obviously improve your odds is to get your average profit greater than zero. However this is not enough, because although you are now likely running a profit, you aren’t controlling risk.

*Worth remembering*
What is most important is the old adage "cut your losses short and let your winners run", one that is obeyed by all the great traders I’ve researched. When you do that you tend to incur many more little losses, but since your gains are essentially unbounded, they usually make up for your losses and drive a profit.

Skate


----------



## Skate (16 January 2019)

*Series of posts*
If you're starting your investment journey - this series of posts are for you.

*Is this crap advice ?*
"Cutting your losses short and let your winners run" - well no it isn't as it's is hallmark of all the great traders & your ability to incur those many small losses and hold out for the big winners is solely dependent on your ability to execute your trading plan flawlessly and maintain your edge.

*Please read *(more than once)
Your ability to incur many small losses and hold out for the big winners when you’re dealing with your own money, gets very complicated, very quickly!

Skate.


----------



## Skate (16 January 2019)

*Series of posts*
If you're starting your investment journey - this series of posts are for you.

*My personal struggle*
I struggled to understand the culture of Share Trading as an investment vehicle at first because I couldn’t follow the logic behind the market movements. I couldn’t understand what moved the share price as it seemed to me logic was the missing link when it came to trading the markets.

*Hunches, opinions, fear and greed*
I soon realised logic is not part of the trading game but fear and greed was. It didn’t take me long to realise that trading decisions don’t follow logic, then the penny dropped, trading decisions are made on hunches, opinions, fear and greed.

Skate.


----------



## Skate (16 January 2019)

Gringotts Bank said:


> yes skate, we can see the duplicates.




Gringotts Bank, I prefer to call it conditioning. Most readers skim over material so quickly they don't allows themselves to fully comprehend what they are reading let alone absorb it.

*Short Bursts*
I post in short bursts in the hope of retaining the readers interest. The 'Dump it here' thread is for others to put an alternative view to mine when it comes to trading. 

*I'll wrap it up*
I take it you are a bit over this short series of posts so I'll wrap it up. The last thing I want to do is to post material that others find not enjoyable, uninteresting or in general they don't see value.

Skate


----------



## Skate (16 January 2019)

Hip hip hooray !!

*This is the END of this series of posts*
The END have come on this series of posts & if I make additional posts the will be generic in format.

*Why should I keep reading?*
If you are new to trading please make an effort to read my ‘Dump it here’ thread from the very first post as it may save you many years of self-education if you have the slightest interest in trading.

*New traders lose 98% of the time *(poor odds indeed)
In this short series of posts I wanted to point out the dangers and pitfalls associated with trading and to inform you about the emotional roller coaster you will soon start experiencing once you start trading.

Skate.


----------



## Gringotts Bank (16 January 2019)

Skate said:


> *I'll wrap it up*
> I take it you are a bit over this short series of posts so I'll wrap it up. The last thing I want to do is to post material that others find not enjoyable, uninteresting or in general they don't see value.
> 
> Skate



I'm not over it or under it.  Just reading and picking up a few crumbs here and there.


----------



## Skate (16 January 2019)

Gringotts Bank said:


> I'm not over it or under it.  Just reading and picking up a few crumbs here and there.




Well, thank you Gringotts Bank - I fully understand my thread is not for everyone.

*Crumbs*
Hansel and Gretel follow the (crumbs) back home, it's where they wanted to be. If some of my crumbs as you say have helped, I'm happy to have made the posts you found of interest.

Skate.


----------



## Joe Blow (16 January 2019)

Skate said:


> Hip hip hooray !!
> 
> *This is the END of this series of posts*
> The END have come on this series of posts & if I make additional posts the will be generic in format.
> ...




Skate, congratulations on seeing this thread through to this point. There is so much great food for thought in here that it's hard to quantify it. You have created something quite unique and I'm sure it will be appreciated by many others in years to come. I also hope that we continue to see numerous additional dumps in this thread, both by yourself and other contributors. It has become the place on ASF to dump random wisdom and interesting and thought provoking ideas.


----------



## myrtie100 (16 January 2019)

Thank you Skate, what an effort!

I have found your thread, thought provoking, educational and conformational.  

Stacks of stuff in here, well done


----------



## Skate (16 January 2019)

Joe, myrtie100, thank you both for your kind words, it's been my wish for the more experienced traders to share their wisdom with those who lack it. We have a good community spirit here on ASF but once we had a great forum & (IMHO) it's worth capturing again. I apologise in advance for the length of this post.

*Stimulate discussion*
I've made a lot of posts to stimulate members to open up & express their point of view, alternative trading ideas. I't been very hard to keep my posts short, snappy, generic & light-hearted  trusting members to post in the same vein. Trading is confusing for the best of us & extremely confusing starting out on your trading journey.

*Seeking answers*
New members visit our community looking for answers & when members express alternative opinions it gives them something to think about on a deeper level.

*Right or wrong it doesn't matter*
The 'Dump it here' thread is not about right or wrong or whether you’re right & they're wrong that's not what is important. What is important is the choice of words members use to express an alternative point of view & expressing an opinion from experience in a respectful manner.

*Please Note*
The 'Dump it here' thread gives everyone the ability to express their views without being ridiculed or challenged.

*Opinions are welcomed *
All I’ve ever asked is for others not to ridicule or challenge posters as it serves no purpose other than curtailing the flow of respectful conversation – everyone has the right to express an alternative point of view. Instead of contesting a member method of trading it would be better for others to explain an alternative, or their methodology when it comes to their trading style

*Listen to everyone *
From my experience it pays to listen to everyone & than you decide if it’s relevant or helpful. You get to decide what to keep & what to discard & when you don’t listen you forgo the right to learn.

Skate.


----------



## tech/a (16 January 2019)

Skate

Keep it coming.
Great job and one of the most proactive posts I've seen.
Make this a sticky Joe!

Some Daffy Advise.




A heart felt Thanks Skate.


----------



## Joe Blow (16 January 2019)

Skate said:


> *Opinions are welcomed *
> All I’ve ever asked is for others not to ridicule or challenge posters as it serves no purpose other than curtailing the flow of respectful conversation – everyone has the right to express an alternative point of view.




I think this point is worth re-iterating. Every day we are faced with choices. We can choose to be kind to others, to be respectful to others, to help others, to educate others and to inspire others.  Or we can choose to be unkind, disrespectful, critical, negative and unhelpful. Those choices affect others in a very real way. The consequences of those decisions linger and leave either positive or negative ripples in people's lives. In the case of this community, it affects the mood and sets the tone and makes ASF either a pleasant or unpleasant place to be. 

I think what we can all take from this thread is that there is no limit on our potential to give to others and to leave positivity in our wake. Our posts live on after us and they reflect how we chose to contribute to this community and relate to those in it. I have witnessed constructive, positive eras here at ASF and more divided, negative ones. The negative ones have only led to more negativity and it was not until that negativity was removed that the community could return to a more positive place. I feel we are back there now and this thread in particular has helped contribute to that in a very real way. I would like to see it continue and I hope this thread inspires others to carry on and perpetuate that constructive, positive ethos. I think the results speak for themselves.


----------



## Skate (17 January 2019)

If you have a Gem 'Dump it here'
*
When you wake up*
When you wake up, put a smile on your dial, be positive, be kind, be you – Repeat.

Skate.


----------



## Skate (17 January 2019)

If you have a Gem 'Dump it here'
*
Have a goal*
My goal is not to be better than anyone else but to be better than I used to be.

Skate.


----------



## Skate (17 January 2019)

If you have a Gem 'Dump it here'
*
Make a change in your life*
It's worth remembering - "Nothing Changes if nothing changes"

Skate.


----------



## tech/a (17 January 2019)

*
It's worth remembering - "Nothing Changes if nothing changes"
*
Radical change gives rise to Radical results.


----------



## Skate (17 January 2019)

*What’s so good about Mechanical Trading Systems ?*
Mechanical trading systems that are well coded have the ability to find positions where markets are somewhat inefficient & can detect patterns in historical data that precede profitable opportunities ensuring those patterns persist long enough to make profitable trades.

*Discretionary traders*
Trading is not an exact science whereas trading a mechanical system exceeds my personal ability to use an alternative discretionary method of trading. Good discretionary traders (IMHO) have a gift that I admire.

Skate.


----------



## tech/a (17 January 2019)

Skate

I don't have time to answer in full
But will say that over the last 3 yrs my understanding
of mechanical systems and in particular their programming
and testing has altered 180 degrees.

General public access to serious capability isn't collated all in one spot.
Its there but putting it together in a meaningful collation with the
understanding and or direction to use it is sadly unavailable to us.

But very soon it will be!


----------



## Skate (17 January 2019)

tech/a said:


> Skate
> 
> I don't have time to answer in full
> *But will say that over the last 3 yrs my understanding
> ...




tech/a, its interesting that you say that over the last 3 yrs your understanding of mechanical systems and in particular their programming and testing has altered 180 degrees.

My mechanical 'Hybrid' system is a trend following system jumping on confirmed breakouts, it's really no better than a 50/50 change of a continuation of the move in the right direct but it's the best I've been able to achieve & it's consistent with this style of strategy.

*Luck & money management principles*
In designing good money management principles into a my 'Mechanical Trading System' to a degree helps but my success or failure in the market is a function of our luck & timing entry.

*Moreover*
No money management principles can turn a system with 'negative expectancy' into a winning system & 'poor money management' can turn any good system into a losing system.

*Waiting with interest*
I'll be interested to hear your expanded views to the topic raise as most know you have a deep understand & a high degree of knowledge in this area

Skate.


----------



## willy1111 (17 January 2019)

The teacher appears when the student is ready . . . one has to have a willingness/open mind/thirst to want to learn a subject/topic.  Once one has that, they go in search of answers and since we are in the information age - the information on said topic is abundant . . . so much so that the information available can be overwhelming.  One then has to determine if the payoff to sort through all that information is worth it.


----------



## willy1111 (17 January 2019)

Skate said:


> *What’s so good about Mechanical Trading Systems ?*
> Mechanical trading systems that are well coded have the ability to find positions where markets are somewhat inefficient & can detect patterns in historical data that precede profitable opportunities ensuring those patterns persist long enough to make profitable trades.
> 
> *Discretionary traders*
> ...




One can learn to be a discretionary trader, the information is out there.

I have tried it, but for me the time involved in back testing is very intensive, back testing a mechanical strategy would seem to be much more quantitative and quicker to get a result.  Different variables and inputs can be changed and tested very quickly with a mechanical strategy to see merit, it can be measured over different times frames, in sample, out of sample, etc.

An expectation of compound annual growth, draw down, trade frequency can be set.  This provides confidence to risk hard earned dollars in the market rather than keep it in cash or another asset class.

At the same time I try to remember that no one knows the future - it may not continue to perform as expected into the future - it is interesting to look at a 20 year back test and compare the annual compound return and count how many specific years were above and below that benchmark.  Over what period is the back test data available, what were the economic conditions like for the country during that period and what is relevant..... unfortunately only hindsight tells us.


----------



## Skate (17 January 2019)

willy1111 said:


> The teacher appears when the student is ready . . . one has to have a willingness/open mind/thirst to want to learn a subject/topic.  Once one has that, they go in search of answers and since we are in the information age - the information on said topic is abundant . . . so much so that the information available can be overwhelming.  One then has to determine if the payoff to sort through all that information is worth it.




willy1111,what a great post & I'll express your views from my point of view.
*
We must engage other to learn*
Learning must be engaging, if it’s not engaging learning will not take place & the very first step towards success in learning is to become interested in the topic.

*Information*
Most people have almost no ability to discern genuine information from false information and today there is a huge amount of information easily available to everyone. Virtually any information you want is available, literally any information whether it's true or false is to be found at a push of a button. Come up with an insane idea, google it, and you will find information 'confirming' it. 

That's why members rely & depend on forums like ASF to discern the 'chaff from the fodder' expecting forum posts to accurate & informative.

Skate.


----------



## Skate (17 January 2019)

willy1111 said:


> One can learn to be a discretionary trader, the information is out there.
> 
> I have tried it, but for me the time involved in back testing is very intensive, back testing a mechanical strategy would seem to be much more quantitative and quicker to get a result.  Different variables and inputs can be changed and tested very quickly with a mechanical strategy to see merit, it can be measured over different times frames, in sample, out of sample, etc.
> 
> ...




willy1111, I've posted that I use a mechanical trend trading system, my strike rate is a 50/50 chance of being correct.

*Just for you* (don't tell anyone else)
Tell you what I'll do, just for you, if you are at all interested - I'm prepared to show you what I see when I push one button to generated Buy & Sell signal. I trade a 40 position strategy. Trading involes a maximum of 15 minutes a week, portfolio management another 15 minutes. (maximum of 30 minutes a week)

*It's past history, so I'm prepared to reveal all*
If you are interested, I won't cherry pick a date - I'll leave that up to you to decide & pick. I'll show you why trading for me is boring. I'll even show you the charts with the signal generated & results of that trade.

*Results*
The results will be clear & with a single glance you will know exactly how the trade panned out for me & there will be no explanation needed. My charts are coded into my strategy, colourful & meaningful.

*Pick a week any week*
Pick any week (I trade a weekly system) starting from "*1st July 2017 to 30th December 2017"* (inclusive) & you'll see exactly what I see. You can even judge if my mechanical system was kind to me or not.

*I'll post signals in a flash*
There wont be any fiddling & I'll post the signals in a flash - then post the charts.

*Not interested*
If your not interested, never mind.

*Others interested ?*
If any other member are interested in how I trade I'll respond quickly. (some may be interested, some not so interested)

Skate.


----------



## willy1111 (17 January 2019)

Skate said:


> willy1111, I've posted that I use a mechanical trend trading system, my strike rate is a 50/50 chance of being correct.
> 
> *Just for you* (don't tell anyone else)
> Tell you what I'll do, just for you, if you are at all interested - I'm prepared to show you what I see when I push one button to generated Buy & Sell signal. I trade a 40 position strategy. Trading involes a maximum of 15 minutes a week, portfolio management another 15 minutes. (maximum of 30 minutes a week)
> ...




From what you describe...our style is very very similar 

I can sense just how eager you are so sure go ahead if you're willing to share why not  , perhaps go with first week of July 17. And perhaps pick another week which shows the entry for your biggest winner.

What universe do you trade.. as in All ords xao, top 300 xko, etc?

And another idea if you are willing to share perhaps a single run backtest from 1 July 17 to 30 June 2018, showing return, drawn down, # of trades, percent winners, ave win %, ave lose %. No probs if not.


----------



## Skate (17 January 2019)

*Generated signals*
My trading signals - I have no idea how they went, I'll check later.

One better from the 7th July 2017 to 4th August 2017




*Charts*
The corresponding charts will be to be posted shortly


----------



## Skate (17 January 2019)

willy1111 said:


> From what you describe...our style is very very similar
> 
> I can sense just how eager you are so sure go ahead if you're willing to share why not  , perhaps go with first week of July 17. And perhaps pick another week which shows the entry for your biggest winner.
> 
> ...




1. I trade the *All Ordinaries *(XAO)
2. A single run backtest from 1 July 17 to 30 June 2018 - *sure no problems *(it's 1.29pm lunch is due & after lunch I'll post them)

Skate.


----------



## Skate (17 January 2019)

*Copy & Paste Statistics (1 July 17 to 30 June 2018)

40 positions @ $15K Positions*

*All trades *
Initial capital 600000
Ending capital 972128.77
Net Profit 372128.77
Net Profit % 62.02%
Exposure % 70.47%
Net Risk Adjusted Return % 88.01%
Annual Return % 63.78%
Risk Adjusted Return % 90.51%
Transaction costs 7906.8

All trades 132
 Avg. Profit/Loss 2819.16
 Avg. Profit/Loss % 19.03%
 Avg. Bars Held 13.41

Winners 74 (56.06 %)
 Total Profit 457763.33
 Avg. Profit 6185.99
 Avg. Profit % 41.66%
 Avg. Bars Held 17.64
 Max. Consecutive 10
 Largest win 37756.53
 # bars in largest win 22

Losers 58 (43.94 %)
 Total Loss -85634.56
 Avg. Loss -1476.46
 Avg. Loss % -9.84%
 Avg. Bars Held 8.02
 Max. Consecutive 4
 Largest loss -5072.01
# bars in largest loss 5

Max. trade drawdown -17499.93
Max. trade % drawdown -40.81
Max. system drawdown -72851.79
Max. system % drawdown -7.23%
Recovery Factor 5.11
CAR/MaxDD 8.82
RAR/MaxDD 12.52
Profit Factor 5.35
Payoff Ratio 4.19
Standard Error 60970.13
Risk-Reward Ratio 7.2
Ulcer Index 2.65
Ulcer Performance Index 22.02
Sharpe Ratio of trades 0.73
K-Ratio 0.28

Profit Take Trades 0
Avg. Take Profit P&L 0
% Avg. Take Profit P&L 0.00%


Trailing Stop Trades 54
Avg. Trailing Stop P&L 2317.25
% Avg. Trailing Stop P&L 15.45%


Stale Stop Trades 38
Avg. Stale Stop P&L 1113.56
% Avg. Stale Stop P&L 7.76%


P&L for Closed Trades 372128.63
Number of Closed Trades 92
Standard Deviation of Closed Trades 8529.69


Number of Open Positions 40
Capital in Open Positions 657544


Expectancy ($) 2819.16
Expectancy (per $100 inv.) 16.18

Skate.


----------



## Skate (17 January 2019)




----------



## Skate (17 January 2019)

Off to lunch..

Skate.


----------



## Skate (17 January 2019)

willy1111 said:


> perhaps pick another week which shows the entry for your biggest winner.




My best trade results 







Skate.


----------



## Skate (17 January 2019)

willy1111 said:


> perhaps pick another week which shows the entry for your biggest winner.




My worst trade results 







Skate.


----------



## Skate (17 January 2019)

*Important NOTICE*
I wish to apologise for not giving advance warning before dumping charts (in my haste for lunch I forgot to give a warning)

*Comments*
I wish to make some conditioning comments 

*Why do I make conditioning comments ? *(I'm starting to feel like Kevin Rudd, ask a question than answer it yourself)
To reiterate important points of view from my angle
*
Rules*
What makes trading so difficult is this: "There are no rules"

*Excess freedom*
The problem is that 'excess freedom' cause people to become overwhelmed and fearful and lose money because they do not 'know' what to do.

*New traders struggle with the markets *
There are no RULES in the markets and most people like ‘rules’ and like to be told what to do. People are conditioned from childhood to listen to authority and follow ‘rules’.

*Don't break your trading rules*
This is very difficult for some people to achieve because when dealing with large amounts of money, you tend to break your rules or make new ones along the way, solely for the purpose of justifying how you feel at the moment.

*Simple message*
If you are a system trader keep the system as simple as possible, validate it (robust backtesting) and trade it with confidence !

*Please read this line 5 times*
When you’re dealing with your own money, trading gets very complicated, very quickly!

Skate


----------



## Skate (17 January 2019)

Before I finish..

*Yes, I've been lucky*
I want to express my gratitude to ASF members who have helped me to become a lucky trader, my trading results are from standing on the shoulders of other. 

*ASF*
Thank you "Aussie Stock Forums" without this site I wouldn't have become a trader at all.

*Trading as in life*
Always have an attitude of gratitude, doing so "you might just turn that frown upside down" 

Skate.


----------



## willy1111 (17 January 2019)

Skate said:


> 1. I trade the *All Ordinaries *(XAO)
> 2. A single run backtest from 1 July 17 to 30 June 2018 - *sure no problems *(it's 1.29pm lunch is due & after lunch I'll post them)
> 
> Skate.




Thanks for taking the time to share.

This brings up an important point when running backtests on certain universes known as Historical Index Constituents that we may all learn from.

Do you have the following code in your buy signal when running backtests  . . . . AND NorgateIndexConstituentTimeSeries("$XAO") . . . and then run the back test on the All Ords Current and Past watchlist.  https://norgatedata.com/amibroker-usage.php


----------



## captain black (17 January 2019)

Skate said:


> Before I finish..




Congratulations on your thread Skate.

It's always the hope that someone you help out goes on to pay it forward, you've certainly done that and more. Cheers


----------



## Skate (17 January 2019)

captain black said:


> Congratulations on your thread Skate.
> 
> It's always the hope that someone you help out goes on to pay it forward, you've certainly done that and more. Cheers




*Reality check*
without venturing onto the ASF site, I would never have met "captain black". Without meeting the captain I would never had the knowledge or confidence to start trading. 
*
Luck*
Talk about luck, the day I met captain black was the luckiest day ever (financially) & without your education, guidance & coding help, I'd still be playing it safe in LIC's



Skate said:


> *Trading as in life*
> Always have an attitude of gratitude, doing so "you might just turn that frown upside down"




*I say *
Three cheers for "the captain" for turning my very basic code into a money making machine (machine = Hybrid strategy)

Skate.


----------



## captain black (17 January 2019)

You're too kind Skate, I know the number of hours you've put into getting your trading systems working, you've made your own luck.


----------



## Gringotts Bank (17 January 2019)

Skate, that's both backtest and real?  Or one or the other?  Thanks.


----------



## Skate (17 January 2019)

willy1111 said:


> Thanks for taking the time to share.
> 
> This brings up an important point when running backtests on certain universes known as *Historical Index Constituents* that we may all learn from.
> 
> Do you have the following code in your buy signal when running backtests  . . . . AND NorgateIndexConstituentTimeSeries("$XAO") . . . and then run the back test on the All Ords Current and Past watchlist.  https://norgatedata.com/amibroker-usage.php




willy1111, I have 3 (Silver Package) data subscriptions & all my strategy development was conducted on the "Current and Past watchlist"  

I purchased the additional 25 year Historical Index Constituents that unfortunately didn't transfer over to the new data package (NDU) as its an inclusion in the Platinum package. My days of crunching formula numbers is now limited (IMHO) a small inconvenience.
*
BACKGROUND*
Norgate has a variety of Subscription Packages that vary in price & extras upgrades.

I didn’t take up the Platinum package that was available to me as a Beta Tester - I purchased the Australian Stocks (Silver Package) as it was all I needed

I lost my historical data that I initially paid for as this data couldn’t be carried forward with the Silver Subscription Package – the only disappointment.

*You can use* (but I don't)
#include_once "Formulas\Norgate Data\Norgate Data Functions.afl"

Skate.


----------



## captain black (17 January 2019)

willy1111 said:


> This brings up an important point when running backtests on certain universes known as Historical Index Constituents that we may all learn from.
> 
> Do you have the following code in your buy signal when running backtests  . . . . AND NorgateIndexConstituentTimeSeries("$XAO") . . . and then run the back test on the All Ords Current and Past watchlist.  https://norgatedata.com/amibroker-usage.php




Great question

I'm daytrading futures atm so dont have time to go into too much detail but I'll just add that as part of Skate's system testing he'd ask me to also test his code for robustness etc. I'm not a fan of restricting yourself to (for example) the All Ords constituents, I tend to use strict volume, liquidity and volatility filters instead but I fully understand Skate's decision to only want to trade the most liquid stocks.

So along with Skate's testing using the Norgate Beta data with All Ords historical constituents I'd also test systems for robustness using my liquidity rules across the entire ASX.

Skate mentioned persistence earlier in this thread and I've seen it in action, I have a "Skate's Systems" folder in Amibroker and it's huge. His hybrid system is the result of 100's hours of trial and testing. Didn't matter how many times I had to email him back and say his latest tweak doesn't work, he'd always be back with something else to try.


----------



## $20shoes (17 January 2019)

I like the idea of a "stale stop" Skate. I should get me one of those. IS it purely time based, or a function of price not being about to post a new high for x days?


----------



## Skate (17 January 2019)

Gringotts Bank said:


> Skate, that's both backtest and real?  Or one or the other?  Thanks.




I'm not too sure what you mean *"that's both backtest and real?"
*
My real figures are much better than the backtest report.

I'm at a loss why my Amibroker backtest report are a little off from the actual results (even though they are very close) It may because of slippage & different bet positions (also there is also off-market purchases) - who knows !

My trade positions range from $15K minimum to $50K maximum but as Captain Black pointed out liquidity is an issue for me & I can shift the price sometimes (peter2 recently explained this in his thread)  

I've had multiple calls from CommSec warning that my trading value will alter the markets - making sure I was aware of this fact. My trading sweet spot is now $25K positions ($29.95 commission max)

I have made a few $100K & $200K buy positions & paid a heavy price. Captain Black liquidity advice came after doing this & he explained how I could have handled it better (correctly) 

Also I didn't listen carefully enough to Captain Black when I first started my trading journey, I was so eager to start. (by not listening close enough cost me $64K) When you are self-opinionated you always think you know better (well sometimes - it's not the case)

Skate.


----------



## Skate (17 January 2019)

captain black said:


> Great question
> 
> I'm daytrading futures atm so dont have time to go into too much detail but I'll just add that as part of Skate's system testing he'd ask me to also test his code for robustness etc. I'm not a fan of restricting yourself to (for example) the All Ords constituents, I tend to use strict volume, liquidity and volatility filters instead but I fully understand Skate's decision to only want to trade the most liquid stocks.
> 
> ...




*I"M SHOUTING*

When Captain Black speaks it pays to listen & always reply "Tell me more" (this guy is the real deal) 

Skate


----------



## Gringotts Bank (17 January 2019)

Skate said:


> My real figures are much better than the backtest report.
> 
> Skate.



Very well done.  Would you mind posting an equity curve of real trades since starting?

It does surprise me how illiquid stock markets are.  Trying to enter/exit during the day is near impossible.


----------



## captain black (17 January 2019)

Gringotts Bank said:


> It does surprise me how illiquid stock markets are.  Trying to enter/exit during the day is near impossible.




The ASX is awful, Open and Close are the most liquid times. The US is much better. It's one of the reasons I focus mainly on futures now, liquidity is rarely an issue on markets like the ES, Nikkei, Bund etc.


----------



## Skate (17 January 2019)

$20shoes said:


> I like the idea of a "stale stop" Skate. I should get me one of those. IS it purely time based, or a function of price not being about to post a new high for x days?




$20shoes, I gave a full description on the (FAR ltd) thread page 40 post #394 (have a read, you will find it interesting)

https://www.aussiestockforums.com/threads/far-far-limited.961/page-40#post-1002154

*Copied from the thread
*
@Ann made this comment: *Hopefully, other chartists like Tech/A, So Cynical, SKC, Gregg, and others could make comments on FAR and its double knife chart interpretation.

Footnote* - @captain black should be included in the list above as his knowledge is invaluable.

*My apologies in advance* 
I hate long winded posts & this is my second long post in a week - I get exhausted reading them let alone writing them. I'll chunk the post as usual to encourage you to keep reading and finally get to my chart of (FAR) for analysis explanation.

*From my Perspective – as a recent owner of (FAR)*
My views are from a technical perspective about the position I recently held in the company (FAR) a position exited with profit.

The typical trend follower would have been all over (FAR) jumping on board once the move was on (that’s the easy part) but knowing when to jump off is the tricky part of the equation. Knowing when to sell is where the money is to be made.

I made a post in another thread about inside information & those comments can go a long way in explaining the sudden movement about the company in question (FAR)

https://www.aussiestockforums.com/t...ion-how-to-get-some.34332/page-2#post-1001452

@joe requested more trading information so I'll explain how I handled my position in (FAR) and I’ll even show you a chart of my actual trade.
*
First Off*
I want to give some background information for educational purposes explaining the feature of a (ROC) indicator - an indicator that would have protected most position holders of (FAR) using this technical indicator just as I had.
*
What’s a ROC ?*
A (ROC) is a Rate of Change indicator, it's simply a Momentum Indicator that measures the percent change in price from one period to the next.
*
Investment success depends on two basic things:*
1. Picking good stocks that increase in price, and
2. Effectively managing the stocks after you buy them.

Effective management means having a plan for either cutting losses or taking gains & @peter2 is the master at this game.

Managing your stocks after you buy them is what determines your level of success. Great investing results are a product of shrewd selling rather than smart buying.

*Reading a Bar Chart*
It takes a bit of practice to get used to reading a bar chart, especially when the price is moving very quickly and @tech/a has proven to be the master of it.

Below I have uploaded a chart from my weekly trend trading strategy – it shows the entry & the exit signals.

I’ve attached the (ROC) indicator at the bottom of my chart for your reference - the exit signal was generated by the ROC indicator because it moved below the 0% line and lower.

On Friday the 28th September the (ROC) indicator dropped below the 0% line and the momentum of (FAR) was dropping. There was a small rally preceding this date only to fall greater the second time.
*
Study the Chart*







*Selling is a valuable tactical tool*
Selling a stock is by far the most valuable tactical tool that the individual investor has at their disposal. Selling is cheap and easy and can be undone in the blink of an eye.

Too many seem to think that if they sell a stock, they are somehow prevented from buying it back again. Not so. For most investors, the biggest stumbling blocks to selling are mental.

If the momentum of (FAR) re-rallied there is nothing stopping you from buying it again, that the secret of trading.
*
In Conclusion*
@tech/a, @peter2 & @captain black are more qualified to express an opinion on the technical aspect of trading & it would be enlightening to get their views through that experience.

Skate


----------



## Skate (17 January 2019)

Gringotts Bank said:


> Very well done.  *Would you mind posting an equity curve of real trades since starting?*
> 
> It does surprise me how illiquid stock markets are.  Trying to enter/exit during the day is near impossible.




I have posted my *"REAL equity curve"* before on this thread but the chart is current as of last Friday - this week is panning out great.

*Disclaimer*
The equity curve is from January 2016 (I started trading July 2015 & didn't keep midyear records preferring to start the year off fresh)

Have a look at every dip, that cost me an absolute fortune (to me at least)

Skate.


----------



## Ann (17 January 2019)

Ann said:


> Do I miss out on making money this way? Yes!






Skate said:


> @Ann made this comment: *Hopefully, other chartists like Tech/A, So Cynical, SKC, Gregg, and others could make comments on FAR and its double knife chart interpretation.*




No, I didn't say this Skate, it was Miner. It is called a 'falling knife'.

https://www.aussiestockforums.com/posts/1002101/


----------



## $20shoes (17 January 2019)

Many thanks, skate. I'll be sure to do some reading.


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## Skate (17 January 2019)

Gringotts Bank said:


> Very well done.  Would you mind posting an equity curve of real trades since starting?
> 
> It does surprise me how illiquid stock markets are.  *Trying to enter/exit during the day is near impossible.*




I didn't notice your comment: _"Trying to enter/exit during the day is near impossible"
_
*Pre-Market trading only*
I only trade the pre-market, taking advantage of the VWAP system (it makes backtesting more accurate in strategy development)

Skate


----------



## Gringotts Bank (17 January 2019)

Skate said:


> I didn't notice your comment: _"Trying to enter/exit during the day is near impossible"
> _
> *Pre-Market trading only*
> I only trade the pre-market, taking advantage of the VWAP system (it makes backtesting more accurate in strategy development)
> ...



Interesting that comsec tells you to be careful about moving the markets.  I would never have expected that.  

Pre-market, meaning the auction period?  Don't the insto bots rip points off you by manipulating the depth in the last seconds before open?


----------



## Skate (17 January 2019)

Gringotts Bank said:


> *Interesting that comsec tells you to be careful about moving the markets. * I would never have expected that.
> 
> Pre-market, meaning the auction period?  *Don't the insto bots rip points off you by manipulating the depth in the last seconds before open?*




_*Pre-market, meaning the auction period?*_

Yes, I only trade in the Pre-Auction 

_*Don't the insto bots rip points off you by manipulating the depth in the last seconds before open?*_

Nah....That's what Captain Black does - jockey & manipulating to get a better start (the captain has explained the system, but it was to difficult for me to comprehend)  

_*"Interesting that comsec tells you to be careful about moving the markets.  I would never have expected that"*_

Yep, I'll get calls when the depth is not in the market. They don't warn me about slight movements, its only when I tend to move the price massively. 

Skate.


----------



## Gringotts Bank (17 January 2019)

Skate said:


> Yep, I'll get calls when the depth is not in the market. They don't warn me about slight movements, its only when I tend to move the price massively.
> 
> Skate.



Paul Rotter could help you get the fills you want at the price you want.


----------



## willy1111 (17 January 2019)

Skate said:


> I'm not too sure what you mean *"that's both backtest and real?"
> *
> My real figures are much better than the backtest report.




So you had a return on capital greater than 60% for 17/18 financial year? That's awesome!


----------



## Skate (17 January 2019)

Gringotts Bank said:


> Paul Rotter could help you get the fills you want at the price you want.




*Thanks for the offer*
Thanks, I'm not a fussy trader, slippage, being a 'dick for a tick' I'm over all that. It's similar to petrol price fluctuations who really gives a toss.

*I have filters now*
I have a full suite of filters coded into my strategy now, I miss some good moves but more will come along & I'm in no hurry. 

*We all make mistakes but that's ok.*
I don't claim to be an expert, far from it and I've made my fair share of mistakes along the way, but the important thing is that I have learned from my mistakes and have become a better trader.

I don’t overtrade, I’m patient and disciplined, but I’m still learning to control my emotions.

Skate.


----------



## Gringotts Bank (17 January 2019)

Skate said:


> *Thanks for the offer*
> 
> 
> Skate.



It was just a throwaway line.  Rotter made something like 60 mill a year over a 10 year period, according to some reports.  He did it by playing both sides of the depth.


----------



## Skate (17 January 2019)

willy1111 said:


> So you had a return on capital greater than 60% for 17/18 financial year? That's awesome!




Yep, trend followings systems work well in a Bull market & I'm way ahead of the game. (that's a given)

*Lemon & Lemonade*
But, there are good times & there are bad time that's the nature of the game. I just roll with the punches. Have a look at January 2018 to June 2018 & feel my pain.

*Pain*
Yep, and the people who can handle the pain do alright and the ones that don't handle it don't do alright! The right mindset is massive in this game!

Skate


----------



## captain black (17 January 2019)

Gringotts Bank said:


> Rotter made something like 60 mill a year over a 10 year period, according to some reports.  He did it by playing both sides of the depth.




He's an interesting bloke, did it on the most liquid futures markets. Oddly enough I've found the most liquid futures markets (ES, Nikkei, Bund) to be the most profitable as well (not quite at 60mill a year though!!)


----------



## captain black (17 January 2019)

Skate said:


> The right mindset is massive in this game!




All you need is (a) PHD.

Persistence
Hard Work
Determination


----------



## Skate (17 January 2019)

captain black said:


> All you need is (a)* PHD.*
> 
> *Persistence
> Hard Work
> Determination*




captain black, well said..

I hope other read your post more than once  -  that is the answer to being a profitable trader in a nutshell.

Skate.


----------



## captain black (17 January 2019)

Speaking of PHD, I've got the tennis on in the background while I'm trading the Bund. I reckon if you look up Persistence, Hard Work and Determination in the dictionary there'll be a picture of Simona Halep under each entry, she's an amazing player.


----------



## willy1111 (17 January 2019)

Skate said:


> Yep, trend followings systems work well in a Bull market & I'm way ahead of the game. (that's a given)
> 
> *Lemon & Lemonade*
> But, there are good times & there are bad time that's the nature of the game. I just roll with the punches. Have a look at January 2018 to June 2018 & feel my pain.
> ...




That's fantastic, what is your view/approach to a safe withdrawal amount from the account to live on/pay tax and how often.

My thoughts are that a withrawal of 5% of the account balance once a year for living expenses should be safe, the account should continue to grow and compound very well. As in a 20% return, of that roughly 5% tax (or 0 if smsf) 5% to live on and 10% adds to the balance for next year.


----------



## captain black (17 January 2019)

> Simona Halep




Wow, what a match. Kenin earned her PHD too! The best players seem to find a way to win.


----------



## Darc Knight (17 January 2019)

Thank you and congratulations on the wonderful thread @Skate What a wonderful contribution to ASF and the internet. Like everyone else I hope you continue to share your wisdom 

P.S. you've scared the bejeebuz outta me when it comes to trading. But forewarned is forearmed, so thank you again.


----------



## Skate (17 January 2019)

willy1111 said:


> That's fantastic, what is your view/approach to a safe withdrawal amount from the account to live on/pay tax and how often.
> 
> My thoughts are that a withrawal of 5% of the account balance once a year for living expenses should be safe, the account should continue to grow and compound very well. As in a 20% return, of that roughly 5% tax (or 0 if smsf) 5% to live on and 10% adds to the balance for next year.




willy1111, being 65 with a SMSF (0% tax rate) the minimum withdrawal rate is 5% of the funds balance @ 1st July of the financial year.

We are in a unique position that we don't require or need any pension payment diverted from our SMSF - the Dividend imputation tax credit is worth around $30K plus a year, not looking forward to losing that as Labors new imputation tax plan treats investors differently & unfairly - the tax application applies differently to the vehicle SMSF invests in.

*My post on the subject:*
https://www.aussiestockforums.com/t...y-or-simply-survive.33847/page-11#post-977832

*Copy & pasted from the "how-to-retire-early-or-simply-survive thread" Page 11 #109*

Consider three people, all of whom have SMSFs in pension phase, and who — according to the current tax rules — pay 0% tax: 

1. Banking Betty, 
2. Rental Richard and 
3. Dividend Davina.

(a) Banking Betty deposits $100,000, and earns $2,000 each year in interest. Betty doesn’t pay any tax.

(b) Rental Richard has a $100,000 property that pays him $2,000 each year in rent. Richard doesn’t pay any tax.

(c) Dividend Davina buys $100,000 worth of shares that earned a profit of $2,000. The company paid tax of $600, so Davina gets $1,400. Davina doesn’t pay any tax.

*See the difference here?* 

Because Davina’s investment is in the form of shares in a company, she gets less than the other two. Even though she’s not supposed to pay any tax, the company paid tax, so she gets less.

Under current rules, she’d get the $600 back, delivering on the current government policy of a 0% tax rate, and equalising the return for each of those investors.

*CONCLUSION:* Bill Shorten, in effect, is penalising people for owning shares.

Skate.


----------



## Skate (17 January 2019)

Darc Knight said:


> Thank you and congratulations on the wonderful thread @Skate What a wonderful contribution to ASF and the internet. Like everyone else I hope you continue to share your wisdom
> 
> P.S. you've scared the bejeebuz outta me when it comes to trading. But forewarned is forearmed, so thank you again.




Darc Knight, thank you for your kind words, it hasn't gone unnoticed that you are one of my biggest supporter, so thank you for liking my posts, hitting the "like" give me a direction for the next post & it also lets me know someone is reading them.

*Important*
You hitting the 'like button' means more to me than I could express in few words.

Skate.


----------



## Darc Knight (17 January 2019)

Haha. You'll be getting a lot more likes when I and others find time to read the entire thread. Thank you again


----------



## captain black (17 January 2019)

One last trading related "dump" before I grab some shuteye before the US markets open.

Paul Rotter was mentioned today along with market liquidity. The quote below is from an article about him:



> He mentioned in an interview that his biggest strength in trading is the ability to trade bigger when he has the advantage and to scale back when he doesn't or isn't trading well.  This is a trait that I have seen often in very successful traders.




I trade automated futures systems as well as some discretionary trading and scaling in and out of trades is the one thing I've found I spend more time on than anything when designing futures systems.


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## Skate (18 January 2019)

The story about ‘Open profits’

*Have you ever thought this ?*
Giving back open profits you tend to think – “I was lucky to have their money to give back & I've lost nothing of my own” then you start to beat yourself up justifying that you don't really see it that way at all, no matter how often you repeat it – you start to believe it’s really your money, your mind keeps saying it’s my money, I’m losing my money.

*We all make up a story when under pressure*
Losing open profits is very painful, so should we say "when it’s my money it’s my money."

*Reality check*
Open profits is not your money (at that stage of the trade) & having these thoughts will muck you up!

*Well worth remembering*
Open profits = Belong to the Market
Closed Profits = Belong to you

If you can accept that mindset (which a lot of traders can't) then that will serve you well when the volatility impacts your account.

Skate.


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## Skate (18 January 2019)

If you have an alternative view on this post, please feel free to express it. (I'm expressing my opinion only)

*Japanese Candlesticks *
I spent 3 months of my life studying Japanese Candlesticks patterns (3 months of my life I’ll never get back) only to find out that Candlesticks patterns do repeat consistently & work well sometimes, other times they don’t. As with trading, Japanese Candlesticks reading is not an exact science & it falls into the category of self interpretation.

*Hidden meaning*
You tend to interpret the hidden meaning of the Candlestick to construe or understand it in your particular way, sometimes you tend to see what you want to see & most times interpret the pattern as favourable that can lead you to trade with confidence.

Skate.


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## captain black (18 January 2019)

Skate said:


> Open profits




One of the ways to change the mindset around open profits is to think in terms of portfolio heat rather than portfolio profit at any one time.

*A simple example*

My system testing shows I can expect a drawdown of 20% of my portfolio at some stage.
My portfolio value has risen from $100K to $130K
If I'm expecting a 20% drawdown then I need to think in terms of my maximum portfolio heat (20%) so in reality my portfolio value is actually $130K -20% = $104K.

It's a bit oversimplified but it's a way changing your mindset.


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## Skate (18 January 2019)

If you have an alternative view on this post, please feel free to express it. (I'm expressing my opinion only)

*Eyeballing charts*
I’ve eyeballed heap of charts to see what has worked consistently over the past. I've studied the charts till my eyes go out of focus & I do see patterns everywhere but I've never seen a consistent pattern that I could turn into a code.

*Predicting the future*
Chart patterns are easy to spot when they are in the middle of the chart but as traders we can only trade at the hard right edge. Chart patterns look good in hindsight but less than handy predicting what will happen tomorrow.

*Nice to visit*
All patterns appear well after the fact, that’s a given, they tell you a story of what has happened in the past & not what will happen tomorrow. (pity)

Skate.


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## Skate (18 January 2019)

If you have an alternative view on this post, please feel free to express it. (I'm expressing my opinion only)

*Charts are easy to interpret*
Furthermore, I’m suggesting that chart patterns are easy to interpret after they happened & they are more predictable than they were before they occurred.

*Unique ability*
Chart readers have a unique ability to express their opinion on certain information that validates what we already know to be true and then create a story about it to make sense out of the event as we attempt to explain it to ourselves.

Skate.


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## captain black (18 January 2019)

Skate said:


> . As with trading, Japanese Candlesticks reading is not an exact science




I'm not a fan of candlestick patterns in isolation but I disagree that trading can't be approached using scientific methods. There's no discretion at all using automated trading systems.


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## captain black (18 January 2019)

Skate said:


> All patterns appear well after the fact




Patterns can be coded and tested. Thomas Bulkowski's patternsite has a wealth of patterns he's tested. Most of my futures systems are built around tested and coded patterns.

Here's one this morning from @tech/a

https://www.aussiestockforums.com/posts/1010418/


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## Skate (18 January 2019)

If you have an alternative view on this post, please feel free to express it. (I'm expressing my opinion only)

*Disclaimer*
'captain black' has the unique ability to read chart patterns as they are developing, a skill I'll never understand, even though its been explained to me quite often. The captain see patterns forming that we can only dream of, but in all honesty he is a master at his craft.
*
Charting reading, leave it to the experts*
Some Chart patterns can give you a false sense of security & can lead you into making a poor trading decision – chart readers always protect there ar$e by saying it could go this ways, than again the price may go the other way (bloody confusing at best)

*Most traders can’t predict*
I tend not to believe those who think they know what the future holds. Most traders can’t predict if the market will open higher or lower tomorrow let alone what a company’s price movement might do.

Skate.


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## tech/a (18 January 2019)

A simple ponder for all of you Mechanical Systems traders.

We formulate
Entry condition which if triggered is tested to move to Exit Condition
X% of the time returning Y expectancy.

What happens in between is largely irrelevant.

Should this be so?


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## Skate (18 January 2019)

captain black said:


> Patterns can be coded and tested. Thomas Bulkowski's patternsite has a wealth of patterns he's tested. Most of my futures systems are built around tested and coded patterns.
> 
> Here's one this morning from @tech/a
> 
> https://www.aussiestockforums.com/posts/1010418/




Gee, I'm glad I added this disclaimer = (I'm expressing my opinion only)

Skate.


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## Skate (18 January 2019)

tech/a said:


> A simple ponder for all of you Mechanical Systems traders.
> 
> We formulate
> Entry condition which if triggered is tested to move to Exit Condition
> ...




Great point tech/a, but this is how I see it as a Mechanical Systems trader

*In between, just hang on for the ride*
No matter what your selection criteria was, or what has motivated you to place a ‘buy’ order, you have to realise everything is out of your control from that point on till you elect to sell that security - just hang on for the ride.

*What happens in between*
After you place a buy order you will either be exuberant when the share price increases or feel despondent experiencing a white knuckle ride to the bottom.

*Trading is bat $hit scary sometimes.*
Trading is an emotional roller coaster and how you manage your psychology really matters even more than your stock selection.

Skate.


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## captain black (18 January 2019)

Skate said:


> Gee, I'm glad I added this disclaimer = (I'm expressing my opinion only)




Lol, you did ask for alternative views


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## Skate (18 January 2019)

captain black said:


> Lol, you did ask for alternative views




Yes, this is what the 'Dump it here' thread is all about, differing points of view, you have expressed your view in a respectful manner from a position much, much higher than mine - you even went as far as quoting a reference site for others to view. (well done)

captain black, this is exactly what the 'Dump it here' thread was lacking, quality posts from quality members.

Skate.


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## Skate (18 January 2019)

captain black said:


> Lol, you did ask for alternative views



*
Feedback & disclaimer*
I have great admiration for the captain's coding ability and the logical way he implement a solution, his measured responses to other forum members delivering help without & never ever being condescending.

The captain has been very kind to me over the years & previously when I have had an issue (he fixed for me) his ongoing help has exceeded all my expectations.

tech/a, I'm not going to mention as the duck finds my attitude when it comes to gratitude a bit over the top.

Skate.


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## Skate (18 January 2019)

My views on coding a good strategy
*
Coding a strategy*
Let me give you an analogy - I don’t care how often you read a Boeing 747 instruction manual or even a Helicopter instruction manual – I can guarantee you that in the end you will not be a good pilot – even if you get it off the ground there would be no guarantee that the plane or helicopter would be safe under your control.

*We all need help*
This is exactly where my coding ability is, weak at best & amateurish at worst - reading something doesn’t mean I understand it.

Skate.


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## captain black (18 January 2019)

Skate said:


> *Feedback & disclaimer*
> I have great admiration




The admiration is always mutual Skate, you've done a great job with this thread.

As you know I'm using machine learning more and more in my systems nowadays but most of what I've done in the past involves using scientific and statistical methods to test pattern setups. I respect your opinion that patterns are subjective and only appear in hindsite but the path I've gone down in my trading is at odds with that. As we've found out over the years, we're quite different people living quite different lives, it's no surprise we approach trading differently


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## Skate (18 January 2019)

captain black said:


> The admiration is always mutual Skate, you've done a great job with this thread.
> 
> As you know I'm using machine learning more and more in my systems nowadays but most of what I've done in the past involves using scientific and statistical methods to test pattern setups. I respect your opinion that patterns are subjective and only appear in hindsite but the path I've gone down in my trading is at odds with that. As we've found out over the years, *we're quite different people living quite different lives*, it's no surprise we approach trading differently




Let me give you an analogy on having a great strategy, being a great coder & why we're quite different.

*Peter Brock* (otherwise known as "Peter Perfect")
He won the Bathurst 1,000 nine times, imagine if he gave you his winning car, do you honestly believe you would be able to win Bathurst even once ?

His 'ability', 'skill' & his 'mental toughness' decided the win, it's not when he got into the car, not even when he exited the car but how he handled the car during the race.

*Traders are all different*
That is one of the nice thing about traders "we are all so different", trading different styles, trading different markets & as you say -"it's no surprise we approach trading differently" (exactly)

Skate.


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## tech/a (18 January 2019)

captain black said:


> The admiration is always mutual Skate, you've done a great job with this thread.
> 
> As you know I'm using machine learning more and more in my systems nowadays but most of what I've done in the past involves using scientific and statistical methods to test pattern setups. I respect your opinion that patterns are subjective and only appear in hindsite but the path I've gone down in my trading is at odds with that. As we've found out over the years, we're quite different people living quite different lives, it's no surprise we approach trading differently




Captain what are you using to implement machine learning.
IE Software and Code type?

Skate
Patterns are the story told by traders over X periods.
Like an airport--Busy--Quite---Under attack!


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## Skate (18 January 2019)

Skate said:


> Let me give you an analogy on having a great strategy, being a great coder & why we're quite different.
> 
> *Peter Brock* (otherwise known as "Peter Perfect")
> He won the Bathurst 1,000 nine times, imagine if he gave you his winning car, do you honestly believe you would be able to win Bathurst even once ?
> ...




*UPDATE *- The previous post was a bit cryptic (explanation highlighted)

*Peter Brock* 
His 'ability', 'skill' & his 'mental toughness' decided the win, it's not when he got into the car (*the BUY*), not even when he exited the car (*the SELL*) but how he handled the car during the race. (*the TRADE*)

Skate.


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## Gringotts Bank (18 January 2019)

Skate said:


> Let me give you an analogy on having a great strategy, being a great coder & why we're quite different.
> 
> *Peter Brock* (otherwise known as "Peter Perfect")
> He won the Bathurst 1,000 nine times, imagine if he gave you his winning car, do you honestly believe you would be able to win Bathurst even once ?
> ...




I have never stumbled upon a good idea when I'm in the wrong frame of mind.
That's why this thread is good.  It has the right vibe.  Readers can use that vibe to go and find an edge, code it, trade it.


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## captain black (18 January 2019)

tech/a said:


> IE Software and Code type?




I started with what I already knew. I do some work on open source projects using Python and I've been using Amibroker almost since it began so started out with small projects using Python machine learning combined with existing futures systems on Amibroker.

My last project for example was using machine learning to build a better index filter for one of my ASX momentum systems.

I've looked at other platforms, most recently Metatrader 5 with ENCOG but I've got so much on the go at the moment it's difficult to find time to learn another language.

I've heard that there's some bloke called "tech/a" coming out with some interesting software soon. Looking forward to it 

As you've said a few times, it turns your views on system design upside down.

I remember starting out with Amibroker all those years ago and coming across Fred Tonetti's Particle Swarm Optimisation and Intelligent Optimiser plugins and knowing this was how I was going to find an edge.

I get the same feeling now with machine learning. Things change so quickly, you either adapt or die.


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## Skate (18 January 2019)

Gringotts Bank said:


> I have never stumbled upon a good idea when I'm in the wrong frame of mind.
> That's why this thread is good.  *It has the right vibe*.  Readers can use that vibe to go and find an edge, code it, trade it.




Gringotts Bank, your post is music to my ears & thank you for experiencing the right "vibe" as you put it. There maybe a post on this thread that could be the catalysis for change & I mean a change for the better.

We have a great community here on ASF but sometimes the proper discourse is lacking, all ideas & views should be able to be expressed & responded to with this same "vibe" that you highlight.

Skate.


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## captain black (18 January 2019)

Skate, you mentioned earlier today that you spent 3 months studying Japanese Candlesticks. I think (correct me if I'm wrong) in our discussions that you've mentioned also looking at trading Forex and also spent some time using Metastock? 

I wonder if you'd mind sharing the path you've followed to reach the stage you're at with your trading now? eg. Software you've tried, different analysis techniques you've looked at, different investment vehicles (you mentioned LIC's) etc.


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## Skate (18 January 2019)

captain black said:


> *Skate, you mentioned earlier today that you spent 3 months studying Japanese Candlesticks.* I think (correct me if I'm wrong) in our discussions that you've mentioned also looking at trading Forex and also spent some time using Metastock?
> 
> I wonder if you'd mind sharing the path you've followed to reach the stage you're at with your trading now? eg. Software you've tried, different analysis techniques you've looked at, different investment vehicles (you mentioned LIC's) etc.




*Skate, you mentioned earlier today that you spent 3 months studying Japanese Candlesticks.*

*The Books*
1. JAPANESE CANDLESTICK CHARTING TECHNIQUES "A Contemporary Guide to the Ancient Investment Techniques of the Far East" by STEVE NISON
2. PROFITABLE CANDLESTICK TRADING "Pinpointing Market Opportunities to Maximize Profits" by Stephen Bigalow

*Training Course*
A full 2 day training course with Steve Nison (podcast)

*I wasted a lot of time reading*
Many of the books that I have read have turned out to be of little value at all, so I just wasted my time, those two books above are included. Trading books take a great deal of concentration reading & more time consuming correlating the perceived important information & committing it to paper.

*Captain, I hear what you say*
_1. "I'm not a fan of candlestick patterns in isolation but I disagree that trading can't be approached using scientific methods. There's no discretion at all using automated trading systems"
2. "Patterns can be coded and tested. Thomas Bulkowski's patternsite has a wealth of patterns he's tested. Most of my futures systems are built around tested and coded patterns"_

*From my perspective*
Understanding candlestick patterns setups that work sometimes but not at other times didn't enrich my trading life.

I'll be answering the captains questions in a series of additional posts.

Skate.


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## captain black (18 January 2019)

Thanks for sharing your trading path Skate.



Skate said:


> *Training Course*
> A full 2 day training course with Steve Nison (podcast)




I hadn't heard of Steve Nison, have vague memories of Louise Bedford writing some stuff on candlesticks.

A quick Google of Steve Nison has this review near the top of the search results:



> Its been 25 years since Steve Nison unveiled candlestick charting to US consumers. Not once in the past 25 years has Steve Nison ever shown through personal trading that his ideas are valid. In fact, modern trading software has allowed consumers to back test every single one of his mystical candlestick patterns, only to discover that they are no more or less predictive than the average carnival fortune teller.




https://www.tradingschools.org/reviews/steve-nison/

Sounds like they agree with your thoughts


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## Skate (18 January 2019)

captain black said:


> Skate, you mentioned earlier today that you spent 3 months studying Japanese Candlesticks. *I think (correct me if I'm wrong) in our discussions that you've mentioned also looking at trading Forex *and also spent some time using Metastock?
> 
> I wonder if you'd mind sharing the path you've followed to reach the stage you're at with your trading now? eg. Software you've tried, different analysis techniques you've looked at, different investment vehicles (you mentioned LIC's) etc.




*I think (correct me if I'm wrong) in our discussions that you've mentioned also looking at trading Forex*

I completed the MAX Primer Webinar course (not the standard course but the "MAX" course) it was intense with hours of homework, from memory there were around 10 students in the class room. The course delivered as promised, it was enjoyable & I consider I learnt a lot, but it Forex Trading (the style) wasn't for me. 

http://www.maxtradingsystem.com/max-primer-course/

*The MAX System *(summary if interested)
The MAX Trading System is designed to put you on the right path to trading success. MAX is our acronym for Momentum, Acceleration and Exit.

*Trend that exhibits good momentum *(interesting)
The successful trader understands the need to take advantage of opportunity when there is a trend that exhibits good momentum. MAX traders always use a hard stop for safety, but in normal trading conditions our stops are never hit…the are only for emergencies, such as an unscheduled news announcement. Training includes basic as well as advanced strategies. Also included are indicators, templates, and risk management training.

*A recorded video was a nice touch*
Each class session is video recorded for your convenience. This provides for work and family schedules, as well as time zone differences. Through our personal mentoring and precise teaching methods, you have the potential of becoming one of the few traders who succeed.

*Disclaimer* 
Forex, Futures, Stocks and Options trading has large potential rewards, but also large potential risk. 

Skate.


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## Skate (18 January 2019)

captain black said:


> Skate, you mentioned earlier today that you spent 3 months studying Japanese Candlesticks. I think (correct me if I'm wrong) in our discussions that you've mentioned also looking at trading Forex and also spent some time using Metastock?
> 
> I wonder if you'd mind sharing the path you've followed to reach the stage you're at with your trading now? eg. Software you've tried, different analysis techniques you've looked at, different investment vehicles (you mentioned LIC's) etc.




*You also spent some time using Metastock?*
*
Learning to code*
Correct, I spent a lot of time using Metastock. Learning to code in Metastock was much easier than learning to code Amibroker Formula Language (AFL). My trading education was going along fine till you learn the limitations of Metastock backtesting feature. I changed over to Amibroker, met you & as they say, "the rest is history"

Skate


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## captain black (18 January 2019)

Thanks again for sharing.


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## captain black (18 January 2019)

Skate said:


> Learning to code in Metastock was much easier than learning to code Amibroker Formula Language (AFL).




The learning curve with Amibroker is very steep if you want to use it to it's full capabilities. Keeping up with all the new features TJ introduces is a full time job on it's own!


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## Skate (18 January 2019)

captain black said:


> Skate, you mentioned earlier today that you spent 3 months studying Japanese Candlesticks. I think (correct me if I'm wrong) in our discussions that you've mentioned also looking at trading Forex and also spent some time using Metastock?
> 
> I wonder if you'd mind sharing the path you've followed to reach the stage you're at with your trading now? eg. *Software you've tried, different analysis techniques you've looked at, different investment vehicles (you mentioned LIC's) *etc.




*Software you've tried, different analysis techniques you've looked at, different investment vehicles (you mentioned LIC's) *
*
Software*
Like every business owner you have a strong understanding of the advantages of keeping accurate records & Microsoft is normally the choice of weapon. With a lot of financial software they have "Office Links". 

*An explanation *
For those who don't know the power of "Office Links" , these links give you the ability to export files from one piece of software into another making manipulation of that data a breeze. Using 'OfficeLinks' allowed me to write reporting software for the 'Management Rights Industry' associated with the accommodation industry, I did that part time for 5 years 

*Share Trade Tracker*
This is a portfolio manager (an excellent one in fact) for XLAutomation. Scott Lindsay was given a screen shot of my Portfolio Manager & he asked if I would allow him to use my features & incorporated those features into his software. Long story short, I'm an ongoing beta tester & a lot of my idea are now standard feature of his software. 

*Users*
Users of 'Share Trade Tracker' - if you like the look of the colourful 'Dashboard' & reference boxes that change colour in reference to the cell content that came from me. Some of the ribbon also, the ATO franking Credit feature mine as well.

*Investment Vehicles*
1. Trading my Hybrid breakout strategy
2. LIC's as a long term 'investment' - dividends reinvestment (a set & forget strategy)
3. I have a few business investments 
4. Like most I have a few residential realestate Investments
5. I also have a few commercial realestate investments

Yeh, I'm doing okay, trading started as a hobby, now its a passion.

Skate.


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## captain black (18 January 2019)

Skate said:


> trading started as a hobby, now its a passion.




There's something we have in common


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## Skate (18 January 2019)

captain black said:


> Thanks for sharing your trading path Skate.
> 
> I hadn't heard of Steve Nison, have vague memories of Louise Bedford writing some stuff on candlesticks.
> 
> ...




Yes I do agree that the mystical candlestick patterns didn't work for me, there is a lot of information on coding candlestick patterns in Amibroker & I can report from personal experience not one strategy was successful in making money. (the name of the game is all about "making money")

Skate.


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## tech/a (18 January 2019)

Skate said:


> *From my perspective*
> Understanding candlestick patterns setups that work sometimes but not at other times didn't enrich my trading life.




Have you ever tried to get your head around VSA?


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## captain black (18 January 2019)

Skate said:


> Yes I do agree that the mystical candlestick patterns didn't work for me, there is a lot of information on coding candlestick patterns in Amibroker & I can report from personal experience not one strategy was successful in making money.




I found the same. I couldn't find an edge in common isolated Candlestick patterns.


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## captain black (18 January 2019)

tech/a said:


> Have you ever tried to get your head around VSA?




That's where it gets interesting isn't it. Add in volume and multiple bar setups and you have a quantifiable edge.


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## Skate (18 January 2019)

tech/a said:


> Have you ever tried to get your head around VSA?




*VSA* 
I've given (VSA) a good shot - I have read many books on Volume Spread Analysis & a few articles by Tom Williams. Following the principles of Wyckoff, Livermore, Tom Williams, and Anna Coulling. I would personally recommend Anna Coulling book would be the first book to read among others

I have the Amibroker indicators & find them useful but when you start to include or incorporate discretionary into the mix over hard coding that's where we'll part company.

Skate.


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## captain black (18 January 2019)

Skate said:


> I have the Amibroker indicators & find them useful but when you start to include or incorporate discretionary into the mix over hard coding that's where we'll part company.




Most of the setups can be coded and used in a mechanical system, it doesn't have to be discretionary.


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## tech/a (18 January 2019)

captain black said:


> Add in volume and multiple bar setups and you have a quantifiable edge.






Skate said:


> include or incorporate discretionary into the mix over hard coding that's where we'll part company




In Isolation placing a car in gear, starting the engine or accelerating wont guarantee forward motion--put it all together and you have a much better chance.
Same with VSA.


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## captain black (18 January 2019)

tech/a said:


> In Isolation placing a car in gear, starting the engine or accelerating wont guarantee forward motion--put it all together and you have a much better chance.
> Same with VSA.




From a discretionary trading point of view the synergies between VSA setups and Market Profile are something I've been exploring. I noticed similar decision points when CanOz and I were posting trades in real time in Modest's futures thread.

It's not something I've been able to code into a system but it's been interesting testing the setups.


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## peter2 (18 January 2019)

re: Skate's hybrid system results for 17-18.   Wow. 

Congrats and damn, you've forced me to re-evaluate my preference to hold 8-12 positions in my portfolios. Did you also research this aspect for your system? 
Clearly with lots of small positions one big hit isn't going to be noticed and with so many positions you're almost certain to get into most of the best trends of any period. 

Now I have to research this myself. More work to do.


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## captain black (18 January 2019)

peter2 said:


> with so many positions you're almost certain to get into most of the best trends of any period.




I'm sure Skate will add more, but around 20 positions is the sweet spot for a trend following system.



peter2 said:


> Now I have to research this myself. More work to do.






It's never ending isn't it


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## Skate (18 January 2019)

peter2 said:


> re: Skate's hybrid system results for 17-18.   Wow.
> 
> Congrats and damn, you've forced me to re-evaluate *my preference to hold 8-12 positions in my portfolios*. Did you also research this aspect for your system?
> Clearly with lots of small positions one big hit isn't going to be noticed and with so many positions you're almost certain to get into most of the best trends of any period.
> ...



*
Sweet Spot*
peter2, 53 positions is the sweet spot for my HYBRID Strategy as testing confirms. (but nothings perfect)

*Combined strategy*
I'm running (3) separate breakout systems combined into one strategy. The combination of strategies allow me to set individual parameters making sure I pick up that signal quicker. Getting onto the move at the right time pays huge dividends in overall performance.

*Taking the signal early*
Trading weekly and getting the signal early makes the difference between a good system to a better system. I've added additional filters & indicators as I use a very large Looping stop (a chandelier stop for a simpler explanation) its in place to keep me safe. (I've explained before I'm a trading wimp)

*ROC indicator*
I've explained in an earlier post how the Exit (stale Stop) works & how I use the (ROC) to gauge momentum (traders interest) going into the trade & when it stalls & downturns I'm out of the trade quick smart.

I'm not using a stock standard Rate of Change indicator (ROC) there's a little more to it than that.

*Don't let other tell you its not all about trends*
I'm a Trend Follower & a quick and simple explanation for others - if traders want to jump on & push a stock price higher count me in but as soon as I know the interest starting to wain (lose momentum) I'm off the sucker looking for the next ride.

Skate.


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## Skate (18 January 2019)

Thank God its Friday..
*
The market has closed.*
After 6pm tonight I'll push one button in Amibroker & it will tell me 3 things in column order (Hint: it's in the same order I'll use to place an order in Commsec)

(a) what ASX code to buy 
(b) how many shares to buy & 
(c) what price to offer in the pre-auction. 

Trading doesn't get any simpler that that (automated trading excluded)

*Let me do a 'Kevin Rudd'* 
I'll ask a question & I'll answer it myself.

*Q1 What am I buying ?*
No idea & frankly I don't really care

*Q2 Why are you buying it ?*
The Amibroker Exploration gives me a signal that the stock has met my strict entry conditions.

*Q3 Are you worried about buying a DUD*
Nope, I know 50% will be losers, that's Trend trading

*Q4 When will you sell the position*
When Amibroker give me a Sell signal, "I will not sell early" no matter how the position is travelling (it's captains black rule not mine)

I wouldn't trust myself to make a sell decision, left up to me I'd most likely get it wrong anyway.
*
Yep, trading for me is boring.
*
Skate.


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## Skate (18 January 2019)

captain black, before you ask.

I have 4 signals today, I'm cheering..

Skate.


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## captain black (18 January 2019)

Skate said:


> captain black, before you ask.






You need to add psychic to your list of talents.



Skate said:


> I have 4 signals today, I'm cheering..




Ah, nice, slowly building up a full portfolio 

Not sure how many positions I'll be opening up on Monday, the scans are scheduled to run automatically in about 40 minutes time for my ASX systems.


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## captain black (18 January 2019)

Skate said:


> I have 4 signals today, I'm cheering..




Looks like I've got a busy Monday coming up. 12 entries and 8 exits across 3 systems.

My "traditional" index filter I use on 2 of the systems is still positive. My "experimental" machine learning index filter on the other system is also still positive but is beginning to weaken. In testing it has been more reactive than the traditional filter and switches off and on quicker. In testing and paper trading it's improved my CAR/MDD quite a bit, will be interesting to see how it performs in live trading.


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## ducati916 (19 January 2019)

Skate said:


> Yes I do agree that the mystical candlestick patterns didn't work for me, there is a lot of information on coding candlestick patterns in Amibroker & I can report from personal experience not one strategy was successful in making money. (the name of the game is all about "making money")
> 
> Skate.




Indeed, single candlesticks, pretty useless. You need to lean backwards, blur your focus and look at a block of 5 or 6. Seriously.

jog on
duc


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## willy1111 (19 January 2019)

Skate said:


> *Investment Vehicles*
> 1. Trading my Hybrid breakout strategy
> 2. LIC's as a long term 'investment' - dividends reinvestment (a set & forget strategy)
> 3. I have a few business investments
> ...




Well done!

Having designed and now trading a system expected to return 20% plus per year on average with less than half an hr input per week what are your thoughts on simplifying your investments further by selling off real estate investments, LICs?

If you were able to rewind the clock 25 years, would you diversify as much as you have or concentrate more strongly on a trading strategy like you have developed?


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## Skate (19 January 2019)

willy1111 said:


> Well done!
> 
> Having designed and now trading a system expected to return 20% plus per year on average with less than half an hr input per week what are your thoughts on simplifying your investments further by selling off real estate investments, LICs?
> 
> If you were able to rewind the clock 25 years, would you diversify as much as you have or concentrate more strongly on a trading strategy like you have developed?




willy1111, let me unpack your question, giving you an idea of the expectation placed on our shoulders. As a communal animal I’ve fallen for the human trait of conformity, being an imitator of others. 

From birth we are conditioned to learn, work hard, raise a family & be financially self-sufficient. Nobody is going to give you the money you need to support yourself let alone raise a family, buy a house etc, that's the very reason we seek employment. The only person who can make sure you’re able to do it on your terms is you.

Your quality of life depends on you & you alone, we all think we are special but in reality our live are a result of a long series of random events. I'm different to most you would meet, I see the world through my eyes & not how the world really is. I think differently to most, mainly on a deeper level, a trait I thought we all possessed. (not so)  

Happiness is really about is creating a quality life of financial independence that will affect everything you do or plan to do.

*Question 1*
_"Having designed and now trading a system expected to return 20% plus per year on average with less than half an hr input per week what are your thoughts on simplifying your investments further by selling off real estate investments, LICs?"_

1. Simplify my investments further, why what the point, my investments are simple (well to me they are)
2. Sell off my real estate investments, investments (assets) that produces an income, assets that increases in value over time. Nope, never thought about it & its not even on the radar.
3. LIC's are our long term investment strategy geared to look after us in our later years of retirement, also it's difficult to trade a large pool of funds in the Australian markets (at worst our LIC's will be used for estate planing) 

*Lots of free time*
I've given away most of our wealth (the secret to living is giving) I still have business interests. Having a lot of free time, I though trading would be fun, a hobby now a passion. I'm currently bored with trading, its proven to be less than exciting, 30 minutes a week is really closer to 15/20 minutes.

*Question 2*
_"If you were able to rewind the clock 25 years, would you diversify as much as you have or concentrate more strongly on a trading strategy like you have developed?"_

Wind the clock back 25 years, never really through about it. I retired at 46 (meaning I was a free agent, others were doing the work for me) it didn't take me long to realise that working took up a lot of my spare time. Freeing up time is not what it's cracked up to be. 

Would I do things differently, most likely not, I've added in a small way to society, I've donated to charities, I've employed people, I've conformed to the norm whereas trading add no value in these aspects. What I've achieved being a member of a community has been rewarding, whereas trading only adds value to my wealth.  

Skate.


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## Skate (19 January 2019)

*You need to know.*
Investing is a ‘risky’ business and if you decide to invest you need to understand both risk and reward. To the average investor the rewards are low but the risk of failure is very high. Unfortunately, it seems that people are more familiar with the expected returns of an investment, and less aware of the risks required to generate those returns. This is like investing with a blindfold on.

*Dividend stock*
To accurately assess risk, you need to understand the payoffs from all possible outcomes, chasing high dividend stock is a strategy worth pursuing as long as you consider your income will be adversely affected if there is a drop in the share price when you sell.

Skate.


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## Skate (19 January 2019)

*Accept & have faith*
Accept what is, let go of what was & have faith in what will be. It doesn’t matter what system you are trading the best way to handle is to just accept it.

*Experience can be dangerous *
Always be sceptical about your own beliefs as experience can create a closed attitude preventing us from seeing when circumstances with our trading position have changed.

Skate.


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## Skate (19 January 2019)

*Worth remembering*
Far more money has been lost buying into bad ideas than missing out on great opportunities.

*Preserve your capital*
Avoiding losses is essential to preserving your capital, which is the prerequisite when trading. Knowing what not to buy is more important than knowing what to buy. 

*Fine tuning*
This is where we need to set boundaries, come up with a sturdy trading plan, think in terms of filters, filters for fine tuning. We don’t need more information, we need a better way to think, we need better tools in our trading tool box (we need good filters). 

*We need tools*
Filters will separate the "wheat from the chaff" by isolating the good signals & eliminating the noise from the market.

Skate.


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## greggles (19 January 2019)

Here are some quotes on adversity to help you get through the difficult times:

"The beauty of the soul shines out when a man bears with composure one heavy mischance after another, not because he does not feel them, but because he is a man of high and heroic temper." - Aristotle

"Adversity introduces a man to himself." - Albert Einstein

"It is your reaction to adversity, not the adversity itself, that determines how your life’s story will develop." - Dieter F. Uchtdorf

"There is no better than adversity. Every defeat, every heartbreak, every loss, contains its own seed, its own lesson on how to improve your performance the next time." - Malcolm X

"Strength does not come from winning. Your struggles develop your strengths. When you go through hardships and decide not to surrender, that is strength." - Mahatma Gandhi

"All the adversity I’ve had in my life, all my troubles and obstacles, have strengthened me. You may not realize it when it happens, but a kick in the teeth may be the best thing in the world for you." - Walt Disney

"Hang in there. Trust that those winds of adversity are blowing away what’s not needed while making you stronger." - Anonymous

"There is no education like adversity." - Benjamin Disraeli


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## Darc Knight (19 January 2019)

_"If you're going through Hell, keep going!"_
Winston Churchill.


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## Gringotts Bank (19 January 2019)

Psychedelics are at the ground floor of a huge uptrend.  A 'tipping point' you might say.  Why dump it here?  Because your level of consciousness determines your success.


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## Skate (19 January 2019)

greggles said:


> Here are some quotes on adversity to help you get through the difficult times:
> 
> "The beauty of the soul shines out when a man bears with composure one heavy mischance after another, not because he does not feel them, but because he is a man of high and heroic temper." - Aristotle
> 
> ...




greggles, I was with you till Walt Disney made his stupid remark (I hope Walt meant a "metaphorical" kick in the mouth) 

*Some quotes are helpful, others not so much*
From one who has been kicked in the mouth, it definitely wasn't 'the best thing' that has happened to me, far from it. I didn't even enjoy the stitches, let alone the dentist visit.

*Lets recap*
_"You may not realize it when it happens, but a kick in the teeth may be the best thing in the world for you" _

Nope, I still don't agree !

Skate.


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## greggles (19 January 2019)

Skate said:


> greggles, I was with you till Walt Disney made his stupid remark *(I hope Walt meant a "metaphorical" kick in the mouth)*




I think he did. A literal kick in the teeth will only result in unnecessary pain and dental bills. But I suppose that is adversity also? Not sure what it can teach you though.

Sorry to hear about your literal kick in the teeth.


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## Skate (19 January 2019)

Gringotts Bank said:


> Psychedelics are at the ground floor of a huge uptrend.  A 'tipping point' you might say.  Why dump it here?  Because your level of consciousness determines your success.





Gringotts Bank, you are absolutely right when you say _"your level of consciousness determines your success"_ I have not had time to view the video, by you using the word "success" now gives me an opportunity to say a few words on the subject & relate success to trading. 
*
Failure and incompetence*
Trading it is not about being right or wrong its about having a go, it is about making decision, good decisions. We hesitate to buy for one reason or another & often become reluctant to sell losing positions because we equate it as failure and incompetence.

*Outcomes the stories*
Deciding to hold that sucker a little longer is where we start to make up stories in our head - "lets give it a little bit more wriggle room" which is totally the wrong mind set.

*Defending poor decisions*
Poor decision-making process creeps into your mind all the time, we start to have an opinion on just about everything. You defend your poor decision instead of making the right decision & cut that sucker 'lose'. Traders always confused net-worth with self-worth.

So always ask: ‘do I want to be a loser for holding a loser ?’

Skate.


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## Skate (19 January 2019)

greggles said:


> I think he did. A literal kick in the teeth will only result in unnecessary pain and dental bills. But I suppose that is adversity also? Not sure what it can teach you though.
> 
> Sorry to hear about your literal kick in the teeth.




greggles, nothing to worry about its was all part of a job I once had & the some of the people I had to deal with were the scum of the earth.

Skate.


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## Skate (19 January 2019)

Gringotts Bank said:


> Psychedelics are at the ground floor of a huge uptrend.  A 'tipping point' you might say.  Why dump it here?  Because your level of *consciousness *determines your success.





Gringotts Bank, consciousness is open-mindedness or mindfulness (mindfulness is an exciting topic)
*
Consciousness*
Having consciousness means you don’t have an opinion on everything, it create open-mindedness, it gives you a chance to listen to the other side of a story, by listening your decision quality goes up because you don’t buy into bad ideas.

*Now I'll relate the above passage to trading*
Having a trading plan prevents you from changing your story to suit the market condition & before entering a position, have an exit plan, be open minded, don't be married to an idea or a stock and before making a trading decision take time to check that you are in the state of mindfulness so you can have confidence in your decision.

Skate


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## Skate (19 January 2019)

Let me give you some short & snappy advice

"Always challenge your own thinking and stay within your circle of competence when trading"

Skate.


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## Gringotts Bank (19 January 2019)

Skate said:


> Gringotts Bank, consciousness is open-mindedness or mindfulness (mindfulness is an exciting topic)
> *
> Consciousness*
> Having consciousness means you don’t have an opinion on everything, it create open-mindedness, it gives you a chance to listen to the other side of a story, by listening your decision quality goes up because you don’t buy into bad ideas.
> ...




Opinions certainly get in the way of gaining access to higher levels of consciousness.  

Seng-ts’an:  "Do not seek the truth; only cease to cherish opinions".  Good advice for me.


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## tech/a (19 January 2019)

Skate said:


> Let me give you some short & snappy advice
> 
> "Always challenge your own thinking and stay within your circle of competence when trading"
> 
> Skate.




We all rise to our level of incompetence!

Think about it!


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## Skate (19 January 2019)

*Risk and the rewards*
Defining the risks and the rewards in the share market is far more intensive than it first appears and it’s vital to understand intimate details of a company’s operations and all external forces that may impact its earnings.

*Playing Pool*
Risk is like playing pool, when a pool player lines up to take the first shot, they may only hit one ball but hitting that one ball scatters so many other balls on the table, and risk is the same, risk has the ability to effect other indexes and it can flow onto individual securities.

Skate.


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## Skate (19 January 2019)

*The world is your oyster*
Trading is not limited to the Australian Securities Exchange (ASX) as the world is your oyster, trading is not limited to the country of your residence.Trading in different countries adds complexities due to their taxation and capital gains laws and how they are appropriated.

*Tax treaties*
Most western countries have reciprocal Investment and tax treaties between participating governments assuring investors don’t circumvent their financial obligations in regard to meeting those taxation requirements.

Skate.


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## Skate (19 January 2019)

*Within the Australian market how do I choose which Index to trade?*
If you decide to invest locally in the ASX you need to evaluate the level of risk that you are willing to absorb to determine which index or combination of indexes that are suitable for you to trade.

*Volatility is a traders friend*
To make money in the stock market you need volatility to shift the share price in conjunction with company performance and capital growth. Rock solid companies being less volatile are suitable for those who have a low tolerance to risk. 

*For the low risk traders*
Bluechip companies have been traditionally traded by low risk traders, these investors find comfort trading these companies because the emotional roller coaster is a lot less scary than other indexes.

Skate.


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## Skate (19 January 2019)

Australian Securities Exchange Indexes

*The ASX 20* 
Comprises all the big Australian Banks and when the banks do poorly so does this index.

*The ASX 100 *
Comprises the largest 100 companies, being the ASX 20 as well as the next 80 companies by market cap. Investors who are a looking for larger returns on their investments may trade this index.

*The ASX 200* 
This is the market that professional traders use as their benchmark. The ASX 200 comprises the largest 200 companies by market cap, being inclusive of the ASX 20, 50, 100 and the next top 100 companies. The ASX 200 is much riskier index to trade but the rewards can increase because of the increased volatility of the companies that make up this index.

If you can accept more risk the rewards can increase as well.

Skate.


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## Skate (19 January 2019)

*Within the market how do I choose which Index to trade ?*
The All Ordinaries (ASX: XAO) comprises of the top 500 companies by market cap and it has a mix of safe, stable and aggressive companies that enjoys more volatility than all the indexes listed before this post.

*The right risk/reward combination*
The All Ordinaries for me has the right risk/reward combination for good growth, the volatility is a bit of a roller coaster but the rewards are larger with the corresponding disadvantage of higher risk.

*Nail biting volatility*
Indexes above the All Ordinaries have nail biting volatility and it’s akin to hanging on to a cliffs edge just by your fingertips, meaning trading an Index above the All Ordinaries you’ll require nerves of steel or at the very least you need to be a very hardened punter.

Skate.


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## Skate (19 January 2019)

*When is it safe to trade?*
The market has three states of movements, trending upward, trending downward or trending sideways.

*Ideal time to trading*
The ideal time to trading is when the Index you are trading is trending upward.

*Index filters are very common in trading*
An Index filter is the most common way to gauge if the market index is moving higher or lower and the filter comprises of a simple moving average set against the index and time frame you are trading.

Skate.


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## Skate (19 January 2019)

*The common old index filter*
An index filter is your safety net as it will keep you from trading & it can be as simple as you want it to be. Example, when the index you are trading falls below a pre-set simple moving average the filter will turn off - your strategy should now stop generating any new buy signals.

*The flexibility of an Index Filter*
Another feature of an index filter is that when the index filter turns off you can have your stop loss tightened so you exit your trade sooner than when the index filter is on. This will lock in profits or stop you losing more money if your position is under water.

*Be a wimp with me*
When markets fall it means the momentum is falling & it’s time to be cautious when the index is moving lower.  Normally an Index will keep moving in the same direction till a price reversal occurs.

*How does an Index Filter operate ?*
When an index filter turns off it has the ability to protect you against larger losses securing and protecting your precious capital. If the index filter falls below the pre-set moving average the stoploss shortens generating sell signal sooner than when the index filter is on.

*Permanent feature*
An Index filter should be a permanent feature of any good strategy & when the index drops it’s a time to take notice, it’s time to watch for sell signals.

Skate.


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## Skate (19 January 2019)

*When is it safe to trade?*
The market has three states of movements, trending upward, trending downward or trending sideways. The ideal time to trading is when the Index you are trading is trending upward.

*Back to the Index Filter*
An Index filter is the most common way to gauge if the market index is moving higher or lower set against the index and time frame you are trading.

Skate.


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## Skate (19 January 2019)

*Money Management*
What does Money Management mean in relationship to trading?

This question relates to position sizing.

*Amount to trade*
It’s about how we proportion the amount of money set aside for trading. The first thing you need to decide is - what dollar value you want to place on each trade.

*Include all costs*
This consideration should include the commission cost and frequency of your trading style relating to your trading plan. You can divide your capital into five, ten, fifteen or twenty or even forty equal amounts. I personally divide my capital into 40 equal parts.

Skate.


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## Skate (20 January 2019)

tech/a said:


> Above all you will need a decent account size
> I’d suggest 50k minimum
> Running a business —-and it is a business is
> Impossible if it’s under funded.
> ...




*How much money do we need to start trading?*
Most traders think you can start with a small amount of money to start trading but anything less than $50k or $60K is quickly swallowed up by commission costs, the cost of doing business.

*Commission drag*
If your trading strategy trades with a high frequency the commission drag will play havoc with your strategies profitability as with any Mean Reversion Strategy.

*It can happen*
I have heard stories that some have turned a $1,000 investment into $500,000 but I’ve also heard of people winning lotto twice with a single ticket, and for either to happen is pretty rare.

Skate.


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## Skate (20 January 2019)

willy1111 said:


> Having designed and now trading a system expected to return 20% plus per year on average with less than half an hr input per week what are your thoughts on simplifying your investments further by selling off real estate investments, LICs?




willy1111, used 20% as an expected return on investment, whereas I'll use 25% as an example. (it's easier to understand)

*The truth is, you need money to make money*
Forget about taking a $1000 account and turn it into millions. That is achieved through gambling, not trading. Instead, you should look to make an average of 25% per year (this depends on your risk appetite and trading style).

On a $1000 account, you're looking at an average of $250 per year.
On a $20,000 account, you're looking at an average of $5,000 per year.
On a $50,000 account, you're looking at an average of $12,500 per year.
On a $100,000 account, you're looking at an average of $25,000 per year.
On a $600,000 account, you're looking at an average of $150k per year.
On a $1m account, you're looking at an average of $250k per year.

Get the picture?

This is extremely important, but most traders don’t get it.

*There are different ways to profit from the markets*
(a)  Warren Buffet, considered the world's greatest investor, invest based on fundamental analysis only.(looking at P&L Financials)
(b)  Ed Seykota, considered the world's best trader, trades based on technical analysis only. (Chart reading – my method)

Skate.


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## Skate (20 January 2019)

*What criteria should you use to pick a stock ?*
Well that the $64,000 question, you can either use fundamental analysis (the study of balance sheets, PE ratio, P&L statements, also researching any known facts about the company and its managers even the company’s historical performances) or you can use technical analysis (the study of charts)

*What stock criteria do I choose ?*
I prefer technical analysis as I believe all that is known about a company, the fundamentals of the company has already been factored into the share price already.

*Support and resistance*
Human fragility such as greed and fear is what fuels the markets, it’s the very same reason why support and resistance areas are so important. Support and resistance is another way of saying - the top and bottom of a price range.

*Psychological barrier*
When a support or resistance line is hit there is a psychological barrier to overcome, this is why it hard to push prices past this point.

A "psychological barrier" is really an "emotional Barrier"

Skate.


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## Skate (20 January 2019)

*Let me make a post about "Market manipulation"*
This manipulation goes on more than you think, the uninformed never realises that this practice is highly orchestrated and planned with precision.

*The mug punter*
Most Investor loses money because they have a habit of buying at the top and selling at the bottom, the smart money manipulates the price to achieve this result, and it’s the big boys at play. It’s a constant battle between professional investors and us the mug punter and the cards are always stacked against us, something to always keep in the back of your mind.

New batches of suckers are born with every new play.

*Rules of engagement*
The Financial Markets are a Cruel, Unkind and Dangerous Playing Field, one place where the newest amateurs are generally fleeced the most brutally, usually by those who know the rules of engagement.

Skate.


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## Skate (20 January 2019)

Playing pool & traders risk (my simple analogy)

*The game of Pool*
So you understand the game of ‘Pool’ - Pool is played with a Cue & Balls on a ‘Pool table’ with six pockets along the rails, into which balls are deposited. (Pool has so many meanings)

*Risk*
Risk is like playing pool, when a ‘pool player' lines up to take the first shot, they may only hit one ball but hitting that one ball scatters so many other balls on the table, and risk is the same, risk has the ability to affect other indexes & it can flow onto individual securities.

*Fun Fact*
What sport is played in a Tuxedo ?

*Answer*
Pool

*Minnesota Fats*
Minnesota Fats arguably one of the best Pool players ever, once made a funny quote: "A Pool player in a Tuxedo is like Ice Cream on a Hot Dog"

Skate.


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## Skate (20 January 2019)

peter2 said:


> re: Skate's hybrid system results for 17-18.   Wow.
> 
> Congrats and damn, you've forced me to re-evaluate my preference to hold 8-12 positions in my portfolios. Did you also research this aspect for your system?
> Clearly with lots of small positions one big hit isn't going to be noticed and with so many positions you're almost certain to get into most of the best trends of any period.
> ...




Poker & Positionsizing (my simple analogy)
*
Trading has no rules *(true)
I've explained before why trading is Bat-**** scary for beginners & it's so scary because of 'trading rules' or more precisely 'NO Trading Rules'.

I'll explain trading in simple terms, an analogy related to the game of Poker.

*The game of Poker*
Most understand the game of Poker but for those who don't - Poker is a card game that combines gambling, strategy, and skill & some poker variants involve betting as part of game.

*Rules*
The game of Poker has lots of rules but consider if there were 'NO rules' in the game of Poker. Imagine if you could have 40 or even 52 cards. Tell the dealer "Just keep them coming" till you have a great hand, a winner hand (a winning Portfolio)

*Why use a handbrake*
As traders, why do we limit our Portfolio (our hand of cards) to 5, 10, 15 or even 20 positions in our trading portfolio or trading system (I personally use 40 & sometimes 53 positions)

*50/50 success rate*
My Hybrid strategy has a 50/50 success rate so I need as many positions my funds will allow. The 'DUDS' don't worry about them, I'll trash them quickly so I get another position (another card) The good positions (the good cards) I'll keep the good ones - so I just keep taking positions (cards) that I'm capable of handling (don't pull the handbrake on your trading) I'll keep looking for the good ones till I have a great portfolio of stock (a good hand of Poker)

*Why so many positions ?*
Simple answer, I trade one Market the (ASX) & in that market I trade one Index, the All Ordinaries (XAO) - trading is a game of mathematics. When you trade the top 500 companies with a positionsize of 50 positions it takes only 10 stock turns to get the good ones.

*Bad ones reduce profits*
Its a pity sometimes I have to look at the bad ones to decide the good ones, the bad ones cost me money. The bad ones cost only a few dollars to have a peek, so my reasoning, looking at the bad ones is an expense for doing business.

Skate.


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## Skate (20 January 2019)

tech/a said:


> Skate
> 
> I don't have time to answer in full
> But will say that over the last 3 yrs my understanding
> ...




So, in summary, to reference your post, yes, technical analysis using a mechanical trading system works for me. 

*But not for all*
That is, it works for some traders, like myself & when it does work it works only some of the time, my strike rates is around 50%, so half of the time my strategy is okay but sufficiently to be profitable on balance. 

*Methodology*
Also the successful traders using technical analysis (a mechanical trading system), you can bet the vast majority have developed their own specific methodology and have combined it with rigorous risk management & testing.

Skate.


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## Skate (20 January 2019)

luutzu said:


> Here's a contradiction I see in APT's business model. One I believe will increase its risks as it tries to de-risk.
> 
> Say APT's interest expense goes up. Up due to higher RBA/Fed/Bankers demanding higher rate.
> 
> ...




I wish to show a chart about (APT) as there is an ongoing discussion about the companies business model
https://www.aussiestockforums.com/threads/apt-afterpay-touch-group.33281/page-16#post-1010808

I have a trading strategy that filters when a stock displays the right trading conditions & as a mechanical system trader its not up to me to decide if the company is good, bad or indifferent. I buy when the Goldilocks conditions are met. (simple)
*
Disclaimer*
APT has been kind to me in the past & has made me a few 'bob' & I'm sure it will again, just sometime in the future.

*1st Chart*
It's a pretty representation of my previous positions
*
2nd Chart*
Is the actual buying & selling pressure of traders, traders who have money on the line, it's important sometimes to know what other traders are doing, as you can see in (chart 2) there are more buyers than sellers at the moment.

*Opinions*
We can all have our own opinion about a particular stock but the only opinion that matters to a trader is what market participants are doing (the rest is noise)

Skate.

*Chart 1 *(my buy & sell positions)




* Chart 2 *(Buying & Selling pressure, stuff that counts)


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## Skate (20 January 2019)

basilio said:


> Ever wondered what would happen if you became quite savvy with your gambling and was a regular winner?  Could be a nice little earner where you make a graceful living on your gambling smarts.
> 
> Dream on folks.. Do you think the bookies are actually going to let you be a consistent winner ?
> 
> ...




basilio, as a registered bookmaker for over 14 years & my brother a professional gambler for the past 47 years I want to say that most commentator sometimes gets some of the story correct but most times they don't understand the industry.

*General comment*
I not making a comment about your post but I would like to make a few general comments from my perspective.

*It's mathematics*
As with trading, bookmaking isn't gambling it's a numbers game, it's mathematics '101'

*Restrict a gambler* (on the whole they aren't lucky)
There is price variations going on all the time & its not to restrict a particular gambler but to balance the ledger. (gamblers are our customers)

*The punter*
The punter places his bet, backs a runner then hopes/prays/wishers for the best.

*The Book*
The big punter make a book for you so I'm at a loss why you would want you restrict them, in fact you need them.

*The Bookmaker*
It's fast, it furious, complicated mental mathematical multiplications then you apply that answer & add back the original stake & write the result on a betting ticket all in the blink of an eye whilst calling out the calculations to a clerk to be penciled in to the ledger. (Adrenalin rush was exciting)

*Mental gymnastics*
The mental gymnastics correlating the entire book was demanding but it was a required skill to evaluate the risk/reward & how each runner affects the outcome.

Skate.


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## Skate (20 January 2019)

The 'Dump it here' thread lacks posters..

*I know it*
When I'm posting I'm only repeating what I already know, but when others post, I tend to learn something new.

*'ASF' entertains*
I've stopped using the Aussie Stock Forum for its educational value, like most I only visit ASF for the entertainment value filling in my time reading posts that add no value to my life even though I enjoy reading them.

Enough said..

Skate.


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## tech/a (20 January 2019)

This poster lacks time

Can’t even keep up with his own threads


----------



## Skate (20 January 2019)

tech/a said:


> This poster lacks time
> 
> Can’t even keep up with his own threads




Yep, I understand.

Skate.


----------



## Skate (20 January 2019)

POR930 said:


> I have a SMSF and running it in retirement phase...meaning I do not pay any income or capital gains taxes. All the portfolio manager's I have looked at all seem to favour the income/capital gains tax accounting layouts, with aged sales throughout the financial years. I do not need any of the complex accounting. Their reports being tax based, seem way off the mark for my needs.
> Do you know of a Portfolio Manager(paid or free) that simply:
> Records Buys, Sells, Dividends.
> Then is "all" I need it do do advise me what my current ownership cost/profit(loss) is per stock taking into account parcel 1,2,3 and 4 all have the same value per share, dividends paid, including Franking Credits. Maybe my current excel spreadsheet is as good as it gets for me?




POR930, my personal recommendation is 'Share Trade Tracker' I've been using the program for many years & it's the best out there (IMHO) & very cost effective, it has all the bells & whistles for your accountant if you have one. (also I've have a hand in its ongoing development)

Support & service is excellent, with automatic updates you are always current with the changing environment. (Free program updates)

There is also a choice of data suppliers (Paid & Free data) & the portfolio tracker is updated with the push of 'one' button. (how cool is that)

*https://xlautomation.com.au/excel-spreadsheets/share-trade-tracker*

It's worthy of an investigation.

Skate


----------



## Gringotts Bank (20 January 2019)

Skate said:


> *Let me make a post about "Market manipulation"*
> This manipulation goes on more than you think, the uninformed never realises that this practice is highly orchestrated and planned with precision.




Price movement definitely seems planned, down to the tiniest detail.  It always strikes me as odd.  If the market consisted of 10 amateurs betting against each other, I wonder if it would still emerge organically.  I feel like it might.


----------



## Skate (20 January 2019)

Gringotts Bank said:


> Price movement definitely seems planned, down to the tiniest detail.  It always strikes me as odd.  If the market consisted of 10 amateurs betting against each other, I wonder if it would still emerge organically.  I feel like it might.




Gringotts Bank, If the market (Poker table) consisted of 10 amateurs betting against each other, you said _"I wonder if it would still happen".  _

It would be naive to think otherwise. 

*Who is the patsy*
If you have been in a poker game for a while, and you still don't know who the patsy is, you're the patsy. (its a common saying)

To make money you need to manipulation either the person or the market participants, Trading is not a 'Lilly white' game.

Skate.


----------



## Gringotts Bank (20 January 2019)

Skate said:


> Gringotts Bank, If the market (Poker table) consisted of 10 amateurs betting against each other, you said _"I wonder if it would still happen".  _
> 
> It would be naive to think otherwise.
> 
> ...




Most (not all, most) of the big players barely manage to beat the index.  So if they are the manipulators, why aren't they winning big?


----------



## Skate (20 January 2019)

Gringotts Bank said:


> Price movement definitely seems planned, down to the tiniest detail.  It always strikes me as odd.  If the market consisted of 10 amateurs betting against each other, I wonder if it would still emerge organically.  I feel like it might.





Gringotts Bank said:


> Most (not all, most) of the big players barely manage to beat the index.  So if they are the manipulators, why aren't they winning big?




Nah, Index Fund Managers is not there to make you money, that's not their business model.

More after lunch.

Skate.


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## Wyatt (20 January 2019)

Hi Skate, Great work and awesome sharing of your experience and hard work.

Also thanks for throwing some meat into the crowd. I have been busily trying to analyse your results to find some of the many gems no doubt awaiting those who bother to look.

It seems you will jump on anything in the ASX that moves (when conditions are right) with your swarm approach, I was very interested to note 7/10 of your best trades last FY were in stocks outside the XAO. Food for thought right there. It seems kissing frogs has never been more rewarding. 

I have looked at index filters and 150ma seems to be a reasonable round number to keep a trader out of major downturns, yet amongst the meat of a trend. I sure there is something much better out there to guide a trend follower, maybe something like the XEC, there seems to be some correlation between it and T/F results. That first 6 months of FY17/18 was a cracker trend. 

We can see on the chart below the XEC diverged from XAO before they both went down the gurgler. 

One more thing Skate, if I may, can you give us a look at your 16/17FY results, that was a crap time for trend followers in general. I would love to see how your system handles the tougher times and how deep your drawdowns are. You have alluded to the pain, show us how tolerant you are.

Cheers Wyatt


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## captain black (20 January 2019)

Skate said:


> The 'Dump it here' thread lacks posters..




Sorry Skate, busy here too. Full moon planting and festivities for a few days on the farm (gotta keep the Pagans and Wiccans happy) plus a few more wwoofers have arrived. Firing up the pizza ovens to feed the masses again tonight 



Skate said:


> when others post, I tend to learn something new.




I've already told you everything I know


----------



## Skate (20 January 2019)

Gringotts Bank said:


> Most (not all, most) of the big players barely manage to beat the index.  So if they are the manipulators, why aren't they winning big?




Gringotts Bank, most traders & fund managers don't have a good handle on how the market works, you think they would should know but they don't.

This will turn into a long post that would be boring for others to read, so I'll keep it as succinctly as possible by giving basic examples that others many understand.

*How a business makes money*
1. They Buy right (at wholesale prices)
2. The sell right (at retail prices)
3. Control their expenses  
4. Pay their Tax obligations 
5. Pocket the balance 

*The manipulators*
1. Buy right at wholesales prices (the low price) 
2. Sell right at retail prices (the high price)

*How do traders lose money ?*
1. They buy at Retail (at the top of the price range)
2. They sell at Wholesale (at the bottom of the price range)
3. Manipulators know where your stops are (its called gunning for stops)  all they have to do is force to that level, emotions will do the rest.

*You've seen the charts.*
1. The prices are pushed up
2. The prices are dragged down
3. Wash & repeat (that's what causes the Zip Zap pattern you see on the charts)

*The Fund Managers*
1. Their business model is to make money for the company & surprise, surprise they don't make money for you (that's not their job)
2. They track Indexes by only buying non volatile companies & they are after the dividends (capital growth is a bonus)
3. Their business model is to keep you fully invested (their profits comes from funds under management) 
4. The funds under management attract a management fee, whether you win or lose money, they don't care (its not about you)

*Investment vehicles*
Safe long term investments vehicle the type 'Fund Managers' use have a low payoff ratio (that's why the lower than expected performance results)

*Ocean Cruises & Industry/Retail Funds are the same*
Ocean Cruises & Industry/Retail Funds can't turn sharply, they can't zip here & zip there like a little speed boat can (that's us by the way, we are the speed boats) & for Fund Managers to change course it's not in their DNA (that's a lot of effort for them to change course, chasing returns just for members , WHY - there is no payoff for them)

*CommSec*
I've posted about CommSec ringing me, alerting that I'll shift the market with the size of some my positions (think about this - are they ringing me for my benefit or for theirs ?)

*They see both sides*
CommSec are active traders, I've taken their trades & they have taken the other side of mine, they do market swaps all the time, the problem as I see it is that they get to see both sides of the market & allowed to be active players ( who would have thunk it ! )

This is a quick & dirty response to a much larger problem. I know all this & I still trade, picking up the splashes the big boys makes it profitable for me. (I see the move, I jump on & ride that sucker till I see them change course, than I'm off the bugger)

Skate.


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## Skate (20 January 2019)

captain black said:


> Sorry Skate, busy here too. Full moon planting and festivities for a few days on the farm (gotta keep the Pagans and Wiccans happy) plus a few more wwoofers have arrived. Firing up the pizza ovens to feed the masses again tonight
> 
> 
> 
> I've already told you everything I know




Yep, I realise others have a life. 

Skate.


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## captain black (20 January 2019)

Skate said:


> Yep, I realise others have a life.




Ok, no probs.


----------



## Skate (20 January 2019)

Wyatt said:


> Hi Skate, Great work and awesome sharing of your experience and hard work.
> 
> Also thanks for throwing some meat into the crowd. I have been busily trying to analyse your results to find some of the many gems no doubt awaiting those who bother to look.
> 
> ...











Overall trading results for 2016 to 2017 FY


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## Gringotts Bank (20 January 2019)

Skate said:


> *CommSec*
> I've posted about CommSec ringing me, alerting that I'll shift the market with the size of some my positions (think about this - are they ringing me for my benefit or for theirs ?)




LOL, it certainly did strike me as unusual when I read it.  Don't disrupt the game please.  *We* set the prices, not you.

Thanks for the reply.


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## Wyatt (20 January 2019)

Thanks for that Skate. Just for amusement sake I did a 1 run sim. with 33 pos.
Eerily similar, although i couldn't replicate the 17/18FY result you posted.


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## ah13 (20 January 2019)

Hi Skate

Thanks for sharing your wealth of knowledge.
You've mentioned that you split your trading capital into 40 positions.

I'd be interested to know how you rank potential buys should you get more buy signals generated by your system than you can actually take at a particular time due to available capital?

Thanks


----------



## Skate (20 January 2019)

Wyatt said:


> Hi Skate, Great work and awesome sharing of your experience and hard work.
> 
> Also thanks for throwing some meat into the crowd.
> 
> ...




A few answers..

*1. It seems you will jump on anything in the ASX that moves (when conditions are right) -* Correct, if it moves & meets my buy criteria I'm all over it. When the momentum stops, I'm off the sucker no matter what. If I'm wrong, I can always jump back on again, that's what traders fail to realise.

_*2. I was very interested to note 7/10 of your best trades last FY were in stocks outside the XAO*. _The reports are from Amibroker backtesting - my Strategy code is fully manipulated through the parameter settings & Amibroker couldn't keep up with the week to week changes that are made. Amibroker want's rock solid setting so it can do the maths. (the results are a guide only - my actual trading results are better) To give you an example, my bet sizes ranges from $15K to $50K (my amibroker code links to 'available funds' to make the bets) Amibroker works statically not dynamically. (each backtest size is set at $15K) Amibroker is a great program but when it comes to Backtesting is just a fancy calculator. 

_*3. I have looked at index filters and 150ma seems to be a reasonable round number to keep a trader out of major downturns.*_ I've done a lot of analysis on how the big boys move in & out, strangely I've done similar to what you are doing now but take it from me it's not that simple. I run 3 different trading systems to make up my Hybrid strategy, each system is optimised individually to get the base parameter, than combined & optimised again for the  optimal (compromise) to give the best returns over all. (150ma, I take that to be the old stock standard SMA, if so you are not in the ballpark - the index filter is tuned to my system) 

*Please Note* 
I own a 2 door yellow Jeep Wrangler, HardTop - petrol, normally aspirated fuel injected, whereas my wife owns a Mercedes 250D Avantguard, Diesel Turbo Charged, what I'm struggling to say is what powers my wife's vehicle won't power my vehicle, just the opposite it would do damage, so what's good for one is sometimes not good for the other)

Skate.


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## Skate (20 January 2019)

Wyatt said:


> Thanks for that Skate. Just for amusement sake I did a 1 run sim. with 33 pos.
> Eerily similar, although i couldn't replicate the 17/18FY result you posted.
> View attachment 91488
> View attachment 91489




Wyatt, just to be clear, my Hybrid Strategy is a Weekly Strategy. 

Skate.


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## Wyatt (20 January 2019)

I see that you buy Fridays' close, interesting as I have noticed a T/F signal service provider does the same. There must be an something there for you there as well? please explain.

I do the open Monday and weekly, well thats the plan anyway. Sim is calculated daily so hence the more grainy graph for anyone curious.


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## Skate (20 January 2019)

ah13 said:


> Hi Skate
> 
> Thanks for sharing your wealth of knowledge.
> You've mentioned that you split your trading capital into 40 positions.
> ...




ah13, that's an excellent question & the ranking method can mean the difference between a good & poor system using the same code.  Positionscore (Amibrokers ranking array) really determines the quality of the results you will achieve - I've tried every ranking code I could get my hands on & tested them to death to achieve better results. 

*Disclaimer*
I use a proprietary 'Positionscore code' given to me by 'captain black' & if I was to disclose the ranking method or his code he would have my "guts for garters"

At all cost you need to get the ranking correct or you might just throw away a good strategy. 

Skate


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## ah13 (20 January 2019)

Thanks Skate.
Fully understand the limitations on what you can reveal and appreciate your confirmation re the importance of ranking to the system results.


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## Skate (20 January 2019)

Wyatt said:


> I see that you buy Fridays' close, interesting as I have noticed a T/F signal service provider does the same. There must be an something there for you there as well? please explain.
> 
> I do the open Monday and weekly, well thats the plan anyway. Sim is calculated daily so hence the more grainy graph for anyone curious.




Wyatt, I've written some fancy code that I'm particularly proud of & have seen nothing like it anywhere else - I've said before I press one button & it tells me 3 things (what to buy, how many share to buy & what price to offer in the pre-auction) but I can tell you there is some fancy footwork going on in the background.

Skate.


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## Skate (20 January 2019)

Wyatt, I forgot to mention, I'm so happy the way my charts look - all the info in one spot, colourful & flashy - a dream to look at. (You may not have noticed the chart appearance but I went to a lot of trouble to get them to look that good)

Charts are meaningless they add no value to my trading, in all honesty you don't need charts to be a system trader.

Skate.


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## Wyatt (20 January 2019)

Yes you have and so you should. 

Keep up the good work.


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## Skate (20 January 2019)

ah13 said:


> Thanks Skate.
> Fully understand the limitations on what you can reveal and appreciate your confirmation re the importance of ranking to the system results.




ah13, even if you had my system it wouldn't automatically mean my Hybrid Strategy would be successful for you as it is for me & I'll tell you why.

Let me give you an analogy on having a great strategy, being a great coder & why we're quite different as traders.

*Peter Brock* (otherwise known as "Peter Perfect")
He won the Bathurst 1,000 nine times, imagine if he gave you his winning car, do you honestly believe you would be able to win Bathurst even once ?

His 'ability', 'skill' & his 'mental toughness' decided the win, it's not when he got into the car, not even when he exited the car but how he handled the car during the race.

*Peter Brock* 
His 'ability', 'skill' & his 'mental toughness' decided the win, it's not when he got into the car (*the BUY*), not even when he exited the car (*the SELL*) but how he handled the car during the race. (*the TRADE*)

Skate.


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## ah13 (20 January 2019)

Skate - another question and it's fine if you feel you shouldn't/can't answer this.

Your 16/17 figures show a profit of 2.1% with a win ratio of 35.9% and ave win/loss ratio of only 1.9.
Your 17/18 figures show a profit of 62% with a win ratio of 56.1% and ave win/loss ratio of 4.2.

In 16/17 the XAO increased by 8.5% and in 17/18 by 9.1%.

So would it be correct to assume that you did not use exactly the same system parameters in 17/18 that you used in 16/17?


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## Skate (20 January 2019)

ah13 said:


> Skate - another question and it's fine if you feel you shouldn't/can't answer this.
> 
> Your 16/17 figures show a profit of 2.1% with a win ratio of 35.9% and ave win/loss ratio of only 1.9.
> Your 17/18 figures show a profit of 62% with a win ratio of 56.1% and ave win/loss ratio of 4.2.
> ...




ah13, exactly the same code & parameters for backtesting - It's my Hybrid strategy. Now look at the differences in the 'Sharpe Ratio' between 2016/17 to 2017/18 (2016/2017  Sharpe Ratio means my system is a DUD, where as the same strategy 2017/18 it's not to bad - it's the same strategy, its the same code) Also cutting a time frame out of a sequence of trades is not a good indicator.

*Meaning*
I didn't close all the positions on 30th June 2016 & started fresh again but that the scenario I was asked for. Trading & metric's are more than using a calculator as Amibroker wants you to believe. My system has been formulated over the last 25 years of corrected historical data. What does that all mean, it means I have the confidence to bet my system is good.

Here's a statistic to show you how confidence I am with my Strategy, Ive just cut that out of my Portfolio Manager

(That's $5,486,712.00)




*Metrics*
Metrics are one of the most academic topics about trading systems. There are so many of them that I find it difficult to know which one is more appropriate to evaluate my Hybrid system.

The Sharpe ratio is considered adequate if returns are normally distributed, and this does not seem the case with my Hybrid Strategy (same for the K-Ratio that detects inconsistency in returns).

Anyway, AmiBroker indicates some of my other metrics are clearly more favorable:

*CAR/MaxDD* - Compound Annual % Return divided by Max. system % drawdown. Good if bigger than 2
*RAR/MaxDD* - Risk Adjusted Return divided by Max. system % drawdown. Good if bigger than 2.
*Recovery factor* - bad < 1, neutral between 1 and 2, good > 2
*Payoff ratio* - bad < 1, neutral between 1 and 2, good > 2

Metrics are guideline to let you know how your system performs over a set period.

Skate.


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## barney (20 January 2019)

Skate said:


> *The 'Dump it here' thread lacks posters*..




LOL Skate ….. You type faster than I can read

This thread is full of some excellent advice and great ideas …… 
People however take time to digest things … 
The thread will have longevity and benefit to readers well into the future for the above reasons

My advice is to carry on as you were Sir and take no notice regarding the lack of posters


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## barney (20 January 2019)

captain black said:


> Sorry Skate, busy here too. Full moon planting and festivities for a few days on the farm (gotta keep the Pagans and Wiccans happy) plus a few more wwoofers have arrived. *Firing up the pizza ovens to feed the masses again tonight*
> 
> 
> 
> *I've already told you everything I know*




Lol ….. 

On a totally unimportant point to the thread given its the weekend …. I also cooked some of my best homemade pizzas last night for a friend visiting from OS ….. He gave me the ultimate compliment that they were better than bought pizzas ….. 

Not a big deal for most, but I was pretty chuffed because he is well travelled and has eaten some pretty good pizzas in his time   I intend to cook more tonight to prove it was no fluke  lol ….  

Carry on Skate, and apologies for bringing my hunger into your thread


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## POR930 (20 January 2019)

Thanks Skate for your advice in the other thread. Yeah, we are all beginners in this game. After 30 years, amazing how you can still fall into the traps. All these years, I have used my excel sheets. 

As you say, easy to buy...much harder to exit. These last 12 months or so not so bad for me, as I have been very active in short term trading and if it aint working, move on. Achieved 225k, including dividends using 450k...but too much left on the table. When I look at my exits, most if not all are on the downside of the bell...And some times, I have exited one day and bought in the next, usually for a win.
My biggest failures were in pot and Bitcoin stocks...never again I venture into this abyss.. 

My aim this year is to get stronger at exits and if the stop loss is there, #$%^& STOP and get out.
I get too floppy at the reasoning setting my stop losses and when I arrive there, I some times think  umm, another few days and it will improve..yeah, right......
Ged


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## Skate (20 January 2019)

barney said:


> LOL Skate ….. You type faster than I can read
> 
> This thread is full of some excellent advice and great ideas ……
> People however take time to digest things …
> ...




Barney, this thread is current only while it’s on the front pages of the Recent Posts.

Nobody reads yesterday’s news, all of my other posts have already been forgotten.

Skate.


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## Joe Blow (20 January 2019)

Skate said:


> Barney, this thread is current only while it’s on the front pages of the Recent Posts.




I've just made it a Sticky thread, so it's now permanently located at the top of the list of threads in the Beginner's Lounge forum.


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## tech/a (20 January 2019)

Good decision Joe


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## Skate (20 January 2019)

POR930 said:


> Thanks Skate for your advice in the other thread. Yeah, we are all beginners in this game. After 30 years, amazing how you can still fall into the traps. All these years, I have used my excel sheets.
> 
> As you say, easy to buy...much harder to exit. These last 12 months or so not so bad for me, as I have been very active in short term trading and if it aint working, move on. Achieved 225k, including dividends using 450k...but too much left on the table. When I look at my exits, most if not all are on the downside of the bell...And some times, I have exited one day and bought in the next, usually for a win.
> My biggest failures were in pot and Bitcoin stocks...never again I venture into this abyss..
> ...




POR930, we have all been there & done that - it's a pain just reading your post as I can feel the confusion & frustration.

“If I only took the profits here, and here, and here I could have done better”

*Mindset*
Having this type of mindset will make you a terrible trader !
I know, been there done that!

In those times ya just gotta 'hang tough'!

*Take Profit Stop*
Also I've done a lot of testing on a 'Take Profit Stop' but they perform similar to what you say, they kick you out only to enter on the next period, very frustrating - also these type of stops don't add any value to my strategy.

Using a the 'Take Profit Stop' just increases the amount of positions to buy increasing your commission costs. Whereas a 'Stale stop' is worth its weight in gold.

I have three buy triggers & two sell triggers in my Hybrid Strategy

*My Existing Two Exits are:*
Exit 1 - A Looping Trailing Stop (that works great)
Exit 2 - A Stale Stop - which is a combination of (a) a Rate of Change (ROC) Indicator and (b) a Chandelier Stop in combination (they both work together and they work great IMHO )

Skate.


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## Joules MM1 (20 January 2019)

Skate said:


> .
> 
> ....all of my other posts have already been forgotten.



you could input a counter on the first page now Joe has stickied it up...maybe Joe could edit with a counter for you?

either way may napkin math suggests you have more than you think




i have to say i would like to see you move from "this is the house you can build" phase thru to "this is where i like to place my furniture" ....kinda thing


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## Skate (20 January 2019)

Joe Blow said:


> I've just made it a Sticky thread, so it's now permanently located at the top of the list of threads in the Beginner's Lounge forum.




*Thank you Joe for making this 'Dump it here' thread a Sticky*
I also want to thank each & every member who has taken the time to read my post, by doing so you have made me feel very happy. To the members who have (& you know who you are) after reading my post have gone on to hit the 'Like' button - thank you.

Also to those members who have engaged in this thread - thank you from the bottom of my heart. I have read each & every post many times over. The members who have freely shared an experience or expressed an opinion here - thank you.

*Why post ?*
If my posts affect anyone's behaviour, I'm a winner - that's my end game..

Our community is worth promoting, we all share the same values & have a common interest.

Skate.


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## Joules MM1 (20 January 2019)

Joules MM1 said:


> you could input a counter on the first page now Joe has stickied it up...maybe Joe could edit with a counter for you?
> 
> either way may napkin math suggests you have more than you think
> 
> ...




 i also suggest, with respect, you begin to index these posts so you can refer back and go indepth, build a chronology, an index, a pathway if you like

build an initial master index for yourself with http's set for each subject that way you'll have a chain to work from, making a comprehensive pathway for a complete newbie


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## Skate (20 January 2019)

Joules MM1 said:


> you could input a counter on the first page now Joe has stickied it up...maybe Joe could edit with a counter for you?
> 
> either way may napkin math suggests you have more than you think
> 
> ...




Joules MM1, YES, I'll do post on this topic tomorrow.

Skate.


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## Skate (20 January 2019)

Joules MM1 said:


> i also suggest, with respect, you begin to index these posts so you can refer back and go indepth, build a chronology, an index, a pathway if you like
> 
> build an initial master index for yourself with http's set for each subject that way you'll have a chain to work from, making a comprehensive pathway for a complete newbie




Joules MM1, did I tell you I lose interest in projects very quickly ?

Its hard enough punching out words as I think of them , I shudder to think of how many grammatical errors I've made.

I'm thinking of just answering questions in future as it's hard to know what others are interested in. 

Long posts are boring to write as well for others to read (we all know this)

Skate.


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## Joules MM1 (20 January 2019)

Skate said:


> Joules MM1, did I tell you I lose interest in projects very quickly ?
> 
> Its hard enough punching out words as I think of them , I shudder to think of how many grammatical errors I've made.
> 
> ...




the one thing about the auction process most find out is you need to "find out" before you know the right questions to ask, it's like no other interaction anyone deals with

maybe they get boring ...for you

any moment there's a thirsty individual gotta drink from the cup and if the cups too big they'll get a forkhoist..they just have to drink


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## Skate (20 January 2019)

Joules MM1 said:


> the one thing about the auction process most find out is you need to "find out" before you know the right questions to ask, it's like no other interaction anyone deals with
> 
> *maybe they get boring ...for you*
> 
> any moment there's a thirsty individual gotta drink from the cup and if the cups too big they'll get a forkhoist..they just have to drink




Joules MM1, you say maybe _"they get boring ...for you" - _NO, that's not the case, I don't interact with anyone to get bored, what is boring is starting a thread so members have a place to share their knowledge, sometimes members forget that someones trash is another persons treasure. 

What you find trivial could be the catalysis to engage another to think on a deeper level. 

*Just maybe *
The low member posting in the 'Dump it here' are mostly likely from a lack of time, as I know its not a lack of knowledge. I've noticed more & more members find debating their position over trivial matters, more enjoyable to them. They play tennis all day, hitting their views back & forth & I never get to see a winner.

*Also*
No one likes to say ‘I don’t know’. It is a conversation killer. It makes one look stupid.
*
There is no right or wrong on this thread*
I do know something about human nature & it's this "everyone wants to be heard" without being belittled & treated with respect.

The nice thing about people is: "We are all different".

We are all at different stages in our trading journey. When I joined ASF, I didn't even know enough to ask the right question. My rapid short posts hopefully goes someway to address this issue.

Skate.


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## Joe Blow (20 January 2019)

Skate said:


> *Thank you Joe for making this 'Dump it here' thread a Sticky*




No problem. This thread will be a great reference for beginners - past, present and future.



Skate said:


> Also to those members who have engaged in this thread - thank you from the bottom of my heart. I have read each & every post many times over. The members who have freely shared an experience or expressed an opinion here - thank you.
> 
> *Why post ?*
> If my posts affect anyone's behaviour, I'm a winner - that's my end game..
> ...




If posting continues at its present rate, this month will see the most posts in a month since either November 2014 or August 2013. We've kicked off to a good start this year. It would be great to see it continue. ASF has a vibrancy and a life to it when there are lots of active discussions happening. It's an interesting and enjoyable place to be.

So, thank you for your part in that Skate. The "Dump it Now" thread has made a huge contribution to the activity here since it was started last month. It seems to have had a real impact on overall activity. Let's keep the ball rolling.


----------



## Joe Blow (20 January 2019)

And I recommend that people share this thread and other threads they find value in on social media, if you use it. If you take a look below the "Similar Threads" area in each thread you'll see some social media buttons. Click them if you're so inclined. I see at least one person has already recommended this thread to others.

You can also like individual posts. Simply click the post number in the top, right of the relevant post and a box will pop up with a direct link to the post and another row of social media share buttons.

Doing this exposes the content to many people who would not otherwise have come into contact with it and who may benefit from it. I recommend doing it to this thread and every other thread that you find valuable enough to recommend to others. It will bring other like-minded people here who may well decide to become a contributing member of our community.


----------



## Gringotts Bank (21 January 2019)

Skate said:


> Gringotts Bank, most traders & fund managers don't have a good handle on how the market works, you think they would should know but they don't.
> 
> This will turn into a long post that would be boring for others to read, so I'll keep it as succinctly as possible by giving basic examples that others many understand.
> 
> ...




So the big players aren't the manipulators.  Most big players don't know how the market works.  That doesn't add up.

Who are the manipulators?  Who are the winners?


----------



## Skate (21 January 2019)

Gringotts Bank said:


> So the big players aren't the manipulators.  That doesn't add up.
> 
> Who are the manipulators?




The market makers.

Skate.


----------



## Gringotts Bank (21 January 2019)

Skate said:


> The market makers.
> 
> Skate.




Who are they?


----------



## Skate (21 January 2019)

Gringotts Bank said:


> Who are they?




Its a long story to type out, maybe 'Google' it. 

Most traders don't understand how the markets work, Most of the industries best are oblivious to this fact as well.

Trading is is business to me & to you (hopefully) as well as every player in the market - some have more a lot more power than others.

Skate.


----------



## Skate (21 January 2019)

Gringotts Bank said:


> On the ASX, we're talking small groups with _*very *_deep pockets, yes?




No !

*We are talking about the 'Market Makers' *
Market Makers make the market you & everyone else trades in, they make the liquidity when there isn't any.

*Anyway to think about this.*
The share market is a business constructed by 'Market Makers' they make it possible for others to set a fair price for stocks, commodities, currency exchange etc..

*Not out of fresh air*
The 'Market' didn't spring up out of fresh air, something/someone/some business/some organisation, created the market, 'Those that make the markets are called "Market Makers"

*Very complex subject*
It's an interesting subject for most to understand & a few words from me won't let you fully comprehend a very complex organism.

I could write pages & pages on this stuff & most would still have trouble grasping & understanding the complexities.

*They create the industry*
Market Makers are there to create an industry & make money for the organisation, they don't do all this for free. Trading is a Zero Sum game & you must understand they need to be paid, they do it by manipulating the market & skim away, most don't understand or feel it happening.

Skate.


----------



## Gringotts Bank (21 January 2019)

Skate said:


> No !
> 
> *We are talking about the 'Market Makers' *
> Market Makers make the market you & everyone else trades in, they make the liquidity when there isn't any.
> ...




Banks and brokers then?  They push a price down in order to accumulate, then let the brakes off to capture some profit.  Are we talking about Wyckoff's "composite man"?


----------



## Skate (21 January 2019)

Gringotts Bank said:


> Banks and brokers then?  They push a price down in order to accumulate, then let the brakes off to capture some profit.  Are we talking about Wyckoff's "composite man"?




No !

The Banks are banks, they are also brokers, they are traders like you & me (only they have much more information than us, they trade against us) 

Each market has to be created, making sure it kicks off with liquidity a market just doesn't happen by itself - it first has to be made, its made by the 'Market Makers'

"Making a market" means a willingness to buy and sell the securities of a defined set of companies to broker-dealer firms that are member firms of that exchange. Each market maker displays buy and sell quotations for a guaranteed number of shares.

A "Market Maker" or "Liquidity Provider" quotes both a buy and a sell price in a financial instrument or commodity held in inventory, hoping to make a profit on the bid-offer spread, or turn.

I hope this helps.

Skate.


----------



## Gringotts Bank (21 January 2019)

Skate said:


> No !
> 
> The Banks are banks, they are also brokers, they are traders like you & me (only they have much more information than us, they trade against us)
> 
> ...




What I mean is, a division of a bank or brokerage firm.  Like IG for example.


----------



## tech/a (21 January 2019)

Skate said:


> No !
> 
> *We are talking about the 'Market Makers' *
> Market Makers make the market you & everyone else trades in, they make the liquidity when there isn't any.
> ...




The share market has its own book makers.

You didn't happen to know Joe Liddy did you Skate?


----------



## Skate (21 January 2019)

tech/a said:


> The share market has its own book makers.
> 
> You didn't happen to know Joe Liddy did you Skate?



Sorry no.

I'm going to have lunch, I've just worked out how to answer to @Gringotts Bank question in three line that most will understand.

Skate.


----------



## Joules MM1 (21 January 2019)

it should be made clear there is a vast difference between providing and being paid to bring liquidity to the auction (both sell side liquidity and buy side liquidity) and an open driving trend

these are vastly difference aspects and constructs and newbies should learn them....eventually....but market makers cannot control trend, trends otustretch

that does not imply that liquidity providers cannot press weak late commers into self-spyched into buying what those players are trying to off-load, sure, that's true, but it requires a small frame work to work in which is not the same as trend, although, having said that, we're now treading into the conversation of what defines a trends.....and my first yawn just hit me (before yours hit you!)  

...so here's one i like to bang the table bout - know relative size of a move and context of the move that way you may get a sense of the intent of the players involved with price at the place and time you want to do business......


----------



## tech/a (21 January 2019)

Joules MM1 said:


> know relative size of a move and context of the move




Worth pulling out.



Joules MM1 said:


> at the place and time you want to do business




Start and finish.


----------



## Gringotts Bank (21 January 2019)

A 40 minute lunch.  Might have made a good stockbroker back in the 80s.


----------



## Skate (21 January 2019)

Gringotts Bank said:


> What I mean is, a division of a bank or brokerage firm.  Like IG for example.




*This is the premise of all businesses*

1. Manufacturer
2. Wholesaler 
3. Retailer
4. Customer

If the wholesaler get stuck with stock from the manufacturer that won't move, the manufacturer give a guarantee (a condition of sale) that they will buy back stock that won't sell.

The manufacturer will take back the stock (but there is a restocking fee) attached, so the manufacturer still makes money on the deal & keep the wholesaler happy (the guarantee from the manufacturer minimizes the Wholesalers risk )

The stock sitting in the manufacturer's warehouse is not making any money for him so he creates interest again in his product once he has a good amount of stock to sell back again & once the interest picks up he sells back his stock to the wholesaler who sells it to the retailer, who on sells it to the customer. (its a rotational system)

*NOW*

1. Manufacturer (Market Maker)
2. Wholesaler (Brokers)
3. Retailer (Banks acting as a broker, also there are full service brokers)
4. Customer (trader)

When the market stalls, meaning 'no liquidity' in the market, the Market Maker makes the liquidity by buying on the other side of the trade buying at wholesale prices, remembering traders brought at retail prices (high price) & sell back at wholesale price, (low price) that why traders lose money. 

The Market Maker buys back the stock cheaply going about filling his cupboard. The Market Maker is still selling FEAR by causing the fear they manipulation the stock lower price because he is in accumulation phase. 

The the Market Maker will create activity by selling GREED manipulation the price higher, creating interest so he can dump back his shares into the market at Retail Prices.(its a rotational system)

The stock is repackaged & resold. 

Market Makers - buy lower sell higher
Traders - Buy higher sell lower 

Skate


----------



## Gringotts Bank (21 January 2019)

Skate said:


> *This is the premise of all businesses*
> 
> 1. Manufacturer
> 2. Wholesaler
> ...



Thanks for taking the time to explain that.  So the MMs have a direct line to the media, yes?  Or it's all done through selling pressure?


----------



## Skate (21 January 2019)

Gringotts Bank said:


> So the MMs have a direct line to the media, yes?  Or it's all done through selling pressure?




The Market Maker manipulate everyone (the media is their football, the media screams for news every day - the Market Makers supply the news to them that set the perception)

Formula (supplied in a previous post) its called "conditioning" 
Perception = Reaction

Meaning, you set up the perception to get the reaction you want (this is how I made most of my wealth)

*They infiltrate*
They infiltrate forums, they infiltrate financial news sites, they infiltrate the Banks, they infiltrate everything for their own benefit.

*Think about this*
Where do you think all the trading news stories come from ?
It comes from a source - who do you think is the source ?
Journalists do make stuff up but that involves effort, they would rather copy & paste a story that's been written for them. They don't even care if the story is factual. (inaccurate stories are worth gold to the media as it creates three more stories & the media business model is stories that earns them money, stories are what they are after & crave) 

Skate.


----------



## Skate (21 January 2019)

I'll be giving away 10 Free eBooks

Members who have 'liked' any of my posts a 'copy' has been earmarked for you.

Skate


----------



## peter2 (21 January 2019)

I'm so glad you included the media in your discussions. Everybody likes to know why a price moves, even if the reasons are complete fabrications (fake news).


----------



## Skate (21 January 2019)

Joules MM1 said:


> i also suggest, with respect, you begin to index these posts so you can refer back and go indepth, build a chronology, an index, a pathway if you like
> 
> build an initial master index for yourself with http's set for each subject that way you'll have a chain to work from, making a comprehensive pathway for a complete newbie




@Joules MM1, I've created an eBook & posted a link if you are interested in a copy. It was much easier to reformat the posts & place them in a book form.

Thanks for the idea.

Skate.


----------



## barney (21 January 2019)

Joules MM1 said:


> ..... *and my first yawn just hit me (before yours hit you!)*




Lol ….. You are a funny man Joules


----------



## Gringotts Bank (21 January 2019)

Skate, can you show us a few more of your chart trades please?


----------



## Skate (21 January 2019)

Gringotts Bank said:


> Skate, can you show us a few more of your chart trades please?




I walk the boardwalk every afternoon for an hour around this time (what charts are you after ?)

Have you a security in mind ?

Skate.


----------



## Gringotts Bank (21 January 2019)

Skate said:


> I walk the boardwalk every afternoon for an hour around this time (what charts are you after ?)
> 
> Have you a security in mind ?
> 
> Skate.



Just anything that you'd consider a good example of your approach.  Thanks.


----------



## Skate (21 January 2019)

Gringotts Bank said:


> Just anything that you'd consider a good example of your approach.  Thanks.




This was a nice winner - I'll post up a bad loser next

Skate.


----------



## Skate (21 January 2019)

OUCH !!

How to lose half of your stake quick smart - 47.17 % loser

Skate.


----------



## qldfrog (22 January 2019)

No trailing stop to avoid outchh?¿


----------



## Darc Knight (22 January 2019)

Any idea of how many investors that are in the stock market who really shouldn't be Skate?


----------



## Skate (22 January 2019)

qldfrog said:


> No trailing stop to avoid outchh?¿




@qldfrog, I do use protection, I do have stops, two of them actually but sometimes there is nothing we can do to prevent being caught on the wrong side of the ledger.

*My Existing Two Exits are:*
*Exit 1* - A Looping Trailing Stop (that works great but as you can see my trailing stop was well with limits - the trailing stop is the straight red line in the Chart)
*Exit 2* - A Stale Stop - which is a combination of (a) a Rate of Change (ROC) Indicator and (b) a Chandelier Stop in combination - they both work together and they work great IMHO & its this Stale Stop that decided (not me) when it was time to sell. 

*My searchlight*
I have a searchlight that turns on (its the yellow shadow, the vertical beam) to show me the 'bar' the signal was generated on. Have a look at the Rate of Change (ROC) ribbon, notice that the amount of yellow. Yellow means prepare to STOP, just like traffic lights. I got the prepare to stop & the searchlight is the 'STOP' signal, I could have made the the searchlight beam 'Red' but cosmetically it didn't look as nice.

***** happens*
No one knowingly puts themselves in harms way but no matter how smart we are, or how hard we work, we will regularly be hit by news, circumstances, and developments that are unforeseen and the stock market gods will periodically use us for their entertainment, and there is nothing we can do to prevent it, so we have to be ready and mentally prepared to realise drawdowns and losses are part of the trading process, so take it on the chin & be the ‘best loser’ you can possible be.

*I use a variety of tools for my protection* - some are listed below:
1. An Index Filter
2. A Turnover Filter
3. A Volume Filter
4. A ROC Strength Filter (ROC = Rate Of Change)
5. A Price Filter
6. A Trend Filter
7. A variable trailing stop
8. A momentum ROC stale stop Filter

The list goes on..

Skate.


----------



## Skate (22 January 2019)

Darc Knight said:


> Any idea of how many investors that are in the stock market who really shouldn't be Skate?




No idea, I guess it takes all sorts.

*If I could rephrase your question if I may.*
_"Any idea of how many investors that are in the stock market who you would be comfortable with trading your funds Skate?"_

Not many I have a trust issue, no one has my interest at heart when it comes to investing my money. In saying this I do use LIC's (a long term set & forget  strategy) 

*RESULTS*
LIC's don't have good returns because of the way they are structured but it's a safe (as can be) passive way of investing, they are dividend investors for a better word. They are long term holders of the big low volatility companies (they play it safe) - low volatility, low returns.

Skate.


----------



## willy1111 (22 January 2019)

I am reading back through the thread, page by page.  It has been difficult to keep up with the speed the thread developed in real time . . . I am finding it very good to read back through at my own pace.

Whilst a lot of the philosophies, psychology and trading related information is not new to me, I have gained a great respect and admiration for @Skate way with words/use of language, his communication skills/style.  Thank you Skate for sharing yourself here


----------



## Skate (22 January 2019)

willy1111 said:


> I am reading back through the thread, page by page.  It has been difficult to keep up with the speed the thread developed in real time . . . I am finding it very good to read back through at my own pace.
> 
> Whilst a lot of the philosophies, psychology and trading related information is not new to me, I have gained a great respect and admiration for @Skate way with words/use of language, his communication skills/style.  Thank you Skate for sharing yourself here




willy1111, thank you for your kind words. 

You go onto say _"the philosophies, psychology and trading related information is not new to me" _well, they're not new to me either but to a beginner they might just be. I've read so many books on trading I've lost count, Blogs, podcasts & YouTube videos rehash & repeat the same old same old, it excruciating.

You go onto say _"I have gained a great respect and admiration for his way with words/use of language, his communication skills/style" _now you have me thinking, I wonder if other members prefer a different style of posts. Instead of trotting out the same old same old should I have my "say" about some of the things I think about, maybe just post on my perception when it comes to trading & maybe only post once a day (so others can keep up) as I'll do anything to keep the reader interested in learning.

*I have a dream* (well not actually - I have an idea)
Here an idea, how about I quickly write a post in two different style & ask members which they would prefer.

*Feedback*
Also I'll ask for feedback to the style, frequency & content of my posts. (you have given me a project)

*Lets see how quick I can turn out a post.*
I was a Sales Trainer who trained sales trainers (in a previous life) & now that I'm a trader let see if I can put an article together & reference both.

Skate.


----------



## tech/a (22 January 2019)

Skate said:


> OUCH !!
> 
> How to lose half of your stake quick smart - 47.17 % loser
> 
> ...




A couple of comments.
With my self answering my own questions I think.

(1) Is that correct --your initial stop is around 12c So for every $1000 risked you have 5260 shares?
Makes sense for a weekly method.

(2) The price action (which is a single bar analysis I have yet to post in my T/A thread ) reacted
exactly as would be expected the majority of the time.
IE after a very high volume wide range day finishing off its highs--we see an inside day.
Trades are not taken on these days but are monitored (In a discretionary world ).
My surprise is a buy on open ---which is not a surprise if trading systematically.


----------



## Skate (22 January 2019)

tech/a said:


> A couple of comments.
> With my self answering my own questions I think.
> 
> (1) Is that correct --your initial stop is around 12c So for every $1000 risked you have 5260 shares?
> ...




tech/a, I trade the pre-auction & trading a weekly strategy "I have to, I need to" jump on every move because I don't know if the move will follow through, I just don't want to miss the boat. 

You win some you lose some.(that's the games) 

Skate.


----------



## willy1111 (22 January 2019)

Skate said:


> @willy1111 forget the words @Ann used but concentrate on context.
> 
> @willy1111 you said _"Her response didn't indicate that to me" _well that's nice (reference to Mrs Browns Boys)
> 
> ...




I refrained from replying to this post as at the time I didn't want to get drawn into 'a game of manipulation' - you are quite a skilled wordsmith @Skate - much more so than I 

Many things can be interpreted in different ways depending on ones own life experiences and this means that the message sent may not always be received in the way it is intended.

When the phrase a "woman didn't know their place" is used - I would say that most (not all) would use that in the context that a woman is a homemaker, belongs in the kitchen, looks after the children, stays quiet, doesn't express her views or challenge a mans views.  I am not saying this is my view, or your view and today is seen as quite a derogatory view/comment towards a woman.  In my view when this phrase is used, generally that is the message intended.

However if the phrase is extended or context is put behind the phrase then the message sent may have a different meaning.

When that phrase was posted in isolation without context - it appeared to be deliberately trying to expose the above bias most people have when they hear the phrase expecting the message receiver to respond with an attack on such an outdated condescending view.   Once that response is obtained, then context is added behind the original statement to change the meaning from a negative to a positive.  The message can change from a negative to a positive if the following is added to the phrase. . . why should women strive to be equal to men, they deserve better.  I'm lifting all women up, men holding outdated views reflect poorly on us as a society.

The message receiver now feels bad they got angry/attacked you when they misinterpreted the message sent.  They made an assumption the message was negative based on their own bias, but after context was added the message changed to a positive and now they apologise.

It appeared to me to be a classic and deliberate example of . . .



Skate said:


> [B]Exercise #1[/B]
> I purposely offend & upset some, I'll bring them to a rage (I'll milk that rage for all its worth)
> Then I set out to condition them & have them apologise for misunderstanding me.
> After a fair bit of their grovelling - I gracefully accept there apology while letter them know how hurt I was.
> ...




I don't believe there was any malice behind the above series of posts, just highlighting the fact that things are not always what they seem.  The message sent is not always received in the way it is intended.  Many messages can be interpreted in a variety of different ways


----------



## Ann (22 January 2019)

willy1111 said:


> I refrained from replying to this post as at the time I didn't want to get drawn into 'a game of manipulation' - you are quite a skilled wordsmith @Skate - much more so than I
> 
> Many things can be interpreted in different ways depending on ones own life experiences and this means that the message sent may not always be received in the way it is intended.
> 
> ...




Willy1111,  Skate just chucked it out there to see everyones' reaction. He was playing a game with us...he had already said that was what he was doing. I thought it was an hilarious opportunity for a bit of fun, a reaction I am not sure Skate was all that pleased with but it was simply an exercise. It was lovely to see some of the fellas rushing to my defence, very sweet and something I hope never dies out.  However the thing fizzled into a non-event so it just hit the floor and died.


----------



## Skate (22 January 2019)

*I have a question*

I've had a few comments about my style, content & frequency of my posts so I'm going to try something different.

1. I enjoy using subheading as I prefer it over a flowing text style (I was going to do the same article twice to give you a comparison but after reading the letter style I was bored & exhausted failing to get to the end) so I've spare forum members this exhaustion & I'll continue to post with headers trying to encourage you to read one more paragraph before giving up.
2. I like to keep my posts short & snappy but my mind works quicker than I can type & some have stated "you write quicker than I can read"
3. We tend to favor posts that are enjoyable to read, no one likes educational posts as they aren't fun to read at all unless they are engaging - sometimes my posts just rehash stuff you already know.
4. Members don't read old news no matter how many words of encouragement comes my way. A forum member made a suggestion that I turn my posts into a eBook for beginners, something for members to read at their leisure or for seasoned traders something to read using it as a pep talk to keep their enthusiasm going, 
5. My eBook "Trading Fundamentals - Skate's Beginners Version" is there to help. (put it on you iPad, iPhone or any ePub reader & take it with you, you'll never never know when you want something "GOOD" to read)

I've written a post today to demonstrate why no one takes the time to read lengthy post & it's because of the content its because of a few different factors being:

1. We don't have the time
2. We are lazy 
3. Your stuff is of no value
4. It's more enjoyable wasting my time reading others debating something trivial  
4. Apathy - you just don't care.

I'll post my article in a few moments hopefully after you read this post.

*FEEDBACK*
I would appreciate feedback hitting the 'like' button will do or post your comments about my style, frequency or content (I'm all ears)

Skate.


----------



## Joe Blow (22 January 2019)

Skate said:


> I would appreciate feedback hitting the 'like' button will do or post your comments about my style, *frequency* or content (I'm all ears)




My policy is, as long as posts contain useful, educational, interesting or thought provoking content then there is never such a thing as too many posts. Quality content is what ASF is (or should be) all about and this thread is chock-a-block with it. So please continue...


----------



## Ann (22 January 2019)

Skate said:


> I've written a post today to demonstrate why no one takes the time to read lengthy post & it's because of the content its because of a few different factors being:
> 
> 1. We don't have the time
> 2. We are lazy
> ...




6. We are Dyslexic


----------



## willy1111 (22 January 2019)

Skate said:


> willy1111, thank you for your kind words.
> 
> You go onto say _"the philosophies, psychology and trading related information is not new to me" _well, they're not new to me either but to a beginner they might just be. I've read so many books on trading I've lost count, Blogs, podcasts & YouTube videos rehash & repeat the same old same old, it excruciating.




The repetition helps with the learning.  When it is heard from a number of different sources it seems to carry more weight.  When I read some of your posts it plays into my confirmation bias as it confirms you are thinking in a very similar way to myself - which has been adopted from my learning from other sources such as books, websites, forums, podcasts, videos, experience etc.  It is almost as if we belong to the same tribe 




I've enjoyed the style you use - it is effective. 

I also have an interest in the psychology, philosophy, the why, human behaviour, salesmanship, etc that is sprinkled through out your thread.


----------



## willy1111 (22 January 2019)

Skate said:


> @Ann as you have raised the word time, I would like to take the opportunity to discuss another exercise I use.
> 
> *Exercise #2*
> I won't explain the exercise in detail but it's directly related to time.
> ...




Please tell me more


----------



## tech/a (22 January 2019)

Skate said:


> tech/a, I trade the pre-auction & trading a weekly strategy "I have to, I need to" jump on every move because I don't know if the move will follow through, I just don't want to miss the boat.
> 
> You win some you lose some.(that's the games)
> 
> Skate.




Buy or sell triggers.
Have you ever added them to your trading methodology?

If I'm driving to Sydney when I hop in the car I want to be sure it has
forward gears and a motor in it!


----------



## Skate (22 January 2019)

Ann said:


> Willy1111,  Skate just chucked it out there to see everyones' reaction. He was playing a game with us...he had already said that was what he was doing. I thought it was an hilarious opportunity for a bit of fun, a reaction I am not sure Skate was all that pleased with but it was simply an exercise. It was lovely to see some of the fellas rushing to my defence, very sweet and something I hope never dies out.  However the thing fizzled into a non-event so it just hit the floor and died.




Ann, you said _"I thought it was an hilarious opportunity for a bit of fun, a reaction I am not sure Skate was all that pleased with but it was simply an exercise"
_
I used you to demonstrate an insignificant point, it could have been anyone but you were the easiest to manipulate at the time. I didn't do it to cause friction but to demonstrate why we shouldn't jump at shadows, why we shouldn't "REACT" but "RESPOND" as "RESPONDING" gives you time to think - you perfectly demonstrated how someone uses their "Lizard" brain.

I could trot lots of quotes & relate them to the way you reacted (but I won't)

Our conversation has now ended - I'm not in the mood to play tennis with you.

*I'm NOW addressing* @willy1111 *from this point on.*

Willy1111, what an orator, after reading your post you have displayed that you are a gifted orator who raised excellent points, making everyone understand better what I was trying to demonstrate where others had no understanding. (I'm about to post an article about how STUPID salespeople really are it will be interesting to read, I relate sales skills or perceived sales ability with trading, I hope the poster reads it)

Ann, didn't understand what I was demonstrating, she didn't get it - my lesson was to demonstrate how to manipulative people, (Ann, often makes quotes (that I don't believe) & (I don't reality think she believes either) its all to do with "little person syndrome" by using "little person syndrome" I mean no disrespect & none is intended but using that saying add meaning to my statement.

There was a remark made that she couldn't be manipulated, as she is stronger than that & it wouldn't work on her. 

I made one statement & BINGO !! (reaction with attitude) for someone who has no feeling & doesn't get upset (she says she don't get upset) well with ever post to me she is upset, one whinge any another.

*She* (I've use the word 'she' not disrespectfully - I have used the word 'she' so I don't offend her again by using her real name) 

*Let me start again*
She perceived my statement one way when my statement meant something entirely different. 

*Perception*
Our belief system comes from others & in her case it came from a "poor role model" in her father, the story she posted broke my heart so I now have a better understanding of her attitude when it comes to others & her perception of the markets. 

*It's a pity*
We tend to see the world through our eyes rather than as the world really is.

Skate.


----------



## Gringotts Bank (22 January 2019)

Skate said:


> *Feedback*
> Also I'll ask for feedback to the style, frequency & content of my posts. (you have given me a project)



Your mind is extremely active.  
1 - How do you ever get to sleep?
2 - WHat happens if you try to meditate?


----------



## Skate (22 January 2019)

willy1111 said:


> Please tell me more




Most people have no understanding about so many things we are conformists & act like everyone else.

Ann, stated that she worked in a Movie theater & the segue was _ "Do you know why movies run between 1.40 minutes to 2hrs 10 minutes on average?" _making light conversation. 

The response was typical, she never wanted to know the answer, most people don't, some don't want say "I don't know" because it makes them sound like an idiot.

*Clouds*
I find some people are like clouds. When they go away, it's a brighter day.

*The answer*
Bladder control

Skate.


----------



## willy1111 (22 January 2019)

Skate said:


> Ann, you said _"I thought it was an hilarious opportunity for a bit of fun, a reaction I am not sure Skate was all that pleased with but it was simply an exercise"
> _
> I used you to demonstrate an insignificant point, it could have been anyone but you were the easiest to manipulate at the time. I didn't do it to cause friction but to demonstrate why we shouldn't jump at shadows, why we shouldn't "REACT" but "RESPOND" as "RESPONDING" gives you time to think - you perfectly demonstrated how someone uses their "Lizard" brain.
> 
> ...




I think it is important that we all be aware of this cognitive bias both in ourselves and in others.


----------



## BlindSquirrel (22 January 2019)

XKCD understands Technical Analysis!


----------



## Skate (22 January 2019)

Gringotts Bank said:


> Your mind is extremely active.
> 1 - How do you ever get to sleep?
> 2 - WHat happens if you try to meditate?




I do meditate but only to project movies on the back of my eye lids (I though everyone done it but I now know better) I don't tell people what I do as it makes me sound crazy by confirming it.

Frustration is the word I would use having an active mind, I can't understand why more people aren't like me.

Skate.


----------



## Skate (22 January 2019)

I'm off to mow the lawns. 

I'll post my article for the day (don't forget the feedback)

Skate.


----------



## Gringotts Bank (22 January 2019)

Skate said:


> only to project movies on the back of my eye lids




That sounds like day dreaming rather than meditation.  What happens if you just feel the breath, in-out-in-out...?


----------



## willy1111 (22 January 2019)

Skate said:


> Most people have no understanding about so many things we are conformists & act like everyone else.
> 
> *The answer*
> Bladder control
> ...




That's interesting, I thought it might have had something to do with attention span.


----------



## greggles (22 January 2019)

Here's something I've learned about myself as I have gotten older. The greatest (and possibly only) genuine limitation on ourselves and our potential (to be distinguished from artificial limitations we sometimes place on ourselves) is our own inherited temperament and personality. Some people are just not built to be masters of the universe: high powered lawyers, CEOs or politicians etc. We don't have the temperament for it. You cannot fit a proverbial square peg into a round hole. But that doesn't mean we cannot achieve great things within the niches we carve for ourselves that suit our own temperaments and personalities. Even if that just means being a great parent or partner. Sometimes our greatest achievement (or failure) will be the lasting impact we have on those around us.


----------



## Skate (22 January 2019)

Skate.


Skate said:


> willy1111, thank you for your kind words.
> 
> You go onto say _"the philosophies, psychology and trading related information is not new to me" _well, they're not new to me either but to a beginner they might just be. I've read so many books on trading I've lost count, Blogs, podcasts & YouTube videos rehash & repeat the same old same old, it excruciating.
> 
> ...




AS promised @willy1111 the article is for you (I hope its not dribble)

Trading, requires planning, preparation, knowledge and experience.

*Planning *
The development path has to be a more realistic, helping to reduce the risk of a trader developing unrealistic expectations.

*Incompetence*
I’ve posted an eBook for beginners, as by the very nature of just starting out they are incompetent in trading terms, they represent a trader who wants to trade successfully, but does not have a proven trading system. People at this stage do not know the difference between fundamental analysis and technical analysis or intraday and position trading.

*Trading software*
At this stage they believe that if a trading software package contains 200 indicators it must make them at least twice as profitable as a trading software package containing only 100 indicators.

*Dummies*
Beginners who will not accept how little they know are a real danger to themselves because they are not capable of taking responsibility for their own actions.

*Competent *(& you know it clap your hands)
Trader who strictly trade according to the rules of their system, and when their success mirrors the profitability of their proven system, they are competent. Most successful traders follow mechanical systems, and are conscious of their competency.

*Competent* (without knowing it)
Highly trained and highly skilled traders (the AF members know who they are) trade differently to most. In trading terms they no longer need to follow, consciously, a mechanical trading system, (but some do in conjunction with) but patiently wait for a setup, and then automatically take the trade. That means “No setup, No trade”

*Successful traders*
Some of the most successful traders are unconscious competent. They appear to trade using their so-called 'intuition', but are in fact, applying their vast knowledge and skill to recognise low risk, high profit potential, trades.

*It's a Numbers Game* (pure mathematics)
Just as you a customer at Harvey Normans give 'knock backs' to pushy salespeople, by saying “no I’m just looking” the salesperson will always say “if you need any help I’ll just be over there” (Where ?  it’s usually in the naughty corner whereas it should be called the STUPID corner)

*Depressed and rejected*
The salesperson is now feeling depressed and rejected. We all get depressed & rejected as traders as well because we tend to put together a string of losses feeling much the same way as the poor old salesman.

*Knock backs*
By looking at selling as well as trading you can appreciate it’s a numbers games, the good salespeople (the sales professionals) and the good traders know that a certain percentage of knock backs and losses, respectively, is just reality. They know that a key to success is not to take the knock back or loss personally, but instead to look at it as the price of doing business. Accept it, and move on to the next sale or trade.

*How is it done*
Professional traders (I mean the good traders) do all they can to avoid unnecessary emotional pressure.

*Failure to Use a Proven System*
The reasons why most traders fail to profit from their trading do so because they do not have a proven trading system or a good idea when just starting out as a beginner.

*System design*
System design requires specialist knowledge, and a beginner would rarely have such knowledge. Traders can never gain confidence in trading something that they do not understand.

*Failure to Follow the Rules*
This is the most common reason why system traders who fail, fail. Following rules seems easy, and it is indeed easy to do when one is paper trading.

*Real trading*
Real trading adds the ingredients of greed and fear. When you’re dealing with your own money, it gets very complicated, very quickly!

It these emotions that can over-ride a trader's determination to follow a system exactly. Most novice system traders who fail to follow their proven system have returns from their trading which are considerably worse than the system should have generated.

*If You Fail to Plan, You Plan to Fail *(these saying are nauseating & I’m personally over it)
Many traders have real trouble working out the time frame in which they wish to trade. On the one hand, they want to trade the longer-term moves, yet at the same time they use very tight stops. The two are incompatible, and will leave them with small losses as they watch the big, profitable moves take off without them. It is my belief that markets, from time to time, make large moves, and that the big money is to be made trading the big moves.

*Traders have a reason for trading*
Every trader has a reason for trading, consider you’re trading aims, you should take into account factors such as:  

1. Your age - the extent to which you can tolerate risk
2. How much money you have available for trading
3. Any income you have available from other sources
4. Your cash needs; and the taxation implications of your trading.

*Investment*
Traditional investment are a vehicle to generate returns (money) & at the moment the stock market & the property markets are doing okay but are both subjected to fluctuations (current sediments of the players) & what the media is spruiking bears no resemblance to normality.

*Signals*
The stock market at the moment are giving appropriate signals of improvement & according to my trading system, I have a strong preference to trade stocks over adding to my property investments. I understand that, as an alternative, I can place additional investment dollars with a Licenced Investment Company (LIC’s) but it’s an aim of mine to outperform these funds by a reasonable margin. I also understand that some funds fail to outperform the Australian All Ordinaries Index, so I also aim to outperform the Index. I don’t see outperform difficult to do, because I have a number of advantages over these funds:


1. My overheads are low
2. I can enter and exit the market more swiftly
3. I can spread my risk over a smaller number of stronger stocks, due to my trading capital being smaller than that of a large fund
4. I do not have to be in the market at all, when the profitmaking opportunities are not there.

Given the above reasons for trading the stock market, given my stock market trading philosophy, I look for trades that allow me to trade with a minimum of risk. I also look for trades that have the potential to generate excellent profits.

*Trading Strategies*
Your trading strategies are your specific rules for trading, which must flow logically from your trading philosophy and aims.

*Records*
Please make it a habit to maintained your records.  This may seem a very mundane topic, yet good record keeping is essential!

*Keep a track of how you are going*
Keep current, comprehensive records of each trade you make. By keeping such records, you will then be in an excellent position to ensure that there are no errors in any paper work you receive from your broker & you have accurate information for taxation purposes but most importantly, your overall position can be monitored at any time.

*Monitoring Your Profitability*
I monitor my profitability every day, after all it’s a money making exercise. You may consider plotting on a simple line chart each day or weekly, monthly, depending on how frequently you trade, your trading equity (the profit/loss of your open trades, plus the money in your trading account). This will allow you to monitor your progress in a graphic manner so you can quickly isolate problem areas in your trading.

*Internet*
The Internet is a cheap and effective source of information, including articles on an almost infinite range of topics & your education is never ending, it’s an ongoing process so you should be serious about it as – *YOUR MONEY IS ON THE LINE*

Skate.


----------



## tech/a (22 January 2019)

BlindSquirrel said:


> XKCD understands Technical Analysis!





I don't understand this either.
But it has an important use for someone.


----------



## Skate (22 January 2019)

Gringotts Bank said:


> That sounds like day dreaming rather than meditation.  What happens if you just feel the breath, in-out-in-out...?




No its mindfulness 

It's a method worth learning.

Skate.


----------



## willy1111 (22 January 2019)

Skate said:


> *A Chinese proverb*
> “A journey of a thousand miles must begin with a single step”
> 
> *The true meaning*
> ...




Interesting interpretation, an alternative interpretation that what seems like a big almost unfathomable goal can appear much more achievable if broken down into simpler smaller processes. A bit like the way you post  

A 1000 mile walk is a long long walk that could take a very very long time, but if one was to think all I need to do is take one step, I can do that, and just take another step, I can do that, and keep going until you reach 1000 miles.

To me it is acknowledging that the little things, the 1 percenters, that when put together can achieve something very big and worthwhile.

It is a bit like saying, How do you eat an elephant? - one bite at a time.

A waterfall can start with one drop of water, look what that can turn into.


----------



## Skate (22 January 2019)

willy1111 said:


> Interesting interpretation, an alternative interpretation that what seems like a big almost unfathomable goal can appear much more achievable if broken down into simpler smaller processes. A bit like the way you post
> 
> A 1000 mile walk is a long long walk that could take a very very long time, but if one was to think all I need to do is take one step, I can do that, and just take another step, I can do that, and keep going until you reach 1000 miles.
> 
> ...




willy1111, when I was a trainer one of the programs was all about "holes in a bucket" goes for 4 hours. (people don't understand until you relate it to simplicity)

Also "Silver Shoes" is a real tear jerker it moistens everyone's eyes. (5hrs course & they hang on every word)

Skate.


----------



## willy1111 (22 January 2019)

greggles said:


> Here's something I've learned about myself as I have gotten older. The greatest (and possibly only) genuine limitation on ourselves and our potential (to be distinguished from artificial limitations we sometimes place on ourselves) is our own inherited temperament and personality. Some people are just not built to be masters of the universe: high powered lawyers, CEOs or politicians etc. We don't have the temperament for it. You cannot fit a proverbial square peg into a round hole. But that doesn't mean we cannot achieve great things within the niches we carve for ourselves that suit our own temperaments and personalities. Even if that just means being a great parent or partner. Sometimes our greatest achievement (or failure) will be the lasting impact we have on those around us.




Mans search for meaning - Viktor Fankl.

Things only mean as much as the meaning we choose to attach to them.  We all have this power, it may be liberating when one realises such.


----------



## willy1111 (22 January 2019)

Skate said:


> willy1111, when I was a trainer one of the programs was all about "holes in a bucket" goes for 4 hours. (people don't understand until you relate it to simplicity)
> 
> Also "Silver Shoes" is a real tear jerker it moistens everyone's eyes. (5hrs course & they hang on every word)
> 
> Skate.




Tell me more, please


----------



## willy1111 (22 January 2019)

Skate said:


> Skate.
> 
> 
> AS promised @willy1111 the article is for you (I hope its not dribble)
> ...




My feedback, preference would be to break up into multiple posts as you previously have been doing


----------



## willy1111 (22 January 2019)

Skate said:


> *Traders have a reason for trading*
> Every trader has a reason for trading, consider you’re trading aims, you should take into account factors such as:
> 
> 1. Your age - the extent to which you can tolerate risk
> ...




I trade a mechanical trading strategy as I can analyse back test results back to 1992 with Amibroker and see how the strategy would have performed at any point in time, over any period within that data set.

I can compare those results and time and effort involved to run the strategy to other investment alternatives like leveraged and unleveraged residential real estate, LIC's, Index Funds, Listed and Unlisted Property Trusts, Commercial property, day trading, forex trading, investing with other managers, etc.  I can compare the advantages/disadvantages as I perceive them.

Knowing what I know now, I would be very very very happy if 27 years ago I put 100% of my money into my trading strategy adding all surplus income over the years.  However, I am acutely aware that past performance does not guarantee future results - nobody knows what the future holds - the next 27 years could look entirely different.  As such 100% of my money is not in my trading strategy, I have other investments and other income streams.


----------



## willy1111 (22 January 2019)

Skate said:


> *If You Fail to Plan, You Plan to Fail *(these saying are nauseating & I’m personally over it)
> Many traders have real trouble working out the time frame in which they wish to trade.
> 
> Skate.




My suggestion for newbies would be to think about how you would like your trading life to look.

Do you want to sit in front of a screen:
 - 8 hrs a day
 - 1 hr a day
 - 10 minutes a day
 - 10 minutes a week
 - 10 minutes a month
 - 10 minutes a quarter
or some other time frame

Start with that and try to design a system around it.  

Is one trading because they like the process or is it simply a means to generate money so you can do whatever it is you want to do.


----------



## Trendnomics (22 January 2019)

willy1111 said:


> Knowing what I know now, I would be very very very happy if 27 years ago I put 100% of my money into my trading strategy adding all surplus income over the years.  However, I am acutely aware that past performance does not guarantee future results - nobody knows what the future holds - the next 27 years could look entirely different.  As such 100% of my money is not in my trading strategy, I have other investments and other income streams.




In contrast I have put my *entire* net worth (Super + All Savings | I own no other assets) into my trend following system and have traded it religiously (*no tinkering*) for 5.5 years. Consequently, this has resulted in a doubling of my *entire* net worth and has pushed my retirement age down to 40 (FIRE).

It is mind boggling how much money you can extract from the market as a retail trader, with the right amount of discipline, fortitude and conviction.


----------



## tech/a (22 January 2019)

Trend

How old are you now?
How long do you think you may live?
How much do you think you will need?
Will you stop trading?
Why are you still trading?


----------



## Skate (22 January 2019)

Finished doing the lawns & surprise 11 messages.

Before I read any of them I'll have a shower & lunch.

Whilst I was doing lawn care (mowing, edging that sort of stuff) I was musing how nice it was to have good tools to do a job giving with excellent results & how could I tie it into trading.

I'm going to post some pictures of my tools & the end result of the mow (I have taken a picture of the clock in the garage so you know the group of pictures are from today)

*The Takeaway*
You need the right tools whether you are doing the yards or Trading.

Skate.


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## willy1111 (22 January 2019)

Trendnomics said:


> In contrast I have put my *entire* net worth (Super + All Savings | I own no other assets) into my trend following system and have traded it religiously (*no tinkering*) for 5.5 years. Consequently, this has resulted in a doubling of my *entire* net worth and has pushed my retirement age down to 40 (FIRE).
> 
> It is mind boggling how much money you can extract from the market as a retail trader, with the right amount of discipline, fortitude and conviction.




I've read your thread numerous times, and your mechanical trend following approach is very much similar to mine and skates.

Maybe you have more conviction than us to commit 100% of your funds to it...but as @Skate has alluded to it is not a competition.

Thank you for sharing both here and in your thread


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## tech/a (22 January 2019)

I like these tools.
Including the guy who uses them.


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## willy1111 (22 January 2019)

Skate said:


> Finished doing the lawns & surprise 11 messages.
> 
> Before I read any of them I'll have a shower & lunch.
> 
> ...




Thoughts when I see the pictures...classic profile from the book...a millionaire next door.

In what state do you live @Skate ?


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## sptrawler (22 January 2019)

Finally a study, that explains what traits are required to become wealthy, we have repeated them on this forum endlessly.
https://www.smh.com.au/business/the...wn-to-six-wealth-factors-20190122-p50ste.html

From the text:

Frugality, or a commitment to saving, spending less and sticking to a budget
Confidence in financial management, investing and household leadership
Responsibility, which involves accepting your role in financial outcomes and believing that luck plays little role
Planning, or setting goals for your financial future
Focus on seeing tasks through to their completion without being distracted
Social indifference, or not succumbing to social pressure to buy the latest thing


----------



## Skate (22 January 2019)

greggles said:


> Here's something I've learned about myself as I have gotten older. The greatest (and possibly only) genuine limitation on ourselves and our potential (to be distinguished from artificial limitations we sometimes place on ourselves) is our own inherited temperament and personality. Some people are just not built to be masters of the universe: high powered lawyers, CEOs or politicians etc. We don't have the temperament for it. You cannot fit a proverbial square peg into a round hole. But that doesn't mean we cannot achieve great things within the niches we carve for ourselves that suit our own temperaments and personalities. Even if that just means being a great parent or partner. Sometimes our greatest achievement (or failure) will be the lasting impact we have on those around us.




*Members TAG*
@Joules MM1 - ...practice perfectly, to make what you do, a perfect expression of yourself.

Sums it up perfectly.

Skate.


----------



## Skate (22 January 2019)

willy1111 said:


> Thoughts when I see the pictures...classic profile from the book...a millionaire next door.
> 
> In what state do you live @Skate ?




I live in NSW
The last 6 years we lived 4 meters off the water, the Boardwalk was between us & the water. (high-rise, complex living) suited us because we were overseas travelling 6 months of the year. (we never experienced a winter for 6 years)

*Purchased a house*
We moved 6 minutes up the road 13 months ago, now living in a modest home but in an affluent area 20 meters from the water - my wife is happy & that's my primary concern. (I'm the maintenance man again, I now have a deeper appreciation for strata fees)

*Internet Speed*
No matter where you are these days you can trade from all over the world. Russia has had the slowest internet whereas the internet speed in Copenhagen, Denmark was blistering fast)

*Side topic*
No matter where I was in the world I could still control any of the stores 'operate their 'Till' pull records, use the computers in either showroom or backoffice - technology is truly amazing (read Nicholas Darvas book & check the comparison)

*A great memory*
I had a scotch in one hand placing a trade while chatting to 'captain black' overlooking the White Cliffs of Dover (life doesn't get any better than that)

Skate.


----------



## Skate (22 January 2019)

willy1111 said:


> Interesting interpretation, an alternative interpretation that what seems like a big almost unfathomable goal can appear much more achievable if broken down into simpler smaller processes. A bit like the way you post
> 
> A 1000 mile walk is a long long walk that could take a very very long time, but if one was to think all I need to do is take one step, I can do that, and just take another step, I can do that, and keep going until you reach 1000 miles.
> 
> ...




willy1111, life is like a game of 'Pool' - it not about sinking the ball but lining up the next shot.

Skate.


----------



## Gringotts Bank (22 January 2019)

Is this what you do skate?   Excerpt from The Mind Illuminated.


----------



## Skate (22 January 2019)

willy1111 said:


> Mans search for meaning - Viktor Fankl.
> 
> Things only mean as much as the meaning we choose to attach to them.  We all have this power, it may be liberating when one realises such.




willy1111, I believe in Nihilism and we are only remember by two generation. I belief there is no meaningful aspects to life, we are just a lucky animal living in a Goldilocks temperature zone. I've posted below so others can understand my position. All my posts are views that I hold & it differs widely to most)

*Nihilism*
Nihilism - from the Latin "nihil" = nothing. 

Nihilism has many definitions, my philosophical positions suggests that I lack the belief that there is a meaningful aspects to life, meaning I believe that life is without objective meaning, purpose or intrinsic value. Just because we are the top dog in the animal kingdom our life has no higher value or meaning than any other animal in our kingdom.

Skate


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## Skate (22 January 2019)

willy1111 said:


> Tell me more, please




Just for you willy1111, I'll write a short story you might understand - condensing a 4 hour course into a few words will be a challenge, holding your interest will be another but I'll assure you if you get to the end you might learn something. Give me a few minutes.

I'll do the "Holes in the bucket" I'll just shot from the hip & make something up - got it, the idea has just come to me - the story will be about 3 little boys. that will do.

Skate.


----------



## Skate (22 January 2019)

Skate said:


> Just for you willy1111, I'll write a short story you might understand - condensing a 4 hour course into a few words will be a challenge, holding your interest will be another but I'll assure you if you get to the end you might learn something. Give me a few minutes.
> 
> I'll do the "Holes in the bucket" I'll just shot from the hip & make something up - got it, the idea has just come to me - the story will be about 3 little boys. that will do.
> 
> Skate.




@willy1111, the story I promised

*Money Flow*
I was reminded about the bucket and water story. The story is about how to make money and how to catch it in a bucket without spilling a drop. The example I’m using is filling a bucket with water (the water is the money flow and the bucket used to catch it) and the holes are the expenses which the money could leak out making filling the bucket so much harder.

*Unavoidable expenses*
Some holes are unavoidable as they represent fixed expenses of which none of us can control but the other holes are the ones we put in the bucket that represented our expense or spending’s and these holes are controllable. It's up to us how many holes we punched in the bucket as well as the size of those holes.

*How long*
The more holes and the size of those holes would determine how long it would take to fill the money bucket.

*Here is a story*
A Dad has 3 little boys & they said to their Dad “how do you make money in business dad ?”

I took them out the back & grabbed a plastic bucket (the Till) I use to wash the car & the hose is where the water (money) comes from.

I went on to explain making money is easy, it’s only takes a few steps

*How*
Turn the tap on & let the water (money) flow into the bucket (the Till) its that easy.

*Eldest boy*
My eldest boy said that’s simple enough, let me have a go (okay I said)
He went over turned the tap on to fill the bucket but the force of the water tipped over the empty bucket (analogy – not successful he just blew over the business)

*Middle boy*
My middle boy learnt from his brothers experience, he grabbed the hose & placed it over the middle of the bucket & told his brother to turn on the tap when he was in position. The water hit the bottom of the bucket with so much force we all got sprayed (analogy – not successful we all got splashed, the business got splashed)

*Youngest son*
Next it was my youngest son turn, learning from his brothers he said “DAD, SHOW ME HOW”

*How its done*
I removed the hose from the tap & the tap seal wasn’t the best, when closed tight the tap had a slight drip, good enough for the demonstration. I placed the bucket under the tap & let the bucket catch every drip.

*That will take ages*
The eldest boy said “that will take ages to fill the bucket” I said "don’t worry we are in no hurry, it's more important that we catch EVERY drip"

*34 Years*
One of my businesses has been in business continuously for 34 years come August, so we must be doing something right.

*Important*
It doesn’t matter how long it takes to fill the bucket. What's more important is how many holes we poke in the bucket taking care not to make those holes too large.

Skate.


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## $20shoes (22 January 2019)

Skate said:


> @Joules MM1, I've created an eBook & posted a link if you are interested in a copy. It was much easier to reformat the posts & place them in a book form.
> 
> Thanks for the idea.
> 
> Skate.



Really nice compendium, Skate. I'll have a good read over the weekend.


----------



## Skate (22 January 2019)

Gringotts Bank said:


> Is this what you do skate?   Excerpt from The Mind Illuminated.




Gringotts Bank, that's not exactly deeper level mindfulness, but the words in the photo tries to explain mindfulness to someone who has never heard the word before.

*Mindfulness*
Mindfulness is blocking everything out around you - it's the period between being awake, alert & clearing the mind, bordering on being in a trance state but being totally conscience.

*An exercise*
Easy exercise, close you eyes and look at your eyelids, then move your focal point & focus on the front of your eyeball, notice the lubrication floating on the eyeball, concentrate on the air bubbles, than manipulate the air bubbles, move them around, it involves heavy concentration.

*Uncomfortable*
Your mind will not like this state, it prefers having full control, your mind makes you a time traveler, this state is uncomfortable for your conscience state - once you can do this you are in the state of mindfulness.

*Example *
When you are reading a book, the mind is not comfortable with heavy concentration so it does everything to stop you from reading, trading books take a deep level of concentration, the mind will wander making you think into the future or back into the past (you mind is a time traveler). 

*Nothing state*
Mindfulness is a "nothing state" something your mind can't cope with, that's the reason why you have to stop reading & go back & start reading all over again. Your mind has to be either side of nothing (never stationary)

*Why again ?*
You have to stop reading & go back over it again all because your mind took over and gave you "mental images" of the past or of the future it broke your consciousnesses. People don't believe you can control your heartbeat or your mind as its a inbuilt involuntary response, we don't even have to remember to breath - but we can control that, everyone knows that.

*Mind get confused*
By blocking the mind it get confused & projects memories "visual memories" that you can see displayed on the back of your eyelid (to break your mindfulness getting you back into consciousness. Once the mind breaks conscientiousness the mind has done its job taking you back over. (the mind never stops, even when you are sleeping)

*An Explanation you may understand*
Remember the craze where you purchase books that had images in them (out of focus) & to see the image you had to shift your focal point, some people can't do straight away but with practice you drop into the image easily. People can't see the picture till its explained to them how to do it .

Skate.


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## willy1111 (22 January 2019)

Skate said:


> I live in NSW
> The last 6 years we lived 4 meters off the water, the Boardwalk was between us & the water. (high-rise, complex living) suited us because we were overseas travelling 6 months of the year. (we never experienced a winter for 6 years)
> 
> *Purchased a house*
> ...




It's nice to be close to water 

And one of the many great things about living in Oz is all the great places in the Northern  Hemosphere we can go to when the weather ain't as we like it here ; )

Where are some of the great places you've been to or that you keep going back to, I'm sure there are many, if it's easy maybe just the top 3 or 5.


----------



## willy1111 (22 January 2019)

Skate said:


> willy1111, I believe in Nihilism and we are only remember by two generation. I belief there is no meaningful aspects to life, we are just a lucky animal living in a Goldilocks temperature zone. I've posted below so others can understand my position. All my posts are views that I hold & it differs widely to most)
> 
> *Nihilism*
> Nihilism - from the Latin "nihil" = nothing.
> ...




I would think most people would ask themselves at some point in their life, what's it all for, what is the point of it all.

And similar to you I can't come up with any logical objective answer. Thats not to say there isn't one, but what does it matter.

It also doesn't mean that I can't create meaning in my life, a purpose to live for...but it is something that I get to create or choose.


----------



## Skate (22 January 2019)

willy1111 said:


> It's nice to be close to water
> 
> And one of the many great things about living in Oz is all the great places in the Northern  Hemosphere we can go to when the weather ain't as we like it here ; )
> 
> Where are some of the great places you've been to or that you keep going back to, I'm sure there are many, if it's easy maybe just the top 3 or 5.




willy1111, it would be easier to say where I haven't been.

*Reminds me of the song*
"I've Been Everywhere"  by Lucky Starr 

*List of 5 places*
St. Petersburg - Russian
Sydney Nova Scotia, Canada.
New York City, United States. (New York)
Stockholm, Sweden
Riga, Latvia (a beautiful place)

Skate.


----------



## Skate (23 January 2019)

willy1111 said:


> My feedback, preference would be to break up into multiple posts as you previously have been doing




willy1111, thank you for taking your time to give me your feedback it indicates you have read my post.

*Jokes* (or why I don't tell them)
I'll let you into a little secret, when you are telling someone a joke they aren't really listening to you, they are thinking of a joke to tell you in return.

*Messing with people* (the bad Skate)
When I want to have some fun I mess with peoples mind,  something I find personally amusing.

*I always square it off* by telling people exactly what I've been doing to them, that's the fun part it allows me to control the conversation & most find the conversation interesting, it usually leads to them saying "tell me more"

*Example 1 *(funny joke)
Someone tells me a very funny joke, funnier the better, once they deliver the punchline & the joke is over (they are extremely happy with themselves, they are now in a happy state)

I let the joke go through to the keeper, I remain expressionless (I put on my poker face) I quickly do a 180 degree turn & ask a irrelevant question.

I'll watch their expression, their mind races, confusion takes over, they are searching why after telling one of their funniest jokes it didn't work this time, they are frowning searching for answers, "Did I tell the joke right ?", "Did I mess up the punchline ?",  "what the hell went wrong"

*A one on one joke*
Doing this to them being one on one - it's funny & before others want to tell me why its not I'll pre-empt an answer - I assume they are telling me a joke to make me happy, its had the desired effect, not just the way they intended. (at this stage my mind is doing cartwheels with the excitement of it all)

*Group joke*
With others around it's even funnier (for me)

*Funnier than the joke itself *
Messing with people when they're telling jokes is always funnier than the joke itself (we are always polite to others when they are telling us jokes, we even laugh when the joke isn't funny at all)

*Example 2 *(Accents & Jokes)
When a person tells me a joke using an accent (to the joke teller it add extra funniness) I will break their rhythm & ask if that's their real nationality as the accent doesn't match. Once their rhythm is broken they have trouble picking up where they left off & the funniness of the joke has evaporated.

Now I observe their jocular spirit change, they switch off being jovial.

*Disclaimer*
As I said, I always let them know what I was doing to them, it's a conversation starter, allowing me to take control of the conversation in tempo & direction.

Controlling a conversation is the name of the game.

*Cryptic message*
The story is a cryptic message, I now better understand the 'Dump it here' thread.

Skate.


----------



## qldfrog (23 January 2019)

Skate said:


> willy1111, I believe in Nihilism and we are only remember by two generation. I belief there is no meaningful aspects to life, we are just a lucky animal living in a Goldilocks temperature zone. I've posted below so others can understand my position. All my posts are views that I hold & it differs widely to most)
> 
> *Nihilism*
> Nihilism - from the Latin "nihil" = nothing.
> ...



I was once named/called? the absolute nihilist.welcome to the brotherhood


----------



## tech/a (23 January 2019)

Skate 
With mind games like that 
I’m sure I was married to you!


----------



## captain black (23 January 2019)

tech/a said:


> Skate
> With mind games like that
> I’m sure I was married to you!




Yep. +1


----------



## Ann (23 January 2019)

This is Mona in action.


----------



## Gringotts Bank (23 January 2019)

Mind games kill trust though.  Without trust there's no real connection.


----------



## willy1111 (23 January 2019)

Skate said:


> View attachment 91421




To help put this graph into context, would you mind saying what levels the horizontal line measures are...as in 10%, 20%, 30%, etc or recalcibrate to an arbitary figure like 100k or 1M etc.


----------



## tech/a (23 January 2019)

Fast winner 2016
Strolling along since.


----------



## Skate (23 January 2019)

Gringotts Bank said:


> Mind games kill trust though.  Without trust there's no real connection.




Gringotts Bank, mind games don't kill trust, I don't believe you have an understanding what mind games are & your post aligns with your belief system.

*The truth*
Every person & I mean everyone plays mind games, you just don't realise when you are doing it to others or when someone is doing it to you.

*I don't play mind games*
Before anyone wants to react & say "I don't play mind games" think again. Just don't react, respond. 

*Time to think*
Responding gives you time to think.  

*It never repairs*
Breaking someones trust can never be fully repaired. I posted an example of trust in this 'Dump it here' thread. 

*Trust Story 1*
The story is about a Dad & his daughter., if you have not read the story it pays to. 

*Trust Story 2*
I've also posted about a hammer, piece of wood & a nail, its worthy of a read as well.

*Precious gift*
Trust is a precious gift but there is one gift that carries more value. The most precious gift you can give to another is your time.

Yes, somethings in life never repair, trust is one of them.

Skate.


----------



## Skate (23 January 2019)

willy1111 said:


> To help put this graph into context, would you mind saying what levels the horizontal line measures are...as in 10%, 20%, 30%, etc or recalcibrate to an arbitary figure like 100k or 1M etc.




Sorry willy1111, you have asked some really good question but this question oversteps the mark.

Skate.


----------



## willy1111 (23 January 2019)

Skate said:


> Sorry willy1111, you have asked some really good question but this question oversteps the mark.
> 
> Skate.




My apologies, perhaps the graph contains your real life balances on the axis label - and no I didn't expect anyone to publish such things.  

To add a bit more context to what I was asking I will provide the following example.  If you still think it oversteps the mark, my apologies.

Below is a graph with no label/context on the axis.  It is from my Hypothetical Monthly Momentum thread.




And below is the same graph with a label on the axis, as can be seen below the viewer can see the return climbed to almost 40% and has since fallen back to 15% - without the label on the left those lines are left to the viewers imagination.


----------



## tech/a (23 January 2019)

True

Texts from myself to my wife 5 mins ago.

Her 
Quick go to Bunning's and pick up a tap washer the laundry tap is pouring out!
Me
Ill pick one up on the way home and do it then
Her
No its pouring out we will be flooded by then!
Me
Well--pull the plug out!

Classic I'm in tears!


----------



## Skate (23 January 2019)

willy1111 said:


> My apologies, perhaps the graph contains your real life balances on the axis label - and no I didn't expect anyone to publish such things.
> 
> To add a bit more context to what I was asking I will provide the following example.  If you still think it oversteps the mark, my apologies.
> 
> ...




willy1111, no apologies needed, each horizontal line represent a quite sizable dollar amount. I've posted that some of those small dips on the line charts look innocent but in dollar terms it's substantial.

I hope this better explains the chart, it was posted as a representation of my equity curve whereas its represents dollars to me. When it comes to money percentages mean squat, when it comes to returns percentages have meaning. 

Skate.


----------



## captain black (23 January 2019)

captain black said:


> My "experimental" machine learning index filter on the other system is also still positive but is beginning to weaken.




It's still a bit of a "work in progress" but it was interesting to see the machine learning based filter flag the weakness in the All Ords this week.

For short term systems it's important to be proactive rather than reactive. Traditional index filters based on moving averages are great for long term trend following systems because they keep you in the market long enough to pick up the prevailing trend but for short term systems a more proactive filter is desirable.

Rather than a simple MA on the All Ords index I've taken the approach of using data from the index constituents and creating composites similar to what I've previously used in Amibroker but using machine learning rather than traditional statistical analysis.

It's not the Holy Grail but it's improved the CAR/MDD on a short term system I've been trading for over 15 years.


----------



## satanoperca (23 January 2019)

As this thread is a dump thread, I would like to say, have gone through your epub, wish I was given that information to diagnose and try to understand 15 years ago, but is well worth the read.

But my dump is this in main stream media, be great for some feed back as it is pissed me off :

https://www.news.com.au/finance/mon...l/news-story/df3c05d05f950821fad7c877e5e2205e

Extracts :
"The NSW Hunter Valley electrician"
"he became Australia’s youngest billionaire after he turned a $1 million investment into $442 million "

F--k me, he must have been a brilliant electrician to accumulate $1M at the at of 32 to invest.

"When the price of coal price tanked, Mr Tinkler’s heavily indebted empire began to look shaky. "

"He told _7.30_ he had to pay $1 million to have his bankruptcy annulled — money that was given to him by his father."

So another rich kids that want to cry poor, I guess all kids in Australia have a father that has $1M to give to their child when they f--k up.

"“I do a bit of consulting work and that sort of stuff. That keeps me fed. You’re not talking millions of dollars a year or anything from that. That’s money to get your family through.”

Yes you dickh--d, every family, needs a $1M to survive

"“I haven’t ripped anyone off at the end of the day,” he said. “I’ve lost my own money."

No, not your money, you fat f--k, your families, you never earnt it

*That is my rant*


----------



## Skate (23 January 2019)

satanoperca said:


> As this thread is a dump thread, I would like to say, have gone through your epub, wish I was given that information to diagnose and try to understand 15 years ago, but is well worth the read.
> 
> But my dump is this in main stream media, be great for some feed back as it is pissed me off :
> 
> ...




satanoperca, as you have asked for feedback, I didn't read the article but I known Nathan Tinkler & his story. Nathan was fleeced by the racing industry, purchasing horses that cost him a fortune that turned out to be no good, everyone stitched him up, money was water & he wasted his good fortune.

He also invested heavily in buying soccer clubs from memory & couldn't pay. I was offered one of his horses (to buy) about 6 years ago from memory, I only had to pay 10 cents in the dollar, meaning Nathan was losing 90% of his investment, he couldn't even pay the horse food bill let alone stable fees, Vet fees & trainers fees. (It was a sad case, not for him but his backers)

Nathan overstretched as did Alan Bond, the Banks fall over perceived rich people, offering them as much money as they want.

*This is how it works*
Assets worth $500 mil, debts worth $800 mil, you do the maths (The Banks were STUPID & got caught big time with both, Nathan Tinkler & Alan Bond)

Skate.


----------



## tech/a (24 January 2019)

We are very diversified types of people.
I have no interest in this story other than having a quick read.
I don’t have an opinion it’s someone else’s life who is not in
My circle of influence - friends and family and business.

I certainly don’t get emotional about someone else’s circumstances 
Outside of my circle.
Each have their own life to live. Lessons to learn.
I have enough to take care of in my own back yard.
It’s full of good and bad luck,tragedies,success and failures.


----------



## qldfrog (24 January 2019)

It shows my age to discover some young people know nothing on a story which was on all papars/news seems like yesterday.
Explains as well how this keeps repeating...
As Sting says 
*History teaches us nothing*
Nothing against you satanopera
A sad reflexion of my age


----------



## qldfrog (24 January 2019)

In honor of this thread
Roy replicant in Blade runner movie, the original
"I've seen things you people wouldn't believe. Attack ships on fire off the shoulder of Orion. I watched c-beams glitter in the dark near the TannhÃ¤user Gate. All those moments will be lost in time, like tears in rain. Time to die."
I am not suicidal but wish this quote to be my epitaph
A life addicted to experiences and discovery, not the wolf of WS style i may say..or regret
And gosh no regret


----------



## Skate (24 January 2019)

qldfrog said:


> In honor of this thread
> Roy replicant in Blade runner movie, the original
> "I've seen things you people wouldn't believe. Attack ships on fire off the shoulder of Orion. I watched c-beams glitter in the dark near the TannhÃ¤user Gate. All those moments will be lost in time, like tears in rain. Time to die."
> I am not suicidal but wish this quote to be my epitaph
> ...




*Beautiful soul*
A young 30 year old, poured his heart out to me on a Sunday morning, explaining he couldn't live up to his fathers expectations, I missed the signs, he took his life the next day (Monday morning at exactly 7am) leaving a beautiful family & wife. 

*You can always do better*
I bashed myself up for many years doing the "what if" scenarios, "what could I have done better"

*Forgiveness*
The only way I've forgiven myself is by relating the experience to the "Ice Berg Theory" just seeing the tip of the problem & not knowing what was underneath.

I've written this post with teary eyes.

Skate


----------



## qldfrog (24 January 2019)

Sorry to hear about suicide.
Have been lucky enough not to have to confront that situation.
I have just faced some depressive friend and was at a loss on how to help.some much and so little you can do at the same time


----------



## Skate (24 January 2019)

Skate said:


> View attachment 91603
> 
> 
> *Trading Fundamentals - Skate's Beginners Version (ePub)*
> ...





A blatant plug for my eBook  "*Trading Fundamentals - Skate's Beginners Version" *(ePub)

*My educational posts have come to an end*
My educational posts in the 'Dump it here' thread have come to an end. After compiling the eBook I couldn't believe how many posts I've made. My wife said, _"I can, you sit there hour after hour hitting the keys without taking a break"_

*Also, may I ask*
If you know anyone beginning their trading journey please direct them to our community (ASF), collectively we have a wealth of knowledge in one forum.

*Recommendation*
The 'Dump it here' thread is a great resource, recommending my eBook (& its a great read) has a link to "Aussie Stock Forums"

*Joe Blow*
@Joe Blow said _"I recommend that people share this thread and other threads they find value in on social media, if you use it"_

*Endorsement *(eBook)
The posts listed below are taken as an personal endorsement of the thread (now a eBook), my posts in the list deserve repeating again.




Dec 17, 2018 @Skate  #1
*Helping Others*
You might want to dump stuff here to help others

Dec 17, 2018 @sptrawler  #81
Keep them coming, there isn't one I disagree with.
It may end up worth publishing, life's lessons on wealth creation.

Dec 17, 2018 @jbocker  #83
Great work Skate. Each message is food for thought.

Dec 18, 2018 @luutzu  #131
Maybe Tech/A is right... have you been puffing the magic dragon Skate? Why have you been hiding all these wisdom from us?

Dec 18, 2018 @explod  #153
The most inner feeling thread of the soul ever on ASF.
Treasure the absolute moment of your own thinking and love the fact that you are able.
Sorry Skate have not been able to cover all your posts yet but love you.

Dec 18, 2018 @Gringotts Bank   #157
Skate... did you sell the farm and go short in October? Or is it the Yuletide spirit? Or maybe you met someone, like our friend Wayne. Either way, I'm happy for you! Some good content here.

Dec 19, 2018 @Darc Knight  #195
I like little words of Wisdom. I like the Wisdom Skate is posting. I just need to take the time to read the rest. Thank you Skate! 

Dec 19, 2018 @Gringotts Bank   #280
Skate, take a break from thinking. You're going to overheat.

Dec 19, 2018 @Garpal Gumnut  #284
G'day Skate.
Can you fix door locks?

Dec 19, 2018 @tech/a  #288
And frankly there is so much here I can’t be bothered
Information overload.

Dec 19, 2018 @greggles  #260
Skate, it's a great thread. There's a ton of wisdom in here already and much more to come I'm sure. I, for one, appreciate your efforts. Communities like ASF need to be positive places where we support each other and help each other. Isn't that what communities are for? Let's not let negativity sneak in and spoil things.

Dec 19, 2018 @sptrawler  #292
You are spot on Skate, today people have all the answers, yet are too busy talking to hear the question.
People are born with two ears and one mouth, they should use them accordingly.

Dec 19, 2018 @Wyatt  #297
Skate, you've given followers of your thread some insights into your interesting world, I would like to know more about your trading experiences.

Dec 19, 2018 @Skate  #300
@Wyatt without the knowledge freely supplied from the ASF community I doubt I would have been successful.

Dec 21, 2018 @Skate  #370
*I'm asking for help*
This thread is designed to be different a place to dump helpful information that may help other traders but the thread lacks traction.

Dec 21, 2018 @barney  #384
You are an interesting Chap indeed Mr. @Skate

Dec 21, 2018 @Skate  #389
@barney I measure everything I say here on ASF.
I've pulled right back..

Dec 22, 2018 @Ann  #407
Skate please let me start by saying, looking at your 'post' count, your 'likes' count and the time you have been posting here no-one could possibly accuse you of over-posting! If they did so, check their post count and likes. Then you may well have a basis to tell them to go and get..........well, whatever tickles your fancy at the time.

Dec 22, 2018 @SirRumpole  #446
This is also a very educational thread.
Well done Skate.

Dec 22, 2018 @Wyatt  #450
This thread is an excellent point of reference for new traders.

Dec 24, 2018 @Skate  #477
*What's my angle*
If one of my posts "affect your behaviour" I'm a winner..

Dec 27, 2018  @Skate  #486
*Personal milestone*
I have now completed my 500th post & it's a personal milestone - it's a low post count compared to others (that's a given) but every post that I've made goes a long way to explain who I am.

Dec 27, 2018 @captain black  #519
It's always the hope that someone you help out comes back and not only helps others out but teaches you as well in the process.
I'm sure anyone reading Skate's words of wisdom in this thread knows the knowledge I've imparted has been returned threefold.

Jan 4, 2019 @Skate  #621
*When you talk*
When you talk, you are only repeating what you already know.
But if you listen, you may learn something new.

Jan 4, 2019 @kahuna1  #634
Love the thread

Jan 8, 2019 @Skate  #675
*My favourite two words are:*
1. Please
2. Thanks

Jan 12, 2019 @ducati916  #780
While Skate, I'm sure is quite capable of defending himself if he so chose, I will do so as in my short time of reading his posts I have found him to be exceptionally polite and patient.

Jan 12, 2019 @Darc Knight  #783
This thread is a thread of wisdom and learning

Jan 16, 2019 @myrtie100  #852
Thank you Skate, what an effort!
I have found your thread, thought provoking, educational and conformational.
Stacks of stuff in here, well done

Jan 16, 2019 @tech/a  #854
Keep it coming.
Great job and one of the most proactive posts I've seen.
Make this a sticky Joe!

Jan 17, 2019 @captain black  #878
Congratulations on your thread Skate.
It's always the hope that someone you help out goes on to pay it forward, you've certainly done that and more. Cheers

Jan 17, 2019 @$20shoes  #892
Many thanks, skate. I'll be sure to do some reading.

Jan 17, 2019 @Darc Knight #907
Thank you and congratulations on the wonderful thread @Skate What a wonderful contribution to ASF and the internet. Like everyone else I hope you continue to share your wisdom

Jan 17, 2019 @captain black  #911
The admiration is always mutual Skate, you've done a great job with this thread.

Jan 20, 2019 @Skate  #993
*I know it*
When I'm posting I'm only repeating what I already know, but when others post, I tend to learn something new.

Jan 20, 2019 @Wyatt  #1001
Hi Skate, Great work and awesome sharing of your experience and hard work.

Jan 20, 2019 @barney  #1021
This thread is full of some excellent advice and great ideas ……
People however take time to digest things …

Jan 20, 2019 @POR930  #1023
Thanks Skate for your advice in the other thread. Yeah, we are all beginners in this game. After 30 years, amazing how you can still fall into the traps. The thread will have longevity and benefit to readers well into the future for the above reasons

Jan 20, 2019 @Joe Blow  #1025
I've just made it a Sticky thread, so it's now permanently located at the top of the list of threads in the Beginner's Lounge forum.

Jan 20, 2019 @Joe Blow  #1035
This thread will be a great reference for beginners - past, present and future.

Jan 20, 2019 @Joe Blow  #1036
And I recommend that people share this thread and other threads they find value in on social media, if you use it.

Jan 22, 2019 @willy1111  #1066
I am reading back through the thread, page by page. It has been difficult to keep up with the speed the thread developed in real time . . . I am finding it very good to read back through at my own pace.

Jan 22, 2019 @Skate  #1107
willy1111, life is like a game of 'Pool' - it not about sinking the ball but lining up the next shot.

Jan 22, 2019 @$20shoes  #1112
Really nice compendium, Skate. I'll have a good read over the weekend.

Skate.


----------



## barney (24 January 2019)

Skate said:


> A young 30 year old, poured his heart out to me on a Sunday morning, explaining he *couldn't live up to his fathers expectations*, I missed the signs, he took his life the next day




Sad story.

The Father would no doubt be totally devastated, but I suspect he should also be ashamed.  

Parents who put undue pressure of expectation on their children without the appropriate balance of support are doing more harm than good.


----------



## tech/a (24 January 2019)

You know as I get older and I have my own history to look back on I appreciate
the opportunity to experience life more and more.

I really don't think many of us stop and consider what an amazing fluke it
is to be who we are. Being born is about 1:400 trillion. and 7000 million of us have beaten those odds.

*So if you don't think you have any luck in your life think again!
*
So the odds of That egg and That sperm getting together to produce *you*

*400 Quadrillion*

Now that is an impossible number but 7000 million of us are who we are
*against* those odds.

We will *NEVER* meet again and we will *NEVER* live this life again.
Don't ever ever waste it!

Don't ever take your Wife, kids, friends and colleagues for granted !!

*So how important is that argument, resentment , disappointment ,EXPECTATION.*

*Kiss, Hug, Smile word of encouragement or good deed?*

Reference---https://www.huffpost.com/entry/probability-being-born_b_877853


----------



## willy1111 (24 January 2019)

tech/a said:


> True
> 
> Texts from myself to my wife 5 mins ago.
> 
> ...




Lends itself to a hair colour joke/stereotype, but I won't go there.

Its funny how sometimes the most obvious solution can evade us.

How did it pan out?


----------



## debtfree (24 January 2019)

@Skate Thank you and Congratulations on a fantastic thread. To say well done is certainly an understatement. 

I along with others appreciate the time and effort you have donated transferring your wisdom and experience in life to us.

Also, thank you for compiling it into the eBook and making it available to download. 
I have grabbed a copy and recommend everyone to do so, if they can't find something of value within it, I'll be amazed.
It's great to find something valuable when your not looking.

Most of all, what a bonus it was to have such a long thread conducted in such a respectable and courteous manner by all. 

@Skate Wishing you good health and happiness and once again, Thank You.


----------



## Darc Knight (24 January 2019)

barney said:


> Sad story.
> 
> The Father would no doubt be totally devastated, but I suspect he should also be ashamed.
> 
> Parents who put undue pressure of expectation on their children without the appropriate balance of support are doing more harm than good.




I don't know Barney. I've seen a Father go to his grave without any empathy or sympathy for a very long time of totally ruthless behaviour which contributed to a very early death of his Wife and Child. Some people are totally devoid of empathy, whether nature or nurture I don't know why.


----------



## Skate (24 January 2019)

debtfree said:


> @Skate Thank you and Congratulations on a fantastic thread. To say well done is certainly an understatement.
> 
> I along with others appreciate the time and effort you have donated transferring your wisdom and experience in life to us.
> 
> ...




*Kindness*
debtfree, thank you for your kind words. I really appreciate you grabbing a copy of the eBook & recommending it to others. Having it in an eBook format means my posts can travel with you. 

*Stop & think about what you have just read* (you will see the eBook in a different light)
You will be amazed how much you can get out of the eBook from reading it again & again, you'll absorb more & more when you learn to unpack the posts instead of quickly skimming over them. 

*Heard it all before*
Most traders won't bother to read the eBook because they have heard it all before, but I bet if they read one paragraph after the other & think about what they just read there maybe some light-bulb moments for them.

*Ambiguity & cryptic *
I've written a lot of the post with ambiguity in mind, others cryptic, meaning a lot of my posts have more than one meaning finding those gems will be worth it in the long run. Even seasoned trader will get value from the eBook, using it as a pep talk, words of encouragement or just an affirmation they're on the right track. 

At some stage you will think "Ahh, I see what Skate is doing"

*We know what to do*
We all know what we have to do as traders but find it difficult sometimes to follow our plan under the most difficult of circumstances. 

Skate.


----------



## tech/a (24 January 2019)

willy1111 said:


> Lends itself to a hair colour joke/stereotype, but I won't go there.
> 
> Its funny how sometimes the most obvious solution can evade us.
> 
> How did it pan out?




Fixed it when I got home.
No biggy


----------



## tech/a (24 January 2019)

It’s* Farkin Hot*

Just knocked off all staff outside
The shot is of the steel cutting yard

*52c* in the sun on the concrete
LONSDALE *47c*

I can feel the heat through the tin roof over the air con


----------



## $20shoes (24 January 2019)

Skate said:


> *I'm asking for help*
> 
> This thread is designed to be different a place to dump helpful information that may help other traders but the thread lacks traction.
> 
> ...




Skate, I have a fine book in my bookcase by Marcus Aurelius called Meditations. Apparently a more authentic title lost in translation is "To Himself". There's something about this thread that reminds me of this book title. I dont know what; it's just the vibe, as they say on the Castle. 

A couple of ideas:

Meditations of a Trading Life
A Compendium of Trading Meditations and Advice

ok and here is one from left of field:

Trading and the Art of Tiramisu 
_
Tiramisu translates as "pick me up"_


----------



## $20shoes (24 January 2019)

tech/a said:


> It’s* Farkin Hot*
> 
> Just knocked off all staff outside
> The shot is of the steel cutting yard
> ...




Damn. That's approaching the temperature satan runs Hell at.


----------



## tech/a (24 January 2019)

$20shoes said:


> Damn. That's approaching the temperature satan runs Hell at.




*$20 shoes.*
You know some of my employees then?


----------



## Gringotts Bank (24 January 2019)

I can picture Ken Block sliding around that yard.  Gymkhana nine.


----------



## tech/a (24 January 2019)

Gringotts Bank said:


> I can picture Ken Block sliding around that yard.  Gymkhana nine.




Been lit up a few times.
Strangely no one owns up.

They have a brain fade--I have CCTV
Not my vehicles so they saved their job.
But they did waste a Saturday morning cleaning it up.

Hasn't happened for a while ---


----------



## Newt (24 January 2019)

Great work on your thread Skate.

There is very real value in sharing your struggles and successes so openly for the next generation of trend traders.  Many of us started out just wanting to know it really IS possible, albeit difficult, before the climb up the long slippery mountain starts.

You've done more than enough in your Dump It Here thread, but if you decide to start a specific weekly TF thread I'm sure you'd continue to inspire and challenge many.


----------



## barney (24 January 2019)

Darc Knight said:


> I don't know Barney. I've seen a Father go to his grave without any empathy or sympathy for a very long time of totally ruthless behaviour which contributed to a very early death of his Wife and Child. Some people are totally devoid of empathy, whether nature or nurture I don't know why.




Its a hard question to fathom DK.  Without getting into an in depth discussion on Free Will and Existentialism … there will always be the argument that we are each programmed to be like we are and only have minimal control over changing our behavior etc etc. but who really knows.

It is just a sad state of affairs when a young man has been driven to take his own life off the back of being unable to "please" his Father …. 

I think many Fathers seem to be unaware they need to be "Dads" first and Fathers second


----------



## Skate (25 January 2019)

debtfree said:


> Most of all, what a bonus it was to have such a long thread conducted in such a respectable and courteous manner by all.




debtfree, I'm pleased that you found the "Dump it here' thread conducted in a friendly & polite manner. I personally have found this thread refreshing, being nice is a gift to others.

*Have your say*
This thread by designed was to pass knowledge onto beginners, something members should be proud of. I now encourage others to have their say on matters that interested them it doesn't needs to be educational, we have done that.

*Disclaimer*
Members know the rules but it's worth repeating.

*Opinions are welcomed *
We shouldn't ridicule or challenge posters as it serves no purpose, it's like masturbating in public, it may feel good to you, but it looks disgusting to everyone else and it just makes the other person work harder to find ways to disagree with you.

*Being right or wrong*
Whether your view is right or wrong isn't important, what's more important, this thread gives you the ability to express your views without being ridiculed or challenged.

*Experience*
Every member enjoys a different level of experience & expertise, there is never a reason to display your level of knowledge by making others feel inferior.

*Timely reminder*
Abuse, insults and personal attacks directed at other people are unacceptable in the "Dump it here' thread, I'm not policing the thread but it pays to remember that everyone is entitled to their opinion.

*Alternative view*
If you disagree with someone rather than argue the merits of their points, post an alternative view, you don't have to belittle members to get your point across. Play the "the point" not the "person"

*Never react to a post but respond* (Responding will give you time to think)
1. Consider the context of what you are saying, put yourself in their shoes, try to understand their point of view.
2. Consider if your post adds value to the discussion.
3. When expressing an alternative view, start off by saying “In my opinion …” and try to focus on the issues rather than person.
4. We are all wordsmiths to some degree & it's easy to incite an emotional, knee-jerk response, creating an emotional outburst.

*Friendly atmosphere*
Such posts that incite emotional responses tend to undermine the friendly atmosphere often resulting in long running feuds creating factional loyalty to one side or the other.

*Hard to detect*
Offending a member is hard to detect. However, some members tend to follow patterns of behaviour, posting to invoke an emotional response, never answering questions directly to justify their position but they "always demand documentary evidence" from others to support their assertions, while offering none in return.

We all deserve a measured response not the alternative.

I'll be the first to post in the new & improved 'Dump it here' thread to start things off.

Skate.


----------



## Skate (25 January 2019)

*Why do I play mind games ?*
I play mind games for my own amusement that sometimes splash others & most can't understand why I do it.

*Conversation controller*
I'll tell you why I do it - I do it to control the conversation in tempo & direction other times to start a conversation.

*Same old chit chat*
Most people you meet like to talk about themselves, stuff that's uninteresting to others, most times it’s the boring same old chit chat making light conversation about nothing.

*Time wasting*
Talking about stupid crap just wastes everyone's time, others just love to listen to their own voice.

*Interesting people*
We have all met interesting people, we hang on their every word, we find what they say interesting & stimulating. When you meet someone you find interesting or different that's when a real conversation starts.

*Ambiguity *
Most of my posts I post with ambiguity in mind, other times they are cryptic, you would have read many of my posts without giving them a second thought. 

*One rule*
I only have one personal rule when it comes to mind games, if you catch on "I LOSE", & I don't lose very often.

*One member*
There has only been one member who has cottoned on so far & it happened on the 12th January this year by @ducati916 in post #780 & again on the 13th January in post #807 (my response to @ducati916 was the next post #808)

*I’m not everyone’s cup of tea*
I look different, I think differently, I have an opinion on everything as most of us do, I see the world through my eyes, but I’m interesting to speak to. (I must remember, self-praise is no recommendation)

Skate.


----------



## Skate (25 January 2019)

@tech/a gave you an example of a recent conversation with his wife that I found amusing.

*Segue*
That's a segue to my wife, married 44 years so she knows a little bit about who I am.

*Wife*
I love you & my new Donna, both keep me warm at night but one of them doesn't talk ****.

*Me*
I point to a present from my eldest son & remarked, "he doesn't share your opinion"




Skate.


----------



## Skate (25 January 2019)

*Science*
Science has given me a clear understanding of how we’ve evolved, why our minds produce and accept ideas, why we will alter our behaviour and even die for and kill for these ideas.

*Conditioning* (beliefs & ideas)
We all have morals ingrained in us from birth and using this as an example I wish to talk about the universal feature of human conditioning. I use "conditioning", others may prefer to call it "manipulation" to deliver a message to achieve a result.

*Perception*
Conditioning is all about perception (the art of 'manipulating' someones perception)

*Formula*
Perception equals reaction, meaning if I want a positive reaction, (others to react in a manner I want them to) I set up the required perception to achieve the desired result I'm looking for.

Skate.


----------



## tech/a (25 January 2019)

*Why
*
Other than procreation of the Species (Homo Sapiens)
What is the point of being this 1:trillions fluke?
Skates Musings---our reactions---

In 80-90 years for me or anyone else what does it matter.
In 200 years and much less-- who was Tech/a--- what did his
presence bring to planet earth?

(I have an answer)--interested in others.


----------



## Skate (25 January 2019)

tech/a said:


> *Why
> *
> Other than procreation of the Species (Homo Sapiens)
> What is the point of being this 1:trillions fluke?
> ...




tech/a, I've answer your question in a previous post in this thread.

*Repeating my self*
I lack the belief that there is a meaningful aspects to life. (I believe in Nihilism)
*
Nihilism *(for others)
Nihilism is from the Latin "nihil" meaning nothing. Nihilism has many definitions, my philosophical positions suggests that I lack the belief that there is a meaningful aspects to life, meaning I believe that life is without objective meaning, purpose or intrinsic value. Just because we are the top dog in the animal kingdom our life has no higher value or meaning than any other animal in our kingdom.

tech/a, I'm more interested in "your answer" & I'm all ears.

Skate.


----------



## tech/a (25 January 2019)

Skate said:


> tech/a, I'm more interested in "your answer" & I'm all ears.




As I am of everyone else's--including yours.


----------



## Skate (25 January 2019)

*Question*
Should we limit & confine the 'Dump it here' thread to trading topics only?

*Random ideas*
Okay, let me post something off topic & let me know if its too much. 

*Why ?*
It appears to me trading topics on the "Aussie Stock Forum" is not in vogue at the moment

@tech/a made a post about what does it all mean "being us" so lets post about being us & how we are conditioned to believe & relate it to one of our strongest beliefs religion & God. (capital 'G' for the respect of others)

Skate.


----------



## Skate (25 January 2019)

*Apologies to some who find this topic a taboo subject *(@tech/a made me do it)
The meaning of life, is there a reason ? 

*We are taught to believe*
Why are we taught to believe in things when it appears to me to be none. From birth we are conditioned to believe in a god, love a god, fear a god, envision a god, pray to a god and assume prayers would be answered.
*
Sacrifices*
We create rituals to worship a god & if we worship him hard enough, make sacrifices of some sort, acknowledge that we are highly imperfect and thank him profusely (whether or not he grants our wishes) our lives will be much better than those who don't.

*Die and kill*
We will even die and kill for that god & for most believers it’s extraordinarily difficult to have an alternative view and depart from those beliefs, even if and when you are so inclined.

*Why so ?*
Human minds generate religious beliefs that are a specific type of beliefs, and why our minds are prone to accept and spread them. In the past when we didn’t understand something we attributed a god to it.

Too much ?

Skate.


----------



## tech/a (25 January 2019)

Skate said:


> Should we limit & confine the 'Dump it here' thread to trading topics only?




*I think so .*
I fear that if we stray the importance of this thread will be lost.

My apologies.

Quickly my answer--one that I like.

Past and Future is of little consequence.
We are in the now beings what matters is right now.
Net everything experienced and learned equates to
and being equipped and existing in the now.

We are only relevant NOW.

I started a thread years ago--Is there a GOD.


----------



## Skate (25 January 2019)

tech/a said:


> *Why
> *
> Other than procreation of the Species (Homo Sapiens)
> What is the point of being this 1:trillions fluke?
> ...




And "remembered by two generations only" (ever thought of that)

Skate.


----------



## satanoperca (25 January 2019)

Skate said:


> *Why do I play mind games ?*
> I play mind games for my own amusement that sometimes splash others & most can't understand why I do it.
> 
> *One rule*
> ...




Thought this was interesting, how would you know if you were playing against a greater opponent than yourself, they keep you believing that your were winning, but really was just greater at the manipulation game than yourself.

A wise man when faced with a master manipulator will play the same game and never let on, that he/she knows that you are playing mind games and lead you to believe that you are in full control, when actually they are.

So while I agree 90% of the time, you can draw a conclusion of win/lose, 10% or less of the time it is impossible for you to determine.


----------



## Joe Blow (25 January 2019)

Skate said:


> *Question*
> Should we limit & confine the 'Dump it here' thread to trading topics only?




All non-trading/investing posts can be split off into a new thread at any time. There could easily be two separate Dump it Here threads with different titles and purposes.


----------



## Skate (25 January 2019)

satanoperca said:


> Thought this was interesting, how would you know if you were playing against a greater opponent than yourself, they keep you believing that your were winning, but really was just greater at the manipulation game than yourself.
> 
> A wise man when faced with a master manipulator will play the same game and never let on, that he/she knows that you are playing mind games and lead you to believe that you are in full control, when actually they are.
> 
> So while I agree 90% of the time, you can draw a conclusion of win/lose, 10% or less of the time it is impossible for you to determine.




*Answer*
You can't bullsh!t a bullsh!tter

Skate.


----------



## Gringotts Bank (25 January 2019)

Skate, what does controlling a conversation mean and what benefit is there in that?  Thanks.


----------



## satanoperca (25 January 2019)

Oh, yes you can.
There is always a difference between the 2 bulls--ters, if the skill level is wide enough, one b--ster will have it over the other. That is is essence of manipulation, I have seen this just a few times in my life, where 2 parties communicate, both walking away thinking they have control or manipulated the events/conversation, however one party has clearly gained or won over the other.

The art of sales is part of this.


----------



## Skate (25 January 2019)

Joe Blow said:


> All non-trading/investing posts can be split off into a new thread at any time. There could easily be two separate Dump it Here threads with different titles and purposes.




Sorry @Joe Blow, trading is not the flavour of the month & the education for beginner has died a natural death, whereas I raised alternatives interests so other members may post, gravitating them back to trading.

Talk on any topic other than "trading education" the thread floods with posters, talk about trading the thread dies in a heap.

Skate.


----------



## Joe Blow (25 January 2019)

Skate said:


> Sorry @Joe Blow, trading is not the flavour of the month & the education for beginner has died a natural death, whereas I raised alternatives interests so other members may post, gravitating them back to trading.
> 
> Talk on any topic other than "trading education" the thread floods with posters, talk about trading the thread dies in a heap.




I understand. It may be something worth considering at some point anyway, if only for the sake of organisation. I'm happy to assist at any time if you decide to go down that road.


----------



## Skate (25 January 2019)

Gringotts Bank said:


> Skate, what does controlling a conversation mean and what benefit is there in that?  Thanks.




Gringotts Bank, a simple answer to a simple question "To make the conversation more interesting for myself & others"

*I shouldn't have to repeat myself *(it's all in the thread)
"Life is like a dogsled team. If you ain't the lead dog, the scenery never changes"

*Station placing*
Station placing is where I get others to say things that they wouldn't normally say. (I want/need people to open up)

Skate.


----------



## Skate (25 January 2019)

Joe Blow said:


> I understand. It may be something worth considering at some point anyway, if only for the sake of organisation. I'm happy to assist at any time if you decide to go down that road.




It's frustrating when you talk on a subject others have little understanding of. This thread had one purpose, others wanted to morph into something different.

Skate.


----------



## Gringotts Bank (25 January 2019)

Skate said:


> Gringotts Bank, a simple answer to a simple question "To make the conversation more interesting for myself & others"
> 
> *I shouldn't have to repeat myself *(its all in the thread)
> "Life is like a dogsled team. If you ain't the lead dog, the scenery never changes"
> ...




I get it.  

How do you feel about small talk?  Say you're at a party and the topic is pleasant but fairly bland - can you enjoy that?  Or do you have to steer things into deeper waters?


----------



## Gringotts Bank (25 January 2019)

It's not a test!  I used to find small talk difficult.  I used to think of it as an irritating waste of time.  But I found there's a way to enjoy it.


----------



## Skate (25 January 2019)

satanoperca said:


> Oh, yes you can.
> There is always a difference between the 2 bulls--ters, if the skill level is wide enough, one b--ster will have it over the other. That is is essence of manipulation, I have seen this just a few times in my life, where 2 parties communicate, both walking away thinking they have control or manipulated the events/conversation, however one party has clearly gained or won over the other.
> 
> The art of sales is part of this.




As you have raised the topic of "The art of sales is part of this" let me respond.

*I'm trying not to being rude*
In a few words I'm not going to convince you that your post lacks an understanding of what I posted. When conditioning we have a large range of tools available to us, words, tones, expressions, body language, asking the right question at the right time whether they be open or closed questions, getting an agreement along the way, cementing a verbal contract along they way, at all times making sure they understand the terms & conditions allowing them to make a favourable decision in the course of the conversation.

*The customer*
On the other hand the customer feels that everything is alright, they will be is relaxed, comfortable, have that nice feeling of contentment, they have absolutely no understanding what just transpired & never will, they feel they have enjoyed a pleasant conversation & had a wonderful buying experience (anything other than that, you "LOSE")

*Respectful*
Thanks for expressive your view in a respectful manner & from your perspective. I quoted an expression (You can't bullsh!t a bullsh!tter) to give you a better understanding in simple terms you maybe able relate to about conditioning & controlling a conversation.

*Off on a tangent*
But no, you went off on a tangent without thinking, you quickly reacted, you didn't responded to the topic of conditioning, you trotted out the example of your understanding a Bullsh!ter without thinking about my post to better understand it, you needed time to understand the post on a deeper level. Answering these types of questions I find frustrating personally. (no reflection on you, your just the norm, it's typical)

*Why frustrating*
It's frustrating when you talk on a subject others have little understanding of, others wanted to morph the conversation into something different.

*From my perspective*
I was a Sales trainer in a previous life (all this has been posted in this thread previously) I trained sales trainers in the art & science that goes behind scene. I turn "sales people" into "Sales Professionals"

Most sales people don't even know what motivates someone to buy, they don't even understand what they sell.

If you are in Sales, read my posts you might learn something. (this post is off topic & now completed)

Skate.


----------



## Skate (25 January 2019)

Gringotts Bank said:


> I get it.
> 
> How do you feel about small talk?  Say you're at a party and the topic is pleasant but fairly bland - can you enjoy that?  Or do you have to steer things into deeper waters?




*No !*

*I'm the driver*
I drive the conversation to get to where I want to be, it's a two way street, meaning others need to feel the conversation is interesting, engaging whilst at all times making sure they enjoy a decent refreshing conversation for once in their life. (it's entertaining for us both, but in much different ways)

Skate.


----------



## Gringotts Bank (25 January 2019)

Skate said:


> *No !*
> 
> *I'm the driver*
> I drive the conversation to get to where I want to be, it's a two way street, meaning others need to feel the conversation is interesting, engaging whilst at all times making sure they enjoy a decent refreshing conversation for once in their life. (it's entertaining for us both, but in much different ways)
> ...



What happens when the other person is not interested in your interests?


----------



## satanoperca (25 January 2019)

WOW.
I respectively, disagree with your response, you obviously don't want others to discuss and hence get a better understanding of what you have written, I will just go back to being the norm.

Been an interesting read at least.


----------



## Skate (25 January 2019)

Gringotts Bank said:


> What happens when the other person is not interested in your interests?




*Re-posting* (with highlights)
_ "What happens when the other person is not interested in your interests?" _
*No*, you don't understand we talk about them & their interests, people love to talk about themselves, see the posts below. 

*When you talk*
When you talk, *you are only repeating what you already know.*
But if you listen*, you may learn something new.*

*Time wasting*
Talking about stupid crap just wastes everyone's time, *others just love to listen to their own voice.*

*Interesting people*
We have all met interesting people, we hang on their every word, we find what they say interesting & stimulating. *When you meet someone you find interesting or different that's when a real conversation starts.*

Gringotts Bank, this topic is now closed, not because it's not interesting but its off topic.

Skate.


----------



## Gringotts Bank (25 January 2019)

I'm one of those people you'd find difficult to sell to.    I've never enjoyed the feeling of being controlled.  I prefer authenticity.  I want to meet the *real *Skate!


----------



## Skate (25 January 2019)

satanoperca said:


> WOW.
> I respectively, disagree with your response, you obviously don't want others to discuss and hence get a better understanding of what you have written, I will just go back to being the norm.
> 
> Been an interesting read at least.



*
"I respectively, disagree with your response"*
Thank you for being so polite, speaks volumes & I now have a better understanding why you have taken a stance in the manner that you did.

*"I will just go back to being the norm"*
WOW, upset and with attitude, hopefully after reading my response we will be cordial once more, & build upon our friendship. The last post was written in such a way to evoke your emotions, expressing your beliefs to me. 

*Helpful criticism*
Sometimes giving someone an example on the topic being discussed it feels to them as a personal attack instead instead of helpful criticism.

I'm sorry but you won't get the same feeling again after you know when someone says something to inflame the situation & I'm going to give you another example. (the next paragraph is only for demonstration purposes only) it shouldn't cause any emotions

-----------------------------------------------------------------------------------------------------------------------------------------------------
*EXAMPLE ONLY *(make sure you are in the zone the correct head-space or it will mess with you)
-----------------------------------------------------------------------------------------------------------------------------------------------------

satanoperca, *"ARE YOU THAT STUPID YOU CAN'T READ*", I re-posted this *"AGAIN"* so you can read it again, reading it the second time you might get it, you can't really be this thick* (this post is off topic & now completed) !!!!! READ IT AGAIN YOU MORON.
*
-----------------------------------------------------------------------------------------------------------------------------------------------------
Now that's an example of flaming, it's designed to inflame your emotions a little more. (It's baiting you so "I" in return can have some more fun, a BIGGER, BETTER experience for me, at your expense) knowing what I said was only an example (for your education) the emotion is not the same, or it shouldn't be & neither should it be an ongoing issue for you.
*
Ambiguity *
Most of my posts I post with ambiguity in mind, other times they are cryptic, you would have read many of my posts without giving them a second thought. People just react & I was politely point this out to you.

*Are we friends again* (I was playing with you to reinforce a point)
satanoperca, I was messing with you, so you better understand manipulation, conditioning, my words were written to achieve the response I wanted. Sometimes you need to be cruel to be kind. 

*Feel the words*
I wanted you not only read my post but "FEEL" the words in my post, I wanted to manipulate your emotions. 

*Takeaway*
Don't you ever let anyone do that to you again, you'll learn from this experience. 

*Oblivious*
Everyone else reading this post or my previous post to you wouldn't have felt the emotions you did because the words were targeted at you, other would be oblivious to what you felt. 

*Silver Shoes*
Hopefully other will go back & re-read my original post to you, understand & see your point of view by putting themselves in your shoes.

*I'm sorry*
I'm sorry to use your emotions to express my point of view.

*I understand what Skate did*
You should be now saying.. "ahh, Skate got me" 

*Work on your emotions* (90% trading is how you control your emotion)
If my post is still an issue for you, that's Okay, it means you need to do a little bit more work on controlling your emotions.

Are we mate again ?

Skate.


----------



## Skate (25 January 2019)

Gringotts Bank said:


> I'm one of those people you'd find difficult to sell to.    I've never enjoyed the feeling of being controlled.  I prefer authenticity.  I want to meet the *real *Skate!




_"I'm one of those people you'd find difficult to sell to"_

No No No...

You have it all wrong..

*Sales Professionals are there for you*
Sales Professionals don't sell anything, I want to repeat this, Sales Professional never ever sell you anything, that's not their job. They are there to give advice so you can make an informed decision, they want you to spend your money wisely, they don't want you to purchase an item that you would not be 100% happy with.

*Repeat business is the name of the game*
Sales Professional want your repeat business, we want customers to say "NO, I know Skate's busy with another customer, but I'm prepared to wait he knows what I want" there is no better feeling when shoppers feel like that about you.

*It's all about the experience*
 as well as giving you a wonderful buying experience. I don't know anyone with the skills to sell you something you did't want (don't give sales people that much credit, they are DUMB A$$ES) I've just insulted all the sales people in here thanks to you @Gringotts Bank 

*No No No...*
Their job is to make you feel special, happy, relaxed offer friendly advice, gives you choices, explain the differences between item, adding value to the product you want to buy it. (When do we want you to buy ? - TODAY)

*Moreover*
_"I've never enjoyed the feeling of being controlled"  _nobody does, that's a terrible feeling knowing your being controlled, that a very bad emotional feeling, it's a deciding factor whether you will shop with that store "again" or "NEVER AGAIN", sales professionals know this stuff.

*Let me say*
You should never feel manipulated, coerced or controlled. The people skilled in this craft will make sure you never get this feeling of discomfort & more importantly you won't even know when it's happening to you.

Skate.


----------



## ducati916 (25 January 2019)

Skate said:


> _"I'm one of those people you'd find difficult to sell to"_
> 
> No No No...
> 
> ...




An interesting little detour.

Not to tell, rather to show: people who tell, instruct, people who show, assist. Few enjoy being told what to do, most will accept assistance.

It is much easier to persuade [manipulate] people who believe that you are helping them. It is difficult [almost impossible] to persuade [manipulate] people who believe you to be locked in a contest with them.

Imagine yourself as a guide, showing them the way home. We facilitate the journey, provide the easy route home.

Analogy: don't fight the market, let it guide you to the easy path.

jog on
duc


----------



## Skate (25 January 2019)

ducati916 said:


> An interesting little detour.
> 
> Not to tell, rather to show: people who tell, instruct, people who show, assist. Few enjoy being told what to do, most will accept assistance.
> 
> ...




ducati916, you're smarter than the average bunny.

Skate.


----------



## Skate (25 January 2019)

Skate said:


> As you have raised the topic of "The art of sales is part of this" let me respond.
> 
> *I'm trying not to being rude*
> In a few words I'm not going to convince you that your post lacks an understanding of what I posted. When conditioning we have a large range of tools available to us, words, tones, expressions, body language, asking the right question at the right time whether they be open or closed questions, getting an agreement along the way, cementing a verbal contract along they way, at all times making sure they understand the terms & conditions allowing them to make a favourable decision in the course of the conversation.
> ...




@satanoperca, I forgot to point out an interesting method in my post for a stronger impact. (you might have missed it)

*Please revisit*
If you re-read the first half of my post again (you will see the post in a different light) you'll notice how friendly the post started off, politely allowing you feel a degree of comfort in what you are reading, when you were relaxed, I punched you 'hard' in the guts so the affect would be greater.

*Don't miss the point*
I didn't want you to miss this point. (sometimes you can read something & not understand the impact it has on you)

Than again, it may be irrelevant to you.

Skate.


----------



## Gringotts Bank (25 January 2019)

Skate said:


> _"I'm one of those people you'd find difficult to sell to"_
> 
> No No No...
> 
> ...




Say I want to buy a TV.  I go into JB Hifi.  The guy runs his spiel and I feel like saying "will you shut up?".  Because I already know they want to sell more LGs that week, so they turn up the brightness and colour controls on the LG, and they turn down the brightness/colour on the Samsung.  The average customer says "wow this LG looks so much nicer" and buys it.  The average customer does what the sales guy wants him to do, and he walks away feeling good about being duped.  Next week JB want to move more Samsungs so they do the opposite trick, and the spiel changes along with it.  What I'm saying is, I don't believe what sales people tell me.


----------



## Gringotts Bank (25 January 2019)

Or the car salesmen who pump up the tires++ on the cars they want to sell so that the test ride feels "so responsive and easy to steer!".  The car they don't need to sell has poorly inflated tires and feels "a little sluggish and less responsive". 

Or the guy at Harvey Norman who tried to sell me an airconditioner by adding the word "yes" to the end of every sentence.  "And this one is $3000, *yes*.  And it comes with a warranty, *yes*.  And we can deliver it, *yes*".  I asked him why he ads the word 'yes' to the end of every sentence and that was the end of that.  I knew why.  Even when you know what they're up to, they can be very persuasive, yes.


----------



## Skate (25 January 2019)

Gringotts Bank said:


> Say I want to buy a TV.  I go into JB Hifi.  The guy runs his spiel and I feel like saying "will you shut up?".  Because I already know they want to sell more LGs that week, so they turn up the brightness and colour controls on the LG, and they turn down the brightness/colour on the Samsung.  The average customer says "wow this LG looks so much nicer" and buys it.  The average customer does what the sales guy wants him to do, and he walks away feeling good about being duped.  Next week JB want to move more Samsungs so they do the opposite trick, and the spiel changes along with it.  What I'm saying is, I don't believe what sales people tell me.




Gringotts Bank, no the concept you are suggesting is all wrong, let me understand this, 'you are comparing a JB Hifi employee' to a sales professional ? (they are not one & the same)

*Easy understanding*
Sales person = NO formal training (they have no idea what they are doing they are a nuisance most of the time. When you want one  they are never around or if they are they're most likely in chatting in a huddle)
Sales Professional = formal trading & highly skilled

*Tuesday of this week*
Gringotts Bank, I presumed you have read my post from a couple of days ago, but if not I've posted them again that answers your question.

*Re-posted* (from 22nd January 2019 Post #1088)
*It's a Numbers Game* (pure mathematics)
Just as you the customer at Harvey Normans give 'knock backs' to *pushy salespeople*, by saying “*no I’m just looking*” the salesperson will always say “*if you need any help I’ll just be over there*” (Where ? it’s usually in the naughty corner whereas it should be called the STUPID corner)

*Knock backs*
By looking at selling as well as trading you can appreciate *it’s a numbers games*, the good salespeople (the sales professionals) and the good traders know that a certain percentage of knock backs and losses, respectively, is just reality. *They know that a key to success is not to take the knock back or loss personally, but instead to look at it as the price of doing business.* Accept it, and move on to the next sale or trade.

Skate.


----------



## Gringotts Bank (25 January 2019)

Skate said:


> Gringotts Bank, no the concept you are suggesting is all wrong, let me understand this, 'you are comparing a JB Hifi employee' to a sales professional ? (they are not one & the same)
> 
> *Easy understanding*
> Sales person = NO formal training (they have no idea what they are doing they are a nuisance most of the time. When you want one  they are never around or if they are they're most likely in chatting in a huddle)
> ...



I'd like to hear about the professional sales person and how he goes about his work.


----------



## Skate (25 January 2019)

Gringotts Bank said:


> Or the car salesmen who pump up the tires++ on the cars they want to sell so that the test ride feels "so responsive and easy to steer!".  The car they don't need to sell has poorly inflated tires and feels "a little sluggish and less responsive".
> 
> Or the guy at Harvey Norman who tried to sell me an airconditioner by adding the word "yes" to the end of every sentence.  "And this one is $3000, *yes*.  And it comes with a warranty, *yes*.  And we can deliver it, *yes*".  I asked him why he ads the word 'yes' to the end of every sentence and that was the end of that.  I knew why.  Even when you know what they're up to, they can be very persuasive, yes.




No, those sales people need to be shot, they are a blight on the industry. To be clear there is a difference between a sales person & a sales professional. Once you accept this you are half way there, having a better understanding of the sales industry. We haven't even touch on the subject on selling yourself yet. 

*Example*
With 5 retail stores, my staff are very well trained but occasionally I'll get a call seeking clarification if they had made the correct decision in handling a customer.

*I ask one question of them*
Did you do the very best for the customer or did you do the very best for the store ?

*Reinforcement*
I reinforce, if a tricky situation arises in future just ask yourself a question "What would I expect in this situation" than do it. If you are still uncertain, our 'Number one policy' always do the very best for the customer no matter what the consequences are for the store. 

A business doesn't hang on one sale.

*Google 5 star rating*
We thrive on 5 star rating anything under is unacceptable, my staff knows this, meaning we want our customers to shop with us "again", not "never again"

*Repeating*
"Business is like a game of Pool, it's not sinking the ball but lining up the next shot"

*Complex* 
Sales is complex to understand let alone apply, everyone thinks selling is simple. I've ask the very best sales people to sell me a circle. They haven't a clue. I maintain if you can sell a circle you can sell anything, Cars, TV's, Insurance, Realestate, the product is irrelevant.

*Think about this*
You own a business & all you sell are circles, do you think you could sell me one ?

Skate.


----------



## Gringotts Bank (25 January 2019)

Skate said:


> No, those sales people need to be shot, they are a blight on the industry. To be clear there is a difference between a sales person & a sales professional. Once you accept this you are half way there, having a better understanding of the sales industry. We haven't even touch on the subject on selling yourself yet.
> 
> *Example*
> With 5 retail stores, my staff are very well trained but occasionally I'll get a call seeking clarification if they had made the correct decision in handling a customer.
> ...



Yeh I probably could. How many do you need?


----------



## Darc Knight (25 January 2019)

You've sold me Skate 

New Car Salespeople, are they Sales Professionals? Anyone else experienced what wonderful human beings they are? 
Real Estate agents, are they Professional Liars I mean Salespeople? 

Skate, can you sell Gringotts something please. I wanna see this


----------



## Skate (25 January 2019)

Gringotts Bank said:


> Yeh I probably could. How many do you need?




You're way too funny..

*Disclaimer*
To be polite, Joe has removed my posts from the 'Dump it here' thread killing further conversation on the topic

Skate.


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## Skate (25 January 2019)

Darc Knight said:


> You've sold me Skate
> 
> New Car Salespeople, are they Sales Professionals? Anyone else experienced what wonderful human beings they are?
> Real Estate agents, are they Professional Liars I mean Salespeople?
> ...




Darc Knight, I always enjoy your posts & to be fair true sales professional are very rare. It's disappointing when you want to make a purchase only to find out you have better product knowledge than the salesman.

*Disclaimer*
To be polite, Joe has removed my posts from the 'Dump it here' thread killing further conversation on the topic

Skate.


----------



## Darc Knight (25 January 2019)

_"Don't wish it were easier, wish you were better!"_


----------



## willy1111 (25 January 2019)

Skate said:


> *Think about this*
> You own a business & all you sell are circles, do you think you could sell me one ?
> 
> Skate.




I'd also be interested in seeing you expand on your thoughts in this regard.

I remember hearing that out of a sample of 10, 2 could be sold anything, 2 won't buy no matter what and 6 are in the middle, a skilled sales professional has a chance to get these 6 to want to buy.

How would yoy say this fits with your views @Skate?


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## Skate (25 January 2019)

Gringotts Bank said:


> I'd like to hear about the professional sales person and how he goes about his work.




Gringotts Bank, this explains how its done...

*A successful person *
The very first step towards success in any occupation is to become interested in it.

*Learning curve*
Very few people succeed in this process as the learning curve is too steep and the correct psychology is too hard to implement. One of the reasons its so fascinating is that it combines elements of psychology, business, mathematics, and numerous other disciplines and sciences.

*Exercise for you*
1. Please read the two paragraphs again (click your mind over) and read it as a Trader.
2. Please read the two paragraphs again & have your mind thinking like a Sales professional.

*High pressure*
Trading & the Sales Industry are so similar, they're both high pressure industries

*You said* 
_"I'd like to hear about the professional sales person and how he goes about his work"_

*Let me rephrase your question & you post me your reply*
_"I'd like to hear about traders and how he goes about his work"_

*Trading/Selling*
You can't learn how to trade in a few words written by me in one post & it's the same with the sales industry, you need to 
understanding you require years of formal training to become a Sales Professional.

Skate.


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## Gringotts Bank (25 January 2019)

Skate said:


> Gringotts Bank, this explains how its done...
> 
> *A successful person *
> The very first step towards success in any occupation is to become interested in it.
> ...



Can you show me a YT clip of someone expert in selling?


----------



## Skate (25 January 2019)

willy1111 said:


> I'd also be interested in seeing you expand on your thoughts in this regard.
> 
> I remember hearing that out of a sample of 10, 2 could be sold anything, 2 won't buy no matter what and 6 are in the middle, a skilled sales professional has a chance to get these 6 to want to buy.
> 
> How would you say this fits with your views @Skate?




*Not as you think*
willy1111, No, you are on the wrong track, it's not about selling, that's not the end game. To be a Sales Professional requires years of formal training. Its takes months of training to get your facial expressions down pat.

*Why talk about facial expressions*
So you have a better understanding of a minor part of a complex subject. We all use facial expression to convey a message (that's a given) how do I explain such a complex subject in a short post. 

*Bet you didn't realise*
Facial expressions, expressions we all take for granted, I bet you never realised the importance of that tool to a Sales Professional & they have hundreds more at their disposal.

*Traders*
Trading software that contains 200 indicators must make them at least twice as profitable as a trading software package containing only 100 indicators. This type of thinking as a trader will send you crazy, now relate that to art & science of selling, it sounds just as crazy.

*Last post on this subject*
You hear it all the time on TV about a person dumb founded that they got scammed, they so intelligent how did it happen to them. I say easy, I've posted why in this 'Dump it here' thread. 

*Rehashing*
I've had a lot of questions about a topic & strangely enough I've already posted about the subject, Selling & Sales Professional "case in point" 

*eBook*
Willy you said you will read my eBook at your leisure, I was happy to hear this, most say I'll read your eBook "if I get around to it"

Skate.


----------



## Skate (25 January 2019)

Gringotts Bank said:


> Can you show me a YT clip of someone expert in selling?




*Nope, let me ask you the same question.*
"Can you show me a YT clip of someone expert in trading?

My last post..

*Last post on this subject*
You hear it all the time on TV about a person dumb founded that they got scammed, they so intelligent how did it happen to them. I say easy, I've posted why it happens in this 'Dump it here' thread, also it's in the eBook, let me suggest that you download & have a read.

*Rehashing*
I've had a lot of questions about a topic & strangely enough "I've already posted about the subject", Selling & Sales Professional *"is a case in point"* it's all in my eBook.

Skate.


----------



## Gringotts Bank (25 January 2019)

Skate said:


> Its takes months of training to get your facial expressions down pat.



eeek.  Inauthentic.  Inauthentic is unattractive (to me), no matter how well rehearsed.  However it probably appeals to some people.

Now nod and smile, now raise your left eyebrow.


----------



## willy1111 (25 January 2019)

Gringotts Bank said:


> Can you show me a YT clip of someone expert in selling?



Have you heard of Zig Ziglar or Jim Rohn?

Fascinating stuff if you have the interest.

Plenty of vids of these two on youtube.


----------



## Gringotts Bank (25 January 2019)

willy1111 said:


> Have you heard of Zig Ziglar or Jim Rohn?
> 
> Fascinating stuff if you have the interest.
> 
> Plenty of vids of these two on youtube.



Thanks I'll have a look, but if I see them trotting out rehearsed material, postures and mannerisms that's not what I'm after.

edit: yeh that's not my style, thanks.


----------



## willy1111 (25 January 2019)

Gringotts Bank said:


> Thanks I'll have a look, but if I see them trotting out rehearsed material, postures and mannerisms that's not what I'm after.
> 
> edit: yeh that's not my style, thanks.




Or Brian Tracey, Tony Robbins. Depends who's style you like there are heaps.

Grant Cardone...he is quite aggressive and full on but there is a youtube clip of him 'a live sales call by Grant Cardone'  he's reportedly worth over 300 mil so must be doing something right.


----------



## ducati916 (26 January 2019)

Gringotts Bank said:


> eeek.  Inauthentic.  Inauthentic is unattractive (to me), no matter how well rehearsed.  However it probably appeals to some people.
> 
> Now nod and smile, now raise your left eyebrow.




The first issue is that there must be some want or desire that can be elicited. If you don't like TV and never watch it, selling you a TV is not going to happen. Hence this low-end selling is predicated on pure volume. TV advertising is a good example of this and still very successful. An example would be fat, lazy people: stand on this and let your fat jiggle for 5mins a week and you can lose 10kg.

Possibly if you thought of 'selling' as a spectrum. You have the lower quality end and the high quality end. The lower end is exemplified above.

At the high quality end you have as an example doctors and lawyers. There are of course many other examples: CEO's [think Enron], Start-ups looking for funding/investment, Franchising, etc.

Doctors: You have a want or desire to 'get better'. Now there are all manner of treatments for any number of complaints. One of the most important, if not the most important, is 'the placebo'. It is the doctor's responsibility to sell to you, that whatever treatment recommended, has a highly positive prognosis. Your confidence [whether you have bought in] level either strengthens or weakens this powerful effect. The placebo effect is sold to you.

Lawyers: operate on a number of levels depending on the end audience, viz. Judge or jury. The jury is the most obvious and easiest to sell to. There are two versions that you, the jury can buy: the prosecution's version or the defence. Trials are won or lost by the quality of the salesman [lawyer] highlighting strengths, explaining weaknesses and selling [his version] of the story.

Part, or most of their success is predicated upon being the expert. You as the layperson are outside of your comfort zone. So easy is it to manipulate and sell to laypersons, that extensive professional rules [ethical requirements] for various professions have been created to prevent exploitation of the layperson and their being fleeced.

The analogy with the 'market' is also accurate. Laypersons, novice traders/investors, fall victim to the professionals consistently.

jog on
duc


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## Skate (26 January 2019)

ducati916 said:


> The first issue is that there must be some want or desire that can be elicited. If you don't like TV and never watch it, selling you a TV is not going to happen. Hence this low-end selling is predicated on pure volume. TV advertising is a good example of this and still very successful. An example would be fat, lazy people: stand on this and let your fat jiggle for 5mins a week and you can lose 10kg.
> 
> Possibly if you thought of 'selling' as a spectrum. You have the lower quality end and the high quality end. The lower end is exemplified above.
> 
> ...




ducati916, congratulations on an excellent post, expressing myself succinctly eludes me at times, I get bogged down explaining the the finer uninteresting details of a question or post.

Skate.


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## tech/a (26 January 2019)

I’ve always found that creating a desire and satisfying it gives me the best results in a sale.

The last car I bought the sales guy said take it home but as you swing onto the freeway hit it.
I did just that —- wow really nice—-I certainly had the desire—-I called my wife from the car.

Hi honey I’m just driving the car we are buying home —- we will shoot out for tea!

Next day I told the sales guy that I loved it and would return it in a few hrs.
Now he had the desire to sell it to me.

I dropped it off and made an appointment for Saturday morning.
I’d also made an appointment with another dealer I knew personally and was the guy that I bought my last car from. The dealership knew of him I made sure he was in our conversations.

Saturday
I want the car
He wants the sale 
To close we need an agreed price.
His leverage —- he has what I want.
My leverage —- I have alternatives.

We jockey around with the I’ll take your offer to my sales manager 
3 times knocking off a few grand here and there adding some extras

Then a stroke of luck in the negotiations 
My friend George calls me wondering where I am.
He is in my speed dial along with the dealership name.
It’s in the middle of negotiation so I show the face of the phone to the small group now trying to get me over the line. I answered the phone in front of them and said I was just finalising a meeting close buy and would be there shortly.

Now I was prepared to lose the deal—- 
They weren’t——-knowing that if I leave then I probably won’t come back
After all if it was them they wouldn’t!

So I deducted a further $8,600 which reached the figure I wanted to pay,
20 mins passed and I got up to go to see George.

Then —— Done it’s yours as long as we can demo the car for 6 weeks
Sure as long as you don’t clock more than 1500k

It was October took delivery in at Xmas.
Both desires are filled
Mine every time I pry it off my wife!
That was 2 years ago.

Fill both sides desires —- win win.


----------



## Skate (26 January 2019)

*Question*
Yesterday, I asked one question & received one reply _"Should we limit & confine the 'Dump it here' thread to trading topics only as trading topics on the "Aussie Stock Forum" is not in vogue at the moment" _

The answer was YES, keep the thread for trading.

*Off topic*
It appears on face value that some posts go were going off topic, not so. My posts are designed to be thought provoking, stimulating with a touch of emotion thrown in, everything traders need to be better what they do & why they do it.

*Drivers*
As traders we need to be aware of the drivers of our emotions so we make better trading decisions. The market manipulates us without our knowledge, we are oblivious to it. 

*Stick with me*
If you stick with me I'll try & tie it all together with stories, experiences, conditioning. The posts for your entertainment & enjoyment, I know all this crap, so it won't help me you may even learn without knowing that you are, hopefully you will feel like your along for the ride. (well that's the goal)

@Joe Blow  remarked _“All non-trading/investing posts can be split off into a new thread at any time. There could easily be two separate Dump it Here threads with different titles and purposes”_

*I want to explain*
Some of my posts were being removed from the "Dump it here' thread & placed rightly so under threads for the topic being discussed as it appeared posters were going off topic. I quickly posted a disclaimer to the relevant posters to quickly to explain the situation (a copy of the disclaimer is below)

*Disclaimer*
To be polite, Joe has removed my posts from the 'Dump it here' thread killing further conversation on the topic

*The big picture*
After explaining my long term strategy for the 'Dump it here' thread Joe understood the process behind my thinking & quickly restored those post, giving me additional latitude for the further develop of the thread.

Skate.


----------



## Skate (26 January 2019)

tech/a said:


> Peter/Skate
> 
> Aren’t you concerned that you’ll perform
> At about the average of the index?
> ...




*It's a Numbers Game* (pure mathematics)
System trading is having the knowledge and skill to recognise low risk, high profit potential, trades. I also aim to outperform the Index. I don’t see out performance difficult to do, because I have a plan to use to my advantage.

(a) I can enter and exit the market more swiftly.
(b) I can spread my risk over 40 stronger stocks from 500.
(c) I don't have to be in the market at all, when the profit-making opportunities are not there.
(d) Don't restrict your strategy like a hand of poker, keep rotating the stock till your have a strong profitable portfolio.
(e) I use protection, but I don't use a handbrake by taking profits too early or restricting my portfolio size.

*It's all about risk*
I look for trades that allow me to trade with a minimum of risk. I also look for trades that have the potential to generate excellent profits. Many traders have trouble working out if they want to trade the longer-term moves, yet at the same time they want to strangle the strategy using very tight stops making them feel more comfortable in doing so. 

*Miss the big moves*
This thinking will drive you distraction as the two are incompatible, and it will leave you with small losses as you watch the big, profitable moves take off without them. It is my belief that markets, from time to time, make large moves, and that the big money is to be made trading the big moves. Your trading strategies are your specific rules for trading, which must flow logically from your trading philosophy and aims.

Skate.


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## Skate (26 January 2019)

*How to ask a good question*
(a) Consider if your post adds value to the discussion.
(b) When expressing an alternative view, start off by saying “In my opinion …” and try to focus on the issues rather than person.
(c) We are all wordsmiths to some degree & it's easy to incite an emotional, knee-jerk response, creating an emotional outburst.

*Ambiguity*
Most times I’ll make posts with ambiguity in mind, other times they are cryptic. When members miss the point I'll sometimes give them a little taste of the subject matter.  I’ll mess with them, so they better understand manipulation & conditioning, two essential elements they need to understand when it comes to trading. I’ll post & direct the words for the biggest impact, written to achieve a response, allowing me to explain a point they previously didn’t grasp.

Skate.


----------



## Skate (26 January 2019)

*I'm surprised* 
It never stop surprising me that others fail to realise the importance of one of our most basic human flaws & how others seek advantage by exploiting them.

Skate


----------



## Skate (26 January 2019)

*Crowd psychology* (crowd behaviour)
We need to understanding crowd psychology as individuals, we tend to behave in an intelligent, controlled manner at least most of the time. 

*But put us in a group*
When we become members of a crowd, however, our behaviour can change quite considerably. Human beings become members of crowds, and follow the crowd, because it gives them a feeling of security. Following a strong leader allows them to feel reassured. Doing what others do helps to combat a fear of uncertainty.

Skate.


----------



## Skate (26 January 2019)

*Traders, trade as a group*
We have felt secure being members of different groups all of our lives, and hence we are conditioned to wanting to become a member of a group. 

*Price is the leader*
As members of a crowd, we tend to follow the leader, and to trust the judgement of the leader more than our own judgment. In the case of trading, the leader becomes 'price'. 

*We are slow on the uptake*
Traders tend to respond only to very obvious changes (such as a market downturn of last year, 2018) & not the slow, subtle changes, such as breakouts and retractions. They also become more emotional and impulsive which is not a desirable characteristic of a trader. 

*It's out of wack at the moment*
Buy the growth has now been replaced with sell into the upswing, (why?) because traders are scared & moody at the moment (Chicken Little, the sky is fall mentality)

Skate.


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## ducati916 (26 January 2019)

Skate said:


> *It's a Numbers Game* (pure mathematics)
> System trading is having the knowledge and skill to recognise low risk, high profit potential, trades. I also aim to outperform the Index. I don’t see out performance difficult to do, because I have a plan to use to my advantage.
> 
> (a) I can enter and exit the market more swiftly.
> ...





In the markets, there are [approximately] 10,000 x more events of 0.1% than events of 10%.

Your system [trading] must, in some form, be exposed to and benefit from these non-linear events. Of course there are many ways that this can be accomplished. Examples abound through various threads.

jog on
duc


----------



## ducati916 (26 January 2019)

Skate said:


> *Crowd psychology* (crowd behaviour)
> We need to understanding crowd psychology as individuals, we tend to behave in an intelligent, controlled manner at least most of the time.
> 
> *But put us in a group*
> ...




Profiting from 'momentum' based strategies requires that you join [at least for a time] the crowd.

jog on
duc


----------



## Skate (26 January 2019)

*We fail to see*
An understanding of 'price' behaviour will help you to understand how traders become mesmerised, how they fail to see the clear warning signs that the market is becoming dangerously overbought. 

*Want to make some money ?*
Such an understanding can make you, and save you, a great deal of money & there are times when a trader must do the exact opposite to what the crowd is doing. 

*Follow your system*
In trading, you need to be able to analyse what 'the price' is doing at any one time, and be prepared to do the opposite should your trading system give you a signal to do so. At the very least, you should exercise the utmost care when you observe extreme price behaviour.

Skate.


----------



## Skate (26 January 2019)

ducati916 said:


> Profiting from 'momentum' based strategies requires that you join [at least for a time] the crowd.
> 
> jog on
> duc




ducati916, Trend Following is all about jumping on 'momentum' I'm a believer that if others want to push a price higher it requires that I join them. Knowing when to get off is the hard part of the equation. 

*Common Reasons for Not Selling *(as a system trader)
People have a whole host of reasons they use to justify not exiting a trade when their trading system has given them a clear signal to exit. The following are some of the more common reasons

(a) The positions that has turn down they believe it will go back up again.
(b) They fail to follow their exit signal promptly. 

If your stock is weak enough to generate a sell signal, then don't look for excuses, just sell. The money is better off invested in another, stronger stock, if the market conditions permit this.

Skate.


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## Skate (26 January 2019)

*Another stupid *r*easons for not Selling*
Shaking my head, traders waiting for a Dividend to be paid no matter what the cost. You need to be conscious of the fact that a stock can fall faster than you may expect, particularly if the market has just experienced a downturn. Waiting for a dividend to be paid can cost you a large sum of money while you wait for a smaller sum.

*Trailing Stops*
Traders who understand mechanical trading systems, will have a proven method for exiting their trades, using a stop-loss or trailing stop, ensuring their trades are closed when their system signal was given.

*Capital preservation*
Exiting a position at the correct time preserves your capital. Capital is required to be 'locked & loaded' ready for the next excellent buying opportunity some point in the future.

Skate


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## Skate (26 January 2019)

*Investing or trading*
As we get older, we look forward to a happy and healthy retirement. We also look forward to a retirement in which we can afford to maintain a high standard of living. 

*Reality*
Sadly for many, however, the dream does not become a reality. In Australia, by the time you get to my age of 65 years, approximately one in six will remain in active employment, one in three will have died, and almost one in two will be relying on the government to support them.

*Life is all about money*
Money is not everything, and it certainly does not guarantee health or happiness, but it keeps my kids close.

Skate.


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## Skate (26 January 2019)

*Why become a trader ?*
Investing in the stock market has consistently proven to be one of the most profitable forms of investment available.

*Starting is easy*
You can start trading with a relatively small amount of money ($50K) whereas buying a property requires much more.

*A small investment*
$50K will allow you to take almost immediate action to buy and sell stocks, unlike property that takes much longer & with trading it allows you to sell part of an investment, whereas real estate requires the full property to be sold. 

*Compare the costs*
Transaction costs are much lower than those of an equivalent property investment & trading allows investments to be monitored easily, allowing you to obtain an accurate valuation quickly, at any time. 

*Trading is a safe Investment*
Trading allows you to choose from a diverse range of stocks, thus maximising returns while spreading the risk.  Trading is mostly free of blatant outside manipulation, due to the activities of regulatory bodies & has proven to be one of the safest forms of investment, if you knows what you are doing. 

Skate.


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## Skate (26 January 2019)

*What to buy & when to buy*
If you only buy the strongest stocks, and sell any stocks that do not perform well, you can expect to achieve significantly better results. These techniques include selecting higher potential stocks, when to enter and exit the market when each stock gives confirmed signals is where the money is made. 

*Consistently returns*
As with all types of investments, there are disadvantages associated with trading in the stock market. The main disadvantages includes the need to acquire knowledge to consistently achieve better than Index returns. The learning process is slow & painful.

*40 Position Portfolio*
Having a reasonable capital base with a large portfolio position size will ensure that you are not exposing too much capital to any one investment, ensuring that you can obtain a big enough return. Having the discipline & conviction to enter and exit the market when entry and exit signals are given is another matter.

*Monitor your investments.*
The good news is that, through gaining trading knowledge and experience, you can overcome these disadvantages, or at least minimise their impact.

Skate.


----------



## Skate (26 January 2019)

*I should answer a question I often get asked*
What is the difference between an investment and a trade ? 

*It's a touchy term*
Some argue that an investment is merely a longer term trade. Others argue that the difference lies in the intent whether you purchased the stock primarily for the dividends paid by the company, or for the capital gain.

*One thing I can say*
Trading requires greater knowledge, preparation and discipline than investing. It is also usually more profitable

Skate.


----------



## Skate (26 January 2019)

*Next I want to post about Trend Following *

*Information overload*
Its been stated the 'Dump it here' thread has an information overload, sometimes I post quicker than some can read, who knows. I'll wait till others catch up because I also want to explain what drives my trading strategy & why I trade three different systems. 

In the break I'll think about how to make the posts interesting to read.

Skate.


----------



## qldfrog (26 January 2019)

Definitely looking forward to cross the internet China wall and download your book


----------



## ducati916 (26 January 2019)

Skate said:


> *I should answer a question I often get asked*
> What is the difference between an investment and a trade ?
> 
> *It's a touchy term*
> ...





There is no difference.

Both have the same purpose: to exchange a set of circumstances (a) for a better/improved set of circumstances (b) through providing an input (a) and reaping the output (b).

The methods employed to achieve the result are different. The purpose is the same.

jog on
duc


----------



## Skate (26 January 2019)

Please if you want to ask me a question use @Skate

*How to ask a good question*
(a) Consider if your post adds value to the discussion.
(b) When expressing an alternative view, start off by saying “In my opinion …” and try to focus on the issues rather than person.
(c) We are all wordsmiths to some degree & it's easy to incite an emotional, knee-jerk response, creating an emotional outburst.
(d) Ask a detailed question & you will get a detailed response.
(e) Ask a one liner, it deserves a one liner response.

*Don't ask one liners*
Most member ask questions as one liner, (not all but some) & sometimes their responses are the same, it's unhelpful. If you skim my post you'll learn nothing but with repetitive reinforcement of successive posts the smart one will.

*It takes time*
It takes a lot of time & effort to give a measured response so all I'm asking if you have a question detail it precisely, let me understand why you don't understand as playing tennis with others is tiresome, boring & more importantly it waste our time.

*Same old same old*
Some members tend to follow patterns of behaviour, posting to invoke an emotional response, never answering questions directly to justify their position but they "always demand documentary evidence" from others to support their assertions, while offering none in return.

Please don't let that be you.

Skate.


----------



## satanoperca (26 January 2019)

*A peer review
*
Original comments in blue for @Skate
Comments by @satanoperca in orange.

There is a reason for the colour selections

The brief :
Sometimes you feel like dumping stuff & this thread might be the perfect place.

Helping Others
You might want to dump stuff here to help others "Achieved, but seems at times to be very manipulated and one sided, helping is not one directional, but bidirectional, may something the creator could understand or does but chooses not to"

Unload
You might want to unload & dump something off your chest "Haven't seen an example by brief creator, but may have missed it as busy out enjoying nature"

Gems
You might even want to dump some gems here "Achieved and enlightening at times, but need to sift through to find the gems"

Let it go
Sometimes you can't let somethings go till you dump it on paper "Haven't seen an example by brief creator, but may have missed it as busy out enjoying nature, with the exception of the briefer at times not liking that he cannot manipulate or control the direction of the discussion"

Dump it here
If you want to dump it, dump it here "Fantastic, creative idea for a thread and all credit to the creator"

Skate.


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## tech/a (26 January 2019)

Clearly targeting the Duck
I will respond as expected with emotion 

(1) I’m not a conformist to you Skate or anyone else. 
(2) I will respond in which ever way I feel the most time efficient and direct.
With question or answer.
(3) Same old Same old — you are affronted by my question, your attempting to gain control.
The same old same old is avoidance to direct questions,in ability to back ridiculous statements (Ann), attempting to put the Duck in its place ( the one you feel most comfortable with ) and of course not answering simple observations.——Deflecting

I’m sure I was married to you once 
Walked out then
Walking out now 

Enjoy your game.


----------



## satanoperca (26 January 2019)

I must also add, that @Skate ebook is long and detailed and in order to understand and get a grasp of the content, one must read completely first, and I would suggest reading small sections at a time to understand the wisdom/knowledge trying to be communicated. For every statement, question (what the f--k is he on about and why) and then you may develop insight and understanding.

Great read @Skate


----------



## Skate (26 January 2019)

satanoperca said:


> *A peer review
> *
> Original comments in blue for @Skate
> Comments by @satanoperca in orange.
> ...




Are me mates again ?

I was illustrating conditioning.

The way we respond to a situation is all about controlling your emotions, it’s so important when it comes to training. 

I was demonstrating that point. Don’t let emotions drive you.

If you still feel upset, let it go.

Skate


----------



## Skate (26 January 2019)

tech/a said:


> Clearly targeting the Duck
> I will respond as expected with emotion
> 
> (1) I’m not a conformist to you Skate or anyone else.
> ...




You miss the point, I’m not asking anything of anyone. I’ve politely requested if people want to ask me a question, please don’t use one liners as they serve no purpose. 

A detailed question let’s me better understand where they are coming from, so I can rely with a metered response instead of making me guess.

My post today was a re-post from a few days ago well before you getting upset.

Skate.


----------



## willy1111 (26 January 2019)

Skate said:


> I’ve always found that creating a desire and satisfying it gives me the best results in a sale.
> 
> The last car I bought the sales guy said take it home but as you swing onto the freeway hit it.
> I did just that —- wow really nice—-I certainly had the desire—-I called my wife from the car.
> ...




@tech/a  Thanks for sharing the story.

Curious to know, how much below rrp do you think you paid in rough percentage terms? 20% below? Ie $100k rrp paid. $80k etc

Rrp is meaningless to you, but to the  average mug off the street, this is what they pay.

I am just trying to gauge how much fat is in there for the dealer, how much room are they willing to move.

 We recently purchased a new car and managed to pay 20% below rrp, the sales process was fun for us, knowing a bit about the game. Maybe we could have got it down further, we will never know, but in the end both parties were happy and deal done.


----------



## willy1111 (26 January 2019)

Skate said:


> *Re-posting* (with highlights)
> _ "What happens when the other person is not interested in your interests?" _
> *No*, you don't understand we talk about them & their interests, people love to talk about themselves, see the posts below.
> 
> Skate.




I learnt this from How to win friends and influence people by Dale Carnegie.


----------



## satanoperca (26 January 2019)

Skate said:


> Are me mates again ?
> I was demonstrating that point. Don’t let emotions drive you.
> 
> If you still feel upset, let it go.
> ...




You make me laugh, young grasshopper.

We were never mates, the term mates, is something that I hold in the highest esteem, they are the people who you celebrate with, who you can call on when you are down, who don't judge you (something you must learn) and accept you for who you are, they are the people you hug and tell them that you love them.

So as we were never mates, unless you simply use the term for acceptance, we cannot be mates again, mateship, like trust is earn't.

So read and understand the statement and you might understand that your further comments a simple and naive, assumptions make an arse out of people, you assume a lot, without understanding.

My advice to you my young Skate, is read what you have written in your ebook and practice it.


----------



## willy1111 (26 January 2019)

Skate said:


> *Why talk about facial expressions*
> So you have a better understanding of a minor part of a complex subject. We all use facial expression to convey a message (that's a given) how do I explain such a complex subject in a short post.
> 
> *Bet you didn't realise*
> ...




I found Allan Pease has a lot of good info on reading the non verbal signs of communication. 

Any others you would recommend?


----------



## Skate (26 January 2019)

satanoperca said:


> You make me laugh, young grasshopper.
> 
> We were never mates, the term mates, is something that I hold in the highest esteem, they are the people who you celebrate with, who you can call on when you are down, who don't judge you (something you must learn) and accept you for who you are, they are the people you hug and tell them that you love them.
> 
> ...




satanoperca, thank you for your reply, its demonstrated that you have thought about your response to me, this time you didn't react but responded to me. (well done) 

I appreciated your measured & thoughtful reply. Having your say is liberating, everyone want to be heard (that's human nature) & expressing your point of view is how its done.

Your post is well written & constructed. (two thumbs up from me)

I only hope others read your post over & over to help them better understand why keeping emotions in check is so important.

Skate.


----------



## Skate (26 January 2019)

satanoperca said:


> I must also add, that @Skate ebook is long and detailed and in order to understand and get a grasp of the content, one must read completely first, and I would suggest reading small sections at a time to understand the wisdom/knowledge trying to be communicated. For every statement, question (what the f--k is he on about and why) and then you may develop insight and understanding.
> 
> Great read @Skate




satanoperca, thank you for grabbing a copy of my eBook I really appreciate you taking the time to have a look inside. I've spent a lot of time formatting the eBook into something so simple. The paragraphs are short & written from my point perspective.

I've got heaps in my head that I want to post, whether people agree with me is irrelevant. 

By you saying, _(what the f--k is he on about and why) _is important & it's an indication that you are thinking about what you are reading, letting it sink in. 

Now that's what I'm on about.

I'm not telling you what to think but how to think, a topic we are never taught. How to make a good decision is another.

Skate.


----------



## willy1111 (26 January 2019)

tech/a said:


> Clearly targeting the Duck
> I will respond as expected with emotion
> 
> (1) I’m not a conformist to you Skate or anyone else.
> ...




This post appears to be all about you @tech/a, have you considered trying to understand where @Skate is coming from? . . . silver shoes and all that 

Perhaps this post is not helpful, I've posted so that hopefully you might reflect and may see things from a different light, perhaps you don't want to?

All of your experiences and views are welcome and just as valid as anyone else's here.


----------



## satanoperca (26 January 2019)

I thank-you for your considered responds grasshopper, I hope you have learnt something from my post, as it is a reflection on one of your many pearls of wisdom, so the learn from something, it is important that the student believes that the teacher practices what they preach (hate the word preach).

Cheers, hope everyone has a great long weekend, off to the beach to become one with nature, even if it is a short period of time


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## satanoperca (26 January 2019)

"I'm not telling you what to think but how to think, a topic we are never taught." this is gold, and very few people even learn to practice it.

Back to gettin ready for the beach, great afternoon in Melbourne


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## Skate (26 January 2019)

willy1111 said:


> I found Allan Pease has a lot of good info on reading the non verbal signs of communication.
> 
> Any others you would recommend?




willy1111, I'm recommending a book that will serve you well.

*The ONE Thing*
The Surprisingly Simple Truth Behind Extraordinary Results
By: Gary Keller with Jay Papasan 

First thing you should be asking yourself, why is Skate recommending this book to me ?

Skate.


----------



## Skate (26 January 2019)

willy1111 said:


> This post appears to be all about you @tech/a, have you considered trying to understand where @Skate is coming from? . . . silver shoes and all that
> 
> Perhaps this post is not helpful, I've posted so that hopefully you might reflect and may see things from a different light, perhaps you don't want to?
> 
> All of your experiences and views are welcome and just as valid as anyone else's here.




Impressed a perfectly metered response. Now I'm getting somewhere.

*My aim*
My aim is to educate & help others - I'm always working an angle (what is the angle?)

*I'm trying to affect readers behaviour*
If my posts affect your behaviour I'm a winner (that's my end game)
What you find trivial could be the catalysis to engage another to think on a deeper level. 

Skate.


----------



## satanoperca (26 January 2019)

Skate said:


> *My aim*
> My aim is to educate & help others - I'm always working an angle (what is the angle?)
> 
> *I'm trying to affect readers behaviour*
> ...




You keep suffering from confirmational bias, I am yet to see or read/acknowledge that you can also learn from other posters, being humble and accepting that not everything you believe is correct, is the greatest attribute than any person can have.

I hope you can understand this, as it has nothing to do with winning or loosing or end game.

I wish you can also practice what you say and think on a deeper level, with understanding that most of the posts are just noise, just like the markets.

I'll the master (controller - not one ever controls, it is just a perception) or believed master, who is never a master until he can understand and accept that his wisdom is not always correct and he can also learn from his student, until he truly understands this, he/she can never to able to impart true wisdom.


----------



## Skate (26 January 2019)

satanoperca said:


> You keep suffering from confirmational bias, *I am yet to see or read/acknowledge that you can also learn from other posters*, being humble and accepting that not everything you believe is correct, is the greatest attribute than any person can have.
> 
> I hope you can understand this, as it has nothing to do with winning or loosing or end game.
> 
> ...




satanoperca, you say _"I am yet to see or read/acknowledge that you can also learn from other posters" _I'm sorry that you feel that way its not my intention to give you that impression.

To save you looking back, I attached a handful of posts for you to read, giving you a better understanding from where I'm coming from. 

*I'll post the last in a series of posts so you don't have to read my post in full.*

*Listen to everyone *
From my experience it pays to listen to everyone & than you decide if it’s relevant or helpful. You get to decide what to keep & what to discard & when you don’t listen you forgo the right to learn.

Skate.


-------------------------------------------------------------------------------------------------------------------------------------
Dec 17, 2018   Post #15

*I’ve been asked…*

*Why do you think you need to help others?*
_So others experience an alternative point of view
In general - people stop learning_

*Why do you feel the need to force your views on other?*
_I try very hard not to force my point of view onto others.
Thinking is integral to being human.
I never tell people what to think but encourage them how to think
Thinking is so much a part of us that we usually don’t think much about thinking.
If we pause for a moment and observe our thoughts, however, we begin to become aware of the activity of our mind._

*Why do I have a need to educate?*
_Hopefully to help others
Sometimes just to get somethings off my chest
Sometimes I can't let things go till I put it down on paper or tell someone_

*Why quote Gems all the time & why do you keep repeating them?*
_Life gems are everywhere & repeating them is for reinforcement
Hearing something once usually means nothing
Repeating is conditioning_

*I’ve been told*..

*I don’t want to hear that ****.*
_From my experience- It pays to listen to everyone & than you decide if it’s relevant or helpful.
You get to decide what to keep & what to discard.
When you don’t listen you forgo the right to learn._

-------------------------------------------------------------------------------------------------------------------------------------
Dec 19, 2018  Post 196

*Decisions*

Hi@tech/a

When you have something to say, I'll be the first to shut & listen.

I'll be the first to say - Tell me more..

IMHO you wear the title of ELDER proudly & when an elder speaks we should all prick our ears.

Thank you 

-------------------------------------------------------------------------------------------------------------------------------------

Dec 23, 2018  Post  #456

*Civility when expressing an opinion *
I've replied to @willy1111 explaining when members express an opinion it's not whether they are right or wrong or whether you’re right or wrong that's not what is important.

What is important - is the words you use to express an alternative point of view or express an opinion from your experience.

This thread gives you the ability to express your views without being ridiculed or challenged.

*Appreciation*
I appreciate every view expressed on ASF, I don't agree with some but others I take on board & feel wealthier for it.

*Acceptance*
We can all agree to disagree - we can all contest our ideas but to express those views in a manner that's unacceptable is not on.

*Belief*
Your belief system defines whether you agree or disagree with a members post but if you don’t listen you forgo the right to understand their point of view..

*A few members with conviction*
I've listed a few forum members I enjoy reading who prosecute their case forcefully with conviction and when they have something to say it pays to listen. Some posts I re-read to pickup the gems they causally scatter.

-------------------------------------------------------------------------------------------------------------------------------------

Jan 8, 2019 Post #689

I was offered a business proposition many years ago. He had flown half way across Australia for the meeting (I refused his offer, but that's not the point of this post)

*Learning something new *
I always make a habit of learning something new from everyone I meet. This guy was mega wealthy & I asked him if he would tell me his life story. (I was genuinely very interested)
*
We were now mates*
Three hours latter, now we are mates. He was from humble beginnings migrating to Australia after WW2.

*What was the takeaway from his story*
In the conversation he remarked " Australians don't appreciate their freedom"

-------------------------------------------------------------------------------------------------------------------------------------

Jan 8, 2019 Read post #686

kahuna1, I have a photo in my office to remind me what the high cost of war looks like. (image included)

61,720 lives lost in WW1
39,429 lives lost in WW2
520 lives lost in Vietnam

These figures don't include the injured or who have died from those injuries.

It's sobering to look at that photo every day.

-------------------------------------------------------------------------------------------------------------------------------------

Jan 16, 2019  Post #853

*Listen to everyone *
From my experience it pays to listen to everyone & than you decide if it’s relevant or helpful. You get to decide what to keep & what to discard & when you don’t listen you forgo the right to learn.

-------------------------------------------------------------------------------------------------------------------------------------

Skate.


----------



## Skate (26 January 2019)

*The Mistakes of Amateurs*
When a stock starts to fall rather than sell the stock and take a small loss, the trader buys more and more shares as the price falls, arguing that the average price that he or she paid was getting lower each time more shares were purchased. 

*Dangerous practice*
Beginners tend to average down because they cannot accept that they are wrong. Professional traders would never consider such a dangerous practice, as they understand that the stock continues to fall for a reason, and that there is no guarantee that it will ever recover.

Skate.


----------



## Skate (26 January 2019)

*Stock price goes up & then it goes down*
There are so many different effects that can cause a stock's price to rise or fall sometimes quite dramatically, these include interests rates, economic data, commodity prices, exchange rates, the mood of the market participants, company news and rumours, dividend payments, the activities of futures and options traders, the activity of funds and the impact of government policies. 

Don't forget "Fake news", who really knows what causes the share price to fluctuates & does it really matter.

*Frustrating exercise*
It is almost impossible to try and identify, even if you are successful, your analysis will be "out of date" just after one day. For this reason technical analysts focus on the stock price itself, which is all that really counts, trying to second guess why a stock rises is a frustrating exercise that is of no value or use.

Skate.


----------



## Skate (26 January 2019)

*Technical analysis*
Technical analysis uses price, volume, market sentiment and cycles to predict future price movements. It is not concerned with the financial position of a company. Technical analysis assumes that the chart reflects all known information that could affect the price of a company. As a consequence, there is no need for technical  analysts  to  concern  themselves  with  economic  or  political  issues,  or  even  with  market fundamentals.

Skate.


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## Skate (26 January 2019)

*Why reinvent the wheel*
When it comes to trading, reinventing the wheel can be very expensive both in terms of trading losses, & undue stress. 

*High quality courses for free*
There are high quality courses, podcasts & YouTube videos conducted by experienced, reputable people, analysts and traders to save you time and money. 

*Free educators*
The Internet has many free educators that you can use to further your education. 

Skate.


----------



## Skate (26 January 2019)

*Have a go*
If you are really determined to try your hand at trading, then do so. You will be a better trader for it, even if you decide at a later date that it is not something you wish to continue doing, just stop.

*Mechanical trading system*
By trading wisely with a mechanical trading system you can maximize your trading profits while strictly controlling your risk that will determine your portfolio performance.

Skate.


----------



## Skate (26 January 2019)

*What holding us back from trading*
In one word, "uncertainty", we are uncertain about what might happen in the future induces fear.

*Then the what-if's start to manifest *
What if I'm not good enough ? 
What if I'm not good enough to handle the risks and reach success ? 
What if I'm good enough to sustain my success ? 
What if I lose all our money ?

*Personal issues*
Personal doubt is always associated with the fear & add this to other personal issues such as insecurity about money, personal negative feelings and emotions, what about the fears that's lurk in your subconscious, it's little wonder that fear is holding you back.

Skate.


----------



## Skate (26 January 2019)

*What about our first trade*
It was my first trade when fear kicked in for me, it felt different to paper trading. It's the fear of doing something new & when your money is on the line, your emotions will go crazy. 

*It gets better*
It's the fear of uncertainty mentioned earlier presenting itself in every trade well into the future, so you must become accustomed to it. 

*Its a pity*
Many beginners succumb to the temptation to deny the fear rather than face it. (fear is a part of the game)

Skate.


----------



## Skate (26 January 2019)

*Learn how to handle the pressure*
Unless the beginning trader learns to handle this type of fear he or she will ultimately give up, probably assigning blame to the market or something else to mask the inability to learn from the experience.

Skate.


----------



## Skate (26 January 2019)

*In conclusion fear is part & parcel of trading.* 
Fear need not be a barrier to success rather than see it as a red light, see it as an amber light waiting for the green light, you don't have to eliminate fear but understand fear is an inbuilt natural human response for you to be cautious, never lose sight of this fact.

*Fear & uncertainty *
Fear & uncertainty is always there but you can learn how to handle it with strategies that build your self-control & confidence. When you enable these strategies to reduce fear, you can concentrate on achieving what you desire from the business of trading. (success)

Skate.


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## Skate (26 January 2019)

Austra02 said:


> Hi All,
> 
> Brand new to the forum and relatively new to trading. Loving the info I'm reading and learning.
> 
> ...




Hi Scott, welcome to 'ASF' community

*Starting Can Be Easy*
Trading doesn’t have to be super complicated or time consuming. Also, you don’t have to be rich either. There are plenty of easy ways to get started without having a ton of money and without being the world’s foremost trading expert.

*Investment strategy rather than trading*
One way is to start investing in LICs or Index Funds that are available on the Australian Securities Exchange. It’s simple, quick and there are no minimum contribution requirements and "*they trade like shares"*

*AFI and Argo Investments*
There are many listed investment companies such as AFI and Argo Investments, both of which will give you access to high quality investments at a low cost. You can keep your investment strategy robust and straightforward by using index funds and the resources are out there to get started with a significant investment strategy, even without much money or knowledge.

*Investing in LIC’s is a ‘set and forget’ style of investing.*
Having money managers looking after your funds, will give you additional comfort knowing your funds are being looked after by professionals who have the means and ability to circumvent the markets side-way movements, a time when the market is neither going up or down. The professional money managers have more tricks up their sleeves to create returns than we have had dinners.

There is even a free eBook for you as well.

*Found Here* --> https://www.aussiestockforums.com/threads/dump-it-here.34425/page-114#post-1011544

Enjoy our community, we have some of the smartest traders around that are willing to help you.

Skate.


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## satanoperca (26 January 2019)

You fail to inferstand or listen. You hear but dont not listen. Still just a grass hopper.


----------



## Skate (26 January 2019)

satanoperca said:


> You fail to inferstand or listen. You hear but dont not listen. Still just a grass hopper.




satanoperca, I'm now asking you respectfully to read the *(4 points)* listed below.

I've posted them before, inadvertently you may have missed or overlooked the post. 

Please read item *(2)* & *(3)* in particular.
*
Never react to a post but respond* (Responding will give you time to think)

1. Consider the context of what you are saying, put yourself in their shoes, try to understand their point of view.
*(2) Consider if your post adds value to the discussion.*
*(3) When expressing an alternative view, start off by saying “In my opinion …” and try to focus on the issues rather than person.*
4. We are all wordsmiths to some degree & it's easy to incite an emotional, knee-jerk response, creating an emotional outburst.

The comments your are making are not helpful for others reading this thread, please be respectful of that.

Skate.


----------



## tinhat (27 January 2019)

Maybe this whole thing should be about being a good person. After all, what should anyone expect to achieve from this disjointed nothing?


----------



## Darc Knight (27 January 2019)

satanoperca said:


> .
> the term mates, is something that I hold in the highest esteem, they are the people who you celebrate with, who you can call on when you are down, who don't judge you (something you must learn) and accept you for who you are, they are the people you hug and tell them that you love them.
> 
> So as we were never mates, unless you simply use the term for acceptance, we cannot be mates again, mateship, like trust is earn't.




I usually look forward to your posts Satan, you've got a down to earth Australian nature about you.

Just taking your post in isolation, without its context in a back and forth discussion: I always held the view that being Australian was about holding the term "mate" in high regard. A Mate is a person who you'd bleed for because as Australians we used to hold ourselves to a higher ideal, we wouldn't have a mate who was a "dodgey" person. We Australians were just that bit better people than those cut throat Yanks (as an example).
When female Salespeople would call me Mate, I'd feel uncomfortable. "Are you willing to bleed for me?" "Do you even know me?"

Yesterday being Australia Day this topic was on my mind, sorry for the detour.


----------



## Darc Knight (27 January 2019)

Why not, yesterday being Australia Day and all.


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## Skate (27 January 2019)

Darc Knight said:


> I usually look forward to your posts Satan, you've got a down to earth Australian nature about you.
> 
> Just taking your post in isolation, without its context in a back and forth discussion: I always held the view that being Australian was about holding the term "mate" in high regard. A Mate is a person who you'd bleed for because as Australians we used to hold ourselves to a higher ideal, we wouldn't have a mate who was a "dodgey" person. We Australians were just that bit better people than those cut throat Yanks (as an example).
> When female Salespeople would call me Mate, I'd feel uncomfortable. "Are you willing to bleed for me?" "Do you even know me?"
> ...





*FACT*
In my younger days I met John Williamson, he made an off the cuff remark to me "we look like twins". My father told John William whilst he was in town preforming don't do anything wrong as I would get the blame.

*Long story short*
For a period of 10 years or so l was the splitting image of John Williamson & I was mistaken for him no matter where I went, I also got recognised once in Florida by an Australian expat, could convince him otherwise.

*I've morphed*
Once the splitting image of John Williamson, now the splitting image of Charles Darwin (the avatar) I use the avatar of Charles Darwin not for his good looks, but he is my absolute hero.

Skate.


----------



## qldfrog (27 January 2019)

Hum skate, can not get the link quoted in 1256..your book, will load when on a proper screen

Just a personal reflection:
*English language limitation:*
In English, we can hear..or we can listen;
But we can only "read"
Always remember what you are actually doing when "reading"!

This thought came to my mind as i was going through this thread


----------



## Skate (27 January 2019)

*I wish to make a detour *
I want to clear up a few points members have raised with me about some of their concerns.

*I'm a straight shooter*
I've been upfront front from the very first post I made . I've posted, explaining why I use conditioning, manipulation, mind control & mind games. 

*Boo Hiss, others do it*
I go on to say without others knowing, "everyone plays mind games" & in the few posts I'll give you two examples of others using the same tactic of conditioning & using mind games. 

*I tell it as it is*
Well didn't I cop it, when I explained what I was doing & what I was hoping to achieve & all I got was a reaction that I'm ingenious, calculating, underhanded, a really bad person, how dare I treat others in this manner, no one likes to be manipulated, having mind games played on them etc. 

*Straight through to the keeper*
Readers just missed the point, they reacted without responding, I don't know how many times I have to says it but responding gives you time to think, something rare these days.

*I've been upfront*
I don't expect everyone to agree with my views but I am hoping others understand why I've written the words in a manner that I have. I've been upfront so you understand me better, Yes I've been conditioning readers from the very first post so the experience is positive for them.

*Conditioning*
This word has played with readers mind, they saw the worst of the word, it meant to them what they believed it meant, but not as I intended

*I have repeat it many times *(what my aim was in posting ?)
My aim is to educate & help others traders, trade successfully (to make money)

*Affect behaviour*
I'm trying to affect readers behaviour by conditioning them think rather than to read & if one my posts affect your behaviour I'm a winner (that's my end game) What you find trivial could be the catalysis to engage another to think on a deeper level. 

More to follow...

Skate.


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## Skate (27 January 2019)

*Boring Recap *(but important)

I'll post in a time line so you can follow (some unimportant paragraphs have been removed) 

*24th January 2019  Post #1145*

*Kindness*
debtfree, thank you for your kind words. I really appreciate you grabbing a copy of the eBook & recommending it to others. Having it in an eBook format means my posts can travel with you. 

*Stop & think about what you have just read* (you will see the eBook in a different light)
You will be amazed how much you can get out of the eBook from reading it again & again, you'll absorb more & more when you learn to unpack the posts instead of quickly skimming over them. 

*Heard it all before*
Most traders won't bother to read the eBook because they have heard it all before, but I bet if they read one paragraph after the other & think about what they just read there maybe some light-bulb moments for them.

*Ambiguity & cryptic *
I've written a lot of the post with ambiguity in mind, others cryptic, meaning a lot of my posts have more than one meaning finding those gems will be worth it in the long run. Even seasoned trader will get value from the eBook, using it as a pep talk, words of encouragement or just an affirmation they're on the right track. 

At some stage you will think "Ahh, I see what Skate is doing"

*We know what to do*
We all know what we have to do as traders but find it difficult sometimes to follow our plan under the most difficult of circumstances. 

More to come...

Skate.


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## Skate (27 January 2019)

*Boring Recap *(but important)

I'll post in a time line so you can follow (some unimportant paragraphs have been removed) 

*THIS POST IS IMPORTANT* (timeline 10:37am Friday)

Skate, Friday at 10:37 AM, 25th January 2019 Post #1155
debtfree, I'm pleased that you found the "Dump it here' thread conducted in a friendly & polite manner. I personally have found this thread refreshing, being nice is a gift to others.

*Have your say*
This thread by designed was to pass knowledge onto beginners, something members should be proud of. I now encourage others to have their say on matters that interested them it doesn't needs to be educational, we have done that.

*Disclaimer*
Members know the rules but it's worth repeating.

*Opinions are welcomed *
We shouldn't ridicule or challenge posters as it serves no purpose, it's like masturbating in public, it may feel good to you, but it looks disgusting to everyone else and it just makes the other person work harder to find ways to disagree with you.

*Being right or wrong*
Whether your view is right or wrong isn't important, what's more important, this thread gives you the ability to express your views without being ridiculed or challenged.

*Experience*
Every member enjoys a different level of experience & expertise, there is never a reason to display your level of knowledge by making others feel inferior.

*Timely reminder*
Abuse, insults and personal attacks directed at other people are unacceptable in the "Dump it here' thread, I'm not policing the thread but it pays to remember that everyone is entitled to their opinion.

*Alternative view*
If you disagree with someone rather than argue the merits of their points, post an alternative view, you don't have to belittle members to get your point across. Play the "the point" not the "person"

*Never react to a post but respond* (Responding will give you time to think)
1. Consider the context of what you are saying, put yourself in their shoes, try to understand their point of view.
*(2)* *Consider if your post adds value* to the discussion.
*(3)* When expressing an alternative view, start off by saying “In my opinion …” and try to *focus on the issues* rather than person.
4. We are all wordsmiths to some degree & it's easy to incite an emotional, knee-jerk response, creating an emotional outburst.
*
Friendly atmosphere*
Such posts that incite emotional responses tend to undermine the friendly atmosphere often resulting in long running feuds creating factional loyalty to one side or the other.

*Hard to detect*
*"Offending a member is hard to detect"* However, some members tend to follow patterns of behaviour, posting to invoke an emotional response, never answering questions directly to justify their position but they "always demand documentary evidence" from others to support their assertions, while offering none in return.

*# We all deserve a measured response not the alternative.*

I'll be the first to post in the new & improved 'Dump it here' thread to start things off.

Skate.


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## Skate (27 January 2019)

*Boring Recap *(but important)

I'll post in a time line so you can follow (some unimportant paragraphs have been removed) 

I posted the previous post above at (10:37am Friday 25th January 2019) on my 'Dump it here' thread & than the next day I explained to tech/a that one liners aren't that helpful, they server no purpose, *well didn't the **** hit the fan.
*
_*"I'm posting this for others to learn, you can take takes side, you can say I'm rude again but the point is 'we should respond to others who are reasonably intelligent in a manner that is helpful' that is the importance of relisting the posts 

(I'm not saying tech/a response was wrong but if he is interested 'ask a good question' & I'll be happy to give a measure response)"*_

*THIS POST IS IMPORTANT* (timeline 12:43pm Saturday 26th January 2019)

Yesterday at 12:43 PM        post #216     ( “p2-asx-weekly-portfolio” thread)
https://www.aussiestockforums.com/threads/p2-asx-weekly-portfolio.32779/page-22#post-1012018

tech/a said: *↑*
_Hold the phone!
If your trading a system you _*DON'T*_ have the luxury of being discretionary (Marked in BLUE)_

*My response*
Sorry tech/a this is Peter's thread & if you would like more details from me post a question to me in the 'Dump it here' thread.

*With respect*
Please write a detailed question instead of using one liners & blue highlighting as it serves no purpose.

*One liners deserve a one liner response*
_"If your trading a system you *DON'T* have the luxury of being discretionary"_

*My Reply*
True, I don't use any discretionary at all. I stand by my statement made at point (a) (d) & (e) 

Skate.


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## Skate (27 January 2019)

*Boring Recap *(but important)

I posted again giving reasons why you need to ask good questions.

*Why ?*
Because others may have missed my previous post on the subject matter

*Skate, yesterday, 26th January 2019 Post #1228*
Please if you want to ask me a question use @Skate

*How to ask a good question*
(a) Consider if your post adds value to the discussion.
(b) When expressing an alternative view, start off by saying “In my opinion …” and try to focus on the issues rather than person.
(c) We are all wordsmiths to some degree & it's easy to incite an emotional, knee-jerk response, creating an emotional outburst.
(d) Ask a detailed question & you will get a detailed response.
(e) Ask a one liner, it deserves a one liner response.

*Don't ask one liners*
Most member ask questions as one liner, (not all but some) & sometimes their responses are the same, it's unhelpful. If you skim my post you'll learn nothing but with repetitive reinforcement of successive posts the smart one will.

*It takes time*
It takes a lot of time & effort to give a measured response so all I'm asking if you have a question detail it precisely, let me understand why you don't understand as playing tennis with others is tiresome, boring & more importantly it waste our time.

*Same old same old*
Some members tend to follow patterns of behaviour, posting to invoke an emotional response, never answering questions directly to justify their position but they "always demand documentary evidence" from others to support their assertions, while offering none in return.

*# Please don't let that be you.*

Skate.


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## Skate (27 January 2019)

*Boring Recap *(but important)

The only reason tech/a took offence was because he believed the *"shoe fitted"*

Yet when I posted the day before on FRIDAY 26th January 2019 post #1155 the same post (*75 posts previously*) there clearly wasn't an issue.

*No self-control *
The issue is "how long we tech/a hold his position" that is what I'm interested in & see how he will respond as he won't be able to control himself. (he realises it was an over reaction but he will defend his position)

*A serious design flaw - faulty thinking*
People experience genuine pleasure—a rush of dopamine—when processing information that supports their beliefs.
“It feels good to ‘stick to our guns’ even if we are wrong,”

*Tech/a, 1:49pm  26th January 2019 Post #1230*
Clearly targeting the Duck
I will respond as expected with emotion 

(1) I’m not a conformist to you Skate or anyone else. 
(2) I will respond in which ever way I feel the most time efficient and direct.
With question or answer.
(3) Same old Same old — you are affronted by my question, your attempting to gain control.
The same old same old is avoidance to direct questions,in ability to back ridiculous statements (Ann), attempting to put the Duck in its place ( the one you feel most comfortable with ) and of course not answering simple observations.——Deflecting

I’m sure I was married to you once 
Walked out then
Walking out now 

Enjoy your game.

Skate.


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## Skate (27 January 2019)

Sometimes people fail to make appropriate revisions to their attitude 

*Sticking to a position *(Confirmation bias)
People will embrace information that supports their beliefs and reject information that contradicts them. Of the many forms of faulty thinking that have been identified, confirmation bias is among the best catalogued.

If reason is designed to generate sound judgments, then it’s hard to conceive of a more serious design flaw than confirmation bias.

Skate.


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## Skate (27 January 2019)

*Conviction*
A person with a conviction is a hard person to change. Tell him you disagree and he turns away. Show him facts or figures and he questions your sources. Appeal to logic and he fails to see your point.

Skate.


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## Skate (27 January 2019)

*Recapping for an example..*

*I have posted "How to ask a good question*
(a) Consider if your post *adds value to the discussion.*
(b) When expressing an alternative view, start off by saying “In my opinion …” and try to focus on the issues rather than person.
(c) We are all wordsmiths to some degree & it's easy to incite an emotional, knee-jerk response, creating an emotional outburst.
(d) *Ask a detailed question & you will get a detailed response.*
(e) *Ask a one liner, it deserves a one liner response.


Tech/a, 25th January 2019 Post #1159
Why*
Other than procreation of the Species (Homo Sapiens)
What is the point

*Skate's reply*
"Because it feels so F*cking good" that's the point !

Skate.


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## Skate (27 January 2019)

Think about MIND Games, manipulation, conditioning. (we all do it)

*Perfect example*
Read the post below by @tech/a & @willy1111 negotiating a vehicle sale. 

*Its okay we all do it*
Mind games at its best, deceptive, use any bad words you like, but mind games is a part that makes us human.

Skate.

-------------------------------------------------------------------------------------------------------------------------------------------------

*Tech/a, yesterday, 26th January 2019 Post #1209*
I’ve always found that creating a desire and satisfying it gives me the best results in a sale.

The last car I bought the sales guy said take it home but as you swing onto the freeway hit it.
I did just that —- wow really nice—-I certainly had the desire—-I called my wife from the car.

Hi honey I’m just driving the car we are buying home —- we will shoot out for tea!

Next day I told the sales guy that I loved it and would return it in a few hrs.
Now he had the desire to sell it to me.

I dropped it off and made an appointment for Saturday morning.
I’d also made an appointment with another dealer I knew personally and was the guy that I bought my last car from. The dealership knew of him I made sure he was in our conversations.

Saturday
I want the car
He wants the sale 
To close we need an agreed price.
His leverage —- he has what I want.
My leverage —- I have alternatives.

We jockey around with the I’ll take your offer to my sales manager 
3 times knocking off a few grand here and there adding some extras

Then a stroke of luck in the negotiations 
My friend George calls me wondering where I am.
He is in my speed dial along with the dealership name.
It’s in the middle of negotiation so I show the face of the phone to the small group now trying to get me over the line. I answered the phone in front of them and said I was just finalising a meeting close buy and would be there shortly.

Now I was prepared to lose the deal—- 
They weren’t——-knowing that if I leave then I probably won’t come back
After all if it was them they wouldn’t!

So I deducted a further $8,600 which reached the figure I wanted to pay,
20 mins passed and I got up to go to see George.

Then —— Done it’s yours as long as we can demo the car for 6 weeks
Sure as long as you don’t clock more than 1500k

It was October took delivery in at Xmas.
Both desires are filled
Mine every time I pry it off my wife!
That was 2 years ago.

Fill both sides desires —- win win.

-------------------------------------------------------------------------------------------------------------------------------------------------

*willy111, yesterday, 26th January 2019 Post #1234*

We recently purchased a new car and managed to pay 20% below rrp, the sales process was fun for us, knowing a bit about the game. Maybe we could have got it down further, we will never know, but in the end both parties were happy and deal done.

-------------------------------------------------------------------------------------------------------------------------------------------------

*Whats the point?*
It's a demonstration to explain when I do it, there is a problem.
When others do it, you fail to realise it, missing the point.

Skate.


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## Skate (27 January 2019)

qldfrog said:


> Hum skate, can not get the link quoted in 1256..your book, will load when on a proper screen
> 
> Just a personal reflection:
> *English language limitation:*
> ...




*Apologies*
Apologies qldfrog, for taking time to get back to you (you posted at 11:25am & its now 1:52pm) I was in the middle of writing some posts & didn't want to beak my concentration. I wanted to keep that group of post together for other to be read without being interrupted by another post not belonging to the series.

*No limitations*
My eBook has no download limitations, I'm assuming the limitations is your location. 

*The power of words*
Reading does much more, when reading a book your mind turns words into pictures, words make you feel emotions, some words will have more meaning to you than for others, when reading you even get to hear tones & smiles in the characters voices.

*172,000 words*
Don't underestimate the power of words, that's why we have 172,000 words to pick from.

*Fun Fact*
You can even hear a smile on a phone.

Skate.


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## Skate (27 January 2019)

*The use of words & why people jump at shadows using their Lizard brain.*

Look at this word & pronounce it in your heard before reading the next post

*LEAD
*
The pronunciation differs & you need to read it in context to understand its meaning.

Skate


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## Skate (27 January 2019)

*"LEAD"*
A few different meanings of the word lead. 

What long post about nothing I hear you ask, if you are thinking alone those lines you're missing the point of the post.

*Its' heavy
Lead* is a chemical element with symbol Pb.
*Lead* is still widely used for car batteries.

*Control your dog
Lead*, better known as a dog lead is a hand held halter, a rope, to control your dog while moving forward.

*Winning position*
L*ead* is a position of advantage in a contest, first place.

*Be in charge
Lead*, taking the lead is an initiative in action, an example for others to follow.

*Follow it*
A *lead* is a potential contact.

*Used in Sales*
A *lead* is an individual or organization with an interest in what you are selling. The interest is expressed by sharing contact information.

*Start of a story*
Beginning of a story is called a "*lead*". The *lead* can be a sentence, a paragraph, or even a page long. 

*Journalist*
If you're interested in becoming an expert journalist, understanding how to *write* *a* *lead* is a key skill for your toolbox.

English is difficult.

Skate.


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## Skate (27 January 2019)

Lets not start of another word.

*Volumn or Volume*
The spelling of "volumn" which is referring to a series of books whereas the word "volume," referred to a measure of space.

Coders use words like these to write trading strategies.

Skate.


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## Skate (27 January 2019)

Now lets talk about that nasty word "*Conditioning*" & in context what does it mean ?

*Conditioning* 
In the 'Dump it here thread' I use 'conditioning' in the psychology sense, it's a behavioural process whereby a response becomes more frequent or more predictable in a given environment as a result of reinforcement, with reinforcement typically being a reward for a desired response. (that's why reading my eBook once you'll learn nothing, read it over & over trivial points become non-trivial)

# I use conditioning for positive reinforcement

*Conditioning* 
Conditioning is a subdivision of behavioral science that studies perception and behaviour through manipulation of knowledge than putting it into practice, to help forum members, people in general to solve day-to-day problems and improve quality of life. Positive affirmation, positive reinforcements, are essential when it comes to trading & trading successfully.

Skate.


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## Skate (27 January 2019)

I want to talk about '*The Mind Map*' & why people act the way they do. (before I move back onto the topic of trading)

*Its all to do with trading*
You might be wondering why I've been going off on a tangent posting about non-trading subjects. Well you might be surprised that this top has all to do with trading it gives you a direct connection of behavioural science (a fancy ways of saying' why people act the way they do) 

*Human Nature*
To help you understand how people think, how they react to you, how they make decisions and how you handle them more effectively. I want to explain a time in my life where I couldn't get enough knowledge quick enough. I was twenty-two at that time and was fascinated to learn the different phases of people. 

Skate.


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## Skate (27 January 2019)

*Human phases*
I’ll outlined each phase in separate posts to give you time to unpack them one by one, it will gives you an insight why people act the way they do. (each stage is an adult stage, even though I relate them to age groups) 

*There are seven clearly identifiable personality* 
There are (7) personality types or phases. I call this outline ‘The Mind Map’. Most of us adopt one of these phases as our primary personality type, but we may shift from one phase to another depending on the relationship, the circumstances, or stress. Whenever people interact, they invariably do so from one of these phases.

Skate.


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## Skate (27 January 2019)

*We can jump at will*
By moving from one phase to another at will, you can have the capacity to deal effectively with anyone, under nearly any circumstance. 

*It's not going well*
When your conversation isn't going well, you can quickly move to a different phase, gaining the psychological high ground that produces results.

Skate.


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## Skate (27 January 2019)

*The Mind Map-Phases of personalities. *
Please remember we are talking about adult personalities, I use different ages so you can have a better understanding, it difficult for me to write about a complex subject & put it in a few words to keep you interested. 

*Takeaway*
You will find this subject matter dull & totally boring or fascinated just like me  

*1. The Amoral Phase.*
We all begin life as infants and because the behaviour of infants is neither moral nor immoral, we call this the Amoral Phase.

Skate.


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## Skate (27 January 2019)

*2. The Ego Phase.*
Infants move into this phase when they discover that they are individuals, unique and separate from their parents. In it, children perceive themselves as the centre of the universe and all other people are placed in their life to serve them.

Skate.


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## Skate (27 January 2019)

*3. The Pleaser Phase.*
At some point early in life, the mind learns that not only is it a separate ego, but that there are other egos in the world. Survival appears to depend on pleasing others. The common characteristic of this phase is the desire to please others. Your best approach with Pleasers is to be friendly, take a real interest in them and be somewhat assertive, since Pleasers tend to put off making decisions.

Skate.


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## Skate (27 January 2019)

*4. The Authority Phase.*
Characterised by its need for rules, in the teen years we realise that not only are we individual egos and that there are other egos, but that there are whole systems or groups of egos we belong to. The maturing mind now seeks the right way to do everything. Authority Phase people are not satisfied for very long because they've relinquished responsibility for their actions and relationships, turning them over to the experts. 

Skate.


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## tech/a (27 January 2019)

willy1111 said:


> @tech/a  Thanks for sharing the story.
> 
> Curious to know, how much below rrp do you think you paid in rough percentage terms? 20% below? Ie $100k rrp paid. $80k etc
> 
> ...




I was surprised myself.
My main criteria was I wanted white with Black leather trim.
There was only one and it was at the Car show in Adelaide and it was the Supercharged Race version.
I wasn't fussed about a Supercharged race version. I could have another one in the same time 3 mths if I ordered it
But then came the chance to take the Puppy home.
I was happy now with this version.
Retail with all the bells and whistles was $147k
I really didn't have a figure as the Diesel version I wanted was $88k

They wanted to keep the R version till Xmas as it was the only one in SA.
So it was then a demo vehicle so $20K straight off.
There was haggle over the trade in and managed another $10k on that.
Then battering until I came up with a figure that equaled to amount I had
add to the trade on to do the deal. Total $108k---Done!

If It wasn't for that Phone call I doubt they would have done the deal and I
doubt I would now be driving it. Time / Place / and Opportunity.

They could now say to those who took it out and wanted it---sorry sir its sold
but you can order one it will be 3 mths.
They have sold a few I've seen at least 5 in Adelaide.


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## Skate (27 January 2019)

*5. The Principle Phase.*
Around thirty something, usually after having been involved in a stable relationship, we may start to recognise that there are certain fundamentals that make life work, something more basic than rules. Once a mind can understand systems of rules and laws at the Authority Phase, it can begin to discern the more fundamental principles by which life functions. The general characteristics of the Principle Phase can be summed up in three words: fair, care and share. 

Skate.


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## Skate (27 January 2019)

*6. The Responsible Phase.*
At some point, usually later in life, we finally recognise the inescapable truth of cause and effect, that everything that we've ever done, everything that we know, everything that we have, is the direct consequence of the choices we've made during our lifetime. The mind that is able to apply principles on a responsible basis enters the Responsible Phase. At this phase we accept accountability for our actions and outcomes. Our achievements are no longer attributed to conditions of birth, bad luck, or our parents' strengths or weakness. 

Skate.


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## Skate (27 January 2019)

*7. The Universal Phase.*
The next phase is that of those who have mastered life and represents the Universal Mind. Nearly everyone has experienced this phase at least once. This is you at your highest potential, fully integrating both your logical and creative mind, integrating yourself with others and integrating the mental, physical and spiritual realms of experiences. The general characteristics of the Universal Phase are freedom and empowerment. This person maximises freedom for everyone by living and teaching correct principles and then allowing others to govern their own lives and handles their own responsibilities. 

Skate.


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## Skate (27 January 2019)

*What Phase should I project ?*
Strive to operate out of the highest possible phases but have the flexibility to adapt to any one of 7 phases. Adapting the correct Phase enables you to dance to the music being played.

*I start with the Principle Phase*
I base all relationships on the ‘Principle Phase’, this Phase demonstrates leadership and it instills confidence in the mind of others. They will like you, trust you and want to talk & listen to you, because of who you are.

*You get to pick*
If you have the ability to pick which Phase at any given time will allow you to fine tune your conversation to cater to their phase. When you can connect to their Phase it allows you to form a person-to-person relationship with them.

*Very IMPORTANT*
I can’t stress this enough, sell yourself first.

Skate.


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## Skate (27 January 2019)

*First Rule*
The first rule is to sell yourself. If you do not like meeting people and learning what makes them tick, what I’ve just post might not be for you.

*Correct techniques*
With the correct techniques you will have a positive effect on people and receive an increased sense of achievement and control over any conversation.

Skate.


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## Skate (27 January 2019)

*Knowledge helps*
A knowledge of psychology helps. Remember everyone is different, the same person is different at 9.00 a.m. & at lunch, over a drink, cold sober, or talking about work or trading, on a Monday morning after a weekend with in-laws or on Friday after the markets close, or thinking about that holiday trip to Sydney on the Australian Day long weekend.

This is the fascination of people & their phase changes with them depending on their mood or emotional state.

Skate.


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## Skate (27 January 2019)

*Reaction*
A persons reaction is driven by their perception, this is the most powerful statement I can pass on to any forum member. People are motivated to respond to you by their emotions. Always keep in mind that people are emotional critters.

*Dance to the music being played*
Get in sync with them quickly the rest is smooth sailing.

Skate.


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## Skate (27 January 2019)

*Fact *(a timely reminder for the Australian Day long weekend)
I want to post about a substance that is responsible for so many deaths each year in Australia.

*DHMO*
Dihydrogen Monoxide (DHMO) is dangerous if ingested in large quantities or not used correctly, it’s colourless and odourless chemical compound & it’s found everywhere.

*If you come in contact with it use these 3 rules to keep you safe*
(1) Use common sense.
(2) Exercise caution when there is the potential for accidental inhalation or ingestion of DHMO.
(3) Don't panic, do everything possible to keep your family safe around it.

*Chemical name*
The chemical name for water is "Dihydrogen Monoxide" (DHMO), and listing some of water's well known effects in a particularly alarming manner, such as accelerating corrosion and causing suffocation, fool most people into thinking the substance should be banned.

*Little understanding*
There are some words we have little understanding of & another word is "conditioning"

Skate.


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## Skate (27 January 2019)

*Now that I've got that off my chest.* 
I've had my rant & now feeling much better, so lets talk about system development from my perspective.

*Instrumental in my system development*
I want to talk about 3 people who have been instrumental in my system development. Their methods formed the way I think & trade.

1. Richard Donchian
2. Nicolas Darvas
3. John Bollinger

All these guys were Trend Followers a theory I can associate with.

Skate.


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## Skate (27 January 2019)

*1. Richard Donchian *(Donchian channels)
*
Donchian channel breakout strategy*
I've traded a Donchian channel breakout strategy for a year with success. I no longer trade the Donchian Breakout strategy (not that's it's not a good strategy) it just didn't make the cut for my Hybrid Strategy. 

*3 of my best*
My Hybrid strategy is a combination of 3 of my best strategies. I have 6 good trading strategies all highly correlated & I've traded them all at the same time a few years back, but with a series of highly correlation systems you tend to get the same signals just weeks apart.

*His rules were surprisingly simple*
1. Buy when the current price exceeds the highs of the previous four full calendar weeks.
2. Exit when the current price falls below the lows of the previous four full calendar weeks.

*Simplicity*
It's a very simple strategy with a twist, that no longer works with standard settings. Also the strategy has been traded to death, the edge is gone.

*Out the box*
# The theory is still good but to trade it successfully you need "out the box" parameters.

*Stock standard moving averages*
Many traders have used the 5 and 20 day moving averages & it's not known why, however they do relate to the number of trading days in a week and a month, respectively. 

*Volatility*
Richard Donchian idea was to use a volatility relative to the 20 day moving average, but with some added parameters. The 5 day moving average serves as a sell. 

*Conclusion*
Richard Donchian was a true pioneer of technical analysis. The fact that the trading methods he developed form the basis of so many trading methods used today is an excellent indication of the value of his method.

Skate


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## explod (27 January 2019)

Before I begin the explanation to my own intuitive approach to investing I feel an understanding (if it can truly be reached) of the following discussion on the breakup/down of reality today could be worthwhile.

https://www.eurozine.com/the-end-of-the-era-of-endings/


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## Skate (27 January 2019)

Some Graphics to explain why the Donchian channel breakout strategy didn't make the cut.

Compare the results to my Hybrid Strategy posted on 17th January 2019 Post #871
https://www.aussiestockforums.com/threads/dump-it-here.34425/page-88

*Hypothetical ONLY*
The graphic in the post are hypothetical ONLY for comparison purposes.
The backtest dates are 1st July 2017 to 30th June 2018 (2017/18 FY)

*Actual Trading Result (next post)*
I traded Donchian channel breakout strategy from July 2015 to June 2016, which I'll post as well (so you can see how I went)

*Donchian channel breakout strategy*
I've traded a Donchian channel breakout strategy for a year with success. I no longer trade the Donchian Breakout strategy (not that's it's not a good strategy) it just didn't make the cut for my Hybrid Strategy.

*Hypothetical Trades ONLY














Skate.*


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## Skate (28 January 2019)

*These graphics are my "Actual Trading Result" 2015-2016 FY*

I traded Donchian channel breakout strategy from 1st July 2015 to 30th June 2016, posted below (so you can see how I went)

*Donchian channel breakout strategy*
I've traded a Donchian channel breakout strategy for a year with success. I no longer trade the Donchian Breakout strategy (not that's it's not a good strategy) it just didn't make the cut for my Hybrid Strategy.

*Actual Trading 


*












Skate.


----------



## Skate (28 January 2019)

explod said:


> Before I begin the explanation to my own intuitive approach to investing I feel an understanding (if it can truly be reached) of the following discussion on the breakup/down of reality today could be worthwhile.
> 
> https://www.eurozine.com/the-end-of-the-era-of-endings/




explod, after reading that exhaustive post, I failed to make the connection how "the-end-of-the-era-of-endings" article can be linked to any trading strategy let alone how you will link the article to your own intuitive approach to investing.

I'm intrigued, you have aroused my curiosity, I look forward with interest to your post.

Skate.


----------



## Wyatt (28 January 2019)

Hi Skate,

Thanks for a getting back to trading. Some of that other stuff is a little too esoteric for me.
 And yes FY15-16 was a magic year for trend followers, I have my own hypothetical backtest to confirm this.





The bottom 2 graphs tell the story of cutting losses after giving the stock every chance of proving it's worth and letting winners run.


----------



## Skate (28 January 2019)

Wyatt said:


> Hi Skate,
> 
> Thanks for a getting back to trading. Some of that other stuff is a little too esoteric for me.
> And yes FY15-16 was a magic year for trend followers, I have my own hypothetical backtest to confirm this.
> ...




*Cafeteria traders*
Wyatt, I've read your posts with interest & yes your posts are slanted towards the facts & figures of trading. I'm trying to cater for a wide audience. I find most members on ASF are cafeteria traders, meaning they tend to pick & choose what appeals to them.

*Why post crazy stuff I'm not interested in*
If I may, the esoteric post I've made serve a purpose, I don't expect everyone to enjoy them but they do have an arching reason for the inclusion into this thread, it's just not evident to most at the moment, but there is a reason.

*Still to come*
I want to post on system design & explain it in such a way that it be universally applied to any charting program. I want to explain about a piece of A4 printer paper & tie that to trading. 

*Ideas*
I have a million ideas & so little time to express them. Next I want to carry on a theme & finish giving a background history on traders who have had an influenced me, explaining why the top 3 strategies out of 6 good strategies made the cut being a part of my Hybrid strategy.

*Charts *
I've posted a few charts in their relevant thread & gave a perspective through the eyes of my Hybrid strategy. The charts will need no explanation & I'm posting them just for your benefit (hopefully others as well) as the charts will go along towards you understanding my system.

Skate.


----------



## Skate (28 January 2019)

*SVW* Seven Group Holdings Ltd

@Wyatt, from my perspective I would like to make a comment on this stock for you.

*Disclaimer*
I like the stock (SVW)Seven Group Holdings, this stock has been kind to me in the past, but it's in a no go zone for me at the moment, traders will continue to sell into any upswing (IMHO) meaning there will be no joy in this stock for me in the near future.




Skate.


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## Skate (28 January 2019)

*@Wyatt I want to make a comment & have an input how I see this stock.*
Bravura Solutions Ltd (BVS) has been good to me in the past, but its totally out of favour at the moment. The ROC indicator (the yellow ribbon at the bottom of the chart) is screaming at me to be cautious,very cautious as nobody is loving this stock at the moment. I'm posting the charts for an alternative perspective.

*Out & back in*
Notice my 'stale stop' kicked me out of the trade. Never be afraid to sell you can always buy it back again. (small commission charge) its no big deal.

*Selling is easy*
Selling is cheap and easy and can be undone in the blink of an eye.

*A stumbling block*
Too many seem to think that if they sell a stock, they are somehow prevented from buying it back again. Not so. For most traders, the biggest stumbling blocks to selling are mental.




Skate.


----------



## explod (28 January 2019)

Certainly not going to drop out of the sky.  Volume (selling) has petered out and it's looking to rise. IMHO


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## Skate (28 January 2019)

@Wyatt, from my perspective I would like to make a comment on this stock for you. @peter2, made a comment that Hub24 Ltd (HUB) "Price has been range bound" & I would like to echo his statement.

*Explanation*
My ROC indicator (the yellow ribbon on the bottom of the chart keeps turning on & off) traders are very apprehensive about this stock, Traders are selling into any upward movement.




Skate.


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## Skate (28 January 2019)

explod said:


> Certainly not going to drop out of the sky.  Volume (selling) has petered out and it's looking to rise. IMHO




*We all have our own opinions*
This is the great thing about traders, "we are all different". 

*I don't share you view*
I don't happen to share your view at the moments and the crowd is agreeing with me at the moment. Traders will continue to sell into any upswing (IMHO) meaning there will be no joy in this stock for me in the near future.

*Why do I think this way* (my reason)
@explod, have a look at the pressure selling, you might just change your opinion. The charts needs no explanation as that charts paints a thousand words.




Skate.


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## Skate (28 January 2019)

@Wyatt, from my perspective I would like to make a comment on G8 Education Ltd (GEM) for you & to show you how my Hybrid strategy picked this move early.
*
Disclaimer*
I'm on this move already.

The chart below explains my entry (my Hybrid system need to be on breakouts early)




Skate.


----------



## Skate (28 January 2019)

Wyatt said:


> Hi Skate,
> 
> Thanks for a getting back to trading. Some of that other stuff is a little too esoteric for me.
> And yes FY15-16 was a magic year for trend followers, I have my own hypothetical backtest to confirm this.
> ...




@Wyatt, would you please post the 2 graphs again, full size image instead of thumb nails,  thumb nails are unreadable for me. I'm very interested in having a look at them.

Skate.


----------



## ducati916 (28 January 2019)

Skate said:


> *We all have our own opinions*
> This is the great thing about traders, "we are all different".
> 
> *I don't share you view*
> ...




I'm with explod on this one. It's a LONG. I'd buy it now, it's moving higher.

jog on
duc


----------



## ducati916 (28 January 2019)

Skate said:


> @Wyatt, from my perspective I would like to make a comment on this stock for you. @peter2, made a comment that Hub24 Ltd (HUB) "Price has been range bound" & I would like to echo his statement.
> 
> *Explanation*
> My ROC indicator (the yellow ribbon on the bottom of the chart keeps turning on & off) traders are very apprehensive about this stock, Traders are selling into any upward movement.
> ...




Agreed. Rangebound.

When is does eventually breakout, the move will likely be substantial.

jog on
duc


----------



## Skate (28 January 2019)

ducati916 said:


> I'm with explod on this one. It's a LONG. I'd buy it now, it's moving higher.
> 
> jog on
> duc




ducati916, that's the very reason we have a market, differing opinions.

*It doesn't matter*
Being right ceases to be right when the majority doesn't share your view. Meaning your view & my view doesn't matter, what does matter is that we hold the same view as the majority & trade accordingly.

*Explanation *(my reason for my views)
I gave a detailed post to explaining that traders are very apprehensive about this stock & traders are selling into any upward movement. There is limited momentum (IMHO) as indicated by the patchy (ROC) indicator, a momentum indicator. There are other stocks that represent better value to me than (HUB) at the moment.

*Reason for your views*
"I'd buy it now, it's moving higher"

Skate.


----------



## Skate (28 January 2019)

ducati916 said:


> Agreed. Rangebound.
> 
> When is does eventually breakout, the move will likely be substantial.
> 
> ...




ducati916, made a great comment about 'Range-bound Stock' & what can happen (not always) when the stock eventually breakouts out of the range, saying that when it does breakout, (the move) will likely be substantial.

*I've posted a chart to explain what ducati916 said in one sentence*
I can talk about this chart with authority because I was on both moves. The stock was 'Price' bound for quite some time as highlighted by the boxing around a range of bars, each bar is 'one week'. The first attempted breakout failed, I was on that move early because of my strategy design. 

*The first breakout cost me money*
I lost money on the first attempted breakout. Heck, no one knows if a breakout is going to be successful & that failed attempt cost me a few dollars. I got off the sucker quickly when the move failed. 

*It's a business*
The cost of the failed attempt is the price of doing business, that's all.

*Feels good*
I was on the second attempt that turned out to be successful & profitable bagging 312% on my investment. Have a look at the (2) charts & read my comments on each. Looking at the charts you are looking at crowd behaviour, the crowd mentality.

*This chart is to explain when the 'Price' is range-bound & what can come after.*




*The next charts explains the move*
This is the same chart that shows a winning position. The first chart shows the 'Price' range-bound before the big move, I've explained I had two goes at profiting from this breakout, the first failed & I had to pay the cost to test the waters (The loss was the price I had to pay to have a go, a cost of doing business) 

# I was lucky to be on the second move.

*The move was on*
I jumped on, made some money, then jumped back off.  Surprise, surprise, it went back to being 'Price' bound again. 

*Nothing changed with the company other than its share price*
The company didn't change but there were forces manipulating the price to make a play. When they make waves I catch the splashes. Well that's the plan at least.




Skate.


----------



## Wyatt (28 January 2019)

Skate said:


> *Still to come*
> I want to post on system design & explain it in such a way that it be universally applied to any charting program.




I look forward to your further ideas in this area as you clearly have lots to offer to this community.



Skate said:


> @Wyatt, would you please post the 2 graphs again, full size image instead of thumb nails, thumb nails are unreadable for me. I'm very interested in having a look at them.






The monthly, as in traded only on the 1st trading day, (Willy1111's preferred timeframe) hypothetically went real well also during this period. Results below.

I have backtested which days in the month bring the best results and I can confirm, at least for myself and support the finding of others in this area, that the last and first few days of the month produce the highest CAGR.




So both of these backtests are for full exposure (Trendnomics style), Overall this does much better than using say a 150sma for a market filter. But makes it much harder to follow.

Skate, you have clearly done a lot of work on a custom market filter, I have thought long and hard on this issue and yet to reach a satisfactory outcome. So any assistance in this area would be a great help.

And for others, just because you can produce a few funky backtests, it does not mean success is guaranteed as @Skate has spoken about previously.


----------



## Skate (28 January 2019)

3 people had a hand in my system development. 

I've posted about Richard Donchian in Post #1296. Now it's Nicolas Darvas turn to be talked about. Apologies for the lengthy post this time but this idea is the 'Ducks Guts' worthy of a more detailed explanation.

1. Richard Donchian (posted the article 27th January 2019 - Post #1296)
*2. Nicolas Darvas*
3. John Bollinger

*Nicolas Darvas*
“How I Made $2,000,000 in the Stock Market written by Nicolas Darvas. His book is compelling reading & one I highly recommend. His book tells the story of a highly successful dancer, who morphed into a very successful trader (by accident) after a less than spectacular start. 

*I have a mate who fled hungry* (Mick, was off to America till he saw a soldier mistreat another, he came to Australia instead)
Nicolas Darvas fled Hungary to go to Turkey in World War II, than migrated to the United States in 1951. Darvas first became interested in the stock market in 1952 when he received some mining stock in exchange for dancing in a Toronto nightclub. The stock trebled, with Darvas selling near the top.

*Lesson learnt*
He learned a valuable lesson when the stock subsequently crashed. Davas realised that knowledge and experience were the keys to success. He ignored everything he read but the stock prices. The movement of the stock price intrigued him.

*Happier with his system*
Darvas was happy with his profits, but nothing made him happier than when he followed the system he developed. His strategy made money in a very strong bull market & his method has shown to be effective in all market conditions.

*No Index Filter*
I don’t restrict his ideas by strangling it with an “Index Filter” I cut this strategy loose as the theory behind the system is sound. The other two strategies in the “Hybrid” system are strictly controlled by an Index Filter, they work on a set of different principle than the Darvas system.

*Price action & volume*
Darvas was essentially a technical analyst who used hand drawn charts. He watched price action & reaction as well as the volume & notated them on a weekly basis. He used a nightly telegram from his broker giving him the high, low and close prices of the stocks he was following. Darvas looked for stocks making a big advance on high volume. He bought when he believed that informed buyers were entering the market.

*Large volume expansion & large increase in demand*
Essentially his system involved noting a stock making a large volume expansion, which indicated a large increase in demand. If the stock then rose in price, indicating that buyers were in control, he would place an order and set his stoploss order. Darvas would establish a box around a trading range. (the Darvas Box System)

*Get out quick*
If the stock broke below the box, his stoploss order would be hit and he would take a small loss. If the stock broke out on the upside, he would buy more, (something I don’t do) especially if the breakout was accompanied by large volume.

*Lock in profits*
After a breakout Darvis would use a trailing stop loss to ensure that he locked in most of his profit, while giving the market sufficient room to make normal retracements without the stop being triggered.

*What's a retracement ?*
A retracement is a temporary reversal in the direction of a stock's price that goes against the prevailing trend. 

*He had a good idea*
Nicolas Darvas, what a man, what an idea, what a system.

*Original idea*
I’ve maintained his original idea & made it my own with a completely different set of parameters after doing vigorous optimisation to get the parameters performing at their peak. To be fair to Nicholas Darvas, if Amibroker had been around back then, he would have done exactly what I have done to improve on his idea.

Skate.


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## ducati916 (28 January 2019)

Skate said:


> ducati916, that's the very reason we have a market, differing opinions.
> 
> *1. It doesn't matter*
> Being right ceases to be right when the majority doesn't share your view. Meaning your view & my view doesn't matter, what does matter is that we hold the same view as the majority & trade accordingly.
> ...




1. Correct.

2. Which is only an indicator. No more right/wrong than any other indicator.

3. My indicator says buy, its moving higher.

jog on
duc


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## ducati916 (28 January 2019)

Skate said:


> *
> Original idea*
> I’ve maintained his original idea & made it my own with a completely different set of parameters after doing vigorous optimisation to get the parameters performing at their peak. To be fair to Nicholas Darvas, if Amibroker had been around back then, he would have done exactly what I have done to improve on his idea.
> 
> Skate.




Would it be analogous to define 'optimisation' with 'efficiency' in your system?

jog on
duc


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## explod (28 January 2019)

Skate said:


> explod, after reading that exhaustive post, I failed to make the connection how "the-end-of-the-era-of-endings" article can be linked to any trading strategy let alone how you will link the article to your own intuitive approach to investing.
> 
> I'm intrigued, you have aroused my curiosity, I look forward with interest to your post.
> 
> Skate.



The article is complex but in fact portrays the modern evolution of thinking across our collective minds.  What we have in "Dump it Here" is a community collective of share trading methods and experience.

Intuition has gradually become important on the realisation that it combines the shaping of my sub-conscience from my very first awareness as a child till the present.  The shaping of how we act and think could go on and on as a length of a string.  We can bounce back as we wish but "intuition" is a key tool that is well worth evaluation.

My first trade was on a Company called Exoil in 1968.  They were searching for oil in an area south south west of Longreach in Queensland.  I was shearing with a fellow who was into mining and fossicking who encouraged me to have a go.  We met with some of the workers at the Lyceum  Hotel (only very recently burnt down actually).  The short of it, inside knowledge, got into it at 15 cents then a couple of months down the track we heard it was a dry hole and got out at 90 cents.

When those fracking companies arose a few years back in the US there was a lot of excitement, they began at a few cents and rose very quickly only to in almost all cases collapse.  I feel they are trying to do it here in the southern part of our continent but remember as a kid how the explorations proved a lot of the Western District area pretty devoid. So advancing from Exoil I have learnt that companies are now created for the initiators to take the money from the uninformed.  They are just rackets in my view.   However my interest in mining has never waned.  Have never had an interest in the commercial side, banks etc., and, as you all know I love gold. 

I'm going to have to rest for a bit but to leave some thought in the meantime; my trading is based more on my feeling (which is intuition) towards the fundamentals (which includes integrity) but yes consider charts as part of entry and exits.  However I studied charting widely and under many Guru's, just realised now that I've thrown Daryle Morley's (Herald Sun Daytrader) handbook out which was given to us at a two day instruction seminar some 15 years or so back.  Lunch.


----------



## Skate (28 January 2019)

ducati916 said:


> Would it be analogous to define 'optimisation' with 'efficiency' in your system?
> 
> jog on
> duc




*You are on the money*
Yes, that's a good description "efficiency". When optimising I looking for a compromise, I'm not looking for the best results, I'm looking for "Out of Sample Data" & its sweet spot. Out of Sample results are the results worth taking notice of.

*It's all about impact*
I'm not over optimising the system but I'm getting the bests parameters that has the biggest overall impact on the system development. 

*Not that simple*
Its not one pass over 25 years of historical data it's not that simple.

Skate.


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## Skate (28 January 2019)

explod said:


> The article is complex but in fact portrays the modern evolution of thinking across our collective minds.  What we have in "Dump it Here" is a community collective of share trading methods and experience.
> 
> Intuition has gradually become important on the realisation that it combines the shaping of my sub-conscience from my very first awareness as a child till the present.  The shaping of how we act and think could go on and on as a length of a string.  We can bounce back as we wish but "intuition" is a key tool that is well worth evaluation.
> 
> ...




explod, you have raised a great point by saying _"Intuition has gradually become important on the realisation that it combines the shaping of my sub-conscience from my very first awareness as a child till the present"_

*Shaping your sub-conscience *(conditioning, that dirty word again)
I've made the eBook so others can read it at their leisure & more than once. reading the eBook more than once I call that conditioning. If you read the eBook once or read my words once there is no value, reading them more than once is when the magic starts to happen.

*I want to give you an example*
It's similar to how we learnt our multiplication tables when were children, we were conditioned to repetitively sing our tables, that how we learnt to memorize them. That memory is now in our Lizard brain, it's the very reason we don't have to think when someone asks you "What's 3X5", we answer 15 without thinking.

*It's hectic in here sometimes*
Don't worry, if you can't keep up with my pace, I'll make another eBook combining all my posts. @Joe Blow knows what I'm up to & I'm sure he will accommodate the updated eBook when it arrives, but till than I have lots to get off my chest & put into words, & I'll 'Dump it here' for others to read.

*Just when you think no one is reading (I look at the stats)*



Skate.


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## ducati916 (28 January 2019)

Skate said:


> *You are on the money*
> Yes, that's a good description "efficiency". When optimising I looking for a compromise, I'm not looking for the best results, I'm looking for "Out of Sample Data" & its sweet spot. Out of Sample results are the results worth taking notice of.
> 
> *It's all about impact*
> ...




So did you use the 2008/2009 period as an out of sample data set or as an in sample data set?

My issue [which may not exist] is that when seeking to build efficiency into a system [any system] that system has no redundancies with which to weather a storm [financial] as seems to afflict markets on a rather regular basis.

Efficiency, cuts all redundancies, as redundancies cost money [and hence reduce] efficiency.

jog on
duc


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## Skate (28 January 2019)

ducati916 said:


> So did you use the 2008/2009 period as an out of sample data set or as an in data set?
> 
> My issue [which may not exist] is that when seeking to build efficiency into a system [any system] that system has no redundancies with which to weather a storm [financial] as seems to afflict markets on a rather regular basis.
> 
> ...




ducati916, thanks for asking this question _"So did you use the 2008/2009 period as an out of sample data set" _

*Out of sample data set*
Out of sample data set takes many forms, testing over many years, testing over clumps of years, spread over different indexes & finally running my strategy over market that I don't trade. I've tested my strategy over many markets around the world & surprisingly get very similar results, meaning the strategy is sound & safe to trade, heck it better be, I've got a lot of money ring on it.

*I don't have to tell you how to suck eggs*
Out of sample data is simple data the strategy hasn't seen before or optimised against.

*This topic*
This topic is worthy of its own thread as its a very important topic, getting it right can mean if you trade a good strategy or not. Imagine having a great strategy thrown away because of not testing it against 'Out of Sample' data, where changing a few parameters could make it tradable.

*Too complex & time consuming*
It would takes many posts for me to explain what I do & how I do it. Strategy development is such a complex subject I've decided to post about the subject so to form a template for other to follow. (in its most basic form)

*All the tests*
Backtesting, forward testing, optimization & Monte Carlo results singularly have importance, but in the combination is where you find the 'Goldilocks area'. Its important to stress, we are not after the best the strategy has to offer, but the best the strategy can achieve over a variety of trading conditions.

Skate.


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## ducati916 (28 January 2019)

Skate said:


> ducati916, thanks for asking this question _"So did you use the 2008/2009 period as an out of sample data set" _
> 
> *Out of sample data set*
> Out of sample data set takes many forms, testing over many years, testing over clumps of years, spread over different indexes & finally running my strategy over market that I don't trade. I've tested my strategy over many markets around the world & surprisingly get very similar results, meaning the strategy is sound & safe to trade, heck it better be, I've got a lot of money ring on it.
> ...





So the short answer is yes.

The data represents [well actually is] different economic/political/regulatory/monetary/etc environments.

Are you:

(a) the past, as an echo will re-emerge at some point; or
(b) the current environment is the most important [for the model] type of chap; and
(c) do you model volatility in any shape or form as 'out of sample' or 'in sample'?

The impression I get, is that your system is LONG only. Would that be correct?

jog on
duc


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## Skate (28 January 2019)

3 people had a hand in my system development.

*I've posted about Richard Donchian in Post #1296 & Nicolas Darvas in Post #1315.*

*John Bollinger*
Now it's John Bollinger’s turn to be talked about. Again apologies for the lengthy post but his idea is worthy of a detailed explanation.

1. Richard Donchian (posted the article 27th January 2019 - Post #1296)
2. Nicolas Darvas (posted the article 28th January 2019 - Post #1315)
*3. John Bollinger*

*Disclaimer*
I use Bollinger Band Breakout theory only, the parameters are all mine. Standard parameters have been traded to death & its advantage has been negated. Daily strategy has trouble finding its legs whereas a weekly strategy can find those bigger moves.

*Bollinger Bands attempt to overcome the problems associated with trading envelopes *
Bollinger Bands combined the measurement of volatility (standard deviation) with a moving average. There are a set of two variable width trading bands that would automatically adapt to the volatility of the market. Whereas trading envelopes surround the market action with two bands which are drawn a fixed percentage above and below a moving average of the market Meaning for intermediate term trends, Bollinger Bands consist of a series of three bands. 

*(Please Note, do not trade these parameters, they don’t work anymore)*

*Phew, what does that all mean ?*
1. The middle band is a 20 day simple moving average of the market closing price.
2. The upper band is drawn by adding two standard deviations to the middle band.
3. The lower band is drawn by taking two standard deviations away from the middle band.

*Trends*
1. For short term trends, a 10 day simple moving average and a standard deviation of 1.5 is more appropriate. 
2. For long term trends, a 50 day simple moving average and 2.5 standard deviations are usually used.

*(PLEASE  - do not trade the setting in this post, most of what I’ve written is from memory, if it's incorrect I apologise)*

*Moving from one band to another*
When the market action moves above the top band or below the bottom band, it suggests that the present trend shall continue. If a market moves from one band towards the moving average, it is likely to continue to the other band. Powerful moves often commence after the market’s volatility has become very low and the bands have tightened around the market action.

*The Bollinger Bands theory has merit*
(a) The bands track market volatility, prices are relatively high when prices are at the upper band and relatively low when they are at the lower band.
(b) Powerful signals that usually follow Bollinger band squeezes make Bollinger Bands an important tool for all traders
(c) Bollinger Bands indicator has been a technical tool that continues to be of immense value to many traders.

Skate.


----------



## Skate (28 January 2019)

ducati916 said:


> So the short answer is yes.
> 
> The data represents [well actually is] different economic/political/regulatory/monetary/etc environments.
> 
> ...




Yes, I only trade long, I only trade breakouts, I'm a trend Follower, I need momentum & volatility. 

My strategy is tested to find conditions, conditions to meet my rules. I have 3 trend following strategies looking for the same signals, I just don't know which one will be first to pick it up, that's why I use them in combination. I need to jump on the move as quick as possible.

The first signal is enough for me to have a bet. Sometimes you win, sometimes you lose. Trend following works differently in different markets there is no strategy I know that can constantly pick winners. 

What I have is "Good enough" &  Good enough is Good enough

ducati916, we are two different traders, & comparing notes wouldn't be helpful to either of us. I'm not trading to be fancy, I want to follow the crowd, join them & when the party is over I look for another party to join.

I don't want to buy rising stock, I want to buy into the growth stock, there is a difference. We see things differently even when looking at the same chart & that's okay. I've got no idea if you are right or I'm right, it doesn't matter, you trade your way, I trade my way.

*The way I trade is not rocket science, its boring as Bat$hit*.

The questions you have asked are really good questions, I'm afraid I can't answer them as you wish but have supplied you an outline of what I do. 

I'm taking the afternoon off.

Skate.


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## Skate (29 January 2019)

*A friends suggestion (private message)*

_"You might need to give people time to read through the past content before adding more, not all of us process information or have the time to at your speed. Just a friendly comment"_

I'm excited to keep going, but at a slower pace. I eager to post about systems & strategy design. 

I also want to post some trading results of a strategy I'm prepared to give away.

The next few posts will take time to absorb so I'll implement my friends suggestion.

Skate.


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## Skate (29 January 2019)

*The kindness of others*
@captain black gave me a strategy 3 years ago called (BlueWren). 

*It's a beauty*
The (BlueWren) base strategy was placed in my code to demonstrate that a simple idea can make money. 

*Long story short*
The (BlueWren) strategy now sits pride & place in my Hybrid strategy, displacing the 'Donchian Channels Strategy' 

*Proprietary system*
I can't discuss the captains code or strategy as it's a proprietary system. If I was to disclose his strategy or any part of it he would have my "guts for garters"

*Paying it forward*
As the captain gave me a strategy, I'm prepared to give one of my strategies away for testing & system development written in Aminbroker formula language. (meaning you need to have the Amibroker v6.2 or higher) 

*Backtest results*
I'll post up some backtests over the last (3 1/2 years) to demonstrate what I'm prepared to give away gives reasonable results.

*It's adjustable*
There are chart parameters to adjust. I have 'optimization code' commented out (uncomment them) & play around to see if they can get the strategy to perform better than I have. 

*Next* 
I wish to make a few comments about 'the captain'

Skate.


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## Skate (29 January 2019)

*Posted without permission *(the captain won't mind)
Without meeting the captain I would never had the knowledge or confidence to start trading. 

*Admiration*
I have great admiration for *@captain black* & he has helped me immensely over the last three years & I'm happy to say I still enjoy the benefits of his wisdom, his coding ability and the logical way he implement a solution. The captain always measures his responses delivering help without being condescending, which I'm trying to emulate. To this day I still enjoy his ongoing friendship.

*Being kind*
The captain has been very kind to me over the years & previously when I have had an issue (he fixed for me) his ongoing help has exceeded all my expectations.

*Trading regrets*
I’ve been asked if I had any regrets when it came to trading & one sprang to mind instantly. I regret not following one piece of advice given to me by the captain - by not following his advice cost me over $64K, an amount I’ve never forgotten.

*A quote from 'the captain'*
“_Education is something that is done to you_. _Learning is something you do for yourself_." when the Captain speaks I listen.

The captain's quote is designed to generate logical thinking by applying sound judgment, it’s hard to conceive of a more serious design flaw than the failure to learn.

*The captain also said*
_“Congratulations on your thread Skate. It's always the hope that someone you help out goes on to pay it forward, you've certainly done that and more” _the Captain reinforced his message a few times over the years, meaning he helped me I should in turn help others.

*Amibroker*
The learning curve with Amibroker is very steep if you want to use it to it's full capabilities. Keeping up with all the new features is a full time job on its own. To save you years of learning coding I'll be giving away a code so you can better understand its structure.

*YES*
@captain black is the real deal (IMHO) and forum members of this quality are getting thinner on this site, we need them back.

Skate.


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## Skate (29 January 2019)

*I've posted about three people with great ideas worth trading (listed below)*
1. Richard Donchian (posted the article 27th January 2019 - Post #1296)
2. Nicolas Darvas (posted the article 28th January 2019 - Post #1315)
3. John Bollinger (posted the article 28th January 2019 - Post #1324)

*Donchian channel breakout strategy *(didn't make the cut)
I've traded a Donchian channel breakout strategy for a year with success. I no longer trade the Donchian Breakout strategy (not that's it's not a good strategy) it just didn't make the cut for my Hybrid Strategy, but @captain black 'BlueWren' strategy did.

*I trade a weekly strategy - a modified version of these three codes.*
(1) a modified version of Captain Black breakout strategy (BlueWren strategy)
(2) a modified version of Nicholas Darvas, (Darvas box system)
(3) a modified version of John Bollinger, (Bollinger Bands Breakout system)

*Triggers*
I have three buy triggers & two sell triggers in my Hybrid Strategy.

*Why modify them ?*
Having a base code is great, but it's like shoes, we have shoes best suited for the job, whether it be for running, walking, formal events & even dancing. They are in essences all shoes, modified to suit the activity, meaning we modify a strategy (code) to suit the job we want it to achieve.

Skate.


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## Skate (29 January 2019)

I'll be posting some backtest reports for an Amibroker Strategy I'm prepared to give away.

I have commitments for the next few hours, I'll post the results this afternoon.

Skate.


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## Skate (29 January 2019)

Before I move on to strategy development I want to talk about a nice little strategy that I'll be giving away from my bag of tricks.

*The strategy *(this is nothing new)
It's called "Skate's Trends & Countertrends Weekly Strategy". Its a weekly strategy as I have no joy coding daily strategies. It's not that I can't code daily systems but the performance is below my expectation.

*Welles Wilder*
Welles Wilder came up with an idea that Barbara Star developed, she noticed behaviour patterns found with two well known indicators (1) ADX and (2) MACD, & applying a Commodity Channel Index (CCI oscillator/indicator) and a 14-day moving average it filtered out false patterns.

*"CAM"* stands for *C*oordinated *A*DX and *M*ACD indicator

*CAM patterns*
The CAM indicator identifies upward and downward trends as well as pullbacks in existing trends and countertrend rallies & these pair of indicator intends to highlight the price patterns of trends and reversion. The colour of the price bars also identify the chart patterns based on a coordinated ADX and MACD or, as she abbreviates it, CAM patterns are there for you on the charts.

*Systematic traders*
Buying pullbacks in the same direction as the long-term trend is a popular approach for systematic traders.  These types of strategies typically identify high probability trades and tend to perform well. This is nothing new, this idea has been around for over 10 years that I know of even if you haven’t.

*Backtesting criteria *
Index = All Ordinaries (XAO)
Initial Equity = $100,000 (a round number to easy understand)
Maximum Open Positions = 20 (standard number considered by most)
Position size = $5,000 (Bet size)
Commission Amount = $19.95 (CommSec commission per trade)

*Reports to follow*
5 Portfolio Equity results showing the performance of the strategy over 4 years. (from 2015 to today 29th January 2019)

Skate


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## Skate (29 January 2019)

1. Trading results 1st July 2015 to 29th Jan 2019 Inclusive.







Skate.


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## Skate (29 January 2019)

2. Trading results 1st July 2015 to 30th June 2016 Capture







Skate.


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## Skate (29 January 2019)

3. Trading results 1st July 2016 to 30th June 2017 Capture







Skate.


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## Skate (29 January 2019)

4. Trading results 1st July 2017 to 30th June 2018 Capture







Skate.


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## Skate (29 January 2019)

5. Trading results 1st July 2018 to 29th Jan 2019 Capture







Skate.


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## Skate (29 January 2019)

*THIS TRADING SYSTEM IS VERY BASIC* (with no magic applied)
Designed to trade securities that trended well, you might want to alter or devise your own parameters to suit the market you trade. The standard settings will work no matter what market you intend to trade as this a universal strategy.

*SUGGESTED USAGE
Enter LONG: *Buy tomorrow at the open if today is a GOLD coloured bar (which represents the CAM-PB, meaning that both the 10-period ADX and MACD are declining) but the 14-period CCI is above zero, OR if today is a BLUE coloured bar (the 10 period ADX is declining but MACD is rising) and today’s close crosses above the 13-period EMA. It’s all written in the formula so you won’t forget.
*Exit LONG:* Sell tomorrow at the open if today is a RED coloured bar (which corresponds to the CAM-DN, that is, the 10-period ADX is rising but the MACD declines) and today’s close is below the 13-period EMA.

*It's easy*
You don't have to know all the above, just takes the signals as they come (You only have to hit one button [Explore] the strategy will do the rest.

*For better Results *
Nonetheless, to maximize your odds, you can apply the strategy to a preselected watchlist of securities that demonstrate trendiness.

*Want a copy ?*
Look at the results & if you would like a copy of the strategy, instructions will follow.

Skate.


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## peter2 (29 January 2019)

Thank you @Skate I was unaware of Barbara Star and her passion for technical analysis.

A PDF of Barbara Star's article on her CAM indicator is in this link. 
Published in Technical Analysis of Stocks & Commodities Jan 2018.

https://www.omnitrader.com/currentclients/proforum/get-attachment.asp?attachmentid=8090

There are Traders Tips to assist traders to code the CAM indicator in many trading platforms if you're interested. Search for Traders Tips Jan 18.


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## Skate (29 January 2019)

peter2 said:


> Thank you @Skate I was unaware of Barbara Star and her passion for technical analysis.
> 
> A PDF of Barbara Star's article on her CAM indicator is in this link.
> Published in Technical Analysis of Stocks & Commodities Jan 2018.
> ...




Thank you @peter2, for the PDF that will come in handy if readers are interested in the base idea.

*Please Note*
There is no published Amibroker code in Technical Analysis of Stocks & Commodities Jan 2018.

*No Amibroker code listed for January 2018  Trader Tips*
The CAM indicator has been around since 2002 that I know of & the formula for most programs are listed in the January 2018 Trader Tips website but they didn't bother coding up the strategy for Amibroker.

*Amibroker code*
The code I'm giving away is based on her principles that has a few more tricks added with a unique chart display. Since 2002 the parameters keep changing with each seminar she does. I've modified her base setting.

*Link*
If you have any program other than Amibroker you can find program code at this site (Amibroker code is missing from the list)

http://traders.com/Documentation/FEEDbk_docs/2018/01/TradersTips.html

AMIBROKER: *No code*
TRADESTATION: JANUARY 2018
eSIGNAL: JANUARY 2018
WEALTH-LAB: JANUARY 2018
NEUROSHELL TRADER: JANUARY 2018
AIQ: JANUARY 2018
TRADERSSTUDIO: JANUARY 2018
NINJATRADER: JANUARY 2018
TRADE NAVIGATOR: JANUARY 2018
MICROSOFT EXCEL: JANUARY 2018
METASTOCK: JANUARY 2018

Skate.


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## peter2 (29 January 2019)

I'm itching to discuss an important distinction you made in an earlier post (#1325).
Just as in the movie "I Robot" I've got to ask the right question to get the right response for me.

I won't interrupt your system design flow as this is also very interesting.

I'll ponder on the right question as I play tennis tonight.


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## Skate (29 January 2019)

Skate said:


> View attachment 91727
> 
> I'll be posting some backtest reports for an Amibroker Strategy I'm prepared to give away.
> 
> ...






"Skate's Trends & Countertrends Weekly Strategy"

If you would like a copy of the Amibroker Strategy you need to meet a few conditions

1. Have a copy of Amibroker Version 6.2 or higher (the strategy requires this version or higher)
2. Hit "Like" (so I can keep track)
3. Send me a 'PM' (ASAP)

*My favourite two words are:*
1. Please
2. Thanks

When you request the strategy all you need to post is: *Strategy please, thanks.*

Skate


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## satanoperca (29 January 2019)

Skate said:


> View attachment 91754
> 
> *My favourite two words are:*
> 1. Please
> 2. Thanks



While I agree, the most positive word that one can learn after the 2 your have mentioned, is just 2 characters, NO. It is simple and constructive.

I never just say NO, but provide an explanation for why I have used the word.

Eg. NO, i disagree with your position due to xxxxxx
NO, I prefer to take another course of action that is more beneficial to my core beliefs
NO, I do not believe violence is the answer  
NO, it is not want I want to do, regardless of pier pressure or that my much gain the acceptance of the crowd.

If only I had learnt the power of this single word when I was younger, I would have made less mistakes.


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## satanoperca (29 January 2019)

And, thank-you @Skate, you are a good mate to those on this forum for providing insight into your trading strategies and exposing your strengths to be questioned and your weakness, if they can be found.


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## Skate (29 January 2019)

satanoperca said:


> And, thank-you @Skate, you are a good mate to those on this forum for providing insight into your trading strategies and exposing your strengths to be questioned and your weakness, if they can be found.




satanoperca, thank you for your kind words.

Skate.


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## satanoperca (29 January 2019)

Just one more thing to get off my chest :
I need to modify my original post, 
*"You can bullsh--t a bullsh---ter, just not a master bullsh--ter of which there a very, very few and you my friend as one of those very few"*
For those that might read this, you need to read back through the posts to understand the contexts of this statement for I am just a grass hopper
*
*


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## captain black (30 January 2019)

Thanks for your kind words yesterday Skate.

Just to clarify for everyone, I don't have any commercial interest in writing code or selling systems so please don't contact me asking to buy systems or offer to pay for coding. Always happy to help out someone genuinely interested in trading anytime though. 



peter2 said:


> There are Traders Tips to assist traders to code the CAM indicator in many trading platforms if you're interested. Search for Traders Tips Jan 18.




There's a good thread on the Traders Tips Amibroker code for the CAM indicator in the Amibroker forum for anyone wanting to explore the concept a bit further. There's a few different coding ideas in the thread including charts, explorations and systems to test.

https://forum.amibroker.com/t/s-c-magazine-jan-2018-traders-tips/3875


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## captain black (30 January 2019)

Skate said:


> *Please Note*
> There is no published Amibroker code in Technical Analysis of Stocks & Commodities Jan 2018.
> 
> *No Amibroker code listed for January 2018  Trader Tips*
> The CAM indicator has been around since 2002 that I know of & the formula for most programs are listed in the January 2018 Trader Tips website but they didn't bother coding up the strategy for Amibroker.




Oops, missed this bit. TJ posted an article about "skim reading" the other day. Seems I'm guilty of it too 

There's no official code for the "CAM" system but there was a thread in the Amibroker forum with some good code in it that you or others might find useful Skate.

https://forum.amibroker.com/t/s-c-magazine-jan-2018-traders-tips/3875


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## Skate (30 January 2019)

I want to pose a rhetorical question (meaning it doesn't require an answer, but it requires you to think of one)

*Not related to trading*
Imagine if I gave you a piece of A4 printer paper & said "do something with it & give it back to me in a week"

What would do with with that sheet of paper ?

Skate


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## Skate (30 January 2019)

I wish to make a series of statements.

*My way is correct*
I've seen so much written in forums over the years, telling others that "their way is the only way". (which is wrong, by the way)

*Alternative view*
I've never made a comment like that, to the contrary, when it comes to trading there is no right or wrong way. If you disagree with me, don't tell me so, you'll hurt my feelings, all I ask is for you to explain your alternative view, keeping "on point".

Skate.


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## Skate (30 January 2019)

I trade is trend following system.

*Trend following is popular*
The only real issue with trend following is that most Trend following Systems are highly correlated and tend to track the broader market movements at the same time. 

*What do I mean ?*
Traders using a variety of 'Trend Following Systems' most likely buy stock at the same time, maybe a week here or a week there. Once Trend traders buy a position it brings out the sellers offloading their positions for a variety of reason. 

*I just brought it now its dropped in price*
If you have ever wondered why the dip in price after you buy buy a position, now you know (It's not the only reason) that's why the share price has a habit of taking a hit early on in the trade.

*Stick to your guns*
Stocks happen to trend at the same time & if you're happy to accept that then there's nothing wrong with trading with a group of others, you are sharing a similar view. Buying good stock or buying bad stock is of no concern for trend followers as we make our money being with the crowd hoping others join in, pushing the price higher.  

Skate.


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## Skate (30 January 2019)

*OFF Topic*

Is it only me or is everyone at the moment making a bucket load of money ?

The tradings gods have been kind (very generous) to me in January, I don't want January to end.

Skate.


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## Darc Knight (30 January 2019)

Skate said:


> *Not related to trading*
> Imagine if I gave you a piece of A4 printer paper & said "do something with it & give it back to me in a week"
> 
> What would do with with that sheet of paper ?
> ...




I'd say, "Skate pls write down your pearls of wisdom so myself and others can learn from you and your many years of experience".
Lucky for ASF and the Internet, that proverbial A4 sheet is right here to benefit everyone!


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## captain black (30 January 2019)

Skate said:


> Is it only me or is everyone at the moment making a bucket load of money ?




My ASX momentum systems are sitting around their long term averages. US trading has been very good in January. My long term ASX systems have had a good January too.

Futures have been very good in January too, plenty of volatility. Both the automated systems and discretionary trading are above my long term expected results.

The volatility on futures markets has decreased in the last week or so which tends to signal a decision point or change in direction.


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## captain black (30 January 2019)

Skate said:


> we make our money being with the crowd




A quote I remember from my early days reading Daryl Guppy's books is "walk a mile with the crowd".

How far a "mile" is depends on your time frame..


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## Skate (30 January 2019)

Darc Knight said:


> I'd say, "Skate pls write down your pearls of wisdom so myself and others can learn from you and your many years of experience".
> Lucky for ASF and the Internet, that proverbial A4 sheet is right here to benefit everyone!




*Decision making*
No one likes to say ‘I don’t know’ it makes one look stupid, when faced with a complex or difficult decision, even a simple question about what a person would do with a piece of A4 paper confuses most as don't know what to do or say.

*What do you think these people would do with that piece of paper*
Leonardo Da Vinci, Vincent Van Gogh, Rembrandt or even Michelangelo, or a famous poet Edgar Allan Poe, I know what they would do. What about J. K. Rowling, or Dan Brown they would certainly know what to do but when it comes to us, we just don't know.

*Rules*
There are NO RULES when it comes to trading and most people like ‘rules’ and like to be told what to do. Give someone freedom & the $hit will hit the fan.

Skate.


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## Skate (30 January 2019)

*Trading is a blank piece of paper.  *
When people are in doubt, they tend to look to others first, that's human nature. Some people would rather adopt the opinions of others rather than form their own. It's greater today than in the past, today we have lost the art of thinking. 

*Help from others*
After thinking & we still don't have the answer that's when we should seek help of others.

Skate.


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## Skate (30 January 2019)

Trading needs a plan
*
Fear of failure*
Everybody has a fear of failure at some level & at times we’ve all been fearful that perhaps we are not enough. Even when we know what to do, our fear can keep us from executing our plans. It's the fear of failure.

Skate.


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## Darc Knight (30 January 2019)

Skate said:


> *Decision making*
> No one likes to say ‘I don’t know’ it makes one look stupid, when faced with a complex or difficult decision, even a simple question about what a person would do with a piece of A4 paper confuses most as don't know what to do or say.
> 
> *What do you think these people would do with that piece of paper*
> ...




Reminds of a story a Lecturer once told us: "a Student had to submit a Thesis for a Post Graduate Degree. The topic was Courage. When the Examiner opened the Paper it contained only three words from the Student: "This is Courage!"".
I believe the Student passed.


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## Skate (30 January 2019)

*The issue is containing your fear

Excess freedom*
The problem is that 'excess freedom' cause people to become overwhelmed and fearful because they do not 'know' what to do. They simple have no plan when it comes to trading & this helps to explain why some traders lose money early in their journey.

Skate.


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## Skate (30 January 2019)

*Good enough is not good enough when better is expected*
A simple approach produces a good enough result most times but sometimes it can lead to significant errors and inconsistencies in our judgments especially when it comes to trading.

Skate.


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## Skate (30 January 2019)

*Communal animals*
We are conditioned from birth to follow rules & conform to them. The characteristic human trait is awareness & conformity. As communal animals we have to follow rules & be compliant, conform, otherwise there are consequences for not doing so. 

*Freedom*
We all have freewill to be expressive to a point but our behaviour govern if we have ongoing personal freedom in some countries your life depend on it.

*Yep, we need rules*
Humans need rules, we depend on them to survive as a specie, when it comes to trading all this knowledge fly out the window.

Skate.


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## Skate (30 January 2019)

*Why tell us this ?*
To explain the importance of rules when it comes to trading, we need a plan. In the next series of posts I want to explain that we have the amazing ability to write our own future when it comes to trading.

*Tell us why*
It's because we have a unique ability to start of with a "blank piece of paper" to write our plan & future.

*Planning *
Having a trading plan is about creating an extraordinary quality of life, living life on our terms & a trading plan somewhat go to secures this aspiration.

*Over the next few days*
I have commitments today, nevertheless I'm eager to start explaining a trading plan, a trading strategy.

Skate.


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## willy1111 (30 January 2019)

Skate said:


> *OFF Topic*
> 
> Is it only me or is everyone at the moment making a bucket load of money ?
> 
> ...




This is why I like to use percentages as it puts everything into context for comparison.

Some one might say my portfolio went up $100K this month, for most people $100k is a lot of money - it is more than the average wage in Australia for a whole year.  

On a portfolio of $100K this represents a 100% return which is remarkable - on a portfolio of $1M it is a 10% return which is really good - on a portfolio of $10M it is merely 1% which when compared to the market being up 4% is not so great.

Talking in percentage terms provides a much better basis for comparison in my view. 

I believe even the Turtles talked in n as a much better comparison method than using $'s.

Would you like to say how you have gone in January in percentage terms?  Take the current figure, minus the starting balance at beginning of Jan and divide by the beginning balance 

My real money account is up about 2.5% for Jan and my Hypothetical is up about 4.73%.  So depending on the account size, it could be a bucket load or a drip


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## Skate (30 January 2019)

willy1111 said:


> This is why I like to use percentages as it puts everything into context for comparison.
> 
> Some one might say my portfolio went up $100K this month, for most people $100k is a lot of money - it is more than the average wage in Australia for a whole year.
> 
> ...




Let me add to your post about percentages. (long winded reply but its important to me)

*Detailed explanation*
Thank you for posting a detailed explanation on the power of percentages, putting everything into perspective for others to understand is very important point to remember, the reason we are posting is to pass on knowledge. Every thing you say about percentages is true, accurate & educational. 

*I'm fascinated* 
willy1111, I enjoy hearing alternative views & how people relate to them. I'm fascinated with the power of words & mathematics, they can be pushed & pulled to achieve a desired outcome. 

*3 sides to any story*
There are always 3 sides to any story, there side, your side & the truth, meaning we slant stories to booster the outcome of the  conversation our way.

*A bucket load of money*
I never talk in personal detail as I know what I can do with a sniff of information. The generic term I used is relevant to most, its universally applicable.

*Another reference*
In a conversation I'll drop the word "you know that sort" they can relate the story to whatever "that sort" means to them.

Skate.


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## Skate (30 January 2019)

*Percentages & probabilities*
This gives me the opportunity to carry the conversation a little further & talk about percentages & probabilities.

*True story*
Back when I was younger & Mike Tyson (the boxer) was at his peak my mate at the time said _"How do you think you would go against Mike Tyson?"_

I replied "I'd have a 50% chance of winning" my mate nodded in agreement & said _"yeah, I agree" _(at this stage I'm thinking, he's delusional)

*Truth*
I had to explain to him it was a "tongue in cheek" comment, even though the statement was 100% true.

*What does a 50% chance mean ?*
There was potentially two outcomes (1) I would win or (2) I would lose. (2 possibilities / 1 outcome = 50/50 chance)

*Now lets talk about probabilities*
I've been in scary situations, I've been knocked out once & going up against Mike Tyson, it would probably make it twice.

*Let's recap*
I had a 50% chance of winning, but the probability of me winning "Zero to None" (reality)

*As traders*
It's good to talk about percentages on things we know, but let's talk about probabilities on the things we don't.

Skate.


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## Skate (30 January 2019)

Skate said:


> This was a nice winner - I'll post up a bad loser next
> 
> Skate.
> 
> View attachment 91534




I want to stay on the theme of my trading style "Trend Trading" & explain it in a simple "line chart" with explanations.

*Resolute Mining Limited*
The chart of (RSG) Resolute Mining Limited on 21st January 2019, Post #1060 explains the way trend followers view a trade. 

*Price bound *
(RSG) was price bound for a long time, it had a trial breakout that didn't work whereas the second breakout worked. 

*It's our job*
My strategy gave a signal so as a trend trader it's our job to jump on the move. When the trend is over it's our job to hop off. This is a simple way to trade, but effective. Jump on the breakout & ride it till it's over.

*Classic trend following*
The setup and exits are classic trend following signals. Enter on a confirmed uptrend, exit when the trend turns down.

*In between the signals, just hang on for the ride*
No matter what your selection criteria was, or what has motivated you to place a ‘buy’ order, you have to realise everything is out of your control from that point on till you elect to sell, so in the mean time just hang on for the ride.

Skate.


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## Skate (31 January 2019)

Skate said:


> View attachment 91754
> 
> "Skate's Trends & Countertrends Weekly Strategy"
> 
> ...




*# Apologies*
This post is long, but it's important for members who have requested a copy of the CAM strategy

*For those who have the CAM strategy*
This post is directed at you, as members who have a copy of the "Trends & Countertrends Weekly Strategy". I've had a few comments & questions about the strategy (all positive by the way)

*Standard CAM strategy*
The coded idea is not mine but I have modified the original idea & coded it so I could give it a test run on the Aussie Market (that is the code I supplied to you)

*It's Okay*
In its basic form the CAM strategy performs okay. The original code gives pleasing results but add a few more bells & whistles, it starts to fly, it grows legs. (all you have to do is find them)

*Before you ask, why didn't I get the upgraded strategy ?*
After I did a few tweaks getting the strategy to run on our Aussie market, that became the base code (the copy you have). Then I started fiddling with the code to see what I could squeezed out the strategy. Those alterations/features/parameters are a "secret" for a better word, the parameters & additional features form part of my Hybrid Strategy.

*What's next
(a)* I'll post the standard parameters that your strategy has compared to the parameters I have (the updated CAM strategy), my parameters may give you some ideas.

*(b)* I'll post the [Explore] signal you get to see "compared" to what I get to see after the [Explore] has been completed.

*(c)* I'm not interested in the original report, I just want to know three things

(1) what to Buy
(2) how many shares to buy
(3) what price to offer in the pre-auction (simple & boring)

*(CCI) Background colours*
I'll post two chart so others can see the chart with "NO" (CCI) background colours & than I'll show the exact same chart with (CCI) background colours. A picture paints a thousand words. As a trend trader, (a mechanical system trader) charts are not needed, the charts are nothing more than a representation of crowd behaviour.

*(a) Standard parameters of your strategy*




*(a) The parameters of the updated CAM strategy *





*(b) The [Explore] signal you get to see*




*(b) The [Explore] signal I get to see *(No deciphering, it tells me what I have to do)





*The CAM strategy chart *
The chart below is with "NO" (CCI) background colours. The "Buy signal" (ARQ) is listed above in the [Explore] report & displayed on the chart with the corresponding "Sell signal" (this trade was a winner)




*The CCI coloured strategy chart *
The chart below is with the (CCI) background colours. When the (CCI) is greater than Zero (CCI > 0) the Background colour is 'green' & when the (CCI) is less than Zero (CCI < 0) the Background colour is 'red'



Skate.

*Post exclusively for:*
@qldfrog
@Newt
@Lone Wolf
@Wyatt
@willy1111
@Habakkuk
@jjbinks


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## Skate (31 January 2019)

The CAM strategy update, this the last post on this subject matter (CAM Star Updated strategy results)

*Now closed*
This is the final post in the series of the CAM strategy & after this post the *(CAM strategy discussion is NOW closed)*

*What can be achieved*
I wish to supply Backtest results to indicate what increases can be achieved from the CAM strategy. In its basic form the CAM strategy performs okay.

*Tweaking*
The original code gives pleasing results but add a few more bells & whistles, it starts to fly, it grows legs. (all you have to do is find them)


*# Comparison reports* (to encourage you to look for improvements)


*The 'CAM Strategy' (the copy you have) Trading results 'without' tweaking* (1st July 2017 to 30th June 2018)



*
This is your 'CAM Strategy' Portfolio results 'without' tweaking* (1st July 2017 to 30th June 2018)




*This is my updated 'CAM Strategy' Trading results "with tweaking"* (1st July 2017 to 30th June 2018)




*This is my updated 'CAM Strategy' Portfolio results "with tweaking"* (1st July 2017 to 30th June 2018)



Skate.

*This post is exclusively for:*
@qldfrog
@Newt
@Lone Wolf
@Wyatt
@willy1111
@Habakkuk
@jjbinks


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## qldfrog (31 January 2019)

Much appreciated Skate, the onus is on us doing our job now.
I do not expect a quick solution but my amibroker version is upgraded, all asx data up to date and linked.the challenge is for us to  beat your optimised version and of course, the least will be to share any better result if any with you
I will keep quite and focus from this week end


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## Skate (31 January 2019)

*America’s cup challenge (1983)*
I have a friend who was a “grinder” on the yacht that challenged for the America’s cup. He's a big tough guy with a kind heart. (a grinder operates the manual winches) 

*It hangs proudly in my office *
He had the crew sign a (poster size) promotional poster for me that hangs proudly in my office to remind me that us Aussies are up to the challenge. (sadly not everyone who signed the poster is with us today)

*We did it*
Ben Lexcen is one who is sadly is no longer with today. Ben is famous for the winged keel design applied to Australia II which John Bertrand skippered to victory in 1983, becoming the first non-American yacht to win the prestigious America's Cup in 132 years

*Man with a plan*
Bertrand and his crew had a plan, a deliberate strategy, a psychological strategy ahead of the America's Cup challenge & his breakthrough was in refusing to refer to the all-conquering American team by their names & it worked.

*Why post about a yacht race*
Because they had a plan, a strategy to win a yacht race (over a series of runs) so let me summarise:

(1) They had a plan (we can use that analogy & call it a trading plan)
(2) They had a strategy (we can call this analogy a trading strategy)

*Success*
They didn’t want to compete, they wanted to win & as traders we should have the same spirit.

*A blatant Qantas catchphrase but it’s still worth a mention*
“Australia's yachtsman have always had the right spirit”

*A bit of trivia*
Ben Lexcen was born "Robert Clyde Miller" if anyone is interested.

Skate.


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## Skate (31 January 2019)

qldfrog said:


> Much appreciated Skate, the onus is on us doing our job now.
> I do not expect a quick solution but my amibroker version is upgraded, all asx data up to date and linked.the challenge is for us to  beat your optimised version and of course, the least will be to share any better result if any with you
> I will keep quite and focus from this week end




*Accuracy*
The optimization was for the accuracy of signal, the performance increase is just a bonus. Please do your own research as I don't trade the CAM strategy, I have better. 

*Good potential*
The CAM strategy has potential & the backtest results was to demonstrate what you can do with a good idea, there is no need for us to reinvent the wheel.

Skate.


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## Skate (31 January 2019)

Skate said:


> I want to pose a rhetorical question (meaning it doesn't require an answer, but it requires you to think of one)
> 
> *Not related to trading*
> Imagine if I gave you a piece of A4 printer paper & said "do something with it & give it back to me in a week"
> ...




*Same question*
I posed the same rhetorical question to my wife.

*A4 printer paper*
"Imagine if I gave you a piece of A4 printer paper & said "do something with it & give it back to me in a week" What would do with that sheet of paper ?

*I'll show you*
She said I won't tell you I'll show you what I'll do. I said no, it's a rhetorical question & left it at that.

*Kindy painting*
Like all proud grandparents we have artwork proudly displayed on the fridge held there by fridge magnets, well we did have. I must admit the painting was crappy, typical of a 5 year old, but now I see the beauty of it all.

*Most rise*
Give someone a challenge & most time they rise to it.

*This is what she did*
What did my wife do with a piece of A4 printer paper, she made a box.

Skate.


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## Skate (31 January 2019)

I wish to make a series of posts about importance of having a trading plan. (I've done a lot of ground work already & some wouldn't have noticed, where others have)

*Paraphrase*
When it comes to Business, financials or trading matter my mind is as sharp as the next & I have a good memory. Most times I can trot out phrases & recite paragraphs out of books word for word or at least paraphrase those words to achieve greater clarity.

*Nope, never forgotten anything I can remember*
I've been told I have a good memory (which is in question) but what not in questions is this statement, "I've never forgotten anything I can remember" (tongue in cheek comment)

*Trading plan*
I've been thinking how to approach this topic, on one hand I want the beginners to understand we need a plan, we need a strategy, we need to have purpose, we need to have an endgame. Writing in this manner is going to bore some & entertain others, I want to keep post in the same vein of this thread & write as if nobody knows anything about trading.  

*I don't know anything about trading how does it all work ?  *
Over the next few post I'll let you know, there will be a series of post.

Skate.


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## Skate (31 January 2019)

*We need a plan*
Trading isn’t about getting rich, (repeating myself) it's not the endgame we are after. But one day you might have the financial independence to support yourself without working for someone. That's the end game.

Skate.


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## Skate (31 January 2019)

*Starting Can Be Easy But we need a plan*
Trading doesn’t have to be super complicated or time consuming. Also, you don’t have to be rich either. There are plenty of easy ways to get started without having a bucket load of money. 

*Won't have a go*
Many people never start trading because they’re worried about losing their money.You shouldn't let this hold you back, you can learn as you go by trading small positions.

*The cost of education*
If you make a mistake small loses are bearable. Making small mistakes now will giving you the skills and experience you need to make the right decisions later on. It's learning on the job.

Skate.


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## Skate (31 January 2019)

Investment strategy rather than trading (IMHO, there is a difference)

*A new member 'Scott' asked a very good question*
_"I have around $1000 a month to invest. I realise if I had a lump sum, it is better to invest in one fell swoop, but as I only have the $1000 available each month"_

*Total bullsh!t *
I get asked this all the time, mostly from friends who want to start trading but say they haven't got enough money to start. Which to me is total bullsh!t .  

*Summer Olympic Games*
1984 Los Angeles Summer Olympic Games we had a mascot, not that many people remember him, but I do. The Australian Mascot was called "Willy" & his slogan was "Where there is a WILL there is a way" & that's worth remembering.

*Comprehensive answer*
I gave Scott a comprehensive answer so I won't clog up this series of posts, I'll supply the hyperlink for others to read if interested, as others may be in the same boat.  

*Found here*
https://www.aussiestockforums.com/threads/dca-strategy-question.34512/#post-1012071

Skate.


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## Skate (31 January 2019)

*The typical beginner*
The typical beginner will usually be worried more about when to enter a trade than anything else. They think little of risk management, or even bother to plan when to sell. Because of this, when a trade begins to turn against them, they hold with the hope of coming back to even or their former profit level. Worse off, they may average down, in effect doubling down on a loser. Then quit trading all together.

Skate.


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## Skate (31 January 2019)

*A trading plan*
A well-timed entry could help your returns, but factors such as how much of each stock to buy and when to sell will always be more significant in the long run.

*It's scary when it's your money*
A trading plan considers all aspects of managing a systematic portfolio, removing all emotional biases, especially when it comes time to sell. This is very difficult for some people to achieve because when dealing with large amounts of money, you tend to break your rules or make new ones along the way, solely for the purpose of justifying how you feel at the moment.

Skate.


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## Skate (31 January 2019)

*If you plan to use the 'Trend following system' *
I use a weekly trend following strategy & place my orders before the market opens hoping to be settled at the opening price of the day. It also makes backtesting simulations much easier & a lot more accurate.

*When I started my first trend following strategy* 
I immediately went into a 3-month drawdown before coming up to even. Luckily, I expected this as returns in trend following are large yet sparse compared to the many, smaller losses. Therefore it is very likely when you enter such a strategy, you will enter in a drawdown. Some can handle trading like this others can't. It's just the nature of the beast.

Skate.


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## Skate (31 January 2019)

*Your ability to understand your plan*
The ability to understand your plan will serve you well, it's probably the best way to deal with uncertainty that you will start to feel when starting out on the journey. 

*Let get some rules*
The scariest thing about trading is the lack of rules, well there aren't any. The first thing we need to do is to make up some rules, rules we can stick with.

I'll get around to rules soon..

Skate.


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## Skate (31 January 2019)

*It matters*
What matters is that you quell the uncertainty and doubt that pollutes your decisions by planning ahead for all possibilities. We all need to simplify our lives, think more clearly & deeper about issues, this is not the time to use your Lizard brain, not when it comes to making a trading plan. 

*Write it down*
It's critical, that we write down our plan, write down things that come to mind, don't worry whether they are in order, we need to remind ourselves to do nothing sometimes and just think about the now. 

*It's your money*
Sometimes when it comes to financial matters "Good enough is not good enough". Remind yourself of this, "It's your money on the line"

Skate.


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## Skate (31 January 2019)

*Add to the plan*
First off started to research alternatives ways to invest. The more you read, the more you will become interested in trading, & we have all made dumb mistakes when starting out, that is just being a beginner.

*To be a successful trader*
The most basic thing you need to be a successful trader is an edge, an advantage in your trading that produces a positive profits over the long-term. Trading is a marathon not a sprint. This edge is the culmination of all your research, planning, execution, and state of mind while managing your portfolio.

Skate


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## Skate (31 January 2019)

*You get to hear this one more time*
Every book, every podcast, will repeat what the 'edge' is. In its most basic form the edge comes from winning more when you win than what you lose when you lose.

*It really works*
What is most important is the old adage “cut your losses short and let your winners run”, is one rule obeyed by all the great traders I’ve researched. When you do that you tend to incur many more little losses, but since your gains are essentially unbounded, they usually make up for your losses and drive a profit.

Skate.


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## Skate (31 January 2019)

*Listen up, I want you to fully understand *
When you’re dealing with your own money, trading gets very complicated, very quickly!

*Fish*
If you think you have a handle on your emotions, think again, trading is another kettle of fish altogether.

Skate.


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## Skate (31 January 2019)

Lets get it out there "98% of Traders Lose"

*It's a shock*
One of the first major shocks you'll learn is that 98% of Traders lose their money and some traders lose their entire capital, blowing up their account, than they go looking for someone to blame. (what they haven't got a mirror ?)

Skate.


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## Skate (31 January 2019)

*We've got it made*
Technology now makes it possible for anyone who is willing to put forth the effort to be a trader. In the past, the average trader had no choice but to rely on brokers, financial advisors, & the media for insight into and advice about the investing process. That is no longer the case. We now have dedicated TV channels to cover all your needs (TV - Your Money)

Skate.


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## Skate (31 January 2019)

*What is a trading plan?*
A trading plan can be as simple as this: (a) When getting out of bed in the morning, if you place your right foot on the ground first you’ll place a buy order but if your left foot hits the ground first you won’t trade at all. (b) When I wake up and if it’s sunny, I’ll trade but if it’s overcast I won’t.

*That’s a trading plan, not a plan I would recommended but it’s still a plan.*

*What do buy & when do I to sell ?*
Your trading plan should incorporate a buy and sell condition & you get decide those conditions. If a buy condition is met execute a buy if your remaining capital permits, if you get a sell, sell the position without hesitation.

*How many positions do I buy ?*
Your plan should contain your position sizing, by that I mean how many positions can you buy with the money you have. Most settle for 5, 10, 15, or 20 positions. The quantity of positions is not a concern, as far as I'm concerned the more the better. Take more positions with a lower dollar value for each position is much better (IMHO)

Skate.


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## Skate (31 January 2019)

*Why you must test and evaluate your Trading Plan.*
We all have opinions and that’s the reason why we have a market, all traders have hunches and opinions and most likely their opinion will be different to yours.

*We are all different*
How investors value companies can be like chalk and cheese and the likelihood of every one coming up with the same valuation would be very rare indeed.

*Some stocks are better to buy than others*
If a company’s value increases it makes it a better to buy than another stock that doesn’t, the value you place on a company is very judgmental and whether you consider a company to be undervalued, or overvalued may be the very reason you buy one and sell the other. 

Skate


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## Skate (31 January 2019)

*It's either doom & gloom or its going gangbusters*
Stories circulated by the media and major player within the industry are either doom or gloom, or the markets are going gangbusters. There is never a dull moment in the markets. When there isn't a story they make one up & sensationalize it to the max

*What about the dangers*
Can you ever recall any media outlets, brokers, institutional money managers ever tell you the dangers associated with investing ? - I can’t. 

*Humdrum story*
Can you ever recall a humdrum story about the markets ? - I can't. (the markets are always exciting)

*Don't trust them*
The media and advertisers only 'spruik' what’s in their best interest and not yours. Investing is a zero sum game and it’s well worth remembering – for every winner there is a corresponding loser, & that loser could be you.

Skate.


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## Skate (31 January 2019)

*Today is coming to an end *(I need a break, well my fingers do)
In the next few days I want to talk about Soldiers, Sumo Wrestlers, Cars & a few more topic all related to trading, like a talking about out market as a little Chihuahua.

*Topics to cover.*
How to stay fully invested
Decide how much to allocate to trading (trading capital)
Which market to trade
What index to trade with
When to be in the market & when to stay out of the markets
How to decide what filters to use when making a decision (Filters are like fine tuning a decision)
What price range will we trade
We need to establish companies that have good turnover (how do we do it ?)
It's the same with volume ( buying is easy, getting someone to buy back off you is the hard bit)
We need to understand momentum, momentum shift the share price & what should we do when it stops
We have to establish what a buy condition should be
We need to know when to hold them & we know when to fold them (Kenny Rodgers)
We need a system to rank the order in which to buy, so we buy the positions first
We need to understand position sizing

So there is lots to post about & discuss.

Skate.


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## Skate (31 January 2019)

*Happiness *(we are all feeling it)
Another brilliant trading day, that has topped off a brilliant month, I'm sorry to see January end.

*February may be better* (who knows)
After talking to the captain it seems we are both rolling in it. (I trust it's the same for all)

Skate.


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## captain black (31 January 2019)

Skate said:


> *Happiness *(we are all feeling it)
> Another brilliant trading day, that has topped off a brilliant month




Well done Skate, great to hear 

It looks like you'll be talking soon about using an index filter to stay out of the market or reduce your exposure during downtrends. No better example than the last few months.

Hopefully catchya in a couple of weeks if all goes well


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## Init (31 January 2019)

Year 2 of investing. Going to focus a lot more on just risk minimising by setting trailing stops and not assuming that all my stocks will go up. Need to prune fast and hard to let the rest grow. 

Going to put more research into fewer stocks rather than thinking lots of diversity will make up for poor entry and exit timing.

Also **** crypto, leaving that behind in 2018.


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## satanoperca (31 January 2019)

*Truth*
A person who cannot talk face to face, but can only engage through a keyboard, is a person who has something to hide.


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## Darc Knight (31 January 2019)

satanoperca said:


> *Truth*
> A person who cannot talk face to face, but can only engage through a keyboard, is a person who has something to hide.




Are you unhappy Satan? You didn't offer to meet your nemesis Tisme  over a Beer did you? Hope you cheer up


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## satanoperca (31 January 2019)

Darc Knight said:


> Are you unhappy Satan? You didn't offer to meet your nemesis Tisme  over a Beer did you? Hope you cheer up



So far from the truth DK, I extended my hand, including contacting Tisme to discuss our differences (we are both humans) via the the old communication method, the phone, provided my phone number, but unfortunately, he made the choice not to call, so I never had the chance to learn about him. 

As for a beer, would have loved the opportunity. 

One never knows another person until they can be in the presence of their spirit/aurora.

As for your comment about happiness, I am and will be always happy with my past, current and future life, as I only have one to live and that is always going to be to short for me, as I will never have enough time to keep on learning.


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## ducati916 (1 February 2019)

Skate said:


> *Why you must test and evaluate your Trading Plan.*
> We all have opinions and that’s the reason why we have a market, all traders have hunches and opinions and most likely their opinion will be different to yours.
> 
> *We are all different*
> ...





'_Everyone has a plan until they get punched in the face'_.

Mike Tyson.


You can have a plan - 'A'. It is a good plan, it could even be a great plan. 

All irrelevant.

It is the discipline brought by the individual that is important.

jog on
duc


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## Skate (1 February 2019)

ducati916 said:


> '_Everyone has a plan until they get punched in the face'_.
> 
> Mike Tyson.
> 
> ...




ducati916, you are 100% correct, as a trader we need discipline, commitment & confidence in your trading plan or strategy to keep pulling the trigger.

Skate.


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## Skate (1 February 2019)

*Trading *(Trading is a risky, you need confidence)
Trading is a ‘risky’ business and if you decide to invest you need to understand both risk and reward. To the average investor the rewards are low but the risk of failure is very high. Unfortunately, it seems that people are more familiar with the expected returns of an investment, and less aware of the risks required to generate those returns. The best way to secure your financial future is to work hard, save, invest and make money work for you.

Skate.


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## Skate (1 February 2019)

*Getting Started*
I believe every trader can greatly improve their experience in the market with the correct software, education and understanding of money management. These days there are some excellent resources available to assist traders to generate an income and improve their skills from home.

Skate.


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## Darc Knight (1 February 2019)

Question if I may please Skate. You've never been into Fundamental Analysis, always been a Tech?


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## Skate (1 February 2019)

*A few observations*
The learning curve for understanding and developing a trading system is high for the average trader but not impossible. The very first step towards success in any occupation is to become interested in it & what you learn must be engaging & interesting otherwise learning will not take place. Reading the 'Dump it here' thread might just be the catalyst to get you excited thinking about trading in a different way.

Skate.


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## Skate (1 February 2019)

Darc Knight said:


> Question if I may please Skate. You've never been into Fundamental Analysis, always been a Tech?




*100% Technicals*
I've always been a Tech guy, I can associate with the principle of technical analysis, I like this style of trading.

*Expanded explanation*
I wish to give an expanded response for others to understand why I prefer technicals over fundamentals. (post to follow)

Skate.


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## Skate (1 February 2019)

*Financial disputes judge*
I have history of evaluating business in a previous life, I was a financial disputes judge in the NSW legal system. The books are not always accurate, sometimes misleading & deceptive. CEO's & CFO's sometimes massage the numbers, fancy accounting, pushing the boundaries, whatever you want to call it happens more often than you hear.

*Crystal-ball*
If you trade on financials, the fundamentals of a company (6 months out of date) records with crystal-ball financial projections & statements doesn't work for me. I've posted about 'Woolworths' a company we know well, because we buy our groceries there, but can you clearly articulate how one dollar of revenue flows through that business ?

*Investment risk*
The more you understand how a business operates, the more you become aware of how little you understand which further compounds the investment’s risk.

*Back to your question*
Fundamental analysis, has no value to me as I'm a short term trader, but if I was an investor there would be a place for the study of financials. Trading Technical's combines elements of psychology, (which I have accreditation) business, mathematics, and numerous other disciplines and sciences all principles I can relate to.

*Technicals*
Technical Analysis judges the mood of market participants in real time, we even get to see the buying & selling pressure, it's a pity traders don't follow logic, if they did trading would be much simpler. The market is made up of logical people making illogical decisions 

*Footnote*
1. There are differing opinion between the word Trader/Investor, a traders is a short term investor as opposed an Investor is a long term investor. It's dependent of the time frame being discussed
2. Trading is not a even playing field when it comes to receiving valuable information. There is absolutely no way small individual traders like us has superior knowledge about a company. 
3. Understanding financials is time consuming, basically a background check of how company has performed and operated in the past assuming the information passed on is accurate, evaluating a business correctly is hard work. 

Skate.


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## Skate (1 February 2019)

*Markets*
Markets are highly efficient, but not perfectly so. Inefficiencies are inherent in the structure of markets & I believe these inefficiencies can be exploited through a combination of trend detection and risk management. Having a Trend Following system with a trading strategy exploits the inefficiencies over time.

Skate.


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## Skate (1 February 2019)

*There are plenty of opportunities*
At any given time, there are plenty of opportunities in the share market as there are some excellent quality companies that are growing and out performing their competitors right now & the trick is finding them but what we must do is stay away from tips, rumours & the media.

Skate.


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## Skate (1 February 2019)

*Difficult periods*
The difference between successful traders and all others is how one handles themselves during difficult periods & there is a gap between the few that succeed and the many who continue to struggle even when they have plan or a great strategy.

Skate.


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## Skate (1 February 2019)

*Have no attachment to money*
Trading requires a great deal of detachment from the money. Start off trading with a smaller balance so you can take losses without flinching. Beginners tend to gyrate from one idea to another based on what they think is going on in the market or what they read or hear, the media is not your friend, take whatever they say with a “grain of salt”

Skate.


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## Skate (1 February 2019)

*Natural ebb and flow *
Trading has natural ebb and flow market movements & it affect everyone emotionally when they persist in one way or the other, most traders want calm & servility but this is the wrong mindset to have, as traders we need chaos & volatility. When trading is not going our way it’s easy to envision a scenario in which things will never get better.

Skate.


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## Skate (1 February 2019)

*Our approach will vary*
The specifics of everyone’s approach will vary, but the broad principles of any successful trend following approaches are mostly similar in application. Traders buy when they think the price of the stock will increase, they buy at one price hoping someone will buy it off them at a higher price. (simple)

*Lets not complicate trading*
Trading is easy, making money trading is the difficult part. Trading consistently & successfully is even harder, which is why the majority of people who try to make money from trading fail.

Skate.


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## Skate (1 February 2019)

*Trading is all about price movement.*
Nothing works perfect in trading so the next best thing is to accept 'that sometimes it works well and other times not so well'. Those that can handle that tend to do well. I say just go with the flow. Trading success is all about just luck & you create your own luck by doing all the right things.

Skate.


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## Skate (1 February 2019)

*A tip for new traders*
Forget about the money & focus on the process of successful trading. The more you obsess about the money the more likely it will derail your as success. Slow steady and methodical trading will win the race & there is never, ever, overnight success. 

*Delay gratification*
If you have the ability to delay gratification, stifle impulsiveness, and shake off the market’s inevitable setbacks and upsets, will make you a successful trader.

Skate.


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## Skate (1 February 2019)

*Expected Performance and Risk*
The performance and risk will be determined by the index you have chosen to trade in your portfolio, market conditions and the application of the strategy. 

*Everyone*
Every strategy and every trader will have periods of good performance and periods of poor performance yet beginners tend to worry about the short term ups and downs of their account. To be successful you needs to accept that losing periods are a part of the game and remain focused on the longer term outcome.

Skate.


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## Skate (1 February 2019)

*So much to understand*
It’s frustrating & time consuming trying to figuring out all this stuff, you don’t know and what you are expected to know, this leads to reading & listening to everyone, absorbing heaps of useless information that will turn out to be irrelevant in the early stages of trading.

*Experience*
Therefore the hardest part of trading is learning from experience or time in the market, its learning how to control your emotions and how to keep persisting even when your account suffers a few losses. It’s about being realistic and having an understanding that we are probably only an average trader at best but that’s okay.

Skate.


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## Skate (1 February 2019)

Lets discuss 'Strategy Development'

*If I have a strategy what should I do ?*
Before trading or before you make any investment decision please ‘Paper Trade’ your strategy first, making sure your strategy has a mathematical advantage. Your strategy has to have a mathematical advantage for you to make money.

*The advantage is simple*
Selling the losers whilst holding the winners will at first see your portfolio balance decline, it’s a stressful situation I know, but this is the very nature of how this mathematical advantage works.

Skate.


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## Skate (1 February 2019)

*Selling the loser’s will crystallise your losses*
For a trend following strategy to work you will need to endure some pain before you see your portfolio increase, if you can handle the pain of a handful of losses, the advantage of holding winners and quickly selling losers will surely kick in. 

*Give it time*
For this strategy to work it’s mathematical advantage you need to be patient as it will take time for this to happens, sometimes it’s a slow process and it can take months for this strategy to develop into profits. That's just the nature of the beast.

Skate.


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## Skate (1 February 2019)

*Make sure you test it*
Stress test your strategy, backtest the strategy, test it with in-sample and out-of-sample data, and test it over different Indexes and over different time frames, even different markets around the world as your strategy needs to work under all conditions.

*Do the work*
Backtesting with in-sample and out-of-samples data is a thread in itself & goes beyond the scope of this thread to explain what I mean.

*In-sample data*
In-sample testing means testing your strategy against data in a sample confined data set, optimising your strategy to achieve the desired outcome. Screwing the strategy allows you to get the best out of your parameters.

*Out-of-samples data*
Out-of-samples data is data that your strategy hasn't seen before & out-of-samples results are the only results worth taking notice of to critique your trading system. 

*Strategy development*
Strategy development needs In-sample data testing to get to a point where you are happy with the results. Than you can run your strategy to see how it performs outside of known data.

Skate.


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## Skate (1 February 2019)

*I have a low level of coding skills and I'm a fiddler*
I have a low level of coding skills and I'm a fiddler. I've picked up all my knowledge from reading & playing with code to see what happens if I do this or this & than decide if I can use the results or that idea in the future. 

*I had a comment*
WOW, there is so much to read in the Amibroker manual it's so comprehensive. I went on to explain that I don't know anyone who read manuals these days, think about it, have you. Manuals (IMHO) are for a reference when you get stuck or want to understand a feature a little better.

*Not a single new idea*
When it comes to trading I haven't been able to come up with one single new idea of my own & that okay, I don’t have the need to reinvent the wheel. I've went overboard on my charting code as I appreciate everything sharp, crisp & colourful.

Skate.


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## Skate (1 February 2019)

*Lets talk about Metrics*
Metrics are one of the most academic topics about trading systems & there are so many of them that I find it difficult to know which one is more appropriate to evaluate a specific system, its really quite frustrating for me. 

*A good metric*
A good metric is your trading account balance. I wanted to stress that I said 'Trading Account Balance', not your 'Bank Account Balance', they are not the same & you need to understand this very import point.

*Portfolio protection*
My thinking was leading me down the path of protecting my portfolio whereas I should concentrate & focus my energies on improving what I have. One peculiar thing I noted in my test results is that a good part of the gains comes from a few stocks that move a lot but that's how a trend following strategy works.

Skate.


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## Skate (1 February 2019)

*I lost my train of thought*
Moreover, running your strategy on different markets around the world could results in SIGNIFICANTLY different results for the same trading period & this is not a cause for concern. Running your strategy over different markets is only a minor indication of what your strategy is capable of achieving in different environments.

*Start dates are important to the mix*
Depending on the starting date of the test, this can also have a big bearing on the performance outcome of the strategy, this is the very reason why we need to mix the markets, mix the index & mix the dates when backtesting, don't shortcut this vital stage in the development of your strategy.

Skate.


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## Skate (1 February 2019)

*Is my strategy a good one ?*
It's very difficult for anyone (not just me) to say if a strategy is a good one or not for "you", since (IMHO) it all depends on the kind of trader you are & what is your maximum "pain" level when things start to go not as expected.

*We are all different*
I mean, what I would constitute & consider a still tradeable strategy for me may not be good for you & vice-versa since it is tightly related to our individual risk‐taking tolerance, time frames, and goals.

Skate


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## Skate (1 February 2019)

*Crystal ball*
Unfortunately, no one has a crystal ball, and any strategy in the real market, for some periods (sometimes long periods), may behave differently from the backtest and it is up to you to decide if you want to continue trading it or to take it off the market definitely (or simply suspend it, continuing to monitor it in paper trading, until it starts again to perform as per your expectancy).

Skate.


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## Skate (1 February 2019)

*Take the good with the bad*
With a weekly strategy you have to hold the position up to week even when the price falling rapidly. With a weekly system you have to stick to the plan even if it means a bigger loss (I never override my strategy) Keep the system as simple as possible, validate it (robust backtesting) and trade it.

Skate.


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## Skate (1 February 2019)

*Money Management*
It’s about how we proportion the amount of money set aside for trading, deciding what dollar value you want to place on each trade & it should be in relationship to the frequency of your trading style relating to your trading plan. You can divide your capital into five, ten, fifteen or twenty equal amounts. I personally divide my capital into 40 equal parts.

*Trading Account*
This is the account you have money in to trade & 'lose'. Trade an account balance that wouldn't be worrisome if you lost it all, that's when you will have confidence to take a trade & the next while being able to sleep well at night. 

*Start out small*
Start out trading small amounts & build up your resistance to the pain of losing, when trading, learn to be the best loser you can possibly be.

Skate.


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## Skate (1 February 2019)

*When is it safe to trade ?*
The market has three states of movements, trending upward, trending downward or trending sideways. The ideal time to trading is when the Index you are trading is trending upward.

*Index Filter*
An Index filter is the most common way to gauge if the market index is moving higher or lower and most filters comprise of a simple moving average set against the index and time frame you are trading.

Skate.


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## Skate (1 February 2019)

*The index filter*
An index filter is your safety net, it will keep you from trading when the index falls below a simple moving average by turning the filter off. When the Index filter turns off it should also prevent your strategy from generating any new buy signals. (this is essential)

*The flexibility of an Index Filter*
Another feature of an index filter is that when the index filter turns off you can have your stop loss tightened so you exit your trade sooner, much quicker than when the index filter is on. This will lock in profits or stop you losing more money if your position is under water.

*Locking in profits*
Locking in profits is the endgame, it's hard to watch profits evaporate, well it is for me, so don't let it happen to you. Don't worry there are times when the **** will hit the fan that will be unavoidable, that's just how it is sometimes.

Skate.


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## Skate (1 February 2019)

*How does an Index Filter operate ?*
When an index filter turns off it has the ability to protect you against larger losses securing and protecting your capital. If the index filter falls below a pre-set simple moving average the stoploss shortens to your preset level of pain generating sell signal sooner than when the index filter is on. 

*One of my first questions*
Index filters are not really difficult to understand & code, it was one of the first questions I ask joining Aussie Stock Forum (ASF) back in 2013, such a long time ago.

Skate.


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## Skate (1 February 2019)

*Permanent feature*
An Index filter should be a permanent feature of any good strategy & when the index drops it’s a time to take notice, it’s time to watch for sell signals.

*From this point, pray*
After placing a buy order all you can do from this point is to sit tight, pray & watch for the sell signal. If you have confidence in your strategy you will buy when your strategy gives a signal, sell when your strategy gives an exit signal, without hesitation never questioning why.

Skate


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## Skate (1 February 2019)

*What stock do we choose ?*
Human fragility such as greed and fear is what fuels the markets, not common sense, so choose stock you believe will increase in price that someone at a later stage will purchase from you. 

Have you any idea how to do that ?

Skate.


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## Skate (1 February 2019)

*Within the market how do we choose which Index to trade?*
Finding a market with the right risk/reward combination is a bit of a roller coaster & it’s trial & error to find the one that suits. Some indexes with a market are luck lusting & boring whereas others have nail biting volatility where you’ll require nerves of steel.

Skate.


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## Skate (1 February 2019)

*Filters are fine tuners*
Filters are best used in a mechanical trading system, taking away the pressure of us making a judgement call, because most know, when we are under pressure we don’t perform at our best.

*Pressure controls performance*
Just ask a goal kicker (Johnathan Thurston NRL 2015 Grand Final ) a kick he makes without any effort in training is much harder to kick when he is kicking to win the match. Players, traders, people in general have a habit of making poor decisions under pressure and that’s another advantage of having a mechanical trading strategy over a discretionary trading system as mechanical trading systems removes the decision making process from us.

Skat.


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## Skate (1 February 2019)

*We need them *(Filters)
It’s a known fact, most traders don’t make good decisions under pressure and this is where filters come into their own, filters are the fine tuning mechanisms of any strategy, removing all human involvement when certain conditions arises.

*Filters*
Having a variety of filters add confidence to your trading knowing that your strategy is a well tuned firing machine.

Skate.


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## Skate (1 February 2019)

*It’s funny how human nature often gets it wrong*
We act so impatiently with the stocks that are moving in the right direction by selling them straight away, yet we reward the falling stocks with endless patience. It’s human nature to sell profitable stocks too early so we can feel good about our decisions.

*A serious design flaw* (faulty thinking)
When processing information that supports our beliefs even after the evidence has been totally refuted, people fail to make appropriate revisions & will double down on a falling stock.

*I guess*
“It feels good to ‘stick to our guns even if we are wrong,” maybe it's disbelief the position could keep falling & at some point it they believe it will go back up. (sometimes it doesn't)

Skate.


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## Skate (1 February 2019)

*Just a bit longer & it will be all better*
We tend to give losing positions more time to recover as no one like to lose money and let’s face it we started the journey of trading to make money and not the reverse. Holding onto losing positions for a little longer can be a very costly mistake. 

*Here is a secret*
Cutting losing bets early is the secret of being a profitable trader, licking your wounds and taking a small loss is better than waiting for the share price to recover. Remember you don’t make money by taking larger losses.

Skate.


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## Skate (1 February 2019)

*So what criteria do we use to know when to cut our losses ?*
The decision to exit a trade has to be made before you decide to buy the stock and never after you make the purchase, you have to decide what you are willing to risk in dollar terms or percentage terms. You have to have a plan for this & include it in your trading plan.

*Good plan*
Knowing how much you are prepared to lose beforehand is a good plan.

Skate.


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## Skate (1 February 2019)

*Best way to invest*
The mistake that the vast majority of individual traders make is that they believe that the best way to trade is the exact same way as the big boys do it. 

*Its not a level playing field*
What do you think the chances are that an individual, sitting at home with limited information, can find better investments than a fund that spends millions of dollars on research, has easy access to company management, and employs teams of people to dig into every aspect of a business ? (NONE)

*Guaranteed*
Unless you are extremely lucky, trying to compete against a mutual fund by mirroring its techniques is not a strategy that will produce superior results.

Skate.


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## Skate (1 February 2019)

*The Sumo Wrestler*
Trying to match the way the big boys do it is like challenging a sumo wrestler to a wrestling match. There is no chance of beating him at the thing he does best. However, if you challenged him to a foot race, a game of basketball, or something where his size is a disadvantage, your chance of success would be very high.

*Don't even consider it*
Don’t try to play the trading game the way the giants do it's futile and unproductive. You should approach the market in a way that allows you to capitalize on your speed, cunning, and flexibility.

*Lets talk about us*
We are speedy, cunning, and flexibility, yep that's us in a nutshell.

Skate.


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## Skate (1 February 2019)

*Being active*
Investing is about taking control of your investments. It is about being active and not passive. You minimize risk by learning to sell quickly and decisively, which is the investment equivalent of hitting it and quitting it. 

*It's underrated*
Selling is one of the most underrated and unappreciated tactical tool any trader has. Traders like us can use our small size, quickness, and aggressiveness to outmaneuver and outrun the giants of the market controlling our own destiny by being quick to act when the time is right, and quick to retreat and sell at the first sign of trouble.

Skate.


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## Skate (1 February 2019)

*Trading is having the right attitude and mindset.*
It is recognizing and understanding that as an individual investor you need to look at the market differently to gain an advantage. You must embrace the fact that there is no way you can consistently beat the big boys at the trading game by acting like one.

*Run for the hills*
Once you recognize that fact and start focusing on the advantages you have as a small individual trader, you will be on the road to success. However, the small trader must also be able to change their minds quickly and run for safety if it looks like their initial decision was a bad one or if trading conditions have change.

Skate.


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## Skate (1 February 2019)

*Typical trader*
Much of what the typical trader knows and believes about trading in the stock market to me is just plain wrong. I'm amazed how little most know about the constructs of the market. I'm in the same boat because there are some trading systems I can't get my head around.

*We think we know*
One of the most dangerous and ironic trading myths is the well known phrase “Buy low, sell high” & “Buy stocks that are fundamentally cheap” are logically indisputable & on the surface that doesn’t sound like such a bad idea but most traders really have no idea how to apply such principles in a manner that will make them money.

Skate.


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## Skate (1 February 2019)

*Shouldn’t we seek out “bargains” when we buy a stock ?*
Unfortunately, whether or not a stock actually is a bargain has little to do with how the current price relates to past prices. In fact, the best bargain may actually be a stock that is trading at its highest price, and the worst bargain may be the one trading at its lowest price.

Skate.


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## Skate (1 February 2019)

*Shopping*
The problem is that we tend to think about buying stocks in much the same way we buy ordinary products. Usually when we go shopping for things, we want to pay less for that item than what someone else paid. If you buy “cheaper” than everyone else, you can take comfort in finding the ultimate bargain. 

*Value changes over time*
However, it is a mistake to apply that same logic to the stock market. Stocks aren’t like a new pair of pants or a Tee shirt. Their real worth changes dramatically over time.

Skate.


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## Skate (1 February 2019)

*Whipsaw, Risk & Stoploss*
After placing a trade you will notice the share price may jump around, going higher than lower, it whipsaws from one price to another. If you have set a low stoploss it means you have a low tolerance to risk. Having a low risk appetite the quicker you will be stopped out of a trade whilst on the other hand accepting a high degree of risk there is a possibility to lose a lot more of your money if the price moves against you. (you can never win)

Skate.


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## Skate (1 February 2019)

*Risk*
Risk is a fine balancing act of been stopped out early only to see the price recover and/or watching the price keep falling and stopping you out at a much larger loss. This is the very reason an exit strategy has to be agreed upon before the initial stock purchase. Knowing when to sell also involves profit taking and not just accepting losses.

Skate.


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## Skate (1 February 2019)

*Buying & selling*
Traders buy and sell for all reasons and just because you are in profit or holding a loss doesn’t mean it’s the same for everyone. Trading is a judgement call, you place a buy with the expectation that the price will rise and you accept a loss and sell when your judgement has been proven to be wrong.

Skate.


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## Skate (1 February 2019)

*Winners are grinners*
Placing a buy order and watching the price rise is exhilarating and I’ve never seen a bad winner. On the other hand loosing is hard to swallow and that’s the reason why traders will hold onto losing trades hoping for a miracle. My advice is to be the best loser you can possible be and accept that losing is part of trading.

Skate.


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## Skate (1 February 2019)

*Be very cautious *
As humans all our decisions are based on 2 facts:

(1) To gain pleasure or
(2) To avoid pain.

The latter is the best principle to apply when it comes to making trading decisions.

Skate.


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## Skate (1 February 2019)

*Points to ponder*
Trading is selecting companies that you believe will increase in price over time, you may even select companies that pay a regular dividend. No matter what your selection criteria was, or what has motivated you to place a ‘buy’ order, you have to realise everything is out of your control from that point on till you elect to sell that security so just hang on for the ride.

Skate.


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## sptrawler (1 February 2019)

tech/a said:


> Id like to comment on fear of failure.
> 
> This was something as a youngster I often faced.
> I learnt why. (I had fear).
> ...




I can really appreciate what you are saying duck, I had children young and always worked for wages, as you say the feeling of security.
Now later in life I look at my son in law in his early 30's, he worked for a recruitment company that went belly up. So he started his own recruitment company, 7 years later he is better off than me.


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## Skate (1 February 2019)

*Exuberance*
After you place a buy order you will either be exuberant when the share price increases or feel despondent experiencing a white knuckle ride to the bottom. Trading is an emotional roller coaster and how you manage your psychology really matters even more than your stock selection & the only thing left for you to do is manage your sell orders as everything is in the lap of the trading gods.

*I have a 50% record*
Half of my picks are DUDS, I just wish I knew which half, knowing this would make me a much better trader.

Skate.


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## Skate (1 February 2019)

*Technicals & Trend Trading*
Today I've been selflessly talking about the markets from my perspective, explaining that I'm a system trader, trading mechanically with no emotional input. I trust my system that gives me confidence to keep pulling the trigger & that's what trading is all about.

*If you are doing it the other way around*
If you are learning about how to evaluate companies that’s a different matter and more study is needed. Fundamental analysis is the study of each company, their balance sheet and their financials & this type of trading is leaning towards value investing which is suited to the Medium to Long term. Everyone will find their own style of trading, or investing. I personally choose to trade and invest!

Skate.


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## Skate (1 February 2019)

*# Apologies*
This post is for those who have Amibroker. I wanted to display the parameter settings of my Hybrid strategy. The parameter are adjustable setting so you don't have to keep writing or changing code. The actual parameters have been removed but the list is complete. The list of parameter are (IMHO) the important ones to have control over.

Posted for demonstration purposes only.

Skate.




Post exclusively for:
@qldfrog
@Newt
@Lone Wolf
@Wyatt
@willy1111
@Habakkuk
@jjbinks


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## satanoperca (1 February 2019)

No figures, just fields.

When are you going to come out and just tell us what you are trying to sell?


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## satanoperca (1 February 2019)

*DUMP @Skate
forum. *
A forum is a place, situation, or group in which people exchange ideas and discuss issues, especially important public issues.


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## satanoperca (1 February 2019)

*Soapbox*
Used with reference to a situation in which someone expresses strong opinions about a particular subject without wishing to engage or listen to anyone else


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## Skate (1 February 2019)

satanoperca said:


> No figures, just fields.
> 
> When are you going to come out and just tell us what you are trying to sell?




I am not selling anything, the thread is for the education of members who want to learn.

*What a great quote *
“Education is something that is done to you. Learning is something you do for yourself."

Skate.


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## satanoperca (1 February 2019)

Forum and Soapbox - learn something for yourself


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## Newt (1 February 2019)

Anyone that's written and backtested trend following systems would have a very good idea what the parameters Skate lists are for.  For those lost or puzzled reading through the parameters post above, could be worth getting into some Nick Radge (Unholy Grails) or Howard Bandy (Blue Owl Press books).


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## Newt (1 February 2019)

Skate, I'm fascinated that you've combined 3 types of go-Long signals into your Hybrid strategy.  Did you ever consider running all 3 with separate accounts somehow?  Wouldn't backtesting and tracking performance forward be easier in that case?


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## Skate (2 February 2019)

Newt said:


> Skate, I'm fascinated that you've combined 3 types of go-Long signals into your Hybrid strategy.  Did you ever consider running all 3 with separate accounts somehow?  Wouldn't backtesting and tracking performance forward be easier in that case?




Newt, that a great question. (I'll post up some charts & reports to explain it in pictures)

*# Apologies for the long winded explanation*

*Points to answer*
_1. "I'm fascinated that you've combined 3 types of go-Long signals into your Hybrid strategy" _
It was the captains idea after explaining the problem of high correlation to him as it was becoming an issue for me.

_2. "Did you ever consider running all 3 with separate accounts somehow?" _
Yes, I traded the three strategies separately over a period of time & this is how I found the problem of correlation.

_3. "Wouldn't backtesting and tracking performance forward be easier in that case?" _
No, it's no easier or harder backtesting & tracking performance of an individual strategy or backtesting a combined strategy. I code up the idea given to me by the captain & backtested it. Backtesting a strategy with one buy condition & one sell condition is no different to backtesting a strategy with three buy conditions & two sell conditions. (there is no difference)

*Optimisation is a different matter*
Backtesting as I have explained, 'there is no difference' but when it comes to optimisation there is a huge difference. Each strategy need to go through its own optimisation procedure, combined & re-optimised to sharpen the overall strategy. One set of parameters work individually whereas another set of parameter are required when they have to work together after being combined. 

*Trading $150k positions*
@captain black floated the idea of combining the strategies after explaining to him that the strategies I was actually trading were taking the same signals on the same week & sometimes only a week apart. At that stage I was buying $50k positions, meaning I could have $150k in one position which was crazy.

*I emailed the captain*
I fired off an email to the captain for clarification & guidance (I'm sure he won't mind me disclosing our personal email correspondence, I can't ask permission as he's out of range for two weeks & I don't want to wait that long to answer)

*What did I do after receiving the captains advice ?*
I quickly coded up my best three strategies into one system & called it the HYBRID strategy. I went to work backtesting the guts out of the new combined (HYBRID) strategy. I started off fresh with a new system strategy development in place & the rest is history.

When the captain speaks, I listen.

Skate.

*EMAIL BELOW* (from the captain)
-----------------------------------------------------------------------------------------------------------------------------------------
*The captains email response*
The only real issue with trend following is that most systems are correlated and tend to track the broader market movements. If you're happy to accept that then there's nothing wrong with trading multiple correlated systems.

You won’t have a smooth equity curve and if you're invested in the same companies across multiple systems you run higher risks if that company goes broke or has a big price drop.

One way to reduce that risk is to run monte carlo simulations to get an idea of the statistical variation of the system if you take trades in a random way rather than using positionscore. That way, if the monte carlo runs have a tight range you can ignore a signal in one system is you're already holding that company/share in another system.

Your systems will still move up and down in a similar fashion over the long term but you reduce the risk of a catastrophic event if a company you're holding across all systems goes broke.

*If you decide to trade multiple correlated systems and you want to reduce the risk of a catastrophic event such as a company going broke then you may want to look at ignoring a signal in one system and taking the next signal if you already own that company in another system.*
-----------------------------------------------------------------------------------------------------------------------------------------

More to follow..


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## Skate (2 February 2019)

Newt said:


> Skate, I'm fascinated that you've combined 3 types of go-Long signals into your Hybrid strategy.  Did you ever consider running all 3 with separate accounts somehow?  Wouldn't backtesting and tracking performance forward be easier in that case?




Moreover...

*A time consuming post*
This graphic below shows clearly the problem of trading high correlation systems. (it was time consuming to write & I'm assuming it going to take a lot longer to read & unpack how I trade)
*
The analysis 'Buy' report below (The first report) shows 4 very important things:*
1. What positions to buy (*SAR *& *EVN*) Signal generated on 11th Jan, Friday - Purchased on 14th Jan, Monday (VWAP = opening price)
2. The quantity to buy of (*SAR - 8,200 shares*) & (*EVN - 6,472 shares*)
3. What price to offer in the pre-action for (*SAR - $3.05*) & (*EVN - $3.87*) Settled at* (SAR - $3.00) *& *(EVN - $3.81)*
4. What strategy gave me the "Buy signal" (*SAR *got the signal from *BBO *&* Darvas*) whereas (*EVN* got the signal from *Darvas* only)

*Signals*
1. (SAR) got the buy signal from the BBO strategy & also got a signal from the DARVAS strategy. The BlueWren strategy didn't acknowledge the signal at all.
2. (EVN) received it signal from the DARVAS strategy only. The BlueWren strategy didn't pick up a signal at all, only Darvas.

*The original correlation issue using $50k positions*
1. I would be holding $100k position in (SAR) & liquidity & slippage would now be an issue for me but after the captains advice this issue is resolved.
2. (EVN) these is no correlation in this example so a $50k position would have been taken.

*Two analysis reports that are exactly the same* (The report I see & the other with scribble on it)
After looking at the Amibroker analysis report I shouldn't have written on it as it doesn't look like a clean report. I make another without the scribble.

*1. Amibroker [Explore] analysis report *(buy signal - actual position currently being held)




*2. Amibroker [Explore] analysis report (with explanations)*



*
Disclaimer *(I'm currently in the move)
(SAR) I'm in this trade at the moment & this chart show the actual Bar I got the Buy Signal & the actual Buy purchase bar 





*Disclaimer *(I'm currently in the move)
(EVN) I'm in this trade at the moment & this chart show the actual Buy Signal Bar & the actual Buy Bar.


*
The issue is now fixed*
I trust this explains why you shouldn't trade high correlated strategies.

Skate.


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## Skate (2 February 2019)

Newt said:


> Anyone that's written and backtested trend following systems would have a very good idea what the parameters Skate lists are for.  For those lost or puzzled reading through the parameters post above, could be worth getting into some Nick Radge (Unholy Grails) or Howard Bandy (Blue Owl Press books).




Newt, thanks for the explanation for those who don't enjoy the benefits of using Amibroker. My post would have been confusing to others noticing the parameters blocked out, not understanding why.

*For the benefit of others let me explain*
The parameter of a strategy is parts of a code that allows you to change settings/parameters on the fly without the need to rewrite or alter the base code. The parameters form only a small part of a much larger system.

*How many parameters*
1. The original CAM strategy has *6* adjustable parameters settings (I posted a photo to display this fact)
2. My updated CAM strategy has *19* adjustable parameters settings (on display for other to see where the improvements came from)
3. My HYBRID strategy has *56* adjustable parameters settings. (The setting/parameters I use to trade are strictly confidential) The parameters are proudly displayed in full view, for Amibroker users to understand the parameters that I have use in my strategy development.

Only the individual setting I use are missing blanked out. (only because they are sensitive)

*Secret sauce ?*
The parameters are the secret why my HYBRID strategy performs the way it does, there has been 1,000's of hour of effort gone into getting the code just right.

*Why list two parameter & not the third ?*
1. The first parameter post was to show that the "CAM" settings is basic (lacks bells & whistles)

2. The 2nd parameter post was for members who had the "CAM" strategy to understand how I achieved more accurate results & performance improvements. With a little extra work the "CAM" strategy could be improved & I left the parameters in full view so they have an understanding what I did to achieve those results. The performance improved, the signal accuracy improved (better trading results, with less signals) The signal quality is the most important metric I aim for. Meaning if the "CAM" strategy is going to give me a signal let it be a good one. (I don't want to know about the crappy ones)

3. The 3rd parameter post was from my HYBRID strategy. The setting/parameters I use are sensitive in nature, strictly confidential & private, any member who has Amibroker would understand this immediately & would be understanding why they were removed from view)

*The CAM strategy is a basic idea with a few lines of code*
1. The "CAM" strategy has 171 lines of code & 28 lines are taken up with explanation notes on how to use the strategy.
2. My HYBRID strategy has 1,192 lines of code with no notes. (even after explaining what under the hood, & what drives my Hybrid strategy do you honestly believe someone is going to replicate it)

*Honest & open*
I've explained in detail the 3 strategy that make up my Hybrid System
I've post actual trades, the timing of the trade & the value of the trade with posted screenshots (so you can see what I see)
I've posted the corresponding charts to confirm those taken positions (so you can see my chart style & corresponding notations)
I've explained how I trade in the markets & what periodicity I use, I've even mentioned the Index I trade once or twice
I have indicated that trade in the pre-auction aiming for the Value Weighted Average Price (VWAP) the opening price of the day
I've explained that I'm a trend follower, trading a mechanical system & describing what it all means
I've posted about the people who came up with the original ideas & gave them credit.
I wrote short stories about those people & a bit of back-grounding of the concept behind their ideas
I've shown you the parameters that makes up my strategy
I've laid out everything on the table so others can understand why trading is difficult & if you are going to trade why you need to be prepared. I've even taken the time to answer question in detail instead of being evasive.

*I'm giving back*
I cannot ever recall anyone being as open & honest as I have on this forum, I can't remember any forum member prepared to give away a good strategy, let alone give hints how to turbo charge it.

*A lot of time & effort*
I've condensed & still rolling out 5 years of study into one thread, I thought it would be helpful for others to read the "nitty gritty" of trading & what it takes to be successful at this game.

*eBook*
I've even wrapped the thread into an eBook for others to read at their leisure if interested. (the 3rd Edition of the eBook will be released shortly)

*Have I got an ulterior motive ?*
None that I can think of. If you find this thread refreshing, helpful or just enjoy reading this thread stick around, if not, I appreciate it's not for everyone & it serves no purpose.

*It's not too much to ask*
All I ask is for you to be considerate of others when posting. I'm not policing the thread, but it pays to remember that everyone is entitled to their opinion.

*Recap - How to ask a good question*
(a) Consider if your post adds value to the discussion.
(b) When expressing an alternative view, start off by saying “In my opinion …” and try to focus on the issues rather than person.
(c) We are all wordsmiths to some degree & it's easy to incite an emotional, knee-jerk response, creating an emotional outburst.
(d) Ask a detailed question & you will get a detailed response.
(e) Ask a one liner, it deserves a one liner response.

*Disclaimer*
The original post did have a disclaimer at the bottom explaining that this post was exclusively for members who have the "CAM" strategy.

*Post exclusively for:*
@qldfrog
@Newt
@Lone Wolf
@Wyatt
@willy1111
@Habakkuk
@jjbinks

Skate.


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## Newt (2 February 2019)

Skate said:


> *Optimisation is a different matter*
> Backtesting as I have explained, 'there is no difference' but when it comes to optimisation there is a huge difference. Each strategy need to go through its own optimisation procedure, combined & re-optimised to sharpen the overall strategy. One set of parameters work individually whereas another set of parameter are required when they have to work together after being combined.




Apology for long answers not required- really appreciate the detail you've provided Skate. 

I spent some time thinking about this and decided the thing that worried me most was over-optimisation.  I've mentioned before how incredibly useful it is to see someone succeeding in pulling 20-40% returns consistently from the XAO with acceptable (modelled) drawdowns.  I've worried for some time about having too many screening conditions, but seem to have ended up with remarkably similar trend, volume and exit criteria.  That is reassuring that my main challenge is probably in my head taking signals rather than more system development. 

Combining 3 systems and having to re-optimise might increase the potential for over-fitting but it sounds like you've gone to great lengths to choose sensible parameters and no doubt optimised them likewise in a consistent careful way.

Congrats on coming with a hybrid system giving multiple chances to catch the next trending stock without multiple entries in the same stock.  I also found it very organised and educational how you've constructed your exploration reporting screen.  For the number of positions your trade that is a logical way to improve efficiency and reduce effort.


----------



## Newt (2 February 2019)

Skate said:


> *The captains email response*
> The only real issue with trend following is that most systems are correlated and tend to track the broader market movements. If you're happy to accept that then there's nothing wrong with trading multiple correlated systems.
> More to follow..




Listening to podcasts like Better System Trader one often hears mention of professional traders running similar strategies with varied parameters.  Presumably for trend following one could have strategies that enter early and exit early, versus others with wider trailing stops prepared to enter later and try to stay in longer.  

I'm guessing very experienced traders like CB eventually look to other market universes for diversification more son than parameter diversification in a single market to avoid over-correlation.  


Incidentally, I spent approx 18months working on a promising daily MR strategies in the ASX, but realise now I should have spent more time working on the software in my head before diversifying into different systems (or markets).


----------



## Skate (2 February 2019)

Newt said:


> Listening to podcasts like Better System Trader one often hears mention of professional traders running similar strategies with varied parameters.  Presumably for trend following one could have strategies that enter early and exit early, versus others with wider trailing stops prepared to enter later and try to stay in longer.
> 
> I'm guessing very experienced traders like CB eventually look to other market universes for diversification more son than parameter diversification in a single market to avoid over-correlation.
> 
> ...




*MRS*
Newt, I have an extremely good Mean Reversion strategy but the way I trade the commission is a killer. Scalping small profits with high win rates is not for me. I traded it for a few years but with so much overseas travel it was not worth the hassle.

*Weekly*
I trade one market & one index. The captain trades everything & he is the real deal when it comes to traders. He's been a professional trader for the last 15 years I know of.

Skate.


----------



## Gringotts Bank (4 February 2019)

And, dear friend, success is created by the belief in success, not the system.


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## tech/a (4 February 2019)

Gringotts Bank said:


> And, dear friend, success is created by the belief in success, not the system.




You think?


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## satanoperca (4 February 2019)

Gringotts Bank said:


> And, dear friend, success is created by the belief in success, not the system.



Bullsh--t, you can believe all you want in a failed system, it will continue to fail and fail you.


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## Gringotts Bank (4 February 2019)

Nothing can be called a law whilst I can find examples to counter it.  Most 'laws' are just correlation and have nothing to do with cause and effect.


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## cynic (5 February 2019)

tech/a said:


> You think?



No! Not think, *believe!*


satanoperca said:


> Bullsh--t, you can believe all you want in a failed system, it will continue to fail and fail you.



For practical purposes I suspect that the philosophical concept GB is referring to, may be beyond the intended scope of this thread.

Whenever viewing causal correlations, the question : "Which is cause, and which is effect?" can at times prove beneficial.

E.g. when examining one's personal beliefs about reality, a worthwhile question might be "Are these beliefs formed from the reality experienced, or is the reality experienced, formed from the beliefs?"


----------



## ducati916 (5 February 2019)

cynic said:


> No! Not think, *believe!*
> 
> 1. For practical purposes I suspect that the philosophical concept GB is referring to, may be beyond the intended scope of this thread.
> 
> ...




1. What is the philosophical concept being referred to?

2. If this question is going to be discussed, then greater precision will be required in defining exactly what we are talking about.

3. It would seem that you are saying that this is an epistemological question.

jog on
duc


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## tech/a (5 February 2019)

While I have seen success due solely to application in the belief that excellence can be attained, particularly in sport and academia.

Most success I have been witness to and involved in consists of

(1) A big dose of luck , right place , right time.
(2) Recognition of an opportunity.
(3) The ability to—-or in the position to take the opportunity.
(4) Going for it.

Often the magnitude of the opportunity isn’t apparent initially.

Trading and trading systems.
A good dose of BOTH in my view.


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## qldfrog (5 February 2019)

Agree with you tech/a and to also persevere..not so much in a failed/failing opportunity but in giving a go again.
In my own experience, many failure or so so results for a win.
But learn from the experience and try again wiser..probably applicable to trading too:
#Do not persists with looser, 
#run your winners ( you would not give up a successful business would you?)
#try again/persist
#get experience/knowledge from your previous tries


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## cynic (5 February 2019)

ducati916 said:


> 1. What is the philosophical concept being referred to?



Realities that one experiences are direct consequences of one's deep seated beliefs.


> 2. If this question is going to be discussed, then greater precision will be required in defining exactly what we are talking about.



Where causation exists, a correlation between causative and effective entities may be expected to occur. So the question pertains to the attribution of causation.

Examples:
We know that some correlation exists between the existence of chickens and eggs. 
Do the eggs cause the chickens, or do the chickens cause the eggs?

We know that some correlation exists between diabetes sufferers and habitual injection of insulin.
Does habitual usage of  insulin cause people to suffer diabetes, or is such usage consequent to diabetic suffering?

We know that there is a correlation between dementia and abstinence from intellectual pursuits.
Does abstinence from intellectual pursuits cause dementia, or is such abstinence merely a consequence of dementia onset?

In order to relate this to trading, one might commence by examining their chosen trading methodology (attendant with all its entry/exit signals/criteria, performance measures etcetera) and reconsidering the merits of any key correlations that influence trading practices pursuant to such methodology.


> 3. It would seem that you are saying that this is an epistemological question.



Perhaps it seems that way, but, I don't believe that it needs to be, unless we choose to make it so.


----------



## ducati916 (5 February 2019)

cynic said:


> 1. Realities that one experiences are direct consequences of one's deep seated beliefs.
> 
> 2. Where causation exists, a correlation between causative and effective entities may be expected to occur. So the question pertains to the attribution of causation.
> 
> ...




1. Belief(s) in:

(a) a set of circumstances [or circumstance] that is supported by objective evidence: which is commonly called a fact; and

(b) a set of circumstances [or circumstance] that has no objective evidence to support it: which is commonly called faith.

So a reality experienced could be the result of either (a) or (b).

A reality experienced due to (b) could [would] likely be unique to that individual exposed to that experience, or possibly all individuals sharing that belief [faith].

A reality experienced due to (a) could [would] likely be experienced by all individuals exposed to that fact, irrespective of any shared commonalities.

2. The higher the correlation, the higher the probability of causation. One issue is in measurement of that correlation: viz the competing variables that could account for an outcome.

3. I see no way around it. You use the word 'reality'. What is reality? Reality is a question of epistemology, viz: how do we know what is real?

I would argue that realities that one experiences are either:

(a) data or phenomena that are sensory in their origin; or
(b) are deduced via synthetic a priori in their origin.

jog on
duc


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## Gringotts Bank (5 February 2019)

cynic said:


> In order to relate this to trading, one might commence by examining their chosen trading methodology (attendant with all its entry/exit signals/criteria, performance measures etcetera) and reconsidering the merits of any key correlations that influence trading practices pursuant to such methodology.



Or do what the Turtles did, but take it up a notch.  Give the exact same system to a few thousand people, sit back and watch as some make it profitable and others make it fail.  The returns will form a nice bell curve.  Interview those at each tail of the curve and you'll see what's happening.  It won't have anything to do with discipline, education or market knowledge.   It will be so-called 'random' events that make the difference.  These 'random' events, whether helpful or harmful, will be related to an individual's core beliefs.


----------



## cynic (5 February 2019)

ducati916 said:


> 1. Belief(s) in:
> 
> (a) a set of circumstances [or circumstance] that is supported by objective evidence: which is commonly called a fact; and
> 
> ...



If belief dictates one's experience of reality, then the only evidence that can exist, is that which has been believed into existence!

So "Objective evidence" could only truly exist for those believing in existence of same.

As such, the distinction between (a) and (b) can only exist, for those subscribing to belief, in the existence of such distinction/s.


> 2. The higher the correlation, the higher the probability of causation.



It seems a correlation (i.e. correlation strength, *correlated* with causal probability) has been introduced. How is application of such circularity of logic, beneficial?


> One issue is in measurement of that correlation: viz the competing variables that could account for an outcome.



It would seem that the measurement issue, to which you refer, renders the matter subject to the perspicacity of the measurer.

A 100% correlation strength is higher than 50%.

A 100% probability (certainty) is higher than 50% probability(coin toss).


Entity A makes 3 consecutive coin tosses, returning a result of heads each time.
Entity B makes 3 consecutive coin tosses, returning a result of tails each time.
Entity C makes 6 consecutive coin tosses, returning 3 heads followed by 3 tails.

If entities A and B were each using a phony coin (i.e. a double headed and a double tailed, respectively), then the outcomes (100% heads, & 100% tails respectively) could indeed be expected to be correlated to the coins.

But what if there only existed a single coin, to be shared between the 3 of them (i.e. entities A, B and C)?

Alternatively, what if entity C was a composite of, entity A, using one coin, and entity B, using another?

Considering the above, just how dependable is the *correlation* between, correlation strength and causal probability?



> 3. I see no way around it. You use the word 'reality'. What is reality? Reality is a question of epistemology, viz: how do we know what is real?
> 
> I would argue that realities that one experiences are either:
> 
> ...



If one deeply believes the aforementioned things to be true, then that is the reality one has created for oneself.


----------



## fiftyeight (5 February 2019)

Skate said:


> View attachment 91865
> 
> View attachment 91866
> 
> ...




Is the content here something you have put together specifically for this thread/book or pearls of wisdom you have noted over the years and are now sharing?


----------



## Skate (6 February 2019)

fiftyeight said:


> Is the content here something you have put together specifically for this thread/book or pearls of wisdom you have noted over the years and are now sharing?




*Why did I start the thread ?*
I've noticed that the forum shifted focus from trading to a social hangout. @Joe Blow frustration was excruciating to read & as a community member I thought I could help out in a small way.

*Visitors don't see value to stick around*
New traders are visiting our forum every day seeking answers to some basic trading question. They ask one question & never stick around, have you ever wondered why ?

*Dog with a bone*
I'm a compulsive learner & have a passion to share knowledge. If any of my posts help one person modify their behaviour or thinking pattern, I'm a winner. I'm compulsive about most things & I study & write everyday - Dumping it here has been therapeutic - it's been a release.

*But I don't have time to read, condense it for me.*
I've condensed 5 years of gained knowledge into one thread, I thought it would be helpful for others to read the "nitty-gritty" of trading & what it takes to be successful at this game. I've explained a simple way I trade, it's nothing fancy or complicated, meaning anyone can start with little effort & money. Getting started is what it's all about, you can learn as you go, I've written about this.

*Why should I read the thread or eBook ? *(for positive reinforcement)
It may save you many years of self-education if you have a slight interest in trading, otherwise you can use it as a pep talk. I wanted to explain the dangers & pitfalls associated with trading, most don't understand the emotional side to trading not realising the roller coaster of emotions everyone experiences when they trade. By keeping your emotions in check you'll make better decisions.

Skate.


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## fiftyeight (6 February 2019)

Skate said:


> *Why did I start the thread ?*
> I've noticed that the forum shifted focus from trading to a social hangout. @Joe Blow frustration was excruciating to read & as a community member I thought I could help out in a small way.
> 
> *Visitors don't see value to stick around*
> ...




Being abused by experienced members in private chat when very new probably does not help keep newbs, said member is still posting today, in this thread actually. Copped some more abuse from them last year actually. I hope they treat new posters better than they do me???

I am sure your posts will help many, the time given in this thread will be appreciated by many new comers over the years!!!

Good timing of the ebook, I am on a flight today and was looking for something to read


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## ducati916 (6 February 2019)

cynic said:


> 1. If belief dictates one's experience of reality, then the only evidence that can exist, is that which has been believed into existence!
> 
> So "Objective evidence" could only truly exist for those believing in existence of same.
> 
> ...




1. Beliefs are _formed by_ either (a) or (b). 

Beliefs do not create reality in (a).
Beliefs can create reality [for the individual or those with the same belief] in (b).

Therefore if (b), I agree with your conclusion. However, if (a), then your conclusion is false.

2. It is important [helpful] for the following reason.

(i) There will be times [occasions] where there is a chain of historical events that are assigned causation. Often these claims are suspect.

(ii) Even if there is a very small period of elapsed time between the causative event and outcome, questions can still arise. As an example 'A' punches 'B' on the nose. 'B' has a nosebleed. On that basic evidence the punch was causative of the bleed. If further information is added: 'B' insulted 'A's' wife, then which is causative? The insult, or the punch?

Which brings back into focus the issue of epistemology. How do we know [causation] anything? Which answers your question at the end of [2]:

_Considering the above, just how dependable is the *correlation* between, correlation strength and causal probability?
_
Exactly my point: how reliable is anything that we [think we] know?

3. Only for those operating on the basis of faith. If operating on the basis of (a), then that assertion is not accurate.

jog on
duc


----------



## ducati916 (6 February 2019)

Gringotts Bank said:


> Or do what the Turtles did, but take it up a notch.  Give the exact same system to a few thousand people, sit back and watch as some make it profitable and others make it fail.  The returns will form a nice bell curve.  Interview those at each tail of the curve and you'll see what's happening.  It won't have anything to do with discipline, education or market knowledge.   It will be so-called 'random' events that make the difference.  These 'random' events, whether helpful or harmful, will be related to an individual's core beliefs.





Your conclusion cannot be true.

The Turtle experiment resulted in a number of the group breaking the rules. A breach of discipline. Had they all traded 100% to the rules, then allowing for slippage in execution, their results would have been the same.

Random events in this context are extrinsic to the individual. Thus must affect the entire group.

An intrinsic variation [random event] in a failure to execute to instructions, is a breach of discipline. The reason that they breached instructions may well be that they did not 'believe' but that is irrelevant to the question in this case: their belief or disbelief, had no direct impact on the profitability of the system [or not as the case maybe]. Their belief was that they could out-trade the system. This was proven to be false.

jog on
duc


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## Skate (6 February 2019)

jjbinks said:


> Retesting making new highs
> Looks it could go fair bit higher if it consolidates and then breaks through?
> 
> View attachment 91926
> View attachment 91927




I could have posted the chart in the (RRL) Regis Resources thread but I prefer to 'Dump it here' for the educational value.

*Why post the chart*
It's a perfect example to show how I trade simple breakouts, you can view the setup & the execution of an actual trade that I have taken from the *get-go*, meaning from the beginning of the trade.

*It's my job*
My Hybrid strategy gave a 'buy' signal on Friday 1st Feb 2019 & I purchased the position on Monday 4th Feb 2019 in the pre-auction. BlueWren & Bollinger Bands (BBO) generated the signal whereas their was no signal generated from the Darvas strategy.

*Its all about breakouts & trends*
As a trend trader it's my job to jump on the move. Will the trade be successful, who knows. When the trend is over it's will be my job to hop off. This is a simple way to trade effectively over time. Breakout trades take time to work. 

*My strategy*
I've jump on the breakout & I'll ride the the trend till it's over. Clean cut, simple in execution I'll post the exit, & explain why the trend ended. 

*Classic trend following*
The setup of (RRL) is a classic trend following breakout, I haven't time to wait for a pullback as per the CAM strategy or like others who trade pullbacks. I entered on a confirmed uptrend & I'll exit when the trend turns down. (Finishes)


*Buy signal from BlueWren & BBO (no Darvas signal)*





*The chart displaying the 'buy' signal bar & the 'buy' bar.*



*From this point on*
Trading is just about selecting companies that you believe will increase in price over time. Now that I've placed my buy order, I'll just hang on for the ride as its all I can do from here on, the only thing left for me to do is manage my sell order as everything is in the lap of the trading gods. Trading is an emotional roller coaster and how you manage your psychology really matters even more than your stock selection.

Skate.


----------



## satanoperca (6 February 2019)

Skate said:


> *Why should I read the thread or eBook ? *(for positive reinforcement)
> It may save you many years of self-education if you have a slight interest in trading, otherwise you can use it as a pep talk. I wanted to explain the dangers & pitfalls associated with trading, most don't understand the emotional side to trading not realising the roller coaster of emotions everyone experiences when they trade. By keeping your emotions in check you'll make better decisions.
> 
> Skate.




I wish I had have found something like your ebook when I started trading, the closest I found was by reading Tech/A threads and then tracking down Nick Radge and subscribing to his service for a year and reading his books over and over again.

While @Skate your ebook is hard to digest when first read, as I have suggested in previous thread, to get real meaning out of what you have written, one must read in full and then read small sections at a time and try to understand what you are saying.

Maybe and I don't know, but Joe can create a section called "Knowledge Base" or "ASF Wiki" where documents like yours can be accessed, it is not a thread, but a library of reference material.

This "ASF Wiki for Trading" could then be used as marketing and point new forum members to it before or when they apply, so they see the worth in the forum and do not get displaced with the normal dribble that happens on all forums.


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## jjbinks (6 February 2019)

Skate said:


> I could have posted the chart in the (RRL) Regis Resources thread but I prefer to 'Dump it here' for the educational value.
> 
> *From this point on*
> Trading is just about selecting companies that you believe will increase in price over time. Now that I've placed my buy order, I'll just hang on for the ride as its all I can do from here on, the only thing left for me to do is manage my sell order as everything is in the lap of the trading gods. Trading is an emotional roller coaster and how you manage your psychology really matters even more than your stock selection.
> ...




Hi Skate thanks for your comments and reading my post .
I must confess I have been pretty busy last few weeks and definitely have not kept up with everything written in this thread so I apologise if what I am about to ask has been addressed already.

I'm curious as to how you decide on stops for these kinds of trades. (This is something I am learning. I try use tight stops but then get stopped out to early). These days I put stop to a point at which I think retracement is likely and then move the stop up once initial target is reached. 
e.g. with RRL I may put stop around 5.0 and move it up once price reaches around 5.60


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## Skate (6 February 2019)

jjbinks said:


> Hi Skate thanks for your comments and reading my post .
> I must confess I have been pretty busy last few weeks and definitely have not kept up with everything written in this thread so I apologise if what I am about to ask has been addressed already.
> 
> I'm curious as to how you decide on stops for these kinds of trades. (This is something I am learning. I try use tight stops but then get stopped out to early). These days I put stop to a point at which I think retracement is likely and then move the stop up once initial target is reached.
> e.g. with RRL I may put stop around 5.0 and move it up once price reaches around 5.60




jjbinks, let me first explain that all breakouts are dependant on momentum & all exits depend on it as well.

_*"I try use tight stops but then get stopped out to early"*_
Tight stops are a handbrake on any trend following strategy, all stock have a natural ebb & flow & interconnected with the industry the stock belongs to.

_*"These days I put stop to a point at which I think retracement is likely and then move the stop up once initial target is reached"*_

*Over thinking*
There is the major difference between us, I don't think. I follow a mechanical strategy, the strategy makes the decision when I should sell. Could you imagine the mistakes I would make having that decision left in my hands ?

*Momentum*
Momentum gets me into a trade & momentum gets me out. To stop whipsaw I use a wide 40% variable trailing stop that is conditional on market conditions & momentum of the stock.

*The Key to Success*
The key to stock market success is properly managing your positions after you buy them. The way to do that is fairly simple.

1. Don’t be afraid to sell.
2. Have a methodology that clearly establishes exit points.

*Triggers*
I have three buy triggers & two sell triggers in my Hybrid Strategy.

*Sell triggers*
1. 40% variable trailing stop
2. A stale stop exit (momentum stop, I don't want to be in a position that has no moment)

*Hop on for the ride* (let it take me to the moon)
I want to be on a bus going in the right direction with momentum. If the bus ceases to go in the right direction (LET ME OFF) if the bus loses momentum & ceases to keep travelling in the right direction (LET ME OFF)

*Nothing complicated*
I've noticed forum members like charts, so I post a 'buy & sell pressure Daily & Weekly chart for (RRL) so you can observe the traders mentality (at the moment) who currently share my opinion.


*(RRL) buy & sell pressure "Daily" chart Capture*




*(RRL) buy & sell pressure "Weekly" chart Capture*



*It doesn't matter*
Being right ceases to be right when the majority doesn't share your view. Meaning your view & my view doesn't matter, what does matter is that we hold the same view as the majority of traders & trade accordingly.

Skate.


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## Gringotts Bank (6 February 2019)

ducati916 said:


> Random events in this context are extrinsic to the individual.



I don't think they are.  That's my point - there's no such thing as 'extrinsic'.  'Inner' and 'outer' are not just linked, they are one thing.  It's like the leaves of a tree thinking they are separate to (and unaffected by) the roots. 

You could even give the same system to two different managed funds and get a robot to trade it and get completely different returns!  The difference would be explained (once again) by 'random' events, such as a power outage or software glitch.  There's no such thing as 'random'.


----------



## ducati916 (6 February 2019)

Gringotts Bank said:


> 1. I don't think they are.  That's my point - there's no such thing as 'extrinsic'.  'Inner' and 'outer' are not just linked, they are one thing.  It's like the leaves of a tree thinking they are separate to (and unaffected by) the roots.
> 
> 2. You could even give the same system to two different managed funds and get a robot to trade it and get completely different returns!  The difference would be explained (once again) by 'random' events, such as a power outage or software glitch.  There's no such thing as 'random'.




1. There is definitely a difference between intrinsic and extrinsic. This is simply a tautology.

2. I accept your provided examples could provide different returns from the same system/methodology.

However, in any analysis of why there were differences, simply allowing for a power outage, thereby precluding the trade to be taken, glitch, etc, the results would theoretically have been the same. The trader could have a degree of confidence that had the trade been taken, the result would have been similar.

Re. random. This requires a far lengthier reply

jog on
duc


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## Skate (6 February 2019)

luutzu said:


> Just done reading through 24 years of MND's annual reports. Yea, I got no life.
> 
> One of Australia's best companies I reckon.
> 
> ...





I don't want to comment on (MND) but use the stock to explain a point. Since selling out of this position there has been a lack of interest in this stock (The yellow ribbon at the bottom of the chart indicates this). I'm with luutzu, at the moment there is now renewed interest in this stock & it's building nicely.

@jjbinks as Monadelphous Group (MND) is being discussed in its own thread, a stock that has been kind to me in the past, it's a perfect example to explain a little more about how I exit a trade.

*My Existing Two Exits are:*
Exit 1 - A variable looping Trailing Stop (the red line in the Chart - NOT hit at exit)
Exit 2 - A Stale Stop - which is a combination of (a) a Rate of Change (ROC) Indicator and (b) a Chandelier Stop & ATR in combination - I'm not using a stock standard Rate of Change indicator (ROC) there's a little more to it than that.

*Why the exit*
The Stale Stop, decided (not me) when it was time to sell out of (MND) & as you can notice the trailing stop hadn't been hit at this stage.


*Stale Stop EXIT taken before the trailing stop was hit*



*My searchlight*
I have a searchlight that turns on (it's the yellow shadow, the vertical beam) to show me the 'bar' the signal was generated on. Have a look at the Rate of Change (ROC) ribbon, notice the amount of yellow. Yellow means prepare to STOP, just like traffic lights.

*Prepare to exit*
I got the prepare to exit signal 3 weeks prior to the actual exit & the searchlight is the 'STOP' signal (bar), I could have made the the searchlight beam 'Red' but cosmetically it didn't look as nice.

*ROC indicator*
I've explained in an earlier post how the 'Exit' (Stale Stop) works & how I use the (ROC) to gauge momentum (traders interest). I use momentum going into the trade & when it stalls & momentum slows & downturns I'm out of the trade quick smart. I'm not using a stock standard Rate of Change indicator (ROC) there's a little more to it than that.

*First off*
Also I want to get off the trade early, well earlier than every other trend follower at least. If I'm wrong & sell too early, don't worry I can hop back on again.

*The ROC (The traffic light)*
This indicator is well under-used & under appreciated. Lets call it my "traffic light" for trading. It simply means when I get a green to go, (I buy, without thinking, I trust my system) When I get a yellow (I'm cautious preparing & looking to stop at any moment) & red to stop (When I get the stop, I sell without a second thought)

*Drive safely*
Traffic lights are in place so we drive safely getting from where we are to where we want to be. The ROC indicator is a reflection of traders behaviour. The standard (ROC) is okay but not for me, there is more to it than that. The ROC in combination with ATR & other indicators you have a more accurate set of traffic lights.

*Hitchhiker *(I'm standing on the side of the road, thumb out, waiting for a ride)
Using the (ROC) indicator means I pick up the breakout as soon as possible (front running other Trend Followers as we all tend to get the same signals) & that is the reason I use three different breakout strategies. I want to be first on the ride.

*Don't let other tell you its not all about trends*
I'm a Trend Follower, a quick and simple explanation for others - if traders want to jump on & push a stock price higher count me in but as soon as I know the interest starting to wain (lose momentum) I'm off the sucker looking for the next ride. Trend Followers are hitchhikers, 'thumb out' waiting for the next ride.

Skate.


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## peter2 (6 February 2019)

@Skate    The more I see, the more I respect the work you've done to create this trading system. I've remained a discretionary trader because I've been unable to mechanise my process. The more I see of your system the more I'm convinced that you've done it.  You have automated my discretionary system. The only technical difference between our processes is the position sizing models. I use the fixed fractional position sizing model where as you use equal sized positions. I use the iSL to size my trades where as you don't and use a much wider iSL initially as a disaster exit. (*)

 You've done a superb job assembling this Hybrid Strategy. 

There are so many aspects to each part. You've got multiple entry setups and dual exits. The two exits sounds so simple yet I think each exit has multiple parts. Exit 1 provides a disaster exit, allows lots of room for price movement in good market conditions and also responds to worsening market conditions to protect open profits. As you've mentioned Exit 2 incorporates several aspects as well but its main role is the detection of the loss of price momentum. 

Together your two exits complement each other and you cleverly created a traffic light methodology to make it easy to understand and implement. 

(*) My work with the ASX40 Pos Portfolio (in real time) will elucidate the advantages or disadvantages between the two position size models (provided I trade through all three market conditions, bull, bear and crappy sideways).


----------



## cynic (7 February 2019)

ducati916 said:


> 1. Beliefs are _formed by_ either (a) or (b).
> 
> Beliefs do not create reality in (a).



Your argument appears to rely heavily upon the veracity of these statements.

Do you firmly believe them to be true?

If so, have you noticed how this does naught more, than provide further evidentiary support for the philosophy under discussion?

In my opinion, intellectual debate on this particular philosophy, whilst quite entertaining, tends to be self defeating.

A way (perhaps the only way) of testing for veracity, is via practical experiment.
=============================================================
For those interested, a couple of publications, offering a useful blend of theory and practical exercises, that one might consider for further exploration are:

"Three Magic Words" by U.S. Andersen,

"Concentration" by Mouni Sadhu,

the former publication, by Andersen, serves as a gentler introduction for those with no prior experience of metaphysical concepts.

The latter, by Sadhu, whilst it also serves as a useful introduction, incorporates a series of concentration exercises demanding a far greater level of mental endurance.

Ardent secularists will likely find the material in aforesaid publications confronting, as certain contemporary secular conceptions, are dismissed as misconceptions, by both authors.

Now, one may rightly ask, how can this relate to trading?
It needn't necessarily relate, but it can be related, if one so chooses.

Upon being confronted with failure in any aspect of life, and seeking remedy for same, it can be quite helpful to have an understanding of the underlying mechanics.

"Something always goes wrong","I am not good enough","I never catch a break","@#%& happens","This always happens to me","SNAFU","Life is hard","I never win anything","Trading is hard"

All of the above can be expressions of belief. All of them can be, or become, true.

But they need not necessarily be, nor become!

With greater self awareness comes greater power to shape one's life experience.

So, whenever performing post mortems on failed strategies, it can sometimes pay to consider major contributing factors.

One's personal religion (i.e. entrenched belief system) is a major contributing factor which can manifest success or failure in a variety of ways. (Even supposedly external events, of a seemingly happenstance nature, could potentially be a direct consequence of personal belief.)

Every consciousness, every day, is exercising a "god" like power, and continuously manifesting miracles (these have been occuring so commonly, for so long, that they are typically viewed as banal).

So what miracles has one been manifesting? Are these the miracles one wants? If not look to the underlying belief and change it!


----------



## Darc Knight (7 February 2019)

Another question if I may please Skate. As a person with an Accounting background my natural bias was toward FA. I've recently started learning Tech after reading this thread. My question is; isn't Tech becoming obsolete for the average Punter due to super computers and AI? Thanks


----------



## willy1111 (7 February 2019)

Darc Knight said:


> Another question if I may please Skate. As a person with an Accounting background my natural bias was toward FA. I've recently started learning Tech after reading this thread. My question is; isn't Tech becoming obsolete for the average Punter due to super computers and AI? Thanks





The way I think of it is the trend followers are piggy backing off all the hard work the FA/Value Investing peoples are doing.

The FA/Value Investing peoples do all the work to find the companies that are being run well, achieving good results and have a good outlook.  They create demand for the company, the share price moves up, the trend followers notice the price moving up and they jump on for the ride. 

If the company continues to perform, continues to have a good outlook as time progresses more people buy into which continues to push the price along. 

When the results start to deteriorate or the outlook looks more uncertain or not so good, the FA/Value investors start to jump off pushing the price down - trend followers have a predetermined stop level in place (or lack of Momentum indicator) and if the price tracks down to this level they are out too.

You will tend to notice that both FA/Value Investors and trend followers will often end up making gains in the same stocks.


----------



## Skate (7 February 2019)

Darc Knight said:


> Another question if I may please Skate. As a person with an Accounting background my natural bias was toward FA. I've recently started learning Tech after reading this thread. My question is; isn't Tech becoming obsolete for the average Punter due to super computers and AI? Thanks




Darc Knight, what a great question, it has shown that you have been thinking about this issue. Let me address each statement & finally your question.

*Your disclaimer*
_1. "As a person with an Accounting background my natural bias was toward FA"_

*My disclaimer*
I was a financial disputes judge in the NSW legal system & I have history of evaluating business in a previous life. The books are not always accurate, sometimes misleading & deceptive. CEO's & CFO's sometimes massage the numbers, fancy accounting, pushing the boundaries, whatever you want to call it happens more often than you hear. Understanding financials is time consuming, basically a background check of how company has performed and operated in the past assuming the information passed on is accurate. Evaluating a business correctly is hard work.

_2. "I've recently started learning Tech after reading this thread"_

*I'm a winner *
If any of my posts help one person modify their behaviour or thinking pattern, I'm a winner.

3. _"My question is; isn't Tech becoming obsolete for the average Punter due to super computers and AI?"
_
*Your question deserves a comprehensive answer*
Technical analysis isn’t becoming obsolete for the average punter & is not obsolete when compared to advancement in technology. My strategy uses a “Decision Tree process” to find signals whereas AI uses the "Machine Learning process" to find signals. Trading is not an exact science but a mathematics game, a game of probabilities & not percentages. AI advancements in medical research is a godsend, its the equivalent of a medical breakthrough for that industry.

*Not an exact science*
Trading is not an exact science & AI is great at finding static positions whereas the market are fluid driven by rational people making irrational decisions. A supercomputer using AI would have no idea what my the next word is going to be let alone what I am thinking. My trading strategy finds conditions that have been pre-programmed into my code, whereas AI find conditions then goes about looking for the reason that preceded that condition. (Simple difference but its more than that)

*176,000 words in the dictionary* (I don't think we need them all)
People have tendency to think in terms "more is better". But the truth is that in programming less is more & to me less is better. I’m not a believer of adding complexity when it is not needed & that's what AI does, adds complexity.

*Good enough is sometimes good enough*
Some maintain that ‘traditional platforms’ using decision trees process is adequate whereas others maintain that the new ‘Machine Learning’ programs like Python returns better results. Thus, there will always a difference of opinion.

*The truth*
To succeed in the financial markets you need to have some kind of trading system in place whether it uses a Decision Tree process or Machine Learning to generate signals it doesn’t really matter. Confidence to keep pulling the trigger is all that matters to me.

*Trading is not exact science*
For all the advancements in technology the market itself hasn’t changed much. It is still driven by the same two opposing forces, fear and greed.

*Profiting from the stock market*
Profiting from the stock market is exceedingly difficult to do consistently over a long period of time because the market is so irrational & emotional, the market is not logical or reasonable. It's emotional & unstable. A market is nothing more than a crowd of people that has absolutely no regard for what any one person may think and most times rational people make irrational decisions, go figure.

*What do 'Tech guys' think*
We recognise that we can take steps to profit when the mood is unusually good or run and hide when things become dark and gloomy. People have fairly predictable emotional responses as stocks become cheaper or more expensive & their profits, losses, dictate their entry & exit point’s that are predictable.

*We understand behaviour*
If you understand the traders past behaviour, tech guys believe they can predict their future behaviour. Stocks are just like people, because that is who makes them look the way they do, by buying and selling creates an emotional ebb and flow pattern. Just like people, stocks can be unpredictable, but certain emotions and behaviours do occur regularly & that what tech guys try to capture.

*I'm a classic trend follower*
I enter on a confirmed uptrend, exit when the trend turns down. I jump on breakout & ride the trend till it's ends. It's a simple method of trading that I find profitable.

*Let me ask you a question*
Do you think I need a super computers and AI to trade the way I do ?

Skate.


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## Darc Knight (7 February 2019)

Skate said:


> *Let me ask you a question*
> Do you think I need a super computers and AI to trade the way I do ?
> 
> Skate.




Sincere thanks for the detailed reply Skate. You are fast approaching ASF Legend status with this thread 

I assume the answer to your question is no you don't use/need a super computer.
Thanks again


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## cynic (7 February 2019)

willy1111 said:


> The way I think of it is the trend followers are piggy backing off all the hard work the FA/Value Investing peoples are doing.
> 
> The FA/Value Investing peoples do all the work to find the companies that are being run well, achieving good results and have a good outlook.  They create demand for the company, the share price moves up, the trend followers notice the price moving up and they jump on for the ride.
> 
> ...



Also piggy backing off of  the actions of inside traders, those nefarious, white collar criminals, who eagerly seek to profit from market moving information prior to publication.


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## satanoperca (7 February 2019)

@Skate QUOTE
"My strategy uses a “Decision Tree process” to find signals whereas AI uses the "Machine Learning process" to find signals. Trading is not an exact science but a mathematics game, a game of probabilities & not percentages.

_My trading strategy finds conditions that have been pre-programmed into my code, whereas AI find conditions then goes about looking for the reason that preceded that condition._ (Simple difference but its more than that)
(this is the most simple explanation that I have come across for those that do not work in the AI field, the difference between the 2 is significant)

I’m not a believer of adding complexity when it is not needed & that's what AI does, adds complexity.
(any designer of any product or service understands that removing complexity creates a better design. What makes a great designer, is his or hers ability to remove complexity or unnecessary functionality that does not make the product or service more functional but increase the chance of failure)

*The truth*
To succeed in the financial markets you need to have some kind of trading system in place whether it uses a Decision Tree process or Machine Learning to generate signals it doesn’t really matter. Confidence to keep pulling the trigger is all that matters to me.
(the underlined section, is the most critical for anyone to understand and accept)

*Profiting from the stock market*
Profiting from the stock market is exceedingly difficult to do consistently over a long period of time because the market is so irrational & emotional, the market is not logical or reasonable. It's emotional & unstable. A market is nothing more than a crowd of people that has absolutely no regard for what any one person may think and most times rational people make irrational decisions, go figure.
(the underlined section, is the most critical for anyone to understand and accept)

*Let me ask you a question*
Do you think I need a super computers and AI to trade the way I do ?
(NO, a basic laptop with access to the internet and some charting software that is programmable to test ideas is all you need, I am busy build a quantum super computer in my shed)"


Great post Skate, I have just condensed it down to the points that I think are the most relevant for people to understand and have been highlighted in BLUE


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## Gringotts Bank (7 February 2019)

cynic said:


> If not look to the underlying belief and change it!




Sounds easy.

Most people who attempt this will start off by repeating a phrase "I am a winning trader" or visualizing a successful scenario such as an enormous bank balance.  This only works if there's no competing scripts.  And there's *always *a competing script.  In other words, this approach very rarely works.  The trick is in identifying and clearing competing scripts.


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## greggles (7 February 2019)

*Ego Death*

In my late teens, twenties and thirties I thought I knew it all. I was supremely confident that I had all the answers. After all, I knew it all, how could I not? I think many, if not most, young men have similar attitude in our young buck years.

Then, in my forties, that facade began to crumble. Unfortunate circumstances led to me losing a lot of money due to my own stupidity and arrogance. Not long after that I lost my source of income. Then I was forced to conduct a more objective analysis of myself and I wasn't happy with what I saw. I was a middle-aged male with outdated qualifications who had skated through life far too easily and without making any plans whatsoever for possible catastrophic life events. I was entirely unprepared and felt like a failure. Feeling like a failure is one thing, but feeling like you've failed your loved ones is something far more devastating. I felt lost and adrift. What was I good at? What was my purpose? What am I going to do with the rest of my life? I had to re-examine everything from the ground up, including myself. 

The first things I noticed was how much like my old man I had become in certain respects. It is true that nature and nurture are both important but the nature part comes from your parents DNA. For some reason I didn't start seeing this stuff until my forties, probably because when I was younger I was busy pretending to be someone else. Now I had no choice but to face myself: anxiety, issues with alcohol, inability to get too close to people, even those very close to me. It was like a ball of string unravelling. Once it started, nothing could stop it. I saw everything. Why do I have short legs and short arms? I started seeing how my siblings were also like our parents. I started thinking about genetic destiny and wondering if I had seen the best years of life and was now on the way down and out. It was a very confusing time and occurred just when I thought I had it all together. 

It was as if my ego had died and was unable to be resuscitated. The old fella had finally croaked and now all that was left was this vastly complex, very imperfect human being that wasn't nearly as impressive nor as talented or intelligent as I once thought. The shine had well and truly come off.

So what did I learn? I learned never to put all your eggs in one basket. I learned not to mistake luck for talent. I learned to never believe my own propaganda. All it takes it one set of unfortunate circumstances for your whole life to start unravelling. I also learned to count your blessings. I had solid support and was grateful for it. But most of all I learned that ego is the greatest blind spot of all. An oversized ego is more of a liability than an asset. It's like joining a cult and losing all perspective. Your ego lies to you. It overlooks your flaws and weaknesses. It doesn't have your best interests at heart. Try to keep it in check, for your own sake.

These days I'm far more humble and objective. I realise how tentative life is and I remind myself every day of how lucky I am, but also how much of a work in progress I still am. I feel like I know less now than I did 25 years ago. I don't, of course, but I deluded myself into thinking I knew everything back then. Now I'm happy to face reality. I have far fewer opinions. I try to listen more than I talk. I second guess everything. There is very little in life I'm certain about any more but I'm happy to be that way. Being certain about things I shouldn't have has cost me a lot. I still plan ahead but I now take it one day at a time, one step at a time. And I watch where I put my feet.


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## barney (7 February 2019)

greggles said:


> *Ego Death*
> 
> In my late teens, twenties and thirties I thought I knew it all. I was supremely confident that I had all the answers. After all, I knew it all, how could I not? I think many, if not most, young men have similar attitude in our young buck years.
> 
> ...




Normally I would condense a long recent post before I comment/reply to it … however in this case I think it is not only important, but more importantly respectful to "replay" your complete post @greggles ….

For the record ….. A few months ago I (and many others at ASF) recognised the fantastic contribution that you offered Greg

Constant Stock reflection with some poignant and insightful commentary …. at a time when ASF needed said commentary because the "numbers" were diminishing, so well done on that alone

I could write a short story on your above comments …. but basically, I feel *ALL* your pain because I, and I suspect many others have been through circumstances which are likely similar … and in my own situation … almost finished me ……. 

However … like you, I'm still here  …….. trading is just another reflection/recollection of our lives and experiences ……..   Not everyone is fortunate enough to come out the other side relatively unscathed, however …. 

The great thing about ASF … is that as traders/humans/regular people with regular problems, is that we can share our situations … and hopefully get support when the chips are down

Your above post is way more valuable than many may recognise at this point in time … simply because many would not have not been through what you have been through.

Hats off from me my friend …. I'd suggest that in the real/non cyber world … you and I would likely get along very well … Cheers.


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## barney (7 February 2019)

greggles said:


> *Ego Death*
> 
> In my late teens, twenties and thirties I thought I knew it all. I was supremely confident that I had all the answers. After all, I knew it all, how could I not? I think many, if not most, young men have similar attitude in our young buck years.
> 
> ...




Normally I would condense a long recent post before I comment/reply to it … however in this case I think it is not only important, but more importantly respectful to "replay" your complete post @greggles ….

For the record ….. A few months ago I (and many others at ASF) recognised the fantastic contribution that you offered Greg

Constant Stock reflection with some poignant and insightful commentary …. at a time when ASF needed said commentary because the "numbers" were diminishing, so well done on that alone

I could write a short story on your above comments …. but basically, I feel *ALL* your pain because I, and I suspect many others have been through circumstances which are likely similar … and in my own situation … almost finished me ……. 

However … like you, I'm still here  …….. trading is just another reflection/recollection of our lives and experiences ……..   Not everyone is fortunate enough to come out the other side relatively unscathed, however …. 

The great thing about ASF … is that as traders/humans/regular people with regular problems, is that we can share our situations … and hopefully get support when the chips are down

Your above post is way more valuable than many may recognise at this point in time … simply because many would not have not been through what you have been through.

Hats off from me my friend …. I'd suggest that in the real/non cyber world … you and I would likely get along very well … Cheers.


----------



## satanoperca (7 February 2019)

barney said:


> The great thing about ASF … is that as traders/humans/regular people with regular problems, is that we can share our situations … and hopefully get support when the chips are down
> 
> Your above post is way more valuable than many may recognise at this point in time … simply because many would not have not been through what you have been through.
> 
> Hats off from me my friend …. I'd suggest that in the real/non cyber world … you and I would likely get along very well … Cheers.




Well this forum is getting a bit soppy but hands out to both Greggles for being transparent and Barney for his kind comments.

Need to go the the IGA for the tissues, this forums is getting a little too emotional, in a good way.

"We are all human with emotions"


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## greggles (7 February 2019)

barney said:


> Normally I would condense a long recent post before I comment/reply to it … however in this case I think it is not only important, but more importantly respectful to "replay" your complete post @greggles ….
> 
> For the record ….. A few months ago I (and many others at ASF) recognised the fantastic contribution that you offered Greg
> 
> ...




Thanks Barney. 

The way I see it, life is all about evolving as a person and change needs a catalyst. Often that catalyst is hardship. If you're going to take the good then you also have to take the bad. I've suffered, but I'm still here and fortunate enough to live in a country with a better than average social welfare system. 

Something to think about. Even if you lose everything, there's no reason why you can't learn to operate an excavator, rent a house and live out your days putting in your eight hours like anyone else. There are plenty of miserable rich people. If you have love, companionship, and inner peace, what else do you need?

When I was doing it tough, I learned to stop buying things. I only bought things I absolutely needed like food and other necessities. I rejected consumerism almost completely. Instead of getting a high from buying something, I got a high from going on a hike in a national park with my wife. After a while, I found that I didn't want to buy anything. If something broke, sure I bought another to replace it, but it was often second hand. That was the extent of my consumerism. But in the end, it became incredibly freeing. When you suddenly realise that you don't need a million gadgets or a big screen TV, suddenly your focus shifts to what's really important. Happiness. And you don't need a million bucks to find that.


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## Gringotts Bank (7 February 2019)

greggles said:


> I rejected consumerism almost completely. Instead of getting a high from buying something, I got a high from going on a hike in a national park with my wife.



That's still ego though, just a different form.

My working theory is that as the ego fades, material success becomes easier.  There are some exceptions to this, like people who who gain wealth through dishonesty and control tactics, or people who work their fingers to the bone and save like crazy (neither looks like a good approach to me). 

So you can still have the big TV!


----------



## greggles (7 February 2019)

Gringotts Bank said:


> That's still ego though, just a different form.
> 
> My working theory is that as the ego fades, material success becomes easier.  There are some exceptions to this, like people who who gain wealth through dishonesty and control tactics, or people who work their fingers to the bone and save like crazy (neither looks like a good approach to me).
> 
> So you can still have the big TV!




I think what happened to me can be best described as a massive change in priorities. What I thought I wanted, I actually didn't want. But it took a massive change in circumstances for me to realise that.

I'm not against consumerism, I just realised it's not for me. It doesn't make me happy. Being content with my situation in life does, so that's what I'm working on. I'm not there yet, but I'm making progress. That's my focus now.


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## Newt (7 February 2019)

greggles said:


> *Ego Death*
> 
> In my late teens, twenties and thirties I thought I knew it all. I was supremely confident that I had all the answers. After all, I knew it all, how could I not? I think many, if not most, young men have similar attitude in our young buck years.
> 
> ...




Sounds like someone who's still learning new tricks, not afraid to take a good hard look at themselves, and setting up foundations for a richer "2nd half".  Definitely not out of touch with reality and deluding themselves.  
Kudos for sharing such an frank appraisal of yourself Greggles....


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## barney (7 February 2019)

satanoperca said:


> this forums is getting a little too emotional, in a good way.




 ….. If we have "Satan" on our side … who do we have to fear!



greggles said:


> Thanks Barney.
> 
> The way I see it, life is all about evolving as a person




Indeed ……


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## sptrawler (8 February 2019)

greggles said:


> I think what happened to me can be best described as a massive change in priorities. What I thought I wanted, I actually didn't want. But it took a massive change in circumstances for me to realise that.
> 
> I'm not against consumerism, I just realised it's not for me. It doesn't make me happy. Being content with my situation in life does, so that's what I'm working on. I'm not there yet, but I'm making progress. That's my focus now.



I think it was a quote on here and it is so very true.
Happiness is being happy with what you have.

I'm not just talking in a material way.


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## Smurf1976 (8 February 2019)

Pick any two famous singers, bands or composers of vastly different musical styles.

Rap versus country. Hard rock versus classical. Electronic versus jazz. Etc.

Now what do both of the singers, bands or composers you picked have in common?

They both did one thing and they did it extremely well.

If your preference is classical music then you'll probably be quick to say that every song AC/DC ever recorded sounds pretty much the same. Comparing their music to that of anyone else that's a fair comment and it's exactly the point - they did one thing and they did it well enough to make an entire career out of it.

Hard rock fans will likewise be quick to point out that, minor detail aside, Mozart also wrote lots of essentially the same music. Bingo! Comparing Mozart's music to any other style it is indeed all pretty similar. He didn't do anything with electric guitars in it, right? And people are still listening to it over 200 years later.

Pick any other random artist and it's much the same. With few exceptions their music is immediately recognizable because yes, most of it is very similar. They're doing one thing and they're doing it well and that's a huge factor in why they're successful.

Now apply that concept to investing. You don't need to know every trick in the book and trying to do that will almost certainly lead to mediocrity and failure.

Find something you're good at and which works and keep doing it. If all your share trading entries and exits look much the same then that's not in itself a problem.


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## ducati916 (8 February 2019)

cynic said:


> Your argument appears to rely heavily upon the veracity of these statements.
> 
> 1. Do you firmly believe them to be true?
> 
> ...




1. Yes I do because in contradistinction to Locke's '_nothing is in the intellect that has not previously been in the senses_' I agree with Leibniz's reply '_except the intellect itself_'.

Knowledge that has objective supporting evidence comes in two forms: (a) empiricism and (b) synthetic a priori.

Faith, while certainly qualifying as knowledge, does not have an evidential base, (c)

So the concept of 'belief' that is currently under discussion can fall under either definition. You can believe due to (a) and (b) or (c). Many will believe using all three, which is fine.

2. You have yet to identify which 'philosophy' that [for you] is under discussion. For my part, it is epistemology. You have yet to identify any.

So as far as epistemology goes, yes, my comments/statements do accurately represent [thus far] epistemology. If you have a further basis for the causation and forming of a 'belief' through a philosophy, I'm open to discussion.

3. I do not share your opinion.

jog on
duc


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## Skate (8 February 2019)

sptrawler said:


> *I think it was a quote on here* and it is so very true.
> *Happiness is being happy with what you have*.
> 
> I'm not just talking in a material way.




https://www.aussiestockforums.com/posts/1006482/

*Muddling of words do make a difference*
sptrawler, said there was a quote on here about the definition of happiness & if it is one of my quotes it would be timely for me to quote it again for clarity.

*A friend of mine reminded me that I once said:*
_“Happiness is appreciating what you have” 
_
*sptrawler remarked, I think it was a quote on here*_*:* 
"Happiness is being happy with what you have"_

*So close*
My definition of happiness is *‘desiring’ *what you have !!

*True happiness *(IMHO)
"Happiness is *‘desiring’ *what you have"

There is a difference..

Skate.


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## satanoperca (8 February 2019)

@Skate, as unusual, I do not understand. Some examples might help me, the definition of "desiring" and "Appreciating" are different as you mentioned.

Let me see if I can work this riddle out with an example for Happiness.


I appreciate my wife, she makes me happy.
I desire my wife, she makes me happy
I desire the tall, brunette, 10 years younger than me as she will make me happy, but appreciate my wife for the life we have
I desire a better life as it will make me happy
I have a happy life and appreciate everything i have


----------



## qldfrog (8 February 2019)

satanoperca said:


> @Skate, as unusual, I do not understand. Some examples might help me, the definition of "desiring" and "Appreciating" are different as you mentioned.
> 
> I desire the tall, brunette, 10 years younger than me as she will make me happy, but appreciate my wife for the life we have



I agree with Skate:
I appreciate what i have..well true but I can still desire the brunette so am i happy ?..well not yet..at least as long as the brunette is around.."what could be" spoil my happiness...

or _Happiness is being happy with what you have_
that is very limiting : yes it is true but does not fit well with my mind: exploring, conquering new territories and going past limits, would I be happy as a corporate tool or civil servant in socialist France taxed to the death with a no future society/ country? Some are, they enjoy their "Free" time, long holidays and holiday residence along the seaside or mountain waiting for retirement..not for me
whereas if I desire what I have, i feel it as I have reached what I wanted, there are no worthwhile goals target etc
we are playing with words I know, overall that is the same generic idea.And a good one to remind ourself of..if that last sentence is proper English.


----------



## barney (8 February 2019)

Skate said:


> "Happiness is *‘desiring’ *what you have"




Being happy with what you have can be an "acceptance"

Desiring what you have can be an "aspiration" or an "achievement" depending on your circumstances.

If we can "enlighten" ourselves to desire what we have …. even though it is much less than what we "want" …. that would be true happiness





satanoperca said:


> [B]I desire the tall, brunette, 10 years younger than me as she will make me happy[/B]





No, she will make you miserable


----------



## Skate (8 February 2019)

satanoperca said:


> @Skate, as unusual, I do not understand. Some examples might help me,* the definition of "desiring" and "Appreciating"* are different as you mentioned.
> 
> Let me see if I can work this riddle out with an example for Happiness.
> 
> ...





sptrawler said:


> I think it was a quote on here and it is so very true.
> Happiness is being happy with what you have.
> 
> *I'm not just talking in a material way*.




*satanoperca, you said:*
_"As unusual, I do not understand the definition of "desiring" and "Appreciating"_

*@sptrawler  made the comment:*
_"Happiness is being happy with what you have. I'm not just talking in a material way"_

Both of the posts referenced a feeling, not possessions, so I'll respond in this vain.

*Let me make a few quoted to set the scene*
1. If you love being married, you will be forever in love.
2. Don't find a wife you can live with, find one you can't live without.
3. If you want true happiness be nicer than the other. 

*Let me unpack item (3) before you ask*
In a relationship if the both of you keep lifting the bar above the other (being nicer than the other) there will be heavenly bliss, remember, you can never be too nice to someone)

*Appreciate & happy*
Sure I appreciate my wife & I'm happy with my wife. (44 years as of last Friday). Those words are so cold.

*Desiring what I have*
I desire my wife, my wife is my life.

*Well what's the difference ?*
1. "Desire" is a deep feeling
2. "Appreciating" is acknowledging the worth of someone or something.

I trust my explanation clarifies the difference between the two words, & yes, the words you elect to use do make a difference to the meaning being expressed.

Skate.


----------



## qldfrog (8 February 2019)

Skate said:


> *Well what's the difference ?*
> 1. "Desire" is a deep feeling
> 2. "Appreciating" is acknowledging the worth of someone or something.



maybe said simply:
"desire" is more visceral , deep 
whereas "appreciate" is more calculated, can be seen as the reasoned acceptance brain over feeling..
anyway was a nice subject, will try to be kinder with my better half this arvo, and in general


----------



## satanoperca (8 February 2019)

Skate said:


> *Well what's the difference ?*
> 1. "Desire" is a deep feeling
> 2. "Appreciating" is acknowledging the worth of someone or something.




That has clarified the difference, thank-you for explaining further, it is appreciated.


----------



## cynic (8 February 2019)

ducati916 said:


> 1. Yes I do because in contradistinction to Locke's '_nothing is in the intellect that has not previously been in the senses_' I agree with Leibniz's reply '_except the intellect itself_'.



On this, I am in disagreement with both, Locke and Leibniz.

One possible counter, to Locke's quote, might be: 'nothing is in the senses that has not been caused by the intellect'


> Knowledge that has objective supporting evidence comes in two forms: (a) empiricism and (b) synthetic a priori.
> 
> Faith, while certainly qualifying as knowledge, does not have an evidential base, (c)
> 
> So the concept of 'belief' that is currently under discussion can fall under either definition. You can believe due to (a) and (b) or (c). Many will believe using all three, which is fine.



If belief precedes the manifestation of that which is believed, then all belief must logically be of the form (c), leaving both, (a) and (b), as empty sets.


> 2. You have yet to identify which 'philosophy' that [for you] is under discussion. For my part, it is epistemology. You have yet to identify any.



I am surprised to see you state that, and am now wondering what our past few interchanges were truly about.







> So as far as epistemology goes, yes, my comments/statements do accurately represent [thus far] epistemology. If you have a further basis for the causation and forming of a 'belief' through a philosophy, I'm open to discussion.



I am not certain that I correctly understand what it is you are saying here. My bases for favouring the viewpoint, that manifestation is a consequence of belief, have arisen from some direct personal experiences, of a more practical (as opposed to theoretical) nature.

I do not wish to taint this philosophy, via assignation of any contemporary labels, lest critics conflate, and/or convolute, a very simple philosophy, with peripheral themes.

Due to the premise/s of the philosophy, I sincerely doubt that the question of veracity, can be truly settled, via any amount of intellectual debate, irrespective of calibre.

As soon as any counter argument (or premise/s of same) is believed, the evidential support base, of the contested philosophy, is increased by that very same counter argument (and/or premises thereof)!!!

Whenever I ask myself, what argument could possibly serve as disproof, the seemingly nearest thing, I ever come up with, is:
an assertion that is entirely true, whilst, simultaneously, thoroughly disbelieved, by the one asserting it.

And the problem with the above counter argument is, that, it defeats itself from the outset, because the asserter doesn't actually believe his/her own assertion/s (i.e. lying).

Needless to say, absence of proof, is not proof of absence. Which is one of my reasons, for choosing to say, that "the proof of this particular pudding, is in the eating".


> 3. I do not share your opinion.



That's very good to know!
(And it need not be a problem, unless one chooses to believe it so!)
===============================================================================
I recently received a private message, from another member, expressing certain opinions, about my contributions to this thread.

For the benefit of that member, and anyone else feeling similarly inclined, I can thoroughly, and wholeheartedly, recommend a review, of the contents, of Skate's opening post.


----------



## Gringotts Bank (8 February 2019)

cynic said:


> My bases for favouring the viewpoint, that manifestation is a consequence of belief, have arisen from some direct personal experiences, of a more practical (as opposed to theoretical) nature.



Same here, and at times in quite shocking ways.  For me the evidence for 'belief causing manifestation' has piled up enough for me to now routinely shift back and forth between the standard model of reality and this alternative one.  However it will never be possible to prove/disprove perhaps even to oneself. 

One thing is for sure - most people don't view reality this way.  Proposing a different model of reality will be perceieved as highly threatening by some.  In a different field of study (not trading), a few of us have completely dismantled the prevailing belief system.  It wasn't hard because most belief systems can be ripped apart.  We aren't popular, because now the possibility of a new model of reality has reared its head and no one wants that.  People cling to their beliefs like nothing else.  I assume I do too (in my own way), but it's hard to be objective about myself.


----------



## cynic (8 February 2019)

cynic said:


> ...renders the matter subject to the perspicacity of the measurer.
> 
> A 100% correlation strength is higher than 50%.
> 
> ...



It has occurred to me, that this excerpt from one of my earlier posts, might potentially hold some insight (at least in a metaphorical sense) for those market newcomers, eagerly analysing historical data, in the hope of finding a tradable edge.

Consider the coins, and cointoss results, as metaphors for a specific market instrument and its price action, respectively, and consider the entities (A, B & C), as metaphors for set periods of time.

So for period A, the market was trending upwards,

and for period B, the market was trending downwards,

and for period C, the market went up, then back down, and could be said to have reverted to mean.

Now consider the widely acclaimed practice of backtesting, and subsequent refinement, via use of historical data.

What pitfalls does this metaphor highlight?


----------



## Gringotts Bank (8 February 2019)

cynic said:


> What pitfalls does this metaphor highlight?



Tell us...but keep it simples please!  If there's too much sophistication it can alienate people who might otherwise appreciate your ideas.  People like me.

I'm interested.


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## ducati916 (9 February 2019)

I'll have to address your various arguments in stages, as, each argument requires greater detail in reply.


"_If belief precedes the manifestation, of that which is believed, then all belief must logically be of the form (c), leaving both, (a) and (b), as empty sets._"

So:

_[If belief precedes the manifestation]_

If belief precedes an event, action or object [manifestation] then the key word becomes the word '_if'_. 
It is not necessary for belief to precede a manifestation. A belief can come after a manifestation. I accept that in certain cases, belief will precede a manifestation.

_[of that which is believed]_

This is the subject of the 'belief'. This is the manifestation. There is nothing in the property of a manifestation that makes it necessary to follow a belief.

_[then all belief must logically be of the form (c), leaving both, (a) and (b), as empty sets._"]

This can only be true if belief always precedes a manifestation. As already discussed, there is nothing in the property of manifestations that makes it necessary that they follow a belief.

What we call beliefs that precede a manifestation...is the word faith.

Thus your statement is false.

jog on
duc


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## ducati916 (9 February 2019)

_1. I am not certain that I correctly understand what it is you are saying here. My bases for favouring the viewpoint, that manifestation is a consequence of belief, have arisen from some direct personal experiences, of a more practical (as opposed to theoretical) nature.

2. I do not wish to taint this philosophy, via assignation of any contemporary labels, lest critics conflate, and/or convolute, a very simple philosophy, with peripheral themes.

3. Due to the premise/s of the philosophy, I sincerely doubt that the question of veracity, can be truly settled, via any amount of intellectual debate, irrespective of calibre.
_
1. So essentially you are saying that your position is based upon personal experience. It is not a position that has been debated by others.

2. It is a personal philosophy. It is not a philosophy that has any mainstream discussion or debate.

3. That is probably true. However, by putting forward your premises, it can be debated and possibly insight might be gleaned.

jog on
duc


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## cynic (9 February 2019)

ducati916 said:


> I'll have to address your various arguments in stages, as, each argument requires greater detail in reply.
> 
> 
> "_If belief precedes the manifestation, of that which is believed, then all belief must logically be of the form (c), leaving both, (a) and (b), as empty sets._"
> ...



The word "If" was included solely as a courtesy, to those readers holding strong attachments to alternative philosophies, and was not intended for inclusion anywhere within the premises of the philosophy.

e.g. "If" philosophy xyz happens to be true, then deduction abc is logically true.

I apologise for any confusion the this ambiguity may have caused, and I thank you for alerting me to its presence.


----------



## ducati916 (9 February 2019)

Continuing...

_"On this, I am in disagreement with both, Locke and Leibniz.

One possible counter, to Locke's quote, might be: 'nothing is in the senses that has not been caused by the intellect"_

Re. Locke:

The reality of the external world, which is perceived via sensory input, is proven by the absence of human omnipotence. There is in the external world resistance to man's wishes and desires. To realise a change, man has to act to effect change. To place that change merely in the senses, is not sufficient to maintain life as we know it. As an example: the intellect that provides the senses with the sensation of eating and drinking, will not sustain life past a certain point: dehydration and malnutrition will cause the body to die.

If the world were merely an extension of man's [an individual or group] then the external world could be changed merely by wishing it so. This may or may not involve sensory phenomena for the individual.

Those that believe that they can change the external world by so utilising the intellect are generally considered as eccentric or insane.

* I would add, that of course this does not preclude faith.


jog on
duc


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## ducati916 (9 February 2019)

_1. As soon as any counter argument (or premise/s of same) is believed, the evidential support base, of the contested philosophy, is increased by that very same counter argument (and/or premises thereof)!!!

2. Whenever I ask myself, what argument could possibly serve as disproof, the seemingly nearest thing, I ever come up with, is:
an assertion that is entirely true, whilst, simultaneously, thoroughly disbelieved, by the one asserting it.

3. And the problem with the above counter argument is, that, it defeats itself from the outset, because the asserter doesn't actually believe his/her own assertion/s (i.e. lying)._

1. I simply cannot follow this argument. Can you restate it in some other way?

2. 
(i) [_An assertion_]: the assertion is the subject matter under discussion. The subject matter can be true; and
(ii) [_that is entirely true,_] so the assertion [subject] is in this case true; and
(iii) [_simultaneously, thoroughly disbelieved,_] is at the same time thought not to be true; by
(iv) [_by the one asserting it._] by a person who is representing the assertion.

There is no conflict here. The person can be:

(i) as you say, lying; or
(b) mistaken; or
(iii) representing a third party's opinion.

jog on
duc


----------



## ducati916 (9 February 2019)

Gringotts Bank said:


> Same here, and at times in quite shocking ways.  For me the evidence for 'belief causing manifestation' has piled up enough for me to now routinely shift back and forth between the standard model of reality and this alternative one.  However it will never be possible to prove/disprove perhaps even to oneself.
> 
> One thing is for sure - most people don't view reality this way.  Proposing a different model of reality will be perceieved as highly threatening by some.  In a different field of study (not trading), a few of us have completely dismantled the prevailing belief system.  It wasn't hard because most belief systems can be ripped apart.  We aren't popular, because now the possibility of a new model of reality has reared its head and no one wants that.  People cling to their beliefs like nothing else.  I assume I do too (in my own way), but it's hard to be objective about myself.




So if I understand you correctly:

You created a belief; then
That belief created the reality.

For this to be true: the belief formed must exist outside of reality as it existed in our world prior to your belief creating it.

Care to expand?

jog on
duc


----------



## cynic (9 February 2019)

ducati916 said:


> _1. I am not certain that I correctly understand what it is you are saying here. My bases for favouring the viewpoint, that manifestation is a consequence of belief, have arisen from some direct personal experiences, of a more practical (as opposed to theoretical) nature.
> 
> 2. I do not wish to taint this philosophy, via assignation of any contemporary labels, lest critics conflate, and/or convolute, a very simple philosophy, with peripheral themes.
> 
> ...



Yes and no. Yes my position is based upon personal experience and, no, philosophies in which this one is incorporated, do tend to get hotly debated, however, the end result is often counterproductive. Ofttimes, in commitment to a position, one or another party will (sometimes deliberately, othertimes ignorantly) argue from a position of misunderstanding, and then proudly embark on a victory parade boasting of their glorious (albeit imagined) conquest.  There is an old saying, which suggeststo the effect that the only one's wasting time, are those running around telling others that they are doing it wrong.[/quote] 


> 3. That is probably true. However, by putting forward your premises, it can be debated and possibly insight might be gleaned.



One of those premises has been repeatedly stated (although not necessarily verbatim). That premise alone must either be true, or it is false. It can be demonstrated that invalidation of said premise, via debate, is futile. (Our interchange provides some evidence of this). However absence of proof/disproof, is not proof/disproof of absence.

Merely talking about food, will not sate one's appetite.

For those genuinely, and openly, interested in finding out for themselves, a couple of books, offering a useful blend of theory and practice, have been mentioned in an earlier post.


----------



## ducati916 (9 February 2019)

cynic said:


> It has occurred to me, that this excerpt from one of my earlier posts, might potentially hold some insight (at least in a metaphorical sense) for those market newcomers, eagerly analysing historical data, in the hope of finding a tradable edge.
> 
> Consider the coins, and cointoss results, as metaphors for a specific market instrument and its price action, respectively, and consider the entities (A, B & C), as metaphors for set periods of time.
> 
> ...





So ignoring the metaphor of the coins and addressing the market. However I suspect this may cause some confusion.

What we know as factual:

(i) the market rises/falls as there is more buying/selling than selling/buying; or
(ii) the market is manipulated higher by market makers; or
(iii) fat finger trades.

These three facts can account for scenarios (a), (b) and (c). 

We also know that if certain events occurred in the future, the price of that common stock would rise/fall: two examples being [there are others]:

(i) for the common stock in question a merger/acquisition 50% higher than the market price from a credible buyer is announced; or
(ii) for the common stock in question, the underlying business is declared legally insolvent.

We also know that future events will effect a change in the stock price. The next direction of price, not knowing the future, or how others may react to that news, leaves us with a 33% probability of higher/lower/no change.

Historical backtesting data only tells us what happened. It assumes that the past will resemble the future. If it does, then it ought to be profitable/or not, based on inputs.

This is of course an example of faulty empirical knowledge or experimental methodology [chemistry & physics being examples of correct empirical knowledge]. I accept that with quantum physics, even this is severely suspect.



jog on
duc


----------



## ducati916 (9 February 2019)

So these books:

In the pages of *Three Magic Words,* you will learn of the unlimited power that is yours. You will learn how you can turn this power to work for you, here on earth, to make your life majestic and overflowing with good. Three Magic Words is not a religion or a sect or a society. In its entirety it is a series of essays aimed at revealing to you your power over all things. You will learn that there is only one mover in all creation and that mover is thought. You will learn that there is only one creator and that creator is the Universal Subconscious Mind, or God. You will learn that this creator creates for you exactly what you think, and you will be shown how you can control your thoughts, not only to obtain answers to your problems but to create in your experience exactly what you desire.

and the second has no summary, so the best review on amazon:

_3.0 out of 5 stars_A now almost forgotten work except in esoteric circles, ...
March 23, 2015
Format: PaperbackVerified Purchase
A now almost forgotten work except in esoteric circles, this classic work bridges the gap for all those that say "can't meditate, I tried". It reintroduces a most-novel concept not used in the West; concentration, as the title suggests. It is indeed very hard to learn to meditate if your mind has been trained to "multitask", which is not healthy from even a modern psychological standpoint. In a society that prizes "operations per second" over "quality", the reintroduction of concentration is critical.




synergy7
_5.0 out of 5 stars_Genuine source on meditation
August 22, 2014
Format: PaperbackVerified Purchase
This is the only real book on meditation I've ever found. It requires a lot of focused effort, time, and discipline, but completely worth it. It covers a lot of background, yet has no fluff. It helps re-reading some sections once in a while. Every time I do it, I find something new.


jog on
duc


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## ducati916 (9 February 2019)

So essentially, we are talking about (c) ie. faith.

jog on
duc


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## rederob (9 February 2019)

ducati916 said:


> So essentially, we are talking about (c) ie. faith.



Hard to follow the preceding, but that was looking the likely ending.
I am curious about the ontology of "belief", especially if it is inferring the common concept of "faith" where we typically confer the epistemological sense that it has a basis which lies beyond what can be reasonably proven.


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## ducati916 (9 February 2019)

rederob said:


> Hard to follow the preceding, but that was looking the likely ending.
> I am curious about the ontology of "belief", especially if it is inferring the common concept of "faith" where we typically confer the epistemological sense that it has a basis which lies beyond what can be reasonably proven.




Faith is a synonym for belief.

One of the categories or domains of ontology would be 'reality'. Reality would crossover or share categories or domains with epistemology.

Belief or faith, rests on this argument:

"_Needless to say, absence of proof, is not proof of absence. _

Which is correct.

If this were then to occur:

_Which is one of my reasons, for choosing to say, that "the proof of this particular pudding, is in the eating"_.

We would be dealing with something else entirely, which is essentially what this book claims:

_In the pages of *Three Magic Words,* you will learn of the unlimited power that is yours. You will learn how you can turn this power to work for you, here on earth, to make your life majestic and overflowing with good. Three Magic Words is not a religion or a sect or a society. In its entirety it is a series of essays aimed at revealing to you your power over all things. You will learn that there is only one mover in all creation and that mover is thought. You will learn that there is only one creator and that creator is the Universal Subconscious Mind, or God. You will learn that this creator creates for you exactly what you think, and you will be shown how you can control your thoughts, not only to obtain answers to your problems but to create in your experience exactly what you desire.
_
This would also seemingly form the basis of Mr Gringott's claim.

jog on
duc


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## ducati916 (9 February 2019)

Darc Knight said:


> Another question if I may please Skate. As a person with an Accounting background my natural bias was toward FA. I've recently started learning Tech after reading this thread. My question is; isn't Tech becoming obsolete for the average Punter due to super computers and AI? Thanks





Have a follow on the FMG thread for a possible current example of the intersection between tech and fundies.

I have no idea on the fundamentals of this stock, however, assuming they are good, it will be the fundies that save and continue the trend higher.

jog on
duc


----------



## rederob (9 February 2019)

ducati916 said:


> Faith is a synonym for belief.
> 
> One of the categories or domains of ontology would be 'reality'. Reality would crossover or share categories or domains with epistemology.
> 
> ...



One's "faith" is a thing.  It is as *real *as numbers.
What I was looking for was what was it that informed the (perhaps more appropriately "*their*") reality to be.


----------



## ducati916 (9 February 2019)

rederob said:


> One's "faith" is a thing.  It is as *real *as numbers.
> What I was looking for was what was it that informed the (perhaps more appropriately "*their*") reality to be.




I can certainly agree that one's faith is real to the individual. I can also accept that a common faith, Christianity, Hinduism, etc are also real things to their followers or believers. This after all is simply an empirical fact.

As to the second part of your post, can't help you there.

jog on
duc


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## cynic (9 February 2019)

ducati916 said:


> _1. As soon as any counter argument (or premise/s of same) is believed, the evidential support base, of the contested philosophy, is increased by that very same counter argument (and/or premises thereof)!!!
> 
> 2. Whenever I ask myself, what argument could possibly serve as disproof, the seemingly nearest thing, I ever come up with, is:
> an assertion that is entirely true, whilst, simultaneously, thoroughly disbelieved, by the one asserting it.
> ...



Any argument (and/or premise/s of same), merely adds to the body of supporting evidence, because every argument that is, will, or has been, brought into existence, is a manifestation of belief, in the validity (or potential thereof) of same.

Some time ago a friend of mine recounted a similarly futile discussion where someone made mention of the existence of "the Devil".
My friend promptly declared that she did not believe in the existence of "the Devil", to which she received the following reply: "That just goes to show how powerful he is!".

The person, claiming the existence of "the Devil", had presented an argument for which any expression of disbelief, only served, to add to the body of evidentiary support, for the argument "the Devil" (a.k.a. "the Father of lies") exists.

(There does exist, at least one, interesting counter, namely, if someone can believe in the existence of an ultimate deceiver, how did such a believer, remain impervious to the Deceiver's inordinate power/s of deception?!

But then again, could the existence of such a counter, being so logically persuasive in convincing others of the falsity of such belief by merit of its contradictory nature, not simply qualify, as further evidence for the potency of the great Deceiver?!i.e. potent enough to decieve via subversion of logic!).




> 2.
> (i) [_An assertion_]: the assertion is the subject matter under discussion. The subject matter can be true; and
> (ii) [_that is entirely true,_] so the assertion [subject] is in this case true; and
> (iii) [_simultaneously, thoroughly disbelieved,_] is at the same time thought not to be true; by
> ...



No!

The representative is merely relaying another party's opinion. 

To relate this to trading, one might think in terms of "execution only" brokers facilitating transactions between traders and the exchange.(Over the counter, proprietary and cross trading, considerations aside), the broker is merely acting as a conduit between parties. Mediums ought not be conflated with that which is channelled.

A true statement, can qualify as a lie, if stated with deceitful intent, and, conversely, an untrue statement, made sans deceitful intent, does not qualify as a lie, despite the statement being untrue!

If a person says 
"All things existing, including the stones underfoot, do so consciously, and are alive!", 
many (but definitely not all) might consider such a statement to be untrue. Provided the person making that statement, did so deliberately, despite considering it to be untrue, then a lie has indeed been told, and yet, the content of the statement itself, need not necessarily be untrue.

Now, consider this, if I were to say:
 "The stones underfoot are neither alive nor conscious." 
I would most definitely be telling a lie, even if the content of the statement happened to be true! 

Now to relate this to financial markets...

This forum is often alerted to the existence of entities, offering products and/or services, which purportedly enable the generation outstandingly healthy returns on investment.

One (of a number of useful adages), is as follows :
"If it seems too good to be true, then it very probably is (too good to be true)!".

Of the many seemingly "too good to be true" offerings, I've encountered over the years, I am aware of at least a few, that were made with sincerity.

As such those particular offerings, could not truly be declared swindles, but, nonetheless, yielded similarly unfortunate results.
Overly optimistic assumptions, about the usefulness of correlations, discovered via backtesting and/or hindsight trading, were the usual culprits, leading to misconceptions about the likely future performance of the strategies so derived. 

The promised returns were not actually lies, but did ultimately prove to be untrue, after those unfortunate enough to have trusted those offerings, discovered, to their dismay, that substantial losses had been realised in lieu of their hopes and dreams.

Of course, history has also revealed multitudes of another type of "too good to be true" offering, namely, that which is proffered by swindlers. 
Unlike the over optimistic hindsight traders, the swindlers, by definition, know themselves to be intentionally engaging in the perpetration of acts of deceit.

Anyhow, irrespective of whether such sensational offerings are made sincerely, or dishonestly, the sheer multitude of such offerings, combined with the noticeable dearth of demonstrably successful clients, gives ample cause for visitation of scepticism.

However, before expediently "calling a spade a spade", it may prove prudent, to first give deeper consideration, to the potential legal ramifications, of overtly doing so, within a public arena.

Overtly defamatory behaviour, has at times, been known to attract litigation, where some burden of proof is placed upon the suspected swindler's accuser (i.e. the one so bluntly declaring "It's a scam".) 

So when nobly seeking to warn the unwary, take care not to inadvertantly step into a legal minefield. 
Instead of overtly declaring a specific entity as definitely, (or even likely), "a scam", try offering some useful pointers on how one might go about assessing, the integrity of the sensational claims, under consideration.

Basically, where possible, "teach the unwary how to fish". 

And should the unwary prove to be so captivated by the lure of fantastic returns as to be unwilling, or unable, to openly consider reasoned arguments, then simply remind oneself, that sometimes the painful lessons in life, whilst emotionally and financially painful, can prove to be highly effective educators.


----------



## Gringotts Bank (9 February 2019)

ducati916 said:


> Faith is a synonym for belief.
> 
> One of the categories or domains of ontology would be 'reality'. Reality would crossover or share categories or domains with epistemology.
> 
> ...




We have all experienced different states of consciousness.  The common ones are unconsciousness (deep sleep), dream sleep, reverie and waking.  There are other states - some say hundreds of them - above the waking state.  Probably everyone has had a glimpse of them at some point in life.  When such states are happening, reality seems to become a bit more 'plastic', and there seems to be some level of interaction between the mind and what we call consensus reality. Sometimes it is so abrupt and obvious it's startling.

It's not such a strange idea.  Despite appearances, reality is *one *thing, not multiple things.  Why would my thoughts not interact with consensus reality?  It's like saying the tree's roots have no influence on the leaves.  They are not two things, they are one thing.

It would be nice if one could tweak this phenomenon and manifest a Ferrari.  I can't do that and I've never heard of anyone who can.  People who write those sort of books are usually living in a fantasy world.  What I'm referring to is a very obvious synchronicity which is so far beyond chance, and so immediately tied to one's thoughts as to render it virtually impossible.  And not one incident, but a string of them.  When one brings will power and personal desire (ego) into the equation, the link vanishes.  Some will say "convenient eh?".  I'm just saying what I've experienced.  It is what it is.


----------



## rederob (9 February 2019)

cynic said:


> My comments are in *red*



Any argument (and/or premise/s of same), merely adds to the body of supporting evidence, because every argument that is, will, or has been, brought into existence, is a manifestation of belief, in the validity (or potential thereof) of same.
*False. The argument may not be sound.*
The person, claiming the existence of "the Devil", had presented an argument for which any expression of disbelief, only served, to add to the body of evidentiary support, for the argument "the Devil" (a.k.a. "the Father of lies") exists.
*That the Devil exists or not is somewhat trivial.  What is the nature of the Devil that it informs us that the entity is coherent?*
(There does exist, at least one, interesting counter, namely, if someone can believe in the existence of an ultimate deceiver, how did such a believer, remain impervious to the Deceiver's inordinate power/s of deception?!
*I am lost on that idea.  How is it treated differently from my previous point? *


----------



## cynic (10 February 2019)

rederob said:


> *False. The argument may not be sound.*



No.  The soundness of the argument is irrelevant to the veracity of my comments about the futility of debating it.
The argument can be unsound, if it is believed to be so!


> *That the Devil exists or not is somewhat trivial.  What is the nature of the Devil that it informs us that the entity is coherent?*



Why would the Father of Lies, choose to inform, or want anyone to be informed, about his nature?! Why would the Father of Lies, require coherence?!







> *I am lost on that idea.  How is it treated differently from my previous point? *



My choice of wording, does at times lack elegance.

Perhaps the two rhetorical questions, I have offered in response, to your previous point, will provide a handy clue to, the unravelling of my intended meaning.
=========================================================
Now let's see if this notion, might be, somehow relatable, to the trading of financial markets.

Whilst pondering the question: "Could there be snakes in the grass?"

Consider the following:

Are brokers "nickel and diming" their clients?

Are stop orders being harvested?

Are favourable price gaps, being withheld from the filling of limit orders?

Are market specialists (a.k.a. market makers) exploiting trader vulnerability, during periods of illiquidity?

Are manipulators ratcheting and/or spoofing the market?

Are the traders at major banks, colluding to manipulate the market, during the reporting of price sensitive news?

Is software like "Lastlook", or similar, still in use?

Are OTC brokers tweaking price feeds?

Are the OTC brokers' live accounts, less conducive, to successful trading performance, than the corresponding demo accounts?

Do OTC brokers, lie to ombudsmen case review officers, in the hope of evading, any financial liability that may arise, from being caught breaching the terms of agreement, between themselves and their clients?

Is/are the financial regulator/s effective?

Do conspiracies occur?

If so, do conspirators hide their intentions, and actions, from the view of those conspired against?

Does one know the answer to each of the above questions?

Or does one think one knows the answers?

Does one know the difference?

Or does one only think one knows the difference?

If one thinks one knows the difference, how does one actually distinguish between what is thought to be known, and what is truly known?

How might this impact one's trading endeavours?

If one thinks there are snakes in the grass, when there aren't, how might one's trading be impacted?

Conversely, if one thinks there are no snakes in the grass, when there are, how might one's trading be impacted?


----------



## ducati916 (10 February 2019)

_1. As soon as any counter argument (or premise/s of same) is believed, the evidential support base, of the contested philosophy, is increased by that very same counter argument (and/or premises thereof)!!!

2. Whenever I ask myself, what argument could possibly serve as disproof, the seemingly nearest thing, I ever come up with, is:

an assertion that is entirely true, whilst, simultaneously, thoroughly disbelieved, by the one asserting it._

1. The problem here is that a counter-argument is not necessarily a proven fact. It is a counter-argument that is 'believed', belief is not factually proven and is therefore incapable of adding to or subtracting from the 'truth' - whatever the truth actually is.

Putting it another way: it does not matter how many believe 'X', the truth or falsity of 'X' is unaffected by the nominal belief it attracts.

Which is why Popper and falsifiability is such a strong principle.

2. 
(i) [an assertion that is entirely true]: the assertion is a fact, a fact that is a true fact (in this case);

(ii) [_whilst simultaneously, thoroughly disbelieved,_]: the true fact is not believed;

(iii) [_by the one *asserting* it._]: 

assert
*Dictionary result for assert*
/əˈsəːt/
_verb_
gerund or present participle: *asserting*

state a fact or belief confidently and forcefully.
"the company asserts that the cuts will not affect development"
synonyms: declare, maintain, contend, argue, state, claim, propound, submit, posit, postulate, adduce, move, advocate, venture, volunteer, aver, proclaim, announce, pronounce, attest, affirm, protest, profess, swear, insist, avow; More


cause others to recognize (one's authority or a right) by confident and forceful behaviour.
"the good librarian is able to assert authority when required"
synonyms: insist on, stand up for, uphold, defend, contend, establish, press/push for, stress
"elderly people find it increasingly difficult to assert their rights"
behave or speak in a confident and forceful manner.
"it was time to assert himself"
synonyms: behave confidently, speak confidently, be assertive, put oneself forward, make one's presence felt, exert one's influence, make people sit up and take notice, make people sit up and listen; 
_informal_put one's foot down
"a large government majority can encourage backbenchers to assert themselves



None of the definitions of the word preclude my previous possibilities, viz:

(i) lying (your example);
(ii) mistaken; or
(iii) expressing a third party's opinion/belief.

As it is written, your argument is simply incorrect.

jog on
duc


----------



## ducati916 (10 February 2019)

Gringotts Bank said:


> We have all experienced different states of consciousness.  The common ones are unconsciousness (deep sleep), dream sleep, reverie and waking.  There are other states - some say hundreds of them - above the waking state.  Probably everyone has had a glimpse of them at some point in life.  When such states are happening, reality seems to become a bit more 'plastic', and there seems to be some level of interaction between the mind and what we call consensus reality. Sometimes it is so abrupt and obvious it's startling.
> 
> It's not such a strange idea.  Despite appearances, reality is *one *thing, not multiple things.  Why would my thoughts not interact with consensus reality?  It's like saying the tree's roots have no influence on the leaves.  They are not two things, they are one thing.
> 
> It would be nice if one could tweak this phenomenon and manifest a Ferrari.  I can't do that and I've never heard of anyone who can.  People who write those sort of books are usually living in a fantasy world.  What I'm referring to is a very obvious synchronicity which is so far beyond chance, and so immediately tied to one's thoughts as to render it virtually impossible.  And not one incident, but a string of them.  When one brings will power and personal desire (ego) into the equation, the link vanishes.  Some will say "convenient eh?".  I'm just saying what I've experienced.  It is what it is.




Do I accept that there are different levels of consciousness - yes. There are any number of psychoactive substances that will alter levels of consciousness, trances, hypnosis, deep meditative states etc.

Is this 'reality'? For that individual, at that time, possibly, but it is not 'reality' for anyone else. Unless that individual is permanently in a form of psychosis, they will return to 'reality' at some point.

Reality consists of cause and effect. We interact with reality by manipulating causes to gain effects.

jog on
duc


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## rederob (10 February 2019)

This was your claim, and it was FALSE:


cynic said:


> Any argument (and/or premise/s of same), merely adds to the body of supporting evidence, because every argument that is, will, or has been, brought into existence, is a manifestation of belief, in the validity (or potential thereof) of same.



You instead created a straw man to respond to a question which was *not *raised.
Next:


cynic said:


> Why would the Father of Lies, choose to inform, or want anyone to be informed, about his nature?! Why would the Father of Lies, require coherence?!



You seem not to understand what is at issue, and it is "*faith*".
My simple response is that in lay terms there are people who use reason to determine a cause for belief.
With regard to your many other questions, people are not perfect.
There are cheats, liars and fraudsters, and then there are people who either cannot tell the difference or are unwilling to accept they could ever be party to their motives.


----------



## cynic (10 February 2019)

ducati916 said:


> _1. As soon as any counter argument (or premise/s of same) is believed, the evidential support base, of the contested philosophy, is increased by that very same counter argument (and/or premises thereof)!!!
> 
> 2. Whenever I ask myself, what argument could possibly serve as disproof, the seemingly nearest thing, I ever come up with, is:
> 
> ...



The problem here is that statements are being presented that are believed to be true.

Markets move because people trade them.

People trade markets because they move.

If nobody traded, markets would not move.

If markets do not move, people are not trading.


> 2.
> (i) [an assertion that is entirely true]: the assertion is a fact, a fact that is a true fact (in this case);
> 
> (ii) [_whilst simultaneously, thoroughly disbelieved,_]: the true fact is not believed;
> ...



That's great Duc! Thanks for bringing that to my attention.

If I have somehow failed to correctly convey my intended meaning, via faulty word choices/usage, or lack of contextual clarity , then I apologise.

Did my "execution only" brokers comparison, somehow fail to contextually clarify, my intended meaning for you?

Understanding market context can be an important consideration for some traders.


----------



## cynic (10 February 2019)

rederob said:


> This was your claim, and it was FALSE:



If you believe it so.
Thankyou for your ample demonstration of the veracity of the point I raised.


> You instead created a straw man to respond to a question which was *not *raised.



Straw men can be most insightful, and have much to offer:

====================================================
Now how might this relate to trading. 

Does own know one's personal limitations?

If not, then rest assured!
The market has a well established history of educating people on same, via emotionally, and financially, costly life lessons.

And what if one thinks one already knows one's personal limitations, what then?

How does one discern what one thinks one knows, from what one truly knows?

Take note of the straw man! Despite his mental limitation (i.e. lacking a brain) useful insights might be discerned by those keenly observing his behaviour!


----------



## rederob (10 February 2019)

cynic said:


> If you believe it so.
> Thankyou for your ample demonstration of the veracity of the point I raised.



Logic is not formed in belief.
Your claim is that "*Any argument (and/or premise/s of same), merely adds to the body of supporting evidence.* "
Arguments are supported by statements.
Statements (premises) must be valid in order to draw a sound conclusion.
Statements which are not valid lead to unsound conclusions.
It is an utter nonsense to propose what you have.


----------



## ducati916 (10 February 2019)

_1. As soon as any counter argument (or premise/s of same) is believed, the evidential support base, of the contested philosophy, is increased by that very same counter argument (and/or premises thereof)!!!_

1. The problem here is that a counter-argument is not necessarily a proven fact. It is a counter-argument that is 'believed', belief is not factually proven and is therefore incapable of adding to or subtracting from the 'truth' - whatever the truth actually is.

Putting it another way: it does not matter how many believe 'X', the truth or falsity of 'X' is unaffected by the nominal belief it attracts.

So now let me re-address [1] using the same argument stated in a slightly different way.

Again, it is necessary to break the sentence into constituent parts:

(i) [_As soon as any counter argument is believed_] At the moment the argument is put forward by 'X' it is believed by 'Y'.

(ii) [_the evidential support base,_] the 'evidence' , which in this case is implied to be the strength of the evidence [support base]. It is not clear however whether the strength of the evidence is in: (a) volume of evidence [number of people believing] or (b) a higher probability of reaching an uncontroverted fact [based on an empirically proven fact or a deduction from an a priori axiom].

*Dictionary result for evidence*
/ˈɛvɪd(ə)ns/
_noun_


the available body of facts or information indicating whether a belief or proposition is true or valid.
"the study finds little evidence of overt discrimination"
synonyms: proof, confirmation, verification, substantiation, corroboration, affirmation, authentication, attestation, documentation; 
It can be seen from the definition that either usage is correct. It is becoming clearer that you are using the word evidence in the context of a 'fact'.

I am using it in the context of merely 'indicating'.

The reason that I am using it in this context is because of the word "_As soon as any counter argument is believed"
_
Belief in a counter-argument, unless proven [in some manner] does not equate to a fact. It is simply a belief founded on faith. If it is not a fact, then the evidence, is the evidence of belief, which is the definition of evidence that uses 'indicating' as its meaning. Indicating is a probability: not a fact.

It is only after the belief has taken place, that it adds to the evidential support base, as a probability. This probability is however based on a 'volume' of evidence, [not the strength of the probability of the evidence] which has no relation to the probability that the evidence is a fact.

jog on
duc


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## rederob (10 February 2019)

ducati916 said:


> The reason that I am using it in this context is because of the word "_As soon as any counter argument is believed"_



It seems easier to go back to what constitutes an *argument*.
People are making statements which lead to a reasoned conclusion.
If their statement (premise in this case) is not supported by their evidence then they cannot arrive at a sound conclusion.
The construction of the argument has nothing to do with belief.
You seem to be creating some mystique over the nature if the evidence.  As I see it, that would be an entirely separate argument and dilute something relatively straightforward with epistemology.
Whenever minutiae come into play philosophy falls into the hole of infinite regress.


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## cynic (10 February 2019)

rederob said:


> Logic is not formed in belief.
> Your claim is that "*Any argument (and/or premise/s of same), merely adds to the body of supporting evidence.* "
> Arguments are supported by statements.
> Statements (premises) must be valid in order to draw a sound conclusion.
> ...



If you believe it so, then I again thankyou for providing further demonstration of my point.

Has one learnt anything new, from straw men, in recent times?

Or does one already know everything?
========================================================

Now to relate this to financial markets.

So one might think one knows, enough about the financial markets, to trade profitably!

How does one know, that one knows enough to trade profitably?!

Perhaps one has ready many books written be experienced traders.
Does reading about sport make one an expert sportsman?

Perhaps one has learnt how to chant popularised mantras courtesy of some purported market gurus (i.e. "trend is your friend", "fail to plan, plan to fail","only worth what someone is willing to pay")!
Does quoting the, purportedly sage, advice, of actual sportsmen, make one an expert sportsman?

Perhaps one has engaged in lengthy discussions about trading!
Does talking about sport make one an expert sportsman?

Perhaps one has watched other people engaged in live trading, or electronic representations of same! 
Does sitting in the crowd of spectators at a game, or viewing the game on television, make one an expert sportsman?

Perhaps one has thoroughly examined and analysed historical data!
Does analysis of past games make one an expert sportsman?

Perhaps one has "traded" using a simulator or "demo" account!
Does the playing of video games make one an expert sportsman?

Perhaps one has been successful in debating the perceived merits of a trading methodology!
Arguments with umpires aside, when in history, has intellectual debate, ever won a game of cricket or football?


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## rederob (10 February 2019)

cynic said:


> If you believe it so, then I again thankyou for providing further demonstration of my point.
> 
> Has one learnt anything new, from straw men, in recent times?
> 
> ...



You need to get some mental health help.
Continuing your irrational games here is fascinating.
Markets are active things which have a history.
They also have an apparent future.
Individual decisions to enter markets are quite separate from what the market does *after *one has entered.  They are completely different senses.
One's view on their prospects while in the market can be conditioned by reasonable expectations, but markets are inherently irrational.


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## Skate (10 February 2019)

rederob said:


> You need to get some mental health help.
> Continuing your irrational games here is fascinating.
> Markets are active things which have a history.
> They also have an apparent future.
> ...




rederob, I've been watching this exchange with great interest & I have made many posts on the subject of beliefs & belief systems in this thread. Your last post is not in the spirit of the 'Dump it here' thread. It may be beneficial for you  to read a few of my comments.

*Your beliefs shape your reality*
I didn't want to jump in as I have a simple philosophy that "your beliefs shape your reality"

*Conviction*
A person with a conviction is a hard person to change. Tell him you disagree and he turns away. Show him facts or figures and he questions your sources. Appeal to logic and he fails to see your point.

*Civility when expressing an opinion*
Members who express an opinion whether they are right or wrong or whether you’re right or wrong that's not what is important.

*What is important*
The words you use to express an alternative point of view or express an opinion from your experience.

*Ridiculed or challenged*
This thread gives you the ability to express your views without being ridiculed or challenged.

*Appreciation*
I appreciate every view expressed here on 'Dump it here' thread, I don't agree with some but others I take on board & feel wealthier for it. I have been reading this exchange with great interest.

*Acceptance*
We can all agree to disagree - we can all contest our ideas but to express those views in a manner that's unacceptable is not on.

*Belief*
Your belief system defines whether you agree or disagree with a members post but if you don’t listen you forgo the right to understand their point of view..

*My belief references*
Post #3 https://www.aussiestockforums.com/posts/1005969/
Post #4 https://www.aussiestockforums.com/posts/1005970/
Post #11 https://www.aussiestockforums.com/posts/1005977/
Post #39 https://www.aussiestockforums.com/posts/1006013/
Post #94 https://www.aussiestockforums.com/posts/1006119/
Post #113 https://www.aussiestockforums.com/posts/1006166/
Post #125 https://www.aussiestockforums.com/posts/1006190/
Post #145 https://www.aussiestockforums.com/posts/1006220/
Post #172 https://www.aussiestockforums.com/posts/1006317/
Post #221 https://www.aussiestockforums.com/posts/1006413/
Post #339 https://www.aussiestockforums.com/posts/1006616/
Post #343 https://www.aussiestockforums.com/posts/1006625/
Post #423 https://www.aussiestockforums.com/posts/1006862/
Post #444 https://www.aussiestockforums.com/posts/1006906/
Post #445 https://www.aussiestockforums.com/posts/1006907/
Post #456 https://www.aussiestockforums.com/posts/1006992/
Post #481 https://www.aussiestockforums.com/posts/1007236/
Post #544 https://www.aussiestockforums.com/posts/1007584/
Post #628 https://www.aussiestockforums.com/posts/1008407/
Post #672 https://www.aussiestockforums.com/posts/1008811/
Post #756 https://www.aussiestockforums.com/posts/1009329/
Post #792 https://www.aussiestockforums.com/posts/1009489/
Post #808 https://www.aussiestockforums.com/posts/1009576/
Post #810 https://www.aussiestockforums.com/posts/1009591/
Post #962 https://www.aussiestockforums.com/posts/1010701/
Post #1078 https://www.aussiestockforums.com/posts/1011244/
Post #1088 https://www.aussiestockforums.com/posts/1011261/
Post #1109 https://www.aussiestockforums.com/posts/1011323/
Post #1157 https://www.aussiestockforums.com/posts/1011847/
Post #1159 https://www.aussiestockforums.com/posts/1011852/
Post #1161 https://www.aussiestockforums.com/posts/1011854/
Post #1162 https://www.aussiestockforums.com/posts/1011857/
Post #1182 https://www.aussiestockforums.com/posts/1011898/
Post #1210 https://www.aussiestockforums.com/posts/1011976/
Post #1125 https://www.aussiestockforums.com/posts/1011518/
Post #1268 https://www.aussiestockforums.com/posts/1012156/
Post #1269 https://www.aussiestockforums.com/posts/1012157/
Post #1432 https://www.aussiestockforums.com/posts/1013069/

Skate.


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## Skate (10 February 2019)

*Friendly reminder*
To all posters, let keep this thread different to most, by expressing our views respectfully 
*
Opinions are welcomed in the 'Dump it here' thread*
We shouldn't ridicule or challenge posters as it serves no purpose, it's like masturbating in public, it may feel good to you, but it looks disgusting to everyone else and it just makes the other person work harder to find ways to disagree with you.

*Being right or wrong*
Whether your view is right or wrong isn't important, what's more important, this thread gives you the ability to express your views without being ridiculed or challenged.

*Experience*
Every member enjoys a different level of experience & expertise, there is never a reason to display your level of knowledge by making others feel inferior.

*Timely reminder*
Abuse, insults and personal attacks directed at other people are unacceptable in the "Dump it here' thread, I'm not policing the thread but it pays to remember that everyone is entitled to their opinion.

*Alternative view*
If you disagree with someone rather than argue the merits of their points, post an alternative view, you don't have to belittle members to get your point across. Play the "the point" not the "person"

*Never react to a post but respond* (Responding will give you time to think)
1. Consider the context of what you are saying, put yourself in their shoes, try to understand their point of view.
2. Consider if your post adds value to the discussion.
3. When expressing an alternative view, start off by saying “In my opinion …” and try to focus on the issues rather than person.
4. We are all wordsmiths to some degree & it's easy to incite an emotional, knee-jerk response, creating an emotional outburst.

*Friendly atmosphere*
Such posts that incite emotional responses tend to undermine the friendly atmosphere often resulting in long running feuds creating factional loyalty to one side or the other.

*Hard to detect*
Offending a member is hard to detect. However, some members tend to follow patterns of behaviour, posting to invoke an emotional response, never answering questions directly to justify their position but they "always demand documentary evidence" from others to support their assertions, while offering none in return.

We all deserve a measured response not the alternative.

Skate.


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## rederob (10 February 2019)

Skate said:


> rederob, I've been watching this exchange with great interest & I have made many posts on the subject of beliefs & belief systems in this thread. Your last post is not in the spirit of the 'Dump it here' thread. It may be beneficial for you to read a few of my comments.



Do I believe I exist?
Yes, I have evidence and I trust you see that this post helps substantiate my claim.
Do you believe I exist?
My existence to you is likely that I am a real person.  Nowadays I could equally be an AI or Poe.
The above is about ontology.
If I was to meet you and we discussed  this post, my existence goes beyond belief: you would have justification, and that's about epistemology.
In matters of *argument*, there is a structure.  
To suppose an argument has no structure defeats the very purpose of using language to convey meaning.
It is unsound of *cynic *to continue to repeat himself unless he is proposing an alternative to logic.  I have not seen this.  Moreover *cynic *so seldom makes sense to me that I just ignore much of what he writes.
I could have chosen less charitable words and indulged in an ad hominem affront.  I did not.  
If *cynic* is not interested in rationally defending his statements then I will call out his repeated nonsense at my choosing (unless someone bans me here from posting).
Everything I have seen him post since my time here this year suggests he needs to get mental health help.


----------



## Skate (10 February 2019)

rederob said:


> Do I believe I exist?
> Yes, I have evidence and I trust you see that this post helps substantiate my claim.
> Do you believe I exist?
> My existence to you is likely that I am a real person.  Nowadays I could equally be an AI or Poe.
> ...




*You said:*_ 
" I could have chosen less charitable words and indulged in an ad hominem affront.  I did not." _*(I'm glad you didn't)*

rederob, thank for acknowledging that you could have selected your words better to express your view in a more measured way.

I find what has been discussed enjoyable to read, let me put my spin on it in a way most can understand, a basic understanding & not on the deeper level you have been discussing.

*Identity *
Our beliefs are an intricate part of our identity, the fact is none of us was born with any of our beliefs. They were all acquired in a combination of ways and sometimes by the way of a father figure.

*Instilled by others*
Many of the beliefs that have the most profound impact on our lives were not even acquired by us as an act of free will but instilled by other people and sometimes by force.

*Negative implications*
And it probably won't come as a surprise to anyone that usually the beliefs that cause us the most difficulty are those that were acquired from others without our conscious consent.

*Too young*
By that I mean beliefs that we acquired when we were too young and uninformed to realise the negative implications of what we were being taught.

*Our beliefs shape our lives*
In the broadest sense, our beliefs shape the way we experience our lives.

*Beliefs are acquired*
As I have already said, we're not born with any of our beliefs. They're acquired, and as they accumulate, we live our lives in a way that reflects what we have learned to believe.

*Perception*
They manage our perception and interpretation of environmental information in a way that is consistent with what we believe. There isn't much about the way we function that beliefs don't play a major role in.

*Reinforcement*
Having negative beliefs reinforced when we are young will have major implications in our adult lives, our mental well-being that will profoundly impact our lives.

*We come up with stories*
When our ideas or beliefs are challenged we tend to be defensive and start to make up stories confirming why you are right and everyone else is wrong. We tell ourselves the same story over and over till we tend to believe our own bull$hit.

*Self-control*
Finally, self-control makes everyone more productive. However, we should repress our feelings of anxiety, fear, anger or sadness when making comments about an emotive subject as personal beliefs.

Skate.


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## rederob (10 February 2019)

Skate said:


> _You said: " I could have chosen less charitable words and indulged in an ad hominem affront.  I did not."_
> 
> rederob, thank for acknowledging that you could have selected your words better to express your view in a more measured way.
> 
> ...



With respect, I look at what is presented and see if it makes sense.  I suspect I deal with information very differently from you.
For something to make sense we apply any number of rules.  A good one is to use principles of logic.
A simple way to test that logic makes sense is to consider how to put a roof on a home which has no framework to support it. 
So in logic we underpin a conclusion with statements (premises) which support it.
Using the analogy again, we can test the premises such that if we can prove the framework will support the roof then our structure is reasoned and sound.
The antithesis of this is throwing around statements which have no bearing on the conclusion.
Anyone posting who wants to be credible should realise that there are good ways to present their information.
It defies logic to suppose an argument without structure would be credible.


----------



## Skate (10 February 2019)

rederob said:


> With respect, I look at what is presented and see if it makes sense.  I suspect I deal with information very differently from you.
> For something to make sense we apply any number of rules.  A good one is to use principles of logic.
> A simple way to test that logic makes sense is to consider how to put a roof on a home which has no framework to support it.
> So in logic we underpin a conclusion with statements (premises) which support it.
> ...




rederob, that's a perfect post in the spirit of this thread. Your explanation from a logical view I'm sure most would understand & appreciate. 

*Well done*
Now that you have your groove back, I would love to hear more about your understanding of beliefs, explaining your views/positions logically.

*Others*
I trust others haven't lost interest in this discussion as its ads value to the 'Dump it here' thread. 

*Convictions & beliefs*
Trading is made up of convictions & beliefs, it's our drivers.

Skate.


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## rederob (10 February 2019)

Skate said:


> I would love to hear more about your understanding of beliefs, explaining your views/positions logically.



I don't believe much and don't know much.
My preference is try and work out what makes things the way they are. 
If something seems not to make sense, it's either me or it.
I try to minimise the risk it is me.


----------



## cynic (10 February 2019)

ducati916 said:


> _1. As soon as any counter argument (or premise/s of same) is believed, the evidential support base, of the contested philosophy, is increased by that very same counter argument (and/or premises thereof)!!!_
> 
> 1. The problem here is that a counter-argument is not necessarily a proven fact. It is a counter-argument that is 'believed', belief is not factually proven and is therefore incapable of adding to or subtracting from the 'truth' - whatever the truth actually is.
> 
> ...



Quantity, or, quality, or, quantity of quality. For the purposes of the point being made, do such considerations make a difference to the outcome?
And if so, (remembering that absence of disproof is not being claimed as disproof of absence) how so?


> *Dictionary result for evidence*
> /ˈɛvɪd(ə)ns/
> _noun_
> 
> ...



That was not my intention.


> I am using it in the context of merely 'indicating'.



That was my intention.


> The reason that I am using it in this context is because of the word "_As soon as any counter argument is believed"
> _
> Belief in a counter-argument, unless proven [in some manner] does not equate to a fact. It is simply a belief founded on faith. If it is not a fact, then the evidence, is the evidence of belief, which is the definition of evidence that uses 'indicating' as its meaning. Indicating is a probability: not a fact.
> 
> It is only after the belief has taken place, that it adds to the evidential support base, as a probability. This probability is however based on a 'volume' of evidence, [not the strength of the probability of the evidence] which has no relation to the probability that the evidence is a fact.



 According to the definition for evidence (so helpfully provided):
"the available body of facts or information..."

Does information (i.e. "knowledge given or received", according to "The Award compact English dictionary") truly exist, or is information truly non-existent?

Does the believer of "a belief", require knowledge of that, upon which the "belief" is founded?

Does "faith" (using one's preferred definition) truly exist, or is "faith" truly non existent?
======================================================================
Traders incorporating technical analysis into their chosen methodology, will typically select some preferred indicators, for inclusion within their toolkit.

Prior to employment of such tools, it may prove beneficial to first acquaint oneself with the tools' strengths and limitations.

What are the strengths of one's chosen indicators?

Which market conditions/contexts are more favourable?

And which market conditions are less so?

Can the indicator be expected to perform favourably in all conceivable market conditions/contexts (i.e. universally)?

If not, which conditions/contexts require alternative tools, or avoidance?

How might one, identify the unfavourable conditions/contexts early, so that an alternative tool, or evacuation, may be quickly effected?


----------



## ducati916 (11 February 2019)

cynic said:


> 1. Quantity, or, quality, or, quantity of quality. For the purposes of the point being made, do such considerations make a difference to the outcome?




I would argue that it does.

Evidence is information which assists the decision maker in determining facts. To do so, the evidence must fulfil two criteria when directed at information.

(a) what is the ultimate fact to which the evidence is intended to make more/less likely; and
(b) how does the evidence make the ultimate fact more/less likely.

(i) facts in issue; and
(ii) facts going to credibility.

Facts going to credibility are those that bear upon the reliability of witnesses or a particular element of the witnesses evidence.

The evidence does not have to make a fact certain [stronger if it does] but the evidence must make the fact more/less probable.

Weight and probative value are words used to describe probability. Numbers [again] inform probability, viz. it can be measured by numbers, which gives weight or probative values.

(a) Classical Approach Frequency: 4 Jacks in a pack of cards 4/52 = relative frequency.
(b) Relative Frequencies: is where you have X observations with Y from your variable, which gives you Y/X expressed as a %.
(c) Likelihood ratios: to test the significance of the evidence [footprints found were made by a male adult shoe, low likelihood. Footprints made by an adult male shoe with a crack in the sole, higher likelihood.]

The above are merely statistical hypotheses.

(d) Circumstantial evidence: where like strands of a rope, no individual strand is sufficient, but when all together, they can bear the burden [of proof].

When assessing the evidence in combination, the rule is that the probative value of multiple items of evidence supporting the same factual allegation is greater in combination than the sum of the parts.

An example: there is a bank robbery and Ms Brown is charged with the offence.

Witness A states: the bank robber was female; and
Witness B states: heard the robber say her birthday was in July; and
Witness C states: saw the robber drive away in a red car.

These strands cumulatively add to: 1/2 x 1/12 x 1/10 = 1/240

The Crown is entitled to say that Ms Brown is 240 times more likely to have these characteristics than a random person [assuming of course that she is in point of fact female, has a red car and her birthday is in July].

Therefore the outcome, which in this case is 'belief', I would argue that this can be very dependent on the [quantity and or quality] of evidence given.

jog on
duc


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## ducati916 (11 February 2019)

cynic said:


> 1. Does information (i.e. "knowledge given or received", according to "The Award compact English dictionary") truly exist, or is information truly non-existent?
> 
> 2. Does the believer of "a belief", require knowledge of that, upon which the "belief" is founded?
> 
> 3. Does "faith" (using one's preferred definition) truly exist, or is "faith" truly non existent?




1. I would argue that information exists because we as humans, effect decisions, based on information, that address causal factors when we wish to create an effect that benefits us in some way.

2. I would argue that no, knowledge in the epistemological meaning is not required. Knowledge of the information conveyed in [1] would be required so that a belief could be formed.

3. I would argue that 'faith' exists.

jog on
duc


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## ducati916 (11 February 2019)

cynic said:


> Traders incorporating technical analysis into their chosen methodology, will typically select some preferred indicators, for inclusion within their toolkit.
> 
> Prior to employment of such tools, it may prove beneficial to first acquaint oneself with the tools' strengths and limitations.
> What are the strengths of one's chosen indicators?
> ...




You would certainly expect that traders would do so. I would however argue that it is not necessary, to trade [whether successfully or not] that they do so.

jog on
duc


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## ducati916 (11 February 2019)

cynic said:


> 1. Can the indicator be expected to perform favourably in all conceivable market conditions/contexts (i.e. universally)?
> 
> 2. If not, which conditions/contexts require alternative tools, or avoidance?
> 
> 3. How might one, identify the unfavourable conditions/contexts early, so that an alternative tool, or evacuation, may be quickly effected?




1. Probably not. Indicators that signal 'oversold' conditions, in 2008, would likely have got you in trouble.

2. Any condition where the rise in volatility exceeds the model that you have built, its capacity to withstand.

3. Where a measurement of volatility, say the VIX [as an example] rises above the VIX level that predominated in your backtesting.

jog on
duc


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## ducati916 (11 February 2019)

rederob said:


> 1. It seems easier to go back to what constitutes an *argument*.
> People are making statements which lead to a reasoned conclusion.
> 
> 2. If their statement (premise in this case) is not supported by their evidence then they cannot arrive at a sound conclusion.
> ...




1. In general, I agree with you. However the nature of this thread is abstract and attempting to universalise the concepts. Thus, an 'argument', which is very specific, while it could be made [with some difficulty] would possibly bog down even more than this discussion already has.

An argument in which we move from one idea that is known [proven] to be true to the inferential move, whereby we move from that first fact to a second idea, that can also be judged a fact, based on the strength and force of the first fact [idea] is how I prefer to argue, however, not all do or can.

When we deal with faith, we enter a fuzzy territory where as Cynic states, the absence of proof, is not proof of absence.

2. Agreed re. [1] but, as I said, it gets fuzzy.

3. I suppose it depends on what that 'belief' is founded on. A proven fact...then belief is acceptable. On a statement of faith...in the context of an argument, not a strong place to be, but on a faith basis, belief will [likely] occur.

4. The strength of the proving evidence that established in the first instance a fact as a fact, is important. Obviously evidence can take many forms.

jog on
duc


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## rederob (11 February 2019)

ducati916 said:


> 1. In general, I agree with you. However the nature of this thread is abstract and attempting to universalise the concepts. Thus, an 'argument', which is very specific, while it could be made [with some difficulty] would possibly bog down even more than this discussion already has.
> 
> An argument in which we move from one idea that is known [proven] to be true to the inferential move, whereby we move from that first fact to a second idea, that can also be judged a fact, based on the strength and force of the first fact [idea] is how I prefer to argue, however, not all do or can.
> 
> ...



Arguments will be either deductive or inductive.
If you are dealing with information unique to an individual - ie information which is beyond reasonable measure - it holds value to the individual and whoever wishes to accept it.  It may at best be a weak inductive argument.


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## cynic (11 February 2019)

ducati916 said:


> I would argue that it does.
> 
> Evidence is information which assists the decision maker in determining facts. To do so, the evidence must fulfil two criteria when directed at information.
> 
> ...



Note that there does exist a logical flaw in the methodology.

Unless 1/240 of the adult populace, happen to be, July born female owners of red cars, then the Crown's assessment would be unreasonable.

However, I grant that said flaw, does not detract from the presented argument.


> Therefore the outcome, which in this case is 'belief', I would argue that this can be very dependent on the [quantity and or quality] of evidence given.



If I have understood correctly, I counter argue, that the level of confidence in 'belief' is not the critical issue here.

The critical issue is, not so much the validity (or lack thereof) of the philosophy being contested, but the question of which tools might be appropriately employed for validity testing.

The arguments presented thus far, are things for which belief, whether past, or present, is associated, and therefore qualify as, examples of, correlations.
Such correlations are compatible with validity, because these would be expected in the event the philosophy happens to be true.

The very concepts of argument structure, scientific method, probabilistic assessment etc.are all things that either, are, or were believed. As such those too serve as correlations adding to the body evidence.

Witness A: "Witness B is about to speak the truth"
Witness B: "Witness A just told a lie"
Witness C: "I agree with both Witnesses A and B"

Could there be some similarity between these paradoxical statements and the matters under discussion?
=====================================================================================
So let's consider what this might have to tell about financial markets.

The Funny Mentalist says hold!
(Because the alphabet of acronyms, when viewed in its entirety, says all is well!)

The Geek says sell!
(Because the milk shakes, i.e. mooing beverages, bollocks quartets, mendacious corn chips, i.e. fibbing nachos, and her surfie dude mate, named Elliot, are all in probabilistic agreement, this one's going doowwwnnnn!)

The Quantum Lord says:"Doesn't matter, just order one with the lot!
(Because it simply doesn't matter!)

The Darts Champ says: "Whoa! Wait a minute! I think it best, to sit this one out!"
(Because some of the darts fell out of the board, before he could determine what it all meant.)

The Lunatic says: "Sell now, and then in two weeks time, buy back in!"
Because the moon is full, and the new moon is due, a fortnight hence.)

The cynic says: "You have all gotten it wrong, but that's alright!"
 (Because cynics profit from traders getting it wrong.)


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## rederob (11 February 2019)

cynic said:


> The critical issue is, not so much the validity (or lack thereof) of the philosophy being contested, but the question of which tools might be appropriately employed for validity testing.



Some unusual language has been used in these examples as philosophy is the realm which includes *logic*.
WRT to testing a premise, what matters is that it can be determined *true.
If a premise is not true, the conclusion must be unsound as the argument is not valid.*
The idea that "choice of tools" per se would be a determinant is unlikely.  However, separate arguments would ensue if the means for testing truth were disputed.
In strict terms, and using duc's bank robbery example where Ms Brown is charged with an offence, and witness statements from A, B & C (regarded as "facts" for the purpose of simplicity here), the prosecution might conclude his/her case by saying "*and that person is standing in the dock*". The *reasonable deduction*, however, was *only in relation to *a person with those *characteristics *as standing in the dock.  Thus, a deductive argument in this example provides a probabilistic outcome for whom the robber might include.
So let's instead turn this into a inductive argument from the prosecution.  Here are some real world example where statistics lead to initial prosecution, and later the verdicts being overturned.
Theoretical probability of guilt on grounds of gender/DOB/colour of car could be 240:1 or 10000:1, but if Ms Brown owns the only red car in town then the prosecution's case begins to look pretty solid.
In *logic *it would not however be considered "sound" as the statements supporting it remain probabilistic.


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## ducati916 (12 February 2019)

rederob said:


> 1. Arguments will be either deductive or inductive.
> 
> 2. If you are dealing with information unique to an individual - ie information which is beyond reasonable measure - it holds value to the individual and whoever wishes to accept it.  It may at best be a weak inductive argument.




A deductive argument moves from the universal to the particular: therefore the universal must be a true fact for any inferences to be true. This is the [synthetic] a priori.

The inductive moves from a particular to the universal. The premise in these arguments must both be true and sufficiently large [wide] in scope to make it a sound foundation for an argument. This is empiricism. This has been predominantly employed as the 'scientific method', viz. experimental. This is the 'effect' looking for a 'cause'.

Arguments of faith cannot be deductive or synthetic a priori. Arguments of faith can be inductive. There is of course a major issue: which is that to become a true cause of the effect, evidence sufficiently strong/convincing must be adduced to raise the cause above a mere probability to a truth.

The argument [in logic] put forward currently is: the absence of proof, is not proof of absence. The burden of proof is therefore shifted from him making the assertion, to those refuting the assertion, if any final answer is possible. Generally, in questions of faith, they never are as a definitive proof in logic is very difficult find.

Hence in my evidence example we have a crime, which is the particular [effect] that must be assigned [in the highest probability approaching or finding truth] a cause. A probability, while not 'the' truth, can be sufficient as a proof.

jog on
duc


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## rederob (12 February 2019)

ducati916 said:


> A deductive argument moves from the universal to the particular: therefore the universal must be a true fact for any inferences to be true. This is the [synthetic] a priori.



The nature of an argument depends on the premises.
The premises can be determinate of either universals or particulars.
The premises may well be true, but they may only provide *grounds *for the conclusion, ie a more likely outcome (probability), as was demonstrated in the examples above relating to Ms Brown.
I won't tackle universals as there are literally too many schools of thought and they merely confuse.  For example, Rex is a dog. Rex is *particular *(ie *one *dog).  The concept of "dog" is of *many*, therefore *universal.  "Dog" *now becomes* one kind, *therefore particular.  If "dog" is a set, or a class of things  then it is not material (ie of substance). Rex is a real living dog .


ducati916 said:


> A probability, while not 'the' truth, can be sufficient as a proof.



I can only say that it would not be a *sound *conclusion to draw. In a legal sense, would you say it was *beyond reasonable doubt*?


----------



## ducati916 (12 February 2019)

rederob said:


> 1. The nature of an argument depends on the premises.
> 
> 2. The premises may well be true, but they may only provide *grounds *for the conclusion, ie a more likely outcome (probability), as was demonstrated in the examples above relating to Ms Brown.
> 
> 3. I can only say that it would not be a *sound *conclusion to draw. In a legal sense, would you say it was *beyond reasonable doubt*?




1. I would argue that the nature of an argument is whether it is a deductive or inductive argument.

2. True, where the argument is inductive. A deductive argument [assuming a true premise that is being reasoned from] that proceeds in valid logical manner, must be true.

3. Correct. And legal proof is based upon an inductive argument. You have the crime, which is the effect or outcome, you are reasoning backwards to elicit the cause [whodunnit].

jog on
duc


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## cynic (12 February 2019)

Thanks for taking the time to read and respond to my post/s. It may seem immodest of me saying this, but, despite the diversity and depth of our respective convictions, our willingness to continue engagement in discussion, is meritorious.
This is intended as a a compliment to both you and I.
I am patting myself on the back,(not many canines know how to do this), and I invite you to do likewise.


rederob said:


> Some unusual language has been used in these examples as philosophy is the realm which includes *logic*.



Knowing that the English language has some nuances, additional consideration of word choice can sometimes prove beneficial.

Needless to say, words with multiple, distinctly different (albeit often relatable) definitions, often require additional care in their usage and interpretation. Sometimes contextual considerations are sufficient for discernment of intended meaning, othertimes clarification may need to be sought, lest misunderstandings arise.


> WRT to testing a premise, what matters is that it can be determined *true.*



Many might agree, however, I do not share your confidence.
Scientists often devise experiments in their efforts to disprove hypotheses.
Some might say that falsification is an equal, or perhaps even paramount consideration.
Others might argue that falsification equates to proof of a hypothesis that is an inverted form of the hypothesis to which falsification is applied.
*



			If a premise is not true, the conclusion must be unsound as the argument is not valid.
		
Click to expand...


*I can agree that the argument is not valid when one or more of the premise/s are untrue.

A faulty argument's conclusion, may or may not happen to be true.

Years ago a piece of machine code I wrote, performed exceptionally well on the majority of my tests, by producing correct answers to the problems it was presented, it wasn't until the later stages of testing a few incorrect results alerted me to the presence of a fault in the coding.

Perhaps its not the ideal analogy, given there can be dispute about whether the written software represents a faulty logical process or a faulty premise.

Whichever way it is sliced, as an analogy for a faulty argument, it does serve to demonstrate the potential for serendipitously correct conclusions.


> The idea that "choice of tools" per se would be a determinant is unlikely.  However, separate arguments would ensue if the means for testing truth were disputed.



Methods chosen for testing truth, can be unsuited to the testing of some claims.
Eg. Consider the following claim:

"The only things that exist are those that are believed to exist."

Out of the many popular methods of contesting such a claim, what argument can be presented to challenge it?

Surely, any argument will by the time it is presented, be already known, else it could never be presented!

And if the presenter thinks the argument presented is dubious, the presenter is still presenting something that is believed to exist (ie. a dubious argument).

Every argument presented, is itself, at minimum, a correlation adding to the body of evidence supporting the claim it purports to challenge.



> In strict terms, and using duc's bank robbery example where Ms Brown is charged with an offence, and witness statements from A, B & C (regarded as "facts" for the purpose of simplicity here), the prosecution might conclude his/her case by saying "*and that person is standing in the dock*". The *reasonable deduction*, however, was *only in relation to *a person with those *characteristics *as standing in the dock.  Thus, a deductive argument in this example provides a probabilistic outcome for whom the robber might include.
> So let's instead turn this into a inductive argument from the prosecution.  Here are some real world example where statistics lead to initial prosecution, and later the verdicts being overturned.
> Theoretical probability of guilt on grounds of gender/DOB/colour of car could be 240:1 or 10000:1, but if Ms Brown owns the only red car in town then the prosecution's case begins to look pretty solid.
> In *logic *it would not however be considered "sound" as the statements supporting it remain probabilistic.



I largely agree with your reasoning here as it appears to be along similar lines to mine.
===========================================================================================
"Balance of probabilities" and "beyond reasonable doubt", are to my understanding, representative of compromises that have been made in favour of practicability, due to the impracticability of the known alternatives.

Care needs to be taken when choosing/devising methodology for probabilisic assessments. Some theoretical applications have been conveniently founded upon the premise of an even distribution of distinct qualities across the population under consideration.

This convenient foundation can ofttimes prove inconvenient to those applying certain methodologies to uneven distributions.

Consider the following example:

The four outermost dots on the 5 dot face of a standard six sided die have worn away leaving only the middle dot.
Effectively that face has become identical to the 1 dot face, meaning that 5 is no longer a possible outcome.
There now exist 5 distinct outcomes, from each throw of the die.
None of those outcomes holds the probability of, 1 out of 5, because the outcome distribution is uneven.

1, holds a 1 out of 3 (i.e. 2 out of 6) probability

2,3,4 and 6 each hold a 1 out of 6 probability

Now let's consider how this knowledge might prove beneficial in analysis of financial markets.

Whilst a market for a chosen instrument is open, the price has the potential to move up, move down, or remain motionless.

So three qualities of price behaviour have been defined with respect to movement (or absence thereof).

Based upon the history of a financial instrument under consideration, is attribution of equal probability, to each of the above qualities justified?

Are larger moves to be treated as one move, or multiple consecutive moves, in a direction?

And what of immobility, is a period of same to be accounted as one, or multiple consecutive exhibitions of price behaviour?

Does time enter into consideration? If so, how is it to be apportioned in respect to each of the price behaviours?

Is the distribution of the price behaviours even?

How might this information be useful to a market strategist?


----------



## ducati916 (12 February 2019)

cynic said:


> Methods chosen for testing truth, can be unsuited to the testing of some claims.
> Eg. Consider the following claim:
> 
> "The only things that exist are those that are believed to exist."
> ...





You are simply repeating the same argument as previously: and the answer to that is also still the same: that something believed [in faith] that cannot be proven and cannot be disproven, simply remains an item of faith.

There is no getting out of the rabbit hole.

* I would qualify that by saying on present knowledge. As knowledge increases, some conundrums are resolved.

jog on
duc


----------



## ducati916 (12 February 2019)

cynic said:


> Care needs to be taken when choosing/devising methodology for probabilisic assessments. Some theoretical applications have been conveniently founded upon the premise of an even distribution of distinct qualities across the population under consideration.




The writing of insurance premiums being one example.

jog on
duc


----------



## ducati916 (12 February 2019)

cynic said:


> Now let's consider how this knowledge might prove beneficial in analysis of financial markets.
> 
> Whilst a market for a chosen instrument is open, the price has the potential to move up, move down, or remain motionless.
> 
> ...




1. Clearly not: as a die has a fixed probability. A market moves in response to future events. It is not currently possible to foretell the future, thus the event, thus the response. While a knowledge of the past is useful [Santayana], history rhymes [Twain].

2. Multiple moves. The market is not a true stochastic process.

3. Multiple.

4. Yes. On market open and market closed. Future events are stochastic, the market is not.

5. No.

6. Mainly because you can devise methodologies that trade and profit from these inefficiencies.

jog on
duc


----------



## barney (12 February 2019)

@rederob @cynic @ducati916

Interesting dialogue from you three guys (I am making the premise that you are all guys … could be totally errant in that assumption)

Anyway, great conversation, and superb articulation ….. I sense potential Law, Philosophy and Language degrees all round

ps I have none of the above but still appreciate the debate …. 
Carry on forthwith and hitherto gentlemen


----------



## rederob (12 February 2019)

ducati916 said:


> 1. I would argue that the nature of an argument is whether it is a deductive or inductive argument.



A premise which is clearly probabilistic can be true, eg. most dogs are *not *called Rex.
As will all premises of a deductive argument if it is sound.
It's a *guess *to assume from *only *the conclusion that an argument is of one type rather than the other.
Put another way, an argument could be constructed such that new evidence presented (ie. not as in the original example) proved that only Ms Brown could have been the robber, as this was deduced (see comments at #3).


ducati916 said:


> 2. True, where the argument is inductive.
> A deductive argument, [assuming a true premise, that is being reasoned from] that proceeds in aalid logical manner, must be true *sound*.





ducati916 said:


> 3. Correct. And legal proof is based upon an inductive argument. You have the crime, which is the effect or outcome, you are reasoning backwards to elicit the cause [whodunnit].



Not necessarily.  For example, video footage of the robbery shows Ms Brown's face clearly, plus the gun she fired into the air. The stolen money and a gun was found in Ms Brown's red car.  It was in fact found by police who had raced to the scene immediately an alarm was set off.  Serial numbers on the stolen money proved it had only arrived that morning and was not for release that day.  Rifling on the round dug from the ceiling proved the gun belonged to Ms Brown.  Gun powder residue found on Ms Brown's gloves as she entered the car matched a subsequent round fired from the same gun by ballistic and forensic experts.  Capping all this off was a signed confession which went into copious detail regarding her motives, planning, and execution.
Although some aspects of these events are probabilistic, others defy logical explanation unless Ms Brown was the actual perpetrator.


----------



## cynic (12 February 2019)

ducati916 said:


> You are simply repeating the same argument as previously: and the answer to that is also still the same: that something believed [in faith] that cannot be proven and cannot be disproven, simply remains an item of faith.



There may exist a very subtle distinction, between that and my earlier wording of the argument.
But for the purposes of highlighting the importance of appropriate tool selection, it is near enough, to be good enough.


> There is no getting out of the rabbit hole.
> 
> * I would qualify that by saying on present knowledge. As knowledge increases, some conundrums are resolved.



Whilst we persist with our current choice of tools, I am tempted to agree.

But what if there wasn't only one tool available?
What if other tools existed that could be implemented in a practical way for harvesting of evidence?

A man spends a lifetime eating meals of solid food, served in a bowl, via use of a fork.

One day the waiter serves him a bowl of soup.

The man endeavours to consume the soup, with his fork.
(This fork has served him so faithfully for so many years and for that reason, he has the utmost con*fide*nce in its universal utility.)

After repeatedly failing in his concerted effort to extract some soup from the bowl, he calls the waiter over and complains:

"There must be some mistake, this cannot possibly be edible food! It keeps dribbling through the tines of my fork!"

To which the waiter replies:

"I am so very sorry to hear that sir!

Perhaps sir might like to consider using a spoon!

Many of our patrons have given assurance they find the soup far more nutritious and enjoyable when consumed that way."

 =======================================================================================================

Now to relate this to financial markets.

Know thy tools, know their strengths and limitations!

So a trader's toolkit serves well for some time and then suddenly the market decides it no longer wishes to cooperate.

Perhaps this trader is a Quantum Lord presiding over an army of open positions as they are flattened by a formula one steam roller.

Or perhaps a Geek suffering the death by a thousand stop outs.

Or perhaps a Funny Mentalist puzzling over how Enron managed to pass audits.

Or a Lunatic wondering how the Draghiton managed to subvert the power of the moon.

Or a Dartist Trumped by a Don.

Or a cynic wondering what the FTSE is going on with the EUR/USD.

What insights might a trader glean from these happenings?


----------



## rederob (12 February 2019)

cynic said:


> "*WRT to testing a premise, what matters is that it can be determined true."
> *
> Many might agree, however, I do not share your confidence.
> Scientists often devise experiments in their efforts to disprove hypotheses.
> ...



Logic does not have an alternative here, so if you were to maintain that viewpoint it becomes impossible for you to be treated coherently.
All science is probabilistic.
However, the outcome of a completed experiment can be known with certainty.
This is a different sense to proving, for example, if the scattered ashes from a cremated body can be resurrected.  Without evidence to the contrary, most people would think it a highly unlikely event.  From an epistemological perspective many aspects of science give us *knowledge *which can be relied upon in all known circumstances.  For all intents and purposes, these would be called facts.  As would outcomes of completed experiments.
For a scientist to falsify an hypothesis, he/she would need to present a counter argument, ideally deductive, which contained premises which could be proven true.  If the scientist has no basis for testing truth then no reasoned conclusion can be sound, let alone most probable.


----------



## Skate (12 February 2019)

Newt said:


> Information overload, but this is same stock universe, same time period, using different system code (my Amibroker interpretation of Nick Radge's "Weekend Trend Trader").
> 
> Again, also remember trading the "optimal" = "most aggressive" number of positions may give you max theoretical returns but also DRASTICALLY increase your Risk of Ruin (i.e. chance of blowing your account, particularly in the first 2 years).
> 
> ...




First off, I would like to echo @barney words about the interesting topic being discussed by @rederob @cynic & @ducati916, well done guys.

https://www.aussiestockforums.com/posts/1014049/

There is a great Thread: Hypothetical Monthly Momentum Portfolio vs. Index

*Comments *
I'll make the comments in here in the 'Dump it here' thread, it will save clogging the Hypothetical Monthly Momentum Portfolio thread.

*Back-grounding on Metrics relating to Position Sizing*
This is going to be a large post to explain System Metrics used in strategy development & I will relate that to Position sizing. The interpretation is sometimes ambiguous in its understanding & in isolation will tend to mislead. Using the CAR/MDD metric for position sizing is weak at best & can lead to faulty thinking.

*Metrics*
Metrics are one of the most academic topics about trading systems, they are guideline to let you know how your system has performs over time. There are so many metrics, I find it difficult to know which one is more appropriate to evaluate a system which is really quite frustrating for me.

A good metric is your trading account balance.

*Parameters*
Choosing parameter values can be tricky. It depends on system under test & its complexity of code. It is important to understand that all smart optimization methods work best in continuous parameter spaces as some algorithms may experience trouble finding optimum value.

*Moreover*
We will use CAR/MDD for consistency of graphics to add to the confusion. The graphs are from the Hybrid Strategy. (only the dates have changes) The CAR/MDD ratio is the metric used in relationship to optimisation for optimal position sizing & it’s a standard Amibroker metric that is very useful to measure system performance as it analyses percentage annual growth divided by the maximum drawdown.

*CAR/MDD *
The compound annual return divided by maximum % drawdown & the higher the CAR/MDD score, the smoother the equity curve and the better the system, so they say.

*Profit factor *
The Profit factor can be a good measure, since it divides the profit of winners by the loss of losers. It’s a quick way to look at the chances of your system being profitable.

*Risk-reward ratio*
Risk-reward ratio can be measured by dividing the slope of the equity line by the standard error of the equity line. It’s an important metric to be able to calculate the optimum position sizing for a system.

*Sharpe ratio*
The Sharpe ratio describes how much return you receive from the added volatility for holding a trade. Basically, the higher the sharpe ratio the better the system. However, Sharpe ratio has come under criticism for not recognising that upward volatility is more desirable than downward volatility.

*Sortino ratio*
The Sortino ratio improves upon the Sharpe ratio by isolating downside volatility from total volatility.

*K-Ratio*
K-Ratio is another popular measure and examines the consistency of an asset’s return over time also the K-Ratio detects inconsistency in returns.

*Poker *(rehash)
The game of Poker has lots of rules but consider if there were 'NO rules' in the game of Poker. Imagine if you could have 40 or even 52 cards. Tell the dealer "Just keep them coming" till you have a great hand, a winner hand (a winning Portfolio)

*Why use a handbrake*
As traders, why do we limit our Portfolio (our hand of cards) to 5, 10, 15 or even 20 positions in our trading portfolio or trading system (I personally use 40 & sometimes 53 positions)

*"QUESTION"*
Look at the optimisation results for position sizing & tell me using the CAR/MDD metric how many positions should my Hybrid Portfolio have ? (for clarity the MaxPos are on the side of the graphic)

*The question is directed at*
@Wyatt
@Newt
@debtfree
@peter2
@qldfrog
@Lone Wolf
@willy1111
@Habakkuk
@jjbinks














*1. 1990-2019 position size Optimisation XAO Capture*


*2. 2015 Calendar year position size Optimisation Capture*


*3. 2015-2016 Financial year position Optimisation Capture*


*4. 2016 Calendar year position size Optimisation Capture*


*5. 2016-2017 Financial year position Optimisation Capture*


*6. 2017 Calendar year position size Optimisation Capture


7. 2017-2018 Financial year position Optimisation Capture

*More if required..

Skate.


----------



## willy1111 (12 February 2019)

The beauty of being self employed is that you can do it which ever way you like 

Personally I wouldn't/don't do it off CAR/MDD alone.

I like to know what the MDD is in percentage terms to see if I can handle it.  I like to see what it is/was through the GFC period, starting in 2006 so the system has a chance to get fully invested and then going through 08 and out the other side.


----------



## Newt (12 February 2019)

On position sizing Skate, totally agree you have to be extremely careful with any optimising, aiming for generic but hopefully significant results across many market regimes and time periods.  
One other important factor you've hinted before is position size itself.  For a large portfolio, it may not be wise to trade the theoretical optimum for fear of moving the market, as you've mentioned here before.  

It sounds like you spent many years working up your systems.  If you're willing to share, how did you adjust parameters?  (e.g. manual tweaking of parameters page, or careful optimising, or both?)


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## Skate (12 February 2019)

willy1111 said:


> The beauty of being self employed is that you can do it which ever way you like
> 
> Personally I wouldn't/don't do it off CAR/MDD alone.
> 
> I like to know what the MDD is in percentage terms to see if I can handle it.  I like to see what it is/was through the GFC period, starting in 2006 so the system has a chance to get fully invested and then going through 08 and out the other side.




_*"Personally I wouldn't/don't do it off CAR/MDD alone" *_
Neither would I, that was the point of the post, I wanted to get this point across. Using the CAR/MDD metric for position sizing is weak at best & can lead to faulty thinking. Of all the metrics you can use for system development, position size is well down on wish list.

_*"I like to see what it is/was through the GFC period, starting in 2006 so the system has a chance to get fully invested and then going through 08 and out the other side"*_
No can do, I only have data back to June 2009

*Data back to June 2006*
My development days are over, I have 3 Norgate licences (Silver package only). When I was in the Strategy development phase I had the advantage of the Platinum package with 25 years of historical Data that included access to delisted securities and historical index constituents.

*F.Y.I *(Silver Package)
Norgate Data - Stock Market Silver Packages: Has access to currently-listed equities (and all other listed security types), indices & current index constituents with 10 years of historical data. (from June 1992 on)

Skate.


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## Boggo (12 February 2019)

This is an extract from Kevin Davey's book "Building winning algorithmic trading systems".
May not be relevant to this discussion but an interesting view from an award winning trader.

(click to expand)


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## Skate (12 February 2019)

Newt said:


> On position sizing Skate, totally agree you have to be extremely careful with any optimising, aiming for generic but hopefully significant results across many market regimes and time periods.
> One other important factor you've hinted before is position size itself.  For a large portfolio, it may not be wise to trade the theoretical optimum for fear of moving the market, as you've mentioned here before.
> 
> It sounds like you spent many years working up your systems.  If you're willing to share, how did you adjust parameters?  (e.g. manual tweaking of parameters page, or careful optimising, or both?)




*Process*
It was an extensive process that involved 1,000's of hours. I did most of my testing while cruising around the world, the serenity was to die for & my wife just loved it. (2014 & 2016 World cruise, 2015 Cherry Blossom Cruise, Pacific Rim & all of Asia, I kept doing back to back cruises so I could work without interruption)

*Challenge*
To get the parameter just right was a challenge, optimising to get a base, than more coding, tweaking constantly. Most would realise one simple parameter just out of kilter & it will bring you undone in a big way. Choosing parameter values can be tricky. 

*Complexity of code*
It depends on system & the complexity of code being used. Amibroker optimization methods work best in continuous parameter & Amibroker Backtesting needs static figures to find optimum values. My strategy is adapting in real time whereas optimisation & Backtesting is only useful on know past data.

*Pre-auction*
Amibroker backtesting has no ability to operate in the pre-auction, where this is the heart of the strategy. I've explained & shown pictures of the simplicity of my strategy, push one [Explore] button & it reports (a) what to buy (b) Qty of shares to buy & (c) what to offer in the pre-auction. There is nothing flashy in the way I trade. Also I don't use a static position sizing model, that's another issue Amibroker has in backtesting & system development.

Skate.


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## Zaxon (12 February 2019)

Skate said:


> My development days are over, I have 3 Norgate licences (Silver package only). When I was in the Strategy development phase I had the advantage of the Platinum package with 25 years of historical Data that included access to delisted securities and historical index constituents.
> 
> *F.Y.I *(Silver Package)
> Norgate Data - Stock Market Silver Packages: Has access to currently-listed equities (and all other listed security types), indices & current index constituents with 10 years of historical data. (from June 1992 on)




If you unsubscribe to Norgate data, do you lose the data you've already downloaded?


----------



## Skate (12 February 2019)

Zaxon said:


> If you unsubscribe to Norgate data, do you lose the data you've already downloaded?




Yes, I had purchased the Historical package originally. Transfering to NDU its a completely different Data subscription packages.

You start fresh with NDU. They credit any unused Data that has he prepaid & turn it into a discount when the new subscription is purchased.

Skate.


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## Zaxon (12 February 2019)

Skate said:


> Yes, I had purchased the Historical package originally. Transfering to NDU its a completely different Data subscription packages.




OK. I noticed under AmiBroker data options, there are several and many require running an import tool.  Presumably that data then lives inside ABs database somewhere. I assumed Norgate Data was the same, in which case, once your Norgate subscription had finished, its downloaded data would still be available somewhere within AB.  Based on what you're saying, this isn't the case?


----------



## Skate (12 February 2019)

Zaxon said:


> OK. I noticed under AmiBroker data options, there are several and many require running an import tool.  Presumably that data then lives inside ABs database somewhere. I assumed Norgate Data was the same, in which case, once your Norgate subscription had finished, its downloaded data would still be available somewhere within AB.  Based on what you're saying, this isn't the case?




_"I assumed Norgate Data was the same, in which case, once your Norgate subscription had finished, its downloaded data would still be available somewhere within AB. _*(Wrong) *_ Based on what you're saying, this isn't the case _*(Correct)*_"_

Norgate uses a new data "format". The old data is incompatible with the new plugin & downloader. (NDU)

Skate.


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## qldfrog (12 February 2019)

About the number of positions:
The way i see it:
If you have a perfect scoring methodology and a binary buy: we are sure of a win, why indeed limit ourselves, the more the better and the safer should a black swan happens on one of our selection.
But we do not lvie in such a nice binary world.
our buy signal is an indication and the score is an order of purchasing priority.
By limiting our buy numbers overall we reduce the lower score entries.it becomes basically another parameter in the buy trigger...
with a more stringent buy, the number of positions could be illimited.it should also improve the overall results
So yes you can get 50 positions..with a well rehearsed system


----------



## peter2 (12 February 2019)

@Skate Very interesting that your testing shows 53 is optimal number of positions whereas most trend following systems indicate 15 - 17 with most people happy to use 20. 

Why is there such a difference if all systems are trend following systems? 

Three entry strategies would get you into trends earlier than most and you mentioned that you're not doubling or tripling up when multiple systems select the same stock. I would accept that your exit strategies would exit slightly earlier than most trend following exits. So overall I accept that the Hybrid strategy will do a slightly better job than most mainstream trend following systems but I fail to understand why there's a huge difference in the optimal number of portfolio positions between apparently similar systems.

I'm not interested in the actual optimum number. I'm trying to understand the difference between 17 and 53. My knowledge and experience would say that a portfolio with 50 positions would not beat the market index. Clearly this has been challenged by skate's work.


----------



## Zaxon (12 February 2019)

Skate said:


> _"I assumed Norgate Data was the same, in which case, once your Norgate subscription had finished, its downloaded data would still be available somewhere within AB. _*(Wrong) *_ Based on what you're saying, this isn't the case _*(Correct)*_"_
> 
> Norgate uses a new data "format". The old data is incompatible with the new plugin & downloader. (NDU)




OK.  Thanks for that.


----------



## Skate (13 February 2019)

Skate said:


> 1. I trade the *All Ordinaries *(XAO)
> 2. A single run backtest from 1 July 17 to 30 June 2018 - *sure no problems *(it's 1.29pm lunch is due & after lunch I'll post them)
> 
> Skate.





peter2 said:


> @Skate Very interesting that your testing shows 53 is optimal number of positions whereas most trend following systems indicate 15 - 17 with most people happy to use 20.
> 
> Why is there such a difference if all systems are trend following systems?
> 
> ...






willy1111 said:


> From what you describe...our style is very very similar
> 
> I can sense just how eager you are so sure go ahead if you're willing to share why not  , perhaps go with first week of July 17. And perhaps pick another week which shows the entry for your biggest winner.
> 
> ...




*(re-post) *
I shouldn't have to repeat my posts but for others who may not have read them - I'll reference the post in answering questions.

*peter2 said*
_"Very interesting that your testing shows 53 is optimal number of positions whereas most trend following systems indicate 15 - 17 with most people happy to use 20"

*(peter2) 1. "most trend following systems indicate 15 - 17" *_
Admittedly a single trend following system rule of thumb is around 15 to 20 positions & just because the majority share that view doesn't automatically make it the correct position size for my 3 system Hybrid Strategy trading a large account.
*Tribal views of the majority *(re-post)  Jan 4, 2019#625
Wrong does not cease to be wrong because the majority share in it

*(peter2) 2. "most people happy to use 20"*
That's okay, what suits one may not suit another, whereas I'm happy to use 40
*Alternative view *(re-post)  Jan 30,  #1348
When it comes to trading there is no right or wrong way. If you disagree with me, don't tell me so, you'll hurt my feelings, all I ask is for you to explain your alternative view, keeping "on point".

*Hybrid Strategy*
My hybrid strategy is a combination of 3 systems & all are trend following systems. Classic trend following systems have a common thread that I have listed just below, their parameters settings dictate the entry & exit points & overall trading results.

*Classic trend following *(re-post) * Jan 30,  #1365*
The setup and exits are classic trend following signals. Enter on a confirmed uptrend, exit when the trend turns down.

*I'm a classic trend follower *(re-post)  *Feb 7, * *#1494*
I enter on a confirmed uptrend, exit when the trend turns down. I jump on breakout & ride the trend till it's ends. It's a simple method of trading that I find profitable.

*Trend following is popular *(re-post) * Jan 30,  #1349*
The only real issue with trend following is that most Trend following Systems are highly correlated and tend to track the broader market movements at the same time.

*(peter2) 3. "Why is there such a difference if all systems are trend following systems?  -  I fail to understand why there's a huge difference in the optimal number of portfolio positions between apparently similar systems"

Explanation*
First, all trending following systems are not the same, there are some systems that are better when it comes to accuracy & some pickup the breakouts signals sooner. The same trend following system with different parameters settings will give different trading results. Doing the same as everyone else gives you no edge when it comes to trading. With a large trading account 'Slippage & Liquidity' are a constant source of irritation.
*Lousy picks *(re-post) *Dec 17, 2018#32*
All investors will buy their fair share of both good and bad stocks. Even the best investor has plenty of lousy picks along the way, but it is the manner in which you handle those investments after their purchase that ultimately determines your level of success. If you sell your good stocks too early and hold on to your bad stocks too long, it doesn’t much matter how good your stock selection might be.

*(peter2) 4. "I'm trying to understand the difference between 17 and 53. My knowledge and experience would say that a portfolio with 50 positions would not beat the market index. Clearly this has been challenged by skate's work"
*
I have been a trader for a short 3 1/2 years so my trading experience is limited. In my defence I have worked extremely hard to develop my Hybrid Strategy. F.Y.I. my backtesting results mirror my actual trading results. I've previously posted my equity curve to indicate trading has not been a smooth ride, but profitable.
*
REAL equity curve *(re-post) Jan 17, 2019 #890
I have posted my *"REAL equity curve"* before on this thread but the chart is current as of last Friday - this week is panning out great. The equity curve is from January 2016 (I started trading July 2015 & didn't keep midyear records preferring to start the year off fresh) Have a look at every dip, that cost me an absolute fortune (to me at least)

*UPDATED today 13th February 2019 *(results reflective as of Friday 9th February 2019)



*Would I share single run backtest*
After explaining my Hybrid strategy back on 17th January @willy1111 asked if I was willing to share a single run backtest from 1 July 17 to 30 June 2018, showing return, drawn down, # of trades, percent winners, ave win %, ave lose %.

*Response*
A single run backtest from 1 July 17 to 30 June 2018 - sure no problems

*The challenge Post # 867*
https://www.aussiestockforums.com/posts/1010309/

*The Backtest Results Post # 871*
https://www.aussiestockforums.com/posts/1010315/

*The backtest report *(The report had fixed parameters for demonstration purposes)
$600,000 Portfolio
40 positions
Fixed $15,000 positions

*The FACTS of the way I trade*
My trading portfolio (in excess of $1m)
Variable position sizing (38 to 53 positions)
Variable $15k to $50k positions sizes (have taken a few 100k & 200k positions)
I have posted a true & accurate Trading Equity curve (Jan 2016 to current as above)

_*(peter2) 5. "I'm trying to understand the difference between 17 and 53"*_

*A picture paints a thousand words*
Let me display a backtest result for my Hybrid Strategy using 5, 10, 15, 20 & 40 positions & let you be the judge. I'll use the same time period @willy1111 request for comparison in his previous post. (backtest is from 1 July 17 to 30 June 2018) On the far right of the chart is the equivalent of buying & holding the All ordinaries (XAO)




I'm trust this sheds more light on how I trade the Hybrid strategy & how the strategy performs using a variety of position sizes & why 40 positions is my preferred position size.

Skate.


----------



## Gringotts Bank (13 February 2019)

Skate said:


> 1-- Most would realise one simple parameter just out of kilter & it will bring you undone in a big way.
> 
> 2-- Amibroker optimization methods work best in continuous parameter




1 - My experience is that when one tiny parameter tweak kills a system, the system lacks robustness.  
2-  What do you mean by continuous parameter please?


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## willy1111 (13 February 2019)

Skate said:


> *(re-post) *
> I shouldn't have to repeat my posts but for others who may not have read them - I'll reference the post in answering questions.
> 
> *peter2 said*
> ...




When looking at the results of the 15 Positions and 40 Positions, what I notice is the difference in exposure.  15 Positions has exposure of 37% whilst 40 Positions has exposure of 70%.  I imagine it is to do with the fixed $15K position size whilst running the backtest.

I also imagine the results would be more closely aligned if you were to use Position code based on % rather than fixed $ as in SetPositionSize(2.5,spsPercentOfEquity);  for 40 positions and SetPositionSize(6.66,spsPercentOfEquity); for 15 positions.

I realise this is not the way you trade, purely an academic/educational exercise for other members


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## ducati916 (13 February 2019)

rederob said:


> 1. A premise which is clearly probabilistic can be true, eg. most dogs are *not *called Rex.
> 1(a). As will all premises of a deductive argument if it is sound.
> 
> 2. It's a *guess *to assume from *only *the conclusion that an argument is of one type rather than the other.
> ...




1. The premise would be contained within an inductive argument.
1(a). The premises of a deductive argument must be true.

2. No it is not a guess. A deductive argument is productive of necessary conclusions. An inductive argument has the capacity to produce probable conclusions only.

2(a). True. 

_ducati916 said: ↑
3. Correct. And legal proof is based upon an inductive argument. You have the crime, which is the effect or outcome, you are reasoning backwards to elicit the cause [whodunnit].
_
What I should have stated was that 'in this example'....the legal proof is based upon an inductive argument.

jog on
duc


----------



## ducati916 (13 February 2019)

Gringotts Bank said:


> 1 - My experience is that when one tiny parameter tweak kills a system, the system lacks robustness.
> 2-  What do you mean by continuous parameter please?




Essentially what [you] are doing is data snooping, which is fitting the rule onto the data. A random series will always display some detectable pattern.

See this paper:
https://econpapers.repec.org/article/blajfinan/v_3a54_3ay_3a1999_3ai_3a5_3ap_3a1647-1691.htm

jog on
duc


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## Gringotts Bank (13 February 2019)

ducati916 said:


> Essentially what [you] are doing is data snooping, which is fitting the rule onto the data. A random series will always display some detectable pattern.
> 
> See this paper:
> https://econpapers.repec.org/article/blajfinan/v_3a54_3ay_3a1999_3ai_3a5_3ap_3a1647-1691.htm
> ...



It's not what I do.  I'm asking Skate why he appears to be re-optimizing on the run.  My experience is that re-optimizing bar-by-bar leads to failure in real life  trading.


----------



## rederob (13 February 2019)

ducati916 said:


> My comments are below



1. The premise would be contained within an inductive argument. *Premises are in all arguments*
1(a). The premises of a deductive argument must be true. *Premises can be true or false*
2. No it is not a guess.  *False - it cannot be known without seeing the premise/s.*
 A deductive argument is productive of necessary conclusions. An inductive argument has the capacity to produce probable conclusions only.  *You cannot preordain the type of argument.  Without a premise there is no argument.*
*To conclude that "Ms Brown is the robber" without seeing the evidence would be a guess.*


----------



## Skate (13 February 2019)

Gringotts Bank said:


> 1 - My experience is that when one tiny parameter tweak kills a system, the system lacks robustness.
> 2-  What do you mean by continuous parameter please?




*1 - "My experience is that when one tiny parameter tweak kills a system, the system lacks robustness"*
I'll take that as a comment as it bears no resemblance to what I've posted.

*Challenge *(re-posted)
To get the parameter just right was a challenge, optimising to get a base, than more coding, tweaking constantly. Most would realise one simple parameter just out of kilter & it will bring you undone in a big way. Choosing parameter values can be tricky. 

_*2-  What do you mean by continuous parameter please?*_
For a better understanding, substitute the word "with fixed parameters" in place of "in continuous parameter"

*Complexity of code *(re-posted)
It depends on system & the complexity of code being used. Amibroker optimization methods work best in continuous parameter & Amibroker Backtesting needs static figures to find optimum values. My strategy is adapting in real time whereas optimisation & Backtesting is only useful on know past data.

Skate.


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## Gringotts Bank (13 February 2019)

Skate, can you define what you mean by fixed parameter please?  Do you mean a single value of an array?  When you choose a parameter, what exactly are you choosing?

When AB optimizes, it's finding the best fit value for an array, using historical data, yes?  What do you mean by "adapting in real time"?  The only data we ever have access to is historical.  If I fit my code to any dataset, I'm fitting it to historical data.  If I re-fit my code as each new OHLCV is printed, I will end up with an overfitted code - ie. one which will fail in real trading.


----------



## Skate (13 February 2019)

willy1111 said:


> When looking at the results of the 15 Positions and 40 Positions, what I notice is the difference in exposure.  15 Positions has exposure of 37% whilst 40 Positions has exposure of 70%.  I imagine it is to do with the fixed $15K position size whilst running the backtest.
> 
> I also imagine the results would be more closely aligned if you were to use Position code based on % rather than fixed $ as in SetPositionSize(2.5,spsPercentOfEquity);  for 40 positions and SetPositionSize(6.66,spsPercentOfEquity); for 15 positions.
> 
> I realise this is not the way you trade, purely an academic/educational exercise for other members




_*1. "When looking at the results of the 15 Positions and 40 Positions, what I notice is the difference in exposure.  15 Positions has exposure of 37% whilst 40 Positions has exposure of 70%.  I imagine it is to do with the fixed $15K position size whilst running the backtest"*_

Correct

_*2. "I also imagine the results would be more closely aligned if you were to use Position code based on % rather than fixed $ as in SetPositionSize(2.5,spsPercentOfEquity);  for 40 positions and SetPositionSize(6.66,spsPercentOfEquity); for 15 positions. I realise this is not the way you trade, purely an academic/educational exercise for other members"
*_
(a) I'm dumbfounded why you would want to trade a $600k account with 15 positions ($40k per position) ballooning out to (80k positions) within 12 months. The logic is missing on me. Talk about slippage & liquidity issues. This also creates issues of not being able to trade the backtest code in the pre-auction.
(b) $600k using 2.5% of Equity ($15k per positions) balloons to ($25k positions) within 12 months. Ballooning position sizing in itself can create additional issues with dire consequences. 

_*3. "*_*I realise this is not the way you trade, purely an academic/educational exercise for other members"
*
Lets do the exercise, so others can understand the difference between: (1) a 15/40 positions portfolio or (2) the difference between trading larger position sizes in dollars $15k/$40k positions or is it to show (3) that limiting a portfolio to 15 positions you're pulling the handbrake on so hard that it restricts the time in the markets, restricting your portfolio's performance

That's the equivalent of having a full time job & the boss cut your hours back so you have a part time job, no I'm not in favour of that, one little bit.


*SetPositionSize(2.5,spsPercentOfEquity); *
$600K *40* positions @ *$15k positions*




*SetPositionSize(6.66,spsPercentOfEquity);* 
$600K - *15* position *@ $40k positions



Summary*
1. Net profit
2. Exposure 
3. Annual Returns %

All items above (1), (2) & (3) are a direct reflection of bet sizing.

Skate.


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## willy1111 (13 February 2019)

Skate said:


> *Summary*
> 1. Net profit
> 2. Exposure
> 3. Annual Returns %
> ...




Precisely - and from an academic view - looking purely at the results of the backtest - reducing to 15 positions results in a much higher % return.  An increase from 66.75% to 94.56% with less than half the amount of trades or work.



Skate said:


> (a) I'm dumbfounded why you would want to trade a $600k account with 15 positions ($40k per position) ballooning out to (80k positions) within 12 months. The logic is missing on me. Talk about slippage & liquidity issues. This also creates issues of not being able to trade the backtest code in the pre-auction.
> (b) $600k using 2.5% of Equity ($15k per positions) balloons to ($25k positions) within 12 months. Ballooning position sizing in itself can create additional issues with dire consequences.




Perhaps the above is the missing link other members are failing to understand between academic discussion of position size versus real world trading.  The liquidity and slippage issues created by having larger positions.


----------



## Skate (13 February 2019)

Gringotts Bank said:


> Skate, can you define what you mean by fixed parameter please?  Do you mean a single value of an array?  When you choose a parameter, what exactly are you choosing?
> 
> When AB optimizes, it's finding the best fit value for an array, using historical data, yes?  What do you mean by "adapting in real time"?  The only data we ever have access to is historical.  If I fit my code to any dataset, I'm fitting it to historical data.  If I re-fit my code as each new OHLCV is printed, I will end up with an overfitted code - ie. one which will fail in real trading.




*1. "When AB optimizes, it's finding the best fit value for an array, using historical data, yes?"
*
Correct (Amibroker is a big calculator when it comes to optimising on past data)

*2. What do you mean by "adapting in real time"? *
*
(re-post)* My strategy is adapting in real time whereas optimisation & Backtesting is only useful on know past data. 

*Fluid numbers*
When trading my parameters are driven by the market movement (a fluid number set, not a fixed number set) some parameters setting are flexible to apply volatility bar-by-bar, sometime the driver is plain old ATR. Optimising can't handle variables to optimise efficiently. Optimisation is a selection of numbers applied to a code over & over to the max number of tries, that's all, optimisation is crude & basic but useful to set a base.

*Impulse/State signals*
Using the Cross() function (impulse signal) instead of the logical greater than operator (state signal) is a poor choice in certain strategies and coding that way is totally a different kettle of fish resulting in a difference of system performance. Reference that to how Optimisation works. Using a fixed number set is how the calculations are done in Amibroker, but what if the number being used wasn't independent by itself but required another set of number to create the new base number set, this is why flexible parameters complicates settings very quickly.

I'm at a loss how to explain it in a simpler way.

Skate.


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## Skate (13 February 2019)

willy1111 said:


> Precisely - and from an academic view - looking purely at the results of the backtest - reducing to 15 positions results in a much higher % return.  An increase from 66.75% to 94.56% with less than half the amount of trades or work.
> 
> 
> 
> Perhaps the above is the missing link other members are failing to understand between academic discussion of position size versus real world trading.  The liquidity and slippage issues created by having larger positions.




*willy1111, what a perfect statement.*
_"Perhaps the above is the missing link other members are failing to understand between academic discussion of position size versus real world trading.  The liquidity and slippage issues created by having larger positions"_

*The real world*
The academic's of trading verses real trading is chalk & cheese, it's totally different. The liquidity and slippage issues are never discussed in most reading material I read before I started trading. When I was paper trading, liquidity and slippage was never an issue but as soon I went live, these issues raised their head & bit me really hard.

*Boxing*
You can condition yourself in the gym & punch that bag really hard, over & over, honing your power & skills, but once you step into the ring it feels totally different, especially when the bag hits back. (the opponent I mean)

Skate.


----------



## peter2 (13 February 2019)

@Skate Thank you very much for the further discussion and the extra data to peruse.


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## Gringotts Bank (13 February 2019)

Skate said:


> *1. "When AB optimizes, it's finding the best fit value for an array, using historical data, yes?"
> *
> Correct (Amibroker is a big calculator when it comes to optimising on past data)
> 
> ...



Alright thanks for the reply.  I don't understand what you're saying though.

Your parameters are driven by market movement - what does that mean?  I would have thought every system ever developed references market movement!  We *only *ever have access to *historical* data.  Even if we're trading based on tick data, it's still historical.


----------



## Skate (13 February 2019)

Gringotts Bank said:


> Alright thanks for the reply.  I don't understand what you're saying though.
> 
> Your parameters are driven by market movement - what does that mean?  I would have thought every system ever developed references market movement!  We *only *ever have access to *historical* data.  Even if we're trading based on tick data, it's still historical.




Gringotts Bank, I appreciate the education, it's evident you are more experienced with Amibroker than I am.

*We all need help *(re-post) Jan 18, 2019 #926
This is exactly where my coding ability is, weak at best & amateurish at worst - reading something doesn’t mean I understand it.

Skate.


----------



## cynic (14 February 2019)

Gringotts Bank said:


> ...
> Your parameters are driven by market movement - what does that mean?  I would have thought every system ever developed references market movement!  We *only *ever have access to *historical* data.  Even if we're trading based on tick data, it's still historical.



Some systems are written in such a way, that they can refine key parameters (and/or switch between algorithms) on a continuous basis, as new data is presented. Even if the data presented relates to the most recent of price movements, it is of course, no longer in the present moment, and is, as you have stated, historical data.


----------



## qldfrog (14 February 2019)

To ensure we have it right:
 it would make sense to ,for example ,relax or tighten stop loss percentage , or reducing exposure base on an index trend.
."becoming cautious" translated in code..
Is that what you mean Skate by flexible parameters in the amibroker context?
And indeed this can complicate backtesting.thanks for your time


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## Skate (14 February 2019)

qldfrog said:


> To ensure we have it right:
> it would make sense to ,for example ,relax or tighten stop loss percentage , or reducing exposure base on an index trend.
> ."becoming cautious" translated in code..
> Is that what you mean Skate by flexible parameters in the amibroker context?
> And indeed this can complicate backtesting.thanks for your time




qldfrog, @cynic nailed it. (spoken from a coders perspective) some of my parameters are dependant on two data feeds. 
_"Some systems are written in such a way, that they can refine key parameters (and/or switch between algorithms) on a continuous basis, as new data is presented. Even if the data presented relates to the most recent of price movements, it is of course, no longer in the present moment, and is, as you have stated, historical data"_
_
*qldfrog said:*
" it would make sense to, for example ,relax or tighten stop loss percentage , or reducing exposure base on an index trend "becoming cautious" translated in code" 
_
*Exits*
Yes, as an example, my exits are driven by stops & there is a separate algorithm & parameter setting for each. I have 7 such parameter setting, switching from one to another with an additional benefit of turning on & off. The stops applied in my Hybrid strategy consist of a Trailing stoploss, Chandelier stop, Stalestophit & a Takeprofitstop,  the flexibility of those parameter are coded in a loop within the code.

*Norgate 1st Data feed* (market data feed)
Gringotts Bank & cynic are absolutely correct to say the recent present fluid 'in the moment' market data becomes 'static' turning it into historical data. 
*
Our mind*
Think of our mind & thoughts, 'current in the moment' becoming 'historical thoughts' in less than a heartbeat.

*CommBank 2nd Data feed *(my trading account balance data feed)
Let me explain a hypothetical scenario simply so you understand how one of my parameter is driven by current data. 
1. A bank feed exports my trading bank balance
2. That bank balance is multiplied by (0.9936)
3. (0.9936) is used to calculated slippage & commission
4. The Buy price 'offer' for the pre-auction is the last closing price plus an additional percentage applied (making sure I'm settled)
5. The Sell price 'offer' for the pre-auction is the last closing price less an additional percentage applied (making sure I'm settled)
6. I have a (40) position portfolio less the positions already filled (18) the positions outstanding (22) yet to be filled
7. Let’s say I have (18) positions filled, it mean I have (22) positions to fill (40-18=22) 
8. Trading bank balance X 0.9936 / 22 is now the new position size. ($24,680)





9. The position size of $24,680 populates the parameter Trading Funds $ variable 
10. I hit the [Explore] in AA & the code works out the required amount of shares to purchase & what price to offer in the pre-auction.
11. Using this formula saves re-balancing & evenly distributes my trading funds in equal portions in relationship my trading results.
12. If I win the Trading bank balance goes up & if I lose the Trading account goes down, but at all times the total funds are always dispersed on the formula above.

*Pre-Auction*
I would be interested if others could optimise & backtested my Hybrid code in its current form to gain meaningful result data - let alone code it to display the pre-auction buy & sell report I've displayed below.

*Pre-auction report*



*World Champion*
Mick Doohan, was an Australian former Grand Prix motorcycle racer, who won five consecutive 500 cc World Championships. When he arrived at a new track, he wanted to know two things. 

(1) Which way the track ran (clockwise or anticlockwise) 
(2) What was the lap record.

*Why tell you this*
My code is designed to tell me three things 

(1) What to buy 
(2) How many shares to buy 
(3) What price to offer in the pre-auction, making sure I get settled. 

*VWAP*
ASX uses the VWAP method to arrive at the opening price & my code takes that into consideration formulating the 'offer' price.

*Historical data*
Optimising & Backtesting works on static historical data, Amibroker has no ability (IMHO) to factor in the nuances of my code to populate parameter setting in relation to current (in the moment) data. Amibroker lacks the ability to handle any setting that changes over time with new updating data. (the 'now' data) 

*Fancy calculator*
Amibroker is an array calculator, it work on a fixed number set. A decision tree process.

*I know what I know, & that's all I know*
I don't have a coding background & lack a deep knowledge & understanding that cynic & Gringotts Bank displays, otherwise I would be able to chose the correct terminology to better explain myself. I know what I know, & that's all I know. 

*Experience *(re-post)* Dec 28, 2018 #541*
Every member enjoys a different level of experience & expertise, there is never a reason to display your level of knowledge by making others feel inferior. This thread is for information to help others & that's why I'm prepared to post in a open way. 

*The reason I'm telling you this *(re-post) Dec 24, 2018 #475
My posts are honest, open & frank - if you haven't noticed (I have nothing to hide)

*A few observations *(re-post) Feb 1, 2019 #1401
The learning curve for understanding and developing a trading system is high for the average trader but not impossible. The very first step towards success in any occupation is to become interested in it & what you learn must be engaging & interesting otherwise learning will not take place. Reading the 'Dump it here' thread might just be the catalyst to get you excited thinking about trading in a different way.

*Quote*
As they say “one man's trash is another man's treasure”

*FYI.*
I'm not prepared to further elaborate on what I have posted above or discuss any of the nuances of my code, which most members would understand & appreciate. 

*Choice of words*
I also want to apologise for any word expressed in any of my post that have been taken out of context, losing its meaning in translation. 

Skate.


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## qldfrog (14 February 2019)

Much appreciated.and a lot of info, it would indeed be nice to code a report simply to say buy/sell this many at this price removing any noise (and also causes for self doubt or indecision..)


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## Skate (14 February 2019)

qldfrog said:


> Much appreciated.and a lot of info, it would indeed be nice to code a report simply to say buy/sell this many at this price removing any noise (and also causes for self doubt or indecision..)




*Simplicity*
That is the simplicity of the Hybrid strategy, even though the code is complex the results are displayed in a easy digestible manner. The trading results gives me the confidence to keep pulling the trigger under the most trying of circumstances.

*Take the good with the bad *(re-post) Feb 1, 2019 #1422
With a weekly strategy you have to hold the position up to week even when the price falling rapidly. With a weekly system you have to stick to the plan even if it means a bigger loss (I never override my strategy) Keep the system as simple as possible, validate it (robust backtesting) and trade it.

*Why (re-post)*
Others may not have read the entire 'Dump it here' thread & a re-post may be the catalysis to do so.

*Side note*
qldfrog, I've been busy updating my eBook that you have. The new 4th Edition has been reworked & updated to make it more enticing & enjoyable to read. I'll post the new update when completed.

Skate.


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## Gringotts Bank (14 February 2019)

Hi Skate, I'm not an expert at AB. 

Let's forget about definitions of 'now' data and parameter values, etc.  There's two ways to cut through any confusion and see what's really important.

*1 -* Does the code stand up to walk forward analysis?  ie. does it retain profitability when continually re-optimized? 

*2 -* Will the code be profitable on another stock market?  Run it on the NQ and see if the general idea of the system is robust.  If not, can it be optimized to become profitable?  If it can, then will it handle walk forward analysis?

I think you've done both of these, yes?  Would you be open to sharing a WF screenshot?


----------



## Skate (14 February 2019)

Gringotts Bank said:


> Hi Skate, I'm not an expert at AB.
> 
> Let's forget about definitions of 'now' data and parameter values, etc.  There's two ways to cut through any confusion and see what's really important.
> 
> ...




*Equity curve*
Gringotts Bank, I have posted my equity curve again, you have not read the entire 'Dump it here' thread & also for the convenience of others saving them time referencing back to that particular post.

*Judge*
I'll let you be the judge if my strategy is profitable.

_*Question 1 -* Does the code stand up to walk forward analysis? _ *(YES)* ie. does it retain profitability when continually re-optimized? *(YES)*




_*Question 2 -* Will the code be profitable on another stock market?  _*(YES, I had it evaluated) *_Run it on the NQ and see if the general idea of the system is robust. _*(NO, can do)*_ If not, can it be optimized to become profitable?  If it can, then will it handle walk forward analysis?
_
*F.Y.I.*
I have had my strategy tested on different market around the world buy two independent traders & I've had it professionally appraised in the Northern hemisphere who specialise in doing this. When my money is on the line "I give a damn"

*Please read this line 5 times *(re-post)* Jan 17, 2019 #875*
When you’re dealing with your own money, trading gets very complicated, very quickly!

*Strategy evaluation*
This is a copy in a series of emails that I'm prepared to share but not discuss. The email is an unaltered summary of the Hybrid Strategy.

-----------------------------------------------------------------------------------------------------------------------------------------
*email START*
I found that in general, the strategy works well also in other international markets where there are a lot of inexpensive stocks. I tried some alternatives for the PositionScore but found that your criteria to be a very good fit for this system.

Thanks for the very detailed answer. Now I better understand your code and logic.

Your coding skill, in my opinion, is already pretty good since you implemented some features that are for sure far above the basics. While the original code could be refactored to achieve greater readability (something that in any case is opinionable), I did not find any major issues (the gfx part is pure aesthetics so it does not interfere with the actual trading system).
*email END*
-----------------------------------------------------------------------------------------------------------------------------------------

Skate.


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## satanoperca (14 February 2019)

Getting back to the original brief of this thread.

DUMP IT HERE, well here we go :

What the F---k is wrong with our press:



IS THERE NOT ONE THING POSITIVE THAT THEY CAN REPORT ON, PAEDO, SEX OFFENDER, EXTREME pr0n and A PERSON (BIKIE) THAT I WISH I NEVER HAVE TO MEET.


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## Skate (15 February 2019)

*Trading Fundamentals - Skate's Beginners Version*
The new 4th Edition of the eBook has been reworked & updated to make it more enticing & enjoyable to read.

Skate.


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## captain black (15 February 2019)

Skate said:


> *Trading Fundamentals - Skate's Beginners Version*




Nice work Skate 

A quote from the book:



> 7. Universal Phase.
> The general characteristics of the Universal Phase are freedom and empowerment. This person maximises freedom for everyone by living and teaching correct principles and then allowing others to govern their own lives and handles their own responsibilities.




May I add another piece to this quote:

"Enjoying the success of others"

It's great to see how far you've come with your Hybrid strategy, I'm sure it's the foundation for several successful trading strategies you'll build in the coming years.


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## Skate (18 February 2019)

peter2 said:


> View attachment 92273
> 
> 
> Yes, I normally get one huge disappointment and several smaller disappointments each year. That's with a 12 position portfolio. A 40 position portfolio is going to get many more disappointments, but each position is much smaller.  This hit from BIN may cost the portfolio a 3R loss that's only 0.8%. Had this position been in my own portfolio a 3R loss would have been -3%.
> ...






peter2 said:


> ASX 40P portfolio: This portfolio has been hit by everything the market can throw at it. We have to expect this with a portfolio containing a large number of positions. Here's the list of our losers with the largest so far (BIN) losing -3R.
> 
> View attachment 92277
> 
> ...




*Apologies*
Apologies for replying to (ASX:BIN) & (ASX:BLD) both positions in peter2 (40) position portfolio thread & a post from the (BIN) thread. I'm not questioning the motive behind the purchase but I would like to post a chart so you have a better idea what I see in relation to both securities.

*2 Charts *(BIN & BLD)
I want to post (2) charts one for each security listed above. My Hybrid strategy didn't select either of these two positions because of the ribbon at the bottom of the chart is a sea of "yellow", yellow means caution. When the ribbon is yellow it means the stock is unloved.

*6 Passages*
I also want to quote 6 passages from the eBook *"Trading Fundamentals - Skate's Beginners Version"* (a blatant plug) that can relate directly to the two securities in question.

*$hit happens *(EXTRACT from the eBook - *Trading Fundamentals - Skate's Beginners Version*)
No one knowingly puts themselves in harm’s way but no matter how smart we are, or how hard we work, we will regularly be hit by news, circumstances, and developments that are unforeseen and the stock market gods will periodically use us for their entertainment, and there is nothing we can do to prevent it, so we have to be ready and mentally prepared to realise drawdowns and losses are part of the trading process, so take it on the chin and be the ‘best loser’ you can possible be.

*Boxing* (EXTRACT from the eBook - *Trading Fundamentals - Skate's Beginners Version*)
Trading is like being a punching Bag. No matter how good you are you still take hits.

*Pain* (EXTRACT from the eBook - *Trading Fundamentals - Skate's Beginners Version*)
Even when you are skilled at trading at some stage you will experience pain.

*Lousy picks* (EXTRACT from the eBook - *Trading Fundamentals - Skate's Beginners Version*)
All investors will buy their fair share of both good and bad stocks. Even the best investor has plenty of lousy picks along the way, but it is the manner in which you handle those investments after their purchase that ultimately determines your level of success.

*Selling early* (EXTRACT from the eBook - *Trading Fundamentals - Skate's Beginners Version*)
If you sell your good stocks too early and hold on to your bad stocks too long, it doesn’t much matter how well your stock selection might be.

*Selling* (EXTRACT from the eBook - *Trading Fundamentals - Skate's Beginners Version*)
Successful investing is largely the art of selling. Buying a stock is easy. It is determining when to cut our losses or when to take our profits that is hard. Because it is so hard to determine when it is the right time to sell, many just don’t do it.

Skate.

*(ASX:BIN) Weekly Chart*




*(ASX:BLD) Weekly Chart*


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## peter2 (18 February 2019)

Thank you @Skate. I like to highlight the unpalatable moments such as the recent losers in the ASX40P portfolio. It's all to easy to post when things are going well and stroke our own egos. When regular posters go quiet, we know they're having a bad run. I post when I'm frustrated and that helps me understand why. I post when my selections are "out of sync" with what's moving in the market because it helps me see what I need to correct. I post about the big losers because they're the trades that provide us with lessons to learn. (*)

_Lessons from BLD, PGH, PPH, BIN_:  All were bought within a week or two of scheduled news. Could I have waited for the news? Of course. All trade opportunities were down trend reversals, perhaps the down trend wasn't over? Perhaps they needed more time. 

Had I started the research portfolio (ASX40P) a few weeks earlier it would have contained FMG and a few gold stocks. It may have been fully invested and most likely wouldn't have had BLD and BIN. The timing was unlucky. Timing plays a huge part in the performance of a portfolio. I'd be a lot more cautious starting a portfolio at a market peak (like now). It wouldn't stop me but I'd establish the portfolio over a longer period. 

(*) They reinforce things I already know, but I hope others take note as well.


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## tinhat (18 February 2019)

satanoperca said:


> Getting back to the original brief of this thread.
> 
> DUMP IT HERE, well here we go :
> 
> ...




Hilarious. Welcome to the check-out isle on the internet. At least people who read that in the supermarket can be defined as being in the real word. You are commenting about that sort of dross on an investing forum!


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## Skate (18 February 2019)

peter2 said:


> Thank you @Skate. I like to highlight the unpalatable moments such as the recent losers in the ASX40P portfolio. It's all to easy to post when things are going well and stroke our own egos. When regular posters go quiet, we know they're having a bad run. I post when I'm frustrated and that helps me understand why. I post when my selections are "out of sync" with what's moving in the market because it helps me see what I need to correct. I post about the big losers because they're the trades that provide us with lessons to learn. (*)
> 
> _Lessons from BLD, PGH, PPH, BIN_:  All were bought within a week or two of scheduled news. Could I have waited for the news? Of course. All trade opportunities were down trend reversals, perhaps the down trend wasn't over? Perhaps they needed more time.
> 
> ...




*peter2 said:*
_"All trade opportunities were down trend reversals, perhaps the down trend wasn't over? Perhaps they needed more time"_
*
Watching with extreme interest*
I'm very interested in the performance of a 40 position portfolio using your original entry & exit techniques compared to a portfolio or 12 to 14 positions. The recent line chart you posted is evolving nicely. Using a large position portfolio takes time to rotate the stocks, always crystallising losses along the way which will be disheartening at first but that's the nature of the beast.

*peter2 said:*
_"Had I started the research portfolio (ASX40P) a few weeks earlier it would have contained FMG and a few gold stocks"_

*(ASX:FMG) Chart*
As peter2 has referenced (FMG) as a possible buy, I've posted a chart as I'm in the move. This was a classic breakout, it's the way I trade, so it was my job to hop on for the ride. Simple. (see Below) The ribbon at the bottom of the chart can be related to traffic lights. (FMG) had the green for GO!

*4 Passages*
I also want to quote 4 passages from the eBook *"Trading Fundamentals - Skate's Beginners Version"* (a blatant plug) that can relate directly to the post peter2 made about the timing & decision why the trades were taken.

*Ideal time *(EXTRACT from the eBook - *Trading Fundamentals - Skate's Beginners Version*)
The ideal time to trading is when the Index you are trading is *trending upward*.

*It's up to you *(EXTRACT from the eBook* - Trading Fundamentals - Skate's Beginners Version*)
Whatever combination of information you use, whether it media reports, fundamental or technical analysis or a combination of all of those it really depends on you.

*Luck *(EXTRACT from the eBook - *Trading Fundamentals - Skate's Beginners Version*)
In designing good money management principles into my 'Mechanical Trading System' to a degree helps but my success or failure in the market is a function of our luck and *timing entry*.

*Caution *(EXTRACT from the eBook - *Trading Fundamentals - Skate's Beginners Version*)
Only be proactive when the market is heading in the *right direction*. Otherwise be a wimp like me.

If you like some of my passages quoted above, they are in the eBook: *Trading Fundamentals - Skate's Beginners Version *(a free download for ASF members)

Skate.


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## Skate (3 March 2019)

*Skate's Modified CAM Strategy *(paper trading execution of the CAM strategy)

Post for members interested in the CAM Strategy
@qldfrog
@Newt
@Lone Wolf
@Wyatt
@willy1111
@Habakkuk
@jjbinks
@Joe90

This is the exact CAM Strategy with modified code that I'm planing to trade once the paper testing correlates with the current Backtest, Walk-Forward & Monte Carlo testing.

*FYI*
Skate's modified CAM Strategy - has 2 Buy conditions & 2 Sell conditions.

*CAM Strategy Settings*
$300,000 Capital
20 Position Portfolio
$15,000 Fixed Positions
Starting Date 1st January 2019
Weekly Strategy

*Conditions*
(a) All Buy positions will be advised in advance before they are taken in the pre-auction. (so you can see the trades as they happen)
(b) If the pre-auction price is not successful, the position will be cancel at the end of trading day.(Meaning Buy order will be active for one day only)
(c) Portfolio performance will be posted weekly (Friday after the close)
(d) The trading results from the 1st January to today are listed for reference. (paper trading commenced 1st January 2019)
(e) Paper Trading is normally 6 to 12 months.
(f) As I'm already paper trading this strategy & with the interest in @qldfrog thread I'll run my Cam Strategy for comparison.
(g) The CAM strategy will be traded as designed with no additional user input or modifications during the paper trading period.

*CAM Strategy - *Main trade settings

*BUY conditions: *
1. If my additional CAM parameters & filters are passed action item (2) & (3)
2. Buy tomorrow at the open if today is a GOLD-colored bar
(which represents the CAM-PB, meaning that both the 10-period ADX and
MACD are declining) but the 14-period CCI is above zero, OR 
3. If today is a BLUE-colored bar (the 10-period ADX is declining but MACD is rising)
and today’s close crosses above the 13-period EMA.

*SELL conditions:* 
1. Sell if StaleStop exit is activated OR
2. Sell tomorrow at the open if today is a RED-colored bar (which corresponds to the CAM-DN - that is, the 10-period ADX is rising but the MACD declines) and today’s close is below the 13-period EMA.

*PLEASE NOTE: *
(a) The CAM system works well in a positive trend & generates a tremendous amount of buy signals (PositionScore is critical to the strategy success)
(b) In a BEAR market this Strategy performance suffers with large drawdowns. 
(c) The idea of my StaleStop exit is in place for the protection against large draw downs. 
(d) Skate's modified CAM strategy uses a unique set of parameters with additional filters because the above standard CAM rules are not enough to maximize the odds of profit, it is mandatory to apply this trading system to a trending universe of stock.

*Graphics *
The charts are displayed so you can see the signal bars as well as the entry & exits bars that are coloured coded which indicates: CAM-UP, CAM-PB & other Buy & Sell conditions listed above)


*These are the CAM Strategy "Orders" to be placed in the pre-auction *(before the Market opens on Monday 4th March 2019) 




*CAM Strategy "1st" Sell (PNC)* 4623 share @ pre-auction offer of $2.37 (Ouch !!)





*CAM Strategy "2nd" Sell (NST)* 1647 share @ pre-auction offer of $8.98 





*CAM Strategy "1st" BUY (NCM)* 598 share @ pre-auction offer of $25.06





*CAM Strategy "2nd" BUY (GEM)* 4652 share @ pre-auction offer of $3.23





*Skate's CAM Strategy Portfolio results* (1st January 2019 to 3rd March 2019)





*Skate's CAM Strategy current Open positions *(1st January 2019 to 3rd March 2019)





*Skate's CAM Strategy - BUY trades *(1st January 2019 to 3rd March 2019)





*Skate's CAM Strategy - SOLD trades *(1st January 2019 to 3rd March 2019)




*Condensed CAM Strategy - Buy & Sell positions* (1st January 2019 to 3rd March 2019)



Skate.


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## Skate (5 March 2019)

*Words of wisdom.*

Please think before you reply to a post.

*THINK*

*T* - is it *true*?
*H* - is it *helpful*?
*I* - is it *inspiring*?
*N* - is it *necessary*?
*K* - is it *kind*?

Skate.


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## Skate (5 March 2019)

*Positive thinking*

*FAIL*
If you fail, never give up because FAIL means:
"*F*irst *A*ttempt *I*n *L*earning"

*END*
The End is not the end. In fact END means:
"*E*ffort *N*ever *D*ies"

*NO*
If you get NO for an answer, remember NO means:
"*N*ext *O*pportunity"

Skate.


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## Skate (5 March 2019)

*Words by C.S. Lewis*
"You can't go back & change the beginning but you can start where you are & change the ending"

*Words by Skate*
"If you don't like the hole you have dug for yourself stop digging"

Skate.


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## Skate (5 March 2019)

*Skate's Modified CAM Strategy - weekly update*
I'm planning to trade the CAM strategy once the paper testing correlates with the current Backtest, Walk-Forward & Monte Carlo testing.

*Actual Sample*
This sample is the end of trade yesterday (Monday 4th March 2019)

*FYI*
Skate's modified CAM Strategy - has 2 Buy conditions & 2 Sell conditions.

*CAM Strategy Settings*
Weekly Strategy
$300,000 Capital
20 Position Portfolio
$15,000 Fixed Positions
Starting Date 1st January 2019


*CAM Strategy Weekly Update format*
1.  Next week’s buy & sell signals will be posted (end of trade Friday) for purchase in the pre-auction Monday morning.
2.  Portfolio performance line chart updated weekly (end of trade Friday)
3.  CAM Strategy open positions will be posted weekly (end of trade Friday)
4.  CAM Strategy Dashboard will be posted weekly (end of trade Friday)


*1.  Next week’s buy & sell signals *(as of end of trade Monday 4th March 2019 - these signals change daily with data updates)




*2.  Portfolio performance line chart updated weekly *(as of end of trade Monday 4th March 2019)





*3. CAM Strategy open positions *(as of end of trade Monday 4th March 2019)





*4.  CAM Strategy Dashboard*  (as of end of trade Monday 4th March 2019)



Skate.


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## Gringotts Bank (5 March 2019)

Skate said:


> *Skate's Modified CAM Strategy - weekly update*
> I'm planning to trade the CAM strategy once the paper testing correlates with the current Backtest, Walk-Forward & Monte Carlo testing.
> 
> *Actual Sample*
> ...



Straight line equity curve, 15% in 2 months.  Well done.


----------



## Smurf1976 (5 March 2019)

Not sure if this has been mentioned but never lose sight of the real objective, which may be very different to the immediate task at hand.

Suppose that you have just sold your holding in whatever stock. 

You now have capital available to deploy elsewhere and the danger lies in unintentionally adopting a mindset that your task is to deploy that capital.

Rather, your task is to make a profit. Only deploy the capital if you can do so in a manner that is expected to be profitable. 

It sounds obvious but it's very possible to fall into the situation of administering your portfolio rather than managing it. Seeing the task as to buy shares in something so as to get rid of the cash rather than focusing on investing to profit.


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## Skate (8 March 2019)

*Skate's Modified CAM Strategy - weekly update*
I'm planning to trade the CAM strategy once the paper testing correlates with the current Backtest, Walk-Forward & Monte Carlo testing.

*CAM Strategy Settings*
Weekly Strategy
$300,000 Capital
20 Position Portfolio
$15,000 Fixed Positions
Starting Date 1st January 2019

*CAM Strategy Weekly Update format*
1. This week’s buy & sell positions to be placed in the pre-auction before Monday's open if action is required.
2. This week's generated Buy & Sell signals for the CAM Strategy (at the end of trade on Friday)
3. Portfolio performance line chart updated weekly (at the end of trade on Friday)
4. The CAM Strategy open positions will be posted weekly (at the end of trade on Friday)
5. The CAM Strategy Dashboard will be posted weekly (at the end of trade on Friday)


*1.  This week’s buy & sell positions to be placed in the pre-auction before Monday open. *(There NO Buys or Sells this week)




*2. This week's generated Buy & Sell signals for the CAM Strategy *(There are No Buys or Sells to be placed in the pre-Auction this week)




*3. Portfolio performance line chart updated weekly *




*4. CAM Strategy open positions*




*5. CAM Strategy Dashboard*




Skate.


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## jbocker (13 March 2019)

Skate Joe et. al. (way too many to name).
Just a word of thanks for the forum, and in particular this one. I am learning a great lesson and I am far more comfortable coming to a decision on investing in shares. I have been selling down my holdings as I have realised how little I know and in reality most of what I do is punting. Funnily enough I probably did well in my earlier strategy soon after I first started, but even that on reflection was more luck than skill.
The hardest thing is to accept is the 'lack of' knowledge and not to hang on and lose more money rather than lose face. If I come back to the fold I will re-read Dump it Here before I invest (not punt) again.
I will stay in touch. I like this place.


----------



## Gringotts Bank (13 March 2019)

jbocker said:


> Skate Joe et. al. (way too many to name).
> *Funnily enough I probably did well in my earlier strategy soon after I first started, but even that on reflection was more luck than skill.*
> The hardest thing is to accept is the 'lack of' knowledge and not to hang on and lose more money rather than lose face. If I come back to the fold I will re-read Dump it Here before I invest (not punt) again.
> I will stay in touch. I like this place.




IMO, it's all about your equity curve.  If you can maintain a good equity curve and spread your risk a bit, then there's absolutely no need to worry about using a punting approach.  It's completely acceptable.  Do whatever makes you money whilst minimizing risk.  My best equity curve is with sports betting, and it's all done on gut feel.

From a Fin Review article on David Walsh.  If you don't know what he did and how he did it, it's worth a search.  Then consider this:

So can lay punters win regularly? “Absolutely yes," Walsh confidently exclaims. “There are punters that watch horse races that have insights that nobody else has.

“It is bloody amazing to me, but is a fact."

He highlights a Betfair disclosure several years ago that among its 800,000 customers there were 30,000 consistent winners. “I was surprised by how large that number was – I would have probably been surprised if it was just 5000.


----------



## lindsayf (13 March 2019)

Gringotts Bank said:


> IMO, it's all about your equity curve.  If you can maintain a good equity curve and spread your risk a bit, then there's absolutely no need to worry about using a punting approach.  It's completely acceptable.  Do whatever makes you money whilst minimizing risk.  My best equity curve is with sports betting, and it's all done on gut feel.
> 
> From a Fin Review article on David Walsh.  If you don't know what he did and how he did it, it's worth a search.  Then consider this:
> 
> ...



That is 3%........
And define ‘consistent’.
Is Walsh on the payroll of one of the sportsbetting companies?
And of course Betfair would inflate that number as it is in thier interests to massage that perception.
Great way to go broke in reality.
Are you really doing better on the sports bets than your trading/investing?
The stats for the rate of rise in problem gambling with sportsbetting are pretty impressive.
Best way to make money on SB is to buy shares in a SB company.


----------



## Gringotts Bank (14 March 2019)

lindsayf said:


> That is 3%........
> And define ‘consistent’.
> Is Walsh on the payroll of one of the sportsbetting companies?
> And of course Betfair would inflate that number as it is in thier interests to massage that perception.
> ...




*4%.*

Probably similar for retail trading.


----------



## Skate (15 March 2019)

*Skate's Modified CAM Strategy - 15th March 2019 (weekly update)*

*CAM Strategy*
The CAM strategy uses indicators to identify upward and downward trends as well as pullbacks in existing trends and countertrend rallies using an exponential moving average (EMA) and the commodity channel index (CCI) to help confirm signals generated. The CAM strategy is an abbreviation of *C*oordinated *A*DX and *M*ACD.

The CAM indicator compares the slope of MACD and ADX and identifies the following 4 market patterns.
1.    Uptrend   
2.    Pullback   
3.    Downtrend  
4.    Counter trend  

*Skate's CAM Strategy Settings*
Weekly Strategy
$300,000 Capital
20 Position Portfolio
$15,000 Fixed Positions
Starting Date 1st January 2019

*CAM Strategy Weekly Update format*
1. This week’s Buy & Sell positions to be placed in the pre-auction before Monday's open if action is required.
2. This week's generated Buy & Sell signals for the CAM Strategy (at the end of trade on Friday)
3. Portfolio performance line chart updated weekly (at the end of trade on Friday)
4. The CAM Strategy ‘Open’ positions will be posted weekly (at the end of trade on Friday)
5. The CAM Strategy ‘Closed’ positions will be posted weekly (at the end of trade on Friday)
6. The CAM Strategy Dashboard will be posted weekly (at the end of trade on Friday)

*1.  This week’s buy & sell positions to be placed in the pre-auction before Monday open.*



*2. This week's generated Buy & Sell signals for the CAM Strategy *



*3. Portfolio performance line chart updated weekly *



*4. CAM Strategy ‘Open’ position*



*5. CAM Strategy ‘Closed’ positions*



*6. CAM Strategy Dashboard*



Skate.


----------



## Newt (15 March 2019)

Skate, can I enquire which entries you are trading for your CAM strategy?

You listed the following patterns/signals:
1. Uptrend 
2. Pullback 
3. Downtrend 
4. Counter trend 

Presumably you take LONG signals on 1,2 and 4?


----------



## Skate (16 March 2019)

Newt said:


> Skate, can I enquire which entries you are trading for your CAM strategy?
> 
> You listed the following patterns/signals:
> 1. Uptrend
> ...




Newt, thank you for reading the 'Dump it here' post on the CAM Strategy with Weekly Updates. The information you are seeking has already been posted. As you have the strategy the operational instructions are written at the bottom of the afl code. I have added a few posts references that better explain how I operate the CAM Strategy.


green candlesticks = uptrend
gold candlesticks = pullback
red candlesticks = downtrend
blue candlesticks = counter trend








*qldfrog weekly Skate inspired system *
@qldfrog thread is also trading his version of the Cam Strategy & because of the interest I'm running my CAM strategy for comparison - the only difference is that I tell you & other members in advance to what I'll be to Buying & Selling in the Mondays preauction.

I also list all the weekly generated signal, trading results, equity curve line chart with additional weekly portfolio reporting so others have a paper trail of the CAM Strategy ongoing progress.

*Newt, PLEASE NOTE *(it's critical to the CAM Strategy)
(a) The CAM system works well in a positive trend & generates a tremendous amount of buy signals (PositionScore is critical to the strategy success)
(b) In a BEAR market this Strategy performance suffers with large drawdowns.
(c) The idea of my StaleStop exit is in place for the protection against large draw downs.
(d) Skate's modified CAM strategy uses a unique set of parameters with additional filters *because the standard CAM rules are not enough to maximize the odds of profit*, it is mandatory to apply this trading system to a trending universe of stock.

*Your question*
_"Presumably you take LONG signals on 1,2 and 4?"_
*
Quick Answer*
I trade the Standard CAM Strategy (listed below) with additional Filters & parameters because of the highlighted issues listed above in the 'PLEASE NOTE' section.

*Skate's CAM Strategy is a Long ONLY weekly system.

Enter LONG:* Buy tomorrow at the open if today is a GOLD-colored bar
(which represents the CAM-PB, meaning that both the 10-period ADX and
MACD are declining) but the 14-period CCI is above zero, OR if today
is a BLUE-colored bar (the 10-period ADX is declining but MACD is rising)
and today’s close crosses above the 13-period EMA.

*Exit LONG:* Sell tomorrow at the open if today is a RED-colored bar (which
corresponds to the CAM-DN; that is, the 10-period ADX is rising but the
MACD declines) and today’s close is below the 13-period EMA.

*Previous explanations of how the CAM Strategy works *(Reposts)
https://www.aussiestockforums.com/posts/1016747/

*Skate's CAM Strategy Trade Conditions *(weekly updates)
(a) All Buy positions will be advised in advance before they are taken in the pre-auction. (so you can see the trades as they happen)
(b) If the pre-auction price is not successful, the position will be cancel at the end of trading day.(Meaning Buy order will be active for one day only)
(c) Portfolio performance will be posted weekly (Friday after the close)
(d) The trading results from the 1st January to today are listed for reference. (paper trading commenced 1st January 2019)
(e) Paper Trading is normally 6 to 12 months.
(f) As I'm already paper trading this strategy & with the interest in @qldfrog thread I'll run my Cam Strategy for comparison.
(g) The CAM strategy will be traded as designed with no additional user input or modifications during the paper trading period.

*Skate's CAM Strategy - Main trade settings
BUY conditions: *
1. If my additional CAM parameters & filters are passed - action item (2) & (3) below
2. Buy tomorrow at the open if today is a GOLD-colored bar
(which represents the CAM-PB, meaning that both the 10-period ADX and
MACD are declining) but the 14-period CCI is above zero, OR
3. If today is a BLUE-colored bar (the 10-period ADX is declining but MACD is rising)
and today’s close crosses above the 13-period EMA.

*SELL conditions: *
1. Sell if StaleStop exit is activated OR
2. Sell tomorrow at the open if today is a RED-colored bar (which corresponds to the CAM-DN - that is, the 10-period ADX is rising but the MACD declines) and today’s close is below the 13-period EMA.

*Post reference *(for additional reading)
https://www.aussiestockforums.com/posts/1013167/

*Post reference *(for additional reading)
https://www.aussiestockforums.com/posts/1012512/

*Post reference *(for additional reading)
https://www.aussiestockforums.com/posts/1012785/

The post is lengthy but important.

Skate.


----------



## qldfrog (16 March 2019)

Thanks @Skate , I also want to add I have tweaked both the entries and the exits, so instead of multiple numerous entries with a position score to determine the best ones, I have stricter criteria and so far less entries
Trying to limit the DD saw me adding some different exits which do not affect the results too badly if replaying past scenario...not failsafe but as much as I can bear.
we should see some similar results between our system but they are now quite different
I completed yesterday the real money purchase to bring me to a start on the 1/02


----------



## Newt (16 March 2019)

Thanks very much for all the detail Skate.  

After digging into the code I wasn't sure if the pullback entry was the only way to use it, but for ASX shares traded long (no shorts) what you describe makes sense.


----------



## Skate (23 March 2019)

*


Skate's Modified CAM Strategy – 22nd March 2019 (weekly update)*
For the first time readers of the ‘Dump it here’ thread I will post the explanation of the CAM strategy on my weekly updates. Attaching the explanation of the CAM Strategy with the weekly updates will be helpful to some & a refresher to others.  

Once the explanation is read - scroll down to the updated records below.

*The CAM Strategy explanation*
1. The CAM strategy indicates how two well-known indicators are able to help traders identify major price movements that produce repeatable patterns.

2. The CAM strategy uses a combination of indicators to identify upward and downward trends as well as pullbacks in existing trends and countertrend rallies.

3. Using the (ADX) & (MACD) indicators in conjunction with an exponential moving average (EMA) and the commodity channel index (CCI) helps to confirm signals generated.

The CAM strategy is an abbreviation of *C*oordinated *A*DX and *M*ACD.

*PLEASE NOTE *(it's critical to the CAM Strategy)
(a) The CAM system works well in a positive trend & generates a tremendous amount of buy signals (PositionScore is critical to the strategy success)
(b) In a BEAR market this Strategy performance suffers with large drawdowns.
(c) The idea of my StaleStop exit is in place for the protection against large draw downs.
(d) Skate's modified CAM strategy uses a unique set of parameters with additional filters *because the standard CAM rules are not enough to maximize the odds of profit*, it is mandatory to apply this trading system to a trending universe of stock.

*CAM Signals*
The CAM strategy is a combination of 4 patterns that produce a tremendous amount of signals that can be short lived producing false & confusing signals. The amount of false signals proves the CAM strategy is not the “Holy Grail” but then again no strategy lives up to that title. The false signals are impossible to avoid & this is where the commodity channel index (CCI) comes into its own by filtering out many of those false, annoying signals.

*ADX*
The average directional index (ADX) shows the strength but not the direction of the price that is trending. Trading in the direction of a strong trend reduces risk and increases profit potential. The ADX rises as the price strengthens into an identifiable trend & falls when the price weakens or consolidates.

*MACD*
Moving Average Convergence Divergence (MACD) is a trend-following momentum directional indicator that shows the direction of the price movement. 

*How the CAM Strategy works*
The CAM indicator compares the slope of MACD and ADX and identifies the following 4 market patterns.

1. Uptrend = green candlesticks
2. Pullback = gold candlesticks
3. Downtrend = red candlesticks
4. Counter trend = blue candlesticks

*Trade Setup (Enter LONG)*
Buy tomorrow at the open if today is a GOLD-coloured bar(which represents the CAM-PB, meaning that both the 10-period ADX and MACD are declining) but the 14-period CCI is above zero, OR if today is a BLUE-coloured bar (the 10-period ADX is declining but MACD is rising) and today’s close crosses above the 13-period EMA.

*Trade Setup (Exit LONG)*
Sell tomorrow at the open if today is a RED-coloured bar (which corresponds to the CAM-DN; that is, the 10-period ADX is rising but the MACD declines) and today’s close is below the 13-period EMA.

*Skate's CAM Strategy Settings*
Weekly Strategy
$300,000 Capital
20 Position Portfolio
$15,000 Fixed Positions
Starting Date 1st January 2019

*CAM Strategy Weekly Update format*
1. This week’s Buy & Sell positions to be placed in the pre-auction before Monday's open if action is required.
2. This week's generated Buy & Sell signals for the CAM Strategy (at the end of trade on Friday)
3. Portfolio performance line chart updated weekly (at the end of trade on Friday)
4. The CAM Strategy ‘Open’ positions will be posted weekly (at the end of trade on Friday)
5. The CAM Strategy ‘Closed’ positions will be posted weekly (at the end of trade on Friday)
6. The CAM Strategy Dashboard will be posted weekly (at the end of trade on Friday)




*1. This week’s buy & sell positions to be placed in the pre-auction before Monday open.*


*2. This week's generated Buy & Sell signals for the CAM Strategy *



*3. Portfolio performance line chart updated weekly *



*4. CAM Strategy ‘Open’ position*



*5. CAM Strategy ‘Closed’ positions*



*6. CAM Strategy Dashboard*



Skate.


----------



## Skate (29 March 2019)

*
Skate's Modified CAM Strategy – 29th March 2019 (weekly update)*
For the first time readers of the ‘Dump it here’ thread I will post the explanation of the CAM strategy on my weekly updates. Attaching the explanation of the CAM Strategy with the weekly updates will be helpful to some & a refresher to others.

Once the explanation is read - scroll down to the updated records below.

*The CAM Strategy explanation*
1. The CAM strategy indicates how two well-known indicators are able to help traders identify major price movements that produce repeatable patterns.
2. The CAM strategy uses a combination of indicators to identify upward and downward trends as well as pullbacks in existing trends and countertrend rallies.
3. Using the (ADX) & (MACD) indicators in conjunction with an exponential moving average (EMA) and the commodity channel index (CCI) helps to confirm signals generated.

The CAM strategy is an abbreviation of *C*oordinated *A*DX and *M*ACD.

*PLEASE NOTE *(it's critical to the CAM Strategy)
(a) The CAM system works well in a positive trend & generates a tremendous amount of Buy signals.
(b) PositionScore is critical to the CAM strategy success.
(c) In a BEAR market the CAM Strategy performance suffers with large drawdowns.
(d) The idea of my StaleStop exit is in place for the protection against large drawdowns.
(e) Skate's modified CAM strategy uses a unique set of parameters with additional filters *because the standard CAM rules are not enough to maximize the odds of profit*, it is mandatory to apply the CAM trading system to a trending universe of stock.

*CAM Signals*
The CAM strategy is a combination of 4 patterns that produce a tremendous amount of signals that can be short lived producing false & confusing signals. The amount of false signals proves the CAM strategy is not the “Holy Grail” but then again no strategy lives up to that title. The false signals are impossible to avoid & this is where the commodity channel index (CCI) comes into its own by filtering out many of those false, annoying signals.

*ADX*
The average directional index (ADX) shows the strength but not the direction of the price that is trending. Trading in the direction of a strong trend reduces risk and increases profit potential. The ADX rises as the price strengthens into an identifiable trend & falls when the price weakens or consolidates.

*MACD*
Moving Average Convergence Divergence (MACD) is a trend-following momentum directional indicator that shows the direction of the price movement.

*How the CAM Strategy works*
The CAM indicator compares the slope of MACD and ADX and identifies the following 4 market patterns.

*Chart patterns*
1. Uptrend = green candlesticks (or Bars)
2. Pullback = gold candlesticks (or Bars)
3. Downtrend = red candlesticks (or Bars)
4. Counter trend = blue candlesticks (or Bars)

*Trade Setup (Enter LONG)*
Buy tomorrow at the open if today is a GOLD-coloured bar(which represents the CAM-PB, meaning that both the 10-period ADX and MACD are declining) but the 14-period CCI is above zero, OR if today is a BLUE-coloured bar (the 10-period ADX is declining but MACD is rising) and today’s close crosses above the 13-period EMA.

*Trade Setup (Exit LONG)*
Sell tomorrow at the open if today is a RED-coloured bar (which corresponds to the CAM-DN; that is, the 10-period ADX is rising but the MACD declines) and today’s close is below the 13-period EMA.

*Skate's CAM Strategy Settings*
Weekly Strategy
$300,000 Capital
20 Position Portfolio
$15,000 Fixed Positions
Starting Date 1st January 2019

*CAM Strategy Weekly Update format*
1. This week’s Buy & Sell positions to be placed in the pre-auction before Monday's open if action is required.
2. This week's generated Buy & Sell signals for the CAM Strategy (at the end of trade on Friday)
3. Portfolio performance line chart updated weekly (at the end of trade on Friday)
4. The CAM Strategy ‘Open’ positions will be posted weekly (at the end of trade on Friday)
5. The CAM Strategy ‘Closed’ positions will be posted weekly (at the end of trade on Friday)
6. The CAM Strategy Dashboard will be posted weekly (at the end of trade on Friday)

*Start of the weekly updated records
*




*1. This week’s buy & sell positions to be placed in the pre-auction before Monday open.*



*2. This week's generated Buy & Sell signals for the CAM Strategy *



*3. Portfolio performance line chart updated weekly *



*4. CAM Strategy ‘Open’ position*



*5. CAM Strategy ‘Closed’ positions*



*6. CAM Strategy Dashboard*



Skate.


----------



## Skate (31 March 2019)

*Update*
For transparency a Chart will be attached to the weekly update from next week. I’ve realised that I have not included a chart in the weekly updates to display the colour coding of the Chart patterns. 

*How the CAM Strategy works*
The CAM indicator compares the slope of MACD and ADX and identifies the following 4 market patterns.

*Chart patterns (A Bar Chart is displayed at the bottom of this post – item #7)*
1. Uptrend = Green Bars (or candlesticks)
2. Pullback = Gold Bars (or candlesticks)
3. Downtrend = Red Bars (or candlesticks)
4. Counter trend = Blue Bars (or candlesticks) 

At the bottom of this weeks update there is a chart for the first ‘Buy’ signal generated this week regardless whether the position is taken. I have included the Chart to demonstrate the colour coding of the Chart patterns.

*Trade Setup (Enter LONG)*
Buy tomorrow at the open if today is a GOLD-coloured bar (which represents the CAM-PB, meaning that both the 10-period ADX and MACD are declining) but the 14-period CCI is above zero, OR if today is a BLUE-coloured bar (the 10-period ADX is declining but MACD is rising) and today’s close crosses above the 13-period EMA.

*Trade Setup (Exit LONG)*
Sell tomorrow at the open if today is a RED-coloured bar (which corresponds to the CAM-DN; that is, the 10-period ADX is rising but the MACD declines) and today’s close is below the 13-period EMA.






*7. The CAM Strategy first weekly ‘Buy’ Chart to demonstrate the bar colour coding.*



Skate.


----------



## Skate (5 April 2019)

*Skate's Modified CAM Strategy *– 5th April 2019 (weekly update)
For the first time readers of the ‘Dump it here’ thread I’ll post the explanation of the CAM strategy on my weekly updates. Attaching the explanation of the CAM Strategy with the weekly updates will be helpful to some & a refresher to others.

Once the explanation is read - scroll down to the updated records below.

*An expanded CAM Strategy explanation*
Trading is all about catching price movements & the most sought-after indicators are those that identify price trends. While the trends are obvious in retrospect, it's another matter altogether to identify the trend in the heat of trading. By combining two popular indicators will not only help traders detect the trend direction but also the trend strength of that price movement.

As you may have noticed, a number of rather complicated indicators are available to measure trend direction & strength but none of these indicators unfortunately are perfect. The indicators involved in the CAM Strategy are the average directional index (ADX) and the moving average convergence/divergence (MACD).

The (ADX) functions as a trend detector, rising as price strengthens into an identifiable trend and falling when price moves sideways or loses its trending power. Unfortunately, the (ADX) does not reveal the trend direction. The (MACD) on the other hand, indicates price momentum and can also be used to identify price direction as it rises above its trigger line or falls below its zero line.

*CAM Strategy Simplified*
1. The CAM strategy indicates how two well-known indicators are able to help traders identify major price movements that produce repeatable patterns.
2. The CAM strategy uses a combination of indicators to identify upward and downward trends as well as pullbacks in existing trends and countertrend rallies.
3. Using the (ADX) & (MACD) indicators in conjunction with an exponential moving average (EMA) and the commodity channel index (CCI) helps to confirm signals generated.
4. The combination of the (MACD) and (ADX) register their signals after the start of a price move, with the (ADX) slower to respond than the (MACD).
5. The indicator combination will not pinpoint tops and bottoms, however traders can expect the (ADX) and (MACD) combination to identify and capture part of a trending move.
6. More important, the CAM Strategy can help traders stay on the right side of the market and increase the probability of successful trading results.
7. The Cam Strategy buys Pullbacks & Countertrends & sells on a Downtrend when the close is below the 13-period EMA.

The CAM strategy is an abbreviation of *C*oordinated *A*DX and *M*ACD.

*Please Note *(it's critical to the CAM Strategy) 
(a) The CAM system works well in a positive trend & generates a tremendous amount of Buy signals.
(b) PositionScore is critical to the CAM strategy success.
(c) In a BEAR market the CAM Strategy performance suffers with large drawdowns.
(d) The idea of my StaleStop exit is in place for the protection against large drawdowns.
(e) It’s mandatory to apply the CAM trading strategy to a trending universe of stock.
(f) Skate's modified CAM strategy uses a unique set of parameters with additional filters *because the standard CAM rules are not enough to maximize the odds of profit*.

*CAM Signals*
The CAM strategy is a combination of 4 patterns that produce a tremendous amount of signals that can be short lived producing false & confusing signals. The amount of false signals proves the CAM strategy is not the “Holy Grail” but then again no strategy lives up to that title. The false signals are impossible to avoid & this is where the commodity channel index (CCI) comes into its own by filtering out many of those false, annoying signals. When both indicators are combined on the same chart, trend strength and trend direction become clear through the colour coding of the price bars or candlesticks.

*ADX*
The average directional index (ADX) shows the strength but not the direction of the price that is trending. Trading in the direction of a strong trend reduces risk and increases profit potential. The (ADX) rises as the price strengthens into an identifiable trend & falls when the price weakens or consolidates. The (ADX) can be confusing because it is interpreted differently from other indicators. Most indicators move up when prices rise, and they fall when prices decline, that’s not necessarily the case with the (ADX).

*MACD*
Moving Average Convergence Divergence (MACD) is a trend-following momentum directional indicator that shows the direction of the price movement. The (MACD) can mislead us at times as we often forget the (MACD) is basically a momentum indicator, so it does not always accurately reflect price movement.

*How the CAM Strategy works*
The CAM indicator compares the slope of (MACD) and (ADX) and identifies the following 4 market patterns. The combination of these 4 patterns can help traders stay on the right side of the market and increase the probability of successful trading results. (The bar colours are displayed in the chart below)

*Chart patterns *
1. Uptrend = Green Bars (or candlesticks)
2. Pullback = Gold Bars (or candlesticks)
3. Downtrend = Red Bars (or candlesticks)
4. Counter trend = Blue Bars (or candlesticks)

*A Bar Chart is attached at the bottom of this post*
At the bottom of this week’s update there is a chart for the first ‘Buy’ signal generated regardless whether the position is taken. I have included the Chart to demonstrate the colour coding of the Chart patterns.

*Trade Setup (Enter LONG)*
Buy tomorrow at the open if today is a GOLD-coloured bar [which represents the *CAM-PB*, meaning that both the 10-period (ADX) and (MACD) are declining] but the 14-period (CCI) is above zero, OR if today is a BLUE-coloured bar [which represents the *CAM-CT*, meaning the 10-period (ADX) is declining but (MACD) is rising] and today’s close crosses above the 13-period EMA.

*Trade Setup (Exit LONG)*
Sell tomorrow at the open if today is a RED-coloured bar [which corresponds to the *CAM-DN*, that is, the 10-period (ADX) is rising but the (MACD) declines] and today’s close is below the 13-period EMA.

*Skate's CAM Strategy Settings*
Weekly Strategy
$300,000 Capital
20 Position Portfolio
$15,000 Fixed Positions
Starting Date 1st January 2019

*CAM Strategy Weekly Update format*
1. This week’s Buy & Sell positions to be placed in the pre-auction before Monday's open if action is required.
2. This week's generated Buy & Sell signals for the CAM Strategy (at the end of trade on Friday)
3. Portfolio performance line chart updated weekly (at the end of trade on Friday)
4. The CAM Strategy ‘Open’ positions will be posted weekly (at the end of trade on Friday)
5. The CAM Strategy ‘Closed’ positions will be posted weekly (at the end of trade on Friday)
6. The CAM Strategy Dashboard will be posted weekly (at the end of trade on Friday)
7. The CAM Strategy first weekly ‘Buy’ Chart to demonstrate the bar colour coding.

*Start of this weeks updated records*



*1. Listed below is week’s buy & sell positions to be placed in the pre-auction before Monday open if action is required.*



*2. This week's generated Buy & Sell signals for the CAM Strategy *



*3. Portfolio performance line chart updated weekly *



*4. CAM Strategy ‘Open’ position*



*5. CAM Strategy ‘Closed’ positions*



*6. CAM Strategy Dashboard*




*7. The CAM Strategy first weekly ‘Buy’ Chart to demonstrate the bar colour coding.*



Skate.


----------



## tech/a (8 April 2019)

https://www.tradingview.com/scripts/cam/

Further information.


----------



## kahuna1 (8 April 2019)

*Words of wisdom.*

Please think before you reply to a post.

*THINK*

*T* - is it *true*?
*H* - is it *helpful*?
*I* - is it *inspiring*?
*N* - is it *necessary*?
*K* - is it *kind*?

I love this one .... you posted ... I at times find myself in the midst of discussions and opinions where ...  some post stuff, opinions, beliefs, and at times based upon faith or hatred which they believe I suspect is true, not helpful, not inspiring to be told someone hates something or some group or issue, not necessary and really not kind. What does one do in the face of being trolled ? By someone who is so sick they hate something illogically or deny science or evidence of impeachable empirical unquestionable nature and then deliberately .... to get attention ... post an opposing view based upon what they know ill annoy, frustrate and deliberately cast doubt upon an issue.

This is a common tactic of modern times. Smoking and its ill effects, for 30 years the tobacco industry employed such tactics, till ...  that changed. People with fears about say a religion or persons skin color or their beliefs, the anonymous internet is a wonderful place for them to emerge and spread their hate. Based upon free speech or some new idea its ok to be intolerant and abusive and show it with gusto.

How does one respond when its n0ow the normal for say a news media outlet overseas to be like this ? Spread hate, fear about topics based on not fact, but crap ? 

Interesting and scary world where even leaders do it and base a decision upon not a group of experts he has to advise him, or science, or impartial examination of facts and cause and effect, but to operate on an opinion based upon listening and reading crap ?

That was a dump .... sorry ... but wisdom and best practice and scientific know best practice verses putting your head in the sand or being racist, or greedy separates us from most other species, or at least used to. We revert back to this base state, time and time and time again on a global level. 

Whilst K.I.N.D is a good policy to follow, at times, boundaries and trolls ensure that even the most tolerant and open to others views and opinions are taken to places where, well .... if one failed to respond to a Troll and their lack of humanity as is seen say on the Christchurch thread here, it leaves the definition of who you are as being human, not saying NO ...  openly and without anger that someone posting with glee over such an event makes you sick ... if you don't openly say your missing parts, for me, my values .... I sadly cant and will not accept. Not trying to foist my own beliefs upon others, but there is a line where all this free speech and hate speech couched in what appears to be discussion but is NOT ... 

Wow still dumping ... sorry.


----------



## Skate (12 April 2019)

*Skate's Modified CAM Strategy *– 12th April 2019 (weekly update)
For the first time readers of the ‘Dump it here’ thread I’ll post the explanation of the CAM strategy on my weekly updates. Attaching the explanation of the CAM Strategy with the weekly updates will be helpful to some & a refresher to others.

Once the explanation is read - scroll down to the updated records below.

*An expanded CAM Strategy explanation*
Trading is all about catching price movements & the most sought-after indicators are those that identify price trends. While the trends are obvious in retrospect, it's another matter altogether to identify the trend in the heat of trading. By combining two popular indicators will not only help traders detect the trend direction but also the trend strength of that price movement.

As you may have noticed, a number of rather complicated indicators are available to measure trend direction & strength but none of these indicators unfortunately, are perfect.

The indicators involved in the CAM Strategy are the average directional index (ADX) and the moving average convergence/divergence (MACD). The (ADX) shows the strength of price movement and the (MACD) shows the direction of the price move.

The (ADX) functions as a trend detector, rising as price strengthens into an identifiable trend and falling when price moves sideways or loses its trending power. Unfortunately, the (ADX) does not reveal the trend direction. The (MACD) on the other hand, indicates price momentum and can also be used to identify price direction as it rises above its trigger line or falls below its zero line.

*Pullback Trading *– (Chart Pattern = Gold Bars are *CAM-PB*)
Pullback trading is one of the most common and most important ‘with-trend’ trading patterns (trend trades) using the natural pauses (or pullbacks) in a trend to enter in the direction of the trend. For instance, in an uptrend, we might look for an area where prices pause or move downward, and look for a spot to buy the market, expecting that the market will make another upward move. These types of strategies typically identify high probability trades and tend to perform well.

*Countertrend* *Trading *–* (*Chart Pattern = Blue Bars are *CAM-CT*)
Many people do not realise that trading countertrends require a very different approach to trading pullbacks because it’s hard to understand whether you are putting on a trade that is in alignment with the existing trend and doing so is sometimes difficult & risky. Countertrend trading requires perfect discipline, both on entry and exit.

*CAM Strategy Simplified*
1. The CAM strategy indicates how two well-known indicators are able to help traders identify major price movements that produce repeatable patterns.
2. The CAM strategy uses a combination of indicators to identify upward and downward trends as well as pullbacks in existing trends and countertrend rallies.
3. Using the (ADX) & (MACD) indicators in conjunction with an exponential moving average (EMA) and the commodity channel index (CCI) helps to confirm signals generated.
4. The combination of the (MACD) and (ADX) register their signals after the start of a price move, with the (ADX) slower to respond than the (MACD).
5. The indicator combination will not pinpoint tops and bottoms, however traders can expect the (ADX) and (MACD) combination to identify and capture part of a trending move.
6. More important, the CAM Strategy can help traders stay on the right side of the market and increase the probability of successful trading results.
7. The Cam Strategy buys Pullbacks & Countertrends & sells on a Downtrend when the close is below the 13-period EMA.

The CAM strategy is an abbreviation of *C*oordinated *A*DX and *M*ACD.

*Please Note *(it's critical to the CAM Strategy) 
(a) The CAM system works well in a positive trend & generates a tremendous amount of Buy signals.
(b) PositionScore is critical to the CAM strategy success.
(c) In a BEAR market the CAM Strategy performance suffers with large drawdowns.
(d) The idea of my StaleStop exit is in place for the protection against large drawdowns.
(e) It’s mandatory to apply the CAM trading strategy to a trending universe of stock.
(f) Skate's modified CAM strategy uses a unique set of parameters with additional filters *because the standard CAM rules are not enough to maximize the odds of profit*.

*CAM Signals*
The CAM strategy is a combination of 4 patterns that produce a tremendous amount of signals that can be short lived producing false & confusing signals. The amount of false signals proves the CAM strategy is not the “Holy Grail” but then again no strategy lives up to that title. The false signals are impossible to avoid & this is where the commodity channel index (CCI) comes into its own by filtering out many of those false, annoying signals. When both indicators are combined on the same chart, trend strength and trend direction become clear through the colour coding of the price bars or candlesticks. Also CAM signals can stay in play for a very long period of time once they catch a good trend.

*ADX*
The average directional index (ADX) shows the strength but not the direction of the price that is trending. Trading in the direction of a strong trend reduces risk and increases profit potential. The (ADX) rises as the price strengthens into an identifiable trend & falls when the price weakens or consolidates. The (ADX) can be confusing because it is interpreted differently from other indicators. Most indicators move up when prices rise, and they fall when prices decline, that’s not necessarily the case with the (ADX).

*MACD*
Moving Average Convergence Divergence (MACD) is a trend-following momentum directional indicator that shows the direction of the price movement. The (MACD) can mislead us at times as we often forget the (MACD) is basically a momentum indicator, so it does not always accurately reflect price movement.

*How the CAM Strategy works*
The CAM indicator compares the slope of (MACD) and (ADX) and identifies the following 4 market patterns. The combination of these 4 patterns can help traders stay on the right side of the market and increase the probability of successful trading results. (The bar colours are displayed in the chart below)

*Chart patterns *
1. Uptrend = Green Bars (or candlesticks)
2. Pullback = Gold Bars (or candlesticks)
3. Downtrend = Red Bars (or candlesticks)
4. Counter trend = Blue Bars (or candlesticks)

*A Bar Chart is attached at the bottom of this post*
At the bottom of this week’s update there is a chart for the first ‘Buy’ signal generated regardless whether the position is taken. I have included the Chart to demonstrate the colour coding of the Chart patterns.

*Trade Setup (Enter LONG)*
Buy tomorrow at the open if today is a GOLD-coloured bar [which represents the *CAM-PB*, meaning that both the 10-period (ADX) and (MACD) are declining] but the 14-period (CCI) is above zero, OR if today is a BLUE-coloured bar [which represents the *CAM-CT*, meaning the 10-period (ADX) is declining but (MACD) is rising] and today’s close crosses above the 13-period EMA.

*Trade Setup (Exit LONG)*
Sell tomorrow at the open if today is a RED-coloured bar [which corresponds to the *CAM-DN*, that is, the 10-period (ADX) is rising but the (MACD) declines] and today’s close is below the 13-period EMA.

*Skate's CAM Strategy Settings*
Weekly Strategy
$300,000 Capital
20 Position Portfolio
$15,000 Fixed Positions
Starting Date 1st January 2019

*CAM Strategy Weekly Update format*
1. This week’s Buy & Sell positions to be placed in the pre-auction before Monday's open if action is required.
2. This week's generated Buy & Sell signals for the CAM Strategy (at the end of trade on Friday)
3. Portfolio performance line chart updated weekly (at the end of trade on Friday)
4. The CAM Strategy ‘Open’ positions will be posted weekly (at the end of trade on Friday)
5. The CAM Strategy ‘Closed’ positions will be posted weekly (at the end of trade on Friday)
6. The CAM Strategy Dashboard will be posted weekly (at the end of trade on Friday)
7. This week’s CAM Strategy first generated ‘Buy’ signal shown on the attached Chart to demonstrate the bar colour coding.

*Start of this weeks updated records*



*1. Listed below is this week’s buy & sell positions to be placed in the pre-auction before Monday open if action is required.*



*2. This week's generated Buy & Sell signals for the CAM Strategy *



*3. Portfolio performance line chart updated weekly *



*4. CAM Strategy ‘Open’ position*



*5. CAM Strategy ‘Closed’ positions*



*6. CAM Strategy Dashboard*




*7. The CAM Strategy first weekly ‘Buy’ Chart to demonstrate the bar colour coding.*



Skate.


----------



## Trendnomics (13 April 2019)

Hey Skate.

Have you posted any back-test results, which cover the GFC period? From the back-tests I have done on similar strategies, the GFC period was particularly detrimental (lots of whipsawing into a down-trending market). The current trend-following system I'm trading (for the past 6 years) was selected on one of the basis's being a benign GFC outcome.

Good work on reigniting the systematic trend-following interest on this forum. Ironically, the last period in which there was such a great interest was just prior to the GFC - I visit the archived graveyard once a while.

A random sample back-test run for my system:


----------



## qldfrog (13 April 2019)

Good point,
Being a relatively negative pessimistic guy, i built my own system  similar to Skate, but with a big emphasis on reducing DD. A more cautious entry so not even half invested  after 2 months and edgy on exit
I do not have Skate stellar results, but am quite happy with the current outcome so far.
i also do not like the odds of THE big crash ahead


----------



## Skate (13 April 2019)

Trendnomics said:


> Hey Skate.
> 
> Have you posted any back-test results, which cover the GFC period? From the back-tests I have done on similar strategies, the GFC period was particularly detrimental (lots of whipsawing into a down-trending market). The current trend-following system I'm trading (for the past 6 years) was selected on one of the basis's being a benign GFC outcome.
> 
> ...




Hi Trendnomics

Thank you for your question & taking the time to read some of my posts.

Over the time you have made some good posts & you have also contributed to this thread with a great post found here:

https://www.aussiestockforums.com/posts/1011285/

*Your statement of fact in that post resonated with me*
_“It is mind boggling how much money you can extract from the market as a retail trader, with the right amount of discipline, fortitude and conviction”_

*Your Question*
_“Have you posted any back-test results, which cover the GFC period?”_

I have posted backtest results from time to time about my HYBRID & my modified CAM strategy but I no longer subscribe to historical data from that time period to give you those backtest results.

*What I can say about the GFC period*
The GFC (the pattern) to a robust trend following strategy would be a non-event. When I had historical data it was proven to be a non-event because any strategy 'worth its salt' have filters & indicators to protect against these recurring trading patterns. When I build my systems they are robustly tested to withstand the 2011 market fluctuations that @peter2 eluded to on his thread. 2011 hit hard & trading reflected this.

*Your first statement *
_“From the back-tests I have done on similar strategies, the GFC period was particularly detrimental (lots of whipsawing into a down-trending market). The current trend-following system I'm trading (for the past 6 years) was selected on one of the basis's being a benign GFC outcome.”_

Point in case – my previous answer & your statement are one & the same.

*Your second statement *
_“Good work on reigniting the systematic trend-following interest on this forum. Ironically, the last period in which there was such a great interest was just prior to the GFC - I visit the archived graveyard once a while.”_

Thank you for your kind words.

The ‘Dump it here’ thread was started in the hope of helping new members those just starting out on their trading journey. I lost interest very quickly in the thread as there was a lack of interaction, I was just repeating information I already knew & it felt as if I was talking to myself. I twisted & turned the thread & at times I was confrontational but that was even short lived.

My Hybrid strategy raise a low level of interest & the CAM strategy much the same. As I was already paper trading the CAM strategy I thought why not share the journey & post my results to keep this thread active. I have made a full & frank disclosure on both strategies.

Revisiting the CAM weekly results I realise it's an information overload so from next week I'll condense the report in the hope of keeping it short & snappy. (I'll link how the CAM strategy works saving other rereading it)

*Confidence in your trading plan*
After reading a few threads it's easy to understand traders have their own methodology & approach when it comes to trading the markets confirming there is no right or wrong way.

Skate.


----------



## Skate (13 April 2019)

kahuna1 said:


> *Words of wisdom.*
> 
> Please think before you reply to a post.
> 
> ...







Skate


----------



## Skate (13 April 2019)

*

*
A reference guide for a basic understanding how the CAM strategy works.
*


*
To simplify the weekly reporting of the CAM Strategy I wanted to explain the working of the strategy in one post so I don't keep listing it in the weekly report. For the first time readers of the ‘Dump it here’ thread or members who follow my CAM Strategy weekly updates I want to explain the workings of the CAM Strategy as it may help you better understand why this simple strategy is so effective in finding price movements & trends.

*Let me explain the CAM Strategy*
The CAM strategy is problematic as far as paper trading goes as it has the ability to find long term trends making for less than exciting reporting of the system on a weekly basis & its ongoing progress. The issue with long term trending systems is that they are hard to qualify as the returns could be down to sheer luck or maybe just the start date - all this just adds complexities of its evaluation. 
*
Why the CAM Strategy is different*
The CAM strategy is based on a few indicators, something so simple you would question if trading the combination of these indicators would work let alone be profitable. The original CAM strategy or idea has a few lines of code & surprisingly it just works. There was a generated interest in the CAM strategy so I added a few bells & whistles to show others that this simple strategy had potential & 'wham-bam-thank-you-mam' this strategy grew wings & my interest was pricked - I was impressed. 

*My modified Strategy*
My modified CAM strategy backtests extremely well but to me that means JACK. The only real test is trading it on 'out-of-sample' data (data not seen before) & that's where we are at the moment, paper trading it. I'm displaying a full disclosure of it progresses in real time before positions are executed. This strategy performs well in a BULL market so the performance is tracking along quite nicely but as I've said before it could all be down to luck or timing, who knows.
* 
Trading is simple*
Trading is all about catching price movements & the most sought-after indicators are those that identify price trends. While the trends are obvious in retrospect, it's another matter altogether to identify the trend in the heat of trading. By combining two popular indicators will not only help traders detect the trend direction but also the trend strength of that price movement.
*
Nothing is perfect*
As you may have noticed, a number of rather complicated indicators are available to measure trend direction & strength but none of these indicators unfortunately, are perfect. The indicators involved in the CAM Strategy are the average directional index (ADX) and the moving average convergence/divergence (MACD). The (ADX) shows the strength of price movement and the (MACD) shows the direction of the price move - nothing complicated but the combination is effective.

*ADX & MACD *
The (ADX) functions as a trend detector, rising as price strengthens into an identifiable trend and falling when price moves sideways or loses its trending power. Unfortunately, the (ADX) does not reveal the trend direction. The (MACD) on the other hand, indicates price momentum and can also be used to identify price direction as it rises above its trigger line or falls below its zero line.
*
The CAM Strategy buys Pullbacks *– (Chart Pattern = Gold Bars are CAM-PB)
Pullback trading is one of the most common and most important ‘with-trend’ trading patterns (trend trading) using the natural pauses (or pullbacks) in a trend to enter in the direction of the trend. For instance, in an uptrend, we might look for an area where prices pause or move downward, and look for a spot to buy the market, expecting that the market will make another upward move. These types of strategies typically identify high probability trades and tend to perform well.
*
The CAM Strategy also buys Countertrends *– (Chart Pattern = Blue Bars are CAM-CT)
Many people do not realise that trading countertrends require a very different approach to trading pullbacks because it’s hard to understand whether you are putting on a trade that is in alignment with the existing trend and doing so is sometimes difficult & risky. Countertrend trading requires perfect discipline, both on entry and exit.
*
CAM Strategy Simplified*
1. The CAM strategy indicates how two well-known indicators are able to help traders identify major price movements that produce repeatable patterns.
2. The CAM strategy uses a combination of indicators to identify upward and downward trends as well as pullbacks in existing trends and countertrend rallies.
3. Using the (ADX) & (MACD) indicators in conjunction with an exponential moving average (EMA) and the commodity channel index (CCI) helps to confirm signals generated.
4. The combination of the (MACD) and (ADX) register their signals after the start of a price move, with the (ADX) slower to respond than the (MACD).
5. The indicator combination will not pinpoint tops and bottoms, however traders can expect the (ADX) and (MACD) combination to identify and capture part of a trending move.
6. More important, the CAM Strategy can help traders stay on the right side of the market and increase the probability of successful trading results.
7. The Cam Strategy buys Pullbacks & Countertrends & sells on a Downtrend when the close is below the 13-period EMA.

*The CAM strategy is an abbreviation of Coordinated ADX and MACD.*

*Please Note *(it's critical to the CAM Strategy) 
(a) The CAM system works well in a positive trend & generates a tremendous amount of Buy signals.
(b) PositionScore is critical to the CAM strategy success.
(c) In a BEAR market the CAM Strategy performance suffers with large drawdowns.
(d) The idea of my StaleStop exit is in place for the protection against large drawdowns.
(e) It’s mandatory to apply the CAM trading strategy to a trending universe of stock.
(f) Skate's modified CAM strategy uses a unique set of parameters with additional filters because the standard CAM rules are not enough to maximize the odds of profit.

*CAM Signals*
The CAM strategy is a combination of 4 patterns that produce a tremendous amount of signals that can be short lived producing false & confusing signals. The amount of false signals proves the CAM strategy is not the “Holy Grail” but then again no strategy lives up to that title. The false signals are impossible to avoid & this is where the commodity channel index (CCI) comes into its own by filtering out many of those false, annoying signals. When both indicators are combined on the same chart, trend strength and trend direction become clear through the colour coding of the price bars or candlesticks. Also CAM signals can stay in play for a very long period of time once they catch a good trend.
*
ADX*
The average directional index (ADX) shows the strength but not the direction of the price that is trending. Trading in the direction of a strong trend reduces risk and increases profit potential. The (ADX) rises as the price strengthens into an identifiable trend & falls when the price weakens or consolidates. The (ADX) can be confusing because it is interpreted differently from other indicators. Most indicators move up when prices rise, and they fall when prices decline, that’s not necessarily the case with the (ADX).
*
MACD*
Moving Average Convergence Divergence (MACD) is a trend-following momentum directional indicator that shows the direction of the price movement. The (MACD) can mislead us at times as we often forget the (MACD) is basically a momentum indicator, so it does not always accurately reflect price movement.
*
This is how the CAM Strategy works*
The CAM indicator compares the slope of (MACD) and (ADX) and identifies the following 4 market patterns. The combination of these 4 patterns can help traders stay on the right side of the market and increase the probability of successful trading results. 
*
Chart patterns *
1. Uptrend = Green Bars (or candlesticks)
2. Pullback = Gold Bars (or candlesticks)
3. Downtrend = Red Bars (or candlesticks)
4. Counter trend = Blue Bars (or candlesticks)
*
A Bar Chart is attached at the bottom of the weekly updated posts*
At the bottom of each week’s update there is a chart for the first ‘Buy’ signal generated regardless whether the position is taken. I have included the Chart in the weekly updates to demonstrate the colour coding of the Chart patterns.
*
Trade Setup *(Enter LONG)
Buy tomorrow at the open if today is a GOLD-coloured bar [which represents the CAM-PB, meaning that both the 10-period (ADX) and (MACD) are declining] but the 14-period (CCI) is above zero, OR if today is a BLUE-coloured bar [which represents the CAM-CT, meaning the 10-period (ADX) is declining but (MACD) is rising] and today’s close crosses above the 13-period EMA.

*Trade Setup *(Exit LONG)
Sell tomorrow at the open if today is a RED-coloured bar [which corresponds to the CAM-DN, that is, the 10-period (ADX) is rising but the (MACD) declines] and today’s close is below the 13-period EMA.

*Skate's CAM Strategy Settings*
Weekly Strategy
$300,000 Capital
20 Position Portfolio
$15,000 Fixed Positions

Paper trading of the CAM Strategy starting date is the 1st January 2019

*CAM Strategy Weekly Update format*
1. This week’s Buy & Sell positions to be placed in the pre-auction before Monday's open if action is required.
2. This week's generated Buy & Sell signals for the CAM Strategy (at the end of trade on Friday)
3. Portfolio performance line chart updated weekly (at the end of trade on Friday)
4. The CAM Strategy ‘Open’ positions will be posted weekly (at the end of trade on Friday)
5. The CAM Strategy ‘Closed’ positions will be posted weekly (at the end of trade on Friday)
6. The CAM Strategy Dashboard will be posted weekly (at the end of trade on Friday)
7. This week’s CAM Strategy first generated ‘Buy’ signal shown on the attached Chart to demonstrate the bar colour coding.




Skate.


----------



## qldfrog (13 April 2019)

Skate, i think the image link might be wrong?


----------



## Skate (13 April 2019)

qldfrog said:


> Skate, i think the image link might be wrong?




I'm unsure of the image link you are referring to..

Maybe a Google Chrome issue others have been reporting

Skate.


----------



## qldfrog (13 April 2019)

T


Skate said:


> I'm unsure of the image link you are referring to..
> 
> Skate.



the cam strategy post ends with an image about the power of compounding? Was it your purpose?


----------



## Skate (13 April 2019)

qldfrog said:


> T
> the cam strategy post ends with an image about the power of compounding? Was it your purpose?




Okay, I assumed there was an issue with the graphic not displaying..

*The graphic is a representation of a wealth creation plan*
Having a trading plan is about creating an extraordinary quality of life, living life on your terms and the graphic somewhat displays what is required to achieve this aspiration. Happiness is really about creating an extraordinary quality of life. Money and financial independence can have a significant effect on everything from our psychology, to our health, to our relationships. 

*A trading plan*
I've posted so much in a short period of time in the 'Dump it here' thread turning it into a short book for others to read when they have nothing else to do or as a travelling companion. As they say a 'picture paints a thousand words' & the picture at the end of my CAM repository post was a representation how to accumulate the funds to trade. Trading in its simplest form is catching a price movement - some try to complicate trading whereas I have a different view. 

*General advice*
Forget about the pending doom & gloom, it's always lurking in the background & someday it will happen but till than concentrate on executing your plan till the $hit hits the fan.

Thank you @qldfrog for allowing me to clarify these minor points.

Skate.


----------



## qldfrog (13 April 2019)

No problem, thanks for the confirmation.have all a great week end


----------



## lindsayf (14 April 2019)

Skate said:


> @Gringotts Bank as no one reads this thread let me indulge..
> 
> *Exercise #1*
> I purposely offend & upset some, I'll bring them to a rage (I'll milk that rage for all its worth)
> ...




Skate
Interesting disclosures about how you interact with others.
Still not really clear what is in it for you to behave like this....orn


Skate said:


> @barney its a means to an end.
> 
> Its not a want its a must (people must do what I want them to do without them knowing - its in my best interest)
> 
> ...





Hi
I still dont understand firstly why you would seek to behave like this or secondly why you are disclosing it.  Unless it is in some part of the financial world where the dumbest manipulator loses...which I think you do allude to.  But outside of that?


----------



## Skate (14 April 2019)

lindsayf said:


> Skate
> Interesting disclosures about how you interact with others.
> Still not really clear what is in it for you to behave like this....orn
> 
> ...




Hi lindsayf

First off, let me say thank you for reading some of my posts..

The post you refer to was a response to @Gringotts Bank with a reference that there is a lack of interest in the 'Dump it here' thread & I made the remark that "as no one reads this thread let me indulge.." to react further with him.

*Very little interest*
The 'Dump it here' thread lacked traction from the 'get go' with little interest in the material I was presenting. With the lack of interest I was merely manipulating the thread to invoke a response with the idea of bring the thread back on topic. I regarded it as a mere interlude before nudging the thread back to the main topic of emotions & how they react with trading. Human behaviour & conditioning is a subject I've written about & taught. 

*Your first quote*
_"Interesting disclosures about how you interact with others.
Still not really clear what is in it for you to behave like this....orn"
_
*Whats in it for me*
Surprisingly I made reference to your quote a few posts back (see below) I behave like this so I can play tennis with someone. Let me explain the art of playing 'Tennis' with someone. Tennis is a game where two people hit the ball back to forth & conditioning is the same. The longer you can keep someone playing tennis it allows the compounding of conditioning to have it biggest affect. 


Skate said:


> The ‘Dump it here’ thread was started in the hope of helping new members those just starting out on their trading journey. I lost interest very quickly in the thread as there was a lack of interaction, I was just repeating information I already knew & it felt as if I was talking to myself. I twisted & turned the thread & at times I was confrontational but that was even short lived.




*Why interact this way ?*
There are a few reasons (there is always a trigger) & it could be but not limited to:
1. To give someone an example
2. To educate
3. To prove a point
4. To control someones emotions
5. To control a conversation or a group (having people hang on your every words is a strong aphrodisiac)
6. To teach someone about their behaviour (a behaviour they are not aware of - if people cannot see the problem, there is no solution)
7. To condition someone for a mutual or beneficial outcome
8. To achieve a desired result
9. For personal pleasure
10. To get a reaction so I can play Tennis with them

It's extremely difficult to explain a very complicated subject & how to apply this procedure in just a few lines (conditioning is a learnt art) body language & facial expression go 'hand in glove'

*Your second statement that ends in a question*
_"I still dont understand firstly why you would seek to behave like this or secondly why you are disclosing it. Unless it is in some part of the financial world where the dumbest manipulator loses...which I think you do allude to. But outside of that?"_

*Let me drill down on your second statement. *
The intention of the 'Dump it here' thread was for the education of traders beginning out on a perilous journey. A journey without knowledge has severe financial & emotional consequences. I've made many posts about the dangers associated with trading & repeated it many time to condition someones mindset (without their knowledge of what I was doing - similar to how we cure hiccups) Conditioning was the vehicle to modify their behaviour & thinking, giving them a fighting change of success. Humans have lost the art of procedural thinking, but that another subject entirely.

*Next*
I want to post about things that are interesting to you & others because I didn't want to keep spewing out information I've learnt over a lifetime that is of no interest or value to you. When members hit the 'Like' button it's an indication of the direction my posts should take. I've had a colourful life & I have a passion to pass on knowledge that has been helpful to me. If I personally think it will make a difference to someone I'll disclose & discuss that topics in a frank & open manner.

*Humans are deeply flawed creatures*
All humans are manipulators (some just don't realise it) I've copped flack explaining the art of 'conditioning' only to be told how bad I am & in the next breath they explain how they have manipulated others to get a desired or favourable outcome for themselves (go figure) People are first to criticise without being smart enough to ask further questions for clarification. If you don't listen you forgo the ability to learn.

I've raised so many different topics in the 'Dump it here' thread that lasted only a few posts because there was a lack of interest. People have lost the desire to learn, we lack passion about so many things & behavioural science perfectly illustrates this.

*Now let me be critical of you*
You have not read the entire 'Dump it here' thread but cherry picked one or two posts with a lack of understanding what transpired before, after, or a desire to fill in the missing blanks for you to better understand where I'm coming from. The heading & the first paragraph was written to evoked an emotion. Words are powerful, setting up someones perception is powerful, conditioning is powerful, how you respond makes a difference. You have reacted to a few of my words, which is basic human nature. I'm hoping my response to you will be the catalysis for you to read a few more of my posts or even a desire to grab my free eBook.

*Disclaimer*
Reading my eBook once is of little benefit, reading it a few more times will allow you to unpack the meaning of what you have read, conditioning you to think on a deeper level & if any of my posts or words modify your behaviour, I'm a winner..

Thank you lindsayf for giving me a platform to further express my views.

Skate.


----------



## Gringotts Bank (14 April 2019)

qldfrog said:


> i also do not like the odds of THE big crash ahead




A banker I know whose job is to look after high net-worth clients is saying his phone isn't ringing, and it's been that way for 6 months or so.  Many of his clients are sitting in cash or other low risk asset classes.  He's been doing this job for a long time.


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## Skate (18 April 2019)

https://www.aussiestockforums.com/posts/1022296/

*Skate's modified CAM Strategy Settings*
Weekly Strategy
$300,000 Capital
20 Position Portfolio
$15,000 Fixed Positions

*1. Listed below is this week’s buy & sell positions to be placed in the pre-auction before Monday open if action is required.*



*2. This week's generated Buy & Sell signals for the CAM Strategy *



*3. Portfolio performance line chart updated weekly *



*4. CAM Strategy ‘Open’ position*



*5. CAM Strategy ‘Closed’ positions*



*6. CAM Strategy Dashboard*




*7. The CAM Strategy first weekly ‘Buy’ Chart to demonstrate the bar colour coding.*



Skate.


----------



## Newt (18 April 2019)

Feeling very spoiled and thankful reading the numerous weekly systematic trading reports on ASF currently.

Skate, a question please - I suspect you would have modelled the effect of trading your Hybrid and CAM strategies together.  I believe you've mentioned before the correlation was relatively low, at least in terms of tickers with Buy signals, but it would be interesting to know if the combined equity curve is flatter, magnifies the period that trend following is successful and times that drawdowns occur.  I'm sure you have market filters for both strategies to limit the DD, but interested if your (expected/modelled) equity curve is now flatter?


----------



## Skate (18 April 2019)

Newt said:


> Feeling very spoiled and thankful reading the numerous weekly systematic trading reports on ASF currently.
> 
> Skate, a question please - I suspect you would have modelled the effect of trading your Hybrid and CAM strategies together.  I believe you've mentioned before the correlation was relatively low, at least in terms of tickers with Buy signals, but it would be interesting to know if the combined equity curve is flatter, magnifies the period that trend following is successful and times that drawdowns occur.  I'm sure you have market filters for both strategies to limit the DD, but interested if your (expected/modelled) equity curve is now flatter?




Hi Newt

Thanks for your question & before I set about answering it - let me please make a few comments.

1. First off the CAM Strategy is not in the same league as the HYBRID strategy. The CAM strategy is okay (not brilliant) & time will tell if the strategy will be good enough for me to trade.
2. The CAM Strategy is a ‘with-trend’ strategy taking advantage of 'pullback & countertrends' entry method that is commonly used by many traders. 
3. The CAM strategy is a simple idea to catch a price movement but I found the original CAM rules are insufficient to maximize the odds of consistent profit.
4. My modified CAM strategy is not being traded as originally designed but I do incorporate the basic idea in my strategy.

The CAM strategy uses the natural pauses the 'pullbacks' in an uptrend to enter the trade in the direction of the trend - it also enters on countertrends which is a very different approach to trading pullbacks, the combination of these two indicators is very clever. I've coded each entry separately but in testing it loses its edge immensely. 

The HYBRID strategy is a pure trend trading breakout strategy. Combining the three separate but similar strategies allow me the opportunity to front run most trend traders as each strategy has the ability to generate signals quicker than one of the other two. The combination of my trailing & stale exits allows me to sell before most trend traders. When the momentum stop, I'm off the sucker quick smart.

*Back to your question*
_"I suspect you would have modeled the effect of trading your Hybrid and CAM strategies together" 
_
Yes, I sure have. The results were disappointing but not unexpected as the entry, exits & positionscore are at odds with each other let alone the parameters & filters differ greatly. Another major issue is the amount of positions the CAM strategy spews out, front running & over powering the HYBRID strategy.

*I've been after another strategy to trade*
I've been coding strategy after strategy for many years looking for another trading system that backtest with long term consistency similar to my HYBRID Strategy but to date its been elusive. The CAM strategy has some inherent irritating annoyingly grabbing everything that moves resulting in false signals that are impossible to avoid but when it catches a good trend it stay in the trade for extended periods due to 13 period EMA. 

Also the CAM strategy loves a BULL market & has difficulty separating the wheat from the chaff. I'm placing a lot of trust that the indicators & filters that I have added will go somewhat to address this & in backtesting it confirms it does. Trading the CAM strategy with 'out of sample' data (OOS) is the only test I'll take notice of. 

Since January the CAM strategy has been motoring along quite nicely & having only two down weeks is disappointing for backtesting but good for live trading. On Monday the portfolio results was shaping up for another exceptional week only to be kicked in the guts by traders taking a bit off the table - traders were being spooked or greedy. Traders taking profits & locking them makes even the most robust strategy look ordinary at times. 

Let me give you an example of the CAM Strategy from Monday to end of trade today displaying what a few down days can do to your trading results.




.   
	

		
			
		

		
	



	

		
			
		

		
	
  .

Thanks for your question giving me an opportunity to explain the CAM strategy in a little more detail.

Skate.


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## Newt (18 April 2019)

Thanks very much Skate for such a comprehensive response.  

I feel your pain about the kick down this week as people took profits before Easter, but when your going for medium term trends it comes with the territory.  First big down week for me since coming back into the market mid January.  

Invaluable for those watching to see you're human and feel these downward jolts, but still have the conviction and confidence to keep doing what your systems call for.


----------



## Skate (26 April 2019)

https://www.aussiestockforums.com/posts/1022296/

*Skate's modified CAM Strategy Settings*
Weekly Strategy
$300,000 Capital
20 Position Portfolio
$15,000 Fixed Positions

*1. Listed below is this week’s buy & sell positions to be placed in the pre-auction before Monday.*



*2. This week's generated Buy & Sell signals for the CAM Strategy *



*3. Portfolio performance line chart updated weekly *



*4. CAM Strategy ‘Open’ position*



*5. CAM Strategy ‘Closed’ positions*



*6. CAM Strategy Dashboard*




*7. The CAM Strategy first weekly ‘Buy’ Chart to demonstrate the bar colour coding.*



Skate.


----------



## Wyatt (29 April 2019)

A bit of panic buying in momo stocks this morning it seems, despite the index going down. 
We'll see how long that lasts.


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## Skate (2 May 2019)

*Quotes I've found interesting*



peter2 said:


> Why is there such a difference if all systems are trend following systems?






peter2 said:


> I think that ASF is fortunate to have multiple systems running in real time. Readers will be able to see the ups and downs of the systems as they progress. People intending to manage their own portfolios, but don't yet have the knowledge or confidence should be following along closely and recording all the buys and sells with their own spreadsheets/portfolio managers. This is a great way to learn without losing money.






Newt said:


> Feeling very spoiled and thankful reading the numerous weekly systematic trading reports on ASF currently






peter2 said:


> ASX 40P portfolio: Week 14 update (started 21 Jan 2019)
> _Comments:_ The portfolio performance continues to impress me. Although I must acknowledge the bullish market conditions. The real test for this portfolio will come with a down turn in the market. This portfolio continues to pull ahead of the P2 portfolio which irritates me greatly. I've started adding more trades to the P2 portfolio but there aren't many good RR opportunities with the market at new highs.






ducati916 said:


> The aim of trading is to become profitable. To do so you need: (i) a methodology that has a positive expectancy and (ii) the ability to execute that methodology.






kahuna1 said:


> Be honest with yourself .... most, in fact 90% of those who trade, loose ,,, of that 90% about half loose everything. Lots of rules, lots that work, lots that never work for some. Having an ego, if your a trader, where sometimes you get it wrong 80% of the time is dangerous. One can make money, a lot of money even if you loose 80% of the time.






ducati916 said:


> You can be shown any number of profitable trading strategies, none of which you can make work for various reasons. The strategy[ies] that [eventually] work are those that you discover yourself as they will be the ones that leave you with a clear mind when trading and able to function calmly.






kahuna1 said:


> If you HAVE an edge, and your stupid NOT to ...* STICK TO IT LIKE GLUE*. Why the hell would you give UP an edge you have over the overall market ? Most don't have an edge, most when they do, give it up, doing stupid things. I could go on, but the psychological side, most fail at and temperament is key. Greed and FEAR are battles one wages, so too ego and stupidity.






ducati916 said:


> Only when are you calm enough and devoid of any number of bad habits that can [and will] get you in trouble, to trade your methodology successfully. To reach that point, requires massive effort, probably measured in years.




*Why make this mid-week post ?*
The markets at the moment are playing havoc with my paper trading of 3 strategies that I'm planning to trade in the near future. I have decided to trade 2 of the new strategies at the start of the new financial year with the appropriate backtesting being completed. Paper trading is purely trading the strategy with data not seen before being 'out of sample' data. Bull markets makes any strategy appear successful whereas Bear markets are a leveler. 

The last 4 months have been extremely profitable for any 'Trend Trading' system. If May & June live up to expectations it will give an insight into the true performance of the strategies. This is the very reason why trading in all markets conditions are essential to qualifying a system or idea.  

*Let me give you an example* 
The Equity line charts displayed below is EXACTLY the same system/strategy under test, the ONLY difference is a slightly different start/entry date & position sizing so its apt to make a few bullet points. 

1. Luck plays a big part in any trading results.
2. The entry date plays a big part in the overall small sample trading results.
3. The sediment of the markets play a big part in the portfolios performance no matter how good you think your strategy is.
4. You can trash a good system on a small sample of data or time.

*Example 1 - Starting Date 29th June 2018*



*Example 2 - Starting Date 18th January 2019 (SAME STRATEGY as above)*
*



Moreover*
I'm in the middle of paper trading 3 strategies at the moment & I'm planning to trade 2 of them if they perform as expected & they mirror their backtest results. 

The current performance results of the 3 strategies are inline with extensive backtesting. The 3 strategies performance are similar as they are all a combination of a few different  'Trend Following Systems' that do extremely well in the conditions the markets are experiencing at the moment. 

The systems being tested need to experience a few down turns in the market to get a true evaluation. I've been reporting weekly the 'CAM Strategy' but for comparisons I'm posting he results of the other two non disclosed systems to highlight the issues a Bull market gives when it comes to paper trading an idea.




Skate.


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## Skate (3 May 2019)

Whilst waiting for the end-of-trade today I wish to make a few comments in the 'Dump it here' thread expressing some of my personal views keeping the theme of the thread alive.

*Catalyst *
@ducati916 posted some alternative views in the "TraderFeed - Brett Steenbarger, Ph.D." thread that I found interesting to read. To be right upfront I aligned with those views expressed by the 'duc' & found that his comments were articulated succinctly & were well written. I gave some thought of lifting some of those comments & placing them in the 'Dump it here' thread but thought better of it. If you are interested in his views you can read the "TraderFeed - Brett Steenbarger, Ph.D." threads for his comments.

*Let me make some general comments* 
Behaviour modification, without doubt, is the key to trading success. It’s not only in how we think but also in how we act in certain situations. We must adapt to changing situations over which we have no control & in turn we must change the situations over which we do have control. It's important to have an attitude & open mind that we are ‘still learning’ no matter where we are in your trading journey. 

You cannot really tell someone what to do, but often they will modify their behaviour by reading a variety of forum posts & hopefully they will be more receptive to making better trading decisions. It's worth remembering that we can all learn from other people's insights whether you agree with them or not.

Skate.


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## Skate (3 May 2019)

I've been following with interest with the comments made in the "TNY - Tinybeans Group" thread that's the catalyst for me to make a general comment about trading & the associated emotions that come with the game. The comments below are general in nature & not directed at the "TNY - Tinybeans Group" thread or any particular member commenting in the thread.

*Why we struggle*
The complexity, the surprises, the shocks, most traders feel on a daily basis sometimes come as a shock because traders aren't even aware that the market can be mean to them without notice. Some traders struggling to understand what went wrong with their position when riding success. Trading is not gambling, trading is not a sprint but a marathon, trading is a game of probabilities. Trading successfully is changing your behaviour to trade the method that gives you the best long term outlook of success.

Skate.


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## Skate (3 May 2019)

*Emotions*
It’s sad anytime someone loses money, sometimes they can lose a fortune in such a little period of time, it can happened to anyone lacking the knowledge what the market can really do to them quick smart. Most traders focus on what the markets can do for them not what the markets can do to them so it’s reasonable you must plan to lose & be the best loser you can possibly be. 

*Trading is a losers' game* 
He who loses the best will have the best chance to win in the end. Most traders fail to realise that it’s easier to take a small loss than it is to take a big loss. As traders we must remove the emotional element as quickly as possible if our trading is to be successful. Humans don't act well when under stress or emotional pressure.

*Don't let the markets control you*
Never let the market tell you that your position is wrong, you must decide when your position is bad & take action without exception, sell & move on as it’s critical to your success in trading. If you don't take early losses, it will becomes more difficult to take a loss as they become larger

You can’t control the market but you have full control of your position - drill that into your thinking & remember you can sell whenever YOU want, it must become second nature to automatically do it at times to elevate stress in your trading

Don’t be a ‘coulda-woulda-shoulda’ type of trader because you will need to have total control when following your trading plan.

Skate.


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## Skate (3 May 2019)

I'll just bullet point some of my ideas & let others think about them rather than posting.

*Topics to think about*
1. With the speed of the internet how effective is what you read or the newly gained knowledge - does it really affect your trading decisions.
2. I believe how we think & act about losing money is really important to the success of our trading.
3. Why we are afraid to take a trade sometimes.
4. How do we control our feelings so we don't get too emotional when trading.
5. I firmly believe that traders never plan for the really bad times.
6. It's a known fact - It can be pretty costly to make a mistakes in trading so how do we slant the odds in our favour?

Skate.


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## Skate (3 May 2019)

@Trav. thanks for reading my posts, I was just filling in some time whilst waiting for the markets to close & settle. When I post it feels like I'm speaking to myself, putting my thoughts into words.

Thank you once again, I appreciate you talking the time to read my thread as well as hitting the Like button.

Skate.


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## peter2 (3 May 2019)

I've also liked your posts but I have to add that most new traders won't realise the truth of your comments until they experience the stress and distress that the markets can produce in us. 

Unfortunately when they do experience the stress they don't know what to do next. They do the wrong things like trying a new indicator or new system not realising that the problem is them. 

Most don't keep comprehensive records. All the answers to our trading questions are in our stats. 

Success in trading comes to those who are willing to modify their behaviour to skew the numbers in our favour. The biggest behavioural adjustment is to become proactive rather than reactive.


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## Skate (3 May 2019)

peter2 said:


> I've also liked your posts but I have to add that most new traders won't realise the truth of your comments until they experience the stress and distress that the markets can produce in us.
> 
> Unfortunately when they do experience the stress they don't know what to do next. They do the wrong things like trying a new indicator or new system not realising that the problem is them.
> 
> ...




Thank you @peter2 for also reading my post & making additional comments - every word you added is so true. The 'Dump it here' thread was designed to educate & condition people how to think (not what to think) when it comes to trading as most don't realise the emotional side that comes with the territory.

The 'Dump it here' thread & the eBook was an effort to give new traders the heads-up before embarking on their trading journey & a pep talk to others. There are some great threads on ASF but most don't take the time to review or read some of the gems previously written as it's perceived as old news or most may just lack the time. I understand reading older posts is a huge commitment.

Skate.


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## Trav. (3 May 2019)

Skate said:


> @Trav.Thank you once again, I appreciate you talking the time to read my thread as well as hitting the Like button.
> 
> Skate.



I have enjoyed your thread and to be honest a lot of your thoughts have gone over my head. But as I continue my journey in this game I find that I keep coming back and re reading some of your posts and the pieces are slowly fitting together.

I have made horrendous mistakes and can only blame myself for them, but I have not given up and the ASF community is definitely part of the reason why I am improving as a trader and now can be honest with myself and work on my weaknesses.

Thanks for sharing your knowledge and wisdom as I am sure many of us have taken something away from this thread.

Cheers


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## Skate (3 May 2019)

https://www.aussiestockforums.com/posts/1022296/

*Skate's modified CAM Strategy Settings*
Weekly Strategy (Start Date: 1st January 2019)
$300,000 Capital
20 Position Portfolio
$15,000 Fixed Positions

*1. Listed below is this week’s buy & sell positions to be placed in the pre-auction before Monday open if action is required.*



*2. This week's generated Buy & Sell signals for the CAM Strategy *



*3. Portfolio performance line chart updated weekly *



*4. CAM Strategy ‘Open’ position*



*5. CAM Strategy ‘Closed’ positions*



*6. CAM Strategy Dashboard*




*7. The CAM Strategy first weekly ‘Buy’ Chart to demonstrate the bar colour coding.*



Skate.


----------



## Skate (4 May 2019)

peter2 said:


> I've also liked your posts but I have to add that *most new traders won't realise the truth of your comments until they experience the stress and distress* that the markets can produce in us.




*We are not computers*
@peter2 comments allows me to expand on a well-known fact that most traders lose money because of inbuilt fragility that come with being human, we are not computers & certainly don't act like one. The markets can produce unbelievable stress when your money is on the line & most traders don't think clearly when faced with losses, indecision creeps in causing us to become emotional instead of being methodical or mechanically in our trading method.

*Poor behaviour patterns*
Common behaviour patterns can lead you into making errors of judgement in your trading, relationship & health can suffer in many ways. I’m not saying that you need to be unemotional but you must recognise things that make you feel good and things that make you feel bad. Some traders don't recognise that things can go terribly wrong because we all have a tendency to believe in things that we expect or hope for, believing in something with little real evidence is very dangerous to your wealth.

*Be capitalised & don't over-trade*
Traders who are under-capitalised or over-trade have a tendency to value the avoidance of loss more highly than the making gains, losses will impact more than gains. When emotional, traders have a habit of making poor decisions, methodical traders will recognise conditions that trigger this mental state. Switching from an emotional state that leads to poor behaviour gives everyone a fighting chance in making a more rational decision. Being calm & methodical can save you money & that's the name of the game.

*Size of losses*
We are also influenced by the size of the loss we have already incurred. The bigger the loss, the bigger it impacts our ability to make the right decision & we are more likely to hold that position rather than moving on to the next trade. If you can recognise that the size of your loss has a huge impact on your ability to make the right decision, it pays to trash those sucker quickly keeping losses small & unemotional.

*Recognise & reconfigure*
No trader likes to crystallise a loss by selling, it's not easy being unemotional when trading either because that's not in our nature. To be a better trader we need to take control & reconfigure our behaviour that gives us a fighting chance to stay in the game.

Trading longevity is truly the end game.

Skate.


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## Cam019 (4 May 2019)

The last 10 posts have truly resonated with me not only as a trader, but also at the most fundamental personal level. There are two specific paragraphs that hit me like a freight train the first time I read Market Wizards. I truly believe these paragraphs regarding the composite of a losing trader and the process of decision making by Dr. Van K. Tharp have been undeniably beneficial to my trading.

When I first read this paragraph below, at that current time in my life, it was like reading an almost identical description about myself. The two things that stood out majorly to me were not having a set of rules to guide my trading and being a crowd follower. I was strategy hopping like a crazy person, looking for the next best thing every time I would have a loss because I was chasing some holy grail strategy (which does not exist). This also happened because I was severely undercapitalised and was taking crazy risks in regards to position sizing. You name the strategy and I've probably tried it at one point or another over the last 2.5 years.. I was getting nowhere fast. I soon realised I needed a set of rules to govern my decision making process in order to remove the emotion from my trading. I also needed to fix the issues in my personal life because at the time I was unknowingly letting those external issues seep in and affect my decision making when trading.




This paragraph below has also been eye opener for me. At times when traders have a system or have rules.. they still apply a subjective thought process to the signals given by the system or rules. Personally, I prefer not to consider potential outcomes for trades at all because this increases self doubt about the signal. I'm nowhere near perfect but I make a conscious effort to just see the signals, apply them, and then move on. I don't think about what could be or what might happen. Thing is... anything can happen to a stocks price, and I have no control of it. All I have control over is: following my signals, risk management and position sizing.






Skate said:


> Trading is not gambling, trading is not a sprint but a marathon, trading is a game of probabilities. Trading successfully is changing your behaviour to trade the method that gives you the best long term outlook of success.



Wholeheartedly agree Skate. It's completely a numbers game. Once I got my head around that... man, things seem to be changing for the better. I dislike making any decision from a place of emotion which is why I am a terrible discretionary trader. There was no structure to alert me about what my reaction should be if a signal appeared. Trying to make those decisions on the fly has forced me to pay my tuition to the markets.


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## qldfrog (5 May 2019)

One critical thing for me in my move toward hopefully successful system trading is the size of the money at risk
By ensuring if all come to the worst and i loose 100pc, it does not significantly affect my life, for the first time, i can have a strict adherence to the system
Funnily, my move into mostly protection mode for most of my assets allow me better following of my system
Before, i was everywhere, mostly loosing while paying zillion in brokerage,always too early in my tradings
Age might help  welnow asl...
And reading this thread...more than reading the various books
If it may inspire people...


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## Skate (5 May 2019)

Cam019 said:


> The last 10 posts *have truly resonated with me* not only as a trader, but also at the most fundamental personal level. I dislike making any decision from *a place of emotion* which is why I am a terrible discretionary trader.




@Cam019 *What a great post. *
I believe your post will have a larger impact than the other 10 posts put together because your words came from the heart, a personal perspective. The 'Dump it here' thread is in the "Beginner's Lounge" section of the forum not visited by many members which is a pity as your post is powerful in its delivery.

*Thinking out loud*
I'm glad I made a few comments whilst filling in some time waiting to post the weekly Cam strategy results. Posting in the 'Dump it here' thread I soon realised it was an information overload as expressed by @tech/a.

*I've shifted focus*
Shifting the thread focus to a more trading strategies theme because of an interest by @qldfrog posting trading results of his version of the CAM strategy & @peter2 deciding to run a 40 position portfolio recording its progress. With renewed interest in the thread I stopped posting the same-old-same-old that didn't hold interest or momentum. I've restricted myself to posting the weekly CAM strategy results & only answering question I'm asked. When there is a new post it gives me the opportunity to make a comment.

*A few comments about emotions & risk*
From my observation the average trader (if there is one) are not seeking to make a few extra bucks, they are trading because they after better return than any other investment vehicle. Traders are expecting big reward and fail to see the big risk that they can experience & somewhere along their journey they will face this situation. Trading can give you some big surprises being a friend one minute or your worst enemy the next, & from my experience with trading you must be prepared for both.

*Self control*
You can eliminate or at least control your reactions & emotions to sudden market moves by having the correct position size that creates your emotions in the first place when there is an adverse move in price against you. You need to have safeguards in place expecting an adverse market move at anytime & your trading plan should be based with that outcome in mind.

*Emotions*
Behaviour modification can take many forms. Each time you have a big loss or did something stupid it worth remembering but just because your trade lost money there is no reason to feel bad or beat yourself up, losing money is a part of the game. Money shouldn’t be the motivator but a by-product when you trade successfully, trading is just a business endeavour.

*Trading burns people*
Unsuccessful trader who loses big will quickly give trading away, the markets can damage you quickly, losses can sometimes be more devastating than losing a few bucks, it can take away much more like your mental peace & your self-esteem. At times it can be devastating to a relationship not because of the money lost but by the mood swings that comes with the anguish.

The anguish, the emotions is all because traders never knew the enemy in the first place.

@kahuna1 posted many years ago: _"What makes a site is the actual posters as I am sure you well know and how they treat each other"_

Deep down we all post in the hope of helping others.

Skate.


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## Skate (7 May 2019)

Ann said:


> *Trading Psychology Techniques 2: Testing Your Trading Ideas
> *
> _......The sad truth is that a substantial portion of trading (and trading psychology) problems stems from trading sheer randomness. Traders convince themselves they see a pattern in price action, earnings, macroeconomic data releases, indicators, etc. and they act upon that pattern without testing its validity in any fashion whatsoever....._



*
Deceived by patterns - *(traderfeed-brett-steenbarger thread)
A post by Ann in the "traderfeed-brett-steenbarger thread" has resonated enough with me to make a post about pattern, chart patterns in particular & how they apply when it comes to trading. As a mechanical system trader I'm constantly looking for repeatable chart patterns that can be coded & backtested confirming the validity, profitability & if that pattern can be turned into a trading strategy. It's one thing to have a good idea but without vigorous testing as suggested by Brett Steenbarger it will all be for nought. 



tech/a said:


> You cant expect a pattern to have influence after say 10-20 periods regardless of time frame



*
Chart Patterns *
Patterns are everywhere. Some Patterns are deadly & can lead you to make a poor decision. Chart patterns are easy to spot when they are in the middle of the chart but as traders we can only trade at the hard right edge. Chart patterns, even candlestick patterns look good in hindsight but less than handy predicting what will happen tomorrow. It's a pity all patterns appear well after the fact, @tech/a suggests it is between 10-20 periods regardless of time frame for patterns to have an influence. Patterns, they tell you a story of what has happened in the past & not what will happen tomorrow. 

*Charts - easy to interpret*
Furthermore, I’m suggesting that chart patterns, candlestick patterns are easy to interpret after they happened & they are more predictable than they were before they occurred. Chart readers have a unique ability to express their opinion on certain information that validates what we already know to be true and then create a story about it to make sense out of the event as we attempt to explain it to ourselves. This why we see cute little Bunnies or faces in cloud formations, seeing patterns is in our DNA, it's an inbuilt survival mechanism to quickly distinguish friend from foe. 

*Stocks are just like people*
Understanding traders past behaviour, may allow you to predict their future behaviour. Stocks are just like people, because that is who makes them look the way they do. The buying and selling creates an emotional ebb and flow pattern & just like people, stocks can be unpredictable, but certain emotions and behaviours do occur regularly.

*In closing*
ASF is awash with a variety of mechanical trading systems being reported at the moment, following along I feel privileged to be apart of their journey. With any mechanical system be it a Daily, Weekly or a Monthly we are all trading repeatable patterns.

Skate.


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## Gringotts Bank (8 May 2019)

Cam019 said:


> I dislike making any decision from a place of emotion which is why I am a terrible discretionary trader. There was no structure to alert me about what my reaction should be if a signal appeared. Trying to make those decisions on the fly has forced me to pay my tuition to the markets.



The subconscious can process a chart immediately and with a _far _higher degree of accuracy than any system ever can.  The problem is that without a backtested system, fear can creep in. 

Fear comes from the conscious mind and will play havoc with the superior subconscious signalling process.  When you "just know" as Cap Black once said - that's the subconscious signalling an opportunity that the conscious mind can't even put into words. When you "just know" that a move is imminent, the conscious mind doesn't know why it knows.  The conscious mind is like a laptop; the subconcious is like a room full of super computers, and it uses _feeling _to signal what it knows.

I use a system, but only because without it I find it hard to control fear.  But the ultimate form of trading is just free-flowing dance where you're totally in tune with the movement of the market.  No fear.


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## Skate (8 May 2019)

Gringotts Bank said:


> The subconscious can process a chart immediately and with a _far _higher degree of accuracy than any system ever can.  The problem is that without a backtested system, fear can creep in.
> 
> Fear comes from the conscious mind and will play havoc with the superior subconscious signalling process.  When you "just know" as Cap Black once said - that's the subconscious signalling an opportunity that the conscious mind can't even put into words. When you "just know" that a move is imminent, the conscious mind doesn't know why it knows.  The conscious mind is like a laptop; the subconcious is like a room full of super computers, and it uses _feeling _to signal what it knows.
> 
> I use a system, but only because without it I find it hard to control fear.  But the ultimate form of trading is just free-flowing dance where you're totally in tune with the movement of the market.  No fear.




*I’ve been thinking*
Turbulent times are forecasted & if you are an avid reader of @kahuna1 posts, or a reader of @noirua, "Latest tweets by The Donald" thread or follow Trumps latest tweets proves that this wouldn't be the best time to start & challenge a new strategy - the markets have turned angry & traders are unpredictable & moody. 

*Sell in May and go away*
The month of May & June historically have not been great trading months so it’s the perfect time to test a new trading strategy. It's been said that there is no perfect time to start trading & when you do start the chances are "it will be the very worst time ever".

*The "Just knowing" comment*
@Gringotts Bank has made another great post in the 'Dump it here' thread & his comments of "just knowing" has stimulated a light bulb moment & got me thinking along the lines of "is it possible to trade & code a feeling" & if so can that strategy make money. 

*An idea generated today*
We all have opinions of what works & what doesn't when it comes to trading but always find it difficult to have the confidence putting our money on the line trading that idea. So after reading @Gringotts Bank post I set about coding a strategy from what I have learnt over the last few years. I'm shooting from the hip coding my idea of what I know & feel to be true (at least for me) to formulate a new strategy that on paper has the ability to make it. 

*Coded & tested*
The idea coded up well & the strategy has backtested with pleasing results. Backtesting is only an indication & the results should be taken with a grain-of-salt. The new strategy has only a few conditions when to buy & sell. Hopefully the new code can withstand a bit of stress, a bit of turmoil. 

*Start Date*
I've started the new strategy as of the 6th May 2019, (3 days ago) & the current negativity & high volatility will be a good test to evaluate the idea. Also is it possible to quickly code a strategy to withstand high volatile & turbulent market that we are all experiencing at the moment.

*A trading idea from reading ASF posts*
Over the years I looked at charts trying to find repeatable patterns to trade BUT for the sake of this experiment I'm using information I've learn over the last 4 years reading ASF forum posts by @captain black , @tech/a  & @peter2 whilst taking on board the comments made by @ducati916 , @Wyatt , @Cam019 , @jjbinks  & @qldfrog 

Today I've coded a simple robust strategy (IMO) that should have a fighting chance no matter what trading conditions are thrown at it, well that's the brief I set myself.



Skate said:


> It's one thing to have a good idea but without vigorous testing as suggested by Brett Steenbarger it will all be for nought.




*The CAM Strategy*
The CAM strategy is so simple in design you would "bet-pounds-to-peanuts" it wouldn't be profitable. The CAM strategy has very few rules & it was the benchmark for my new strategy. I'm a bit different to most when it comes to making money out of the markets. My simplistic views are not for every one as all I want to do is "jump on when prices are rising & jump off when the momentum stalls".

My new strategy, is the *MAP* strategy. 

MAP is an acronym - *M*oving *A*verage *P*eriod Strategy (it's a simple MA strategy)

*The 'MAP Strategy' trading Plan*
To keep this strategy as simple as possible the plan has 2 Buy rules & 2 sell rules.

(a) I'll buy whenever the Closing price is higher than a selected Moving Average conditional on the ROC filter being above 0% - *OR* - I'll buy when the Closing price is at least 10% higher than the previous week close with Volume higher than the Moving Average period. 
(b) I'll sell when the momentum stalls or when a trailing stop is hit. 

*In Plan in English*
I'll buy when the price is moving up with momentum & Sell when the momentum stalls or the trailing stop is breached. I won't disclosed the Moving Average look-back period or my parameters. 

Reverse engineer a system if it turns out to be profitable can sometimes be fun.

*This is my first post*
Starting from the first purchase on Monday the 6th MAY 2019 the results are underwater from the get-go that's pleasing -  the stress testing of the strategy has already begun. 

I'll be posting the MAP trading weekly results at the same time I post the CAM strategy weekly updates on Friday after the close. The Trade amounts for both strategies will be exactly the same for comparison purposes.




*Skate's MAP Strategy Settings*
Weekly Strategy (Start Date: 1st January 2019)
$300,000 Capital
20 Position Portfolio
$15,000 Fixed Positions

*1. Listed below is this week’s buy & sell positions to be placed in the pre-auction before Monday open if action is required.*
This will be listed this coming Friday after the close.

*2. This week's generated Buy & Sell signals for the MAP Strategy *



*3. Portfolio performance line chart updated weekly *



*4. MAP Strategy ‘Open’ position*



*5. MAP Strategy ‘Closed’ positions*
As the strategy has not completed a trading week there is nothing to display

*6. MAP Strategy Dashboard - after three days of trading*



*Why post a another strategy to test?*
Well, frankly, reporting on the CAM strategy in my opinion is not enough to spark additional interest in systematic trading. This forum is chock full of talented traders who have something to contribute & maybe just one post from them might be the light-bulb they are looking for.

Skate.


----------



## Skate (8 May 2019)

There has been a request for a direct comparison between the results of CAM strategy & the MAP strategy from the 1st January 2019, its a wonder I didn't think of doing that. DOH !

*Results for the MAP strategy - 1st January 2019 to end of trade today




Results for the CAM strategy - 1st January 2019 to end of trade today





The MAP Strategy Portfolio Dashboard - from 1st January 2019 to the end of close today Wednesday 8th May 2019





The CAM Strategy Portfolio Dashboard - from 1st January 2019 to the end of close today Wednesday 8th May 2019



Early indications *
Both strategies are performing as expected, so it will be interesting to see how they both handle the next few months. 

Future MAP strategy updates will be from 1st May 2019.  

Skate.


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## Gringotts Bank (10 May 2019)

Skate said:


> *The "Just knowing" comment*
> @Gringotts Bank has made another great post in the 'Dump it here' thread & his comments of "just knowing" has stimulated a light bulb moment & got me thinking along the lines of "is it possible to trade & code a feeling" & if so can that strategy make money.
> 
> *An idea generated today*
> We all have opinions of what works & what doesn't when it comes to trading but always find it difficult to have the confidence putting our money on the line trading that idea. So after reading @Gringotts Bank post I set about coding a strategy from what I have learnt over the last few years. I'm shooting from the hip coding my idea of what I know & feel to be true (at least for me) to formulate a new strategy that on paper has the ability to make it.




Good idea.  Asking the question "so how _was _it that I 'just knew' with absolute certainty?".  Was it the sustained speeding up of turnover (trades per second)?  Was it massive block trades taking out several lines at once?  Was it the sudden and repeated re-filling of the bid?  Was it that my sell order just got eaten as if it wasn't even there?  These things are obvious, so unlikely to be it.  Such conditions are well known to traders already.  Perhaps it was something far more subtle, or a combination of very subtle 'thin slices'.

What style did you come up with Skate?


----------



## Skate (10 May 2019)

Gringotts Bank said:


> Good idea.  Asking the question "so how _was _it that I 'just knew' with absolute certainty?".  Was it the sustained speeding up of turnover (trades per second)?  Was it massive block trades taking out several lines at once?  Was it the sudden and repeated re-filling of the bid?  Was it that my sell order just got eaten as if it wasn't even there?  These things are obvious, so unlikely to be it.  Such conditions are well known to traders already.  Perhaps it was something far more subtle, or a combination of very subtle 'thin slices'.
> 
> What style did you come up with Skate?




*Succinct Answer*
I came up with another trend following system because it’s a style proven to make money.

*Additional comments*
For the sake of others reading this thread I’m going to make a few comments about making money in the markets (our end game) I’m dumbfounded that there are so many ways to bet on the share markets, as with Horse racing, rugby league & even baseball (heaven forbid)

*There are successful traders & others not so fortunate*
You made some interesting comments in your previous post, two of which are listed below:
(a) [You] "just know" that a move is imminent [that] signals an opportunity.
(b) [It’s] “just [a] free-flowing dance where you're totally in tune with the movement of the market. [having] No fear.”

*So let’s unpack your statement* (I’m 100% in agreement)
(a) Most seasoned traders "just know" when a move is on but sometimes lack the correct tools to capture the move OR they lack the confidence to enter the move.
(b) Traders need to be in tune with the movement of the market - it’s so much easier to go with the trend than fighting against it. 

*Trends*
Trends come & go otherwise we would all be wearing ‘Bell bottom’ trousers, ‘Paisley Shirts’, 'Mutton chops' & a 'Mullet hair style'. I’m a big believer in dancing to the music being played (I’ve written about this in many of my previous posts on this thread)

*Now let me have my say from my perspective*
Trading doesn’t have to be complicated, find a trading style that you are comfortable with & go for it. 

*Tread carefully*
Be careful & educated before you start trading because when your money is on the line trading things can get complicated very quickly bringing emotions to surface that you never knew existed. You need to condition yourself to have the correct mental attitude so you can think clearly under pressure. The way you respond when it comes to trading is the whole essence of starting the ‘Dump it here’ thread condensing it into an eBook format on Trading Fundamentals. (from my perspective)

*Let me explain what I “just know”*
Moving averages is an indicator showing the movement of the markets & I use moving averages extensively in my HYBRID trading strategy. Your post sparked a light bulb moment as I “just know” how vital simple moving averages (SMA) as well as exponential moving averages (EMA) are to any trading system. A quick explanation for others, "Exponential moving averages" (EMA) gives more weight to the most recent data that reacts faster to recent price changes than simple moving averages (SMA)

*Key component*
Moving averages are the key components to my new MAP strategy. Simply using a moving average to enter & exit the market, nothing fancy, pretty basic really. I wanted to prove to readers that you don’t have to reinvent the wheel or have a new idea as everything you need to trade successfully is right at your fingertips. 

*The MAP strategy*
I'll buy when the price is moving up & Sell when the price is moving down as I “just know” this strategy will work over time, paper trading it live on the ‘Dump it here’ thread with weekly updates will prove or disprove what I “just know” to be true.

*Nothings perfect*
All indicators are lagging, they need a period of time to establish a pattern & that’s why trading ‘Moving Averages’ is not an exact science. Getting into & out of a move using moving averages can be tricky but I “just know” trading moving averages has potential.

Skate.


----------



## Skate (10 May 2019)

Repository found here - https://www.aussiestockforums.com/posts/1022296/

*Skate's modified CAM Strategy Settings*
Weekly Strategy (Start Date: 1st January 2019)
$300,000 Capital
20 Position Portfolio
$15,000 Fixed Positions

*1. Listed below is this week’s buy & sell positions to be placed in the pre-auction before Monday open.*



*2. This week's generated Buy & Sell signals for the CAM Strategy *



*3. Portfolio performance line chart updated weekly *



*4. CAM Strategy ‘Open’ position*



*5. CAM Strategy ‘Closed’ positions*



*6. CAM Strategy Dashboard*




*7. The CAM Strategy first weekly ‘Buy’ Chart to demonstrate the bar colour coding.*



Skate.


----------



## Skate (10 May 2019)

*Skate's MAP Strategy Settings*
Weekly Strategy (Start Date: 1st May 2019)
$300,000 Capital
20 Position Portfolio
$15,000 Fixed Positions

*1. Listed below is this week’s buy & sell positions to be placed in the pre-auction before Monday.*



*2. This week's generated Buy & Sell signals for the MAP Strategy *



*3. Portfolio performance line chart updated weekly *



*4. MAP Strategy ‘Open’ position*



*5. MAP Strategy ‘Closed’ positions*



*6. MAP Strategy Dashboard*




*7. Direct comparisons of the trading results of the CAM verses the MAP strategy*



Skate.


----------



## Skate (11 May 2019)

peter2 said:


> _Aim:_ To earn extra income that enables me to do more of the things that make me happy.
> (as Bill is going to take my franking credits away)




*Changing investment style*
Yep, I'm also rearranging my long term dividend seeking investments into a more hands on trading style & I'm planning to redirect some of those funds into 2 new weekly Trend Following systems.



peter2 said:


> I'll show the progress as I've done in the past. You'll know if I'm profitable or not and whether I'm hot or cold. If this thread lasts for more than 6 mths then I'll tell you the profit as a percentage of starting capital OK?




*This got me thinking*
As I'm already keeping accurate records paper trading my new strategies why not list a summary of the three under test so others can follow their progress live.



Gringotts Bank said:


> Good idea. Asking the question "so how _was _it that I 'just knew' with absolute certainty?". Was it the sustained speeding up of turnover (trades per second)? Was it massive block trades taking out several lines at once? Was it the sudden and repeated re-filling of the bid? Was it that my sell order just got eaten as if it wasn't even there? These things are obvious, so unlikely to be it. Such conditions are well known to traders already. Perhaps it was something far more subtle, or a combination of very subtle 'thin slices'.




*Too fancy for me*
Phew, comments made recently by @Gringotts Bank &  @peter2 is above my pay grade so I'll be happy to keeping my trading style simple, following trends.

*Great threads*
It’s inspiring to see a renewed interest in a few trading threads & especially @peter2 “p2-momentum-trade-book-part-3” thread & @tech/a "potential-breakout-trading-technical-tips-and-tricks" thread.

*2 now 3 Strategies under evaluation*
I have two strategies that have been under valuation since 1st January 2019, the CAM strategy is one of them & my BOX strategy is the other. The 3rd strategy is the recent MAP strategy inspired by @Gringotts Bank & it's now one week old. The BOX strategy is another simple Breakout system with extreme parameters unrestricted by market conditions or an index filter. The BOX strategy is designed to be a free flowing system with minimal restrictions on the Darvas principle of Boxes.

The BOX strategy is a simple *B*reak*O*ute*X*treme system – *BOX* for short

*Weekly updates*
I'll keep posting weekly updates of the CAM & MAP strategies & a summary report of the progress of the 3 strategies under evaluation. I won't chock up the 'Dump it here' thread with another weekly update of the BOX strategy but rather display a graph of the three for a direct comparison.  (see below)

*Summary Report

*

*This is the BOX strategy Dashboard from 1st January 2019 to end of close on Friday 10th May 2019 - *(The Dashboard is being posted once for those interested)



Skate.


----------



## Newt (11 May 2019)

Whew, at this rate we risk ASF going into another golden age for trading threads and education


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## Gringotts Bank (11 May 2019)

Simple is good.  What would really interest me is to see one of your strats traded by a couple of other people (not me) over the course of a few months.  To have a small group of people apply a simple, solid and purely mechanical strat, then contrast the equity curves.  For a 100% mechanical strat, one might assume the equity curves would be very similar.  But would they?  I'd bet on significant differences.

Traders would have excuses of course.  "My internet was down for a week, so I missed that big trade", "I had to move interstate and couldn't continue", "I had to withdraw capital to help out a friend", etc. etc.  All legitimate excuses, but such things _would _appear.  The question is "what is really underlying such excuses?".  You (Skate) would continue to succeed, and strangely, others would not match you.  There is much more to succeeding than a good strat.  You have a factor in your success which is not fully explored here.


----------



## willy1111 (11 May 2019)

Newt said:


> Whew, at this rate we risk ASF going into another golden age for trading threads and education




I can't help but thinking perhaps this is another sign we are close to a top in the market


----------



## Skate (11 May 2019)

Gringotts Bank said:


> Simple is good.  What would really interest me is to see one of your strats traded by a couple of other people (not me) over the course of a few months.  To have a small group of people apply a simple, solid and purely mechanical strat, then contrast the equity curves.  For a 100% mechanical strat, one might assume the equity curves would be very similar.  But would they?  I'd bet on significant differences.




*No need to*
@Gringotts Bank, there is no need for others to trade my strategies as I report religiously all the trading signals & positions sizing of both strategies before the positions are taken, doing this the trading results cannot be fudged as there is nothing hidden whatsoever. Even my trading setups are disclosed at the bottom of this post.

*The Turtles*
If the exercise is to confirm whether trading temperament & emotions plays a big role as in the Turtle experiment, the results may vary & as you say: "I'd bet on significant differences".

*Confidence*
I've put in the hard yards learning the culture of trading that allows me to have the confidence to back myself to follow my trading plan 100%. I "never ever" deviate from the plan even when I know at the end of the week I'll be financially worst off. What annoys me is logical people making illogical decisions constantly but that's just part of the trading game.

*Platoon Sargent*
In movies & in the US army, Platoon Sargent's main role is to shout & stress the new recruits, why?  It's so the new recruits are conditioned to can handle stress from the get-go ensuring they make calm, measured decisions under enormous stressful combat conditions, their lives depend on it.

*How to think 'not' what to think*
The 'Dump it here' thread is designed to condition traders beginning their journey, making sure they are aware that stress from trading can be hazardous to their health & wealth. Uncontrolled stress will nags & nags at you even when asleep. I'm a firm believer how one handles stress when trading can be the difference between being profitable or a dead set loser. You only have to read some of the words posters use & how those words are strung together to feel their emotions. 

*Let me be frank*
I'm totally amazed how temperamental some forum members are & frankly I expect better, so many on here are so thin skinned, one hint of perceived criticism & their noses are all out of joint, crikey all posts are just written words. To use the words of our Prime Minister Scott Morrison: "If you can't handle stress you can't manage trades"..

*Some members don't post*
We all have the right to express an opinion whether it right or wrong, I've been [pm'ed] & abused a few times over certain comments & I've even copped some harsh words for "Liking" someones post, go figure. When a discussion gravitates & the other poster makes a personal remark towards myself it makes me feel like a winner. Truth be told I don't mind a scrap or a heated argument & sometimes the loudest doesn't always win.



willy1111 said:


> I can't help but thinking perhaps this is another sign we are close to a top in the market




@willy1111 sometimes we can overthink things. I don't even know if the markets will open higher or lower on Monday let alone where we are in the markets & frankly I don't care.

*Let me make a comment *(from experience)
When your in a fight it's not how hard you can hit - it's depends on how well you can take one that decides the outcome.

*After making a few comments - I'm now back on message.. 

Below is a full disclosure of both strategies


(a) The CAM Strategy - Trading Plan *(Enter LONG)
Buy before the open on Monday in the pre-auction at the open if today (Friday) is a GOLD-coloured bar [which represents the CAM-PB, meaning that both the 10-period (ADX) and (MACD) are declining] but the 14-period (CCI) is above zero, OR if today (Friday) is a BLUE-coloured bar [which represents the CAM-CT, meaning the 10-period (ADX) is declining but (MACD) is rising] and today’s close crosses above the 13-period EMA.
*(b) The CAM Strategy - *Trading Plan  (Exit LONG)
Sell before the open on Monday in the pre-auction if Fridays end of close is a RED-coloured bar [which corresponds to the CAM-DN, that is, the 10-period (ADX) is rising but the (MACD) declines] and today’s (Friday) close is below the 13-period EMA.



*(a) The 'MAP Strategy' - *Trading Plan (Enter LONG)
Buy whenever the Closing price is higher than a selected Moving Average conditional on the ROC filter being above 0% - *OR* - I'll buy when the Closing price is at least 10% higher than the previous week close with Volume higher than the Moving Average period.
*(b) The 'MAP Strategy' - *Trading Plan (Exit LONG)
Sell when the momentum stalls using a momentum indicator *- OR - *when a trailing stop is hit.

Skate.


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## Gringotts Bank (11 May 2019)

Skate said:


> *No need to*
> @Gringotts Bank, there is no need for others to trade my strategies as I report religiously all the trading signals & positions sizing of both strategies before the positions are taken, doing this the trading results cannot be fudged as there is nothing hidden whatsoever. Even my trading setups are disclosed at the bottom of this post.
> 
> *The Turtles*
> ...



Sorry I skim read a lot of stuff.  

Since some of those stocks are thinly traded, you'd be aware if others are following your buy signals or whether you're sitting alone on the bid come Monday mornings.  Are you?


----------



## Skate (11 May 2019)

Gringotts Bank said:


> Sorry I skim read a lot of stuff.
> 
> Since some of those stocks are thinly traded, you'd be aware if others are following your buy signals or whether you're sitting alone on the bid come Monday mornings.  Are you?




The parameters & setting I use in my trading strategies takes position sizing into consideration. 

Trading small $15k positions I've never had an issue trading in the pre-auction.

Skate.


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## Skate (13 May 2019)

nulla nulla said:


> This thread was started by Bushman on 11 June 2010. At the time of my first post with the initial table on 18 June 2012 (some two years later) there had been 3000+ views but no replies. Since my first response with the table there has been a further 3000+ views. The table is just that, a table of the major A-REIT's as extracted from the AXO property sector.




*Another who can proudly wear the badge of Elder..*

What a mile stone - well done @nulla nulla for maintaining the "a-reit-valuation-model" thread since June 2012.

It's been a huge commitment on your part to keep the thread updated with charts that are so easy to comprehend, the value of your posts have not been lost on me.

Please accept my personal gratitude @nulla nulla for your tireless efforts in keeping ASF members and visitors informed on a weekly basis. @Joe Blow would be thrilled to have members so committed as yourself & @bigdog

Skate.


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## Joe Blow (13 May 2019)

Skate said:


> Please accept my personal gratitude @nulla nulla for your tireless efforts in keeping ASF members and visitors informed on a weekly basis. @Joe Blow would be thrilled to have members so committed as yourself & @bigdog




These threads require an incredible amount of dedication and commitment and I am very grateful to them both for continuing to keep ASF members informed. We are lucky to have them here.


----------



## willoneau (13 May 2019)

My little dump- i have come to realize losing traders concentrate all their effort at finding ways to increase their wins and very little effort at controlling risk and money management. So end up losing and leaving before they find a way to becoming a profitable trader. If they spent their time first getting risk and money management sorted then they would last long enough to find something that works for them to make them a profitable trader.
It has taken me many years to realize that, now i'm working on part two.


----------



## Gringotts Bank (13 May 2019)

willoneau said:


> My little dump- i have come to realize losing traders concentrate all their effort at finding ways to increase their wins and very little effort at controlling risk and money management. So end up losing and leaving before they find a way to becoming a profitable trader. If they spent their time first getting risk and money management sorted then they would last long enough to find something that works for them to make them a profitable trader.
> It has taken me many years to realize that, now i'm working on part two.



Regularly taking losses can easily lead to a slow painful death ('death by a thousand cuts').  But death is death, whether fast or slow.

These are my rules - they are pretty simple.

Have a properly backtested system.  Stick to it*.  Above everything else, ensure your vibe is pumped up.  Your vibe is everything.

*For any instances where you can't stick to it, (eg. jumping on big spec runners which are outside your  system or doubling down), then develop a separate system for those instances.


----------



## willoneau (13 May 2019)

Gringotts Bank said:


> Regularly taking losses can easily lead to a slow painful death ('death by a thousand cuts').  But death is death, whether fast or slow.
> 
> These are my rules - they are pretty simple.
> 
> ...



Some very profitable traders (trend followers) have a win rate between 30% and 40%,
it's not how often you win , but how much you do when you do that matters.
But also how much you lose too counts.


----------



## Gringotts Bank (13 May 2019)

willoneau said:


> Some very profitable traders (trend followers) have a win rate between 30and 40%,
> it's not how often you win , but how much you do when you do that matters.



Yes, 30-40% is a standard WR for a profitable trend following system.  I can't handle that myself which is why I have to use a mean reversion system where the standard WR is 66%.


----------



## willoneau (13 May 2019)

Gringotts Bank said:


> Regularly taking losses can easily lead to a slow painful death ('death by a thousand cuts').  But death is death, whether fast or slow.
> 
> These are my rules - they are pretty simple.
> 
> ...



 I agree with the death by a thousand cuts, but at least you have time to try and work it out . One big cut and it's good night.


----------



## willoneau (13 May 2019)

Gringotts Bank said:


> Yes, 30-40% is a standard WR for a profitable trend following system.  I can't handle that myself which is why I have to use a mean reversion system where the standard WR is 66%.



So you found out how to trade your way which suits you, did it take you long to find that out?


----------



## Gringotts Bank (13 May 2019)

willoneau said:


> I agree with the death by a thousand cuts, but at least you have time to try and work it out . One big cut and it's good night.



If you can handle a big number of losses in a row and not lose your cool, then your vibe is probably pretty good.  So we're saying the same thing, only I would say it's better to develop the system first.


----------



## Gringotts Bank (13 May 2019)

willoneau said:


> So you found out how to trade your way which suits you, did it take you long to find that out?



Forever.  It's gone through multiple iterations.  Main limits were an inability to code well, and an inability to get the data I needed.  You won't have those same limits in a trend following system, particularly if you follow Skate's lead.


----------



## willoneau (13 May 2019)

Gringotts Bank said:


> If you can handle a big number of losses in a row and not lose your cool, then your vibe is probably pretty good.  So we're saying the same thing, only I would say it's better to develop the system first.



Yes , but how do you know what system to develop if you don't know what suits you.


----------



## Gringotts Bank (13 May 2019)

willoneau said:


> Yes , but how do you know what system to develop if you don't know what suits you.



MR is more suited if you need a high WR, smooth equity curve, low drawdowns and are ok with daily involvement.  TF is more suited if you are ok with a low WR, drawdowns and prefer less involvement. 

I would prefer low or zero involvement (full automation), but that is impossible given my coding ability.  There's always difficutlies, no matter which way you go.


----------



## willoneau (13 May 2019)

I agree you need a system but i believe in learning risk and money management enables you to last long enough to find that. Paper trading is fine if you already control your emotions, but only live trading will determine if that is true or not.


----------



## willoneau (13 May 2019)

Lets put it another way, lets say you have your system and i have my risk and money management down pat. Then we trade live, suddenly emotion is involved. I think i know who would last longer before they learnt how to control it.


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## willoneau (13 May 2019)

The penny dropped for me about three years ago, I pick it up and keep on dropping it.


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## willoneau (13 May 2019)

We all have our own journey to take and the path we take can become hard at times. We can change paths if we like but the easiest path is nearly always down.


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## Gringotts Bank (13 May 2019)

willoneau said:


> Lets put it another way, lets say you have your system and i have my risk and money management down pat. Then we trade live, suddenly emotion is involved. I think i know who would last longer before they learnt how to control it.



That's a false dichotomy because risk and money management are part of a system.


----------



## willoneau (13 May 2019)

Gringotts Bank said:


> That's a false dilemma because risk and money management are part of a system.



so are you stating the chicken and egg scenario?


----------



## willoneau (13 May 2019)

Gringotts Bank said:


> That's a false dichotomy because risk and money management are part of a system.



That is true for some but a lot have systems with practically no risk or money management, are their systems good or not? most never find out because they blow up.


----------



## Wyatt (16 May 2019)

Well it has been a great time for the trend following mob this year, a bit of a purple patch you could say, Hypothetically, at least. 
Different style to Skate, but along similar lines, being weekly, except the model in this demonstration, buys highest ranked stocks on specific lookback periods. That is, stocks showing the largest gains over the given period, give or take a few volatility mods. Typically some stocks will be in blue sky and others in a pullback mode when bought.
The order of backtest lookback periods shown below are 20 day, 50 day, 100 day, 150 day, 200 day and 250 day. 20 x 5% positions, trades taken 1st day of each week. Of course these results from 1/1/19 to current has been cherry picked, so while it is real, it's not very realistic and results during other normal conditions are more err...modest



It all seems to good to be true and that is always the way in hindsight. 

So what could happen if this run keeps rockin for another year and blows off, history shows an incredible run during 1998-2001, followed by the bend at the end.


Of course the chances of this happening again in this day and age are 0%
FWIW results include historical constituents. Most of the big movers over the parabolic run up are now delisted, if any one was curious.


----------



## Skate (17 May 2019)

The CAM strategy Repository found here - https://www.aussiestockforums.com/posts/1022296/

*Skate's modified CAM Strategy Settings*
Weekly Strategy (Start Date: 1st January 2019)
$300,000 Capital
20 Position Portfolio
$15,000 Fixed Positions

*1. Listed below is this week’s buy & sell positions to be placed in the pre-auction before Monday open if action is required.*



*2. Portfolio performance line chart updated weekly *



*3. CAM Strategy ‘Open’ position*



*4. CAM Strategy ‘Closed’ positions*



*5. CAM Strategy Dashboard*




*6. The CAM Strategy first weekly ‘Buy’ Chart to demonstrate the bar colour coding.*



Skate.


----------



## Skate (17 May 2019)

The MAP strategy Repository found here:  https://www.aussiestockforums.com/posts/1025758/

*Skate's MAP Strategy Settings*
Weekly Strategy (Start Date: 1st May 2019)
$300,000 Capital
20 Position Portfolio
$15,000 Fixed Positions

*1. Listed below is this week’s buy positions to be placed in the pre-auction before Monday open.*



*2. Portfolio performance line chart updated weekly *



*3. MAP Strategy ‘Open’ position*



*4. MAP Strategy ‘Closed’ positions*



*5. MAP Strategy Dashboard*




Skate.


----------



## Skate (17 May 2019)

*Strategies under evaluation *
The CAM, MAP & BOX strategies are all weekly trend following systems that I have under evaluation.

*1. The CAM Strategy* - summary
The CAM strategy buys pullbacks in existing trends and buys countertrends when the rally continues.
*(a) The CAM Strategy* - Trading Plan (*Enter LONG*)
Buy before the open on Monday in the pre-auction at the open if today (Friday) is a GOLD-coloured bar [which represents the CAM-PB, meaning that both the 10-period (ADX) and (MACD) are declining] but the 14-period (CCI) is above zero, OR if today (Friday) is a BLUE-coloured bar [which represents the CAM-CT, meaning the 10-period (ADX) is declining but (MACD) is rising] and today’s close crosses above the 13-period EMA.
*(b) The CAM Strategy* - Trading Plan (*Exit LONG*)
Sell before the open on Monday in the pre-auction if Fridays end of close is a RED-coloured bar [which corresponds to the CAM-DN, that is, the 10-period (ADX) is rising but the (MACD) declines] and today’s (Friday) close is below the 13-period EMA.


*2. The MAP Strategy* - summary
The MAP strategy relies on two independent Buy signals. The first Buy signal is generated when the closing price is above a moving average period & the second Buy signal is generated when there is a 10% increase in the closing price compared to the previous week close. Sell when the Rate of Change filter is below 0% - *OR* - when the closing price is below a trailing stop.
*(a) The MAP Strategy *- Trading Plan (*Enter LONG*)
Buy whenever the Closing price is higher than a selected Moving Average conditional on the ROC filter being above 0% - *OR* - Buy when the Closing price is at least 10% higher than the previous week close with Volume higher than the Moving Average period.
*(b) The MAP Strategy - *Trading Plan (*Exit LONG*)
Sell when the momentum stalls using a momentum indicator *- OR - *when a trailing stop is hit.
*Footnote:* The MAP strategy in (Report II) has a trading start date the 1st MAY 2019 whereas the trading results above (Report III) for the MAP strategy is from the 1st January 2019 so there is a direct correlation & comparison between the 3 strategies.

*3. The Box Strategy* - summary
The Box Strategy is a trend continuation strategy. After three consecutive weekly pullbacks in a confirmed trend – Buy when the closing price breaks above the previous high conditional the ROC filter is above 0%. Sells when the Rate of Change filter drops below zero - *OR* - when the closing price is below a trailing stop.
*(a)  The BOX Strategy* - Trading Plan (*Enter LONG*)
After three consecutive weekly pullbacks in a confirmed trend – Buy when the closing price breaks above the previous high conditional the ROC filter is above 0%.
*(b) The BOX Strategy* - Trading Plan (*Exit LONG*)
Sell when the Rate Of Change filter & the closing price is below a moving average confirming the momentum has ceased *- OR - *Sell when a variable trailing stop is hit.

Skate.


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## peter2 (17 May 2019)

Wow, CAM had a very good week gaining over 5%. A new entry, ISX, earned 50% of this weeks profit.


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## kid hustlr (17 May 2019)

Skate, are you at all concerned about fully revealing your system online?
From what I gather you have fully disclosed the Cam strategy


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## Skate (17 May 2019)

kid hustlr said:


> Skate, are you at all concerned about fully revealing your system online?
> From what I gather you have fully disclosed the Cam strategy




Hi @kid hustlr thank you for your question, & yes I have disclosed the CAM strategies for all that have requested it.

*Frank & Honest*
If you were look back at my previous posts I've been frank & honest, being right up front disclosing & explaining the development of my main trading system, the (HYBRID strategy). If any of my posts make a positive difference I'll be the happiest poster on the forum. We are all family here at the ('Dump it here') thread helping others hopefully to trade successfully. I have a simple strategy/method when it comes to trading, I'm not a fancy traders & to be honest I'm in it for the money. (so far so good)

*Change of invest direction*
I have three strategies under evaluation & I have a few spare bucks hanging around so I'm after another few profitable strategies to trade. I'm disclosing not only the CAM strategy but the other two strategies as well explaining how each of the strategy get their signals, I also explain under what conditions I exit the trade. I make sure all the signals are posted well in advance before they are taken in the pre-auction on Monday morning, alleviating any confusion.

*Why be open?*
Revealing a system online may help others, my primary concern is for members to have the experience to learn. We have so many quality posters, (you included) here on the ASF & sharing information can be a light bulb moment for someone or catalysis for change for others.

Skate.


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## Gringotts Bank (18 May 2019)

Skate said:


> *Why be open?*
> Revealing a system online may help others, my primary concern is for members to have the experience to learn. We have so many quality posters, (you included) here on the ASF & sharing information can be a light bulb moment for someone or catalysis for change for others.
> 
> Skate.




The fact that you would disclose your system screams 'abundance mindset'.  When Elon Musk disclosed all his patents for anyone to use, that was coming from an abundance mindset.  On the surface it seems to go against the company's best interest, but the opposite is true.  It's a mindset which is completely free of concern about competitors.

My contention is that someone with a scarcity mindset would not be able to trade this same system to the same degree of profitability.  This would imply that the mindset is the primary determinant of success.


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## Skate (24 May 2019)

The CAM strategy Repository found here - https://www.aussiestockforums.com/posts/1022296/

*Skate's modified CAM Strategy Settings*
Weekly Strategy (Start Date: 1st January 2019)
$300,000 Capital
20 Position Portfolio
$15,000 Fixed Positions

*1. Listed below is this week’s buy & sell positions to be placed in the pre-auction before Monday open if action is required.*



*2. Portfolio performance line chart updated weekly *



*3. CAM Strategy ‘Open’ position*



*4. CAM Strategy ‘Closed’ positions*



*5. CAM Strategy Dashboard*




*6. The CAM Strategy first weekly ‘Buy’ Chart to demonstrate the bar colour coding.*



Skate.


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## Skate (24 May 2019)

The MAP strategy Repository found here:  https://www.aussiestockforums.com/posts/1025758/

*Skate's MAP Strategy Settings*
Weekly Strategy (Start Date: 1st May 2019)
$300,000 Capital
20 Position Portfolio
$15,000 Fixed Positions

*1. Listed below is this week’s buy & sell positions to be placed in the pre-auction before Monday open if action is required.*



*2. Portfolio performance line chart updated weekly *



*3. MAP Strategy ‘Open’ position*



*4. MAP Strategy ‘Closed’ positions*



*5. MAP Strategy Dashboard*



*Comment*
I normally refrain from making comments about any of my strategies under evaluation but this is the first week that the 'MAP' strategy has hit the front, its taken 3 weeks.

Skate.


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## Skate (24 May 2019)




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## Skate (25 May 2019)

*Repository *
I’ll use this post as a Repository of information for the three strategies under evaluation saving the need to post additional information with my weekly comparison updates.
*
Current strategies under evaluation*
The CAM, MAP & BOX strategies are all weekly trend following systems I have under evaluation & they stem from a few simple ideas.


*1. The CAM Strategy* - summary
The CAM strategy buys pullbacks in existing trends and buys countertrends when the rally continues.


*(a) The CAM Strategy* - Trading Plan (*Enter LONG*)
Buy before the open on Monday in the pre-auction at the open if today (Friday) is a GOLD-coloured bar [which represents the CAM-PB, meaning that both the 10-period (ADX) and (MACD) are declining] but the 14-period (CCI) is above zero, *-* *OR -* if today (Friday) is a BLUE-coloured bar [which represents the CAM-CT, meaning the 10-period (ADX) is declining but (MACD) is rising] and today’s close crosses above the 13-period EMA.
*(b) The CAM Strategy* - Trading Plan (*Exit LONG*)
Sell before the open on Monday in the pre-auction if Fridays end of close is a RED-coloured bar [which corresponds to the CAM-DN, that is, the 10-period (ADX) is rising but the (MACD) declines] and today’s (Friday) close is below the 13-period EMA.


*2. The MAP Strategy* - summary
The MAP strategy has two different buys conditions for entry. The first ‘Buys Signal’ is when the closing price is above a moving average period *-* *AND -* the second signal is where there is a 10% increase in the closing price compared to the previous weeks close. The MAP strategy has also two different Sell conditions, the first being (a) when the Rate of Change filter is below 0% or when (b) the close is below a trailing stop.


*(a) The MAP Strategy *- Trading Plan (*Enter LONG*)
Buy whenever the Closing price is higher than a selected Moving Average conditional on the ROC filter being above 0% - *OR* - Buy when the Closing price is at least 10% higher than the previous week close with Volume higher than the Moving Average period.
*(b) The MAP Strategy - *Trading Plan (*Exit LONG*)
Sell when the momentum stalls using a momentum indicator *- OR - *when a trailing stop is hit.
*


3. The Box Strategy* - summary
The Box Strategy is a trend continuation strategy & buys after a new high is reached after a pullback within the trend & Sells the position when the Rate of Change filter drops below zero or when the closing price is below a variable Chandelier trailing stop.


*(a)  The BOX Strategy* - Trading Plan (*Enter LONG*)
After three consecutive weekly pullbacks in a confirmed trend – Buy when the closing price breaks above the previous high conditional the ROC filter is above 0%. 
*(b) The BOX Strategy* - Trading Plan (*Exit LONG*)
Sell when the Rate Of Change filter & the closing price is below a moving average confirming the momentum has ceased *- OR - *Sell when a variable trailing stop is hit.

Skate.


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## Newt (25 May 2019)

Very impressive how closely all 3 are performing and taking advantage of current conditions Skate.  I'm a bit amazed how quickly they taken positions and jumped into profit, but the real surprise is how closely and consistently they are performing.  

What is the correlation like in the stocks being traded - are you happy that each is tapping into different names at different "moves" in their upward momentum?


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## Skate (25 May 2019)

Newt said:


> Very impressive how closely all 3 are performing and taking advantage of current conditions Skate.  I'm a bit amazed how quickly they taken positions and jumped into profit, but the real surprise is how closely and consistently they are performing.
> 
> What is the correlation like in the stocks being traded - are you happy that each is tapping into different names at different "moves" in their upward momentum?




_*"What is the correlation like in the stocks being traded"*_
@Newt thank you for your questions - I'll answer your questions out of sequence for clarity. Unfortunately sometimes trading any 'trend following systems' there is normally a degree of correlation with the signals, the index being traded usually is reflective of the prevailing market conditions. The correlation of signals of the three strategies are very low by design. All 'Trend Following Systems' naturally jump on & join trends (the momentum), that's the very nature of the beast. 

Each of my strategies have their own independent reason for entering the trade, the parameters within the code takes care of the signal correlations. With my weekly updates I post the 'Open Positions' of both the CAM & Map Strategy but not the BOX strategy that reflects the correlation of taken signals if any. I can report the correlation between the 3 strategies are very minimal. My weekly updates can sometimes be a bit over the top, some may be interested in the journey whereas others just look at the trading results, their ongoing progress, you never can tell the interest level.

*"Are you happy that each is tapping into different names at different "moves" in their upward momentum?"*
What's really pleasing, making me happy is the 3 strategies under evaluation are not correlated to my HYBRID strategy, my main trading strategy, even though they are all trend following systems. I'm biased when it comes to trading as I'm a 100% mechanical trend trader. 

I'm not asking the earth, all I want is to make a few bucks by (a) joining a 'confirmed' move & (b) when the momentum is 'confirmed' to be stagnating or has completely stopped I want to get off, regroup & look for another ride, nothing fancy in that idea. (code confirmation of the signal, 'confirmed' signals are critical to the success of any strategy)

_*"Very impressive how closely all 3 are performing and taking advantage of current conditions"*_
We are all good traders in a Bull market, even geniuses in hindsight looking at the charts - have you ever caught yourself saying "If only I entered here & exited there" well I have. It's frustrating that we can only see the good moves in hindsight, unable to see them in the 'heat of the battle' whilst trading. Some forum members do possess this unique ability but if you are more like me you'll fall short in this area. 

Following trends is one of the simplest form of trading there has ever been having a proven track record of making money over time. I for one, can confirm "following trends" has been kind to me over the 4 years I've been trading.

*"I'm a bit amazed how quickly they taken positions and jumped into profit"*
Trends are always happening whether it's a Bull or a Bear market, volatility is our friend, without volatility we'll make no money. I'm constantly amazed how other view volatility after reading so many negative comments about it. With any trading method, separating the wheat from chaff is the difficult part, ranking the quality of the signals is another. 

Personally I only ever want to enter the best-of-the-best trades by choosing the best signals, coding those conditions & parameters isn't easy but they are so critical to trading successfully. Before you put one dollar of your money into the markets you'll need a tested & proven edge or otherwise it's gambling. 

Skate.


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## willoneau (25 May 2019)

Hi Skate,
do you get stocks that pop up in all three systems at once and if you do what is their success rate?
Interested how you rank the quality of a signal?


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## Newt (25 May 2019)

Great response - thanks for taking the time to compose Skate


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## Skate (25 May 2019)

willoneau said:


> Hi Skate,
> do you get stocks that pop up in all three systems at once and if you do what is their success rate?




@willoneau thank you for your questions.
*
Do you get stocks that pop up in all three systems at once?*
I actively trade a few weekly systems, & have no issues in getting an abundance of signals from any strategy as there are breakouts (trends) forming constantly. My strategies find trends that only meet my stringent hard-coded conditions, parameters & sort ranking. Every strategy I develop is aimed at displaying only the strongest signals giving me 100% confidence to place the next trade.

A feature of all my developed systems is to incorporate a simple display of the scan results seeking great positions to enter, each strategy has a common display - displaying only three items of interest.
(1) the security code
(2) the amount of shares to buy &
(3) what price to offer in the pre-auction before Mondays open.

If trading for you is easier than that please let me know.

I trade a large account (well to me it is) so I'm only interested in the best-of-the-best signals from any of my strategies. I'm a hard task master & if any strategy makes it into my stable it has to earn its keep.
*
What is their success rate?*
# Pictures speak louder than words..

The trading results of the CAM, MAP & BOX strategies are displayed separately below. The trading period is from 1st January till today a short (5) month window of results.

*The CAM Strategy



The MAP Strategy



The BOX Strategy



Interested how you rank the quality of a signal?*
Each strategy has its own ranking & it forms a large part of my successful trading, disclosing each & how they were developed is a book in itself.

I hope my reply answers your 3 questions..

Skate.


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## willoneau (25 May 2019)

Thanx for the reply Skate
it sort of does, i guess i was curious to see if all three picked the same stock on a regular basis what the results of those alone would be?
I'm noticing with my discretionary trading at moment has a correlation with my weekly trend following system but on a daily time frame .I'm not surprised as the signals i use are similar.


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## Skate (31 May 2019)

The CAM strategy Repository found here - https://www.aussiestockforums.com/posts/1028382/

*Skate's modified CAM Strategy Settings*
Weekly Strategy (Start Date: 1st January 2019)
$300,000 Capital
20 Position Portfolio
$15,000 Fixed Positions

*1. Listed below is this week’s buy & sell positions to be placed in the pre-auction before Monday open if action is required.*



*2. Portfolio performance line chart updated weekly *



*3. CAM Strategy ‘Open’ position*



*4. CAM Strategy ‘Closed’ positions*



*5. CAM Strategy Dashboard*




*6. The CAM Strategy first weekly ‘Buy’ Chart to demonstrate the bar colour coding.*



Skate.


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## Skate (31 May 2019)

The MAP strategy Repository found here:  https://www.aussiestockforums.com/posts/1028382/

*Skate's MAP Strategy Settings*
Weekly Strategy (Start Date: 1st May 2019)
$300,000 Capital
20 Position Portfolio
$15,000 Fixed Positions

*1. Listed below is this week’s buy & sell positions to be placed in the pre-auction before Monday open if action is required.*



*2. Portfolio performance line chart updated weekly *



*3. MAP Strategy ‘Open’ position*



*4. MAP Strategy ‘Closed’ positions*



*5. MAP Strategy Dashboard*




Skate.


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## Skate (31 May 2019)

The Repository of information can be found here:* https://www.aussiestockforums.com/posts/1028382/*

*Current strategies under evaluation*
The CAM, MAP & BOX strategies are all weekly trend following systems I have under evaluation & they stem from a few simple ideas. 

*The Top Section of the Graphics*
The top graphics are the trading results of the 3 strategies currently under evaluation from the *1st January 2019* up to end-of-trade today.

*The Bottom Section of the Graphics*
The bottom graphics are the trading results of the 3 strategies currently under evaluation from the *1st May 2019* up to end-of-trade today. 

All of the graphics in the top & bottom sections are the trading results using the same strategy with different trade start date.

Skate.


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## aus_trader (31 May 2019)

Great turnaround in the MAP portfolio Skate, nice work ! I think the take-over proposal on
Vocus Group Ltd (VOC) has given a boost and news announcement on Electro Optic Systems Ltd (EOS) has turned it's position around from a -ve to a +ve position 

I noticed Kidman Resources Ltd (KDR) was bought after the take-over announcement from Wesfarmers Ltd (WES). Was that intentional i.e. You believe there is a higher bid for the take-over or this type of fundamental information is ignored from the system ?


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## Skate (1 June 2019)

aus_trader said:


> Great turnaround in the MAP portfolio Skate, nice work ! I think the take-over proposal on
> Vocus Group Ltd (VOC) has given a boost and news announcement on Electro Optic Systems Ltd (EOS) has turned it's position around from a -ve to a +ve position
> 
> I noticed Kidman Resources Ltd (KDR) was bought after the take-over announcement from Wesfarmers Ltd (WES). Was that intentional i.e. You believe there is a higher bid for the take-over or this type of fundamental information is ignored from the system ?




Hi @aus_trader, thank you for you question. First up let me say once again that I'm 100% system trader, a trend follower. Your question gives me another opportunity to express my simplistic views on trading. There is no right or wrong way when it comes to trading & the way I trade works for me.

*Trading compared to AFL or NRL* (take your pick)
1. AFL players get paid to do one job & that is to "kick the ball straight" (simple)
2. NRL players get paid to do one thing & that is to "place the ball on the ground in the in-goal-area" (simple)
3. As a mechanical system trader I have one job to do & that is to "take the signals my system gives me" (simple)

*Simple is good*
Traders, we are all different, I enjoy reading the methodology of different traders, following trading related posts on ASF with extreme interest, some trading systems are complicated, some are simple & I fall into the latter. A few members here on the ASF forum have skills that I can only dream of.

*Another analogy - Trading & Boxing*
Its been many years (a few decades actually) since the last time I jumped into the ring but there are comparisons I wish to make. When it comes to boxing you need to have confidence you have done the work to give yourself a fighting chance of success.

Boxing is seen as a brutal sport but its game of strategy, timing & persistence, it's all about executing a plan. It's your job to keep standing & to land the big one you need to take some hits along the way - even when you win your body always feels that it hasn't. The nature of the game whether it's boxing or trading "you are going to take some hits", some will hurt more than others but that's to be expected.

*To answer your question*
_I noticed Kidman Resources Ltd (KDR) was bought after the take-over announcement from Wesfarmers Ltd (WES). Was that intentional i.e. You believe there is a higher bid for the take-over or this type of fundamental information is ignored from the system ?_

"As a Trader I have one job to do & that is to take the signals my system gives me"  It's not my job to think. News, additional information is never a deciding factor whether I take the position or not. I execute my plan no matter what.

*I know I'll buy 50% DUDS*
I've taken trades I know will be dead set losers, I've taken trades on Mondays only to see the position tank on the 'open' knowing full well I'm going to lose a lot of money holding them for the entire week before I can off load them on the next Mondays open. I know I'm going to takes some hits, my backtesting reflects this. I accept my systems aren't perfect so the correct 'mindset' is critical - I need to be the best loser I can possibly be.

*System Coding*
It's not my job to fiddle or override the system making judgement calls at will. I have one job to do & that is to take the signals that my system has given.

I can tell you with 100% certainly that the code, the system, the trading strategy will be more accurate, more profitable than I would ever be trading on my ability or feelings.

*Facts*
1. Do I know if the markets will be kind to me on Monday after readings @bigdog post today - NOPE, I don't know
2. I have positions to execute on Monday - will anything stop me from executing the trades - NOPE, nothing
3. Will additional information have any affect on the way I trade - NOPE, its not my job to fiddle
4. Nothing will deter me from executing my plan, I'm focused & committed otherwise why would I spends 100's of hours developing a strategy only to change it at the last moment or override it on the run, doing that makes no sense.

*Lets recap the MAP strategy *
The MAP strategy came about from a comment from @Gringotts Bank. I have posted a 5 month window of results that aren't too shabby & the MAP logo looks good. The MAP strategy simply buys a position when the closing price is above a moving average period or when there is a 10% increase in the closing price compared to the previous weeks close, pretty simple idea really.

*In English*
The MAP strategy jumps on a confirmed breakout & when the momentum stops - you get off.

*Disclaimer*
The trading results of the MAP strategy are inline with my backtesting results which is pleasing. I've publish two sets of results having different start dates making a difference in the short term - but in the long term they should reflect each other as all systems need time to do there thing.

*Hitting the "like" button*
I want to take this opportunity to say thank you for reading my posts & hitting the "like" button. I know members hit the "like" button for a variety of reasons but the "likes" encourages me to post more in the same vein.

*Finally, my question is open to everyone*
Would anyone have the confidence to trade the MAP strategy?

Skate.


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## investtrader (1 June 2019)

Skate,
What software do you use for your reports (dashboard etc)?

Sorry, I haven't read enough of this thread to answer your question. It looks pretty good to me though with a quick perusal. But of course, the secret is in the application of any strategy, as you know.

Cheers


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## kid hustlr (1 June 2019)

Skate, i love this thread and your kicking butt too which makes it more entertaining.

Regarding the MAP strategy - have you outlined the details of the strategy somewhere (I'm planning on doing some testing this afternoon, however I can only see where you say ' a moving average' and not a specific #. Same with the exit.

If this is on purpose I apologise and feel free to ignore.


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## Skate (1 June 2019)

investtrader said:


> Skate,
> What software do you use for your reports (dashboard etc)?
> 
> Sorry, I haven't read enough of this thread to answer your question. It looks pretty good to me though with a quick perusal. But of course, the secret is in the application of any strategy, as you know.
> ...




Hi @investtrader thank you for you question..

_"What software do you use for your reports (dashboard etc)?"_
I use "Share Trade Tracker" from XLAutomation - https://xlautomation.com.au/excel-spreadsheets/share-trade-tracker

*Share Trade Tracker*
If you want a simple program to track your share trading there is only one I've found that does the job perfectly. It is a simple to use share trading manager that's nicely customisable to incorporate & manage my trades in one application. With a name you'll remember and one that explains what it does, and it does it with ease - "Share Trade Tracker is Brilliant!"

*Catalyst*
Hopefully there will be one of my posts that will be a catalyst for you to read another then another one, steamrolling you into reading the entire thread - reading my older posts is a large commitment that's why I made a free eBook (ePub format) - the download link for the free eBook is in the tag below my name. It's the book I wish I had when I started out. (blatant plug)

Skate.


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## Skate (1 June 2019)

kid hustlr said:


> Skate, i love this thread and your kicking butt too which makes it more entertaining.
> 
> Regarding the MAP strategy - have you outlined the details of the strategy somewhere (I'm planning on doing some testing this afternoon, however I can only see where you say ' a moving average' and not a specific #. Same with the exit.
> 
> If this is on purpose I apologise and feel free to ignore.




Hi @kid hustlr thank you for your kind words.

*Hey, if it helps*
I'm the first to help others where I can, every post I make is done with that sole purpose of helping others, it's a way of repaying the kindness shown to me by others. There is no smoke & mirrors with me, I'm frank & honest & at times a bit too open, but that's just me. I'm sharing the three strategies I have under evaluation hoping others find the process educational or enjoyable. I'm a bit different to others as I'm prepared to share the ongoing progress in real time, displaying the trades before they are taken & reporting the weekly progress - doing this is one way of keeping the 'Dump it here' thread alive & active.

_"Regarding the MAP strategy - have you outlined the details of the strategy somewhere (I'm planning on doing some testing this afternoon, however I can only see where you say ' a moving average' and not a specific #. Same with the exit"_

*I usually only disclose the idea*
I try very hard to talk in general terms only as I don't want to give a false hope, or a sense of security / confidence for others to risk their money as I would prefer they understanding the strategy for themselves.

*Only if you promise*
I'll disclose the full entry & exit strategy only if you promise not to tell anyone "it will be our little secret" (also others who read this post of course)

The MAP strategy is a dead set simple idea, disclosing the entry & exit settings will take away the mystique of the strategy, I hope you realise this..

*Two entry conditions*
The MAP Strategy - Trading Plan (Enter LONG)
Buy whenever one of the two conditions are met.
(1) Buy when the closing price is higher than a 10 Period Moving Average conditional that the 10 period ROC filter is above 0%  
(2) Buy when the closing price is at least 10% higher than the previous week close with Volume higher than the 10 period Moving Average.
*
Two exit conditions*
The MAP Strategy* - *Trading Plan (Exit LONG) 
Sell whenever one of the two conditions are met.
(1) Sell when 10 Period ROC indicator is 0% or below 
(2) Sell when the close is below a 20% trailing stop.

You now have the the periods disclosed - I hope they help in some small way.

Skate.


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## kid hustlr (1 June 2019)

Ty lol I was playing around and knowing you thought it was simple so it was either going to be 10 or 20.

Edit: not calling you simple just that you like simple systems!!!


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## aus_trader (1 June 2019)

Skate said:


> *Simple is good*
> Traders, we are all different, I enjoy reading the methodology of different traders, following trading related posts on ASF with extreme interest, some trading systems are complicated, some are simple & I fall into the latter. A few members here on the ASF forum have skills that I can only dream of.




Simple is good Skate, I also like simple methods whether they are technical analysis (chart) based or fundamental (business ratios, stock research etc) or a combination of both or other methodologies. Not all simple systems are good (let's say if a system buys every breakout of stocks) but you have good filters and back tests to back you up and the live results are looking good.



Skate said:


> The MAP strategy came about from a comment from @Gringotts Bank. I have posted a 5 month window of results that aren't too shabby & the MAP logo looks good.



I agree, your logos look amazing ! Do you design them yourself ?


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## investtrader (1 June 2019)

Skate said:


> Hi @investtrader thank you for you question..
> 
> _"What software do you use for your reports (dashboard etc)?"_
> I use "Share Trade Tracker" from XLAutomation - https://xlautomation.com.au/excel-spreadsheets/share-trade-tracker
> ...



Hi Skate,

Well I just coded the MAP system into Ami - took all of about 3 minutes ( I modified an existing system and I have a library of trailing stop codes) and my answer is yes, I would definitely trade it. The simplicity is great and goes along with exactly what I know works. Lower win/loss ratio than my systems and more trades(I'm lazy) and MaxDD is very acceptable. I like it a lot.
Just so you know, I started my trading journey in 2001. I have had periods out of the market for various reasons, but still passionate. Never had a losing year, believe it or not. Sat out 2018 due to a bit of luck mainly.


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## investtrader (1 June 2019)

Skate,

Just realised I tested with Positionscore selecting lowest priced stocks. I am sure you know but this improves performance quite a lot.
Cheers


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## aus_trader (1 June 2019)

investtrader said:


> Skate,
> 
> Just realised I tested with Positionscore selecting lowest priced stocks. I am sure you know but this improves performance quite a lot.
> Cheers



Does higher priced stocks offer lower Draw-Downs (DD's), my thinking is due to lower volatility ? Rather than guessing it would be nice if you have the facts. I have read in few different places that higher priced stocks can give a smoother equity curve with lower DD's, but it could be a myth without data to back up the claim...


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## investtrader (2 June 2019)

To answer your question I ran three tests of my MAP code. The first result picks the lowest price stocks available, the second just picks whatever(single run) and the third always picks the highest priced stocks. Last 5 years, All ords(current list only). The higher price stocks are large caps usually(always?) and it makes sense that they move slowly and are priced more efficiently.


----------



## aus_trader (2 June 2019)

investtrader said:


> To answer your question I ran three tests of my MAP code. The first result picks the lowest price stocks available, the second just picks whatever(single run) and the third always picks the highest priced stocks. Last 5 years, All ords(current list only). The higher price stocks are large caps usually(always?) and it makes sense that they move slowly and are priced more efficiently.




Thank you for doing that extra iteration investtrader, it confirms what I believed would happen theoretically. As the myth-busters would say the myth/hypothesis is either confirmed or busted. The higher priced stocks had absolute maximum draw-downs that were smaller but in terms of profit factor the lower priced stocks really hit it out of the ball park.


----------



## Skate (2 June 2019)

investtrader said:


> To answer your question I ran three tests of my MAP code. The first result picks the lowest price stocks available, the second just picks whatever(single run) and the third always picks the highest priced stocks. Last 5 years, All ords(current list only). The higher price stocks are large caps usually(always?) and it makes sense that they move slowly and are priced more efficiently.




@investtrader thank you for posting the results of your MAP strategy. I've done a 5 year backtest using the All Ordinaries starting from 27th May 2014 to 27th May 2019.

*Backtesting means JACK*
I've stated before, backtest results mean "Jack" to me but they do give an indication between test results using different parameters. 

At the bottom of my backtest report there is additional data that can be important in backtesting evaluation. 

*Additional Info in the backtest report*
1. The MAP strategy performs better without the "Take Profit" feature being turned on.
2. There is a comparisons between the exits whether they were taken out by the "Trailing Stop" or the "Stale Exit"
3. The expectancy report at the bottom in-itself is handy for evaluation comparisons the other is the CAR/MaxDD







Skate.


----------



## Newt (2 June 2019)

investtrader said:


> Skate,
> 
> Just realised I tested with Positionscore selecting lowest priced stocks. I am sure you know but this improves performance quite a lot.
> Cheers




And this is ASF at its best.  Of all the things I've tried and used in PositionScore over the years, never thought to do that one.  You can get too comfortable inside your own head sometimes.  Not sure if I'll ever use this but thanks investtrader.


----------



## Newt (2 June 2019)

Thanks yet again Skate for sharing in such detail.

It only just occurred to me you've also done something I'd rarely think to do in an Entry condition - use multiple "OR" entry options.  Guess I normally get so caught up defining the best entry end up going deeper and deeper down the "AND" conditions borrow.  

Exits are different - weekly trend systems seems to be most robust with a primary exit condition OR'd with a 2nd stop loss/trailing stop.

These posts don't read like somehow who's now bored with trading - glad to see the creative juices are flowing.


----------



## Wyatt (2 June 2019)

Some fancy numbers in that backtest @Skate.

Exposure at just over 50% says a lot to me about the value of being in the market only during favourable conditions. There are plenty of us soaking up your good work.


----------



## investtrader (2 June 2019)

Newt,
If you trade Aussie stocks I think you should use this idea. Backtesting tells me that low priced stocks out perform. It works with every weekly system I trade or have traded. So when you have a decision to make between signals with all else being equal, then select the lowest price. I personally look at the fundamentals as well so as not to fully load up with crappy companies, but I will still break a tie using the lowest price.


----------



## kid hustlr (2 June 2019)

Skate,

When you talk period I assume you're talking weekly periods given it's a weekly system? I'm getting results all over the shop at present so just re-checking what I've done and thought I'd check


----------



## peter2 (2 June 2019)

Excellent discussion, my thanks to all, especially @Skate and @investtrader . 



Skate said:


> Would anyone have the confidence to trade the MAP strategy?




Absolutely, as the MAP entries are very similar to my own weekly bullish bar entries. I liked it so much that I coded the MAP buy signal into my charts and I'll create a scan to be included in my weekly routine. An objective scan should improve my consistency in "nailing the initial entry". 

I've been looking at the MAP trends on the monthly charts. HUGE, many lasting years.


----------



## Newt (2 June 2019)

Newt said:


> Thanks yet again Skate for sharing in such detail.
> 
> It only just occurred to me you've also done something I'd rarely think to do in an Entry condition - use multiple "OR" entry options.  Guess I normally get so caught up defining the best entry end up going deeper and deeper down the "AND" conditions borrow.
> 
> ...




Eek
borrow should have been burrow
somehow should have been somone


----------



## Skate (2 June 2019)

kid hustlr said:


> Skate,
> 
> When you talk period I assume you're talking weekly periods given it's a weekly system? I'm getting results all over the shop at present so just re-checking what I've done and thought I'd check




@kid hustlr it's using the 10 period (weekly system) all round - nothing fancy - don't over complicate things.

Below is the buy code less the filters I use. The buy code is wrapped around another 1,260 lines of code & I would be surprised if @investtrader or your results would mimic my results. Using the settings below should get you very close to half decent returns.

*BUY code - less the usual filters I use* (you will work it out)
( Close > MA( Close, 10 )
Close == 1.1
Volume > MA( Volume, 10 )
ROC(C, 10) >= 0

Don't forget to use *OR* statement for the first 2 conditions & use the *AND* statement for the other two.

Half the fun is fiddling..



Newt said:


> Thanks yet again Skate for sharing in such detail.
> 
> It only just occurred to me you've also done something I'd rarely think to do in an Entry condition - use multiple "OR" entry options.  Guess I normally get so caught up defining the best entry end up going deeper and deeper down the "AND" conditions borrow.
> 
> ...




@Newt trading is still boring to me because there is little for me to do each week, 3 minutes to get the end-of-week signals & another 3 minutes to place my orders (less than 10 minutes per week)

Imagine if you only worked 10 minutes a week, I think you would get bored pretty quickly as well. Don't get me wrong, I like trading, it's the only profession I know that makes money without consuming any of my time & it's all due to the way I trade.

Skate.


----------



## Newt (2 June 2019)

1260 lines of code - in Amibroker!
That must be a lot of custom looping and filtering


----------



## captain black (2 June 2019)

Newt said:


> And this is ASF at its best.




It's been great to see the amount of trading related discussion on ASF over the last few days. 
*
ASF at it's best*

Also great to see the progress you've made and are still making @Skate


----------



## Skate (6 June 2019)

*The CAM Strategy evaluation has come to an end*
The evaluation of the CAM strategy has now been completed. Tomorrow will be my last update of the CAM Strategy paper trading.

*Going Live*
The CAM strategy goes live on Tuesday 11th June 2019.

*Weekly Report*
I’ll be simplifying my weekly post by concentrating on reporting the trading progress of the CAM strategy only (for better or for worse) keeping the ‘Dump it here’ thread active.

*Ends tomorrow (MAP & BOX strategies)*
Tomorrow will be the last post of the other two strategies under ongoing evaluation thus freeing up the multiple post I make each Friday evening.

*Why trade the CAM strategy*
All 3 strategies under evaluation (the CAM strategy, the MAP strategy & the BOX strategy) are all worthy to be traded - they have all backtested well & the paper trading reflects this.

The first strategy under evaluation was the CAM strategy so naturally I’ll start trading it first & progress to trading the others strategies over time.

*Mission Statement*
I have a simple mission statement “Trade the CAM strategy to achieve an average weekly profit of $1,000 from a $300K investment”.

*Ongoing Weekly Updates of the CAM Strategy*
(1) I'll post the trading progress of the CAM strategy on a weekly basis that will include (a) the total Net Profit & (b) Portfolio % Return.
(2) I’ll also post the Equity Curve (Line chart) displaying (a) the Weekly Return & (b) the Weekly Average Return to note its ongoing progress to comply with the mission statement

The CAM strategy Repository found here - https://www.aussiestockforums.com/posts/1028382/

*The CAM Weekly Strategy* (for live trading)
Start Date: Tuesday 11th June 2019
Capital Invested: $300,000 
Positions in the Portfolio: 20
Position Sizing: $15,000 initial positions, re-balanced weekly

Skate.


----------



## rnr (6 June 2019)

Skate said:


> *The CAM Strategy evaluation has come to an end*
> 
> *The CAM Weekly Strategy* (for live trading)
> Start Date: Tuesday 11th June 2019
> ...




Hi Skate,

If you don't mind me asking, what exactly do you mean by the comment highlighted in red?

Cheers,
Rob


----------



## Skate (6 June 2019)

rnr said:


> Hi Skate,
> 
> If you don't mind me asking, what exactly do you mean by the comment highlighted in red?
> 
> ...




Hi @rnr

Thank you for your question. Let me give you a preamble before answering your question directly.

1. The CAM strategy will start out with a capital balance of $300K / 20 positions = $15K positions. The strategy starts out with a fixed dollar amount of $15K, the only time it does.
2. I trade in the pre-auction only & the CAM strategy code calculates a 3% premium for a buy or a 3% discount for a sell to assure being settled at the opening price.
3. Using a premium / discount calculations in the buy & sell code the $15k is never completely used up in the purchase or sale even though the strategy code allowed for it.

*QTY of shares is the only known*
The quantity of shares being purchased is FIXED but the share price (the opening price is UNKNOWN) theoretically the position will be filled between $14,550 (if filled at the last closing price) to a maximum of $15,000 if the premium of 3% is totally applied to secure the buy. The amount invested is unknown till the trade happens.

*IMPORTANT* 
If a 3% premium is unsuccessful to secure a buy (due to a gap-up) it’s a condition of the Strategy plan not to chase a price. The buy order is open for one day only.

*How is the re-balancing done? *
A bank feed supplies the trading balance to the strategy code & this amount is equally divided by the outstanding positions required to fill the 20 position portfolio. 

*Soldiers* 
I make sure every dollar is placed in the market, I consider dollars as soldiers & when they go to war they all need to be in there fighting for me. Weekly re-balancing achieves this for me. 

*Trading account balance fluctuates*
When trading goes well the trading account balance increases & if the alternative happens heaven forbid the account balance reduces. Meaning, when the account balance fluctuates the account balance determines the quantity of the shares to buy & the invested amount reflects this.

Skate.


----------



## rnr (6 June 2019)

Hi Skate,

Thank you for taking the time to answer my question.

If my take on your response is correct, should the trading account balance double and get to $600,00  then the total value of each trade would be $30,000.

Am I correct with this conclusion?

Cheers,
Rob


----------



## Skate (7 June 2019)

rnr said:


> Hi Skate,
> 
> Thank you for taking the time to answer my question.
> 
> ...




Hi Rob

*Your conclusion is correct*
In theory you are correct, but there are other variables to consider. The ease of moving in & out of the markets is my primary concern. When I first started my minimums bet size was upwards from $50K & it didn’t take me long to understand what the word “slippage” meant.

*Bet size*
At the moment my trading plan allow each bet size to vary between $15K to a maximum of $25k within violating my trading rules. 

*Portfolio size*
Portfolio size can vary between 20 & 53 positions without breaking any of my rules. Just to be clear, my trading rules are set in stone.

*My Strategy Rules*
1. $15K positions can ballon out to $25K positions under a 20 position portfolio ($300k can ballon out to a $500K Portfolio) before a new rule kick in.
2. Once the strategy reaches the maximum $25K bet size the strategy can now raises the portfolio position size to a maximum of 53 positions ($1,325,000) - I personally prefer to limit my positions to 40.
3. My Hybrid Strategy has already outgrown my trading rules - I’ve stopped at 40 positions even though 53 positions is the sweet spot in my testing.
4. I’m going to trade the CAM strategy from this Tuesday. The mission statement & timing came about from an off the cuff comment made to me last week -* “I could live on a $1,000 a week” *so that’s the plan, I’m aiming for $1K a week for the next 52 weeks. 

*Rearing to go*
I’m eager to get started & Im interested to see if the CAM strategy can perform over the next year, keeping in mind that all strategies take time to ramp up & develop.

I’ve been busting to trade another strategy putting some idle cash to work. Paper trading the CAM strategy & posting the weekly results in the ‘Dump it here’ thread has also had a hand in bring this process forward.

Skate.


----------



## rnr (7 June 2019)

Hi Skate,

Thank you once again for taking the time to respond to my question.

I am sure there are a number of ASF members, either developing or considering developing their own system, who will benefit significantly from the information you have disclosed/discussed in your response.

This comment you made in an earlier post (#1753) "The buy code is wrapped around another 1,260 lines of code" gives an indication to the number of issues considered prior to your system firing off a BUY signal.

Cheers,
Rob


----------



## Skate (7 June 2019)

The CAM strategy Repository found here - https://www.aussiestockforums.com/posts/1028382/

*Skate's modified CAM Strategy Settings*
Weekly Strategy (Start Date: 1st January 2019)
$300,000 Capital
20 Position Portfolio
$15,000 Fixed Positions

*1. Portfolio performance line chart updated weekly *



*2. CAM Strategy Dashboard*



*The CAM Strategy evaluation has now come to an end*
The evaluation of the CAM strategy has now been completed. This will be my last update of the CAM Strategy paper trading.

*Going Live*
The CAM strategy goes live on Tuesday 11th June 2019.

*Mission Statement*
"Seek to achieve an average weekly profit of $1,000 from a $300,000 investment”.

*Weekly Report*
I’ll be simplifying my weekly post by concentrating on the trading progress of the CAM strategy keeping the ‘Dump it here’ thread active.

Skate.


----------



## barney (7 June 2019)

Skate said:


> The CAM strategy goes live on Tuesday 11th June 2019.




Well done and good luck


----------



## Skate (7 June 2019)

The MAP strategy Repository found here:  https://www.aussiestockforums.com/posts/1028382/

*Skate's MAP Strategy Settings*
Weekly Strategy (Start Date: 1st May 2019)
$300,000 Capital
20 Position Portfolio
$15,000 Fixed Positions

*1. Portfolio performance line chart updated weekly *



*2. MAP Strategy Dashboard*



*This brings to an END the weekly reporting of the May 2019 MAP Strategy*

Skate.


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## Skate (7 June 2019)

The Repository of information can be found here: https://www.aussiestockforums.com/posts/1028382/

*The strategies that have been under evaluation*
The CAM, MAP & BOX strategies are all weekly trend following systems under evaluation & they stem from a few simple ideas. 

*The Top Section of the Graphics*
The top graphics are the trading results of the 3 strategies currently under evaluation from the 1st January 2019 up to end-of-trade today.

*The Bottom Section of the Graphics*
The bottom graphics are the trading results of the 3 strategies currently under evaluation from the 1st May 2019 up to end-of-trade today.

All of the graphics in the top & bottom sections are the trading results using the same strategy with different trade start date.




*This brings to an END the weekly comparison reporting of the 3 Strategies*

Skate.


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## qldfrog (7 June 2019)

Great exercise, keep us informed on your progress.


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## kid hustlr (7 June 2019)

Skate,

Nothing more certain that a market top is in than turning a system from paper trading to live!

Best of luck, this is a great thread


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## Skate (10 June 2019)

It's a quite day so I'll make a few general comments. 

*Successful trading*
Successful trading is like getting pregnant. Everyone congratulates you when you manage it but no one asks how many times you got fu¢ked first. 

@verce in the "tny-tinybeans-group" thread is the perfect example, he's riding the wave of success without any of us knowing the journey he had to endure to get to his level of euphoria. 

*It's all about off-loading*
Successful trading is all about buying a position solely in the hope of being able to off-load it to someone else at a higher price, so lets not try & complicate trading in the hope of making ourselves look like a trading genius. Pure & simple, good traders are calculated risk takers. 

*Risk*
Risk is a fine balancing act of been stopped out early only to see the price recover 'or' watching the price keep falling and stopping you out at a much larger loss. Knowing when to sell also involves profit taking and not just accepting losses. Risk management is crucial when it comes to trading successfully as posted many times by @peter2 in his "p2-asx-weekly-portfolio" thread. The last post on his thread is about 'Trade Management' & it's a recommended read.

*It's complicated*
First off, when it comes to risk you first need to find your level as risk varies between traders. Risk plays an important part in my Backtesting procedure & when it comes to risk management it's important to 'Dance to the music being played', or it's simply a matter of 'Horses for courses' take your pick. 

*Parameters*
The graphic below displays some of the parameters I use to evaluate various risks using a variety of position sizing methods. The Exportation procedure is more intense than backtesting as the variables & parameters increase.






qldfrog said:


> if I backtest the system, I have real life gain of $2017 vs backtest $5215
> interesting difference, where does it come from?



*
Backtesting & Monet Carlo runs*
To me, backtesting gives a base comparison at best, a comparison between strategies or within a strategy. Backtesting & real live trading 'in my opinion' will never truly align as there is so many variables. Backtesting on historical data means JACK, 'out-of-sample' data is the only true measure of value, meaning paper trading is the only real measure of a systems worth. 

*Its not a level playing field*
There is no way any of us sitting at home with limited information, slow internet service using off the shelf trading software can find better investments than the professional trader or the multi nationals that spends millions of dollars on research having easy access to company management. These companies employs teams of people who have the sharpest, fastest & sometimes the most unethical minds in the world - that's who you are trading against.

*It's worth remembering*
You're up against traders who will have more experience, more information & much more money than you so leave all your dreams of making quick and easy money, behind & concentrate on your survival. Your absolute first goal is to learn how to stay in the game & as with boxing you need to keep on your feet at all times, that's your one job.

*The truth is, you need money to make money*
Forget about taking a $1,000 account and turn it into millions. That is achieved through gambling, not trading. Instead, you should look to make an average of 25% per year & to achieve this it all depends on your risk appetite and trading style.

*What 25% returns will buy*
On a $20,000 account, you're looking at an average of $5,000 per year. (Xmas presents for the family)
On a $100,000 account, you're looking at an average of $25,000 per year. (this will Buy me one extra position)
On a $300,000 account, you're looking at an average of $75k per year. (this will meet the 'CAM Strategy' Mission Statement)
On a $1m account, you're looking at an average of $250k per year. (a couple of World Cruises)

This is extremely important, but most traders don’t get it, your account size matters.



peter2 said:


> If you needed evidence to trade the smaller priced stocks which generally show greater price volatility in preference to the larger priced stocks with lower volatility, this and some results recently shown by @investtrader (in *skates* Dump it Here thread) are it.




*PositionScore* (Ranking your signals)
A good strategy has many key features giving you a fighting chance of survival, longevity as a trader is your number one job. 'PositionScore' is an important ingredient & @investtrader made a great post in relation to 'positionscore' for the benefit of others. I'm sure he knew I was aware of this. 

@investtrader posted in the hope of helping others, the very essence of the 'Dump it here' thread.

Skate.


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## Gringotts Bank (10 June 2019)

I think small priced stocks are still the best playing field for most traders.  The only big fish in this space are the microcap funds.  I don't believe the microcap funds attract the 'best and brightest', so whilst this space _*is*_ definitely manipulated, I don't think it's a very sophisticated form of manipulation.  You can still win trading ASX speccies, but it's obviously not scalable.


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## captain black (10 June 2019)

Skate said:


> The evaluation of the CAM strategy has now been completed. This will be my last update of the CAM Strategy paper trading.




Great job getting through the paper trading evaluation period 



Skate said:


> The CAM strategy goes live on Tuesday 11th June 2019.




Well done on getting another trading system up and running live.


----------



## Newt (10 June 2019)

Skate said:


> It's a quite day so I'll make a few general comments.
> 
> *Successful trading*
> Successful trading is like getting pregnant. Everyone congratulates you when you manage it but no one asks how many times you got fu¢ked first.
> ...


----------



## investtrader (11 June 2019)

Gringotts Bank said:


> I think small priced stocks are still the best playing field for most traders.  The only big fish in this space are the microcap funds.  I don't believe the microcap funds attract the 'best and brightest', so whilst this space _*is*_ definitely manipulated, I don't think it's a very sophisticated form of manipulation.  You can still win trading ASX speccies, but it's obviously not scalable.



I think you can scale it a bit more than you think. I use a liquidity filter and it is hard to trade really thin stocks. But, I know from testing that the average price the week following the signal is not a lot different than monday's open. So what you can do is trade a few times in the week without moving the market too much. I suggest say placing orders at the same time & day each week. So if you want a 100k position, you might trade Monday to Thursday @ 25k each trade. at say 3.30pm for example. This is actually how the micro cap managers trade -have someone continually placing smaller trades over time. Getting out is the same but can be harder. But some big drops happen on these stocks so you just have to be prepared to accept that.


----------



## peter2 (11 June 2019)

re. exiting trades in thin markets

My day trading mentor (yes I have one, why wouldn't I) always reminds me to exit when I can NOT when I have to. 

This is why I often sell into a price spike up when the volume is huge. I'm selling when I can, not when I have to.


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## investtrader (12 June 2019)

peter2 said:


> re. exiting trades in thin markets
> 
> My day trading mentor (yes I have one, why wouldn't I) always reminds me to exit when I can NOT when I have to.
> 
> This is why I often sell into a price spike up when the volume is huge. I'm selling when I can, not when I have to.



I don’t trade shorter term ....I don’t know of a way to ride long term trends without waiting until the trend ends


----------



## Skate (14 June 2019)




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## willoneau (15 June 2019)

Quick question Skate and maybe nit picking , but looking at your cam results how can you have one losing trade but no closed trade? unless you include open position but in the red i guess but it could still become a wining trade once closed?


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## Skate (15 June 2019)

willoneau said:


> Quick question Skate and maybe nit picking , but looking at your cam results how can you have one losing trade but no closed trade? unless you include open position but in the red i guess but it could still become a wining trade once closed?




Hi @willoneau

Thank you for your question & I can assure you that your not nit picking, "if you don't know, you don't know"

Let me post two graphic & I'll explain what they mean..



*The CAM strategy has currently 7 winners & one loser (at the moment)*



*These are the corresponding trades listed above.*



*THE LOSER - This is what the Chart looks like for the losing trade (NWL)*



*A WINNER - This is the chart to show you what a winner looks like (IEL)*



To understand the colour coding of the bars on the charts above additional information can be found here: https://www.aussiestockforums.com/posts/1028382/

*The CAM strategy *
1. The CAM strategy has traded for 4 days.
2. There are (8) open positions
3. (7) positions are in profit & (1) is a loser at the moment.
4. There are no closed trades.
5. I trade in the pre-auction only.

*Live Trading*
I've condensed my weekly report to display the 'Dashboard' & 'Line Chart' only for the CAM Strategy. All the information is listed in the Dashboard with corresponding coloured squares to denote the progress ("a picture paint a thousand words")

The last thing I want to do with my weekly reporting of the CAM strategy is to post so much information that it becomes exhausting to read, turning people off the thread. Your question gives me the opportunity to explain the Dashboard in a little more detail & I'm sure if it was unclear to you it would be unclear to others as well.

Skate.


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## willoneau (15 June 2019)

Thanx Skase , I did notice the difference between your losing and closed trades. So your winning and losing trades would actually be position not trade because you haven't actually traded is that right?


----------



## qldfrog (16 June 2019)

I think Skate means currently losing, not sold at a loss


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## willoneau (16 June 2019)

Yes I think so too, so maybe should be 7 winning positions and one losing position.
As I said just nit picking.


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## Skate (16 June 2019)

willoneau said:


> Thanx Skase , I did notice the difference between your losing and closed trades. So your winning and losing trades would actually be position not trade because you haven't actually traded is that right?




Hi @willoneau 

*Further explanation of the Dashboard*
@qldfrog is correct, there is one losing trade & the losing trade has not been closed. The portfolio has seven winning trades, one losing trade totalling (8) open positions (at the moment). The CAM Strategy weekly posts reports the progress of the actual live trades. The 'Dashboard' displays all the current activity of the strategy & these displays will change weekly. 

*An explanation of the Line Chart*
The line chart is a quick representation of the CAM's progress for others who require less detail, a visual aide to plot the progress of the strategy.

*Information below the line chart 

*
I have three coloured boxes displaying positive or negative amounts of the [Weekly Trading P/L] the [YTD Net P/L] & more importantly the [Weekly Average] that needs to be greater than [$1,000] to meet the CAM Strategy Mission Statement.

*Minor Update*
After 4 days of trading I have decided to make a few minor changes to the strategy, the CAM Strategy code is unchanged. 
*


The CAM Weekly Strategy *- minor UPDATES
Capital Invested: *changes from* [$300,000] to *$400,000*
Positions in the Portfolio: *changes from* [20] to *25*
Position Sizing: *changes from* [$15,000] to *$16,000*, re-balanced weekly

*Issues with trading in the pre-auction*
There is (2) issues trading in the pre-auction.
1. The quantity of shares being purchased is known - but
2. The opening price of the position is *unknown*

*Actual purchases*
The graphic below represents the actual purchases made on Tuesday 11th June. The share purchased in the pre-auction uses the last closing price for its calculations to incorporate a 3% premium for buys. If the premium is completely taken up the maximum investment would be around $15,000 or so for each position. 

If you look at the graphic below you will notice the Dollar varies for each position from $13,760.13 - *to* - $15,704.13, proving that trading in the pre-auction has limitations proving there is nothing perfect trading this way when it comes to dollar position sizing - this is the very reason why I need to re-balance the dollar positions on a weekly basis.




*Lets RECAP*
The CAM Strategy is actively being traded & its progress is being reported weekly in this thread, the reporting is 100% accurate. The report is very minimal with the Dashboard & Line Chart - between them you can gleam as much information that you are interested in. 

*Changes at a glance*



Skate.


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## Skate (21 June 2019)




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## Skate (22 June 2019)

willoneau said:


> Finding the correct medium between winning% profit% and drawdown is what most of us strive for.
> My aim is around 50% win rate
> 30% profit
> and under 20% drawdown.






willoneau said:


> review-
> win%= 30%
> return on capital= -11.2%
> expectancy= -0.51





@willoneau has made two posts in his thread "My breakout journal" & I wish to make a few general comments about his posts & relate it to the results of one of my portfolios currently being traded. (FYI - the strategy is not related to the Hybrid or the CAM strategy)

*The portfolio in question is not important*
I won't name or discuss the portfolio in question but I'll post the accurate trading results (as of yesterday) to give a better idea of the frustration that you can experience trading a strategy with patchy results. The strategy started its life on the 1st January 2019 & the dollar results are pleasing. The strategy is a 10 position portfolio that (IMHO) contributes to the fluctuating results, Trumps tweets could be another.

*Low win rate*
Currently I'm actively trading a few different portfolios & one of those portfolios have a low win rate of 39% with an acceptable 17% return. I'll use this portfolio to make the comments about a strategy that has a constant low win rate that invokes the urge to fiddle at the edges.





*This strategy has lots of rules*
Every trading strategy needs a set of well-defined rules because when it comes to trading there are “no rules" in this game. This level of freedom causes some traders to become overwhelmed & fearful, sometimes they will lose money because they just don’t 'know' what to do - or do next when things don't go to plan or turn pear shape.

*Don’t break your rules                                                                        *
When dealing with large amounts of money, you tend to break your rules or make new ones along the way, solely for the purpose of justifying how you feel or what you think the market is doing or what the market is about to do.

*Rules should be non-negotiable                                                              *
Your trading rules should be set in stone even before you start investing one dollar into the markets.

*It’s worth remembering                                                                      *
When you’re dealing with your own money, trading gets very complicated, very quickly.

Skate.


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## willoneau (22 June 2019)

Hi Skate , I totally agree that needing a set of rules is important. I found after I reviewed the trading strategy that I was following based around what tech/a does wasn't working for me and allowed me to overtrade. Getting in trades that I shouldn't have taken so I changed the strategy entry to reduce my discretionary input into the trading and now follow a systematic entry. I know it will take time as losing trades are discarded mostly at the start and profitable ones are held and slowly add up in the portfolio.


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## Gaz1991 (24 June 2019)

Hi guys,

I’m new to this forum but I would love some advice, information or some guidance on trading. What I’m looking for is a life coach or mentor to teach me the ropes on how to trade effectively for a long to medium term investment. 

Thank you and any support would be appreciated.


----------



## Skate (24 June 2019)

Gaz1991 said:


> Hi guys,
> 
> I’m new to this forum but I would love some advice, information or some guidance on trading. What I’m looking for is a life coach or mentor to teach me the ropes on how to trade effectively for a long to medium term investment.
> 
> Thank you and any support would be appreciated.




Hi @Gaz1991 welcome to the forum & welcome to my thread.

*Trading is easy*
My reply to you is designed in such a way for you to decide if you are after a quick fix being a few words of encouragement or whether you are truly committed to put in the hard yards to learn the craft. Learning how to trade successfully takes a long period of time to become good enough not to lose money. Trading is easy - making money from trading is the hard part.

*Especially for you*
The 'Dump it here' thread has been written especially for you & it's the perfect thread for all new traders starting out on their trading journey. Reading the 'Dump it here' thread is a big commitment, it will be exhausting but in the long run it will ground you in the basics giving you enough information to find your feet.

*Free eBook*
The thread has been condensed into a free eBook: "Trading Fundamentals - Skate's Beginners Version eBook"
Download the free eBook here -  https://www.aussiestockforums.com/posts/1014728/

*A few facts to start *


This is one example why traders lose money, our mind deceives us. Our mind is our worst enemy - the two tables above are exactly the same size - measure them to be sure. Now that you know these two tables are the same size yet our mind won't let them be. We are easy confused by what we see.

*There are no short cuts*


*From my experience*
It pays to listen to everyone & than you decide if it’s relevant or helpful. You get to decide what to keep & what to discard. When you don’t listen you forgo the right to learn.

*Why should I read the 'Dump it here' thread?*
It may save you many years of self-education if you have a slight interest in trading. I want to point out the dangers and pitfalls associated with trading and to inform you about the emotional roller coaster you will soon start experiencing once you start trading.

*The Trading Game*
Trading is a mathematics game, a game of probabilities and not percentages. Trading isn’t about getting rich, but more about one day having the financial independence of being able to support yourself without an income. Your financial freedom is at stake here, and there is no better time to start creating it than right now. Trading doesn’t have to be super complicated or time consuming. Also, you don’t have to be rich to get started.

*Learning curve*
Very few people succeed in this process as the learning curve is too steep and the correct psychology is too hard to implement. If you have any attachment to making money, and who doesn’t, it is very tough to trade successfully and correctly.

*Success depends on two basic things:*
1. Picking good stocks that increase in price, and
2. Effectively managing the stocks after you buy them.

*Luck*
To a great degree, our success or failure in the market is a function of our luck. We like to think that our results are a direct consequence of our insight and efforts, but the reality is that luck plays a big part in how we do.

*Being afraid*
People are afraid of things they don’t understand. It’s a shame, because trading shares is a lot less complex than most people think.

*It's risky*
Trading is risky as with any endeavour that offer good long term returns, however, risks can be minimised and returns can be magnified with the right strategy. Anyone can buy and sell shares, it’s how we choose these shares and then how we manage our position that dictates how successful we will be.

*The quality of advice & traders vary*
The "Aussie Stock Forum" is chock full of knowledgeable successful traders & its pays to read all the threads of any members who reply to you. Read & learn, align yourself with a member whose trading styles makes the most sense to you.

*I'm the first to respond*
This is a blatant plug, take your time, read my thread first, read my eBook not once but many times (it's a great read) & I can assure you that your journey has started on the right foot.

Best of luck..

Skate.


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## Skate (24 June 2019)

*The CAM strategy is now full.*
The CAM strategy has now filled the *25* positions of the portfolio - the initial capital allocation is *$378,711 *of the $400K set aside.

*The need for - Rebalancing*
Trading in the pre-auction necessitates dollar re-balancing of positions sizing. Re-balancing will be a direct correlation to the current trading account balance.

*F.Y.I *
Today’s end-of-trade results are posted as a milestone indicating the CAM strategy is now full & rearing to go. The post today is a ‘snap shot in time’ that will bear no resemblance to the end-of-the-week trading results I’ll post after 6pm Friday. The posted results are 100% accurate of the CAM's progess.






Skate.


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## Skate (28 June 2019)

sptrawler said:


> Oh for the good old days, I recently rolled over a term deposit 2.3%, when will we return to long term average?






Value Collector said:


> View attachment 95778
> 
> 
> 
> ...






Ann said:


> Very interesting!
> I have traded 12 stocks in and out since Feb. I decided to have no trading plan or correct mental attitude but I wanted to see what I would find doing random trading. Four fails, four wins, four break evens-ish, very, very poor result. I decided to just go back to Weinstein+. It works....for me.
> 
> Now this month I have begun for real. I have two stocks so far and the other two bits of money are DRPs that got caught when I closed in a hurry through injury a couple of years ago, which I must clean out one day. I am going slow with a maximum of $5000 per trade until I am happy I am getting this right.
> View attachment 95773




*Actively trading*
The above has prompted me to post for those who are chasing better returns than 8% by actively trading the markets. Any endeavour that offers good long term returns carry a level of risk. Risk can be minimised and returns can be magnified trading the right strategy.

*Returns since Jan 2019*
I was 100% in cash at the 1st January 2019 & I'm now fully invested. The markets in the last 6 months have been very kind to me trading a similar style promoted in the 'Dump it here' thread. @captain black, @peter2 have both recently confirmed trading hasn't been too shabby over the last 6 months.

*You can listen to too many*
Reading various trading threads here at ASF sounds good in theory, but the problem is that getting so many different trading opinions & trading styles becomes confusing & in the end you won't know who to believe thus putting a handbrake on your trading.

*Find your comfort level*
By reading various trading threads you'll find out what works and what doesn't. The hardest part is finding yourself a setup you like, one that's simple and suits your mindset.

*Paper trading *
Become an expert in paper trading a strategy to start with, practice & practice & practice until you feel your strategy preforms well enough to give you the confidence to start trading. How you handle yourself in difficult times riding the emotional roller coaster will be the test of your mettle.

*Simple is good*
You'd be surprised how simple some methods top traders use & how few setups they have. Many of them specialise in just one or two setups.

*Snippet*
Call it chest beating, or what ever. @Ann was kind enough to cut a snippet of her holdings for all to see so I'm prepared to do the same to reinforce a point. The 27 position snippet below is from one of my strategies that is currently returning in excess of 8% the highest listed by @Value Collector.

*Trading a mechanical system can be profitable. *(snippet is before the start of trade today)



*A great quote by *@tech/a 
*Our aim* is to identify opportunity --- to anticipate a move in our direction and take advantage of it. if we are right stay right for as long as our analysis anticipates further momentum in our direction all the while mitigating Risk and maximising profit. If Wrong----dont stay Wrong for TOO LONG!.

Skate.


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## 93Ceaudist (28 June 2019)

Never too late to start doing what you love most.


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## aus_trader (28 June 2019)

Skate, sorry for my ignorance but I didn't understand the bit from your post which is listed below. Could you please explain a little more.



Skate said:


> the highest listed by @Value Collector.


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## Skate (28 June 2019)

aus_trader said:


> Skate, sorry for my ignorance but I didn't understand the bit from your post which is listed below. Could you please explain a little more.




Hi @aus_trader, sorry for the confusion the graphic that I referenced came across as a hyperlink ONLY that @Value Collector posted ( View attachment 95778 Current rates ) 

*My Graphic*
I posted a snippet displaying 27 of my current positions that have exceeded 8% all within the last 6 months of trading. It was a visual representation of what can be achieve from actively rather than passively investing your funds. My current returns posted above range from *8.46%* to *104.49% *

*The highest return quoted in the graphic below is 8.2%.  (This is the missing Graphic from my previous post)*



*The Thread: Alternatives to Term Deposit? *I was referencing this post: https://www.aussiestockforums.com/posts/1032461/

*I was fumbling to say*
Since January, I have 27 positions exceeding the return of 8.2%. If you wanted to chase better returns than the 8% I was suggesting actively trading the markets using a system explained in the 'Dump it here' thread. 

Trading as with any endeavour that offers good long term returns do carry an added level of risk. I also remarked you can minimise the risk while at the same time magnifying your returns with the right strategy. 

Skate.


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## Skate (28 June 2019)

Skate.


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## aus_trader (28 June 2019)

Skate said:


> Hi @aus_trader, sorry for the confusion the graphic that I referenced came across as a hyperlink ONLY that @Value Collector posted ( View attachment 95778 Current rates )
> 
> *My Graphic*
> I posted a snippet displaying 27 of my current positions that have exceeded 8% all within the last 6 months of trading. It was a visual representation of what can be achieve from actively rather than passively investing your funds. My current returns posted above range from *8.46%* to *104.49% *
> ...



All clear, thanks for the explanation Skate.


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## Skate (29 June 2019)

*Gee, I’m lazy*
We all tend to be lazy making excuses at every turn why we don’t do things. I’ve made the time over the last week to read a few older post & boy they are chock-a-block full of helpful information. Reading these older posts has prompted me to make another post in the ‘Dump it here’ thread, a pep talk for a better word, simple stuff that is sometimes worth repeating.

*It might be you*
If you have a great trading system, one that consistently makes you money, it is mostly that you are the one that’s making the system work that was reinforced to me by @Gringotts Bank a few posts back. How you handle yourself in the difficult times removing the fear of losing money will be the decider in becoming consistently successful.

*It’s about making decisions*
No matter how successful a system is or how good your rules are, consistent profits will be difficult to obtain without training yourself to be aware when your emotions start to rise to the surface taking over your decision process.

*Confidence is the key*
Ridding yourself of the emotional fear starts by having confidence in your strategy, this has been reinforced many times to me by @captain black - understanding what the strategy was capable of in the past, paper trading the system into the future, understanding & accepting what can happen if the trade fails – being emotionally & mentally prepared to handle the side effects of losing money goes to the very heart of confidence.

*Measured risk*
Unsuccessful traders tend to think more about losing money more often than not, constantly passing up potential opportunity that a measured risk provides.  Traders will continue to pass up on potential opportunities because they are too scared to lose. @peter2 reinforces risk calculations in most of his post so it pays to listen & learn from him.

*Trading*
Losing is part of the game & if you can accept this, you are half way there. Heck you may even eventually become successful. It pays for you to be the best loser you can possibly be. The markets are emotional that’s a given because humans are the emotional drivers of the markets & these emotions never seem to change. I hate when rational people go out of their way to constantly make irrational decision, I find it a battle just to keep up with them.

*Longevity is your one job*
Losing will always be emotional & it will always hurt but how you handle yourself in these times will be the deciding factor how long you keep playing this game.

*Words*
Don’t focus on the losing aspect even though it’s an important part of trading. Never ever use the words “if only” don’t use any word that has an “if” in it - as in “what-if”. @tech/a has written so many great posts & I reference them for only one reason & that reason is 'experience'. His words have come from his experience. 

*Not long now*
In recent posts it appears @captain black & @tech/a interest has been reignited confirming both are about to post more about the nitty gritty of trading & for one I can't wait. It's a real shame knowing to gain experience it consumes so much time & effort, it's a real pity we're not able to download experience like we do with most computer programs.

Skate.


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## Newt (29 June 2019)

Valuable words skate for everyone following a systematic trading plan.

You posts and some PMs helped prompt me to ruthlessly track my trading performance versus the model each week this year.  I actually ("sort of....") thought I had been doing that for years, but copying each signal and position from the model and comparing performance against actual positions/returns showed a number of insidious compromises.  Every little tweak or modification I had made to "improve" things almost always  proved to have reduced returns.

This led to 2 changes in my weekly routine:

1. *Ensure every component of my entries and exit logic was graphically indicated on charts.*  Doing so rubbed my nose in something the system "wanted to do" I hadn't been doing consistently on exits in the past - essentially I hadn't been correctly implementing one of my 2 trailing stops (insert embarrased emoji!).  An unanticipated benefit of this more "clockwork" approach is an extra layer of trust entering new buy and sell signals - perhaps there is now another layer of "ownership" forcing myself to repeat a defined process over and over and removing the temptation of tweak on the fly when a buy signal for some ticker I've never heard of pops out.

2.  *Record weekly performance against the system modelled returns -  and "Score" my performance tracking against it.*  Record the reasons for any difference and check their validity.  Examples of valid variations might include:
- paper positions open before go-live trading date
- not getting filled in your order
- trading halts, takeover offers

In any case, I'm sure my returns have been significanty better over the first 6 months of this year than they would have been without these "skate-tweaks".  I was also more than bit peeved to realise my system was "smarter" than the guy that created in some ways - it would appear I have much more to learn if my "trading discretion" is ever going to add value to the equity curve!

One other thought.  Developing a decent process and then the confidence to stick to it is, I suspect, an iterative process for most.  Over the years you gain experience writing better code/processes, and your experience through various market conditions helps you improve your confidence and trading accuracy.  This might include an improvement in the risk:return metrics for those strategies you choose to stick with, which of course improves enthusiasm, confidence, accuracy.  The learning and challenges never stop, and like most complex skills it is probably unreasonable to expect modelled returns in the first 3-5 years.  Even if your equity curve struggles to curve upwards in those initial years, sticking in there to consistently find and sqaush errors (and ego) will eventually improve your returns, confidence, etc, etc....


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## Skate (2 July 2019)

tech/a said:


> *If this doesn't excite you nothing will!!!*
> 
> *
> View attachment 95834
> *






Skate said:


> *Not long now*
> In recent posts it appears @captain black & @tech/a interest has been reignited confirming both are about to post more about the nitty gritty of trading & for one I can't wait. It's a real shame knowing to gain experience it consumes so much time & effort, it's a real pity we're not able to download experience like we do with most computer programs.
> 
> Skate.




There is a perfect 'chart' example in @tech/a Thread that illustrates his experience at work:* Learning Technical Analysis and its Practical Application - *https://www.aussiestockforums.com/posts/1033030/

The security charted is (GBT) & most would be able to follow along as the signals being displayed are very obvious, but most charts are not so obvious - the chart remark is: _"Now take a good look at this chart, you can't tell me that VOLUME & PATTERN aren't telling you a strong & compelling story !!"
_
*The compelling argument for systematic trading*


Newt said:


> Valuable words skate for everyone following a systematic trading plan.






Skate said:


> *A great quote by *@tech/a
> Our aim is to identify opportunity --- to anticipate a move in our direction and take advantage of it. if we are right stay right for as long as our analysis anticipates further momentum in our direction all the while mitigating Risk and maximising profit. If Wrong----don't stay Wrong for TOO LONG!.




I made the remark in my post above - _"it's a real pity we're not able to download experience like we do with most computer programs"_

It is a pity experience can't be downloaded but you can code it. Being a systematic trend trader, coding a trading system that jumps on 'confirmed' trends (confirmed is the key word) takes the skill of experience out of the equation by a few lines of code.  Whereas other trend trading systems will wait for a pullback within a trend, sometimes taking advantage of a trend continuations. There are a multitude of ways to code a system to achieve the same results.

@tech/a (GTB) *Daily CHART used to explain the setup pattern



The same weekly chart of (GBT) displaying the HYBRID buy signal*
The Hybrid Strategy is all over 'confirmed' trends.



*This is the weekly CAM Strategy chart jumping on (GBT) *- a 'countertrend' setup
The CAM strategy looks for pullbacks & countertrend conditions. It just so happened that the signal in this case was a countertrend & it developed much earlier than the Hybrid breakout signal. The countertrend developed because the (ADX) was declining while the (MACD) was rising, two simple indicators confirming a countertrend in motion. With systematic trading nothing works perfectly but the examples above & below shows that sometimes they get it right.

*


*
Skate.


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## Skate (2 July 2019)

captain black said:


> I posted the charts with buy and sell signals of AQG and SLR in my futures thread last week and the current charts of both are good examples of short term momentum trading.
> 
> There was a quote by @peter2 in @Skate 's thread a few weeks ago about trading in thin markets.
> For short term trading it's important to have a proactive rather than reactive exit. Reactive exits work well for trend following systems. You take the exit when there is confirmation of a change in trend. If you're short term trading in small caps waiting for confirmation means you end up selling into a very thin depth on the buy side and taking a big hit from the resulting slippage.
> ...




*Trading different time frames*
I'm a current holder of the two securities referenced in @captain black thread so it's a reason for me to make a separate post in the 'Dump it here' thread showing charts trading in different time frames. 

*The reference is from this thread:* Captain Black's Share Trading Thread https://www.aussiestockforums.com/posts/1033102/

*Weekly time frame v Short term trading*
Trend trading in a weekly time frame as the captain explains uses a reactive exit. Reactive exits will always give back some open profits but that's par for the course. Watching open profits evaporate while waiting for the week to complete can be painful but trading a weekly system you have to accept this. For short term trading you can be proactive with your exits alleviating the mental gymnastics of a weekly system. Reactive exits work well for my weekly trend following systems combining stalling momentum with a 'confirmed' change in trend gets me out pretty quick but as I've said before, waiting for the week to end is sometimes excruciating.

*Why don't I trade lower time frames?*
For one very good reason - I lack the skill to code a profitable trend following systems in lower time frames. Trading in lower time frames requires skill - you only have to look at the captains yearly results to understand the level of skill he has.

*Disclaimer*
I hold both (AQG) as well as (SLR) & they are both currently travelling nicely at the moment. I would like to take the opportunity to display both charts for (AQG) & (SLR) to compare short term trading verses a longer weekly trading system entry & exit signals. It requires skill to be nimble & agile trading in lower time frames, something I can only wish for.

*The captains chart* (AQG) entry & exit signal



*My Hybrid Chart* (AQG) showing the entry signal



*The captains chart* (SLR) entry & exit signal



*My Hybrid Chart* (SLR) showing the entry signal



*Freedom*
Short term trading allows you the freedom to be a proactive when it comes to your exits - @captain black, @peter2 & @tech/a all use proactive exits & there are examples in their respective threads whereas I'm stuck trading with a reactive exit - sitting through the pain watching the price spiraling out of my control sometimes. 

*Override your exits*
Will I think about overriding the exits of my systems to alleviate the pain & save myself a few dollars in doing so - Heck NO !! 

It's not my job to think - I've got one JOB to do when it comes to trading & that one job is to follow my system without fail..

*Summary*
Proactive exits are a lot less stressful than reactive exits, that's a given.

Skate.


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## captain black (2 July 2019)

Great post @Skate and a couple of nice trades there in your Hybrid system 



Skate said:


> It's not my job to think - I've got one JOB to do when it comes to trading & that one job is to follow my system without fail..


----------



## willoneau (2 July 2019)

No pain skate if you only look at your weekly system on weekends.


----------



## Newt (2 July 2019)

Congrats on your AQG and SLR trades Skate, and thanks for sharing detail on how you hopped on board both of these according to your systematic rules.

I think you've mentioned before valuable trading podcasts, and here in Australia we've been fortunate to have Aaron Fifield (Chat with Traders) and Andrew Swanscott (Better System Trader) putting out a lot of fantastic material.  The most recent Better System Trader podcast is a nice one for established traders and newbies alike.   Steve Ward talks about the inevitable "J curve" to profitability most traders endure and ways of reducing the depth and time in drawdown before (hopefully) establishing sustainable profitability.  Most new traders probably also suffer from a dose of over-optimism and Dunning-Kruger effect.....

Some other great material in this episode too:
Better System Trader Episode 164

.


----------



## captain black (2 July 2019)

Newt said:


> Most new traders probably also suffer from a dose of over-optimism




Even us old traders still suffer from over-optimism far too often for our own good


----------



## Skate (3 July 2019)

Skate said:


> *You can listen to too many*
> Reading various trading threads here at ASF sounds good in theory, but the problem is that getting so many different trading opinions & trading styles becomes confusing & in the end you won't know who to believe thus putting a handbrake on your trading.




Read below..



Skate said:


> *The quality of advice & traders vary*
> The "Aussie Stock Forum" is chock full of knowledgeable successful traders & its pays to read all the threads of any members who reply to you. Read & learn, align yourself with a member whose trading styles makes the most sense to you.




I aligned myself with @captain black over the last 4 years I've been trading. Like others on the forum I've made some serious coin over the last 4 years by listening & learning from his advice.



captain black said:


> Great post @Skate and a couple of nice trades there in your Hybrid system




*The Hybrid Strategy*
Yes, nice trades are easy to handle. I have better performing trades at the moment so its a good time to show 4 of my best trades & 4 of my worst trades of the Hybrid Strategy. The Hybrid strategy is my main trading strategy that I trade with a combination of other strategies. The CAM strategy is the latest in the series & other than that one all have been consistent performers. The CAM strategy went live on the 11th June so its early days & I'm comfortable adding it to my stable of strategies.

*My best 4 Hybrid performers*
PET +152.24%
JIN +93.49%
Z1P +89.19%
PME +85.23%
















*My 4 absolute worst Hybrid performers*
HFR -11%
JMS -4.4%
MNY -4.32
NGI - 4.29
















*Systematic trend trading *
This style of trading is not for everyone & not all systems & assumptions that make up a strategy work for all traders @Gringotts Bank has made some worthwhile posts in the 'Dump it here' thread & he recently reinforced the fact - that's it's you who makes the strategy work.

*The Bottom Line*
Planning how to code a profitable strategy is not an easy task. There are many variables to consider but with a little extra time and effort, you can figure it out. Having the Captain in my corner didn't do me any harm. I'm forever in the Captains debt & I feel privileged to call him a friend & mentor.



Newt said:


> Congrats on your AQG and SLR trades Skate, and thanks for sharing detail on how you hopped on board both of these according to your systematic rules.
> 
> I think you've mentioned before valuable trading podcasts, and here in Australia we've been fortunate to have Aaron Fifield (Chat with Traders) and Andrew Swanscott (Better System Trader) putting out a lot of fantastic material. The most recent Better System Trader podcast is a nice one for established traders and newbies alike. Steve Ward talks about the inevitable "J curve" to profitability most traders endure and ways of reducing the depth and time in drawdown before (hopefully) establishing sustainable profitability. Most new traders probably also suffer from a dose of over-optimism and Dunning-Kruger effect.....
> 
> ...




@Newt your input is very much welcomed along with others who make a contribution in keeping the 'Dump it here' thread active - it's the very essence why this thread was started, thank you.

Skate.


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## captain black (4 July 2019)

Skate said:


> *My 4 absolute worst Hybrid performers*
> HFR -11%
> JMS -4.4%
> MNY -4.32
> NGI - 4.29




Great job keeping your losses so low Skate, perhaps I need to take some lessons from you in building trend following systems


----------



## barney (5 July 2019)

captain black said:


> Great job keeping your losses so low Skate, perhaps I need to take some lessons from you in building trend following systems




I was thinking the same thing Captain. Well done @Skate …. Your top 4 winners V Losers represents about a 17:1 profit ratio percentage wise …… that's pretty amazing


----------



## willoneau (5 July 2019)

Hi Skate , how do you determine your universe of stocks to select from?


----------



## Skate (5 July 2019)

willoneau said:


> Hi Skate , how do you determine your universe of stocks to select from?




Hi @willoneau thank you for your question & it's a really good question - a question that gives me the opportunity to expand on the logic in making that decision.

*Commitment*
I'll answer you question first & follow with a few words that may help others to understand the commitment required to have a fighting chance of not losing their money in this game.

*The All Ordinaries*
I determined the universe of stock to trade from my personal risk management assessment & the All Ordinaries was the winner.

*Universe of stock*
Deciding what  universe of stock to trade was one of the very first questions I had to answer before risking one dollar trading. It took me a little over three years of study (14 hour days) to understand the culture of the share market & how to trade successfully before I made my first trade.

*The decision*
4 years ago I decided to invest locally. Trading is a risky business, so I set about evaluating the level of risk I was willing to absorb. Volatility was the determining factor to which universe of stock was suitable for me to trade - for a better word it was "my" risk factor that decided it for me.

*Low risk & low volatility*
The companies in ASX 20 are considered to be Bluechip investments with low volatility. A stock with lower volatility usually suggests the stock price will be much more stable than riskier investments. To make money in the stock market you need volatility to shift the share price in conjunction with company performance and capital growth. Rock solid companies being less volatile are suitable for those who have a low tolerance to risk. Investors not traders will find comfort trading these companies because the emotional roller coaster is a lot less scary than other indexes. Low volatility thus low risk was not for me. I was leaning towards trading stock that carried higher risk - a risk that I could manage. Being a multi business owner & Bookmaker has influenced my risk tolerance for sure, but who really knows.

*The right mix of risk*
The All Ordinaries has a mix of safe, stable and aggressive companies that enjoys more volatility than all the indexes listed above the XAO. The All Ordinaries for me has the right risk/reward combination for a growth portfolio – it’s a bit of a roller coaster but the rewards are larger with the corresponding disadvantage of higher risk. Indexes below the All Ordinaries have nail biting volatility and it’s akin to hanging on to a cliffs edge just by your fingertips, meaning trading an Index below the All Ordinaries you’ll require nerves of steel or at the very least you need to be a very hardened punter.

*98% of Traders Lose*
One of the first major shocks you will learn is that 98% of Traders lose their money and some traders lose their entire capital, blowing up their account.

*Education is the key*
I’ve read umpteen books & trading articles, I’ve listened to more podcasts than I care to remember, keeping my eyes and ears open, hoping to learn from successful traders, finding out what sets them apart from the average trader, trying to learn the secrets of their success whilst trying not to repeat their failures. @Newt recently posted an episode from Better System Trader Episode 164 it's a great listen, highly recommended. The 'Dump it here' thread is a condensed version of some of the important things I've learnt along the way.

*Technology*
Technology now makes it possible for anyone who is willing to put forth the effort to be an trader. In the past, most had to rely on financial advisers or the media for advice about the trading process. That is no longer the case as the 'Aussie Stock Forum' is full of members only too happy to help out when the need arises.

*Tools*
I'm a mechanical system trader & some members are unsure what that really means, some simply don’t know that trading tools exist let alone how to use those tools effectively. Many software applications, websites, forums & other sources of information are designed to help, but they are so overwhelming complex & inconsistent that people often feel even more confused & uncertain about how to proceed. This is one of the reasons that new members land here on the ASF site seeking help.



barney said:


> I was thinking the same thing Captain. Well done @Skate …. Your top 4 winners V Losers represents about a 17:1 profit ratio percentage wise …… that's pretty amazing




*Kind words*
Thanks @captain black & @barney for your kind words but the accolades need to be directed to the Hybrid Strategy. The Hybrid Strategy has my best interest at heart by selecting only the stock that meets my strict criteria - the strategy even goes as far to rank the signals in buy order just for me. The strategy knows I don't like slow, non-performing stock so it goes out of its way to keep me happy by trashing those annoying buggers quick smart.

The winners I'm prepared to keep - because that's just the type of person I am.

Skate.


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## willoneau (5 July 2019)

Thanx for the reply Skate , i also use XAO as my universe. Have you also looked at price range as part of your criteria?


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## Skate (5 July 2019)

willoneau said:


> Thanx for the reply Skate , i also use XAO as my universe. Have you also looked at price range as part of your criteria?




Hi @willoneau as you have taken an interest I'll explain the parameters used in my Hybrid system. I have most bases cover with my selection of parameters, price range being one of them. For AmiBoker users I'm posting my parameter list for the Hybrid Strategy below. Others might find some interest in looking at it.

*N.B.*
The individual parameters settings used in the Hybrid system are not displayed - they are sensitive.

*The Hybrid Strategy*
The Hybrid strategy has been previously discussed in the 'Dump it here' thread at length but as a recap I'll condense it again. The Hybrid Strategy is a combination of my 3 best performing strategies being (1) BlueWren, (2) Bollinger Bands & (3) Darvas. The 3 strategies are named with their parameters segregated into work groups. Each strategy works independently of each other but all 3 totally work in conjunction with each other. Reading the last sentence back sounds double dutch - I know.

*No need to re-invent the wheel*
Each strategy in their own right are good performers, by putting them all together turns a good system into a better system (IMHO). The 3 strategies compete to get me into the breakout "as early" as possible whereas my exit strategies look after it from here saving my butt on a few occasions. Having a good exit strategy can be the difference if you make money or not. Having a good idea is not enough, getting into a good trade is not enough. How you manage your exits is the key to profitability.

*As traders*
To start trading all we want to know is (a) what to buy & (b) when to sell - can't be that hard I thought. After years of experience I now think differently.

*AmiBroker Parameter setting*
Having a great idea to catch a trend is one thing but having the correct parameters to enter those trends is critical to its overall performance. The parameter list below shows there is so much more that goes into systematic trading than one thinks. The 3 trading ideas that make up the Hybrid System requires many lines of code to make the operation seamless. The Hybrid Strategy takes an additional 1,260 lines of code to simply tell me three things:

(1) What code to Buy
(2) How many shares to buy &
(3) What price to offer in the pre-auction.

*Simple is good*
The code is complex but the generated signals are simple to understand & follow - systematic trading removes all the emotions, my end game.




I hope this goes some way to explain why it's so important to use the tools at your disposable giving yourself a fighting chance to survive let alone make money playing this game.

Skate.


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## Skate (5 July 2019)

Skate.


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## Zaxon (5 July 2019)

I like how you've set a concrete target, and measure yourself by it.  Most of us like to "outperform the market", but if the market is a bear, that can still mean losing...but hopefully less.  You haven't given yourself that option.


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## willoneau (5 July 2019)

When you backtested your hybrid system what was annual return%?


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## Skate (5 July 2019)

willoneau said:


> When you backtested your hybrid system what was annual return%?




@willoneau thank you for your follow up question . I wish to make a few statements before posting the backtest results you requested to put the results into perspective. I've posted a full & frank discussion about my HYBRID strategy as most were interested to understand it a little better. If you are interested it's still all there for you to read.

*Backtesting means JACK*
I've stated before, backtest results mean "Jack" - but the backtest results do give an indication between test results using different parameters for evaluation. 

*As you have asked*
I've cut & pasted 4 backtest runs from 1/7/2015. The backtests are correlated from a single year (last year, than the last 2 years average than the last 3 year average & than the 4 year average) 

*Static Dollar position sizing*
These backtest results use static dollar positing sizing whereas my Hybrid system uses a Bank feed to calculate dollar position sizing. (read back a few post as I've explained why it's done this way, I even talk about wars & soldiers - all the neat stuff to explain it) https://www.aussiestockforums.com/posts/1029737/

*Backtest Results*
Are the backtest an accurate reflection of my trading results - no not really, they mean Jack - my actual trading results are a little better.

*Last year*


*
The average of the last 2 years



The Average of the last 3 years



The average for the last 4 years





Zaxon said:



View attachment 95952


I like how you've set a concrete target, and measure yourself by it.  Most of us like to "outperform the market", but if the market is a bear, that can still mean losing...but hopefully less.  You haven't given yourself that option.
		
Click to expand...


*
@Zaxon thank you for your positive comment, comments & questions are always welcomed - hitting the 'Like' button means someone is reading my posts & it encourages posters like myself to keep going when there is a definite interest in the subject matter being posted.

*Targets*
Targets need to be achievable for most to have the enthusiasm to keep striving for the best results that you can possible achieve. 
*
Mission Statement (The CAM Strategy)*
The mission statement came about from an off the cuff comment made to me a few weeks ago - _“I could live on a $1,000 a week” _so that’s the plan, I’m aiming for $1K a week for the next 52 weeks. Results will vary & maintaining an average set is a hard task most times.

*When I first started trading* 
I set a target to achieve a 6% return - I've ticked that one off !!

Skate.


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## Skate (12 July 2019)




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## investtrader (17 July 2019)

Skate,







Skate said:


> I've stated before, backtest results mean "Jack" - but the backtest results do give an indication between test results using different parameters for evaluation.




Interesting.. actually I don't agree with this at all, with all due respect. Which surprises me, as I agree with most other things you say. But I think you didn't really mean this.

Do backtest results guarantee the same going forward ... no.
Can backtest results give you false hope ... yes
Can backtest results lead you to a winning strategy ..yes

It really depends on the quality of the backtest. You can curve fit or torture the data to give any result basically. You need to start with an idea which is sound and move forward from there.  But if your view of the markets are flawed, then good luck with that.

Most traders fail. It is pretty hard to forge ahead without some historical idea that what you are doing works.


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## Skate (17 July 2019)

investtrader said:


> Skate,
> 
> Interesting.. actually I don't agree with this at all, with all due respect. Which surprises me, as I agree with most other things you say. But I think you didn't really mean this.
> 
> ...




Hi @investtrader, thank you for allowing me to clarify my statement about Backtesting.

*Your statement (1)*
_"Interesting.. actually I don't agree with this at all, with all due respect. Which surprises me, as I agree with most other things you say. But I think you didn't really mean this"_

*I mean it*
Let me put my statement into perspective to why backtesting means 'JACK' to me. 

*AmiBroker*
I know you use AmiBroker & you actively trade so lets do a backtest to confirm what I mean. 

*Your homework*
Pick a date that you have traded & compare your actual results to the backtest results for the same period. Those two results will not correlate. Post your results or send them via a "PM" if they are sensitive. For the benefit of others please post a followup comment with regards to the comparison results. Posting your results will be important to this discussion & hopefully to other readers. 

*The CAM Strategy*
I'm posting the actual trading portfolio of the CAM strategy with the corresponding backtest result over the last 36 days. The backtest results are displayed so you can compare the discrepancy of a one month trading period, imagine if the backtest was carried out over one to ten years. (it would be mind blowing)  

*Comparison Results*
Actual Results = + $12,660
AmiBroker Backtest = + $10,126

*Compare*
Compare the "actual" results with the "backtest" results & this is only after 36 days

*CAM actual returns* (from 11th June 2019 to 17th July 2019)




*CAM Amibroker - Backtest *(from 11th June 2019 to 17th July 2019)


*Your statement (2)*
_Do backtest results guarantee the same going forward ... no._ *(I agree)*
_Can backtest results give you false hope ... yes_ *(I agree)*
_Can backtest results lead you to a winning strategy_ ..yes   *(I agree)

Your statement (3)*
_"It really depends on the quality of the backtest. You can curve fit or torture the data to give any result basically. You need to start with an idea which is sound and move forward from there.  But if your view of the markets are flawed, then good luck with that. Most traders fail. It is pretty hard to forge ahead without some historical idea that what you are doing works"_

*Backtesting*
For others - Backtesting is run on known data & yes I totally agree with you that any strategy can be curve fitted to give great backtest results. 

*OOS Data*
For others - "Out of sample data", is data that your strategy has not seen before. 

*Paper Trading*
Running your strategy using (OOS) data (paper trading) is the only results you should take notice of when "your cash" is on the line. Paper trading measures the true worth of any strategy.  All other trading results not using OOS data mean 'JACK ****' to me & I really mean this.

Skate.


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## Gringotts Bank (17 July 2019)

Backtests give you confidence.  They're important, and yet they mean jack ****.  There are some deep paradoxes in trading - the outer reflects the inner.  Here's the system I trade.

2004-2019


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## investtrader (18 July 2019)

Not a lot of time right now, but I will follow up more fully later. I don't think we are that far apart in our thinking. 

Skate, maybe you need to know that I have 'traded' for 14 years. Never actually had a losing year and sat out some years for extraneous reasons. Because of this I don't even really think abut the difference between a backtest and real life - of course they are going to be different.


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## investtrader (18 July 2019)

Skate,


Skate said:


> *Your homework*
> Pick a date that you have traded & compare your actual results to the backtest results for the same period. Those two results will not correlate. Post your results or send them via a "PM" if they are sensitive. For the benefit of others please post a followup comment with regards to the comparison results. Posting your results will be important to this discussion & hopefully to other readers.



My main account returned about 27% last FY. Backtested system result was 15%. Now this is not usual as it normally is the other way around.
Why the difference? Well I sold some positions before they hit stops in the downturn which helped reduce DD. I also bought positions that had triggered earlier but I hadn't taken the original trade. I recognized how bullish the market had become after January and just piled on. I also look at the fundamentals and use Stockopedia for this. Great resource. I don't want a whole port of spec stuff as I trade longer term weekly trends. I have a lot experience with true quant tech/fundamental systems using Portfolio123 for US stocks and know a fundamental overlay can help. So I vary the strict Amibroker rules I trade around. I never vary the stop though - when it says get out I always do.
But in all of this my conviction begins with a backtest.  
So I think what you really mean is backtesting is the most important thing I have done as it has lead me to develop a system/s that makes me money. But don't expect my perfect backtest to predict exactly what my returns will be in the future.

Cheers
Gary


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## qldfrog (18 July 2019)

A bit surprised by the discrepancy between your backtest and real;
Mine kind of match pretty well:
maybe you suffer from the same issue as I do:
Let me try to explain:
you buy based on last trading price: add a margin2 or 3pc, whatever 
that higher price give you the amount of shares to buy on the next open    ..but that share price at open will rarely be spot one, so you will buy less shares than required at open price to match your 5k/10k/20k or whatever per position;
the variation will actually be indicative of the short term movement: so a share falling on the next open will be less invested (in $ term) than one going up at open..which is good;
That flaw alone could explain your better than backtest results.
I do not mean to say backtest will be indicative of the future trades but backtest on AB are pretty spot on otherwise with a real system for the past actions unless you have stop lossess etc which may not be executed..definitively a risk too
Hope I am not confusing anyone


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## investtrader (19 July 2019)

qldfrog said:


> A bit surprised by the discrepancy between your backtest and real;




Well I luckily bought a couple of big winners ..PET,PME ,ISXand PMV. I also bought JIN when the actual buy signal was back in August 18 and I bought in Feb19 as this is a high quality company and the market is really rewarding this currently with not much regard for valuation. I know that these long stable trends can persist so I just jumped on. Also, I loaded up on Gold stocks in the last six months. So these are kind of discretionary overlays. And as I said my DD was less as I aggressively sold some positions last Sept/Oct before actual stops were hit.


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## tech/a (19 July 2019)

tech/a said:


> I could spend the next month commenting on dumps.
> But don't have a month.
> This one though not entirely agree.
> 
> ...




Up date

He ended up the the much younger girl.
She hooked up with the guy she was engaged to
before she married the current one.

She is over the moon and a different person.
He is teaching her English!

I know who is happiest.


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## Skate (19 July 2019)

Skate.


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## captain black (19 July 2019)

Nice pop this week Mr Skate, well ahead of target now


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## Skate (20 July 2019)

*It’s unusual*
It's rare that members supply details of their trading account let alone the methodology used in their trading system. I have a few systems being traded at the moment & one of those systems is my HYBRID strategy.

*Screen Capture*
I've posted in detail about the HYBRID strategy & I'm prepared to post a screen capture of the "Open profits" from the last 7 months. The CommSec trading screen capture is as of today 20th July 2019. Traders using CommSec as their broker would know this format & graphic without a required explanation. (The full list of my positions are omitted)

*Share Holdings Summary Chart *
The Share Holdings Summary Chart displays some of my current positions. As there are some of my positions shown in the chart below I’m prepared to list the 'open profit percentages' as some may be interested.




*Percentage returns for the current "Open Positions" listed above*

*PET  * +213.90%
*IEL  * +20.78%
*PME*   +114.00%
*SLR*   +96.88%
*Z1P*   +88.58%
*JIN*   +88.14%
*AQG*   +69.05%
*MFG*   +61.33%
*FMG*   +51.00%
*GOR*   +54.67%
*RRL  * +31.29%
*ASL*   +28.61%

*Confirmation of results*
Back on the 19th December 2018 @Wyatt asked if I was in 100% Cash, which I confirmed I was. I was sitting on the side lines waiting for the next big move. Early in January 2019 the move was on & the HYBRID strategy started to pump out buy signals so I set about filling those 40 position.

*FYI*
The HYBRID Strategy is a weekly 40 position portfolio trading $25K positions.

*Trading Results (open profits)*
The CommSec screen capture of the "Open Profits" of the HYBRID Strategy is $200,850 (it's travelling along quite nicely)

*Trading Results (open & closed profits)*
Trading has been kind to me since January 2019. My actual trading results exceeds the current 'open profits' shown in the screen capture as my actual profit includes "closed profits" as well during this 7 month trading period. (January 2019 to 19th July 2019)

*Why make this post *
1. It confirms I actively trade.
2. It also confirms that I practice what I preach (if there is a "Doubting Thomas" out there) &
3. The HYBRID Strategy trades a 7 figure amount.

*This weeks results*
The Hybrid picked up $18,595 this week & the CAM strategy picked up another $13,298 - not a bad week at all.

Skate.


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## Newt (20 July 2019)

Thanks so much for sharing this Skate.  I remember being greatly inspired as to what was possible from a skilful trader or value investor reading posts by Peter2 and craft years ago.  The spirit of the info you've shared, along with Zaxon's recent thread, gives those willing to put in the hard yards a glimse as to what is possible.  Possible after some years of hard yakka and learning about one's own psychology.  It hasn't always been easier to find this sort of info on  ASF - kudos for firing up systematic trading discussion through the last 12 months.

Question - Will those figures also represent your Open + Closed profits for the last 7 months, based on the expectation you reinvest and rebalance on each closed position, and  presumably are currently fully invested?


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## Skate (20 July 2019)

Newt said:


> Thanks so much for sharing this Skate.  I remember being greatly inspired as to what was possible from a skilful trader or value investor reading posts by Peter2 and craft years ago.  The spirit of the info you've shared, along with Zaxon's recent thread, gives those willing to put in the hard yards a glimse as to what is possible.  Possible after some years of hard yakka and learning about one's own psychology.  It hasn't always been easier to find this sort of info on  ASF - kudos for firing up systematic trading discussion through the last 12 months.
> 
> *Question - Will those figures also represent your Open + Closed profits for the last 7 months, based on the expectation you reinvest and rebalance on each closed position, and  presumably are currently fully invested?*




@Newt, thanks for accepting that I've posted my results in the spirit of inspiring others, the very essence of the 'Dump it Here' thread. 

*Answers to your questions*
_*1. "Will those figures also represent your Open + Closed profits for the last 7 months" ?*_
NO - those figures are just my current open position - If you add my closed positions profits to that figure the results are much, much better. I didn't post my yearly results in @Zaxon's thread as sometimes it can be interpreted as puffing ones owns ability. For the record - My yearly results lie somewhere between @peter2 & @captain black results.
*2. "based on the expectation you reinvest and rebalance on each closed position, and  presumably are currently fully invested" ?*
YES - I am fully invested but the HYBRID strategy has outgrown all my trading rules resulting in starting another strategy. The CAM strategy has now been added to the stable of systems being traded.

*Your Statement*
_*"It hasn't always been easier to find this sort of info on  ASF - kudos for firing up systematic trading discussion through the last 12 months"*_
Thank you for the credit but I'm the one inspired by other members posting their trading journey on a Friday evening, it's so refreshing to read posts about trading the reason why we visit the 'ASF' community every day.

*Stay with me*
I'll make another post tonight, a story that others may find inspiring or just an enjoy reading. It's about a member who reached out to me back in December 2018 asking for my help. 

Skate.


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## Skate (20 July 2019)

*@Newt - The Story*
Back in December 2018 an ASF member asked if I would help him start trading. The usual question, (a) Why do you want to trade? (b) What do you know or understand about trading?

*A complete novice*
It didn't take long to work out he was a complete novice, the only thing he knew was 2 of his friends traded & he felt like a shag-on-a-rock when they got together discussing finances.

*Years of study*
I went on to explain it takes many years of study to learn how 'not to lose money' let alone make money at this game. Than the **** hit the fan - he said, "I got a lot of money saved that I can invest" - $20K  (to him that was a fortune, saved over many years)

*You can lose it all - by trading*
I tried to sway him from trading explaining $20k is a lot of money but there are high cost that come with trading, one being brokers commission & many other expenses. Trading accounts under $50K makes trading so much harder. I told him that risking all his savings will be an emotional roller coaster when there is skin in the game.

*Long story - short*
He was committed & parrot phased some of my post back to me. The one that resonated with me was that he was prepared to start trading small & learn on the job. I don't know if I was impressed he read my thread or the commitment he had shown that he was prepared to learn.
*
This is my post he parrot phased back to me*
Learning Curve - Practice Makes Perfect. You can learn as you go by trading small positions and if you make a mistake small loses are bearable. Making small mistakes now will give you the skills and experience you’ll need to make the right decisions later on. So don’t let fear or self-doubt keep you from getting started. The very act of getting started is much more important than getting it right.

*So I quoted some of my post back to him*
1. Rules of engagement - The Financial Markets are a Cruel, Unkind and Dangerous Playing Field, one place where the newest amateurs are generally fleeced the most brutally, usually by those who know the rules of engagement.
2. Most traders think you can start with a small amount of money to start trading but anything less than $50k or $60K is quickly swallowed up by commission costs, the cost of doing business.
3. If your trading strategy trades with a high frequency the commission drag will play havoc with your strategy profitability.

*My final statement to him*
The truth is, you need money to make money - forget about taking a $20,000 account and turning it into millions. That is achieved through gambling, not trading. Instead, he should look to make an average of 25% per year. Meaning the best he could hope for was a profit of $5,00 if all went to plan.

*I gave him this example*
On a $1000 account, you're looking at an average of $250 per year.
*# On a $20,000 account, you can average $5,000 per year return. (his savings account balance)*
On a $50,000 account, you're looking at an average of $12,500 per year.
*On a $80,000 account, you can average $20,000 per year return*
On a $100,000 account, you're looking at an average of $25,000 per year.
On a $600,000 account, you're looking at an average of $150k per year.
*On a $1m account, you're looking at an average of $250k per year.
*
It was a demonstration that your trading account SIZE really matters & most traders don’t get it.

*So what happened*
I had about 5 strategies in the final stages of paper trading & I said that I was prepared to offer him a steady stream of weekly signal from one of them, the worst one.

*Worst of the strategies*
He was ecstatic, so I reconfirmed it was signals from the worst strategy not from the best, I assumed he misunderstood what I was saying. He said he understood & had confidence starting out this way.

*His results*
Accepting signals from the worst strategy seemed to make no difference to him & after 7 months he has been 100% committed to trading the signals I've given him, he requests the signal every week confirming he is still interested in trading.

*Record Keeping*
I've been keeping his trading records till he got on his feet & up to speed so with his permission I'll post up his results so far, he is one happy dude (at the moment) being up $5,683 a return of 28.42% (the excitement of youth, you can't beat that)

*The MAP Strategy*
He is trading a modified version of my weekly MAP strategy.
*Start Date:* 14th January 2018
*Starting Capital:* $20,000
*Positions in the portfolio:* 10
*Position size:* $2,000







By starting the 'Dump it here' thread has made a difference to some & modified the thinking of others making me happy.

Skate.


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## qldfrog (21 July 2019)

Your posts and a combinaison of timing (personal, not market as i moved into retirement now effective ) was much influencial in making me build my system based on your initial concept
Furthermore, while happy with my results, I realise the drawback of not being fully invested
I will so work on another weekly trending system with more dynamic in out, some automated stop loss able to trigger during the week, and a fully invested rule
After all, even on a long only system and a collapsing asx, some code can still go uo like bear or negative etf
That is the plan
So @Skate,@tech/a ,@Zaxon ,@Newt ,@peter2  but even new entrants like @jjbinks and i forget many, your posts are not wasted and inspirational for rookies like me.
Be proud of your contribution


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## Newt (21 July 2019)

Thanks for sharing that tale Skate.  I wasn't expecting to hear of that kink of follow through.  Your apprentice has much to be thankful for learning the essential pillars of the business like that.  
This year seems to have been an unusually kind period to trend traders, but with that kind of dedication he deserves to hang in there and profit further as life and savings allow.


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## IFocus (23 July 2019)

Hi Skate just read your thread in full, skimmed a fair bit of it but gained some learning re weekly verses shorter time frame which I have been following on Peters thread.

I started out actually looking for a answer to an obscure  question which was "do you manually input you buy sells in the Comsec platform"......days later here I am.  

Congratulations first on the thread and its contend (rare) but also on your success after 4 years (rare) and the level you have reached in trading (rare) which is not that common long may it continue.

Cheers


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## willoneau (23 July 2019)

Hi Skate , do you close your position when it touches your trailing stop or close below?


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## Gringotts Bank (23 July 2019)

That's very good of you Skate to help out whoever it was.  But just in case people get the wrong idea, it's worth repeating:  success is not created by the system, money management, disclipline or the size of your starting capital.  It's created by the personal energy one brings to the task.


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## Skate (23 July 2019)

IFocus said:


> Hi Skate just read your thread in full, skimmed a fair bit of it but gained some learning re weekly verses shorter time frame which I have been following on Peters thread.
> 
> I started out actually looking for a answer to an obscure  question which was "do you manually input you buy sells in the Comsec platform"......days later here I am.
> 
> ...




@IFocus thanks for taking the time to read my thread in full, that's a large commitment. I hope you grabbed a copy of my free eBook because it has a purpose. Re-reading those short burst passages will condition how to think, that is the reason why the posts are written this way.

*Boxing & fighting*
I've done a lot inside & outside of the ring & trading has similar aspects to it. If my opponent would fight in slow motion I would still take on anyone. Trading weekly verses daily is much the same. Trading weekly is like boxing in slow motion, meaning you have time to 'respond' when trading is not going your way. Trading on a daily time frame you are always 'reacting' to price movements. Responding gives you time to think. So never react always respond.

*How to think *
The 'Dump it here' thread is designed to condition traders how to think, how to be aware of their emotions. Stress from trading can be hazardous to your health & certainly to your wealth. I'm a firm believer how one handles stress when trading can be the difference between being profitable or a dead set loser. You only have to read some of the words other posters use to gauge their emotions. 

*Platoon Sergeant*
We have all seen it in the movies when a Platoon Sergeant shouts at the new recruits, stressing & confusing them - do you ever wonder why they are so mean, shouting loudly into their face?

*The answer*
It's so the new recruits are conditioned to handle stress from the get-go, ensuring they make calm, measured decisions under enormous stressful combat conditions, their lives will depend on it. This is the very reason why it's so important to control our emotions & stress when trading giving us the ability to make calm measured trading decision because our wealth will certainly depend on it.

*Emotions*
When trading, your emotions need to be parked at the front door. It’s sad anytime someone loses money, sometimes they can lose a fortune in such a short period of time, it can happened to anyone lacking the knowledge what the market can really do to them quick smart. Most traders focus on what the markets can do for them not what the markets can do to them. It’s reasonable that you must plan to lose & keep being the best loser you can possibly be to win at this game. 

*Trading is a losers' game* 
Most traders fail to realise that it’s easier to take a small loss than it is to take a big loss. As traders we must remove the emotional element as quickly as possible if our trading is to be successful.

*Don't let the markets control you*
Never let the market tell you that your position is wrong, you must decide when your position is bad & take action without exception, sell & move on as it’s critical to your success in trading. If you don't take early losses, it will becomes more difficult to take a loss as they become larger.

*You control your position*
You can’t control the market but you have full control of your position - drill that into your thinking & remember you can sell whenever YOU want to, it must become second nature to automatically do it at times to alleviate stress in your trading.

*Traders over think it*
Don’t be a ‘coulda-woulda-shoulda’ type of trader because you will need to have total control when following your trading plan. We tend to over think things when trading. Sometimes how we feel starts to become important. As a mechanical system trader it's not our job to think but to action the signals generated by our strategy. We have one job & that one job is to take the signals - whether we feel it's a good or bad move is not important.

_*"I started out actually looking for a answer to an obscure question which was "do you manually input you buy sells in the Comsec platform"......days later here I am"*_

*Short answer*
Yes, I manually add my buy & sell positions into the CommSec website. If I didn't have this to do there would be little for me to do each week.  

_*"Congratulations first on the thread and its contend (rare) but also on your success after 4 years (rare) and the level you have reached in trading (rare) which is not that common long may it continue"*_

*3 years of study before 4 years of success*
Don't forget it had taken 3 years of full time study & extensive testing before I placed my first trade. Learning was slow & difficult to understand the culture of trading let alone coding up profitable & repeatable patterns. Without the help from @captain black I wouldn't be trading at all. Everyone needs help sometimes, while others may just need a pep talk once in awhile..

*Less than 10 minutes per week*
After all the work it now takes me less than 10 minutes per week to handle the way I trade - 3 minutes to get the end-of-week signals & another 3 minutes to place my orders. Trading is the only profession I know that makes money without consuming any of my time & it's all due to the way I trade & the systems I have in place.

Skate.


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## Skate (23 July 2019)

willoneau said:


> Hi Skate , do you close your position when it touches your trailing stop or close below?




@willoneau, I wish it was that simple - I'll answer your question succinctly & move on to how I exit a position.

*Trailing Stop exit *
I do have a wide Trailing stop & when the closing price hits the trailing stop or falls below it I exit but only if the signal is at the "close of trade" on a Friday afternoon as I trade a weekly system. A sell position is entered in the pre-auction over the weekend to secure the opening price in Mondays auction. It's a simple process - take the signal, sell & move on.

*Let's put an exit into a story *(maybe its too simple)
No one likes to be caught in a rain storm. Before leaving home if it looks like rain (cloudy skies) we prepare & carry an umbrella. With clouds & falling water droplets, confirms to us its raining & it's time for us to put up the umbrella to protect us from getting wet.

*It's the same with trading*
Exits are handled in the same way. When the momentum slows (clouds are forming) - when the sediment of players reverse their positions (water droplets) this activates a stop (putting up the umbrella) & we exit - BUT - not until the week is finished (it might be just a passing scud, who knows). At the first sign of a few droplets we wouldn't panic & run like babies for a bit of cover would we. The smarter move would be to wait & see what transpires before exiting. If we are to exit, trading a weekly system we exit at the end of the week.

*I have 2 Exits with 2 variables for each exit*
1. I have variable trailing stop with two different settings depending on the conditions of the markets.
2. I also exercise a 'Stale Stop' that also needs two simultaneous conditions being met before I exit.

*Selling*
Successful trading is largely the art of selling. Buying a stock is easy. It is determining when to cut our losses or when to take our profits that is hard. Because it is so hard to determine when it is the right time to sell, many just don’t do it.
*
Selling is a valuable tactical tool*
Selling a stock is by far the most valuable tactical tool that the individual trader has at their disposal. Selling is cheap and easy and can be undone in the blink of an eye. Too many seem to think that if they sell a stock, they are somehow prevented from buying it back again. Not so..

*It's a fact - Skate's a wimp*
In fact, I’ll go so far as to claim that a smart wimp who runs and hides when the going gets tough generally produces better results than brave souls who are proud of their ability to suffer great monetary pains while they wait for their convictions to be rewarded.



Gringotts Bank said:


> That's very good of you Skate to help out whoever it was.  But just in case people get the wrong idea, it's worth repeating:  success is not created by the system, money management, disclipline or the size of your starting capital.  *It's created by the personal energy one brings to the task*.




@Gringotts Bank I hope everyone reads your comment at least twice, a comment that has my tick of approval.

Skate


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## qldfrog (23 July 2019)

Your trailing stop exit on a weekly system is food for though, 
On my  next system, i was to put a daily stoploss on a weekly system
I will take your opinion into account


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## willoneau (23 July 2019)

I often wonder if I should use a trailing conditional order to get out once my trailing stop is touched.


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## Skate (24 July 2019)

Newt said:


> Question - Will those figures also represent your Open + Closed profits for the last 7 months, based on the expectation you reinvest and rebalance on each closed position, and  presumably are currently fully invested?




*Follow up post*
@Newt I'm posting 4 of my closed positions (all closed positions were closed profits positions)

*Why Exit*
We exit for 2 reasons (1) to lock in profits & (2) to avoid further loses.

*How I exit a position*
The charts below are for a dual purpose (a) to show locked in profits & (b) to display the exits & why they were taken. The Charts have a few notations so @willoneau & others may understand how I exit a position (with notations & without notations gives a clearer picture) also @qldfrog may get an idea how to incorporate a new exit strategy from what I do.

*Closed profit positions *(it also demonstrates why the exit was taken)




*Explanation of the exits* (colour coding makes a big difference to me - I'm the visual type)




*Confirmation that I need two simultaneous conditions being met before I exit*




*The chart shows I need to give back some open profits to exit* (it's part of the game)




*Example of two different exits on the one chart* ('Trailing Stop' exit & a 'Stale Stop' exit)





Newt said:


> This year seems to have been an *unusually kind period to trend traders*.




*
After another 2 days of trading & it's still being kind to trend traders*



Skate.


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## Gringotts Bank (24 July 2019)

Definitely a dream run for the trend traders.  Meanwhile, for the last 2 weeks, reversion has been impossible.  We're getting a lot of these.

Small gap at the open with very low volume, tiny peak above the open, continues to fall, then closes above the low.  Requires some discretion now.  Waiting for supply to dry up isn't the answer.  Setting a trade delay entry of a few days looks like the way to go, but I don't want to end up playing whack-a-mole. Needs to be coded somehow.  I hate flat weeks.


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## willoneau (24 July 2019)

Hi skate, i enjoyed the charts you put up which are very close to the charting strategy I use.


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## BlindSquirrel (24 July 2019)

Don't look now but XAO is within a bee's unmentionables of its ATH. 
Currently 6860.8 vs ATH of 6873.2


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## willoneau (24 July 2019)

hi BlindSquirrel , not sure what you mean?


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## willoneau (24 July 2019)




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## BlindSquirrel (24 July 2019)

willoneau said:


> hi BlindSquirrel , not sure what you mean?



Al Ordinaries currently 6862.40, all time high was on 31/10/2007 @ 3873.20

I've basically just restated the previous post without so much jargon.


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## willoneau (24 July 2019)

Do you use it in your trading BlindSquirrel?


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## BlindSquirrel (24 July 2019)

No, just as a general interest on the current overall ASX market.


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## willoneau (24 July 2019)

OK , I'll get my crystal ball out . I have read some were that the bull run should stop in 2022 sometime so using that time frame lets look at what might happen on the chart.





PS, I don't use my crystal ball to trade with.


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## Skate (26 July 2019)

Trav. said:


> If you look at Skates 'Dump it here' thread you will find reference to a stale stop that he uses, which I believe is based on ROC(period)... period can be optimised for daily / weekly systems






Zaxon said:


> If you're going to use stops for exits, a "stale" test makes sense. Really though, I think it's about using the right tool for the job.






aus_trader said:


> I have been reading Skate's thread, it is an encyclopedia of information and food for thought. Great work from Skate and all the contributors. I haven't looked deeply into ROC (Rate Of Change) indicator but might have a look into it.






To my previous post about my "Stale Stop" exit that I have explained using the analogy of Clouds, Rain & an Umbrella.

@willoneau posted his chart of [ASX:MGX] in the “Speculative Stock Portfolio” thread of his strategy entry & exit positions. I'm using his chart as a comparison of his trailing stop verses my "Stale Stop" EXIT. 

*F.Y.I*
The HYBRID strategy had taken the same trade. 

*Comparison Charts*
I’m posting my HYBRID chart with the entry & exit positions. I've included the same chart with comments that explain the exit using the "Stale Stop" verses @willoneau trailing stop exit - There is a comparison between signals & profits.

@willoneau - *MGX chart*



*
HYBRID strategy "Stale Stop" Example Chart - MGX chart *(Plain chart)



*
HYBRID strategy - MGX chart *(with explanations)






Skate said:


> *Selling*
> Successful trading is largely the art of selling. Buying a stock is easy. It is determining when to cut our losses or when to take our profits that is hard. Because it is so hard to determine when it is the right time to sell, many just don’t do it.




*Explanation in Dollar terms*
1. A $25K position in MGX @ $0.65 buys 38,461 shares
2. Both @willoneau & the Hybrid Strategy enters at the same price of $0.65
3. The HYBRID strategy exits at $1.05 a profit of *$15,384 *whereas
4. @willoneau exits at $0.90 (by his chart) a profit of *$9,614* (using a $25K position size)
5. A difference of *$5,770* in profit between the two strategies & that is only after *one trade.*

*Using a Stale Stop*
A "Stale Stop" is an advantage in trading whereas adding a "Take Profit" stop is a disadvantage, which is another story for another time.

Skate.


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## willoneau (26 July 2019)

Hi skate , interesting analogy of MGX and something to think about.
BUT and there is always a but, what about NEA for example?
PS I added the rain.


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## willoneau (26 July 2019)

Skate said:


> *Explanation in Dollar terms*
> 1. A $25K position in MGX @ $0.65 buys 38,461 shares
> 2. Both @willoneau & the Hybrid Strategy enters at the same price of $0.65
> 3. The HYBRID strategy exits at $1.05 a profit of *$15,384 *whereas
> ...



Just a minor point skate I actually closed the position at 1.20 were arrow is.


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## Skate (26 July 2019)

willoneau said:


> Hi skate , interesting analogy of MGX and something to think about. *BUT and there is always a but, what about NEA for example?*
> PS I added the rain.
> 
> 
> ...




Hi @willoneau 

I'm confused by your statement in *BOLD* - I'm unsure what you are asking or implying. I can comment on [NEA] as its been a good money spinner for me. I kept jumping in & out of the position when there was money to be made. When [NEA] went off the boil, I put my capital to work elsewhere, apparently you didn't do the same.

*It's confirmed *- we are different traders
Your chart & my chart shows that we trade differently, we think about making money differently & we hold positions differently.

*I'm at a loss*
I can't see your reasoning why you locked up your capital when [NEA] was doing nothing, actually I'm dumbfounded. 

*A stumbling block*
Too many seem to think that if they sell a stock, they are somehow prevented from buying it back again. "Not so". For most traders, the biggest stumbling blocks to selling are mental.




*My Question*
Why would you hold a position when its doing nothing? (refer to my Stumbling Block quote above)

Skate.


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## willoneau (26 July 2019)

Hi skate, i agree we trade differently to some extent and i am trying to learn from your way to see how different they are and maybe meld together. The point i was making was that i don't know what can happen at any time, so leaving the trade on and following my strategy is what i do. It would be interesting to see the difference in return between the two, I am still in it but not sure how much longer. I don't have a stale exit in my system and have noted that price can consolidate in sideways pattern then have an explosive move which i like to be on, just my thoughts.


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## willoneau (26 July 2019)

I don't think price does nothing as tech/a says it can be in accumulation mode or distribution, i know which one i would rather try to locate.
If only a small portion of capital is tied up in the trade and your capital exposure isn't high why not hold the position. Extra cream on top if stock pays dividends too


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## investtrader (26 July 2019)

There are plenty of trading books and blogs that just cherry pick charts. System trading is not about just one trade. A loss of momentum stop may be good for one system but also can hurt another system - the slowing of the trend may be just that and not a true exit. Different systems perform differently according to market conditions and issue traded, even given similar long term metrics.


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## willoneau (26 July 2019)

Hi investtrader, not sure what you are getting at referring to the discussion between skate and myself?


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## willoneau (26 July 2019)

investtrader, if you don't mind me asking what type of trader/ investor are you?
I learn through discussion and everyone has their take on things which may or may not be helpful to me. Quick quote i read in a book (trading)which has stuck with me for ages. 
A bloke was chatting to his mate and mentioned all the ways to skin a cat, at which points his mate chirped up and said, and the cat doesn't like any of them.


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## investtrader (26 July 2019)

Willoneau
Yes, just commenting on different ways of trading the same charts - as you were discussing with Skate.
I trade weekly longer term trends on ASX, using my own Amibroker systems for over 10 years (missed some years due to various personal & business reasons).


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## willoneau (26 July 2019)

Thanx investtrader, just not sure were the cherry picking came from?


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## willoneau (26 July 2019)

investtrader, i would be interested in your take on things and how your weekly strategy plays out , both skate and i have weekly systems. Added interest would be thought provoking?


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## Boggo (26 July 2019)

Skate said:


> ...
> *A stumbling block*
> Too many seem to think that if they sell a stock, they are somehow prevented from buying it back again. *"Not so"*. For most traders, the biggest stumbling blocks to selling are mental.
> 
> Skate.




Slightly off topic Skate but displaying how I agree entirely.
Hit them again and again if they are going the right way, RMD up over 5% today 

(click to expand)


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## willy1111 (26 July 2019)

Skate said:


> Hi @willoneau
> 
> I'm confused by your statement in *BOLD* - I'm unsure what you are asking or implying.




Skate made an explanation in Dollar terms between Skates exit and Willoneau exit for MGX - maybe Willoneau was implying Skate do the same for NEA which shows that perhaps a stale exit doesn't always maximise the profit outcome. . .

Skates Dollar outcome for NEA
1.  A $25K position in NEA @ $0.745 buys 33,557 shares
2. 1st exit @ $0.655 results in capital of $21,980 (a loss of $3,020)
3. Using capital of $21,980, 2nd entry @ $0.92 buys 23,891 shares
4. 2nd exit @ $0.96 results in capital of $22,935 (a gain of $955)
5. Using capital of $22,935, 3rd entry @ $1.075 buys 21,334 shares
6. 3rd exit @ $1.665 results in capital of $35,521 (a gain of $12,587)
7. Using capital of $35,521, 4th entry @ $2.43 buys 14,617 shares
8. 4th exit @ $3.32 results in final capital of $48,528 (a gain of $13,009)

Skates result - $25K capital has grown to $48,528 a total gain of $23,528

Willonea Dollar outcome for NEA
1. A $25K position in NEA @0.745 buys 33,557 shares
2. No exits, his trade is still running @ $3.33 for capital of $111,744 (an unrealised gain of $86,744.

Willonea result - $25K capital has grown to $111,744 a total unrealised gain of $86,744

A difference of $63,216 and that is after only one trade.

We are all different and we all choose to trade according to different rules which produce different results.


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## rnr (26 July 2019)

willy1111 said:


> Skate made an explanation in Dollar terms between Skates exit and Willoneau exit for MGX - maybe Willoneau was implying Skate do the same for NEA which shows that perhaps a stale exit doesn't always maximise the profit outcome. . .
> 
> Skates Dollar outcome for NEA
> 1.  A $25K position in NEA @ $0.745 buys 33,557 shares
> ...




@willy1111 

Your comparison is a tad short of being valid as I would doubt that @Skate keeps his spare cash in his back pocket when he is not in a NEA trade.


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## Skate (26 July 2019)

rnr said:


> @willy1111
> 
> Your comparison is a tad short of being valid as I would doubt that @Skate keeps his spare cash in his back pocket when he is not in a NEA trade.




@rnr my post has not been lost on you & you are correct - I make every dollar earns its keep, my soldiers need to be in there fighting for me not being idle hoping for the next breakout to come.

*Lets talk about "Opportunity Costs"*
For the benefits of others @rnr has pointed out a very important fact. @willy1111 neglected to mention "Opportunity Costs" that represent the benefits trader misses out on when choosing one alternative method of trading over another. 

*Not well known*
"Opportunity Costs" can be easily overlooked if one is not careful. Understanding the potential of missed opportunities by choosing to ride a stale position instead of catching fast moving trends can’t be overlooked.

My example was to demonstrate a "Stale Exit" rather than debate the results of one position or infer my method of trading is better than anyone else, the 'Dump it here' thread is an educational thread for the betterment of others & everyone's input is valued.

Skate.


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## willoneau (26 July 2019)

Willy1111, spot on I noticed it by eye balling just not as accurate as you layed out. but was used to highlight different approaches and add some thought.


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## willoneau (26 July 2019)

Hi nrn, your point would only be valid if skate picked a wining trade and not a losing one with that spare cash.


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## willy1111 (26 July 2019)

Skate provided an example of the difference in exits on MGX which one may read as implying a stale exit produces better profit.

Perhaps it was cherry picked to demonstrate this.

Willoneau raised NEA as another stock to do a comparison on.

I just did the calculation to demonstrate an alternative view and provide some perspective that a stale stop doesn’t always provide a better profit outcome.

Yes NEA was cherry picked...as was MGX

One trade does not make a system.

I'm not arguing for or against just attempting to provide balance/perspective for the reader.

The opportunity cost for Skate not staying with the trade all the way through may have been $63k, then again his capital may have been applied to another stock...so many variables so impossible to determine hence the comparison was done just on NEA for simplistic sake.

It is great people are willing to share their ideas as others may not have thought of it and can test it themselves on their own systems to see if it enhances their results.


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## willoneau (26 July 2019)

I agree and was making that point to try and create a discussion and get people thinking. Both skate and myself know our systems well, both good and bad points. I know my system can leave large amounts of profits on the table too.


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## willoneau (26 July 2019)

willy1111 said:


> Skate provided an example of the difference in exits on MGX which one may read as implying a stale exit produces better profit.
> 
> Perhaps it was cherry picked to demonstrate this.
> 
> ...



I'm glad you took the time to look at it and hope to hear more of what you think.


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## willoneau (26 July 2019)

Skate said:


> My example was to demonstrate a "Stale Exit" rather than debate the results of one position or infer my method of trading is better than anyone else, the 'Dump it here' thread is an educational thread for the betterment of others & everyone's input is valued.



I am very interested in your stale exit skate looking at both the positive and negative aspect of it. Finding a compromise between them can only improve the bottom line, any idea's how anyone?


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## Skate (26 July 2019)

Skate.


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## Skate (28 July 2019)

*ideas-not-advice* - thread
I wish to make a comment that was raised by @lindsayf - a thought in the back of most peoples mind about what comes after working for an income.



lindsayf said:


> I am looking for some ideas on how to approach finances to position myself and wife for retirement. Nothing anyone says will be construed as financial advice...I am just finding that accountants and financial advisers are limited and conservative in their offerings...at least the ones I come across.




*An old hand at this game*
After reading his initial post, he's doing okay, he's switched on but having a few niggling doubts as to what the next stage of his life may bring & how he'll prepare for this. As he is a seasoned member of our community & not new to trading my advice would be the same as @ducati916 has given him, as I know he has read parts of my thread already. (Please note - the advice given by @ducati916 has been condensed) 

*Pep talk*
I feel @lindsayf just needs a pep talk to refocus his mind that he is still on the right track & re-reading the 'Dump it here' thread will do just that.



ducati916 said:


> Here's a threads that will help you. https://www.aussiestockforums.com/threads/dump-it-here.34425/ Probably keep you occupied for a while.
> jog on
> duc




*T.I.N.A.*
There is no alternative (TINA) at the moment where returns can be amplified on your money other than the share market 'at the moment'. Trading isn’t about getting rich, but more about one day having the financial independence of being able to support yourself without an income. 

*It's not easy*
Profiting from the stock market is exceedingly difficult to do consistently over a long period of time because the market is irrational and emotional. It moves in a manner that has little appreciation for what we might think is reasonable which brings me to the post by @kahuna1 - a member with a wealth of experience & a writing style dissimilar to mine. 

*Talking Doom & Gloom*


kahuna1 said:


> Hmmm ,....
> Well ... being a trader in many ways all my adult life, an observation is that less than 1%  who try, succeed. I would NOT trade, nor risk capital.




*I'm posting hope & education*
Trading education plus having a suite of the right tools will give any trader a fighting chance to succeed at this game. I don't have a long history in trading (4 years) but they have been very profitable so far. I posted screen shots from CommSec of my trading results a few posts back "not to big-note myself" but posted in the spirit of helping others, giving others a method of trading that I use personally, displaying proof of the results using this method.

*6 months results*
The screen shot shows the performance of my HYBRID strategy from January this year, a time when my portfolio was 100% in cash. The HYBRID open profits relates to the 6 month period from 14th January 2019 to the end of trade on the 20th July 2019. The second screen shot is the HYBRID performance this week. (if interested)

*Before anyone asks*
I have sold 3 positions this week, meaning the market value of the HYBRID strategy is stabilised around the $1m mark. There has been an increase of $13,994 profit this week. 

*Summary*
Hybrid Strategy + the CAM Strategy = another good week.

*20th July 2019 screen shot - HYBRID strategy*




*28th July 2019 screen shot - HYBRID strategy* (one week later)



*Finally *
@kahuna1 has his thoughts on the markets at the moment that differ from mine. There is an old saying "Make Hay while the sun shines" which means, Trade while an opportunity exists & to take action while a situation is favourable.

Skate.


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## Sir Burr (28 July 2019)

Skate said:


> @willoneau,
> *Selling*
> Successful trading is largely the art of selling. Buying a stock is easy.




Replying here because I saw your quote in the "Blunders" thread.

Just wanted to say that I find the above quote the reverse. Buying is harder - system trading.

Reason why and in my case a weekly system, it's so simple to place a trade after the market has closed on Friday and data has come in. Run a scan and enter the trade - done. No thinking at all and takes me a few minutes and don't ever look at it again.

On the other-hand a buy, I look at the list and start at #1. Open the ASX site and check for any announcements that might make me select the next one down ie: takeovers or anything that might make me bypass it.

Then, if I'm fully invested I need to wait (using IB) for a sell and capital becomes available to place the new buy between 10-10:10am. If I'm NOT fully invested then I can just place the trade any-time over the weekend.

In my case, I say buying is harder


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## kahuna1 (28 July 2019)

Hahah ...

I am actually bullish ... S+P to 3,165 or so ... wary mind you of realities and all time highs and shall we say super profits via NO tax in the USA and NO tax paid overseas and a healthcare system in the USA being able to charge what they want at 500% of the cost, and all this supporting USA.

Perspective ... a 5% Deficit to GDP, not unseen but very unusual 10 years post a crash. Debt off the scale corporate wise USA and govt at 200k per person with average income lower 80% PRE TAX a mere 32k.

We here, different ... but ... valuation dictated to by the USA as always.

On the 1% trading making it, I mean day traders and very short term traders. Difference in terminology, sure now ... as market rises ... even a retard males money. What sorts them out, and this is of course an eventual outcome is a sideways market or god forbid downwards one.

The thing is, an IF ... is not the question but WHEN ... for say Google paying no tax to anyone anywhere and even avoiding GST, or USA drug-makers, for NOW price gouging at 400% the cost and selling in Mexico or Canada the very same drug ... identical made in the same  factory for 3-,4,5 and even in some cases 50 times the price.

Big picture and ... well, perspective few have. Not suggesting a crash tomorrow and not even soon, I do however seem to dance to a different drum and beat to most. A mere 7 months ago, I felt like a bank teller ... then a magic rally, so I reduced, then another crash, and pre election I was wearing the uniform and again magic rally .... this one overnight. Again less amused and reduced drastically as valuation went from cheap to expensive.

Meanwhile underlying stuff going backwards, whilst price again hits those highs .... 

Each to their own and yep my writing style, and thought process different.


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## willoneau (28 July 2019)

kahuna1 said:


> On the 1% trading making it, I mean day traders and very short term traders. Difference in terminology, sure now ... as market rises ... even a retard males money. What sorts them out, and this is of course an eventual outcome is a sideways market or god forbid downwards one.



Totally agree on this ,


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## willoneau (28 July 2019)

Sir Burr said:


> Replying here because I saw your quote in the "Blunders" thread.
> 
> Just wanted to say that I find the above quote the reverse. Buying is harder - system trading.
> 
> ...



Hi Sir Burr, I was refering to the actual process of pushing the button to buy the stock if i remember correctly not all the reasons I would use to press that button.
Do you find it harder to open a trade or close it?
Once you make a decision to open a trade using what ever method you choose you just press the button  The interesting part is how you manage that trade once your in it.


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## ducati916 (29 July 2019)

Skate said:


> *Backtesting means JACK*
> I've stated before, backtest results mean "Jack" - but the backtest results do give an indication between test results using different parameters for evaluation.
> 
> 
> ...




This little exchange interested me.

The backtesting [and backtested results] are a hypothesis about the market. It is valuable because it is falsifiable [Popper].

The OOS is the testing of that hypothesis, using real or paper trades [no difference].

Popper's methodology is the only valid methodology for mechanical based systems which are a hypothesis on the market as it was historically, which provides the boundaries of the system [falsifiability] going forward. Which is simply to say, if its broken, you need to know its broken.

The methodology selected, should have as part of its design, the ability to protect the trader from asymmetry and skewness.

jog on
duc


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## Skate (2 August 2019)

Skate.


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## willoneau (2 August 2019)

Hi Skate , your dump it here is getting quite big, any thoughts about opening a new thread about your systems mainly instead of general stuff that you started dump it with?


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## peter2 (3 August 2019)

I'm comfortable knowing that all contributions from skate are in the one thread. I also understand that if we're wanting to look for something in particular then it becomes very time consuming loading pages and scanning all the posts until we find the start of the topic of interest.

@Joe Blow  Does this forum have the facility for the OP to edit the first post in a thread so that links may be placed to the start of topics?
eg.
Link to Skate's ebook download.
Link to start of discussion on the Hybrid mechanical system.
Link to backtesting results of the Hybrid system.
Link to the start of discussion on the CAM mechanical strategy. 
Link to the start of the MAP mechanical strategy. 
Link for important info for beginners (also in the ebook).


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## willoneau (3 August 2019)

Thanx peter2, I like to re read some of the points skate make referring to systems and yes I have found it frustrating to locate.


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## Gringotts Bank (3 August 2019)

ducati916 said:


> This little exchange interested me.
> 
> The backtesting [and backtested results] are a hypothesis about the market. It is valuable because it is falsifiable [Popper].




At one level, yes.  But there are invisible forces which have a far greater influence on profits than the system ever could.

[edit out qldfrog - different systems]


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## ducati916 (3 August 2019)

Gringotts Bank said:


> At one level, yes.  But there are invisible forces which have a far greater influence on profits than the system ever could.
> 
> [edit out qldfrog - different systems]




An interesting reply in that it is an answer without an answer.

I will clarify my position:

A backtested system is simply a time series of stock prices [or any prices] to which trading rules are applied, looking for a positive [profitable] outcome. 

Clearly the selection of the time series is crucially important. Data should be used from the 1929-1933 debacle, the 1969-1975 period, the 1987 crash, the 1997 currency crisis and the 2008 experience. Of course how that data is aggregated with longer timeframes will have an impact.

At the end of your testing you have a model of how your system [hypothesis] will perform through past historical events, based purely on a price time series. It is a valid exercise because if going forward in real time there is a significant deviation from the model, you can say the model is falsified.

The prices incorporate every event that actually happened that had an effect on the data [price/time series].

Essentially what your answer implies, is (a) for any given event, there are multiple alternative pathways that could have pertained, but didn't, but could the 'next time', or (b) there will be a new event that has not once happened in the existing time series.

With regards to (b), I'll cite the Bible to you, "there is nothing new under the sun".

With regards to (a), a much more interesting proposition and one with which I agree. You could have the same type of trigger [event] with a totally different reaction through prices [human reaction]. In other words, an alternative history plays out.

But: because your outcomes [price time series] are fixed to only 4 possible outcomes, up, down, sideways or complete failure [bourse closes with 100% loss], my question is: do alternative paths make any practical difference?

You may of course in your answer be considering something completely different, which is why enigmatic answers can create misunderstandings.

jog on
duc


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## Sir Burr (3 August 2019)

Gringotts Bank said:


> At one level, yes.  But there are invisible forces which have a far greater influence on profits than the system ever could.




I see shapes in the clouds sometimes.


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## Joe Blow (3 August 2019)

peter2 said:


> @Joe Blow  Does this forum have the facility for the OP to edit the first post in a thread so that links may be placed to the start of topics?
> eg.
> Link to Skate's ebook download.
> Link to start of discussion on the Hybrid mechanical system.
> ...




Hi Peter, I can add any links (or additional text) to the first post in a thread at the request of the OP. Just contact me via PM and let me know what you would like added. I'm happy to do this at the request of any ASF member who has started a thread and would like the first post modified in some way.


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## debtfree (3 August 2019)

peter2 said:


> I'm comfortable knowing that all contributions from skate are in the one thread. I also understand that if we're wanting to look for something in particular then it becomes very time consuming loading pages and scanning all the posts until we find the start of the topic of interest.
> 
> @Joe Blow  Does this forum have the facility for the OP to edit the first post in a thread so that links may be placed to the start of topics?
> eg.
> ...



If this is not possible @peter2 everyone can create their own links using their bookmark list. If they create too many or one they don't really want any more they can easily delete it.

If I like a post that I want to keep I bookmark it, a box comes up, I put a description in the 'Note:' section that I can quickly understand what it's about so I can find it with ease when looking in my bookmark list.

I do the same if it's the start of a section within a thread that has caught my attention. Bookmark that post and title it in the 'Note:' box, such as 'Discussion Hybrid Mechanical System'. Now it's in your bookmark list, your private library of favorite post, threads or part threads, it takes you back to that post in the thread so you can keep on reading thereafter.

When you title it be aware you only have about 35 spaces to put in your title/description.
Yes I understand that this is alright moving forward and doesn't solve the problem of finding it at a later date. 

Edit: Just seen Joe's post


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## Gringotts Bank (3 August 2019)

ducati916 said:


> With regards to (a), a much more interesting proposition and one with which I agree. You could have the same type of trigger [event] with a totally different reaction through prices [human reaction]. In other words, an alternative history plays out.




Sort of what I was getting at.  Even the best system will be affected in a pos/neg way by the human involvement.  It will show up as something like eg. your internet connection drops out at 4pm when you're due to place a group of trades.  Looks like random chance, but I don't think it is.  I think we all create our own realities via some sort of link between mind and so-called 'external reality'.  And I think this even operates when a system is fully automated.  Two companies running the same auto-system will not get identical profits.


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## JimmyJames80 (3 August 2019)

debtfree said:


> If this is not possible @peter2 everyone can create their own links using their bookmark list. If they create too many or one they don't really want any more they can easily delete it.
> 
> If I like a post that I want to keep I bookmark it, a box comes up, I put a description in the 'Note:' section that I can quickly understand what it's about so I can find it with ease when looking in my bookmark list.
> 
> ...




Personally I like all of skates stuff in one thread, reading posts will trigger a memory of what I have previously read so I use the search feature to find the previous post by skate to read again.



Sir Burr said:


> I see shapes in the clouds sometimes.




I searched for a quote from skate about shapes in the clouds, I knew I've read that one, so I posted it below.



Skate said:


> *Charts - easy to interpret*
> *This why we see cute little Bunnies or faces in cloud formations*, seeing patterns is in our DNA, it's an inbuilt survival mechanism to quickly distinguish friend from foe.


----------



## Skate (4 August 2019)

willoneau said:


> Hi Skate , your dump it here is getting quite big, any thoughts about opening a new thread about your systems mainly instead of general stuff that you started dump it with?




Hi @willoneau 

The 'Dump it here' thread was started back on the 17th December 2018 & the thread was designed to educate newbies starting out on their trading journey being a one stop shop (as to say) - a repository of my ideas & keeping my posts in one spot is an advantage for me. 

*Searching*
If you use keywords in the search feature & include "posted by" Skate, you will find what you are looking for without too much frustration.  

*The Educational side*
The 'Dump it here' thread lacked traction early on as there was a lack of input from other members so I just kept punching out ideas as they come to me, at one stage I thought I was wasting my time as it had little value to others. The 'Dump it here' thread has had 58,568 views to date with 1,886 post (mainly mine)

*Talking about strategies*
Shifting focus from a bunch of educational posts to talking about the strategies I trade & about system development the thread started to come alive so I persisted in this vein. I no longer post other than to update my weekly trading results of the CAM strategy & to answer questions when asked.

*An oldie but a goodie*
No one reads yesterdays news, meaning most members only read [Recent Posts] without revisiting older posts. Just for you I'll revisit & update a good strategy developed by Richard Donchian.

*Donchian channel breakout strategy*
I've traded a modified version of the Donchian channel breakout strategy with great success. Unfortunately I no longer trade the Donchian Breakout strategy, not that's it's not a good strategy, it’s because I’ve got better ones & I can’t trade them all. Richard Donchian was a true pioneer of technical analysis. The fact is that a lot of trading strategies he developed forms the basis of so many other systems used today is an excellent indication of the value of his method.

*His rules were surprisingly simple*
1. Buy when the current price exceeds the highs of the previous four full calendar weeks.
2. Exit when the current price falls below the lows of the previous four full calendar weeks.

*Looking for perfection*
For those looking for the perfect strategy, there isn’t one, so in the meantime why re-invent the wheel – pick an idea that’s been backtested, proven to work & modify the idea to suit the job you want it to achieve.

*UPDATE*
I'm posting a recent backtest update of the "Donchian Strategy" for the last financial year with results & charts to show its no slouch.

*The Donchian Weekly Strategy Backtest Results*
Backtest Period:  1/7/2018  to  30/6/2019
Capital Allocation : $100,000
Positions in the Portfolio: 20
Position Size: $5,000








*Questions about the strategy*
There is no need to ask any questions about this strategy as my previous post on the "Donchian Strategy" can be found  here: *https://www.aussiestockforums.com/posts/1012251/
*
Skate.


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## willoneau (4 August 2019)

Thanx Skate, you just keep on giving which i admire greatly.


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## Wyatt (5 August 2019)

https://www.aussiestockforums.com/threads/dump-it-here.34425/page-86#post-1026888

Update for those interested following on from post #1711



	

		
			
		

		
	
 When trend followers post backtests, don't for a moment consider it some form of competition between participants. The only real competition or major challenge as I see it in system trading, is between each individual's ears. Although @Skate is a shining light of strength in this area.
Staying on the systematic path all of the time is just not easy, despite what the casual observer might think.
BTW This is for 20 x 5% positions and 1/1/19- 5/8/19


----------



## Skate (6 August 2019)

Zaxon said:


> With the recent, sharp drop in the share market, I thought it would be a good time to revisit risk management.  *Break-even Stops / Whole Portfolio Risk. *The question is, is there a way of mitigating this?  I don't believe there is (for the average, vanilla investor), but I'm interested to hear your thoughts.




*I want to make a few comments*
I've hijacked a passage from @Zaxons "risk-management" thread to make a post about panicking. I've also lifted a passage from @peter2 "p2-asx-weekly-portfolio" thread to reinforce my point of view.

*Here we go..*
We have all had a great run from January this year & after a few down days we have a new thread talking about risks & break even stops. Some how after losing a few bucks we start talking about modifying a perfectly good strategy disguised as a trading strategy improvements. The development stage of a system is when these measures are crafted & certainly not after the horse has bolted.

*Losing is part of the game*
Traders need to remember losing money is part of the game & if you can accept this, you are half way there. Heck you may even eventually become a successful trader if you can handle severe down days. It pays for you to be the best loser you can possibly be as a trader.

*A tweet or a quote*
The markets are emotional that’s a given because humans are the emotional drivers of the markets & these emotions never seem to change. I hate when rational people go out of their way to constantly make irrational decision, I find it a battle just to keep up with them let alone Trump, Xi Jinping or what's going to happen with Boris & Brexit.

*We all make up a story when under pressure*
Losing open profits is very painful, so "when is it really our money"

*Reality check*
Open profits is not your money & thinking this way will muck you up quick smart!

*It's well worth remembering*
Open profits & loses = Belong to the Market
Closed Profits & loses = Belong to you

If you can accept that mindset (which a lot of traders can't) it will serve you well when the volatility impacts your account as in the last few days.

*If you are a system trader*
Hang tight, remember you have one job to do as a system trader & that one job is to take your signals without question, don't let your "Lizard Brain" drive your emotions.

Skate.

*Words from an experienced trader*


peter2 said:


> How will weekly system traders handle this huge one day selloff?  The experienced will say there's nothing to do until the weekend. The inexperienced will panic sell. The active traders like myself will do a bit of both (lol). Our portfolios will definitely take a hit and we'll lose some of our open profits. But first, let me say I love the selloff. It was exactly what the markets needed. This selloff will show us the strength of the overall demand and it will show us which stocks are strongest. I expect to see this demand by the EOW. /QUOTE]


----------



## myrtie100 (6 August 2019)

Absolutely Skate, well said and well timed.


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## qldfrog (6 August 2019)

And the system self insure itself lately via gold miner exposure
This is today result for my system 1
Total Holdings $53,559.40 
So a profit of $469.19 today via gold exposure
Just following blindly my signals


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## Zaxon (7 August 2019)

Skate said:


> *I want to make a few comments*
> I've hijacked a passage from @Zaxons "risk-management" thread to make a post about panicking.



Hijack away 


Skate said:


> *Here we go..*
> We have all had a great run from January this year & after a few down days we have a new thread talking about risks & break even stops. Some how after losing a few bucks we start talking about modifying a perfectly good strategy disguised as a trading strategy improvements. The development stage of a system is when these measures are crafted & certainly not after the horse has bolted.



Very true. But I don't think it hurts to use bad events to focus your attention in on a particular area.  So that was the purpose of my thread.  It's like if your neighbour has their house broken into, it's probably a good catalyst to have a discussion with your partner about your own security and insurance levels.  I've used this recent market downturn to revisit and "sure up" our understanding about risk management.


Skate said:


> *Losing is part of the game*
> Traders need to remember losing money is part of the game & if you can accept this, you are half way there. Heck you may even eventually become a successful trader if you can handle severe down days. It pays for you to be the best loser you can possibly be as a trader.



I quite agree with this. But I'll broaden out the context a bit.  To me it always comes back to being able to put your money in an index fund as the benchmark. Because we hold a more concentrated portfolio than the whole market, by definition there will be tracking risk, so you're bound to underperform the market for a few weeks or months.  Where it become more problematic is if you start underperforming the market for years or even decades.  Your strategy may recover (or may not) in the long run, but it starts to become more like a "religion" where you believe in your strategy, despite long term evidence to the contrary.

Exactly where the line is between allowing for tracking error and where your approach is genuinely an underperformer, is hard to say for sure.


Skate said:


> *If you are a system trader*
> Hang tight, remember you have one job to do as a system trader & that one job is to take your signals without question, don't let your "Lizard Brain" drive your emotions.



But "V" (the SciFi series) has taught us that many seemingly innocent people really are lizards inside


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## investtrader (8 August 2019)

Most (without being 100% positive,but from experience) systems spend a lot more time in drawdown that at equity highs. That is normal. Drawdowns are normal, just the length and severity vary. It is the price you pay to get superior returns.


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## Calmside (8 August 2019)

Hi all. Not so new to investing but very new to posting online which isn't something I normally do but wanted some feedback about a company.
I've recently been throwing around some money at small caps and have been looking at a company called CropLogic Ltd (ASX CLI). It's got a tiny market cap but I came across this article just the other day.

https://smallcaps.com.au/croplogic-deal-supply-hemp-biomass-large-scale-manufacturer/

Agriculture is not an area I have much expertise in but looking at this recent announcement it seems like the share price could really run from here. Also it seems that the only thing that held the price down the last couple of days was the market drop caused by the US China trade war escalation.

I was just wanting to get others thoughts on this. Especially those with experience in agriculture investment.

Thankyou.


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## Skate (9 August 2019)

Zaxon said:


> Hijack away




Okay, Thanks !

*Hijacked post*


Zaxon said:


> Yes.  It's "how long is a piece of string" territory.




Forum members often quote "how long is a piece of string" & if you google the expression there are a multitude of answers.  As with trading, the length of a piece of string is pure mathematics - I'll give you a simple answer if you are ever asked the question.

*How long is a piece of string?*
It's not that hard to answer - Get the piece of string, fold it in half, measure it, then just double it.

*Endless piece of string is harder to measure*
A piece of string that's had the ends cut off is more difficult to measure because cutting off the ends makes the string endless & difficult to measure.



Zaxon said:


> I'm a big fan of 20 as well.  They say 15-30 positions is ideal.  And it's said that any more than 30, and you may as well just own an index fund.




*Index Fund*
Holding the top 50 securities verses the bottom 50 of the All Ordinaries is not the same as holding an Index.

*A picture paints a thousand words*
Let me display a backtest result from my Hybrid Strategy using 5, 10, 15, 20 & 40 positions & let you be the judge. The backtest has been posted before & is from 1 July 2017 to 30 June 2018. On the far right of the chart is the equivalent of buying & holding the All ordinaries (XAO)






*Right or wrong*
Whether your right or wrong or whether you agree with the view expressed isn't important – what’s more important is that the ‘Dump it here’ thread gives others the ability to express their point of view & if you have an alternate point of view feel free to 'Dump it here'

Skate.


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## qldfrog (9 August 2019)

About the number of stocks to hold in a system, there is of course also the total value of your portfolio and your universe
To use extreme examples
With 10k to play, better not have 50 stocks or your brokerage will kill you
If you have 3 millions, it could get hard to fill positions of 100'000 dollars...just my 2c
But i like Skate replay about 50stocks vs index


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## Zaxon (9 August 2019)

Skate said:


> *Index Fund*
> Holding the top 50 securities verses the bottom 50 of the All Ordinaries is not the same as holding an Index.



I'm glad you've focused on that, because things are often said as "standard wisdom", but they need to be tested to see if they're actually true.

The statement "if you hold more than 30 stocks..." oops, I forgot where I was.  Reconfiguring my thoughts into the 'Dump it Here' formatting standard 

*Statement under question*
"If you hold more than 30 stocks, you may as well just hold an index fund" is one of those "accepted as fact" statements quoted by financial commentators.  So let's tap into what I think they mean by that statement, because I believe it encapsulates two separate ideas.

*Idea 1: concentration = performance*
If you're going to be a stock picker, then presumably you're doing so because you believe you can outperform the market.  If you don't believe that, then stick your money in an index fund.  Now, we know intuitively that the more stocks you hold, the closer will be your performance to the index.  The "stop at 30" idea is based on allowing each stock to be a high enough percentage of your portfolio, that its performance matters.  You hold stock "XYZ" and it doubles in price.  Amazing!  But if it's just 1/50th of your portfolio, you're not getting much bang for your buck.

*Idea 2: diminishing diversification*
The more stocks you have, the harder it is to manage them.  Overhead.  You need to separately track them, calculate their capital gains tax, set stop-losses, move up the stop-loss each day (depending on your system).  The "stop at 30" idea is based on the belief that by 30, you're probably diversified enough in your portfolio to have reduced stock-specific risk.  Beyond 30, you're getting diminished returns of diversification relative to the effort you'll put in.



Skate said:


> *A picture paints a thousand words*
> Let me display a backtest result from my Hybrid Strategy using 5, 10, 15, 20 & 40 positions & let you be the judge. The backtest has been posted before & is from 1 July 2017 to 30 June 2018. On the far right of the chart is the equivalent of buying & holding the All ordinaries (XAO)



*Results Summary*
Interesting results.  So to sum up what you found, is the more positions you held, the better you did. However, holding 500 of them (XAO) performed the same as holding just 5.  I think what we're seeing here is a selection error or bias.  I'll use a thought experiment to explain.

*Thought Experiment*
If you were only allowed to buy 1 stock in Jan-2000 and held it for 10 years, and you had today's knowledge, you could cheat by picking the best performing stock for that decade.  Easy. Likewise, you could pick the worst performing stock for that decade.  So what we've learned is that a single stock, and by extension a small number of stocks, inherently has a selection bias in them.  So if 5 stocks outperformed 50, or 50 stocks outperformed 5, both seem feasible to me.  It depends on which specific 5 stocks you chose.

*Conclusion*
Whether 30 is the right upper limit will depend on the individual.  Cautious individuals may want more. High flyers may only want to hold 5 stocks.  At this stage, I'm happy enough that it's reasonable number as "general advice" (although I'm not specifically wedded to the exact number of 30).


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## kid hustlr (9 August 2019)

Skate, as well as posting your weekly update can you post the p&l by day for this week


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## IFocus (9 August 2019)

Zaxon, holding and trading just to separate these two terms.

Skates method is the hold the strongest cull the weakest making your money work ever day. The higher number of positions raises the probability to find the strongest (obvious but a revelation to me thanks Peter 2)

Holding a large number of stocks with out churning to find the strongest will possibly get you similar results as the index.


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## Skate (9 August 2019)

Skate.


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## Skate (9 August 2019)

kid hustlr said:


> Skate, as well as posting your weekly update can you post the p&l by day for this week




Hi @kid hustlr

*Why?*
I'm at a loss why you would want to know the daily P&L of a weekly system?

It's an unusual request to report daily variations of a weekly system but as you have asked I see no reason not to show you how the week panned out for the CAM Strategy day-by-day for the entire week.

The week started off with a dip & couldn't recover losing (-$8,885) a down week, hopefully there are better weeks to come.



*Daily Summary*
I've included a graph to show the decline in profits on a daily basis. Monday wasn't kind to the CAM Strategy starting the week off by losing (-$14,948) & another loss of (-$7,589) on Tuesday.

Over the next 3 days the CAM Strategy couldn't recover the loss of the first two days closing with a weekly loss of (-$8,885)

*How the week panned out*
1. Monday started out poorly down (-$14,948) at the end of trade... #*Mondays loss was (-$14,948)*
2. Tuesday the CAM Strategy went from a loss of (-$14,948) to losing another (-$7,589) now we are down (-$22,537)... #*Tuesdays Loss = (-$7,589) *
3. Wednesday we had a small win of *+$2,236*, taking the loss from (-$22,537) to a loss of (-$20,301)... **Wednesday's gain +$2,236*
4. On Thursday the CAM strategy had a small win of *+$4,389* taking the weekly loss to (-$15,912)... **Thursday's gain +$4,389*
5. Today the CAM strategy had another win of *+$7,027 *unfortunately not enough to make up the loss of Monday & Tuesday... **Friday's gain = $7,027*

Monday = (-$14,948)
Tuesday = (-$7,589)
Wednesday = *+$2,236*
Thursday = *+$4,389*
Friday = *+$7,027*

A total of (-$8,885) loss for the CAM Strategy this week.

*The maths*
In two days the CAM Strategy lost -$22,537 & the next 3 days it made +$13,652 which was just not enough to make up for the loses of the first two days.

*Open positions*
Open Profit & Loses go up & down minute by minute, week by week, month by month & open P&L belong to the markets. It's only when the positions are closed the P&L belongs to you & until then, it's not even worth worrying about.
*
Remember*
Open profits & loses = Belong to the Market
Closed Profits & loses = Belong to you

Skate.


----------



## willoneau (10 August 2019)

It would be interesting to know why he asked too?


----------



## kid hustlr (10 August 2019)

I think its important to see real life what can happen. Someone following your thread might not realise there can be a huge difference between end of week changes in equity and daily changes.

I agree in theory it doesn't matter but emotions can be hard to manage


----------



## JimmyJames80 (10 August 2019)

kid hustlr said:


> I think its important to see real life what can happen. Someone following your thread might not realise there can be a huge difference between end of week changes in equity and daily changes. I agree in theory it doesn't matter but emotions can be hard to manage




kid, skates thread is littered with posts about emotions & I've read everyone. 



Skate said:


> *Emotions colour your attitude*
> Emotions colour your attitude toward the market and often push you to act when feelings of fear or greed overcome logic. Self-awareness is a valuable trait to cultivate in many areas of life. Investing is no different. The role of emotions becomes even more important when the market has been trending down.
> Skate.




Also I grabbed some of these posts from skate that I found helpful in overcomming my emotions as I find losing money very stressful as well as emotional, but I'm getting better & it's not easy.

Skate said:
*1. Emotions*
Emotions drive our reactions on what we perceive

*2. Underestimate*
Market participants tend to underestimate the importance of their emotions when making market decisions. If you have a totally mechanical or mathematical approach to the market, you don’t have to worry too much about pesky emotions. But they are still there in some degree.

*3. How We All Think*
When under the influence of emotions, we may surrender our emotional intelligence and this is why trading is such a difficult endeavour.

*4. Being hijacked*
We all feel that sinking feeling in our guts after we enter a trade and that trade go slightly against us our emotions kick in and if the fear is strong enough, we might cut the trade short to escape the unpleasantness, hijacked by our emotions encouraging us to do the wrong thing at the wrong time.

*5. All Your Emotions Belong to You*
Trading psychology is something most people don’t think about when dealing with their investments. However when trading for yourself, your emotions will have an unavoidable impact on your outcome.

Kid, read some of skates other comments about your emotions & trading as I think its important, well I think skate thinks so.


----------



## kid hustlr (10 August 2019)

Hi JJ,

I get all that however I thought it was a pretty good time to highlight a point.

How would most feel on Tuesday night trading this system when the account is -5% in 2 days and there's no stops to be applied until the following Monday. I'm not saying this is a good thing or bad thing I just felt it was a perfect example of seeing a weekly system under pressure in action in real time.


----------



## JimmyJames80 (10 August 2019)

kid hustlr said:


> Hi JJ,
> I get all that however I thought it was a pretty good time to highlight a point. *How would most feel* on Tuesday night trading this system when the account is -5% in 2 days and there's no stops to be applied until the following Monday. I'm not saying this is a good thing or bad thing *I just felt it was a perfect example of seeing a weekly system under pressure in action in real time*.




kid, it's a good point - *"how most would feel"* if it was me i would have been devistated. $22,000 in two days I think I would have sold but after reading skates posts maybe not because he has also spoken a lot about having confidence in your system. He has reinforced that coinfidence comes from extensive testing of your system, its all beyond me at this stage but reading this thread & peter2 thread its starting to make a bit more sense & i though trading wasn't going to be difficults, wasn't i wrong.


Skate said:


> It's only when the positions are closed the P&L belongs to you & *until then, it's not even worth worrying about*.



I like this quote about when your money is in the markets "don't worry" because your trading amount fluctuates all the time & its only when the position is closed that matters.  I think I worry too much I need to be more like skate


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## willoneau (10 August 2019)

If you don't look at your weekly system until after close Friday or over w/end then less stress if you have trouble controlling emotion.


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## Skate (11 August 2019)

*Stimulate discussion*
I've made a lot of posts to stimulate members to open up & express their alternative trading ideas as trading is confusing for the best of us.

*Right or wrong it doesn't matter*
The 'Dump it here' thread is not about right or wrong as everyone has the right to express an alternative point of view & to explain their methodology when it comes to their trading style.



Zaxon said:


> Hijack away




*Okay, let me post a few more*


Zaxon said:


> *Acquired Taste*
> His posting style is an acquired taste.  Perhaps someone appreciates his abundant use of headings.
> OK.  I'm just having fun here, and it's all tongue-in-cheek. Skate can post in whatever style he likes.  But it certainly is unique.






Zaxon said:


> I'm glad you've focused on that, because things are often said as "standard wisdom", but they need to be tested to see if they're actually true. The statement "if you hold more than 30 stocks..." *oops, I forgot where I was.  Reconfiguring my thoughts into the 'Dump it Here' formatting standard
> 
> 
> 
> ...




*Just to be fair*
I'm Hijacking a few other posts that have caught my eye.
*
“portfolio-heat-will-it-save-your-bacon”* thread


Newt said:


> I've found focusing on open profit adjusted for "open risk" helps me deal with the inevitable rapid market falls into drawdown.   As a systematic trend trader, its no use getting excited over long periods of climbing profits if you blow your cool after a few down days. Its no fun seeing open profit evaporate quickly, but they're never really your profits until you book them and you usually shouldn't be doing that until price closes below trailing stops (thinking weekly trend following here).




@Newt, nailed it. Being a systematic trend trader myself I appreciate "open profits" & "open loses" can carry emotions but those emotions don't drive our decision making process as they are pre-locked into our strategy.

*“when-to-buy-a-stock”* thread


SensibleInvesting said:


> Perhaps I should have specified more clearly in the video - if I buy a stock, and the fundamentals clearly don't match the trajectory, and it goes down, I simply buy more. Typically I'll do first buy ~25 - 40% on first drop, and then buy more if it goes down another 25 - 30%, with one more buy if it goes down another 25 - 30% after that.




@SensibleInvesting thread is a worthy read even though our trading style is like 'Chalk-&-Cheese', I say each to their own. Different trading style make a market.

*“stock-market-sectors-are-you-a-loser-or-one-of-the-cool-kids”* thread


aus_trader said:


> I am curious as to whether some of the system type traders pay attention to this area or if they have a system in place that incorporates the sector bias. I know there is a lot of system based traders on the ASF like peter2, captain black, tech/a, Skate, willoneau, Boggo,* investtrader*, but I've just mentioned a few who regularly post info/charts of their system based trades and see what they can contribute to the discussion.




*As I was mentioned*
I can only comment on my style of system trading, others may hold a different view. I trade the All Ordinaries only, the top 500 companies listed on the ASX & sector bias doesn't even rate.

*ASX codes*
I want to right upfront & say "I don't even know what companies I'm buying" let alone the sector they belong to, I'm just buying ASX codes. But what I do know about the ASX codes I buy is that they meet my buy conditions & a predetermined list of parameters.



IFocus said:


> Skates method is the hold the strongest cull the weakest making your money work ever day. The higher number of positions raises the probability to find the strongest (obvious but a revelation to me thanks Peter 2) Holding a large number of stocks with out churning to find the strongest will possibly get you similar results as the index.




*Yes, that's how I trade*
@IFocus post demonstrates an understanding of how I trade. I trade a variety strategies & they all do the same thing "finding repeatable patterns" jumping on the "shakers-&-movers" that have momentum & when they stop "moving & shaking" the system culls them.

Skate.


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## willoneau (11 August 2019)

I trade similar to Skate and  chase the outliers but I don't know which they are so take every signal.
Outliers are the edge in trend trading.


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## willoneau (11 August 2019)

So from the portfolio heat thread I think controlling how quickly I buy positions will only have a negative impact on my system.


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## Zaxon (11 August 2019)

Skate said:


>



@Skate , in retrospect, that original post I made came across as slightly mean, so I apologize for that.


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## willoneau (11 August 2019)

willoneau said:


> I trade similar to Skate and  chase the outliers but I don't know which they are so take every signal.
> Outliers are the edge in trend trading.



Actually that isn't entirely true, I also eye ball the signals and look for expansion bars with high volume and place conditional orders above instead of open orders on Monday.
Tech/a made a valid point ages ago about systems and pick and choosing signals and I totally agree with him.


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## qldfrog (11 August 2019)

But the above can be incorporated in your system too?


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## willoneau (11 August 2019)

Definately qldfrog,
as tech/a stated as long as you pick signals it doesn't matter because you will still fall inside the range of your moniti carlo test of worst and best return. Just hopefully more towards the best side.


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## aus_trader (12 August 2019)

Skate said:


> *As I was mentioned*
> I can only comment on my style of system trading, others may hold a different view. I trade the All Ordinaries only, the top 500 companies listed on the ASX & sector bias doesn't even rate.




Thanks for clarifying your input with respect to stock selection. How Sectors affect stocks is something we are still learning about and although we believe there is a co-relation, it is not yet proven with any testing or stats.


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## Smurf1976 (12 August 2019)

IFocus said:


> Holding a large number of stocks with out churning to find the strongest will possibly get you similar results as the index.



One advantage of holding a large number of stocks is that it should assist in controlling the "human" factors.

Taking it to the extreme, if someone holds 50 stocks of equal value then even a total loss on any one of them is still only 2% of the portfolio. That ought to reduce the tendency to panic because a particular stock is down 10 or 20%.

The downside of that approach of course is that even a 100% gain in any individual stock is only a 2% gain to the portfolio. 

50 is going too far in my view but 30 seems workable.


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## willoneau (12 August 2019)

Hi Smurf1976, I also think universe size will play a part when looking at larger portfolio size.


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## Skate (16 August 2019)

Skate.


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## willoneau (16 August 2019)

Hi SKate , is your total position size 30?
never mind just noticed it was 25 total not open at moment.


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## Skate (16 August 2019)

willoneau said:


> Hi SKate , is your total position size 30?







Skate.


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## willoneau (16 August 2019)

You must have replied faster than I could edit.


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## Skate (19 August 2019)

I've been testing & coding @peter2 1st Blue Bar (SuperTrend Strategy) that has been discussed in his thread. I'm now a believer - his strategy performs well. Peter is onto something here & his posts on the topic are pure gold.

*Discretionary verses parameters*
The difference between our strategies is that Peter uses his discretion skills whereas my systematic code uses parameters resulting in selecting different positions at different times utilising the SuperTrend idea.



peter2 said:


> *1st BB *(Peter's Discretionary Checks)
> HL - check, no resistance - check, first one in the sequence - check, no news - check, weekly trend UP - check, ASX trend UP - check, iSL below swing low, Place the buy order.
> *LOSING TRADE*. No setup, no matter how many parameters we include, will guarantee a winning result. Only I will show you a losing trade first up.




*Extra Parameters reduces false breakouts*


peter2 said:


> 1st blue bars are nothing special. Hundreds of them form every month. Trade them all and you'll lose very quickly. Our checklist helps us select ones that have a higher probability for success.




*Nothings perfect*


peter2 said:


> I post this to remind new traders that every strategy has losing trades. We cannot avoid them. However if we're *persistent* and manage our downside exposure we'll do quite well using this simple strategy.




*Bull Market*


peter2 said:


> A new trader doesn't realise the importance of a bull market.




*Bull verses Bear markets*
The 2 Backtests below reinforces what a Bull Market can produce.

*N.B.*
Optimising the strategy found using 2xATR(21) gave better results than using Peter's suggested 1.5xATR(21) for weekly systems. The best optimised system was using 5xATR(21) parameter but I wasn't comfortable with the longer hold period.

*Skate's modified SuperTrend Strategy Settings *(BULL Market)
Parameters 2xATR(21)
Weekly Strategy (*Backtest: 1st January 2019 to 30th June 2019*)
Starting Capital $600,000
40 Position Portfolio
Position sizing $15,000




*Bear Market*
July 2018 to December 2018 wasn't kind to most traders. Peter has posted that his 1st Blue Bar setup works better in a Bull market. Below is the backtest results confirming this.

*Skate's modified SuperTrend Strategy Settings *(BEAR Market)
Parameters 2xATR(21)
Weekly Strategy (*Backtest: 1st July 2018 to 30th December 2018*)
Starting Capital $600,000
40 Position Portfolio
Position sizing $15,000



*Summary*
Well done Peter, your 1st Blue Bar setup using the SuperTrend indicator with additional parameters works a treat. I encourage anyone looking for a simple strategy to play around with - check out Peters posts on the subject. Using the ASF search feature finds at least 24 separate posts.

Skate.


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## peter2 (20 August 2019)

@Skate  Wow, thank you. I've eaten a whole pack of TimTams reading through your research. 

Same system tested through a bull and bear market. It was the best of times, it was the worst of times. 




(1) I'm surprised that the system actually made an overall profit in the bear market. I think that your use of 40 positions helped with this. I'm assuming your universe was the AllOrds500. I'm also assuming that the portfolio held quite a few gold stocks which would have helped. 

(2) Bull market comments: 
Double the index performance, 
W% is disappointing considering the bull market (expected >60%)
Very good AW/AL of 4.6

(3) Bear market comments: 
Max DD < half the index is very good. 
Ave Loss in this bear mkt is similar to that of the bull market. 
Robust control of downside exposure (trade risk) in both markets is a real feature in these results.


----------



## Skate (20 August 2019)

peter2 said:


> @Skate  Wow, thank you. I've eaten a whole pack of TimTams reading through your research.
> 
> Same system tested through a bull and bear market. It was the best of times, it was the worst of times.
> 
> ...




Hi @peter2 

Thank you adding additional comments & I apologise in advance for the lengthy reply.

*(1) I'm surprised that the system actually made an overall profit in the bear market. I think that your use of 40 positions helped with this. I'm assuming your universe was the AllOrds500. I'm also assuming that the portfolio held quite a few gold stocks which would have helped.
*
The SuperTrend strategy backtest was against the XAO (all ordinaries) The profit in the Bear market was mainly due to the systems Index Filter turning off in late August 2018 protecting the strategy from the pending disaster from September to December 2018. @Warr87 Index Filters are worth their weight in gold.

_*(2) Bull market comments:
Double the index performance,
W% is disappointing considering the bull market (expected >60%)
Very good AW/AL of 4.6
*_
*The Full Bull Market Trade list *- The SuperTrend Strategy (January 2019 to 30th June 2019)
_*

*_

*3 Best Trades (Bull Market) as at 30th June 2019* (the Backtest period)



*# This is Important - These are the ACTUAL Trade EXITS for clarity*



*3 Worst Trades (Bull Market) as at 30th June 2019* (the Backtest period)



*The Best Bull Trade CHART* - ASX:ISX
Peter colours the price bars BLUE - whereas my charts tell me a story by the colours I use, so they are retained. For explanation & clarity I have included a "BLUE plot line" when the SuperTrend Indicator in on.





*(3) Bear market comments:
Max DD < half the index is very good.
Ave Loss in this bear mkt is similar to that of the bull market.
Robust control of downside exposure (trade risk) in both markets is a real feature in these results.

The Full Bear Market Trade list* - The SuperTrend Strategy (July 2018 to 30th December 2018)



*3 Best Trades (Bear Market) as at 30th June 2019* (the Backtest period)



*3 Worst Trades (Bear Market) as at 30th June 2019* (the Backtest period)



*Best Bear Trade CHART* - SFG
Peter colours the price bars BLUE - For clarity I have included a BLUE plot line when the SuperTrend Indicator in on.



*Confirmation*
The SuperTrend Indicator is not too shabby as a simple strategy, well done Peter for highlighting a strategy that has the potential to help others.

*Full Year financial results * - 2018/2019 strategy results



Skate.


----------



## Lone Wolf (20 August 2019)

Hi Skate,

Just something to be aware of is that not sure all supertrend indicators are the same. I was looking yesterday and I can't get my supertrend indicator to match Pete's for the AIA chart in his weekly portfolio thread. 

Supertend can either use median or closing prices for the calculation. The version I had uses median by default. Also, there are multiple ways of doing the ATR calculation. I believe BullCharts lets you select the method and it looks like Pete chose Exponential MA. If you look up the ATR function in amibroker there's a comment below it from the developer stating that it uses the Wilders calculation.
"Note that original formulation of ATR (the one that AmiBroker implements)
uses WILDERS smoothing (not simple moving average)"

I don't mean to detract from your findings. Even if your version isn't exactly like Pete's, it doesn't take away from the points you make. You still took the supertrend indicator, made a system from it and your results are valid for your version. But the stats may or may not be applicable to Pete's version.


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## Skate (21 August 2019)

Lone Wolf said:


> Hi Skate,
> 
> Just something to be aware of is that not sure all supertrend indicators are the same. I was looking yesterday and I can't get my supertrend indicator to match Pete's for the AIA chart in his weekly portfolio thread.
> 
> ...




Hi @Lone Wolf 

Thank you for your post in the 'Dump it here' thread, I appreciate when knowledgeable & highly respected member decide to add to the discussion.  Your remark clarifying that all SuperTrend indicators are not the same is 100% correct. May I also add, how the indicator is implemented varies from trader to trader. As a point in case - yourself, Peter, as-well-as myself have all used the indicator differently. In my case I've used the indicator to formulate a complete SuperTrend trading strategy. 

*It's a simple indicator*
The Supertrend is a simple trend following indicator & it works well in trending market. As you say there are multiple ways to calculate the ATR. Amibroker uses the Wilders smoothing to calculate theirs. @peter2 has demonstrated the SuperTrend is an excellent indicator of trend direction, the heart of any trend follower.

*SuperTrend has two parameters*
1. Time Period
2. ATR Multiplier

*The two parameters Peter has used *
The time period of (21) & the ATR multiplier of (2) was the foundation of my trading system. The different ATR multipliers signal the degree of price volatility. It's also important to note that using the old method of buying when the Supertrend closes above the price and a sell when it closes below the closing price is a sure way of losing your money quick smart, so I'm advising others not to use the indicator this way - just don’t do it.

*The Blue Line on my chart*
I’ve overlaid the Supertrend indicator on a weekly price chart in my previous post (the Blue line) displaying when the trend is ascending. When there is a change in trend the indicator line turns "blue" which is simple to use & understand. 

*The basic idea *
The SuperTrend indicator is to give buy & sell signal to the traders but I don’t use it that way. I use the indicator in-conjunction with parameters & a momentum indicator to enter the move. The SuperTrend indicator by itself is not enough giving a degree of false signals & that's why @peter2 uses his discretionary skills to enter a position.

*It's not the Holy Grail*
The Supertrend indicator fails in a "Bear or sideways-moving market" & that’s the very reason why I've added an Index Filter to my strategy design. Like any other indicator, the Supertrend indicator works best when used in conjunction with other indicators. Meaning the indicator is best used in combination with other indicators & parameter or else it will end up generating the wrong entry signals. The SuperTrend indicator is not appropriate for all markets & situations.

*It helps*
The indicator works when the market is trending & is a wonderful tool to know the current market trends. It clearly depicts the distinction of the downtrends and uptrends helping you to make smarter decisions. There are times when you get false signals which are yet again not as high as compared to other indicators. Hence, it is best to use the right combination of multiple indicators, especially a momentum indicator.

*False signals*
There’s no technical indicator which can be 100% accurate including the Supertrend indicator. The indicator also generates false signals in the sideways market, though it gives a lot less false signals as compared to other indicators I’ve used in the past.



Lone Wolf said:


> I don't mean to detract from your findings. Even if your version isn't exactly like Pete's, it doesn't take away from the points you make. *You still took the supertrend indicator, made a system from it and your results are valid for your version*. But the stats may or may not be applicable to Pete's version.




No worries, I wasn't trying to emulate @peter2 results but my post was merely an exercise explaining to others how a simple strategy Peter applies in his trading can be very profitable. I've posted details & trading results of my MAP Strategy, my BOX strategy even my CAM strategy - the SuperTrend strategy is just added to the list, hoping to help others.

Skate.


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## peter2 (21 August 2019)

@Lone Wolf and @Skate  Thank you both for the additional discussion on the supertrend indicator. It's a little more complicated than a moving average and can be calculated in many ways. Like all indicators there are charts where the supertrend nails it and we think it's the best, then there's price action that defies all indicators. 

I could select a moving average and colour the bars blue when price closes above the MA (red when price is below) and I would trade it in a similar manner to the 1st BBs. 

It's interesting that skate mentioned that the 5xATR produced the best back test results in his recent 1st BB optimisation. A long time ago, another knowledgeable ASF member posted that a 6xATR produced the best results in his back-testing. He was a longer term trader and wasn't concerned by the higher portfolio heat and loss of open profits. Profitable investors aren't worried by these temporary deviations that the market produces. 

Back on the supertrend indicator, I use it as it represents a significant price move from a recent low. We know that all up moves off a low don't turn into trends but a few of them do. If we start with a larger time frame, say a weekly and we know the weekly trend is up, then a price movement off a low (1st BB) in a daily chart has a higher probability that the prior up trend is resuming. 

The 1stBB can get me into smaller price swings that I can trade as well as longer price trends.


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## Skate (23 August 2019)

Skate.


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## Skate (23 August 2019)

I've had a quick 'PM' alerting me to the fact that the Portfolio Dashboard didn't quite add up this week & if others are wondering it all to do with a Dividend payment that is included in the P&L Total.

*Just a quick note to suggest there is a problem with this weeks figures.
Gross Profits = 29330
Gross Losses = (26172)
Profit = 3158

P&L is showing as $3581 which is a difference of $ 423.*
*








*
Apologies for the confusion..

Skate.


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## Skate (24 August 2019)

*Rough week ahead*
The US President Donald Trump launched a sensational tirade on Twitter, announcing increased taxes on products from China as the stock market plummeted.




*Adages*
Never a truer word spoken...
Little strokes fell great oaks...
The pen is mightier than the sword...

*Confucius once said* 
“Before you embark on a journey of *revenge*, *dig two graves"*

Skate.


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## Sir Burr (24 August 2019)

Skate said:


> *ASX codes*
> I want to right upfront & say "I don't even know what companies I'm buying" let alone the sector they belong to, I'm just buying ASX codes. But what I do know about the ASX codes I buy is that they meet my buy conditions & a predetermined list of parameters.




I'm interested in this because I'm the same _except _there are things that Amibroker can't tell me. Maybe takeovers and mergers or other reasons for bypassing a trade on the list.

I plug the ASX code into here: https://www.asx.com.au/prices/company-information.htm to see if there is something "funny" going on before continuing. I don't read all the pdfs (unless something seems odd), just a quick scan of the headlines.

Note that I don't like overriding my system and it's rare I exclude a trade.

Are there any circumstances where you would cross a trade off?
Apart from takeovers or mergers what could other reasons be? Maybe share dilution?


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## Skate (24 August 2019)

Sir Burr said:


> I'm interested in this. Note that I don't like overriding my system and it's rare I exclude a trade. *Are there any circumstances where you would cross a trade off?* Apart from takeovers or mergers what could other reasons be? Maybe share dilution?




Hi @Sir Burr

Thank you for your question & it’s a good one.

I take every trade as they come, I’ve even taken trades that I think will be dead set losers but what keeps me stepping up to the plate can be summed up in two reasons.

1. It’s not my job to think & what I think is irrelevant to my trading style.
2. My systems are throughly tested over many years & would have included something similar (barring Trump that is)

So in short, I don’t override my strategy not even for one trade. I’ve planned what to do & I do what I’ve planned.

*Inclosing*
I’m not a cafeteria trader, meaning I don’t pick & choose which trades I will take & which trades I’ll pass on.

Skate.


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## willoneau (24 August 2019)

Hi Skate, did you look at pyramiding at all to reduce draw down?


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## Skate (24 August 2019)

willoneau said:


> Hi Skate, did you look at pyramiding at all to reduce draw down?




Hi @willoneau, thank you for your question. Your question may be the catalyst for others to seek more information about pyramiding into positions..

My drawdowns (posted backtest results in the 'Dump it here' thread) are well within acceptable limits for my risk tolerance. When formulating a strategy, pyramiding was always found to be detrimental to the systems performance. Using a "Take Profit Stop" did much the same. Being a trend follower it's essential to get into the move (the trend) as soon as possible & pyramiding defeats this purpose.

*For Simplicity*
Formulation of a strategy (for me) is not about seeking the best or ultimate returns but seeking to find the "Goldilocks parameters" to suit the strategy & it's always a trade off to some degree. Strategy development is always a constant balancing act between risk & reward.

*Confidence*
If pyramiding into to a position gives you the confidence to take the trade I see no reason not to use it. The good thing about traders, we are all different.

Skate.


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## Gringotts Bank (24 August 2019)

Scaling in is ok with certain MR set ups, but it does alter my target price.  if I'm at 3x my usual size (due to continued scaling in), I either look to exit at a much lower *or *much higher target price than for a single lot.  The much lower price will usually be a break-even trade.  The much higher target will be about twice the usual target.  This is another way of saying "if a stock is going to revert after several successive buy signals, it will revert big time.  If it's not going to revert, there will be a small window of opportunity to exit before it continues lower".


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## Sir Burr (24 August 2019)

Skate said:


> 2. My systems are throughly tested over many years & would have included something similar (barring *Trump *that is)




Thoroughly tested here but when the system snags a shareprice spiking to a takeover price, that's my Trump.

I use rank based on turnover but fine without.


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## Sir Burr (25 August 2019)

I feel like a dump this morning ...about takeovers.
Note my goal as a system trader is to simulate as close to actual trading as possible. Also, I’m not a short term trader.

There are two situations for takeovers, firstly holding a stock for a period then taken over (can’t avoid). Secondly, a buysignal is triggered by a takeover bid (can avoid).

This Amibroker code is relevant for both situations in backtesting delisted stocks. Trades that have been entered yet have no sell signal and these will "probably" have an exit value at or near takeover price.


```
NonTradedPeriod = 30;
SymbolDT = DateTimeAdd(DateTime(), NonTradedPeriod, inDaily);
Delisted = BarIndex() == (LastValue(BarIndex()) -1) AND DateTimeDiff(Now(5), SymbolDT) >= 0;
Sell = Sell or Delisted;
```

Better still, if you use Norgate data: https://norgatedata.com/amibroker-faq.php#exitpriortodelisting

 If you don't use this for backtesting, you could be left with a bunch of stocks blocking buysignals. These stocks will withhold your capital and effect backtest results.

In real time trading, would you have exited on the announcement of a takeover, waited until the takeover is completed or accept a new ASX code?

I sell before a takeover is completed but should you choose to accept your mission of a new ASX code, what happens to exits? There would be no exitsignal for your new ASX code when running an Amibroker exploration as there would be no buysignal. Perhaps it's possible to manually add a trade but you could save the ASX code to favourites in Amibroker and check stops. Depending how complex exits are, this could be tricky. i.e. if your exit uses the buyprice or has some timed stop from the entry signal.

For the second situation where a takeover triggers a buysignal you could use one of the above choices (except “exited on the announcement”) but using the Amibroker code above simulates not buying, except if in real time the stock doesn’t end up being taken over!

Mr Monte Carlo is helpful guy


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## Sir Burr (25 August 2019)

Damn!
Scan this week and top of the list is EPM with a big spike and a takeover announcement.

Fridays close $2.45.

"ERM's founder and top shareholder, Trevor St Baker, who speaks for 27 per cent of the company's shares, said in a statement he would accept the offer of $2.465 a share if no higher bid emerges".


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## qldfrog (25 August 2019)

So do you get in hoping for future higher bidder , or run away


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## rnr (25 August 2019)

Sir Burr said:


> I feel like a dump this morning ...about takeovers.
> Note my goal as a system trader is to simulate as close to actual trading as possible. Also, I’m not a short term trader.
> 
> There are two situations for takeovers, firstly holding a stock for a period then taken over (can’t avoid). Secondly, a buysignal is triggered by a takeover bid (can avoid).
> ...




Unless I'm missing something I believe that the stale exit code used by @Skate addresses this problem.


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## Sir Burr (25 August 2019)

qldfrog said:


> So do you get in hoping for future higher bidder , or run away




Standing my ground, guilty of overriding and running away 
Have about 20 buys below this one and trust Monte.

Don't check, look or think more about it.


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## Sir Burr (25 August 2019)

rnr said:


> Unless I'm missing something I believe that the stale exit code used by @Skate addresses this problem.




Yeah not sure, I'm just dumping it here. Haven't read the whole thread and about the stale exit.


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## aus_trader (25 August 2019)

Sir Burr said:


> Damn!
> Scan this week and top of the list is EPM with a big spike and a takeover announcement.
> 
> Fridays close $2.45.
> ...



SirB, I think you must have mis-spelt the stock code, you must be talking about "EPW".


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## qldfrog (25 August 2019)

Yes it is epw which was on my buy list
I ensure that i do not buy above the takeover price


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## Skate (25 August 2019)

Frankieplus said:


> My cash account sits at $50k but I am being cautious and using only $10k of it. I started trading with $30k but due to my stupidity removing a stop loss on an APT trade I lost $3k and am now treading lightly. Hence why I'm asking if this is how you all trade or if I should bump up my risk or trade with more money and half my stop loss amount. I know, catch - 22






Frankieplus said:


> Since it's on the way up I want to buy into gold, but not sure which ETF or Stock I should consider.




I've hijacked a question from @Frankieplus in the - *"which-gold-etf-stock" *thread, that I'll answer here..

Hi @Frankieplus

I've read most of your posts & you have had some great responses from members to your questions so far. It's unsettling reading your latest post asking for trading advice in this manner.

*Dangers of trading from advice of others*
Before you invest or trade again I'm suggesting you read a few threads to bring yourself up to speed on the dangers of trading without a plan - or - at least grab a copy & read my eBook about the dangers of trading when your money is on the line.

*Trading Fundamentals - Skate's Beginners Version eBook*
https://www.aussiestockforums.com/posts/1014728/

*Risks involved in trading*
Traders without an education are notoriously optimistic & many lack a clear understanding of the risks involved in trading & are not always sufficiently educated in proper investment or trading strategies.

*You said: *"What Gold Stock I should consider or what stock you would recommend instead?"
If you want a tip to buy a gold stock at the open tomorrow - buy (ASX: *GOR*) & sell at the end of the week - I can guarantee you that your trading account balance will be different at the end of the week. (Make sure you hold your nerve for the entire week, don't be tempted to cash out early)

Skate.


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## Skate (26 August 2019)

Skate said:


> I've been testing & coding @peter2 1st Blue Bar (SuperTrend Strategy) that has been discussed in his thread. I'm now a believer - his strategy performs well. Peter is onto something here & his posts on the topic are pure gold






*With permission*
Matt Radtke from “Quantforhire” recently wrote an article on how to “*Beat the Market with a Simple SuperTrend Strategy” *& with his kind permission Matt has allowed me to reference his work & hyperlink to his webinar presentation where he describes the process of creating and validating a simple trading strategy using the SuperTrend indicator.

*Respectable results*
The performance results of his strategy are quite respectable but the real purpose of his webinar was to introduce traders to the tools and methodologies that can be used to develop effective strategies of their own.

*Well worth a watch*
I have downloaded & watched Matt’s webinar a few times. The slides for the webinar can also be downloaded separately. Matt, in my opinion is the real deal & has done a great job coding the SuperTrend Indicator & presenting his webinar on the subject & for a better understanding of how his simple indicator can be applied to all time frames & all markets with an explanation on the correct application of the indicator for trading.

*The AmiBroker AFL code is also kindly supplied.*
https://quantforhire.com/2018/08/19/supertrend-indicator/

*Robustness of a strategy*
At the 39:50 minute mark - Matt explains how to test a strategy robustness using "Parameter Sensitivity" & then goes on to explain the procedure to refine a strategy using the "In Sample" (IS) & "Out Of Sample" (OOS) testing to avoid curve fitting was priceless. I have posted many times that backtesting alone means Jack. The only true test of a strategy is using the results from the “In Sample” (IS) & “Out Of Sample” (OOS) testing that is explained succinctly in the webinar presentation.

*Beat the Market with a Simple SuperTrend Strategy *by Matt Radtke
*
Website reference
https://quantforhire.com/2019/03/16/beat-the-market-with-a-simple-supertrend-strategy/

Webinar download
https://videos.files.wordpress.com/AF3ZeUuc/quantact-1_dvd.mp4

Presentation Slides download
https://quantforhire.files.wordpress.com/2019/03/quantact-amibroker-nifty.pdf

Disclaimer*
I have not used Matt’s code in formulating my "SuperTrend Strategy" nor do I use the SuperTrend Indicator as intended or described in the webinar.

Skate.


----------



## Sir Burr (27 August 2019)

aus_trader said:


> SirB, I think you must have mis-spelt the stock code, you must be talking about "EPW".




Your right, I mixed up the code with their name 

EPW - ERM Power Limited


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## Sir Burr (27 August 2019)

Skate said:


> Backtesting with in-sample and out-of-samples data




Skate, do you or have you thought about re-testing your system after trading it for some time.

An example could be: if real trading for a couple of years, backtest say 5 years plus one year actual trading with one year out-of-sample and compare?

I was out of the market a lot of last year and average trade can be 6 months so very few stats.

Any thoughts about this? I've read people like to retest every year but I'd say it depends on your average trade length.


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## Sir Burr (27 August 2019)

Sir Burr said:


> Your right, I mixed up the code with their name
> 
> EPW - ERM Power Limited




Quoting myself here and just a thought about my error. This is exactly the reason I have automated placing trades as there is the risk of making errors when manually entering them.

This is my routine:

Run IB Trader Workstation
Run Amibroker Exploration, saves trades to a spreadsheet,
Open a secondary spreadsheet which automatically retrieves trades from above spreadsheet, it connects to TWS, calculates entry/exit price and number of stocks to buy.
A button press sends the trades to TWS

Little input and avoids silly errors. Only input is to delete trades that are above my capital. Could probably automate that too but haven't bothered (yet).


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## Skate (27 August 2019)

Sir Burr said:


> Skate, do you or have you thought about re-testing your system after trading it for some time. An example could be: if real trading for a couple of years, backtest say 5 years plus one year actual trading with one year out-of-sample and compare? I was out of the market a lot of last year and average trade can be 6 months so very few stats. Any thoughts about this? I've read people like to retest every year but I'd say it depends on your average trade length.






Sir Burr said:


> Yeah not sure, I'm just dumping it here. Haven't read the whole thread and about the stale exit.




Hi @Sir Burr 

Another great question & its a pity you have not read all my posts. This may be one post to read..
https://www.aussiestockforums.com/posts/1014617/

*Strategy Development*
I've posted about the extensive testing that goes into strategy development & the ongoing re-testing fine tuning selected parameters keeping in tune with the markets. Amibroker is a big scientific calculator & it's hard (for me) to code how my strategy re-balances position sizing from a direct bank feed.

*Strategy capabilities*
I re-testing my strategy constantly not looking at the basic code but the ongoing parameters used in my system. It should also be noted that running your strategy on different markets around the world could results in SIGNIFICANTLY different results for the same trading period & this is not a cause for concern. Running your strategy over different markets is only a minor indication of what your strategy is capable of achieving in different environments.

*Start dates are important to the mix*
Depending on the starting date of the test, this can also have a big bearing on the performance outcome of the strategy, this is the very reason why we need to mix the markets, mix the index & mix the dates when backtesting, don't shortcut this vital stage in the development of your strategy.

*Crystal ball*
Unfortunately, no one has a crystal ball, and any strategy in the real market, for some periods (sometimes long periods), may behave differently from the backtest and it is up to you to decide if you want to continue trading it or to take it off the market definitely (or simply suspend it as you did last year, continuing to monitor it, until it starts again to perform as per your expectancy).

*Take the good with the bad*
With a weekly strategy you have to hold the position up to week even when the price falling rapidly. With a weekly system you have to stick to the plan even if it means a bigger loss (I never override my strategy) Keep the system as simple as possible, validate it (robust backtesting) and trade it.

*Make sure you test it*
Stress test your strategy, backtest the strategy, test it with in-sample and out-of-sample data, and test it over different Indexes and over different time frames, even different markets around the world as your strategy needs to work under all conditions.

*# The way I trade is not rocket science, it's boring as Bat$hit*.

*You can listen to too many*
Reading various trading threads here at ASF sounds good in theory, but the problem is that getting so many different trading opinions & trading styles becomes confusing & in the end you won't know who to believe thus putting a handbrake on your trading.

*Find your comfort level*
By reading various trading threads you'll find out what works and what doesn't. The hardest part is finding yourself a setup you like, one that's simple and suits your mindset.

*Overseas Strategy Evaluation*
This is an (unaltered copy) of "one" email in a series that I'm prepared to share about the overseas testing of my Hybrid Strategy. I'm not prepared to discuss the results any further. The email returned to me is an unaltered summary of the Hybrid Strategy tested overseas on a variety of markets around the world. Conducting & believing your own research is typically fraught with danger & when my money is on the line I try not to leave anything to chance.

-----------------------------------------------------------------------------------------------------------------------------------------
*email START*
I found that in general, the strategy works well also in other international markets where there are a lot of inexpensive stocks. I tried some alternatives for the PositionScore but found that your criteria to be a very good fit for this system.

Thanks for the very detailed answer. Now I better understand your code and logic.

Your coding skill, in my opinion, is already pretty good since you implemented some features that are for sure far above the basics. While the original code could be refactored to achieve greater readability (something that in any case is opinionable), I did not find any major issues (the gfx part is pure aesthetics so it does not interfere with the actual trading system).
*email END*
-----------------------------------------------------------------------------------------------------------------------------------------

*In Short *- I've posted a long reply to say..
Yes I test all my strategy constantly, testing never stops.

Skate.


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## Sir Burr (27 August 2019)

Skate said:


> This may be one post to read




Thanks.

Yes I have been one of the yearly re-testers, varying parameters too. I don't change code unless something can be improved like the code vs Norgates solution I posted above about delisted stocks.

There is a reason behind being interested in what you do. Subject of data and I don't like paying for things if unnecessary things. 

I was a beta tester for Norgate Data and after their discount last year, that ends altogether when it expires in 30 days. I think it's crazy not to backtest including delisted so it's now 12 months = AUD 630. Cost of trading.
https://norgatedata.com/stockmarketpackages.php


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## Skate (27 August 2019)

greggles said:


> Especially after today. You know when a company puts an announcement's headline in all caps it's serious business. Looks like things are finally paying off for STX shareholders. Well done to those that hold! STX up another 55.2% to 22.5c today.




Hi @greggles & @barney 

I've hijacked your post from the "*stx-strike-energy*" thread that I can use for an educational post in the 'Dump it here' thread about market knowledge.

*Disclaimer*
As I'm on the ride of ASX:STX, in at $0.135 & it's a perfect segue to explain "when you know - it's too late"

*The market is not a level playing field*
The stock market is not a level playing field, but most individuals trade as if it is. They assume they have the same information as everyone else, so they focus on the facts that are readily available to them & ignore how a stock is actually moving.

*Someone out there always knows more than you do*
We don’t consider that maybe someone out there knows a lot more than they do & perhaps that might account for why a stock is moving the way it is. We have all seen a situation in which a stock suddenly starts making big moves up or down such as [STX] & then a short time later significant news is released that explains why that move took place.

*I want to alert others*
Someone out there always knows more than you do, and you shouldn’t assume otherwise.

*Valuable information*
It is just plain foolish to think that trading is a level playing field when it comes to receiving valuable information & rather than complain about that fact, we must use it to our advantage by paying close attention to those who do have inside information. There is absolutely no way a small individual trader like us has superior knowledge about a company but the good news is that small traders don’t need an informational edge. They make up for it by moving fast and being reactive to breakouts the very essence of a trend trader.

*Someone knew*
Look at my weekly chart, someone knew something well in advance of the news being released, I'm so lucky my strategy snagged the breakout - in @ $0.135.

*Standard Chart [STX]*



*Expanded view of the same chart [STX]*



Skate.


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## Gringotts Bank (27 August 2019)

Skate said:


> Hi @greggles & @barney
> 
> I've hijacked your post from the "*stx-strike-energy*" thread that I can use for an educational post in the 'Dump it here' thread about market knowledge.
> 
> ...



Skate, how does it prove it when some stocks have a strong bar with no follow through?


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## Skate (27 August 2019)

Gringotts Bank said:


> Skate, how does it prove it when some stocks have a strong bar with no follow through?




@Gringotts Bank you have missed the point of my educational post.

*It would be the same if I asked you in return...*
"Are you saying nobody knew anything?"

*Playing tennis*
Comments like these serve no purpose other than playing tennis with each other. If you have an alternative view on the subject feel free to post it for others to consider.

Skate.


----------



## willoneau (27 August 2019)

Gringotts Bank said:


> Skate, how does it prove it when some stocks have a strong bar with no follow through?



Then wouldn't that be an exhaustion bar , were someone knows it's going to go the other way?


----------



## peter2 (28 August 2019)

galumay said:


> I suspect that finding a niche or strategy and learning it, practising it, reflecting on it and sticking to it, maybe more important than which one you choose. . .




Worth reposting in this thread as it's exactly correct. New traders and investors generally abandon winning strategies too early.


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## IFocus (28 August 2019)

peter2 said:


> Worth reposting in this thread as it's exactly correct. New traders and investors generally abandon winning strategies too early.




Couldn't agree more become the expert when it works and when it doesn't.


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## craft (30 August 2019)

peter2 said:


> Worth reposting in this thread as it's exactly correct. New traders and investors generally abandon winning strategies too early.



Reading another thread I was thinking how important the journey is and not wanting to clog up that thread I thought I might dump here if thats O.K. Then I see your post Peter and I think how important staying the course is and so, face one of my unresolved conflicts.

I started as a Muppet, taking risk I didn’t even realise,

Then I passed through a phase of trading on price to control risks tightly and build early funds.

Then I moved to focused stock selection to take on more calculated risk in an effort to accelerate wealth building

Now I’m morphing again, into broader diversification for wealth preservation over a multigenerational outlook.


"Stay the course" *is the most important thing!*
"Journey" *is the most important thing!*

How to reconcile?????????

Stay the course of risk management? 
Maybe methods can evolve?

how do you know when the time is right for a paradigm shift?

So many questions, so few answers. But forward we move regardless.

I feel better for dumping - thanks.


----------



## Skate (30 August 2019)

craft said:


> Reading another thread I was thinking how important the journey is and not wanting to clog up that thread *I thought I might dump here if thats O.K. *Then I see your post Peter and I think how important staying the course is and so, face one of my unresolved conflicts. *I feel better for dumping - thanks.*




Hi @craft

Thank you for your post in the 'Dump it here' thread, I appreciate when knowledgeable & highly respected members decide to add to the discussion. Better still raising or starting a new topic for discussion always stimulates thinking on a higher level, education is the key in this game.

When you have something to say "Dump it here"
https://www.aussiestockforums.com/posts/1005967/

*The perfect place*
Sometimes you feel like dumping stuff & this thread might be the perfect place.

*Helping Others*
You might want to dump stuff here to help others

*Unload*
You might want to unload & dump something off your chest

*Gems*
You might even want to dump some gems here

*Let it go*
Sometimes you can't let somethings go till you dump it on paper

*Dump it here*
If you want to dump it, dump it here

Skate.


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## Skate (30 August 2019)

Skate.


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## Gringotts Bank (31 August 2019)

Skate, would I be able to have a look at some of your codes please?  I'd like to try and develop a momo strategy.


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## Skate (31 August 2019)

peter2 said:


> Worth reposting in this thread as it's exactly correct. New traders and investors generally abandon winning strategies too early.




*The beginners stage*
After reading the post by @peter2 I thought it was the ideal time to make a post about the turbulent times of trading the last few weeks & what it can do to a perfectly good strategy. 



craft said:


> valuation calculated from what the underlying physical economy is doing. Inputs like productivity, population, inflation target, profit share to wages vs capital etc. Not specifically cash rate – that is more driven by the underlying economy.




*Indicators*
In the next post I'll explain about indicators that I've found useful in my style of trading & how important they are to me. @craft in another thread has eluded to an indicator he uses to calculate how the economy is travelling whereas @Gringotts Bank might find how I apply the indicators I use useful in developing his "momo" strategy whatever that is. 

*Abandon winning strategies too early*
Imagine this - Scenario (1) You decide to start trading for the first time on the 1st July 2019 using my Hybrid Strategy - at the end of your first month you would be punching the air with excitement thinking "how good is this".

*Reaching for the tissues*
Now imagine this - Scenario (2) Starting the same strategy a month later on the 1st August 2019 - I must admit the weekly & monthly results are far from impressive & would have most reaching for the tissues at this stage thinking "this strategy is a dud". 

*Lack of confidence*
I wonder how many traders would have the confidence trading the same strategy next month after dropping $47,470 in one week, losing $21,621 for the month. This confirms some new traders may abandon winning strategies too early. 
*
True & accurate trading results*
The performance results of my Hybrid Strategy is listed below for the first eight weeks of the new financial year. The CAM strategy results are posted above in my weekly updates. 




*Two important points*
(a) Get your mindset in the right head-space because it will take time to go from a losing strategy to making you money because that's just how trading works.
(b) If your strategy has a proven edge don't be disheartened if the strategy is not performing - just keep with it & don't stop trading no matter what.

*Losing is part of the game*
Don't forget every trader loses money & when that happens 'suck-it-up' & don't panic. Successful trading is not guaranteed but 'there-is-no-alternative' that gets 'better-than-average' long term returns than parking your money in the Bank. 

*Remember*
Trading is not a sprint but a marathon. The starting date when you decide to take the plunge can have a big impact on your trading results.

*Scary*
Trading can be scary when you're trusting a system developed by someone else, developing your own system has its advantages.

*In-closing*
The Hybrid strategy is not too shabby up $53,089 YTD or $6,636 a weekly so far.

Skate.


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## Skate (31 August 2019)

*Lets talk about indicators *
Indicators are boring to talk about but they make a strategy.

*Indicators are best used in-conjunction *
Using indicators in conjunction with other indicators allow you to better catch confirmed trend. Trends are happening all the time, they come & go with regularity. Confirmed trends or a continuation of a confirmed trend is what systematic trader are constantly searching for.

*What indicators don’t do*
Indicators don't provide buy or sell signals - their primary function is to determine whether the timing for the entry or exit is optimal & they are essentially the main drivers in coordinating the trading strategy.

*I only use a few Indicators *
ATR, CCI, ROC, EMA

*1. ATR*
The average true range (ATR) is a volatility indicator, combined with a momentum indicator (ROC) tells a powerful story

*2. CCI*
Commodity Channel Index (CCI) is a momentum-based oscillator used to determine overbought or oversold conditions but this indicator is best used in conjunction with additional indicators & that is how I use this indicator.

*3. ROC*
The Rate-of-Change (ROC) indicator is a simple Momentum indicator (my favourite indicator) & I use the ROC indicator in every strategy that I code to confirm increasing momentum of a trend.

*4. EMA*
The exponential moving average (EMA) is just one variety of moving averages to choose from. The (EMA) used by itself has no special powers but use it in combination with others turns the (EMA) into a super hero.

*How do I use the ATR indicator*
By varying the bands of the average true range (ATR) it matches the volatility for the time frame being traded.

*How do I use the CCI indicator*
I use the CCI indicator in conjunction with a few additional indicators but simply I make sure the CCI nPeriod is greater than zero (CCI > 0) confirms the momentum is moving in the right direction.

*How do I use the ROC indicator*
I make sure before I enter any position the ROC of a shorter nPeriod is greater than that of a longer nPeriod & if it is I'm good to take the trade.

*How do I use the EMA indicator*
The exponential moving average (EMA) is a priceless indicator, I use the (EMA) nPeriod to gauge the accuracy & fine tuning of parameter setting. Trend traders need momentum & volatility & without either there is no money to be made.

*You don't need to know*
1. The Commodity Channel Index (CCI) is calculated by determining the difference between the mean price of a security and the average of the means over the nPeriod chosen.
2. The Rate-of-Change (ROC) indicator is a simple Momentum indicator that measures the percent change in price from one period to the next. The ROC calculation compares the current price with the price nPeriods ago.
3. The exponential moving average (EMA) differs from a simple moving average (SMA) in two primary ways (a) more weight is given to the most recent data and the (b) EMA reacts faster to recent price changes than the SMA. The EMA is the basis of every one of my trading strategies.

*In my next post*
Calling @Gringotts Bank , @Saqeeb , @willy1111 , @Newt , @debtfree , @qldfrog , @lindsayf , @Boggo & any other AmiBroker user that I've missed - I'll be supplying the AmiBroker line of code that drives my Box Strategy that's not too shabby as a simple strategy.

Skate.


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## Skate (31 August 2019)

Gringotts Bank said:


> The fact that you would disclose your system screams 'abundance mindset'. My contention is that someone with a scarcity mindset would not be able to trade this same system to the same degree of profitability. This would imply that the mindset is the primary determinant of success.



*
Lets talk about the 'MAP Strategy'*
Is it possible to trade & code a feeling that you believe will make money.

*Confidence*
We all have opinions of what works & what doesn't when it comes to trading but we always find it difficult to code & have the confidence to trade it.

*Coded & tested*
My idea coded up well & the strategy backtested with pleasing results. The MAP strategy has only a few conditions when to buy & sell. Most seasoned traders "just know" when a move is on but sometimes lack the correct tools to capture the move OR have the confidence to take the trade - it’s so much easier to go with the trend than fighting against it.

*Nothings perfect*
All indicators are lagging & they need a period of time to establish a pattern & that’s why trading ‘Moving Averages’ is not an exact science. Getting into & out of a move can be tricky but get it right & the strategy has potential.

*The 'MAP Strategy' – is simply one line of code *
The Map strategy is built around one line of code with a variety of indicators mentioned in my previous post.

*The Map Strategy in English*
Buy whenever the closing price is higher than a 10 period Moving Average conditional on the ROC filter being above 0% - *OR* - Buy when the Closing price is at least 10% higher than the previous weeks close with volume higher than the Moving Average period.

*The Map Strategy in AmiBroker code*
MapBuyCondition = ( Close > MA( Close, 10 ) OR Close == 1.1 * Ref( Close, -1 ) );

*Requesting - Weekly timeframe*
Most traders who use AmiBroker will have a trading template & I'm asking nicely if a user that has a template to add the one line of code above, backtest it & post the backtest results for others to view.

*Validation*
Independent Backtesting of the line of code will validate if the idea has legs - OR - not.

Skate.


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## Gringotts Bank (31 August 2019)

Thanks Skate.  
Translating from English to AFL, I get:
MapBuyCondition = ( Close > MA( Close, 10 AND ROC(C,10)>0) OR (Close == 1.1 * Ref( Close, -1 ) and V>Ref(MA(V,10),-1)) );


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## Skate (31 August 2019)

Gringotts Bank said:


> Thanks Skate.
> Translating from English to AFL, I get:
> MapBuyCondition = ( Close > MA( Close, 10 AND ROC(C,10)>0) OR (Close == 1.1 * Ref( Close, -1 ) and V>Ref(MA(V,10),-1)) );




@Gringotts Bank, your combined code is spot on.

I have posted the base code for the ‘MapBuyCondition’ as my additional filters, parameters & indicators are listed separately & are merged in the Buy condition.

*Question*
Do you have the time to backtest & post the results?

Skate.


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## Gringotts Bank (31 August 2019)

Skate said:


> @Gringotts Bank, your combined code is spot on.
> 
> I have posted the base code for the ‘MapBuyCondition’ as my additional filters, parameters & indicators are listed separately & are merged in the Buy condition.
> 
> ...




I would but I don't have an existing momentum strat to add it to.  Still looking.


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## Saqeeb (1 September 2019)

Thanks Skate
Added the code to a strategy that I am currently fiddling with and the backtest results as below. I am still learning Amibroker though.... 
Backtest range - 01/09/2018 - 30/08/2019


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## qldfrog (1 September 2019)

Good conversation, about a previous post considering trading a system and timing, have a thought about my systemII started 5th of august..
Still under water.and so it should even if a piece of magic..which it is not
Kudos to Skate and his lessons/advices


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## Newt (1 September 2019)

Skate said:


> *Lets talk about the 'MAP Strategy'*
> Is it possible to trade & code a feeling that you believe will make money.
> 
> *Confidence*
> ...




That's gold there Skate.  There are endless variations and ways to tweak and own "New'ish highs on volume" in a weekly trend following strategy.  Examples include positionscoring code (something I underestimated the importance in my early days giving psychology a foothold to cause issues), market filters, etc. 
Of course there is also the challenge of exits, position  sizing and a plenty of other things, but for those with a systematic technical trading mindset thanks again for the stimulating posts.

New traders could do a lot worse than just sticking with a basic strategy until the understand enough to "improve" it.


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## Nina4 (1 September 2019)

/*
   Skate's Info gathered from thread.

   Weekly Strategy (Backtest: 1st January 2019 to 30th June 2019)
   Starting Capital $600,000
   40 Position Portfolio
   Position sizing $15,000

   The Map Strategy in AmiBroker code
   MapBuyCondition = ( Close > MA( Close, 10 ) OR Close == 1.1 * Ref( Close, -1 ) );

   The Map Strategy in English
   Buy whenever the closing price is higher than a 10 period Moving Average conditional on the ROC filter being above 0%
   - OR - Buy when the Closing price is at least 10% higher than the previous weeks close with volume higher than the Moving Average period.
*/

AccountSize   =    600000;
BuyValue =        15000;
Commission =   29.95;
MaxPositions =   40;

SetOption( "InitialEquity", AccountSize );
SetOption( "CommissionMode", 2 );
SetOption( "CommissionAmount", Commission );
SetOption( "AllowSameBarExit", False );
SetOption( "AllowPositionShrinking", False );
SetOption( "MaxOpenPositions", MaxPositions );

SetPositionSize( BuyValue, spsValue );

SetTradeDelays( 1, 1, 1, 1 );

//--------------------- Variables --------------------- //

MA_Close_10 = MA( C, 10 );
MA_Vol_10 = MA( V, 10 );
ROC_Filter_Up = ROC( C, 10 ) > 0;

//--------------------- Buy Signal --------------------- //

PositionScore = MA_Close_10;

BuyPrice = SellPrice = Open;

Only_XAO = InWatchListName( "All Ordinaries Current & Past" );

Buy =  Only_XAO AND C > MA_Close_10 AND ROC_Filter_Up OR
       Only_XAO AND C >= Ref( C, -1 ) * 1.1 AND V > MA_Vol_10;

//--------------------- Index Filter ---------------------//

SetForeign( "$XAO" );
Index_Up = C > MA( C, 10 );
RestorePriceArrays();

//--------------------- Sell Trailing Stop --------------------- //

Sell = 0;

Exit_Percent = IIf( Index_Up, 40, 10 );

ApplyStop( stopTypeTrailing, stopModePercent, Exit_Percent, ExitAtStop = 2 );

// =======================================================//


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## Skate (1 September 2019)

Hi @Saqeeb & @Nina4

Thank you guys for posting a backtest of the MAP Strategy code that I have supplied. I've backtested my copy of the MAP Strategy using the setting below that closely mimic the setting I use in live trading. The three backtests posted confirms that a simple moving average strategy has the ability to turn a profit.

*Skate's MAP Weekly Strategy *
(Backtest period: 1st January 2019 to 30th June 2019)
Starting Capital $600,000
40 Position Portfolio
Position sizing $15,000




*Paper Trading results of 3 strategies under evaluation found here:*
https://www.aussiestockforums.com/posts/1027039/

*Previous Post - for comparison ($300K portfolio)*
Skate's MAP Weekly Strategy (sandwiched between the CAM & BOX Strategy)
(Backtest period: *1st January 2019 to 17th May 2019*)
Starting Capital *$300,000
20 Position* Portfolio
Position sizing $15,000




*Proof*
It's a given - all trend trading strategies perform well in a roaring bull market

Skate.


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## Sir Burr (1 September 2019)

Skate said:


> It's a given - all trend trading strategies perform well in a roaring bull market




Yep and the 'ol index filter during other times is your safety net.


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## Skate (2 September 2019)

Skate said:


> Hi @qldfrog My Hybrid Strategy gave a sell signal as well & looking at the chart you can understand why. Rebounding just after you sell it does mess with you only to 'pour salt on the wound' with a signal to buy on the next bar.




I posted a chart in the "nan-nanosonics-limited" thread to console @qldfrog about exiting a position too early.  

*Why is it So? *
Channelling Julius Sumner Miller, who had a Television series in the early 1960's of the same name, I wanted to explain why this sometimes happens. If you look at today's chart of ASX:NAN rebounding just after a generated sell signal.




*When we sell why does the price reverse ?*
I have been asked a few times "Why is this so?" - First off, I want to explain that the price doesn’t reverse because buyers are jumping in – it’s because the selling has nearly stopped or completely stopped. The fear of losing money creates a liquidity black hole from the lack of buyers & this is when fear turns into panic - sellers don’t care at what price they sell as they just want out of the position.

*Elvis has left the building*
When all the scared money has left the building some buyers step in & at other times the buyers will gradually return after they perceive it to be safe to do so. It’s not Rocket Science, it’s "Behavioural Science" or for a better word, predictable human behaviour of emotions.

*Trump*
In a previous post I reported that my Hybrid Strategy the week ending the 16th August 2019 dropped $47,470. Lets be clear, my strategy wasn't to blame as Trump was in the drivers seat that week. News feeds now drives the share prices every day & Tweets from Trump will become less effective over time. 

The more Trump pumps out - the more traders will tune out.

*Strategies*
"Strategies react to patterns not emotions" & that's why the sell signal was generated & taken - it's not for me to question why. 

*Predicting the future*
I don't know anyone who can predict what tomorrow's trading will bring & in hindsight it wasn't the smartest move by the Hybrid strategy to pump out a sell signal only to be given another buy signal on the very next bar. 

*Thinking is overrated*
As a systematic trader I have one job to do & that is to take the signals without thinking, its not my job to think what tomorrow might bring.

*Another long post when a few words would have done*
Prices reverse when the selling is nearly done & panic has left the building.

Skate.


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## willoneau (2 September 2019)

Hi Skate, 
Have you back tested your system to buy on the close if higher than open?
Just curious as a weekly system why carn't you take the entry any day of the entry bar?
I am aware then you would say need to place order in say last half hour on friday.


----------



## Skate (2 September 2019)

willoneau said:


> Hi Skate,
> Have you back tested your system to buy on the close if higher than open?
> Just curious as a weekly system why carn't you take the entry any day of the entry bar?
> I am aware then you would say *need to place order in say last half hour on friday.*




Hi @willoneau
_*"need to place order in say last half hour on friday"*_
When I first started to trade back in 2015 I did exactly that, sell at 3:30 pm on a Friday instead of entering in the pre-auction - sometimes you win but mostly it turned out to be a disadvantage with my style of trading - this is a perfect example of "the beginners cycle"

*Done to death*
I have done extensive backtesting on your suggestions & a bit more, even traded it as described in the paragraph above. Each strategy I trade has been backtested to death because when my money is on the line I try to leave nothing to chance. The strategies I trade are not perfect but they are as near as I can possibly get them.

*Fear of losing money*
The fear of loss or the fear of being wrong & losing money is the single biggest factor why traders don’t follow their strategy & start fiddling at the edges similarly as you have suggested.

*Fear turns to Anger*
Psychologically, when overriding a strategy & when that decision is proven to be the wrong "fear soon turns to anger". When your emotions run high it pays not to trade because no matter what you do next you will perceive that decision has made the situation worse.

*Take the good with the bad*
Notice my 'Trailing stop' kicked me out of the trade in the chart above. Never be afraid to sell you can always buy it back again. (small commission charge) it's no big deal.

*Selling is easy*
Selling is cheap and easy and can be undone in the blink of an eye & as you can see by the chart, "been-there-done-that".

*A stumbling block*
Too many seem to think that if they sell a stock, they are somehow prevented from buying it back again. Not so. For most traders, the biggest stumbling block to selling are mental, thinking they are better than their strategy.

Skate.


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## willoneau (2 September 2019)

Skate said:


> Hi @willoneau
> _*"need to place order in say last half hour on friday"*_
> When I first started to trade back in 2015 I did exactly that, sell at 3:30 pm on a Friday instead of entering in the pre-auction - sometimes you win but mostly it turned out to be a disadvantage with my style of trading - this is a perfect example of "the beginners cycle"



I'm not really sure were it is classified as beginners cycle?
A weekly system gives you entry triggers, if you don't take some or enter slightly later you should still be within your Monti Carlo range of results. Be it at either the lower or higher end of that distribution.
The reason I ask is that for example I have two stocks that have given me entry signals based on large range weekly bar with close off the high, do I blindly buy today or wait?


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## Skate (2 September 2019)

willoneau said:


> I'm not really sure were it is classified as beginners cycle?
> A weekly system gives you entry triggers, if you don't take some or enter slightly later you should still be within your Monti Carlo range of results. Be it at either the lower or higher end of that distribution.




@willoneau as you reference Nick Radge from the chartist it would be beneficial to read this pdf extract about the “Beginners Cycle”

https://www.thechartist.com.au/images/Breaking_the_beginners_cycle.pdf

Skate.


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## willoneau (2 September 2019)

Skate said:


> @willoneau as you reference Nick Radge from the chartist it would be beneficial to read this pdf extract about the “Beginners Cycle”
> 
> https://www.thechartist.com.au/images/Breaking_the_beginners_cycle.pdf
> 
> Skate.



Will do.


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## willoneau (2 September 2019)

Read the article thanx for the refresher.
Now my original question was have you back tested an entry other than the open of the weekly bar?
and if so what results did you find. From your post I gather that you did and found it to be of a disadvantage to your style or your system?
the two that came to my mind was break above the signal bar and a close higher than the open of the entry bar. Both should be able to be coded and thus not discretionary.


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## Skate (2 September 2019)

willoneau said:


> Read the article thanx for the refresher.
> Now my original question was have you back tested an entry other than the open of the weekly bar? and if so what results did you find. From your post I gather that you did and found it to be of a disadvantage to your style or your system? the two that came to my mind was break above the signal bar and a close higher than the open of the entry bar.




*1. have you back tested an entry other than the open of the weekly bar?*
Yes

*2. if so what results did you find.*
Liquidity is highest at the open. Amibroker backtests defaults using trade delays takes the opening price & trading in the pre-auction mimic this. (I trade in the pre-auction)
*
3. I gather that you did and found it to be of a disadvantage to your style or your system?*
Both

*4. The two that came to my mind was break above the signal bar and a close higher than the open of the entry bar.*



willoneau said:


> Then wouldn't that be an exhaustion bar




The ‘Dump it here’ is an educational thread & it appears you have an understanding of a subject others may find interesting - so it might be the perfect time for you to make a post on the subject.

Skate.


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## peter2 (5 September 2019)

More rambling thoughts from a short term trader that might be relevant to those who want to trade short term. It started with a post from @barney about the company *SPT*. I looked at the chart and noticed the huge bullish bar five days ago that was also a 1st BB on my charts. Yes, I'd seen this 1stBB but ignored it as it didn't comply with my 1stBB checklist. I dismissed it in seconds because it didn't fit with the strategy that I was using when I was looking through the 1stBB scan results. 




Another person with a different strategy may have thought there was a great opportunity for a short term trade in *SPT* after seeing the huge bullish bar (30/8/19). This person may use a strategy that looks for obvious insto buying and anticipates that there may be some follow through immediately or in the next few days. The huge volume bullish bar would have come up in their scan results and they would have a few tactics to get into this trade opportunity. 

One of my core beliefs as a short term trader is that there are an unlimited number of opportunities every day. My job is to find them and trade them using a plan. Some people like prospecting for gold, some look for truffles and some look for the next big wave. I like looking for the next trade. 

I know there are lots of us out there looking for the next trade. Well, you're not going to find it without having a specific strategy in mind. It's almost impossible to look through the charts with multiple strategies in your head. Do I trade this break-out or this pull-back or this 1st BB or this huge gap up?  We've got to clear the mechanism. (Know which movie this came from?)

This is another reminder to specialise. Master one strategy at a time. I started with break-outs of Darvas boxes.  If you want to learn how trade huge volume days please ask because ASF has these specialists available.


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## peter2 (5 September 2019)

If you really want to be a trader then be prepared to work for it. ASF has people willing to help but they're sick of all the time wasting wannabe traders. We discuss a strategy that they're keen to develop then we never hear from them again.


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## Skate (5 September 2019)

peter2 said:


> More rambling thoughts from a short term trader that might be relevant to those who want to trade short term. *One of my core beliefs as a short term trader is that there are an unlimited number of opportunities every day.* My job is to find them and trade them using a plan. Some people like prospecting for gold, some look for truffles and some look for the next big wave. I like looking for the next trade. I know there are lots of us out there looking for the next trade. *Well, you're not going to find it without having a specific strategy in mind.*




@peter2 your post couldn't have come at a better time as I've been struggling to code a daily strategy for many years (just over 3 years to be more precise), & it has taken a lot of effort & persistence.

My Daily Strategy is now into the 'paper trading' phase. I'm not going to clog up the 'Dump it thread' with another strategy but it would be educational if a successful systematic daily trader would post & discuss the process involved.

*"The Daily Strategy"*
Starting Capital: $300,000
20 Position Portfolio
Position sizing: $15,000
Start Date: 30th August 2019

10 positions filled, 10 to go..




Thank you Peter for making 2 more quality posts in the 'Dump it here' thread.

Skate.


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## Skate (6 September 2019)

Skate.


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## ducati916 (7 September 2019)

peter2 said:


> We've got to clear the mechanism. (Know which movie this came from?)




Kevin Costner: 'For the Love of the Game'

jog on
duc


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## Gringotts Bank (7 September 2019)

Imaginings of a TF system here, but nothing to remotely tradable.  By the time I get something worked out we will be in the midst of the 2020 bear market.


----------



## Skate (7 September 2019)

Lifted from “*p2-asx-weekly-portfolio*” thread.

I've decided to make a post about "Portfolio position sizing", a current discussion in the “*p2-asx-weekly-portfolio*” thread.



Newt said:


> Hi Peter, This an important (and fascinating) area. Any new information, or facts contradictory to our established way of thinking should be reconsidered. I'm not as yet convinced 30 or more positions is optimal for how you trade.  There is no doubt the ASX40 portfolio is delivering consistent and well above average returns.






Newt said:


> Re number of positions, the commentary and careful observations are appreciated.  I'm glad that 30+ positions works so well for both yourself and Skate, and also pleasantly surprised at the rate of portfolio growth.  It may be that there are also psychological benefits in missing less winners and possibly keeping week to week variability down. As always, everyone must validate and review their own strategy.  Personally however I can't justify straying above 15-20 positions.




*What a great post*
@Newt posted an "alternative view" about 'optimal portfolio position sizing' in the “*p2-asx-weekly-portfolio*” thread relating to his own experience & research. Newt has put forth a compelling argument even posting an optimisation chart that corresponds to his views that differs from the actual results trading a 40 position portfolio. It's refreshing how Newt explained an alternative point of view in a respectful manner that others could understand.

*My views*
All the posts I've made are written to pass on my experience I’ve gained over the years explaining that there is an alternative point of view or a different way of thinking about issues that may be beneficial to others, a little contrary to the accepted norm.

*Psychological and behavioural reasons*
As @peter2 eluded to in the “p2-asx-weekly-portfolio” thread - there are obvious “psychological and behavioural” reasons why a 30-stock portfolio is preferable to a 10-stock portfolio. There are fantastic risk/reward opportunities that you are willing to do at 3 per cent of your portfolio that you might be unwilling to do at 10 per cent. Historically it’s only a handful of stock that accounts for the bulk of market returns & having a 40 position portfolio gives you a fighting chance to find those handful of stocks that eliminates the risk of serious under performance.

*Large enough to be meaningful*
A 40 position portfolio has a meaningful allocation or otherwise you risk missing out on significant market opportunities. Your portfolio has to large enough to have a meaningful position size in each. I’m not after sector performance but rather I'm after the top 40 stocks that make up the All ordinaries. Also trading a large account position sizing is critical for slippage. (Reference: "Slippage" refers to the difference between the expected price of a trade and the price at which the trade is executed)

*Under performance*
My research is contrary to @Newt's findings in-as-much that a portfolio with a smaller position sizing in their portfolio 'under perform' whereas a 30-50 stocks in a portfolio for me is the “sweet spot” & that is what I aim for. In saying this there is no ideal number of stocks you should own, that is for your research & the strategy being traded.

*There are factors you should consider *
‘First’, how actively do you want to manage your portfolio?
‘Second’, you should decide how much risk you are willing to take &
‘Third’, this goes along with your risk to some extent, but you should consider if you are looking to be serious in this game as the quantity of positions in your portfolio can be a game changer.

*It doesn't matter*
The maximum number really doesn't matter.

*If you're trading long-term*
Buy when "you have all your ducks in a row" & sell when the stock goes 'stale' (stagnates) or after the position has reached its peak, crested & on the way down, it's not rocket science.

Skate.


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## Newt (7 September 2019)

Must admit Skate, I would be more inclined to traded an increased number of positions if not working F/T.  Please do keep doing as you do.  I'm more concerned with understanding the process and reasoning behind your decisions than backseat-driving what is appropriate for yourself, Peter or anyone else.

On another note, I've been listening to another pocast series lately ("Trading Story Podcast"), and wanted to share this one:

https://www.tradingstory.com/podcast/41-bruce-bower-on-peak-performance-trading/

There are some excellent references to the importance of a "process mindset" versus "individual trade mindset".  There are examples on how focusing in this way is productive for athletes as well as traders, as well providing psychological buffer in hard times.

I'm personally grateful for some pokes and prods you gave me Skate many months ago.  In hindsight alsmost certainly would have missed a large part of the ASX rally earlier this year by toying about with entry dates and smaller during the bull market, then probably over-trading when slower or downward times come.  I'm shocked how obvious it is now that I was hobbling what is (hopefully) a reasonably good systematic trading strategy.  And I always thought I was perfect.....


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## Gringotts Bank (8 September 2019)

I've gone off coffee and have been searching for a replacement.  This is an old-skool Aztec brew.

Recipe:  boiling water, handful of cloves, vanilla bean, raw cacao (100% chocolate) and chilli powder.

Only had one cup so far.  Will forward test over the course of this week, as tolerated.


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## Gringotts Bank (9 September 2019)

Note to self:  don't use Ghost Pepper chilli.


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## aus_trader (9 September 2019)

Gringotts Bank said:


> Note to self:  don't use Ghost Pepper chilli.



OMG ! Anything hotter than Sweet Paprika powder is out of bounds in my place. Just a note, I've tried Chai Tea with spices in it and do like the flavour, but I don't like the commercial stuff as they tend to have too much sugar. I like to buy the Chai Tea ingredients and make the tea and put just the amount of sugar to my taste.


----------



## Gringotts Bank (9 September 2019)

aus_trader said:


> OMG ! Anything hotter than Sweet Paprika powder is out of bounds in my place. Just a note, I've tried Chai Tea with spices in it and do like the flavour, but I don't like the commercial stuff as they tend to have too much sugar. I like to buy the Chai Tea ingredients and make the tea and put just the amount of sugar to my taste.



I was kidding about the Ghost pepper.    I just use standard ones.  My concoction isn't very nice to drink but the cloves give it some sweetness.  Plenty of studies on chilli and cocoa, but who knows what to believe.  Chilli _does _cross the blood brain barrier, so it would at least make sense that it could improve brain perfusion/oxygenation.  PEA in cocoa seems to be a bit of a mood booster.  I made money today so that's ironclad proof it works.  Google 'Bro science'.


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## aus_trader (9 September 2019)

Gringotts Bank said:


> I was kidding about the Ghost pepper.    I just use standard ones.  My concoction isn't very nice to drink but the cloves give it some sweetness.  Plenty of studies on chilli and cocoa, but who knows what to believe.  Chilli _does _cross the blood brain barrier, so it would at least make sense that it could improve brain perfusion/oxygenation.  PEA in cocoa seems to be a bit of a mood booster.  I made money today so that's ironclad proof it works.  Google 'Bro science'.



Sounds good GB.

I don't use chilli, but use a few aromatic spices such as cinnamon, cloves, cardamom and ginger in my chai brewing. May even use a tiny bit of star anise, but not too much as this makes it too strong with an aniseed taste. I put all the ingredients in a muslin bag and let it infuse into the boiling tea pot. The good thing about bagging the ingredients is, I can use it a few times at least before it no longer infuses the spice aromas into the tea. Can't claim any super powers when I drink it, but I enjoy it.


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## Skate (10 September 2019)

*I've been thinking..*
I've had a few messages asking for trading help & trading advice but most questions revolve around the amount of funds they have set aside for trading - varying from $2,000 to $80,000. The most recent question was - "I have $40,000 is that enough to get started?"

*Lets live trade "The BOX Strategy"*
I was thinking this might be a good exercise for the 'Dump it here' thread to live trading a $40,000 portfolio & report weekly of its progress giving others an insight if trading a portfolio of this size would be profitable & viable .

*The BOX Strategy*
I have a spare strategy. "The BOX Strategy" has already been paper traded on this thread with pleasing results. The last thing I want to do is clog up the ‘Dump it here’ thread with reporting another live trading strategy but if enough members are interested I'll go ahead & trade this strategy & report weekly on its progress.

*$40,000 will get you trading*
$40,000 is enough money to get started. Many people never start trading because they’re worried about losing but this shouldn't hold anyone back as you can learn as you go by trading small positions. The very act of getting started is much more important than getting it right. Trading isn’t about getting rich, but more about one day having the financial independence of being able to support yourself without an income.

*Mission Statement*
Aim to make an average of 25% per year trading a small account.



Does anyone want to see the weekly trading progress of "The BOX Strategy" ? - if yes - hit the* "LIKE"* button & if there is enough interest I'll post the progress each week.

*This is the proposed strategy*




*The BOX Strategy *
Weekly Strategy (Start Date: On or after 16th September 2019)
$40,000 Capital
20 Position Portfolio
$2,000 Fixed Positions (re-balanced weekly)

*Don't forget to let me know by hitting the 'Like' button, if there is enough "likes" I'll post the weekly progress..*

Skate.


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## sptrawler (10 September 2019)

Skate said:


> *I've been thinking..*
> I've had a few messages asking for trading help & trading advice but most questions revolve around the amount of funds they have set aside for trading - varying from $2,000 to $80,000. The most recent question was - "I have $40,000 is that enough to get started?"
> 
> *Lets live trade "The BOX Strategy"*
> ...



That sounds great Skate, what do you think of starting a new thread in the Tading Strategies/Systems, dedicated to it so that you can start at the very beginning i.e setting it up and then following it through?
It would be a great learning tool and easy to follow if it concentrates on one strategy and its development.
Just my thoughts, its your baby and your dump it here thread proves you credentials.


----------



## Skate (10 September 2019)

sptrawler said:


> That sounds great Skate, what do you think of starting a new thread in the Tading Strategies/Systems, dedicated to it so that you can start at the very beginning i.e setting it up and then following it through?
> It would be a great learning tool and easy to follow if it concentrates on one strategy and its development.
> Just my thoughts, its your baby and your dump it here thread proves you credentials.






sptrawler said:


> I see where you are coming from Joe, one thing that I think would increase the number of posts and also streamline the search function for new and old members, would be if the members broke their threads down to sensible sized threads.
> For example Skates "Dump it here" thread, it is obviously highly regarded and accessed by a lot of people, but it is cumbersome. If the thread was broken down to 'obvious' threads i.e down to its components, where each thread reflects a different knowledge base, for example:  MACD, Momentum, Price Rate of Change, Relative strength, Oscillators, Volume by price, etc  it would probably make ten threads.




Hi @sptrawler that's a great idea "but" I started the 'Dump it here' thread to be educational & my preference is to keep all my posts in the one thread. I'll even high-jack a post in another thread, making my comments in the 'Dump it here' thread for others to read.

Skate.


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## sptrawler (10 September 2019)

Skate said:


> Hi @sptrawler that's a great idea "but" I started the 'Dump it here' thread to be educational & my preference is to keep all my posts in the one thread. I'll even high-jack a post in another thread, making my comments in the 'Dump it here' thread for others to read.
> 
> Skate.



That sounds fine Skate, just an idea, the Dump it here thread is great.
It was just a thought to start educational threads, focusing on different methods, but it was only a thought.
It is your baby, hope I didn't step on your toes.


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## aus_trader (10 September 2019)

Hi Skate,
That sounds great.

Are you going to only show weekly performance ? I find without knowing the actual stocks traded I am a little lost when it comes to how the strategy is picking the trades i.e it's effectiveness and relevance to me. Even if the stock codes are revealed after the trades are closed, I would find that more interesting than just looking at the performance results only.

Just my thoughts.


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## Skate (10 September 2019)

aus_trader said:


> Hi Skate, That sounds great. Are you going to only show weekly performance ? I find without knowing the actual stocks traded I am a little lost when it comes to how the strategy is picking the trades i.e it's effectiveness and relevance to me. Even if the stock codes are revealed after the trades are closed, I would find that more interesting than just looking at the performance results only. Just my thoughts.




@aus_trader if having additional reporting helps I'm only too happy to post those with full disclosure.

*Weekly reporting*
I'll post the Portfolio Dashboard, the Equity curve, the complete list of the positions in the portfolio, the day they were purchased, the buy price & the ongoing performance of each position. When the positions are sold I'll post those results so you will be able see how each position performed.

*Facts & Figures*
It's a fine line between posting too little & posting too much, my primary concern is to post what others find interesting. I'm a facts & figures guy so I'll post all the information after the end of trade on the Friday evening.

Skate.


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## Skate (13 September 2019)

*I've been asked*
“What will generate the Buy & Sell signals for The Box Strategy?”

*F.Y.I. - The Box Strategy - summary*
The Box Strategy is a trend continuation strategy & buys after a new high is reached after a pullback within the trend. We Sell the position when the Rate-of-Change filter (ROC) drops below zero or when the closing price is below a variable trailing stop.

*What does ROC mean?*
The Rate-of-Change (ROC) indicator is a simple Momentum indicator (my favourite indicator) & I use the Rate-of-Change indicator in every strategy that I code to confirm increasing momentum of a trend.

*What is a variable trailing stop?*
A variable trailing stop is a fixed percentage stop, a percentage from the entry or “buy price”. As the share price rises, the trailing stop rises by the trailing amount, but if the stock price falls, the stop loss price doesn't change & we “Sell” when the stop price is hit. If the All Ordinary (XAO) index is going up we have a generous wide stop loss & when the index is going down we shorten the stop loss for our safety.

*(a) What generates a BUY SIGNAL?*
After three consecutive weekly pullbacks in a confirmed trend a “Buy” signal will be generated when the closing price breaks above the previous high conditional the Rate-of-Change filter is above 0%.

*(b) What generates a SELL SIGNALS?*
“Sell” signals are generated when the Rate-of-Change filter & the closing price is below a moving average confirming the momentum has ceased - OR – when the closing price is below a variable trailing stop loss.

*It will be interesting exercise*
Trading a small account can it be profitable?

Thank you for the interest shown for another weekly live trading report.

Skate.


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## Skate (13 September 2019)

*Musing while waiting for the end of trade today..

What's trading all about*
As traders we buy a position in the hope sometime in the future we will be able to offload our position to someone at a higher price than we brought it. Traders make money in the markets by exploiting changes in the prices. Most traders put all their effort into buying where as successful traders put most of their effort into selling.

*Trading with the trend*
Trends exist in all markets and can be traded profitably, finding profitable repeatable patterns & timing when to enter is normally the primary concern of most technical traders. Technical traders spend an enormous amount of time on analysis, yet analysis is the easiest part of the trading process whereas our primary objective when conducting our analysis must be to limit our losses. Also it pays to stay with the trend, but get out when it is clearly ends.

*Trading analysis*
The reason most traders concentrate so much on analysis is based on the false premise that if the "right" stock is bought at the "right" time this is where the money will be made on the trade. While stock selection and timing the entry are important, when the trade is closed is far more important. Selling is where we make our money & it’s much more important than when we buy into the position.

*Trading is much more than analysis.  *
Trading is a very emotional experience & emotions can sometimes sabotage the best of plans, even when trading is travelling nicely it’s difficult to follow the plan.  Most losses are not the result of a poor plan, but of failure to follow it.
*
Bad habits*
When traders profit from not following their rules, it reinforces bad habits a false sense of security. In the long run it will be more profitable to trade the market rather than try to predict it. We as humans are really good at one thing - selecting only the evidence that supports what we want to believe.

Skate.


----------



## Skate (13 September 2019)

Skate.


----------



## ducati916 (14 September 2019)

Skate said:


> *Musing while waiting for the end of trade today..
> 
> What's trading all about*
> As traders we buy a position in the hope sometime in the future we will be able to offload our position to someone at a higher price than we brought it. Traders make money in the markets by exploiting changes in the prices. Most traders put all their effort into buying where as successful traders put most of their effort into selling.
> ...





So to summarise the above post in two sentences:

Trading is subtractive, not additive. We subtract what does not work, not adding what will work.

jog on
duc


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## Skate (14 September 2019)

Skate said:


> *How much money do we need to start trading?*
> Most traders think you can start with a small amount of money to start trading but anything less than $50k or $60K is quickly swallowed up by commission costs, the cost of doing business.




*What was I thinking..*
The exercise to trade a small portfolio is hypocritical - I've been preaching one thing, and planning to do another. The Box Strategy starts trading Monday with a minor change to the starting capital - increasing from $40k to *$75k*



Skate.


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## qldfrog (15 September 2019)

There is only so much hit you can take with a low capital, i found out that brokerage is a killer if your parcels are below $2k.then doing a buy sell cost you more than 1pc
So $2k parcels, 20 to 40 max invested stocks means you need between $40k and $80k to start..
Is that the reason for the increase @Skate ?


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## Skate (16 September 2019)

aus_trader said:


> Hi Skate, I find without knowing the actual stocks traded I am a little lost when it comes to how the strategy is picking the trades i.e it's effectiveness and relevance to me.











The BOX Strategy is off & running...

Skate.


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## Gringotts Bank (16 September 2019)

Skate said:


> *(a) What generates a BUY SIGNAL?*
> After three consecutive weekly pullbacks in a confirmed trend a “Buy” signal will be generated when the closing price breaks above the previous high conditional the Rate-of-Change filter is above 0%.




ASL fits this criterion?


----------



## Skate (16 September 2019)

Gringotts Bank said:


> ASL fits this criterion?




*Yes *
ASL fits the buy criteria of 'The BOX Strategy'

*Tennis*
Lets not play tennis with each other, if you have an alternative view - feel free to express it.




Skate.


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## InsvestoBoy (16 September 2019)

Gringotts Bank said:


> ASL fits this criterion?



Good question  as it doesn't seem the system is quantitatively defined at all?

What constitutes a "weekly pullback"?

What constitutes a confirmed trend?

When which closing price breaks above which previous high?

What is the parameter for ROC on which timeframe?

For ASL, I can see some previous lower weekly closes that might be what is referred to as a weekly pullback but the close above both previous weekly high and previous swing high at 2.07 occurred last week?



For GMA there is no close above previous swing high, only previous weekly high and there are no consecutive lower weekly closes, just lower previous weekly highs. No close above previous swing high and the close above previous weekly high occurred last week?




For IGO I can't see either 3 consecutive lower weekly highs or lower weekly closes and the close above previous weekly high and previous swing high occurred 2 weeks ago?




So can you elaborate a bit on the above questions @Skate? The proposed trades don't seem to line up with the rules, and the rules don't seem very rigorously defined for a quantitative trading system...


----------



## tech/a (16 September 2019)

Inv Boy

Why don''t you include Volume in your analysis

Gaps, Range and Close?


----------



## InsvestoBoy (16 September 2019)

tech/a said:


> Inv Boy
> 
> Why don''t you include Volume in your analysis
> 
> Gaps, Range and Close?




@tech/a sorry for the confusion, I am not providing any analysis here, just posting the charts for the 3 trades in @Skate's box system to try and tease out the meaning behind the entry rules he provided, because none of them seem to conform to those rules...


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## systematic (16 September 2019)

Hang on - is Skate's intention to disclose parameters?  If so, fine - others can back-test, tweak and share. In which case the parameters would help. But Skate might just be sharing the concepts and this is a follow my trade thing?  Either way is good - just wanted to point that out.

Skate's chart seems to indicate that InsvestoBoy is correct about ASL - it's been in a trade for a week already (which is fine).

But Skate might be measuring 'pullback' etc via an indicator or whatever.  Actually, from a quick glance at a bar chart, the others even work on a price basis - if by 'pullback' Skate meant, '3 weeks below the swing high'


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## InsvestoBoy (16 September 2019)

systematic said:


> Hang on - is Skate's intention to disclose parameters?  If so, fine - others can back-test, tweak and share. In which case the parameters would help. But Skate might just be sharing the concepts and this is a follow my trade thing?  Either way is good - just wanted to point that out.




Sorry, not questioning to try and get the precise parameters of the system or have a dig.

Just trying understand the meaning behind the conditions that make up the buy signal because the charts don't consistently match any interpretation I can make based on 3 examples.



> But Skate might be measuring 'pullback' etc via an indicator or whatever.  Actually, from a quick glance at a bar chart, the others even work on a price basis - if by 'pullback' Skate meant, '3 weeks below the swing high'




If 'three consecutive weekly pullbacks' means 'three consecutive weeks below the swing high' then ASL is a week or two late and IGO is either two or three weeks late...depending on the definition of "closing price breaks above previous high".


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## Skate (16 September 2019)

InsvestoBoy said:


> Good question  as it doesn't seem the system is quantitatively defined at all?
> 
> What constitutes a "weekly pullback"?
> 
> ...




@InsvestoBoy, they are all good questions. I've previously condensed a description how 'The BOX Strategy' enters & exits a position. The other more intricate details have not been disclosed nor the parameters with the associated time frames.

*Reporting*
I'm now trading the BOX Strategy (previously paper traded in this thread) & posting in live time. Nothing is hidden other than what constitutes the intricate details of the main strategy. The exercise is not to disclose the system or code but to report weekly if a small $75k portfolio can achieve a yearly 25% return. 

*Mud Map*
The mud map below is for others to have a general idea of the strategy not the specifics. As you have eluded to - there is more to the strategy than meets the eye.  

*(a) What generates a BUY SIGNAL?*
After three consecutive weekly pullbacks in a confirmed trend a “Buy” signal will be generated when the closing price breaks above the previous high conditional the Rate-of-Change filter is above 0%.

*(b) What generates a SELL SIGNALS?*
“Sell” signals are generated when the Rate-of-Change filter & the closing price is below a moving average confirming the momentum has ceased - OR – when the closing price is below a variable trailing stop loss.

*What constitutes a "weekly pullback"?*
The BOX Strategy uses multiple weekly pullbacks conditional to a main Rate-of-Change filter turning on & off. Also additional variable ROC filters are used in relationship to the another momentum filter of the index to make the final decision for an entry.

*What constitutes a confirmed trend?*
Well that is subjective, the trend & momentum filters that the BOX Strategy uses are not disclosed

*What is the parameter for ROC on which timeframe?*
Variable parameters of either will be disclosed.

Skate.


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## InsvestoBoy (16 September 2019)

That's alright @Skate, I misunderstood the point of your post and thought it was an open quantitative system which you wanted to explore but I see it's more of a trading log for your own proprietary system which maybe has some subjective components.


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## systematic (16 September 2019)

InsvestoBoy said:


> Sorry, not questioning to try and get the precise parameters of the system or have a dig.




No, no, you asked excellent questions for Skate to clarify. I already suspected that (as you correctly pointed out) due to the lack of specific definitions and parameters that this was either discretionary, quantitative but undisclosed (or a mixture of both).

I just wanted to point out that it depends on the definition. Even looking at the price chart - IGO is only one week 'late' (but remember, the ROC has to be up as well etc). And GMA looks just triggered on the chart. Yours looks different - GMA had an up week last week?


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## investtrader (16 September 2019)

I was confused also - trades didn't seem to match the brief description. Now all seems clear.


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## Gringotts Bank (16 September 2019)

The buy should have been a few weeks ago, according to the rules.  I don't know what tennis has to do with it though.


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## Skate (16 September 2019)

Gringotts Bank said:


> The buy should have been a few weeks ago, according to the rules.  I don't know what tennis has to do with it though.
> 
> View attachment 97450







*Reporting*
The exercise of reporting the trading results of the BOX Strategy wasn't for the disclosure of the system or disclosure of the strategy code but to report weekly if a small *$75k portfolio* can achieve a yearly *25% return.* 

*On the money*
Read @systematic responses above as his comments are close to the mark, explaining succinctly what I was trying to achieve posting the weekly trading results of the BOX Strategy. 

*Confusion*
@Gringotts Bank don't get hung up on a generalised description of the buy or sell conditions. A conditional previous high within the trend would have been a better description but that is still only a generalisation as well - the previous high within the pullback was never suggested. If a position is taken rest assured it meets the BOX strategy buy condition otherwise it wouldn't be taken.

*Questions*
@InsvestoBoy asked a series of good questions expressing his alternative views with graphics that others could easily understand. Asking questions in the "Dump it here' thread is how we learn, playing tennis on a subject is another matter. When comments are wrapped in a question it has no educational value.

*Tennis - *(Generalising for others to understand my terminology)
Posting backwards & forwards, hanging on the trivial to justify a position is unhelpful. Some always demanding documentary evidence from others to support their assertions, while offering none in return.

*Opinions are welcomed*
All I ask if others have an alternative view - post it. Whether your view is right or wrong isn't important, what's more important, this thread gives you the ability to express your views without being ridiculed or challenged.

*Experience*
Every member enjoys a different level of experience & expertise. When posting think of posting an "alternative view" that has educational value or if you "totally disagree" with one of my posts, explain so others understand your alternative view.

*Don't ask one liners*
Some members ask questions as one liner, (not all but some) & sometimes their responses are the same, it's unhelpful. It serves no educational value.

*It takes time*
It takes a lot of time & effort to give a measured response so all I'm asking if you have a question detail it precisely, let me understand why you don't understand as playing tennis with others is tiresome, boring & more importantly it waste our time.

Skate.


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## aus_trader (16 September 2019)

Skate said:


> View attachment 97436
> 
> 
> 
> ...



Thanks Skate, it's nice to see the actual positions of the portfolio.


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## Gringotts Bank (16 September 2019)

Skate said:


> View attachment 97452
> 
> 
> *Reporting*
> ...




Some people may want to code this.  That's whole idea innit?  

The entry rule relates to the breakout above the most recent swing high or pivot.  In order to code this one needs to be very careful about lookahead bias.  This is especially true if zig-zag is used to define it.


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## Skate (20 September 2019)

Skate.


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## Skate (20 September 2019)

Skate.


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## Skate (23 September 2019)

Skate.


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## Saqeeb (23 September 2019)

Hi Skate,
I see you have noted PAR to be an 'Unlikely' buy and eventually you have not purchased it. If I may,  can I ask why this was not purchased?
Is it because it gapped through your offer price?
I notice PAR opened at $2.39 and is now up by ~10% at the time of my posting.
Thanks


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## Skate (23 September 2019)

Saqeeb said:


> Hi Skate,
> I see you have noted PAR to be an 'Unlikely' buy and eventually you have not purchased it. If I may,  can I ask why this was not purchased?
> I notice PAR opened at $2.39 and is now up by ~10% at the time of my posting.
> Thanks




Hi @Saqeeb thank you for your question as it give me the opportunity to explain another of my rules.

*A simple explanation*
In the pre-auction I offered $2.36 & it opened at $2.39 as you reported. One of my rules is the "Buy offer" is good for one day only & I don't chase the price. There are some positions that you miss (willingly)

*Another missed opportunity *
In another strategy I also missed ASX:CLV today. Offered $2.36 in the pre-auction - opened @ $2.68 now trading @ $2.77. That's trading (my way)

*Trend Followers are hitchhikers *
If I fail to hop on a move, there will be others coming along, so it's no big deal. Trend followers are hitchhikers - as a hitchhiker if a car fails to stop it's not the end of the world, there will be other cars coming along soon. 

I also don't do - "if only" - if you start doing that it will mess with you big time.

Skate.


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## Saqeeb (23 September 2019)

Thanks Skate, that brings me to another question that I have been meaning to ask as I missed two entries (CLV and PMV) today in my system inspired by yourself and @peter2.

How to ensure that you are filled at open?

Is it best to place limit orders in the market or do you buy at open? (this, i think, may be disadvantageous more times than not)

How do you work out a buy offer (limit)? Is there a methodology or a formula to it?

Thanks


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## Skate (23 September 2019)

Saqeeb said:


> Thanks Skate, that brings me to another question that I have been meaning to ask as I missed two entries (CLV and PMV) today in my system inspired by yourself and @peter2. How to ensure that you are filled at open? Is it best to place limit orders in the market or do you buy at open? (this, i think, may be disadvantageous more times than not) How do you work out a buy offer (limit)? Is there a methodology or a formula to it? Thanks




*"How to ensure that you are filled at open?"*
@Saqeeb, that's a great question. Getting filled at the open is my objective. To achieve this I offer 3% above the previous close & I get filled 99.99% of the time. Many moons ago I would offer 5%-6% above the last closing price to guarantee buying at the "opening price" but I soon realised trading large dollar position offering 5% or 6% can move the market, something to be avoided.

*Lets talk about ASX [PAR]*
There was minimal sellers & one large over-the-top (OTT) buy offer. The "OTT" buy offer didn't even get completely filled (short filled 277 shares) & now you know why the price pushed higher, emotions (FOMO). I wasn't one of them chasing the price & now I'm unlikely to be filled, thus the notification (highlighted in red) on the Mondays update. (F.O.M.O. is an acronym for "The Fear Of Missing Out")

*GAPS*
Gap-up at opens have a tendency, (but not always) to fall back during the day if (FOMO) buyers dry up & sometimes the price will drop back to my original "offer" snagging the buy. Sometimes I just miss the ride, pure & simple.

*"Is it best to place limit orders in the market or do you buy at open?"*
I know you use AmiBroker & all backtesting results are calculated using the opening price. To replicate your backtest results it's vital to snag the opening price & a limit order is the tool, other than that you will find it difficult to secure the opening price.

*(1) How do you work out a buy offer (limit)?*
Easy, add a percentage to the last closing price (I use 3%) & use that calculation in your limit order. I personally only want to buy on the day & not tomorrow or in a months time so I'll make sure the order is "Good for a Day"

*(2) Is there a methodology or a formula to it? *
This is not the formula I use but it's close enough for you to study. Also check out two other "afl" functions - ( "ceil" & "floor" )
Use the AmiBroker formula below - it's a quick & easy way for you to calculate 3% above & below the closing price

BuyOffer = Close * 1.03; //3% offered above the last closing price. (use the "ceil" function to round prices up)
SellOffer = Close * 0.97; //3% offered below the last closing price. (use the "floor" function to round prices down)

I hope this helps..

Skate.


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## Saqeeb (23 September 2019)

Thank you Skate for your detailed explanation. 
I will lookup ceil and floor. 
Disclaimer: I am guilty of chasing CLV!


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## Newt (23 September 2019)

Oh man, I know you've explained this before Skate re opening auction offers, but after _thinking_ I'd listened the first time, see in my code I've got:

BuyPrice = Open*1.015;
SellPrice = Close*0.985;

Personally thought 3% margin on close was a bit pestimistic, but was never going to argue about it with you.  Now realise I missed an opportunity to learn/understand *BuyOffer* and *SellOffer,* while hung up on 1.5% versus 3%.  Grrr. 

Back to the books....


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## aus_trader (23 September 2019)

Skate, not chasing prices is one thing we have in common and have mentioned a number of times in my portfolio as well. I like to wait patiently for the price to come back to a price that I am willing to pay or let go of the opportunity if it skyrockets without me, there will be other opportunities.

By the way, well done on the Bellamy's Australia Ltd (BAL) pick in your CAM strategy. Nice premium offered by the take-over.


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## Sir Burr (23 September 2019)

Skate said:


> This is not the formula I use but it's close enough for you to study. Also check out two other "afl" functions - ( "ceil" & "floor" )




Yes I is those too...

function RoundTickBuy( Price )
{
    return
        IIf( Price < 0.1, ceil( Price * 1000 ) / 1000,
             IIf( Price < 2, ceil( Price * 200 ) / 200,
                  ceil( Price * 100 ) / 100 ) );
}
function RoundTickSell( Price )
{
    return
        IIf( Price < 0.1, floor( Price * 1000 ) / 1000,
             IIf( Price < 2, floor( Price * 200 ) / 200,
                  floor( Price * 100 ) / 100 ) );
}


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## Newt (23 September 2019)

Hmmm, so I wasn't missing anything - BuyOffer must be a variable you're using Skate?
Not an AFL keyword.....


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## Skate (23 September 2019)

Newt said:


> Hmmm, so I wasn't missing anything - BuyOffer must be a variable you're using Skate?
> Not an AFL keyword.....




@Newt, BuyOffer is an array not an Afl function.

*Automated *
The "Exploration Code" that I use drives the BuyOffer & SellOffer - in saying this I use a Bank feed for re-balancing so all the available trading funds are always fully applied. The coding is complex but the idea is quite simple.

*How is it done*
1. The trading account balance is divided by the number of unfilled positions of the strategy
2. The re-balanced position sizing directly feeds to a variable parameter setting.
3. Each position has a premium of 3% added or subtracted to snag the opening price
4. When a position is placed in the pre-auction the only known is the amount of shares being purchased 
5. The initial dollar investment is unknown because the opening price is unknown, as most times the 3% premium is never fully exercised
6. Weekly re-balancing is required as the opening price poorly reflects the final dollar amount being committed to the position

*Posted code*
The simple code I supplied was to answer a question that @Saqeeb had asked: *"How do you work out a buy offer (limit)? Is there a methodology or a formula to it?".* My answer was to give him a piece of code that would be helpful. The additional information about two "afl" functions was designed to stimulate him to research for an answer that would apply to his style of trading.

Skate.


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## Newt (23 September 2019)

Thanks Skate.  I should have just done some reading and thinking before writing down the first thought that came into my head.  The first time you ever explained this I made the mistake of dismissing it as a nicety, which was unlikely to make much difference in day to day trading.  

Later I realised the benefit of creating a straightforward, reproducible formula for following your strategy, with minimal opportunities for "overthinking" the trade selections.  With the number of positions and strategies your trading the time benefits would be significant too.

Which reminds me of some Captain Black words of wisdom - along the lines of keep automating and simplifying your systems wherever possible.  Probably time I gave this some serious thought on options to do so.


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## myrtie100 (27 September 2019)

Hi @Skate - I have a question.
You have said that you won't chase prices up, but what about down?
If your system says 'sell' and you have your limit sell price less 3% sitting in the market.
What is your rule, if your sell price isn't low enough at open?


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## Skate (27 September 2019)

myrtie100 said:


> Hi @Skate - I have a question.
> You have said that you won't chase prices up, but what about down?
> If your system says 'sell' and you have your limit sell price less 3% sitting in the market.
> What is your rule, if your sell price isn't low enough at open?




@myrtie100 thank you for your question as it gives me another opportunity to explain the way I trade.

*Set in stone*
I have a clear set of non-negotiable rules when trading.

*The Sell Rules*
1. Never sell before a signal is given
2. If the position is not sold in the pre-auction on Monday morning (at the open) I give the position till 10:30 am to be executed 
3. If the position is still open at 10:30 am - I sell immediately "at market" 

*Window*
The 20 minute window between 10:10 am & 10:30 am is a very fluid part of the day - waiting the extra 20 minutes allows the market to settle.

*Rules*
What makes trading so difficult is this: "There are no rules" - that's why I have a defined set of rules.

*Excess freedom*
The problem is that 'excess freedom' cause people to become overwhelmed and fearful and lose money because they do not 'know' what to do. Having a defined set of rules alleviates these concerns.

*Don't break your trading rules*
This is very difficult for some people to achieve because when dealing with large amounts of money, you tend to break your rules or make new ones along the way, solely for the purpose of justifying how you feel at the moment. When traders profit from not following their rules, it reinforces bad habits giving a false sense of security. In the long run it will be more profitable to trade the market rather than try to predict it.

*Simple message*
If you are a system trader keep the system as simple as possible, validate it (robust backtesting) and trade it with confidence !

*Why?*
Because when you’re dealing with your own money, trading gets very complicated, very quickly!

Skate.


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## Skate (27 September 2019)

Skate.


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## Skate (27 September 2019)

Skate.


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## Skate (28 September 2019)

*The Problem - circled in red*
1. The CAM Portfolio has all 25 positions in the markets
2. Having all positions in the markets with one pending sell leaves no room for re-balancing
3. The accumulated idle funds plus a sell with a large open profit will need to be put to work












*The Issue - *(circled in red)
After 9 weeks the "CAM Portfolio" has had a great run with closed profits leaving limited re-balancing options. All of the 25 positions are currently in the market with only one sell pending.

*Excess Funds*
The CAM Portfolio has accumulated net profits of $41,781 leaving uncommitted funds sitting idle. To utilise those funds I have decided to open another three $16K positions, taking the position size from 25 to 28 positions.

Skate.


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## Newt (28 September 2019)

That sounds like a nice sort of problem to have Skate


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## ducati916 (28 September 2019)

Skate said:


> View attachment 97701
> 
> 
> *The Problem - circled in red*
> ...





So you are modifying your rules. Essentially you are saying that, 'I know better than my system'. If this element of discretion falls within the design, well and good. If it does not, then it is a failure of discipline.

Idle funds in a bull market are a drag on returns.
Idle funds in a bear (or approaching bear) are a godsend.

Which is it?
Nobody knows.

Was this a factor that was tested? If not, why not. If yes, what did the testing suggest?

jog on
duc


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## Skate (28 September 2019)

ducati916 said:


> *So you are modifying your rules. *Essentially you are saying that, 'I know better than my system'. If this element of discretion falls within the design, well and good. If it does not, then it is a failure of discipline.
> 
> Idle funds in a bull market are a drag on returns.
> Idle funds in a bear (or approaching bear) are a godsend.
> ...




Hi @ducati916 thank you for your comments but your statement of facts are wrong when they are applied to my style of trading.

*1. "So you are modifying your rules."*
No, I'm not modifying my rules but applying them.

_*2. Essentially you are saying that, 'I know better than my system'. *_
No, I'm not saying that at all. Post after post, I've remarked about never overriding your system & "ad nauseam" stated "never think you know better than your system". This topic has been discussed in the 'Dump it here' thread extensively. 

*3. If this element of discretion falls within the design, well and good.*
This is not a discretionary decision but a design of the strategy, so as you say it's all "well and good"

*4. Was this a factor that was tested? - If yes, what did the testing suggest?*
Yes extensively tested, I try not to leave anything to chance trading my own money. There has been much discussion about Portfolio position sizing & may I state "just because the majority says one thing doesn't make it true" & especially not when it comes to my style of trading. I've posted my finding on this very topic (position sizing) & even mentioned the sweet-spot that I've found once or twice.

*Lets talk about (a) position size & (b) position value re-balancing*
First off, we often agree on most things but I can't accept your statement as if it is a fact:

*"Idle funds in a bull market are a drag on returns.
Idle funds in a bear (or approaching bear) are a godsend"

Idle funds*
Idle funds are just that, Idle funds, funds not being productive. Personally I want my funds to be in the markets fighting the good fight (I call them soldiers). Don't let anyone tell you that there's not money to be made in the markets whether it's a bull or bear market. (Good traders - trade in both)

*My* *(a)* *position size & (b) position value re-balancing rules*
1. Every new strategy that I start begins with - *20 X $15k positions* ($300k starting Equity for every new strategy)
2. Preferred method is to re-balance dollar position sizing first - (HOW) *Trading account Bank balance divided by outstanding, unfilled positions. *
3. Once the dollar position sizing reaches $25k per positions - *I add extra positions to the Portfolio to a maximum of 53 positions. *
4. Once the portfolio size reaches *53 X $25 per position* - the strategy is deemed to be full & another strategy is started & traded.
5. I have multiple strategies actively being traded every week.
6. The CAM Strategy didn't allow for my preferred (or first) option to increase dollar position sizing as the strategy was "position full" so my second option to increase the quantity of positions had to be enacted.

*F.Y.I*
The CAM Strategy was "a project" started 9 weeks ago on the premise of keeping the 'Dump it here' thread alive. (without posts in the thread - the 'Dump it here' thread is dead) 

*Side project*
The CAM Strategy is just a side project, a strategy that I paper traded live on this thread, I've even supplied the base code to those that were interested. 

*Real money on the line*
The CAM Strategy is a project being traded with real money, sharing the concepts & code so others could follow along. By publishing my weekly results & the progress of my trades in the hope of encouraging others to read my entire thread or at least grab a copy of my eBook. All my posts are a condensed version of information that was helpful to my trading, knowing it would certainly be helpful to others in their journey. 

*The essence of the 'Dump it here' thread *
"to help others"

Skate.


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## Skate (28 September 2019)

investtrader said:


> IMH Duc's right. A 25 position system is 25 positions.
> Here's the code - SetOption("MaxOpenPositions", 25  );
> If you want to change it, that's your prerogative.




@investtrader I've also said "ad nauseam" alternative views educate, playing tennis on minor points serve no purpose without an explanation for others to understand where you are coming from. 

*Comments*
Just making a comment: _"IMH Duc's right. A 25 position system is 25 positions"_ is a statement that has no educational value.

*So others can understand*
I've explained in detail for others to understand how & why I re-balance my systems - others may do it differently, do you? 

*Opinions are welcomed*
All I ask if others have an alternative view - post it. Whether your view is right or wrong isn't important, what's more important, this thread gives you the ability to express your views without being ridiculed or challenged.

*Experience*
Every member enjoys a different level of experience & expertise. When posting think of posting an "alternative view" that has educational value or if you "totally disagree" with one of my posts, explain so others understand your alternative view.

*Don't ask one liners*
Some members ask questions as one liner, (not all but some) & sometimes their responses are the same, it's unhelpful. It serves no educational value.

*It takes time*
It takes a lot of time & effort to give a measured response so all I'm asking if you have a question or making a statement detail it precisely, let me understand why you don't understand as playing tennis with others is tiresome, boring & more importantly it wastes our time.

*Here is my code*
maxOpenPositions = Param( "Maximum Open Positions", 28, 1, 10000, 1 );
Your basic code hasn't the feature of "on the run" re-balancing. 

*A photo of my parameters filter*



*Re-balancing* 
I'm unsure if re-balancing is a feature of your strategy but re-balancing plays an important part in the performance of my systems. I've given a full & detailed response to @ducati916 outlining & explaining my re-balancing rules.   

Skate.


----------



## ducati916 (29 September 2019)

This post isn't to be taken too seriously. It is more to simply demonstrate how easily (through language) things can be misconstrued.

So...


*The Problem - circled in red*
1. The CAM Portfolio has all 25 positions in the markets
2. Having all positions in the markets with one pending sell leaves no room for re-balancing
3. The accumulated idle funds plus a sell with a large open profit will need to be put to work

*The Issue - *(circled in red)
After 9 weeks the "CAM Portfolio" has had a great run with closed profits leaving limited re-balancing options. All of the 25 positions are currently in the market with only one sell pending.

This identifies that there is an issue and infers that something about the 25 position number, is the causation of this issue. 

The solution to the issue:

*Excess Funds*
The CAM Portfolio has accumulated net profits of $41,781 leaving uncommitted funds sitting idle. To utilise those funds *I have decided *to open another three $16K positions, taking the position size from 25 to 28 positions.

The underlined and highlighted, can very easily be construed as a 'subjective' solution to the already identified issue.

Now I'm quite willing to accept that it has been tested etc.

The above (post) is simply where I was coming from.

jog on
duc


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## Sir Burr (29 September 2019)

Yay I can comment! 

*Aussie Stock Forums - Error
 "Shrinking": No results found.*

Regarding the reduced positionsize mentioned above, a titbit for newbies. You would need to select "Allow position size shrinking" for backtesting:

_There is a checkbox in the AA settings window: "Allow position size shrinking" - this controls how backtester handles the situation when requested position size (via PositionSize variable) exceeds available cash: when this flag is checked the position is entered with size shinked to available cash if it is unchecked the position is not entered.
_
Edit: On second thoughts, this would only be for the very last position filled. Doesn't cover three last positions of identical sizes. Might be able to be coded, I'm not sure.


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## qldfrog (30 September 2019)

This is indeed an issue, usually your win keep going and are virtual gains whereas your losses are real dollars
So you end up with a virtual profit  in your portfolio but sell one code at a loss 
 when you want to buy the next parcel there is no hard cash in your system
How do your systems handle this?
Similarly one of my system was fully invested and had 2 sell and so 2 buys today
But i had to manually scramble at 10:15am once the cash from my sell at open was in before ordering the 2 buy, now on the market chasing price until completion of order

Do you guys keep a cash buffer?
And if so how much as this is indeed dead money?
Your knowledgeable opinion welcome


----------



## Skate (30 September 2019)

qldfrog said:


> you end up with a virtual profit  in your portfolio but sell one code at a loss
> when you want to buy the next parcel there is no hard cash in your system
> *How do your systems handle this?*
> Similarly one of my system was fully invested and had 2 sell and so 2 buys today. But i had to manually scramble at 10:15am once the cash from my sell at open was in before ordering the 2 buy, now on the market chasing price until completion of order
> Do you guys keep a cash buffer? - And if so how much as this is indeed dead money? - Your knowledgeable opinion welcome




@qldfrog by trading in the pre-auction this is not a concern with CommSec's (T2) settlement as it's pure mathematics. (simple maths at that)

*Trading in the pre-auction *(+/- 3% premium)
1. Buy positions - the maximum dollar cost is know if the +3% premium is fully exercised. (usually it isn't)
2. Sell positions - the minimum dollar value income is known if the -3% premium is fully exercised. (usually it isn't)

*My re-balancing works in this manner*
Trading Bank balance - known
Maximum Buy cost (expense) - known
Minimum Sell value (income) - known

*Easy Formula*
Bank balance + Sell (income) value - Buy cost (expense) / outstanding positions to purchase = Dollar position sizing. With this formula every trading dollar set aside for the strategy is in the markets fighting the good fight. (well that's the plan)

*No need to wait*
As it's pure mathematics & with a (T2) settlement period there is no need to wait. If your calculations are incorrect you have a "2 day grace period" to correct the mistake - liquidate the worst position held for extra funds if needed.

*If worried *
If your trading account is borderline & you require sells to cover purchases - Don't buy this week, wait until the funds are in the Bank & plan the buys for next week once the funds are available - a one week delay will not alter your trading results "over time"

Skate.


----------



## Skate (30 September 2019)

Skate.


----------



## qldfrog (30 September 2019)

Skate said:


> @qldfrog by trading in the pre-auction this is not a concern with CommSec's (T2) settlement as it's pure mathematics. (simple maths at that)
> 
> *Trading in the pre-auction *(+/- 3% premium)
> 1. Buy positions - the maximum dollar cost is know if the +3% premium is fully exercised. (usually it isn't)
> ...



Bell direct does not allow me this


----------



## Skate (4 October 2019)

Skate.


----------



## Skate (4 October 2019)

Skate.


----------



## kid hustlr (4 October 2019)

Hi,

your weekly average calc for the cam strategy looks wrong


----------



## debtfree (4 October 2019)

@kid hustlr  $33,805 / 9 weeks = $3,756 Average looks ok


----------



## Skate (4 October 2019)

kid hustlr said:


> Hi, your weekly average calc for the cam strategy looks wrong




@kid hustlr well spotted, thank you. There was an issue with the week number not automatically updating - The link has now been corrected & updated.



debtfree said:


> @kid hustlr  $33,805 / 9 weeks = $3,756 Average looks ok




@debtfree - your calculations are correct but the issue was with the weeks displayed in the post wasn't updating. The mission statement is the very heart of the experiment (to make $1,000 per week) & it needs to be accurate.

*Update*
$33,805 / *17* weeks = *$1,989 Average per week*

Thanks for taking an interest in the progress of the CAM strategy.




Skate.


----------



## debtfree (4 October 2019)

Your right, I just seen the P/L and the 9 Weeks ..... sorry @kid hustlr my error as well, good pickup.


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## kid hustlr (5 October 2019)

Happy to be the qualified auditor for this thread skate.

My understanding is institutional accounting rates vary from 600-1500 an hour based on levels of experience.


----------



## aus_trader (6 October 2019)

kid hustlr said:


> Happy to be the qualified auditor for this thread skate.
> 
> My understanding is institutional accounting rates vary from 600-1500 an hour based on levels of experience.



Good one Kid, I think Skate wouldn't qualify as an institutional trader, so you might have to lower your rates to individual retail trader level


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## Skate (7 October 2019)

Skate.


----------



## Skate (10 October 2019)

Muschu said:


> Hi
> Thought I'd see if there is any interest among retirees exchanging thoughts on stocks to hold for dividends and (usually) franking credits for income purposes.I'm 74 and my wife and I have a SMSF.  *30% of this is in cash and earning very little of course.* The other 70% is in the ASX and generally very conservative. *Any other retirees out there who would care to share what they're up to?*




@Muschu - What a great thread & topic most retirees are interested in. 

*Disclaimer*
I'm 66 & retired, I'm also a very active systematic trend trader, trading multiple strategies.

*Experience*
Every member enjoys a different level of experience & expertise with varying levels of skill & risk tolerance, meaning there is no one answer. Taking that into consideration there is nothing I can add to your thread that would be personally helpful to you. Everyone will find their own style of trading, or investing no matter what others have to say.

*Trading & Investing*
Your thread topic & question has given me an idea for a 'Dump it here' post. I'm going to make some general posts on the topic.

*30% in cash*
Whether it's under the mattress, buried in the backyard or sitting idol in the bank it's an opportunity lost. 

*Think about how long are you going to live?*
How would you invest if you knew you could live another 20 or 30 years after retiring?

*Invest conservatively*
Once you retire at 65 all the current advice is to invest conservatively but if you’re planning on living for another 20 or 30 years investing conservatively may not be the best advice. If you are in the retirement phase of your SMSF there are compulsory withdrawals every year with the additional burden of inflation biting into your funds balance so a little more aggressive investment plan may be the way to go.

*In Conclusion*
Trading is an emotional roller coaster and how you manage your psychology really matters even more than your investment vehicle selection. Everyone tends to find their own level of expertise & will be driven to make their decisions based on this.

Skate.


----------



## Skate (10 October 2019)

*Retirees & being afraid*
People, not only retirees are afraid of things they don’t understand. It’s a shame, because trading is a lot less complex than most people think. Investing and trading in the stock market has some risk, as do all asset classes that offer good long term returns, however, risks can be minimised and returns can be magnified with the right strategy. Anyone can buy and sell shares, it’s how we choose these and then how we manage our position that dictates how successful we will be.

*Fear of failure*
Everybody has a fear of failure at some level - at times we’ve all been fearful that perhaps we are not enough. Even when we know what to do, our fear can keep us from executing our plans. As a result, rather than face our natural fears, what do we do?

*When in doubt*
When people are in doubt, they tend to look to others to confirm their behaviour. Some people would rather adopt others’ opinions rather than form their own.

*The law of least effort*
You will think as little as possible.

Skate.


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## Skate (10 October 2019)

*We are a lazy bunch*
Human rarely think for themselves, they find it too uncomfortable & believe others known more than they do. One our design flaws for the most part of our species simply repeat what they are told, believe what they are told and become upset if they are exposed to any different view & reject information right in front of their eyes because it is contrary to what they want to believe.

*Personal Responsibility*
There are so many that refuse to take responsibility when trading go wrong, the problem is always caused by someone or something else. We all know that draw downs and losses are part of the trading process, so take it on the chin and be the ‘best loser’ you can possible be.

Skate.


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## Skate (10 October 2019)

*Investment strategy rather than trading*
Retirees believe you can't teach old dogs new tricks & trading seems out of their reach so they start off investing in listed investment companies (LICs), Index Funds or just a handful of Banks to play it safe. Investing like this is simple, quick & perceived to be risk free.

*AFI and Argo *
There are many listed investment companies such as AFI and Argo Investments, both of which I have invested in that has given me access to high quality investments at a low cost. You can keep your investment strategy robust & straightforward by using index funds. The resources are out there to get started without a significant investment strategy, even without much money or knowledge.

*Being active*
Trading is about taking control of your investments. It's about being active & not passive. You can minimise your risk by learning to sell quickly & decisively. Selling is one of the most underrated & unappreciated tactical tool any trader has. Being quick & nimble to act when the time is right even quicker to retreat and sell at the first sign of trouble. Being a trading wimp really helps.

Skate.


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## Skate (10 October 2019)

*The Holy Grail of investing*
The truth is that there is no Holy Grail when it comes to investing or trading & there is no easy and simple answer to be consistently profitable in the stock market. The best approach to the market is highly subjective as @Muschu is finding out. The best approach depends primarily on you and your particular strengths and weaknesses.

*Profiting from the stock market*
Profiting from the stock market is exceedingly difficult to do consistently over a long period of time because the market is irrational and emotional. It moves in a manner that has little appreciation for what we might think is reasonable. When the market goes down, it tends to sink further than seems possible. When it rallies, the moves often last longer than seems logical. If you try to apply common sense and logic to the market, you will end up quite frustrated.

Skate.


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## Skate (10 October 2019)

*What’s happening to the markets.*
If you read @bigdog "nyse-dow-jones-finished-today" thread each day it has an underlying theme of "Yo-Yo" trading due to the prospects or perceived progress in the trade war between the U.S. and China & frankly I'm getting a bit over it.

*WHY?*
Traders at the moment have a "sell first and ask question later mentality," as worries about the US economy continued to rattle investors spooking the markets. Traders realise tariffs are a handbrake on trade, the lifeblood of the markets proving Trump's trade war with China is dragging on traders confidence.

*Uncertainty*
Traders hate uncertainty & its appears it’s the same each day when it comes to Wall Street. US markets are not only having choppy weeks at the moment but also they are having choppy daily trading sessions, fluctuating hundreds of points. 

*Yo-Yo trading* 
It's hard to handle Yo-Yo trading & it's even harder to get a handle on it. 

*In conclusion*
"Yo-Yo trading plays havoc with systematic trading"

Skate.


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## aus_trader (11 October 2019)

Skate said:


> *In conclusion*
> "Yo-Yo trading plays havoc with systematic trading"



So true, I think it plays havoc with any type of directional trading method as the markets chop around.


----------



## Skate (11 October 2019)

aus_trader said:


> So true, I think it plays havoc with any type of directional trading method as the markets chop around.




@aus_trader you are spot on the money with that comment.

*Trading price fluctuations.*
System trading can heavily improve your decision making process, as all your decisions will be rule based & not discretionary. Keeping an eye on the important events & their implications is not essential if you trade purely based on technical analysis.

*News items & tweets*
Monitoring the news to make trading decisions can have a negative effect on my trading results even though I read @bigdog thread each day. I strictly focus on the technical side of trading as opposed to the fundamentals because price action is more important giving me a clear indication of how the market is performing. News items & tweets can affect the markets over the short-term but the longer-term trend is usually unaffected.

*In my opinion*
Pessimists cannot be successful traders because they’ll always be fearful & cynical about the outcome of every trade. Their emotions will drive their decisions making process even if they are systemic traders & sometimes it will get the better of them. Optimists in turn will look at the brighter side & hope for the best. (in my case I pray a lot)

Skate.


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## investtrader (11 October 2019)

yo yo ... more commonly called whipsaw

This has probably been posted somewhere on this forum but worth posting again. Great stuff!!


----------



## qldfrog (11 October 2019)

I 


Skate said:


> @aus_trader you are spot on the money with that comment.
> 
> *Trading price fluctuations.*
> System trading can heavily improve your decision making process, as all your decisions will be rule based & not discretionary. Keeping an eye on the important events & their implications is not essential if you trade purely based on technical analysis.
> ...



Am deeply pessimistic but also scientifically minded..which does not help my like count in the global warming and trump related threads
System trading is the only way i can extract myself from negative trading influences
I believe hope that the pessimistic side will be avoided that way


----------



## myrtie100 (11 October 2019)

Hahaha that Whipsaw Song is hilarious!
I especially like the line "File the News", excellent idea - filed in the circular filing cabinet.
That should sort out any pessimism


----------



## Knobby22 (11 October 2019)

Old classic, I have always been very positive, two good trends gets you there.
You have to sell the duds.
You should read the news but ignore the crap. You shouldn't think you are smarter than the market.


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## aus_trader (11 October 2019)

Have seen this song before on ASF I think, but do like it a bit more each time I listen to it. Cheers investtrader.

I am guilty of reading and reacting to the news in the past, even as recently as a year or two ago which I can't hide from as I have documented in my spec trading . But I am getting better at absorbing the good bits of the news and further investigating those and verifying the facts, which I then incorporate into my planning as opposed to jumping in.


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## Skate (11 October 2019)

investtrader said:


> yo yo ... more commonly called whipsaw - *This has probably been posted somewhere on this forum but worth posting again*. Great stuff!!







aus_trader said:


> Have seen this song before on ASF I think, but do like it a bit more each time I listen to it. Cheers investtrader.




@investtrader & @aus_trader - the video clip in question "The Whipsaw Song" I've posted this very thread. There is another very important video to watch in the same post - it's all about behavioural science & why "we won't take a bet". 

I encourage you to hyperlink to the post & have a watch of the additional short 7 minute video - it's educational while very entertaining.

Found here: https://www.aussiestockforums.com/posts/1006578/

Skate.


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## aus_trader (11 October 2019)

Skate said:


> @investtrader & @aus_trader - the video clip in question "The Whipsaw Song" I've posted this very thread. There is another very important video to watch in the same post - it's all about behavioural science & why "we won't take a bet".
> 
> I encourage you to hyperlink to the post & have a watch of the additional short 7 minute video - it's educational while very entertaining.
> 
> ...



Just watched it, thanks Skate. It really simplifies explains clearly the concept of Risk/Reward and win rate, which is what we strive to achieve in our own trading methodologies in order to achieve a +ve edge.


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## Skate (11 October 2019)

Skate.


----------



## Skate (11 October 2019)

Skate.


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## ducati916 (12 October 2019)

*Profiting from the stock market*
Profiting from the stock market is exceedingly difficult to do consistently over a long period of time because the market is _irrational and emotional._ It moves in a manner that has little appreciation for what we might think is reasonable. When the market goes down, it tends to sink further than seems possible. When it rallies, the moves often last longer than seems logical. If you try to apply common sense and logic to the market, you will end up quite frustrated.

*News items & tweets*
Monitoring the news to make trading decisions can have a negative effect on my trading results even though I read @bigdog thread each day. I strictly focus on the technical side of trading as opposed to the fundamentals because price action is more important giving me a clear indication of how the market is performing. News items & tweets can affect the markets over the short-term but the _longer-term trend is usually unaffected._

Mr Skate;

There would seem to be some cognitive dissonance occurring within yesterday's multiple posts. So my question to you (based on the underlined) which refers to the 'longer term': what then drives the longer term (to which the technicals map)?

jog on
duc


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## Gringotts Bank (12 October 2019)

Having several optimized parameters is fine if the least profitable combination still creates a profitable curve.


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## Skate (15 October 2019)

aus_trader said:


> Yes Skate, I am interested in seeing the entry/exit points based on your system for a few Gold stocks that I have traded in the recent past: *PRU* SLR and WGX please if you got time.




@aus_trader as there is only one security in @Wyatt momentum ranking list I have decided to post your request for the three Gold Charts in my thread as not to clog up @peter2 "p2-asx-weekly-portfolio" thread keeping it clean of clutter.



Skate said:


> *ASX codes*
> I want to right upfront & say "I don't even know what companies I'm buying" let alone the sector they belong to, I'm just buying ASX codes. But what I do know about the ASX codes I buy is that they meet my buy conditions & a predetermined list of parameters.




I'll post the 3 charts in separate posts for clarity

*1. PRU - The HYBRID Strategy*






*2. PRU - The CAM Strategy*






*3. PRU - The Daily Strategy*





Skate.


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## Skate (15 October 2019)

aus_trader said:


> Yes Skate, I am interested in seeing the entry/exit points based on your system for a few Gold stocks that I have traded in the recent past: PRU *SLR* and WGX please if you got time.





*1. SLR - The HYBRID Strategy*






*SLR - The CAM Strategy*






*SLR - The Daily Strategy*





Skate.


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## Skate (15 October 2019)

aus_trader said:


> Yes Skate, I am interested in seeing the entry/exit points based on your system for a few Gold stocks that I have traded in the recent past: PRU SLR and *WGX* please if you got time.





*WGX - The HYBRID Strategy






WGX - The CAM Strategy 






WGX - The Daily Strategy




*
Skate.


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## qldfrog (15 October 2019)

Many thanks, ot is nice to have comparison points


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## aus_trader (15 October 2019)

Thank you Skate, great to see the entry and exit points for the various strategies you use for the stocks that I was interested in.


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## Boggo (15 October 2019)

@Skate My weekly is very similiar to yours but I have found that especially over the last few years I get whipsawed to death by the stops on the daily.
I find that just trading my personal account and running the SMSF is much better on the weekly.
Just my 

(click to expand)


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## Skate (15 October 2019)

Boggo said:


> @Skate My weekly is very similiar to yours but I have found that especially over the last few years I get whipsawed to death by the stops on the daily. *I find that just trading my personal account and running the SMSF is much better on the weekly*. Just my




@Boggo, thank you for your comment & yes I've also had good success with trading weekly strategies. Its been a long battle to code a decent daily strategy for the exact reasons you have quoted "being whipsawed out of a trend" only to re-enter shortly after. But in saying this I now have a half decent daily strategy that concentrates on the exit timing. Getting into a trend has always been the easy part but knowing when to pull the pin to get out was another.



Skate said:


> *In conclusion*
> In my opinion, timing the exit is more important than timing the entry.




*My exit strategy*
Timing the exit was the missing link when it came to coding a Daily Strategy as I was relying on commonly held beliefs & well known exit conditions. I've never found one exit strategy in isolation that works quite good enough to risk trading as the backtest results lacked the consistency I was seeking.

*F.Y.I.*
Even my HYBRID Strategy multi-conditional exit falls short on a daily system but works in harmony with a weekly system.

*It's no secret sauce*
A huge amount of time has been spent on getting an exit strategy on a the Daily Strategy to work successfully "most of the time" so I'm not prepared to elaborate or answer questions on my exit strategy.

*It's been a struggle*
For the sake of transparency my daily exit strategy involves variable parameters in relation to the value weighted average price channel, with a conditional trailing stop for the unexpected gap down events. The Stale exit is more of an "out of favour indicator" that incorporates an extreme Rate of change momentum indicator working hand-in-glove with an exponential moving average.

Skate.


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## Boggo (15 October 2019)

Boggo said:


> @Skate My *weekly* is very similiar to yours but I have found that especially over the last few years I get whipsawed to death by the stops on the daily.




Thanks Skate.
Minor correction to my post, should have read "daily" instead of weekly.


----------



## sptrawler (15 October 2019)

Boggo said:


> Thanks Skate.
> Minor correction to my post, should have read "daily" instead of weekly.



The weekly chart appears much easier to follow, the daily looks quite chaotic, thanks for the posts. Between Skate, yourself, peter, gregles and the duck, I'm beginning to make sense of these charts.


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## Gringotts Bank (15 October 2019)

Hi Skate, what trail stop are you using please?


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## Skate (15 October 2019)

Gringotts Bank said:


> Hi Skate, what trail stop are you using please?




@Gringotts Bank, each of my strategies run there own parameters for the trailing Stop & one of my strategies runs no trailing stop at all so I’ll let your question go through to the keeper.

I’m only guessing but if your question relates to the Daily Strategy in particular the Trailing Stop forms part of my exit strategy which is not up for discussion.

Skate.


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## qldfrog (16 October 2019)

Can you reveal if the trailing stop is dynamic or static!
I was toying with implementing a stop loss which would be a function of buy price, last prices,time in market etc so the question.


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## qldfrog (16 October 2019)

Note: i still use no stop loss with my systems and not happy with that


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## Skate (16 October 2019)

qldfrog said:


> Can you reveal if the trailing stop is dynamic or static!
> I was toying with implementing a stop loss which would be a function of buy price, last prices,time in market etc so the question.




@qldfrog I use a dynamic trailing stop in my Daily Strategy & it's used for those unexpected "long move down-bars & gap-down scenarios" - in other words to protect me against the "run of play" (a footy term) or "large down-gaps before news is released".

*The importance of a trailing stop*
I'll display an example why a trailing stop is important as my other daily (stopping) triggers were still within acceptable parameters. The trailing stop locked in the profits. I maintain & firmly believe someone knew about the information that affected the price (fall) before the information was released to the public.

*The trailing Stop*
In the case of my Daily Strategy the trailing stop is designed to "action surprises". The trailing stop is designed to expects the unexpected.



Skate said:


> *Foolish - *It is just plain foolish to think that it is an even playing field when it comes to receiving valuable information. There is absolutely no way small individual traders like us has superior knowledge about a company. But the good news is that small Investors don’t need an informational edge. They make up for it by moving fast and being reactive. The stock market is not an even playing field, and rather than complain about that fact, we must use it to our advantage by paying close attention to those who do have inside information.




*ISX - Someone knew* (the timeline)
10/9/2019 - closed $1.645 (in a very long up trend)
11/9/2019 - unexpected - large down-bar closing at $1.41
12/9/2019 - another large down-bar closing at $0.93 (this triggered my trailing stop)
13/9/2019 - Adverse News Report released at 9.31 am
13/9/2019 - My exit was already in the pre-auction before the news release
13/9/2019 - Exited ISX at the opening price

*F.Y.I*
On the 10th September 2019 the closing price of ISX was $1.645 (trailing stop exit price $1.14 on the morning of the news release at 9.31 am - marked by the violet vertical line - added for @sptrawler as he has shown an interest in charting)




*Expanded view of the exit for clarity*

*



Request*
Is there someone that would be prepared to post their daily chart for ASX:ISX for the same time period as it would be appreciated. (from Jan 2019)



Boggo said:


> @Skate My *Daily is very similar to yours* but I have found that especially over the last few years I get whipsawed to death by the stops on the daily.






aus_trader said:


> Yes Skate, I am interested in seeing the entry/exit points based on your system for a few Gold stocks that I have traded in the recent past: PRU SLR and WGX please if you got time.




@Boggo you have posted a similar daily chart for WGX thank you for that. To solve my curiosity are you prepared to post your daily charts for the other two securities in question - being *PRU *&* SLR* as I'm interested to see the comparison & I'm sure @aus_trader would also find value in your charts as well. Posting up a daily chart of *ISX* would also be appreciated. (Jan 2019 to now)

@aus_trader would you be kind enough to post your 3 daily charts for PRU SLR and WGX please, I & others would find interest in that. Also posting a Daily Chart of *ISX *wouldn't go astray either (if you have the time)

Skate.


----------



## IFocus (16 October 2019)




----------



## Boggo (16 October 2019)

Skate said:


> @Boggo you have posted a similar daily chart for WGX thank you for that. To solve my curiosity are you prepared to post your daily charts for the other two securities in question - being *PRU *&* SLR* as I'm interested to see the comparison & I'm sure @aus_trader would also find value in your charts as well. Posting up a daily chart of *ISX* would also be appreciated. (Jan 2019 to now)




All attached, click to expand.


----------



## peter2 (16 October 2019)

My chart with a few comments.


----------



## Country Lad (16 October 2019)

I might as well play too, seeing I did trade this.

Many years ago (if I remember correctly, early 90’s) in Cairns, tech/a and I had a discussion about trading and charting.  He was of course, heavily into charting and I was doing P&F charting and some other basic stuff. After some discussion he decided I had the wherewithal to seriously get in to charting.

Sorry John, tried it but didn’t like it.  Being a simple country lad, I developed a simple system in conjunction with a few trading buddies which has served us extremely well over the years.  The market sentiment at time of entry has been added a few years ago and is a key part of the system in order to get a good start in the trade.


----------



## Sir Burr (16 October 2019)

Skate said:


> In the case of my Daily Strategy the trailing stop is designed to "action surprises". The trailing stop is designed to expects the unexpected.




Yeah the chart has some clues 

Trailing stop moves up on new highs and obviously an index filter as it tightens substantially when the index drops (re: the dates).

Keeping it simple would be a percentage from high (10%) and tightens when the index filter goes negative (5%).


----------



## aus_trader (17 October 2019)

Skate said:


> @aus_trader would you be kind enough to post your 3 daily charts for PRU SLR and WGX please, I & others would find interest in that. Also posting a Daily Chart of *ISX *wouldn't go astray either (if you have the time)




Hi Skate, Yes happy to post but I don't follow an exact technical trading system so entries and exits are based on my own thinking as detailed in my Speculative Stock Portfolio.




SLR was traded more than a year ago, so had to post a longer daily chart to show that







With ISX, I have not traded it but there was a channel that I had drawn on it a long way back before it broke below it and then moved up strongly.


----------



## julieta (17 October 2019)

Gday skate have liked your posts as a hobby trader they  are very interesting the three charts are ccl and isx the green and yellow bars are ema xao 75 ccl has two exits one is when xao  is below 75 ema by percent


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## Skate (18 October 2019)

Skate.


----------



## Skate (18 October 2019)

Skate.


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## aus_trader (19 October 2019)

Skate said:


> View attachment 98059
> 
> View attachment 98060
> 
> ...




I think I picked up another feature of your stale filter. If a take-over target stays stale for too long without attracting a higher offer it shall be sold based on stale filter criteria even if the underlying reasoning is not known. I just saw BAL position and that was my assumption, so if that's the case then the stale feature is quite useful and clever in locking in profits.


----------



## julieta (19 October 2019)

Gday aus here is a linc about time stops 2 different takes on this 
*Final Thoughts*
Even though the N week stop rule does not improve the CAR and MDD, one still may want to add this rule. Psychologically it is always good to get out of losers. Some people would prefer to have the more trades because it improves the chances of getting big winners.


 Nick Radge  -  September 22, 2014   Reply 

This so-called ‘stale exit’ techniques are something we’ve done research on before. What we found is that market leaders tend to consolidate rather than retrace enough to hit the stops. When the market moves higher again, its these market leaders that jump first out of their respective consolidation. So, a stale exit method tends to remove these first movers. If the entry mechanism is filtered, i.e. using some kind of ROC, then there is a chance that these market leaders won’t be picked up again. 
https://alvarezquanttrading.com/blog/dtays-weekly-breakout-strategy-with-time-stops/ well done skate on nailing this exit


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## Skate (21 October 2019)

Skate.


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## satanoperca (21 October 2019)

Are you a graphic designer Skate, love the illustrations. Very clever


----------



## barney (21 October 2019)

satanoperca said:


> Are you a graphic designer Skate, love the illustrations. Very clever



I was thinking similar and about to suggest @Skate sources a position at an advertising firm


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## aus_trader (21 October 2019)

barney said:


> I was thinking similar and about to suggest @Skate sources a position at an advertising firm



I also commented on Skate's Logo design skills earlier in the 'Dump it here' thread. Very impressive


----------



## barney (21 October 2019)

aus_trader said:


> I also commented on Skate's Logo design skills earlier in the 'Dump it here' thread. Very impressive



Every chance I did read that aus … and then simply forgot ………. that seems to be a common occurrence as I get older .…. I also find I tend to repeat myself a lot repeat myself a lot.

Off topic, sorry @Skate   …… as you were


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## Skate (25 October 2019)

Skate.


----------



## Skate (25 October 2019)

Skate.


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## Skate (28 October 2019)

Skate.


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## Skate (1 November 2019)

Skate.


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## Skate (1 November 2019)

Skate.


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## peter2 (1 November 2019)

Thanks @Skate for the updates, but I've a query.




Surely you've used the wrong pic. 
[No I didn't call you Shirley.]


----------



## Skate (1 November 2019)

peter2 said:


> Thanks @Skate for the updates, but I've a query.
> 
> View attachment 98371
> 
> ...




Hi @peter2

No, that's the correct picture - they are the last updates of the CAM & BOX Strategies.

Initially to keep the 'Dump it here' thread active I decided to trade two new small accounts reporting the weekly trading results - really it was pure self indulgence on my part having no educational value.

Both strategies aren't too shabby - both are showing potential.

Skate.


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## Wyatt (1 November 2019)

Skate said:


> really it was pure self indulgence on my part having no educational value.



On the contrary @Skate, there is a truckload of educational value for all to enjoy in your generous disclosure of your momentum strategies. No doubt many will refer back to this thread for the treasures it contains.


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## aus_trader (2 November 2019)

It's been good of you to post those updates Skate and thank you for taking the time to post the actual stocks picked by your strategies, it's been very interesting/educational/informative to read.

Look forward to any updates on those new strategies you mentioned...


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## Sir Burr (3 November 2019)

aus_trader said:


> It's been good of you to post those updates Skate and thank you for taking the time to post the actual stocks picked by your strategies, it's been very interesting/educational/informative to read.




Yes, loads of great info in this thread. I've been system trading for a long time and only found this thread recently. Changed a system variable because of a tip here.

Thanks Skate, makes sense 

And me always being precise the change...

AddColumn( RoundTickBuy( Close * 1.05), "Buy105%", 1.3, colorDefault, colorPaleGreen, -1 );

To...

AddColumn( RoundTickBuy( Close * 1.03), "Buy103%", 1.3, colorDefault, colorPaleGreen, -1 );


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## Newt (10 November 2019)

Missed quite a few posts in Oct and catching up now found the comparison of daily and weekly approaches from so many contributors fascinating.  Thanks again Skate for stirring up such thought provoking discussions.  

So many ways to trade, but love seeing the rules and discipline each brings to their chosen approach.


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## KingJim007 (10 November 2019)

Skate said:


> *The market is fascinating*
> 
> One of the reasons that the market is so fascinating is that it combines elements of psychology, business, mathematics, and numerous other disciplines and sciences.
> 
> Skate.




You forgot fortune telling!


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## Skate (10 November 2019)

KingJim007 said:


> You forgot fortune telling!




Hi @KingJim007, I didn't forget - it's all covered, see below


Skate said:


> The market is fascinating - One of the reasons that the market is so fascinating is that it combines elements of psychology, business, mathematics, "*and numerous other disciplines"* and sciences.




There is also a free copy of my downloadable eBook if interested - found here: https://www.aussiestockforums.com/posts/1014728/

Skate.


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## Gringotts Bank (11 November 2019)

Skate said:


> *WHY FACTS DON’T CHANGE OUR MINDS*
> 
> *Fact*
> 
> ...




So many automatic thoughts are triggered when you're wrong.  When "I'm clearly wrong here" is bouncing around in the mind, very soon after comes "mummy and daddy only love me when I'm right" _or whetever your particular circumstances might dictate ("I'm bad, I'm hopeless, god hates me", etc. etc.)_.  And then it cascades because a lot of the time it's hidden from cosncious awareness - like a virus that interferes with your computer, but you don't even know you have one.  Why do my shoulders feel so tight?  Why does my back hurt?  Why do I feel irritable?  I wonder.

Ego defense mechanisms protect us from experiencing these painful feelings.  We deny being wrong, repress the pain, project it onto others, ruminate, rationalize, intellectualize, becomes withdrawn, etc.  There's a huge range of possibilities for avoiding emotional pain via ego defense.  And every one of these defenses creates more problems down the track.  For example, we lose objectivity, we get triggered and don't know why, we lose access to subtle feelings which can guide decision-making (especially important in discretionary trading), and so on.

"Cutting your losses is liberating".  Yes, because it brings an end to the tension inherent in holding excessive open losses.  But the *end goal* is to cut losses early and without tension, _not because the tension is repressed_, but because the triggering memories have been processed and released from your system.


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## Skate (11 November 2019)

Gringotts Bank said:


> So many automatic thoughts are triggered when you're wrong. Ego defense mechanisms protect us from experiencing these painful feelings.  We deny being wrong, or repress the pain or project it onto others. For example, we lose objectivity, we get triggered and don't know why, we lose access to subtle feelings which can guide decision-making (especially important in discretionary trading), and so on.




@Gringotts Bank what a great post.

*A a species we are flawed*
Winners take responsibility. Losers place blame as clearly stated above _"We deny being wrong, or repress the pain or project it onto others"._

*One step further*
The difference between winners & losers is their psychological outlook. Your psychology plays the biggest part when it comes to trading because it controls your perception driving your reactions. You can condition how & what to think, meaning you can train your "psychological outlook" allowing you to be able to overcome or handle the stress & pressure when things go horribly wrong.

*Self control*
It’s vital and very important to learn how to train your mind to accept stress when trading. Controlling your emotions, training your mind to stay calm under pressure, responding, rather than reacting to a situation, controlling how and what you think is so important in this game. 

*Summary*
How you react to stress IMO will decide whether you’ll be a success or a failure at trading.

Skate.


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## Gringotts Bank (11 November 2019)

Skate said:


> @Gringotts Bank
> 
> You can condition how & what to think, meaning you can train your "psychological outlook" allowing you to be able to overcome or handle the stress & pressure when things go horribly wrong.
> 
> ...




Thanks.  Yes I hadn't considered that here, but it's definitely possible to create and attach new meanings to negative events.  We can re-associate "I am clearly wrong here" with positive thoughts such as "...and I always learn new things when I'm wrong, so my process is always improving".  Actually, you can re-associate it with anything positive, even an image of your dog smiling and wagging his tail.  "I'm wrong" -> happy dog.  Re-association.  One potential difficulty with re-association is the reverse effect, ie. that your happy dog can now remind you of losing trades and send you into a negative spiral.  

There's a bit of a debate about whether the old associations (eg. "...and mummy/daddy only love me when I'm right") can ever be overriden this way.  If we use a process of re-assocition with positives, it's likely we end up with a split mind (like a partitioned hard drive).  This then requires enormous strain and continual effort to stay on the right track.  Any lapse in effort willl have us back on the wrong track where we feel overwhelmed and ineffectual, with a tendency to make bad decisions.

My understanding is that a release of the negative is required for full functioning of the mind.  That's not necessarily a comfortable process.


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## Skate (11 November 2019)

@RickyY has two recent lengthy threads prompting me to make a few comments about trading with an edge.

*Trading System*
When you have a trading system - Confirm that your strategy has an edge that you can confidently trade remembering "_an edge needs time to work" _as @peter2 has remarked below. If you are after an edge please read @peter2 "p2-asx-weekly-portfolio" thread as the results of his style of trading is fully discussed & his recent trading results speak for themselves - https://www.aussiestockforums.com/posts/1045628/

*Peter2 "condensed comment" from his "p2-asx-weekly-portfolio" thread *
_Entries and money management are as important as trade management (exits). A trailing stop (TS) is designed to protect open profits. There's no point using one until there's sufficient profits to protect. Traders starting out don't understand that an edge needs time to work out. The smaller the edge the more time it needs to appear. Once a portfolio that is operating on longer time frames is established, there is not a lot to do. Remember, we're collecting winning trades. We ditch our losers. Don't sabotage a robust system by fiddling with it. The most important thing is to create and apply a consistent approach.
_
@tech/a *posted in Peter2 "p2-asx-weekly-portfolio" thread *
_


tech/a said:



*Absolute Gold. *Why people think they need to pay for someone or some method to lead them to profit----.?
		
Click to expand...


_
*Confirmation *
I'm re-posting a screen capture from the "p2-asx-weekly-portfolio" thread without permission confirming Peter2 trading method has an edge & is profitable.







*All roads lead to Rome*.
Which means, the same outcome can be reached by *many* methods or *ideas*. Peter2 uses a lot of discretion when trading based on his interpretation of current market observations & current sentiment whereas I lack those talents relying on a coded systematic weekly trend trading system with the same end game in mind - generated profits over time. Trading is a marathon not a sprint.

*Trend trading is not complex*
After reading till my eyes bled I soon realised why I shouldn't re-invent the wheel. Trend Trading is a simple process & easy to code that never goes out of vogue. Trend traders buy confirmed breakouts & sells when the trend ends. Boring but profitable.

*Trend Trading - Confirmation of my trading results*
I'm posting a screen capture of my Hybrid Strategy for the same period, Jan 2019 till end-of-trade today confirming trading with the trend still works. The Equity Curve below confirms trading is not always a smooth process.




Skate.


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## tyson2710 (22 November 2019)

Skate said:


> *ISX - Someone knew* (the timeline)
> 10/9/2019 - closed $1.645 (in a very long up trend)
> 11/9/2019 - unexpected - large down-bar closing at $1.41
> 12/9/2019 - another large down-bar closing at $0.93 (this triggered my trailing stop)
> ...




I think Skate was right about this one 3 weeks before the $hit "hit the fan", yes I believe someone knew something to quickly offload their shares before a negative news announcement was release. The ASX has suspended ISX since the 1st October and I wonder what will happen when the suspension is lifted, I'm glad I don't own it.


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## Newt (12 December 2019)

I'm still enjoying listening to the "Trading Story" Podcast at the moment. 

Episode 99 with Dr Brett Steenbarger was a goodie - there is a fantastic analogy where BS compares creativity in trading to "recipes".  Nothing wrong with following established recipes starting out, but as you become more experienced you need to use some creativity and follow your own instincts, skills, personal strengths to customise your own "recipes".  

You wouldn't expect 10 restaurants to serve the same meal for a dish, and neither should 10 traders with similar systems follow identical paths.  

https://podtail.com/en/podcast/trad...rading-psychology-2-0-with-brett-steenbarger/


Spoiler - the host gives up on mastering trading (again) by podcast 113.  Its a jungle out there....!


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## Skate (15 December 2019)

*Lets talk about EXITS*
IMO - the timing of your exit has to be the most important part of your trading Strategy. New trader spend a lot of time researching, reading articles, books & searching the forums looking for the best trade entry, with little or no effort in structuring an exit plan. Finding entry conditions are a dime-a-dozen, whether they are trend breakouts or pullbacks with in a trend or trend continuations it doesn't matter. There are multitudes of reasons to enter a trade, knowing when to get out is the most important.

*Out of your control*
What happens after you enter a position is out of your control, all you can do from here on is to hang for the ride. Not knowing what will happen next is the scary part of trading. When a trade goes against you & how you handle the position will eventually decide how successful you will be as a trader. As @Warr87 has stated your "trading psychology" is important in this game.

*Inconsistent trading results*
Having a poor exit plan or having a discretionary exit plan using gut feelings can lead to inconsistencies in your trading results. The importance of an exit can be debated but it’s important to remember they really determine the final outcome of a trade leading to the long-term success or failure of a trading system.

*Common problems of trade exits*
1. Executing a stop too late - hoping, wishing or praying the position will come back to break-even is where bad habits start. By not exiting at the correct time can let a small loss get out of hand quick smart.
2. Taking profits too early - thinking what might happen is another bad habit. When it comes to the markets what you "think" is irrelevant – the markets will do what the markets will do.

*Summary*
Poor trading results can normally be attributed to one of these two mistakes & it all stems from not knowing when or how to get out of a trade confirming "the exit" is the most important part of any trading plan or strategy.

*Hey guys & gals - Why do you exit a position ?*
@peter2 & myself have listed a variety of reasons in our respective threads why we exit a position & I'm thinking it would be helpful for others to read what is the catalyst why you exit a position. Lets make a repository of exits in the "Dump it here" thread for the benefit of others.

Skate.


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## Wyatt (15 December 2019)

OK,  I'll start here as I have plenty to learn.

My exits are simply a weekly close below 100 day SMA and position score outside of top 20% (variable) of stocks in $XAO (top 100) as rated by position score which is just momentum measured over a chosen lookback period. No rocket science there.

I've wondered about using your ROC(close,20) as an additional stale stop, but as I'm a coding dumbass, I'll have to consult my mentor about that.

I also agree with your statement @Skate about exits being the most important and overlooked aspect of trading.


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## Skate (15 December 2019)

Wyatt said:


> OK,  I'll start here as I have plenty to learn. My exits are simply a weekly close below 100 day SMA and position score outside of top 20% (variable) of stocks in $XAO (top 100) as rated by position score which is just momentum measured over a chosen lookback period. No rocket science there. I've wondered about using your ROC(close,20) as an additional stale stop, but as I'm a coding dumbass, I'll have to consult my mentor about that. I also agree with your statement @Skate about exits being the most important and overlooked aspect of trading.




@Wyatt, thanks for being the first to outline your exit strategy. I'm positive others will backtest your exit strategy to find if there is an application that may be beneficial to their trading results. The "Dump it here" thread is not about being 'right or wrong' - it's a thread to express ideas not a contest of ideas.

*Exits*
I have stated many times - I believe "exits" is where the money is made, when others disagree the "Dump it here" thread gives a perfect platform for others to express an alternative view rather than criticise a post. I'm now hoping @peter2 will post his exit ideas as it makes no difference whether they are discretionary or hard coded.

Skate.


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## Skate (15 December 2019)

*Robust discussions*
1. There is always a robust discussion when Discretionary trading verses Technical trading is raised - I'm a believer if it works for you it's right for you.
2. There is always a robust discussion when it comes to the "entry & exit" & which is more important when it comes to the profitability of any trading plan - some will express money management, position sizing or risk management is more important.

*Now lets talk about finding the Holy Grail*
First off, let me make a disclaimer: there is a major distinction between "The Holy Grail" & your "Holy Grail"

*Finding your Holy Grail *
The market is a completely chaotic & unpredictable due to the infinite amount of information pouring into the markets second-by-second, let alone tweets by the 'Donald'. A seasoned trader doesn’t try to predict the market, but trades probabilities. We can learn to analyse the markets but if we don't learn to understand our own "trading psychology" it will be all for nought. Without the confidence in your trading plan/system or strategy you won’t keep pulling the trigger when the going gets tough regardless of how good you think your system is.

*Sticking to your plan*
Trading in a disciplined manner by following your trading plan without override your system - I think you have just found your “Holy Grail”.

Skate.


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## Habakkuk (15 December 2019)

Question: Is it possible to code an exit that has an edge? An edge all by itself is what I'm asking.
Random entry any time and then exit mechanically, systematically, not discretionary.
That should be clear enough, but just in case, your code must have:
Buy = 1;
Buyprice = something that is obtainable, like Open or Close, not Low.
I don't think it can be done but I could be wrong. It is obvious that some exits work better than others but that's not the issue. I'm not asking for secrets or the code, just whether anyone can say that they have statistical evidence of such an exit. (and not just quoting Van Tharp)


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## peter2 (15 December 2019)

*EXITS* of a short to medium term trader. 

(1)  *Initial Stop Loss exit* (iSL):  This is the first exit I consider. This exit is important because it's placed at a price that if traded indicates that my timing or my chart analysis is wrong. This exit is also important because I use it to calculate my position size. I don't buy a fixed dollar amount, rather, I risk a fixed fraction (ie 0.5% - 1%) of my total account. 

If price closes below this level I must sell. My timing or analysis is wrong and I must realise the loss immediately because if my timing or analysis is wrong then the price is probably going to fall further. If my iSL is below support and support fails, price is likely to fall further. Sell!

Acting on this exit is the first important skill to master in order to be a profitable trader. Learning this skill will enable a new trader to survive long enough to learn the next important skill. 

(2)  *Trailing Stop exit* (TS): Once our trade becomes profitable this is the exit we have to master next. Mastering this exit is difficult. Most profitable traders will tell you that they still haven't mastered this one yet. However they do know what they have to do in order to be profitable. 

This exit stop is only ever raised not lowered (after a buy setup). The method that we use to raise our TS must match the type of movement we're trying to profit from. 

If our aim is to profit from a very short term move then we may raise the TS below the prior days low or use a short term moving average or a volatility measure from the recent high. 

If our aim is to profit from a medium term trend then I would suggest raising the stop below recent higher swing lows. This is difficult because the trader must allow prices to pull-back to form these higher lows. Prices normally pull-back to 50% - 62% levels of the prior move up. In these situations this means losing >50% of our open profits. This is the worst time to close your trade as we have all experienced. 

Raising our TS higher reduces the trade heat (downside exposure) and protects open profits. Don't raise your TS until you've earned above average profits in the trade. Your past trade stats will indicate when this happens. 

Letting or profits get bigger is the second important skill that we must master and it relies on how we manage the trailing stop exit. 

(3) *Price Target exit* (PT): Generally only used by short term traders. Must never be used by trend traders.


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## Skate (15 December 2019)

Habakkuk said:


> Question: Is it possible to code an exit that has an edge? An edge all by itself is what I'm asking.
> Random entry any time and then exit mechanically, systematically, not discretionary. That should be clear enough, but just in case, your code must have:
> Buy = 1; Buyprice = something that is obtainable, like Open or Close, not Low. *I don't think it can be done but I could be wrong.* It is obvious that some exits work better than others but that's not the issue. I'm not asking for secrets or the code, just whether anyone can say that they have statistical evidence of such an exit. (and not just quoting Van Tharp)




@Habakkuk, that's a great question.

*Lets talk about an edge*
Without an edge you'll just be an "also ran" meaning your trading wouldn't be profitable. An edge comes in many forms but it's all about consistency. Trend traders jump on confirmed trends & jumping off when the trend slow, stops or reverses.

*Its been posted*
The 'Dump it here' thread lists strategies & code that I trade - the posts also include some Amibroker code & how I enter & exits a trade - I've even listed the indicators I use, let alone my equity curve, it's all been previously posted - It's all simple stuff. 

*Lets recap*
Traders buy a position in the hope of offloading the position at a higher price at a later date. That's it in a nutshell. Season traders are all about chasing stock that has volatility, without volatility there is no money to be made. 

*Exits*
Different strategies require different exits, it's about dancing to the music being played. Not one exit works for every strategy. The charts tell a story in hindsight "but" we trade on the right side of the chart, meaning we trade the last bar. The last price bar is currently a representation of all the emotions in the markets or an individual position in real time. Remember the price displayed is always correct.

*Simple exit*
If you want a simple exit that will work, try this: Sell when there is 5 lower highs than the last highest high bar. Meaning if the position is not moving up or it's stagnating - sell the sucker & look for another position, they are coming along all the time.

Skate.


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## Skate (15 December 2019)

peter2 said:


> *EXITS* of a short to medium term trader.
> 
> (1)  *Initial Stop Loss exit* (iSL):  This is the first exit I consider. This exit is important because it's placed at a price that if traded indicates that my timing or my chart analysis is wrong. This exit is also important because I use it to calculate my position size. I don't buy a fixed dollar amount, rather, I risk a fixed fraction (ie 0.5% - 1%) of my total account.
> 
> ...




@peter2 , with deep appreciation, the very essence of this thread, helping others.

*Moreover*
You have also mentioned once or twice about discretionary exits on takeover & capital raising announcements. 

Skate.


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## Skate (15 December 2019)

Habakkuk said:


> An edge all by itself is what I'm asking. Random entry any time and then exit mechanically, systematically, not discretionary. I don't think it can be done but I could be wrong. It is obvious that some exits work better than others but that's not the issue. I'm not asking for secrets or the code, *just whether anyone can say that they have statistical evidence of such an exit*.




@Habakkuk - I'm posting a small extract from a recent 'PM' from a member without permission - As "No names" or "personal information" is displayed I'm sure they won't mind. I made a small modification to exit of the strategy with major improvements. The exit matters & yes they are easily coded.

*Small extract of a "Private Message"*
_"I'm shocked at how a few adjustments have completely changed the system. I even went and ran your code at 2008 and it treated it like a non-event. There is a lot to digest in there and I plan on going over this code to see how/why it improved everything so much. From what I understand the StaleStop you put in will look at the ROC at the specified time in the StaleStopDefault where the param statement is. Also noticed the change in the buy condition, and saw you removed my sell condition. I wouldn't have thought that would have been a good sell condition but it makes sense. And to clarify, do you want me to not trade this because it is your code or because its not ready? I am now feeling like I am clueless as I wouldn't have thought to make the changes you did."_

*Statistical evidence of such a Re-Engineered exit 
From this...




To this..



$300K positions











Recap*
The exit makes a difference.

Skate.


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## ducati916 (16 December 2019)

Exits:

I use a number of different exits depending on what I'm trading.

1. Exits are correlated to the time period of the trade. As Peter has already indicated, the shorter the time frame, the greater the requirement for a target exit. These might be exit at $X or %profit.

2. Ratio exit trades. Used for indefinite holding periods where the desire is to build (compound) returns. Usually reserved for ETFs, Closed End Funds, etc.

3. Extrinsic exits. Used when trading an asset class (or sector) as opposed to individual stock. For example commodities v bonds, or banks v consumer staples, etc. So a signal from one will trigger the exit in the other. Bonds/Commodities as an example.

4. Volatility expansion/contraction. Simply based on a calculation of ranked volatility. Sell high, buy low. The advantage being that volatility measures are very consistent.

5. Convergence trades at convergence (modified target trade). All pairs trades.

jog on
duc


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## peter2 (16 December 2019)

Skate said:


> *Moreover*
> You have also mentioned once or twice about discretionary exits on takeover & capital raising announcements.




Trailing exits are used to control the downside exposure of each trade and the portfolio as a whole. I've often raised a few trailing stops to reduce the downside exposure of the portfolio when market conditions look unsuitable for my system (falling market). 

Trailing stops are also used to exit a position that is going sideways so that the capital can be used on other opportunities. @Skate's stale exit is one example. 

Overall, trailing stop strategies do a good job of handling routine market price movements. However markets are often interrupted by the release of new information. New information can dramatically interfere with the normal supply, demand interaction and cause prices to spike up or down. 

I've a set of rules or guidelines that indicate what I should do when price moves dramatically after the release of news. I call these rules discretionary because I'm unable to back test the effectiveness of the rules. I believe they add to my edge but I'm unable to prove it. 

eg.
IF the company receives a takeover offer and spikes significantly higher
THEN I should sell after reviewing the offer and directors' recommendation. 

I believe doing this adds to my edge because I grab the extra profit and can re-deploy the capital into new opportunities. The risk is that I'll miss out if the offer is increased (what are the odds?). The reward is that I've grabbed the extra profit in case the offer is rescinded (What are the odds?  CWN, VOC in 2019).


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## Saqeeb (16 December 2019)

@Skate Thank you for bringing up this subject of exits. Thanks to everyone for their valuable inputs.
This has been very timely for me when I was infact rethinking my exits.
I have been struggling to comes to terms with my exits that are purely based on momentum and a far away trailing stop to counter a sudden drop. I have been following my system religiously, which was started in early Sep this year, where I have seen some respectable gains disappear into a cloud of smoke. This clearly highlights the need to think and strategise exits.

That being said a few respectable members have pointed out in @Warr87 's thread how trend following systems may be in draw down during this period.

Nevertheless, exits are very important for profitablity.

Thanks again


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## Warr87 (16 December 2019)

While many experienced members here have been doing well, I'm not the only one to see profits disappear as the market goes sideways. Exits definitely make a difference (but market direction obviously helps systems as well). Been a lot of good info on exits !


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## willoneau (17 December 2019)

I trend trade and am in DD at this time and feel it may continue,
but I take my positions as they come up and follow my system to the letter having faith in it's expectancy.


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## Warr87 (17 December 2019)

willoneau said:


> I trend trade and am in DD at this time and feel it may continue,
> but I take my positions as they come up and follow my system to the letter having faith in it's expectancy.




Gotta trust the system. But being in a DD always makes you wonder what you can be doing better. I like systematic trading since I know my backtests have proven my edge (to some degree).


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## willoneau (17 December 2019)

Warr87 said:


> Gotta trust the system. But being in a DD always makes you wonder what you can be doing better. I like systematic trading since I know my backtests have proven my edge (to some degree).



If you agree with probabilities, expectancy and random outcomes you will get streaks of losing trades and the only thing you can do is control risk and position size forget about tweaking system to try and evade those losing streaks.


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## Newt (17 December 2019)

Warr87 said:


> Gotta trust the system. But being in a DD always makes you wonder what you can be doing better. I like systematic trading since I know my backtests have proven my edge (to some degree).




Sometimes being in a DD larger than expected forces you to confront the possibility you're not correctly trading the system (psychology, or mistakes).  It may also give you the kick to try changes in your system (entry, exit, position sizing) BUT you then need to be even more careful than usual following robust coding, backtesting, live testing checks before possibly changing your code.

I've found some very useful improvements in my code and processes after identifying significant underperformance against other trend followers here on ASF, or listening to new ideas from podcasts etc.  The vast majority of ideas and tweaks show no reliable/robut benefit, but that makes it even more valuable when/if you find a "nugent in the rough".  The journey never ends......


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## willoneau (17 December 2019)

So deciding how to control risk and position size which work together has a better chance of improving your expectancy. Do you reduce your your ISL or leave it and reduce your position size


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## willoneau (17 December 2019)

Newt said:


> Sometimes being in a DD larger than expected forces you to confront the possibility you're not correctly trading the system (psychology, or mistakes).  It may also give you the kick to try changes in your system (entry, exit, position sizing) BUT you then need to be even more careful than usual following robust coding, backtesting, live testing checks before possibly changing your code.
> 
> I've found some very useful improvements in my code and processes after identifying significant underperformance against other trend followers here on ASF, or listening to new ideas from podcasts etc.  The vast majority of ideas and tweaks show no reliable/robut benefit, but that makes it even more valuable when/if you find a "nugent in the rough".  The journey never ends......



Hi Newt, I was thinking more along the lines that the market was creating the DD.


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## Newt (17 December 2019)

willoneau said:


> Hi Newt, I was thinking more along the lines that the market was creating the DD.




I guess I'm agreeing, but only after many many years of (probably gradually smaller and smaller) iterative improvements to your system and skill at executing it.  That might eventually include discretionary decisions, but every learner has the earn the experience to do any discretionary decision making.  

Perhaps for an experienced trader with a proven long term system the bulk of the DD will be market related, but for most of us the reality is a decent % of the DD will still be self inflicted.  

peter2 made a great statement some time ago - some along the lines of "most traders are unable to realise the max potential returns of their systems, because of themselves".....

found it:

"Your current trading system can only get what it is designed to get. If you have done any backtesting then you would know what those values are. If you have been fully invested 100% of the time then you should be near your system limits. It seems that you may not know what your system is capable of achieving. You could review your performance to identify if there are any aspects that you can improve to boost the results.

You could consider how your results compare to the MAE and MFE of the moves (swings) you traded. You may like to calculate an efficiency factor for your trading.

My general observation is that most traders do not get anywhere near what their systems are capable of. The human is the weakest point in most trading systems."

https://www.aussiestockforums.com/threads/realistic-rate-of-return.26829/page-2


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## willoneau (17 December 2019)

Newt said:


> Perhaps for an experienced trader with a proven long term system the bulk of the DD will be market related, but for most of us the reality is a decent % of the DD will still be self inflicted.



I totally agree and changing or tweaking system will not fix that problem


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## willoneau (17 December 2019)

So a big step in the right direction is to find out which is the cause of DD. If market ignore it and continue to follow system and if self inflicted look at why


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## qldfrog (18 December 2019)

All the above comments also point to another problem.
We all know markets are dynamic and what could be a good system yesterday may be obsolete today
After soso results or DD, when do you decide that a specific algorithm is now passé?
After becoming more popular or due to fashions, market movements, whatever :
Your system is past its time and has lost its edge

For the experienced system traders here: how did you reach that conclusion and close a system?
Ideally, i assume you do not want to ask this question in the heat of a DD or in the middle of a crash?


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## Warr87 (18 December 2019)

willoneau said:


> If you agree with probabilities, expectancy and random outcomes you will get streaks of losing trades and the only thing you can do is control risk and position size forget about tweaking system to try and evade those losing streaks.




I agree. Also, with some of the reading I have done, the illustration of this through the appreciation or Monte Carlo sims is good to help. If there is only a 10% chance of having so many losing trades in a row, or having your max DD reaching xx%, you are either in a statistical improbability or something else is askew.


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## willoneau (18 December 2019)

qldfrog said:


> All the above comments also point to another problem.
> We all know markets are dynamic and what could be a good system yesterday may be obsolete today
> After soso results or DD, when do you decide that a specific algorithm is now passé?
> After becoming more popular or due to fashions, market movements, whatever :
> ...



A great question to ask and one I would be interested in others thoughts,
as I have seen here from peter2 I think would be to chart your returns against an index


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## qldfrog (18 December 2019)

I doubt there is an easy answer.you can underperform vs an index  for s while yet still be overall relevant
It will be hard to admit defeat and say system 1 or 2 gone, i need to stop
Back to psyche..as per a SP..it will catch up.. etc
But would like to hear from experience system traders
Not thinking of stopping any system yet


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## Newt (18 December 2019)

Like so many questions in trading, there will be a big grey area detecting system deterioration or failure.  For longer term trend following, you would probably need an extended period of underperformance against an index.  The variability of most trend following returns means how far (standard deviations?) and how long (months, years) could be tricky to define.

Howard Bandy recommends determining your failure criteria for a system when you finish development and start trading.  He also pushes for much shorter holding periods in systems, which would likely make it somewhat easier to define "how much" and "how long" for failed performance.


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## Sir Burr (18 December 2019)

qldfrog said:


> I doubt there is an easy answer.you can underperform vs an index for s while yet still be overall relevant
> It will be hard to admit defeat and say system 1 or 2 gone, i need to stop
> Back to psyche..as per a SP..it will catch up.. etc
> But would like to hear from experience system traders
> Not thinking of stopping any system yet



Interesting topic about admitting defeat.
In the past 14 years I have dumped 3 systems.

First time was when I tripled capital over a few years leading up to 2008 and lost maybe 20-25% as the index filter exited. Took me a while to feel comfy enough to get back in, missing the 2009 recovery but overall let me pay most of the mortgage.

So why didn't I continue that system, good question and not looked at it since. Instead decided to let a signal service take over (saving me time and effort) and lost at least a 1/4 capital on each of the systems over 3 years plus the "opportunity cost".

So why stay 3+ years in negative? We are talking about running our own systems here but some points about my situation:

- over that time the systems were "revised" due to poor performance (plus a fault in system risk) so there was hope of better performance
- signal service suggested it being normal (ok)
- paid subscription in advance to save money (locked-in)
- system one, a long term and who likes to break system signals
- system two, a short term and had an investment in time and effort setting up as a company in order to trade margin plus the effort to trade a short term system

I admitted defeat, pulled the plug and regrouped. What brought me to stop those systems was the rising fear of continuing that trend with retirement looming plus no point if your not ahead of the index.


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## Skate (19 December 2019)

Sir Burr said:


> Interesting topic about admitting defeat. In the past 14 years I have dumped 3 systems, systems were "revised" due to poor performance (plus a fault in system risk) so there was hope of better performance. What brought me to stop those systems was the rising fear of continuing that trend with retirement looming plus no point if your not ahead of the index.




*Trading & Boxing - *Well done Jeff Horne




Jeff Horn last night won against Michael Zerafa in a rematch with the man who almost ended his boxing career earlier this year. Jeff Horn took some hits & kept standing - his one job as a boxer (the picture above is what a winner looks like, even when you win your body doesn't feel like it did)

*The nature of the trading game*
I've been reading the recent comments with interest. It's a perfect time to remember that trading is not always a bed of roses, losing days/weeks & heaven forbid even a few losing years are inevitable.  Even after you have learnt to trade successfully, you will still take your hits. No matter how smart you are, or how hard you work, we will regularly be hit by news, circumstances & developments that are unforeseen and unknowable & frankly there is nothing we can do to prevent it, so we have to be ready and mentally prepared. Very few people succeed in this process as the learning curve is too steep & the correct psychology is too hard to implement. 

*Staying disciplined & focused is hard*
To a great degree, our success or failure in the market is a function of our luck. We like to think that our results are a direct consequence of our insight and efforts, but the reality is that luck plays a big part in how we do. Even when you are skilled at trading/boxing at some stage you will experience pain. Pure & simple, good traders are calculated risk takers. After reading the recent posts maybe a pep talk is in order.

Skate.


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## Skate (19 December 2019)

*A “New Year’s resolutions” just for you*
Grab a pen & an exercise book & write down anything that you read on this forum that gels with you otherwise you’ll forget, referencing over important materials will condition you "how to think"

*Education is something that is done to you. Learning is something you do for yourself.*
You should continually seek further knowledge. You can read almost any trading book that has been written and discover gems in them. Yet most people fail to follow them because they forget or are undisciplined to action them. If what you learn leads to knowledge, you become a fool - but if what you learn leads to action, you can become wealthy.

*Discipline*
We need to learn discipline as at some stage we will all face the same challenges. Learning to be disciplined when it comes to trading lets you better cope when the unexpected happen. Being disciplined & being in the correct head-space is important in this game - as other factors are almost irrelevant when it comes to trading.

Skate.


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## Skate (19 December 2019)

*Confidence & Consistency*
Your trading ability comes from within, desiring to learn & develop the skills necessary to develop a solid trading plan – one that you will execute consistently with confidence. Finding your trading plan that is right for you "might just be your Holy Grail"

*IMO*
Trading is straight forward, yet many make a mess of it. When trading gets tough some realise that trading isn’t easy so they try to over complicate their approach, search for better entries & exits believing that a complex solution has to be better & they honestly believe it’s certainly required. Unfortunately, this approach often leads traders down the wrong path. One of the main reasons that people fail in the market is because they don’t have a plan, or if they do - they don’t follow it.

*A simple example*
Traders enter a position not knowing at what point they are going to sell. Even if traders have a robust trading plan they find all sorts of reasons not to follow the rules. Successful traders understand the importance of having a plan to guide them when the going gets tough or a little pear shape. Our species have a terrible habit of making poor decisions when "under pressure"

Skate.


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## Skate (19 December 2019)

*Success is not guaranteed*
It’s a major disappointment that many traders don’t make any money. Trading is stressful & emotional when your money is on the line. Bloody hell it takes an enormous amount of time & effort to be consistently profitable because you are required to develop skills & attributes for successful trading. Those who trade well have already been well educated & prepared. To trade successfully & consistently profitable - you have to have a plan that you can follow. 

*Moreover *
It doesn’t matter how disciplined or confident you are if you don’t have a “robust and simple trading method”, you won’t be successful. Forums are full of traders who are losing money because they have no plan & little self discipline. Traders who lack the required discipline are the traders who go on to break the rules, even concrete rules they set themselves. Break your rules once & you will do it again & again - eventually breaking your trading rules will become second nature - drifting away from your trading plan starts one of many bad habits.

*Soap Box*
I made a personal affirmation not to get back on my soap box, these series of recent posts prove old habits are hard to shake.

Skate.


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## myrtie100 (19 December 2019)

I like your soapbox @Skate


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## ducati916 (20 December 2019)

Warr87 said:


> Gotta trust the system. But being in a DD always makes you wonder what you can be doing better. I like systematic trading since I know my backtests have proven my edge (to some degree).




Trust the system. Well, not always.

The Issue: when is a system broken?

Much will depend on what your system trades: (a) variety of asset classes (stocks, bonds, commodities), (b) single asset class (stocks).

If a single asset class (stocks) then;

If the system is underperforming, that information will be telling you something: that something is that the market conditions are changing.

So your system should perform in a bull market where most stocks will trend higher.
At a turning point, your system may well start to underperform; and
In a bear, go into drawdown; unless

Your system (or you) can differentiate between a bear market bounce and a true uptrend in a bear market.

This is essentially an analysis of sector rotation.

In a bear market for stocks, characterised by a rising commodity/bond ratio, inflation type stocks (gold, energy, basic materials) as examples, will enter bull markets.

In a falling commodity/bond ratio, interest rate sensitive stocks outperform (drugs, financials, utilities, consumer staples/discretionary) will outperform.

In a transition period, things get a bit choppier. Volatility starts to creep higher.

Your system may not be broken, it may simply be providing that (early) information as most of the systems discussed have as a consideration 'exits'. Exits are hit more often and sooner in transition markets and bear markets. That is valuable information as now you can pay more attention to the choices thrown up in your scans and avoid the pure 'bull market' plays and look for stocks starting their runs in more defensive sectors.

Currently energy and industrial metals are approaching breakouts from extended bear markets. If they do actually enter a bull market, then at some point the 'market' as an index, will start to reflect this (normally takes about 6 months or so). Signals in say Tech, then become bear bounces and not true long signals. Therefore we have been in a falling commodity/bond ratio. We still are. However, it is turning or more accurately slowing. If it does turn, we will enter a rising commodity/bond ratio.

Therefore, taking every signal, can result in underperformance. This is where experience is invaluable. Having traded through 2 major bears (2000 & 2008) and learned those lessons, it is not that your system is broken, it is simply that you as a trader have to step up to the next level and learn when to apply discretionary filters to your system, thereby avoiding sectors that are rolling over and taking signals in the sectors that will perform.

jog on
duc


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## ducati916 (20 December 2019)

The last month:




Basic materials are commodities. Strong in the last month (obvious). If that strength continues, forms part of an early signal re. stock market. However, still waiting, no signal yet. Under observation.

jog on
duc


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## ducati916 (20 December 2019)

Another way to look:




That is the 50 day. I look at the 200 for bull/bear purposes. If it holds the 50 (and it looks as if it will) then it will be approaching the 200 at some point.

jog on
duc


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## ducati916 (20 December 2019)

For the Fundies:




On all metrics, the message is consistent.

So these are all simply additional filters that you pass your system through to decide whether it is truly broken or simply providing early information about the market, which requires discretionary adjustments by you.

jog on
duc


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## Skate (23 December 2019)

peter2 said:


> It's a few months later and the chart looks much better. However price has not yet broken the two year sloping resistance line. Technically price remains in the downtrend. This indicates that SRG needs more time as the longer term insto investors haven't accumulated a significant amount of the supply that's available every time price rallies a little.  I've placed SRG in by reversal watch list for now.
> 
> View attachment 99178
> 
> ...




@peter2 post has been lifted from the SRG - SRG Global thread.

*Disclaimer* 
The post by peter is very valid & well explained that SRG is on his watch list whereas SRG is on my Buy list.

*I'm buying SRG today*
@peter2 has made a compelling case why SRG is now in his watch list. If any one is interested why I'm buying SRG at the open today just ask & I'll make my case using technical analysis after the markets open. (I'll be busy for the next hour or so)

As traders we all have our own reasons why we enter & exit a position - a difference of opinions makes a market.

Skate.


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## Saqeeb (23 December 2019)

Skate said:


> @peter2 post has been lifted from the SRG - SRG Global thread.
> 
> *Disclaimer*
> The post by peter is very valid & well explained that SRG is on his watch list whereas SRG is on my Buy list.
> ...



@Skate yes please, would like to hear your reasoning and analysis on SRG. Thanks


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## Skate (23 December 2019)

Skate said:


> *I have a 50% record*
> Half of my picks are DUDS, I just wish I knew which half, knowing this would make me a much better trader.




@Saqeeb sorry for the delay. Let me outline the analysis & reasoning behind the purchase of SRG today, remembering *"One swallow doesn't make a summer" *- meaning the outcome of this or any "one trade" is not guaranteed because of the uncertainties the markets hold.

*The CAM strategy *
The CAM strategy has indicated that SRG has started in a “Counter Trend” rally & is a buy today.

*A Counter Trend?*
The CAM strategy uses two indicator the (1) MACD & (2) ADX to determine a "Counter Trend" rally by comparing the slope of those indicators. The slope of each indicator identifies four different trends which is nothing short of amazing. Also using the commodity channel index (CCI) as a guide helps filter out many of those false signals that are sometimes impossible to avoid. 

@tech/a often says -* “when all the Ducks align”...*

*Counter trends*
The CAM strategy has determined (ASX:SRG) is in the start of a "Counter Trend Rally" indicated by the BLUE-coloured price bars. The CAM Strategy colours the price bars so you know exactly the condition of every bar - meaning a "blue price bar" indicates  a counter trend has commenced. A counter Trend is when the 10-period (ADX) is declining but the (MACD) is rising whilst having a closing price above the 13-period EMA.

*ROC Filter*
Also another indicator confirms that the ROC Filter is above 0% (the yellow ribbon at the bottom of the chart) - No yellow ribbon below the price bar means it’s safe to enter the position.




*A bit about the ADX indicator*
The "Average Directional Index" (ADX) shows the "strength" but "not the direction of the price that is trending". Trading in the direction of a strong trend reduces risk and increases profit potential. The ADX rises as the price strengthens into an identifiable trend & falls when the price weakens or consolidates.

*Explanation of the MACD indicator*
The "Moving Average Convergence Divergence" (MACD) is a trend-following momentum directional indicator that shows the direction of the price movement & can be useful to determine if a trend is strong or weak.

*I only use a few Indicators *
ATR, CCI, ROC, EMA, MACD, DSMA, ADX, MA
With an infinite number of indicator combinations, how on earth are you supposed to find something that works.

*Using them in combination*
Indicators by themselves have limited use but using indicators in combination makes them perform much better.

*Indicators are just - Indicators*
The key takeaway here is that indicator-based strategies will always be condition-dependent & I have designed them to work in a trending market. Indicators by themselves don’t make a strategy they just make a good strategy even better IMHO.

*I have two complete strategies at the moment under going paper trading.*
(1) a MAP strategy (a Moving Average Strategy) that has already been discussed in the 'Dump it here thread & coming along just nicely.
(2) Also I have a DSMA strategy (DSMA is an indicator developed by John Ehlers) - The DSMA indicator is an adaptive moving average that features rapid adaptation to volatility in price movement. As usual I'm not using the indicator as designed but I have wrapped John Ehlers idea into a whole new trading strategy & if paper trading aligns with backtesting I'll be doing cartwheels.

Skate.


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## Saqeeb (23 December 2019)

@Skate, thank you for the detailed explanation. Very insightful and informative on the indicators you use.


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## Skate (24 December 2019)

Skate.


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## Skate (8 January 2020)

qldfrog said:


> Any relevant entry is most welcome @Skate , and we can all learn so much of these interactions.
> As least at my humble beginner level. I have a bit of beekeeping tasks to do today but much to work on after Peter and Skate input




I'm on my soapbox so another lengthy post..

@qldfrog has asked for "any relevant entry" in his "qldfrog-weekly-skate-inspired-system" thread but as my answer may have some broader educational value the answer would be better suited to the 'Dump it here' thread.

*Lets talk about trends*
Any style of trading depends on a trend, every trend needs a start & finish - there are even trends within a trend "but" the big question is how do we know a trend is starting - even more importantly how do we know when a trend is no longer trending? The answer is a simple use of a few indicators. The weather guys use indicators all the time to forecast what the weather is likely to do in the future & they tend to get the weather forecast right 50% of the time & as systematic trend traders will have a similar strike rate (50%) because trading is not an exact science. If your signals are correct 50% of the time, you are in the ballpark with my strike rate.

*Indicators*
There are so many indicators at the disposal of systematic traders so it's no wonder trading is confusing. Catching a confirm trend is even harder. Trends are so easy to spot in hindsight but you have to trade on the very last bar on the chart. I only use a few Indicators myself & they have been listed previously being: ATR, CCI, ROC, EMA, MACD, DSMA, ADX, SMA. With an infinite number of indicator combinations, how on earth are you supposed to find something that works. Indicators in isolation have limited use but using indicators in combination makes them perform much better. Before someone want to highlight the obvious that all indicators are lagging don't fret as in this day & age there are mathematical tricks to overcome these shortcoming. "Simple Moving averages" for an example have two characteristics - they lag and they smooth data.

*Taking an indicator a step further* (Sorry - the next paragraph is beyond beginners)
Background: Exponential Moving Average (EMA) and Simple Moving Average (SMA) are similar in that they each measure trends, but the exponential moving average gives a higher weighting to recent prices, while the simple moving average assigns equal weighting to all values. First off the look-back period of any indicator is very crucial to its overall performance factor but in saying this there are different ways to tweak them further by modifying the alpha term of an EMA by the amplitude of an oscillator scaled in standard deviations from the mean this in turn changes the responsiveness that's best suited for trend-following systems. The smoothing coefficient of this trick is that it automatically updated based on the magnitude of price changes. In summary, it turns the EMA into an adaptive moving average that features rapid adaptation to volatility in price movement.

*Entry*
As @qldfrog has asked for "Any relevant entry" let me give you one of thousands relevant entry into a trend as I've already given one entry for my MAP strategy that came about after @Gringotts Bank asked me what I know would work as an entry condition & backtesting isn't too shabby at all. My MAP strategy has been previously discussed here: https://www.aussiestockforums.com/posts/1028382/ with the CAM & BOX Strategy. The Amibroker code for the "MAP Strategy" buy condition has also been provided.
*
Any Relevant Entry*
But after reading the words of @qldfrog - "Any Relevant Entry" - let me give you the first simplest entry into a trend that jumped into my mind & the simplest exit I though of. Lets try this I thought, as anything will get you into a trend. So here it is - lets Buy (All Ordinaries) when you make a new High of the last 5 periods (that being 5 weeks on a weekly system) & lets sell when there are 5 lower highs from the entry. I've used the usual Index filter, ROC filter, Price Filter, Turnover Filter & Volume filter, & a 20% trailing stop with the stop provided above to give the strategy a fighting chance of being a tradeable strategy.

*Lets see how the "High5 Strategy" performs *
RECAP: enters on a higher high of the previous 5 periods & exits when there have been 5 lower highs since entry. The strategy is so simple its hard to believe that "Any Relevant Entry" will do & if the positions make 5 lower highs in 5 periods we will cut that sucker loose.

*Lets see how it would have handle ASX:LIC*
I'll attach a screen capture of the entry & exit of the position discussed by @peter2 in "qldfrog-weekly-skate-inspired-system" thread for a direct comparisons that can be found here: https://www.aussiestockforums.com/posts/1051654/

*Backtesting*
1. The last previous year (8th Jan 2019 to 8th Jan 2020)
2. $300k Portfolio
3. 20 positions (20 x $15k positions)
4. Index filter
5. The EXIT (the stop) will be conditional on 5 lower highs (I'll call this my StaleStop) or a 20% trailing stop (whichever is hit first)

*RESULTS







Chart of ASX:LIC



*
Skate.


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## Skate (8 January 2020)

Skate said:


> I'm on my soapbox so another lengthy post..
> 
> @qldfrog has asked for "any relevant entry" in his "qldfrog-weekly-skate-inspired-system" thread but as my answer may have some broader educational value the answer would be better suited to the 'Dump it here' thread.
> 
> ...




Time beat me to EDIT my previous post..

*Additional statistics*
Additional stats for those who like to crunch the numbers like me - this additional information forms part of my backtesting results & is very important to me. In fairness & full disclosure I will share this additional information for the "High5 strategy" that has been discussed above.

*Important info on the performance of a StaleStop *




*Another strategy for the trash bin*
The "High5 Strategy" is nothing special with so-so performer results. The strategy lacks "Expectancy" - the expectancy is the return from $100 dollars invested -  a low expectancy figure of $8.24 per $100 invested just doesn't cut it for me (AFAIC)

*The advantage of using any StaleStop in your exit strategy*
Let me be upfront - if any position is not up-trending (meaning, the position is going side-wards or heavens forbid dropping) I'm out of the trade & into another looking for something better (Trends are coming along all the time). Adapting a simple stalestop strategy of "5 lower highs" as in the "High5 Strategy" the stalestop exited the position 74 times verses 21 exits for the trailing stop - I use a more refined StaleStop but for demonstration purposes the stalestop in the "High5 Strategy" was to demonstate you don't need anything fancy to exit trades that are not performing. Traders will give positions more time than they deserve & I'm always amased why traders persist in holding positions that are not up-trending. I guess each to their own, as traders we are all different.

Stepping down off my "soap box" now..

Skate.


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## peter2 (8 January 2020)

It's always informative reading one of your "soapbox" series of trading systems. In a thread as long as this one it's a pity I can't bookmark the posts I may want to reference in the future. I've so many thoughts to express.

Thanks for the edit. I managed to call the banker in time to cancel the loan application. I told him that my business plan with an 8% expectancy and generates +58% for the year wasn't good enough. 

You made an interesting point with the # of stale exits vs trailing stop exits. This ratio is probably due to the current sideways market that we've experienced for a while. 

I'm guilty of staying too long in a sideways market, provided the range is narrow compared to the prior move up. My view is that as long as the range is shallow I'm not losing too much open profit and I'll be in it when it takes off again. Thinking about that view, price will probably create another buy signal when it takes off again. An earlier stale exit would provide capital for redeployment and would reduce losses if price falls instead of going higher. These break downs can be a false break (engineered by the instos) or swift (DCG). Being a day late with the sell can be costly. All avoided by the earlier stale exit. 

All this talk of mech systems has me noting the criteria for many of my buy signals. They can be coded even if there's a few of them (hybrid approach  ). I'm going to try to code a buy signal indicator that appears on my charts when all the criteria are met.


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## Skate (8 January 2020)

peter2 said:


> Thanks for the edit. I managed to call the banker in time to cancel the loan application. I told him that my business plan with an 8% expectancy and generates +58% for the year wasn't good enough.




_*Another strategy for the trash bin*
The "High5 Strategy" is nothing special with so-so performer results. The strategy lacks "Expectancy" - the expectancy is the return from $100 dollars invested - a low expectancy figure of $8.24 per $100 invested just doesn't cut it for me (AFAIC)_

@peter2, rewording of the above paragraph is in order.

*Rewording of the paragraph*
The "High5 Strategy" performance results are well below the "Expectancy" of the 3 systems already being traded & therefore would "not-at-this-time" make my trading team. I have at the moment a suite of much better performing strategies under evaluation that runs rings around the "High5 Strategy" a strategy that I quickly coded for @qldfrog - the "High5 Strategy" was the first idea that sprung into mind after @qldfrog requested "Any Relevant Entry".

*Bull Markets*
Getting into a trend is easier than most traders think especially in a Bull Market  (last year was rip snorter). Timing the exit is another matter, that takes finesse. Any trader who is not rolling in it at the moment should be re-evaluating their strategy to understand why they missed a great trading opportunity. Sure, I'll be first to admit trading was bumpy at times in the last 12 months but a stalestop eliminates this stress. Winners don't seem to carry the same stress as losing trades. Weekly re-balancing of my position-sizing is another of my personal favourites by putting every dollar to work (soldiers should be out there fighting the good fight not laying idle in the barracks) 

*EXAMPLE* of my PANDA strategy
As the "PANDA Strategy" was the first to post a chart in the "qldfrog-weekly-skate-inspired-system" thread I'll post a backtest results for the same period as an example of a trading strategy. The period is from (8th Jan 2019 to 8th Jan 2020) for an evaluation why the "High5 Strategy" misses the cut & has landed in the trash bin.


















*Puffing*
I try hard not to post my trading results as it comes across as "puffing" but there would be some serious traders on this forum making serious coin from trading. Trading is not a shoulda-coulda-woulda endeavour - it's a game of mathematics, it's a game of probabilities, it's a game of calculated risk but most importantly it's a game of emotions.

*Words from my old Boxing coach*
My boxing coach expected me to time-my-punches, hit hard & be patient (boxing is a game of timing & skill). I would get the same reminder before every fight (a) "Don't get in the ring if you don't want to be hit" & before the start of each round he would say, (b) "Don't let him put you on the canvas & "ALWAYS" keep throwing punches" (otherwise the ref will stop the fight) I was only knocked out once (TKO really) as I never hit the canvas - I got tangled in the ropes. When I came to & regained my sight I preceded to argue with the ref that I was right to keep going. The Ref said I had been counted out but in my defense "I didn't hear it"

*Analogy to trading *
When you take a few hits in trading, making the next trade becomes much harder as you won't be thinking clearly. To stay in this game you need to keep taking the trades as they come along because no one is interested in how you feel or what you might think will happen next.

I also try hard to measure my responses but sometimes getting on my soap box is a hard habit to break.

Skate.


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## Skate (9 January 2020)

Gringotts Bank said:


> I have requested the various share registries stop posting the "welcome as a shareholder" letter.  *There's too many - it's ridiculous if you're trading. *Currently they have to do this (apparently).  If they get others requesting same, maybe they will allow email correspondence. Thanks for helping.




*Lets talk about mail*
My wife & I have been working away for the last 6 months & arrived home a week ago. Technology allows me to trade no matter where we are in the world & after looking at my mail when we returned home it's a blessing that I'm able to update my Share Registry details on-the-fly without responding to a letter requesting to do so. Our neighbour was kind enough to collect our mail & delivered it to me in a overflowing milk-crate. I tipped the mail onto the office floor to return his crate & now kick myself I didn't take a photo of the enormous amount of mail (all trading related) spread all over the floor. The photo below is the mail opened & in a pile waiting to be shredded. The pile of papers is an accumulation over a 6 month period. I'm now in @Gringotts Bank corner stating the obvious "*There's too many letters - it's ridiculous if you're trading" - *I'm a weekly trader image the volume if I traded a Daily Strategy.




Skate.


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## Roller_1 (9 January 2020)

wow skate the PANDA backtest is impressive! what are the long term results of the backtest? say 2005-now? Also are you using Norgate data with the historical database?

Nice one


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## qldfrog (9 January 2020)

Skate said:


> *Lets talk about mail*
> My wife & I have been working away for the last 6 months & arrived home a week ago. Technology allows me to trade no matter where we are in the world & after looking at my mail when we returned home it's a blessing that I'm able to update my Share Registry details on-the-fly without responding to a letter requesting to do so. Our neighbour was kind enough to collect our mail & delivered it to me in a overflowing milk-crate. I tipped the mail onto the office floor to return his crate & now kick myself I didn't take a photo of the enormous amount of mail (all trading related) spread all over the floor. The photo below is the mail opened & in a pile waiting to be shredded. The pile of papers is an accumulation over a 6 month period. I'm now in @Gringotts Bank corner stating the obvious "*There's too many letters - it's ridiculous if you're trading" - *I'm a weekly trader image the volume if I traded a Daily Strategy.
> 
> View attachment 99563
> ...



Share the feeling
But how do you think compushare makes profit: by billing companies for mailing.
There is no real want by these chess manager to reduce
Why would i need to have a specific email, bank account, tfn per share traded, could not we have a default setup atyached to our hin?
Yes we can but where is the money....


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## Skate (9 January 2020)

Roller_1 said:


> wow skate the PANDA backtest is impressive! what are the long term results of the backtest? say 2005-now? Also are you using Norgate data with the historical database? Nice one




*The PANDA Strategy*
The PANDA strategy fits nicely into my stable of trading strategies - A bit of trivia: All my strategies have their own logo & the PANDA Strategy logo is the logo on the front cover of my free eBook (the link to the free eBook is in the tag below my user name if interested) or found here - https://www.aussiestockforums.com/posts/1014728/ The PANDA Strategy is my top performer & is very different to my other two strategies, being The HYBRID & CAM Strategies (Footnote: I'm very impressed by the results of the CAM Strategy to date - more than I expected or hoped for). The PANDA Strategy stands head & shoulders above the other two in "Consistency of results". When I develop a strategy - "consistency" - is the main measure - profit performance 'not so important' as there is a direct correlation between consistency & performance, meaning get the consistency right & the performance naturally follows.

*What makes the PANDA Strategy different?*
I have used an extensive amount of mathematical gymnastics to arrive at an entry point in the PANDA Strategy - a mathematical trick that modifies a section of an EMA that automatically updates the variables of the coefficient that greatly smooths the magnitude of price changes. In summary, it turns the EMA into an adaptive moving average that features rapid adaptation to volatility in price movement. I use this trickery because trading is about getting into a "confirmed trend" quickly (the mathematical trickery handles the entry) & just as important or if not more importantly to quickly exit when the move starts to stall - why? - so funds can be better deployed elsewhere (my StaleStop & trailing stop handles the exit) The StaleStop attached to the PANDA Strategy requires heavy looping to constantly reference the entry bar. The Trailing stop & StaleStop code is integrated/entwined in the same looping formula. (the power & versatility of AmiBoker is nothing short of amazing)

*Norgate Data - Silver package*
@Roller_1 my strategy development days are over, I currently have 3 Norgate licences (Silver package only). When I was in the Strategy development phase I had the advantage of the Platinum package with 25 years of Historical Data that included access to delisted securities and historical index constituents. The data of the Norgate Silver Subscription has 10 years of data as standard but as I started trading on the 1st July 2015 - I'll use that start date for the backtest.

*Backtesting means JACK*
I've stated before, backtest results mean "Jack" - but they do give an indication between test results using different parameters for evaluation. Also, I'm not a lover of pyramiding into a position or adding to an existing position (others can argue the case for pyramiding but with a "Take Profit Stops" or "Pyramiding" neither work for me) Moreover: I'm a TRUE believer in "pyramiding" my Position-sizing (I've discussed this many times in this thread) "Position-sizing Pyramiding" is handle by re-balancing my weekly position-sizes. How? - Position-sizing uses my trading Bank balance - the Bank feed is sent to a parameter setting within the strategy code. It's simply way of putting every dollar to work.

*The PANDA Strategy backtest results *(from 1st July 2015 - my trading start date)



















Skate.


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## Newt (9 January 2020)

PANDA certainly looks like another impressive addition to the stable Skate!

How are you doing those extended Backtest stats including Expectancy please - guessing they are custom user metrics coded onto your reports?


Re your mail crate - gosh that's a lot of paper to wade through.  Quite depressing to confront after such an absence.


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## Skate (9 January 2020)

Newt said:


> PANDA certainly looks like another impressive addition to the stable Skate! How are you doing those extended Backtest stats including Expectancy please - guessing they are custom user metrics coded onto your reports?




@Newt you are correct I’ve coded the extra stats into the body of each strategy & they form part of the Amibroker’s standard backtest report.

*Return on investment *
@peter2 made a remark about contacting his bank, so I’ll use that analogy: “if I had money to deposit in a bank I would like to know the return on my investment before I make the deposit” 

*The “Expectancy” (per $100 invested)*
This displays the consistency of returns & this metric is important to me. When I deploy my funds (soldiers) I expect to receive the spoils of war.

Skate.


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## Trav. (9 January 2020)

Newt said:


> How are you doing those extended Backtest stats including Expectancy please - guessing they are custom user metrics coded onto your reports?




from the user guide





```
/* First we need to enablecustom backtest procedure and
** tell AmiBroker to use current formula
*/

SetCustomBacktestProc("");

/* Now custom-backtest procedure follows */

if( Status("action")== actionPortfolio )
{
   bo = GetBacktesterObject();

   bo.Backtest(); // run default backtest procedure 

  SumProfitPer100Inv = 0;
  NumTrades = 0;

   // iterate through closed tradesfirst
   for(trade = bo.GetFirstTrade(); trade; trade = bo.GetNextTrade() )
  {
      // here we sumup profit per $100 invested 
      SumProfitPer100Inv = SumProfitPer100Inv + trade.GetPercentProfit();
      NumTrades++;
  }

   // iterate through eventually still open positions 
   for(trade = bo.GetFirstOpenPos(); trade; trade = bo.GetNextOpenPos() )
  {
      SumProfitPer100Inv = SumProfitPer100Inv + trade.GetPercentProfit();
      NumTrades++;
  }

  expectancy2 = SumProfitPer100Inv / NumTrades;

   bo.AddCustomMetric( "Expectancy (per $100 inv.)",expectancy2 );

}

// your trading system here 
fast = Optimize("fast", 12, 5, 20, 1 );
slow = Optimize("slow", 26, 10, 25, 1 );
Buy=Cross(MACD(fast,slow),Signal(fast,slow));
Sell=Cross(Signal(fast,slow),MACD(fast,slow));
```


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## Newt (9 January 2020)

Thanks Trav for digging that out.
Haven't read up on custom backtester for a while.


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## Warr87 (9 January 2020)

Thanks @Trav. Ive looked at the custom backtester a little but not enough.

I tried the code, works pretty good


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## Trav. (9 January 2020)

no problem mate. I have had it coded ( and the other examples ) for a while but not really used it.

Looking at Skate's report has given me some ideas on other parameters to add but just haven't pulled the trigger yet.


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## Newt (9 January 2020)

Actually I'm pretty happy with my backtesting lately.  Just about ready to jump back in time 10 years and start trading my strategy  

Or may as well go back 20  




Skate said:


> *There’s No Time Like Today*
> 
> “The best time to plant a tree was 20 years ago. The second best time is now.” — Chinese proverb
> 
> ...


----------



## qldfrog (10 January 2020)

Trav. said:


> no problem mate. I have had it coded ( and the other examples ) for a while but not really used it.
> 
> Looking at Skate's report has given me some ideas on other parameters to add but just haven't pulled the trigger yet.
> 
> View attachment 99582



One way i found this custom backtest useful was adding a cause of exit if using trailing stop
This way i could check how many trailing SL would have happened on a given period, google search will give details but was simple and useful


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## Newt (10 January 2020)

Some of my best early trading learning, and later quite a few entry/exit ideas, came from writing code to scoop up a small universe of trending stocks then review and distinguishing entry (or exit) features that might be codable (is that a word?)

Agree Qldfrog that flagging which of multiple exit conditions fires is a good application too.


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## peter2 (10 January 2020)

peter2 said:


> In a thread as long as this one it's a pity I can't bookmark the posts I may want to reference in the future.




Well I'm disappointed with the lot of you. I just noticed that there is a bookmark facility and it works.


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## debtfree (10 January 2020)

@peter2
I covered this for you on Page 38 Aug 3, 2019. Post # 1884. Sorry you missed it.


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## peter2 (10 January 2020)

@debtfree My humblest apologies. I must have read your post as I liked it. I didn't test it straight away and forgot about it. 

I'm going to bookmark  @Skate CAM, MAP, BOX, HYBRID, PANDA strategies, exit discussions and even his secret sauce. 


	

		
			
		

		
	
  Skate will wonder what's hit him.


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## Skate (10 January 2020)

qldfrog said:


> A lot of interesting talk this week and a pretty disappointing/bad end result for the systems today I know there is so much to fix that I feel pretty tempted to stop system 2 and flipper.
> System1 lost a whooping $829 on a week which saw the asx surge I have to get into the details and check which shares produce that and see if there is a fundamental fault I can spot and system2 got a minimal $108 profit Flipper lost another $342 and does have a single (slightly) positive position out of 5!!!!!
> Pathetic..






peter2 said:


> Yes, that is disappointing with 15 open positions in the Sys 1 portfolio. I'd love to help but unfortunately I don't use Amibroker nor could I evaluate your system code. 13/14 positions in the P2 wkly/dly portfolio went up this week and I'm certain @Skate portfolios would show the same pattern.




@qldfrog from memory your system 1 is a modified version of the CAM strategy. I'll post an update of my CAM strategy - its above it's mission statement. @peter2 is correct his P2 portfolio went up & all my three strategies have done the same.

*FYI*
The CAM strategy is a live trading account. I started trading the CAM Strategy on a whim to keep the 'Dump it here' thread alive - $58k in 31 weeks was worth the effort.






peter2 said:


> @debtfree My humblest apologies. I must have read your post as I liked it. I didn't test it straight away and forgot about it. *I'm going to bookmark* @Skate *CAM, MAP, BOX, HYBRID, PANDA strategies, exit discussions and even his secret sauce.*
> View attachment 99612
> 
> 
> ...




@peter2 thank you for your comment to bookmarks some of my posts. Your post may encourage others to do the same or at least revisit some of my older posts, it may be the catalysis for a member to grab the 4th edition of my eBook.

Skate.


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## Warr87 (10 January 2020)

I'm guilty of bookmarking a number of posts.


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## Skate (11 January 2020)

*The 'Dump it here' thread *
The 'Dump it here' thread was originally intended to help beginners find their feet, start them off on the right foot (as to say) with the hope of conditioning their way of thinking. (In my defence - the conditioning posts were designed in such a way to encourage others - "how to think" not what to think )

*For the more advanced*
As this thread is being followed by a few seasoned traders I'll break one of my cardinal rules of keeping its simple & make a more complex post as it may be helpful to a few members at the moment.



Skate said:


> When I develop a strategy - *"consistency" - is the main measure - profit performance 'not so important' *as there is a direct correlation between consistency & performance, meaning get the consistency right & the performance naturally follows.






Skate said:


> I'm not a lover of pyramiding into a position or adding to an existing position (others can argue the case for pyramiding but with a "Take Profit Stops" or "Pyramiding" neither work for me) Moreover: *I'm a TRUE believer in "pyramiding" my Position-sizing* (I've discussed this many times in this thread) "Position-sizing Pyramiding" is handle by re-balancing my weekly position-sizes. How? - Position-sizing uses my trading Bank balance - the Bank feed is sent to a parameter setting within the strategy code. It's simply a way of putting every dollar to work.




*Lets’ talk about “Pyramiding into PositionSizing”*

*What are the benefits of Pyramiding my PositionSizing*
What metric do I use?, How do I measure how effective a strategy is? Which of my systems will generate the most return? Which is better for real trading? These are very important questions that I need answer for as I'm a numbers man. I happy to report there’s a metric that helps answer all those questions.

*What metric is important to me*
The Megan ratio, the Geometric Mean & the Expectancy Ratio answers all my questions. As @Trav. was kind enough to post some helpful Amibroker code I'll post a screen capture of the Megan ratio & the Geometric Mean code (both codes are embedded in the body of my codes). Why post my code? Because metrics & reporting is a dry subject to read & sometimes hard to grasp but by supplying the code hopefully it will keep you reading to the end.

*Think about this*
I value every dollar (lets call them soldiers) You wouldn't expect me to deploy my funds (soldiers) into the heat of battle without knowing the odds of winning the war would you? When I put my soldiers to war I need to know the odds of them returning as there are more wars to fight (talking about war at the moment is insensitive but combine it with the analogy of boxing "makes the explanation clearer" - well to me at least)

*There are so many metric *
Many metrics can evaluate the performance of trading systems. These include Net Profit, Recovery Factor, Sharpe Ratio, K-ratio, CAR/MaxDD, RAR/MaxDD, Profit Factor, Payoff Ratio, Risk-Reward Ratio, Risk-adjusted return, Ulcer Performance Index & now I'm giving you yet another two ratios to complicate matters further to go with my Expectancy Ratio - The additional two ratios are (1) the Megan ratio & (2) Geometric Mean percentile, 'phew'. Seasons traders know all this stuff but it highlights how beginners are swamped with an information overload.

*Which System = Higher Return? *
Even though you can use these metrics to select the best trading system for you, the criteria for selecting a system tends to be arbitrary. Metrics such as the Sharpe ratio or K-ratio give an indication about the slope & smoothness of the equity curve but don’t indicate which system is the best in terms of consistency or monetary performance.

*Lets not chase Net Profits – Lets seek consistency of returns*
Not only that, keep in mind that the system with the best "Net Profit" after backtesting is not necessarily the one that will generate a higher return when you actually trade it. Another system with fewer trades in backtesting but better returns/statistics could produce more trades & superior performance.

*Backtesting means JACK*
Real trading results will differ from backtest trades because different systems have different holding periods for trades & can't handle "PositionSize Pyramiding" because Amibroker simply doesn't have direct access to my trading funds Bank account balance. Also in summary, those systems that generate more trades in the same period should do better (if the rest stays the same). This is where the Megan ratio is a God send when evaluating different strategies, it gives you the ability to compare apples with apples when backtesting apples & oranges.

*FYI *
MEGAN is an acronym which stands for the “*M*aximum *E*xponential *G*rowth *A*nnualized *N*otation” of the equity curve of a trading system, it’s a metric specifically designed to highlight the system that generates more returns per year when the profits are "reinvested" (PositionSize Pyramiding) regardless of the number of trades, holding period, drawdown, & so on.

*The geometric mean*
This is especially useful to determine whether a specific filter, which eliminates trades & therefore profits, is beneficial to the performance of the system. The best system is the one with the best geometric mean. This is because we want to reinvest the profits in the next trade (PositionSize Pyramiding). IMHO all other metric don't take into account the reinvestment of profits.

*As promised - The Megan ratio, the Geometric Mean code capture*

*

*

Skate.


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## Skate (11 January 2020)

qldfrog said:


> A lot of interesting talk this week and a pretty disappointing/bad end result for the systems today
> I know there is so much to fix that I feel pretty tempted to stop system 2 and flipper.



*
Lifted without your permission*
@qldfrog compare your equity curve to my Hybrid Equity curve - don't be disheartened you are on track & "fine tuning" of any strategy is an ongoing process. It's wise to remember "A good strategy is not good when better is expected"



*
Trend Trading *
I've posted a screen capture of my Hybrid Strategy Equity Curve back in November 2019 & in comparison you are doing OK. (2019 seems so long ago) 

(The Hybrid Equity curve below is from: Jan 2019 till end-of-trade 11th November 2019) 

My original post is found here - https://www.aussiestockforums.com/posts/1045831/ 








*Update - of my Hybrid Strategy*
The updated Equity Curve of my Hybrid Strategy below confirms trading with the trend still works but I'm first to admit trend trading is not always a smooth process. 

*Comparison*
FYI - The chart above is from 6th January 2019 whereas the chart below is a little longer in the date range - from 6th July 2019. 



qldfrog said:


> System1 lost a whooping $829 on a week which saw the asx surge




*I'm trading a large account *
Well to me it's a large account & I have to accept that sometimes "I win big & sometimes I lose big" that's just trading - If you look at the chart below each dip represents real dollars just evaporating away. It's the very reason why you need to control your emotions & be in the correct head-space. 

(The Hybrid Equity curve below is from: July 2019 till end-of-trade 10th January 2020) The Equity curve is a recent sample of a much larger chart as I commenced trading back in July 2015. My previous Equity curves posted can be found here: https://www.aussiestockforums.com/posts/1006532/ & here: https://www.aussiestockforums.com/posts/1010348/ if anyone is interested.





*Losing*
There are times when trading it can all go south for no good reason & at other times the **** can hit the fan that will be unavoidable, just like a tweet from Trump, that's just how it is sometimes. No one knowingly puts themselves in harms way - "but" - no matter how smart we are, or how hard we work, we will regularly be hit by something unforeseen. Trading is Bat-**** scary for beginners & as seasoned traders we aren't immuned. Remember the words of my old boxing coach "Don't get in the ring if you don't want to be hit"

The "Pep talk" is over...

Skate.


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## qldfrog (11 January 2020)

Thanks Skate, after analysis, the strong under performance last week was  not there I made a modest 370 gain..I posted details on my thread, but interesting how a simple manipulation error triggerred me into deeper searches, discovered a few minor errors and a major problem in my dynamic trending (system 2)
Moral of the storypathetic attempt at Skate poetry mixed with Confusius wisdom follows, read at your peril):
"Chasing shadows might lead you to discover the gold at the end of the rainbow"
Thanks again for your support and wise words


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## Skate (12 January 2020)

peter2 said:


> @debtfree I'm going to bookmark  @Skate *CAM, MAP, BOX, HYBRID, PANDA strategies*, exit discussions and even his secret sauce.




@peter2 comments missed two other strategies I've discussed previously & both have merits to be studied. Both strategies aren't too shabby having already been discussed previously in this thread. 

*1. SuperTrend Strategy*
The SuperTrend Strategy is based loosely on *@peter2* 1st Blue Bar setup that has been discussed in his thread. The performance results of the SuperTrend Strategy are quite respectable

*2. The High5 Strategy*
It’s a simple strategy that enters on a higher high of previous 5 high periods & exits when there have been 5 lower highs since entry. The strategy is so simple it’s hard to believe something so simple could have legs.



peter2 said:


> _For the new followers_: This portfolio is an *educational portfolio*




*Using the search*
If you want to bookmark any post or re-read about any of my strategies just use the search feature. Meaning, 'Search' for [Strategies] by [Skate] will get you started.

*I've lost focus *
I've stopped the educational side of posting because it was obvious that most prefer talking about charts & strategy performance but I believe there is importance to understand & grasp the practical / emotional side of trading. I'll bring out the soap box for a few post & put it away before "I hop on my high horse". I'll make a mixture of posts to encourage reading  of the 'Dump it here' thread. 

I'm not seeking to contest ideas but to express my own that I've found helpful in my trading experience. I'll also post more about the two strategies above with displayed backtest results as a refresher for others that enjoy the practical side to posts.

Skate.


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## Skate (12 January 2020)

Let’s talk about 'Strategies'

*My views*
All the posts in the ’Dump it here’ thread have been written to pass on my experience I’ve gained over the years explaining that there is an alternative way of thinking about trading & I’m very mindful that every member enjoys a different level of experience & expertise. 

*A profitable strategy*
For a strategy to be profitable it needs to have a mathematical advantage & without the advantage you won’t make any money. Trading can be scary when you trust a system developed by someone else, developing your own system has its advantages as we need discipline, commitment & confidence in your trading plan or strategy just to keep pulling the trigger. (your own strategy development provides this)

Skate.


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## Skate (12 January 2020)

*The advantage of an edge*
Traders need an edge to beat the markets & selling the losers whilst holding the winners can in fact be your simple edge, it’s a stressful situation selling losers I know, but selling quickly & holding the winners is how this mathematical advantage works.

*What's my edge?*
I keep the winners & trash the poor performers.

*It's a fallacy* 
The reason most traders concentrate on the entry is based on the false premise that if the "right" stock is bought at the "right" time this is where the money will be made. In my experience, timing of the exit is where the money is made. Cutting losing trades early is the secret of being a profitable trader. Alternative views have already been expressed in this thread that "buying" is the most important to a successful trade but in my trading experience getting the exit timed correctly works better for me.

*The importance of an exit *
Getting into a trade is simple knowing when to pull the trigger & exit (exiting at the correct time) is the hard part of trading - nailing the exit is my EDGE & as traders we all should be seeking to fine tune this part of our strategy. It’s important to remember the "EXIT" really determine the final outcome of a trade leading to the long-term success or failure of any trading strategy. 

Skate.


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## Skate (12 January 2020)

*Trading is a slow process *(Give it time)
For the mathematical advantage I've been posting about needs time to work, any strategy will not be an overnight sensation. Every strategy takes time & you'll need to be patient as truly does takes time, sometimes it’s a slow process and it can take months to develop into profits. That's just the nature of the beast. Traders without an education are notoriously optimistic & lack patience when they first start out. 

*It's complex*
I’m first to admit financial markets are complex, but that doesn’t mean it requires a complex strategy. Understanding what drives the markets is the key that leads to better decision making & the level of complexity of a strategy has little to almost no bearing on its performance. 

*The Holy Grail*
Everyone's looking for the perfect strategy, the foolproof method, well if the perfect strategy is out there it has eluded me so far. Trading in a disciplined manner by following your trading rules/plan without override your system - BINGO ! - you may have just found your “Holy Grail”.

Skate.


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## frugal.rock (12 January 2020)

Gday @Skate,
A couple of questions, if I may?
For a novice, would I be better off reading your ebook before chewing through this entire thread?
Brokers, seems that Ami is the theme, what do you use?
Tick data, can get through my current broker (Westpac), but possibly only each day, CSV or pdf format I believe. Maybe their premium subscription will have historic data?
Apologies if the answers are already in the thread... somewhere!
Have started listening to the TITZ ebook. Only 7.5 hrs to go!
Hoping to be able to pick your brain as I travel along the way, some of your strategies stand out to me as are similar (from what I can tell) to some of my previous thoughts on strategies. Eg; looking forward to learning about the 4 different vector types mentioned somewhere...
Cheers,
F.Rock


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## Skate (12 January 2020)

frugal.rock said:


> Gday @Skate,
> A couple of questions, if I may?
> For a novice, would I be better off reading your ebook before chewing through this entire thread?
> Brokers, seems that Ami is the theme, what do you use?
> ...




*Let me be frank..*
As a beginner, reading my free eBook over a few times will serve you well, not only will you be able to grasp the basics but reading it over & over will condition the way "to think"

*Blatant Plugs*
There are 3 pieces of software I couldn't live without as a trader:  (1) AmiBroker (2) Norgate data (3) Share Trade Tracker - have these three pieces of software & my eBook & you are good to go. The eBook saves you reading the thread & tons of books. Don't speed read anything I've written because as a species we have lost the art of memorising, to absorb & retain what you are learning. Some have made comments on my posting style of chunking paragraphs with heading but its done for the very reason I've just explained.

*Oh, I don't want to spend money !* (don't be one of those)
I'll write a post for you today on the importance of having the correct tool & how to use the tools in combination to get the best out of them.

*Oh, I haven't the time to learn *(don't be one of those)
Most people really aren't smart enough to deal with the information overload required to learn how to trade successfully, even intelligent people with good critical thinking skills find it hard, so take your time, your trading results will be reflected in how much of that information your absorb & put into action, that I can guarantee.

*Reading the 'Dump it here' thread is a big commitment*
If you want to be a successful trader make the effort, I'll write a post about the traits of a loser today as well, look out for the post - it will be written just be for you - "don't be loser", in this game they are a dime-a-dozen.

*TITZ ebook. Only 7.5 hrs to go!*
I don't want to be critical of members who wanted to learn or buys dozens of books - as the saying goes, if what you learn leads to knowledge, you become a fool - but if what you learn leads to action, you can become wealthy. The difference between a successful trader is not a lack of knowledge, but rather a lack of will to action that knowledge. My advice - start with the basics & formulate one trading strategy & don't move on till your have it nailed it down before seeking something more exotic.

*Think about this*
It has taken me time to respond to you in a measured way, something lost on most, don't let that happen to you.

Skate.


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## Skate (12 January 2020)

Now some facts & figures of the SuperTrend Strategy

*I've made a few improvements since I last posted*
The SuperTrend Strategy is based loosely on @peter2 1st Blue Bar setup that has been discussed in his thread. The performance results of the SuperTrend Strategy are quite respectable. My previous discussion can be found here: https://www.aussiestockforums.com/posts/1038656/ and here: https://www.aussiestockforums.com/posts/1038138/

*Impressive* 
The backtest results are impressive, my paper trading confirms the backtest results. I have found no Future leak. The XAO index performance of the last 12 months & the "SuperTrend Strategy" were made for each other (a perfect match)





















Skate.


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## Skate (12 January 2020)

*Losers are a dime a dozen*
@frugal.rock losing traders all lose for the same reasons, they seem to have certain habits in common, among which is that they start trading with little or no education, under capitalisation which is a foolproof way to lose money. Underfunded traders experience a huge disadvantage when trading because without the cushion of having those extra funds they are driven in making emotional decisions to override their strategy that can lead to them experiencing substantial loss.

*The fear of losing is sometimes crippling*
Forced emotional behaviours is mainly based on fear of loss & sometimes the fear of missing out. Fear of loss is based solely on a complete lack of understanding how to handle trades after experiencing a substantial loss. If it's any consolation we all feel it at times. This advice no way contradicts under-capitalisation, because even if you are fully-cashed-up still start out trading small amounts & build up your resistance to the pain of losing, when trading, learn to be the best loser you can possibly be.

Skate.


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## Skate (12 January 2020)

*Furthermore* (Beginners)
In the beginning, when traders start out on their trading journey there is a strong likelihood that they will mess up at some stage, everyone make mistakes & take some losses along the way, it’s price to paid when trading & especially when learning - "new traders should factored this in" - modifying your expectations is a good thing.

*Trading is a waiting game*
Waiting for a trade that fits all the parameters of your trading strategy is widely misunderstood & having no positions is a position, sometimes it's the best position to have. (waiting is the other part of trading) The time we are not trading, waiting on the sideline (doing nothing) is measured by the strategies (”Exposure %”) this metric measures the activity/inactivity of a strategy.

Skate.


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## Skate (12 January 2020)

*Successful Trading is all about discipline*
In reality, is there any valid, logical, unemotional reason to bail out of any single trade? After all, each trade is normally in series of trades regardless of individual outcome. Jumping at shadows is a poor strategy to trade with.

*I keep banging on about this*
You may have read in my previous posts, having the correct head space is critical when it comes to trading – learning to control, accept & correct your emotional attitude is absolutely the core of being successful in trading. Having the correct head space (having a strong mental attitude) is also required when trading 100% mechanical systems. There is no need to make an emotional decision to override your mechanical strategy & "self-manage" those positions if you have done the necessary testing beforehand. Having the confidence in your trading plan/strategy is the key. Read a few posts on the ASF website & it won't take you long to find them - this site is littered with those types of posts. Don't fall into the habit of overriding your system do it once & you do it again.

Skate.


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## Skate (12 January 2020)

*The High5 Strategy*
It’s a simple strategy that enters on the higher high of the previous 5 periods & exits when there have been 5 lower highs since the entry. The strategy is so simple it’s hard to believe something so simple could have legs. Its only been a few posts back to see the full report - Found here: https://www.aussiestockforums.com/posts/1051723/  & for others I've updated the backtest from today. All the backtests posted today are exactly 12 months to the day.










Skate.


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## Skate (12 January 2020)

*Tools of the trade *
@frugal.rock a successful trader needs a set of tools for dealing with varying market conditions. Having the proper tools & knowing when to use them will help any trader trade more successfully. One of the tools that should be in the trader's toolbox is a good system to trade breakouts (known as trend trading) & another system for trading pullbacks in trending stocks. Since the market does not trend all the time, you also need a way to determine when it is appropriate to use this tool & when it is best to use something else. Knowing the answers to these questions can make you a more effective trader & lessen your risk.

*1. # For trend trading*
I've detailed the "Map Strategy" & posted the Amibroker code to do so, look it up. The MAP Strategy is another simple plain envelope trading strategy that is worthy to understand.

*The MAP Strategy*
The MAP Strategy Buys when the closing price is higher than a 10 Period Moving Average conditional that the 10 period ROC filter is above 0% or it Buys when the closing price is at least 10% higher than the previous week close with Volume higher than the 10 period Moving Average. The Amibroker code has previously been supplied in the ‘Dump it here’ thread if interested - do a search.

*2. # For trading Pullbacks*
The CAM strategy has been provided to members for tweaking & evaluation (supplying the CAM strategy code is conditional). In summary the CAM Strategy buys pullbacks in existing trends and buys countertrends when the rally continues. One sample of many posts on the CAM Strategy can be found here: https://www.aussiestockforums.com/posts/1027030/ & an important announcement about the CAM Strategy can be found here: https://www.aussiestockforums.com/posts/1029730/
*
The CAM Strategy* - summary
The CAM strategy buys pullbacks in existing trends and buys countertrends when the rally continues. The most recent live trading results (days ago Friday to be exact) can be found here: https://www.aussiestockforums.com/posts/1052063/

Skate.


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## frugal.rock (12 January 2020)

Thanks for the measured response @Skate and the time given freely, something that is hard to come by in modern society.
At this point in time, I will consider myself a loser- until I can quantify the mindset and good habits required and have worked on it considerably.
I have already learnt about patience and waiting as I have exited trades early and missed some substantial profits. Eg; the portfolio could be +50% instead of being down ~40%
So my timing needs much working on also.
Much obliged.
F.Rock
PS; when you find me un-liking post's, it's just that I haven't dealt with the contents properly. As I deal with each post and absorb the info, I will like it, as part of the filing system.


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## Skate (12 January 2020)

*To save other searching for the Repository of my strategies *
I’ll post the Repository of information for the three strategies discussed today so its easier to read about the strategies in one post. The CAM, MAP & BOX strategies are all weekly trend following systems I have under evaluation & they stem from a few simple ideas.







*1. The CAM Strategy* - summary
The CAM strategy buys pullbacks in existing trends and buys countertrends when the rally continues.






*(a) The CAM Strategy* - Trading Plan (*Enter LONG*)
Buy before the open on Monday in the pre-auction at the open if today (Friday) is a GOLD-coloured bar [which represents the CAM-PB, meaning that both the 10-period (ADX) and (MACD) are declining] but the 14-period (CCI) is above zero, *-* *OR -* if today (Friday) is a BLUE-coloured bar [which represents the CAM-CT, meaning the 10-period (ADX) is declining but (MACD) is rising] and today’s close crosses above the 13-period EMA.
*(b) The CAM Strategy* - Trading Plan (*Exit LONG*)
Sell before the open on Monday in the pre-auction if Fridays end of close is a RED-coloured bar [which corresponds to the CAM-DN, that is, the 10-period (ADX) is rising but the (MACD) declines] and today’s (Friday) close is below the 13-period EMA.






*2. The MAP Strategy* - summary
The MAP strategy has two different buys conditions for entry. The first ‘Buys Signal’ is when the closing price is above a moving average period *-* *AND -* the second signal is where there is a 10% increase in the closing price compared to the previous weeks close. The MAP strategy has also two different Sell conditions, the first being (a) when the Rate of Change filter is below 0% or when (b) the close is below a trailing stop.






*(a) The MAP Strategy *- Trading Plan (*Enter LONG*)
Buy whenever the Closing price is higher than a selected Moving Average conditional on the ROC filter being above 0% - *OR* - Buy when the Closing price is at least 10% higher than the previous week close with Volume higher than the Moving Average period.
*(b) The MAP Strategy - *Trading Plan (*Exit LONG*)
Sell when the momentum stalls using a momentum indicator *- OR - *when a trailing stop is hit.

*





3. The Box Strategy* - summary
The Box Strategy is a trend continuation strategy & buys after a new high is reached after a pullback within the trend & Sells the position when the Rate of Change filter drops below zero or when the closing price is below a variable Chandelier trailing stop.




*(a) The BOX Strategy* - Trading Plan (*Enter LONG*)
After three consecutive weekly pullbacks in a confirmed trend – Buy when the closing price breaks above the previous high conditional the ROC filter is above 0%.
*(b) The BOX Strategy* - Trading Plan (*Exit LONG*)
Sell when the Rate Of Change filter & the closing price is below a moving average confirming the momentum has ceased *- OR - *Sell when a variable trailing stop is hit.






*4. The HYBRID Strategy


*

*The Hybrid strategy is complex to summarise *(The HYBRID Strategy has been detailed in previous posts)
The Hybrid strategy is a modified version of these three codes.
(1) a modified version of Captain Black breakout strategy (BlueWren strategy)
(2) a modified version of Nicholas Darvas, (Darvas box system)
(3) a modified version of John Bollinger, (Bollinger Bands Breakout system)






*5. The PANDA Strategy  




The Panda Strategy *
I have used an extensive amount of mathematical gymnastics to arrive at an entry point in the PANDA Strategy - a mathematical trick that modifies a section of an EMA that automatically updates the variables of the coefficient that greatly smooths the magnitude of price changes. In summary, it turns the EMA into an adaptive moving average that features rapid adaptation to volatility in price movement






I won't list other strategies under development or strategies that have made it to the paper trading stage of development as it would be of no educational benefit.

Skate.


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## Skate (12 January 2020)

*Negativity leads to negative thinking *
Without a doubt, a positive outlook is important. To that end, believing that your overall trading will be profitable is certainly valuable. However, mismanagement of your trading is another thing. Trading by its very nature is risky, but there are ways to manage & minimise the risks - one risky way of trading is taking on undue amounts of risk or staying too long in a trade that has moved against you – following that path is a recipe for disaster.



frugal.rock said:


> Thanks for the measured response @Skate and the time given freely, something that is hard to come by in modern society. As I deal with each post and absorb the info, I will like it, as part of the filing system.





*Appreciation*
@frugal.rock I appreciate every "like" I receive & value each & every one of them. When a member hits the "Like" button it's an affirmation I'm not wasting my time or the precious time of other members. "Likes" let me know if the subject I writing about is interesting to someone else as I'm just repeating things I already know. I re-read every post that has been "liked" as it gives a mental image of the member.

*I want to reinforce one point before I finish for the day*
As traders we must focus most of our time & attention on the mental side of trading. If you get that right, everything falls into place for you. The good news is, profitable trading is simpler than you might think but far from easy.

*In summary*
There comes a time when I have to get down off my "Soap Box" as the last thing I want to do is bore readers with stuff they already know (In my defence - a refresher course is always handy to refocus & re-invigorate, sometimes its fun to go over stuff we tend to forget)

Thanks for reading..

Skate.


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## fergee (12 January 2020)

Skate said:


> *Appreciation*
> @frugal.rock I appreciate every "like" I receive & value each & every one of them. When a member hits the "Like" button it's an affirmation I'm not wasting my time or the precious time of other members. "Likes" let me know if the subject I writing about is interesting to someone else as I'm just repeating things I already know. I re-read every post that has been "liked" as it gives a mental image of the member.
> 
> *I want to reinforce one point before I finish for the day*
> ...



@Skate keep on doing what you are doing man. I for one really appreciate the knowledge you are handing on to us and hope that one day I can be a fraction of the trader(philosopher) you are and am able to pass on some of this knowledge to others who seek it.
Thank you


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## Warr87 (12 January 2020)

some more gold. If it wasn't for you, and a number of other members on here, I wouldn't have been able to put together my strategies and ideas and stitch together the knowledge I've been accumulating.

I also wanted a little more info, if you can, on how you pyramid your positions? If you get another buy signal for a stock you already hold, are you adding to it? Or, are you sizing out of a position as a way to lock in profits and use the equity to add to new positions?

Also, thanks for the additional code for the metrics. One thing though, what is mtpy as it hasn't been initialized in the code you provide .

<CODE>
meg = mtpy*ln(geom);
</CODE>


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## Skate (12 January 2020)

Warr87 said:


> some more gold. If it wasn't for you, and a number of other members on here, I wouldn't have been able to put together my strategies and ideas and stitch together the knowledge I've been accumulating. I also wanted a little more info, *if you can, on how you pyramid your positions?* If you get another buy signal for a stock you already hold, are you adding to it? Or, are you sizing out of a position as a way to lock in profits and use the equity to add to new positions? Also, thanks for the additional code for the metrics. One thing though, what is mtpy as it hasn't been initialized in the code you provide .<CODE>meg = mtpy*ln(geom);</CODE>




@Warr87  I'm not a lover of pyramiding into a position or adding to an existing position (others can argue the case for pyramiding but with a "Take Profit Stops" or "Pyramiding" neither work for me)

*Answer to QUESTION 1* - _"If you get another buy signal for a stock you already hold, are you adding to it?" _*Absolutely "NO" - I never pyramid into a position (one of my many rules)

Answer to QUESTION 2 - *_"are you sizing out of a position as a way to lock in profits and use the equity to add to new positions?"_* "NO" - It's re-balancing the size of the next bet see explanation below*

*"Pyramiding Explanation" *(positionSize)
Pyramiding my positionSize is a re-balancing technique to vary my position sizes (my next series of bets) with the reinvestment of profits. I'm a TRUE believer in "pyramiding" my Position-sizing (I've discussed this many times in this thread) "Position-sizing Pyramiding" is to re-balancing my weekly position-sizes. By "Pyramiding (re-balancing)my PositionSizes" every soldier is put into the battle to fight the good fight.

*How? *
Position-sizing uses my trading Bank balance - the Bank feed is sent to a parameter setting within the AFL strategy code. It's simply way of putting every dollar to work.

*What is the Re-Balancing Formula?*
Trading Bank Balance/outstanding positions = new "PositionSize" 
This will now be the new bet for each & every pending trade (the new PositionSize also calculates the number of share to buy in the pre-auction)

*Recap*
MEGAN is an acronym which stands for the “*M*aximum *E*xponential *G*rowth *A*nnualized *N*otation” of the equity curve of a trading system, it’s a metric specifically designed to highlight the system that generates more returns per year when the profits are "reinvested" PositionSize Pyramiding regardless of the number of trades, holding period, drawdown, & so on. The Megan ratio lets you evaluate different strategies, it gives you the ability to compare apples with apples when backtesting apples & oranges.

*The geometric mean*
This is especially useful to determine whether a specific filter, which eliminates trades & therefore profits, is beneficial to the performance of the system. The best system is the one with the best geometric mean. This is because we want to reinvest the profits in the next trade (PositionSize Pyramiding). IMHO all other metric don't take into account the reinvestment of profits.

*AmiBroker code*
The AmiBroker code provided below calculate the Megan ratio adding a custom metric to the standard AmiBrokers backtest statistics. The MEGAN code also add the geometric average percentage.

*My suggestion*
Check that you have copied the line of code correctly especially the Array naming of: *mtpy = 252 / st.getvalue( "AllAvgBarsHeld" ); //maximum number of trades per year*

*//Megan Ratio & Geom% Calculation*
Check the *BOLDING* in the formula at ---->   * [* *mtpy = 252 / st.getvalue( "AllAvgBarsHeld" );   ]*

*MEGAN Ratio Code
*
    SetCustomBacktestProc( "" );

    if( Status( "action" ) == actionPortfolio )
    {
        bo = GetBacktesterObject();
        bo.backtest();
        st = bo.getperformancestats( 0 );
        geom = ( st.getvalue( "EndingCapital" ) / st.getvalue( "InitialCapital" ) ) ^ ( 1 / st.getvalue( "AllQty" ) );
        geomp = 100 * ( geom - 1 ); //geom percentage
*mtpy = 252 / st.getvalue( "AllAvgBarsHeld" ); //maximum number of trades per year - "PLEASE CHECK": you may have written the array incorrectly or not at all.*
        meg = mtpy * ln( geom ); //max exponential growth rate (annual)
        bo.addcustommetric( "Geom%", geomp );
        bo.addcustommetric( "MEGAN Ratio", meg );
    }
    }

Skate.


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## Warr87 (12 January 2020)

Thanks for the further clarification. That's the way I have been thinking about rebalancing positions too, but I had wondered if that meant too much was being reinvested into new positions. Considering we are utilising compounded returns, it also makes sense to do it this way though.

Thanks for the code. It is working. And while I am sure you will hate to give a specific figure, I have to wonder what you consider to be a good MEGAN value for a system? Obviously your criterion is different to someone elses, but if this is another tool in your toolbox, how do you like it to value add to your evaluation?


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## Skate (12 January 2020)

Warr87 said:


> Thanks for the further clarification. That's the way I have been thinking about rebalancing positions too, but I had wondered if that meant too much was being reinvested into new positions. Considering we are utilising compounded returns, it also makes sense to do it this way though. Thanks for the code. It is working. And while I am sure you will hate to give a specific figure, *I have to wonder what you consider to be a good MEGAN value for a system? *Obviously your criterion is different to someone elses, but if this is another tool in your toolbox, how do you like it to value add to your evaluation?




*Hmm...*
The Megan Ratio figure isn't to tell you what a good strategy is - its compares systems - Its a old question "which system is better compared to another". Say you have two different systems to trade. System 1 has a geometric mean of 3% and holds positions for an average of three days. System 2 has a geometric mean of 4% and holds positions for four days. Which is better for real trading? The Megan ratio will give you the answer. In terms of absolute return, the best system is the one with the best geometric mean. This is because we want to reinvest the profits in the next trade. The arithmetic average of backtests doesn't  take into account the reinvestment of profits.

*The Megan Ratio*
The MEGAN ratio focuses on the ability to select profitable trading systems in general. There are many aspects to consider when evaluating a trading system & an examination of reinvested profits is a worthwhile objective.We are looking for the system with the highest Megan ratio value. While this proved effective at picking the system with the greatest profits, you also have to use additional performance metrics alongside the Megan ratio to select a robust system. The better system has the higher Megan ratio.

*A test for you*
The Megan ratio for system 1 is [0.0184] versus [0.0049] for system 2, which is the best system? "Hint": the answer is the last sentence of the last paragraph above that's underlined. Its simply a measure between systems. It's similar when you have a bunch of buy signals - Which ones do you take first (Answer: the highest PositionScore)

*This will be easier for you*
When comparing two Trading System - trade the the strategy with the highest CAR/MDD & don't worry what the numbers mean.

*Footnote*
I can't wait to read @bigdog next Dow Jones report - there has be little made of the fact The Dow rose 40 points to cross the 29,000 level for the first time, but couldn't sustain its gains & ended the day down 133 point.

*This year*
2020 may be shaping up for a big year with a few blip along the way, so get your strategy in order, we don't want to miss the next big move.

Skate.


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## peter2 (12 January 2020)

@Skate  You've been busy posting lots of excellent advice and practical applications. Thank you. 

This thread is an excellent educational resource for traders who want to apply an automated system to manage their share portfolios. 

I've coded the MAP and CAM buy signals onto my charts and you should see some of the trends you get on monthly and quarterly charts. The trend in CSL (quarterly) has been going for 15 years, RMD +10 years, MFG 9 years, COH 5 years and lots of others for just as long. 

We have a tendency to think smaller time frames but the same techniques are just as good in the longer time frames and there's much less work involved.


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## Warr87 (12 January 2020)

When comparing two systems, I understand that the higher the value for the geometric mean and MEGAN will be better, just as I look at CAR/MDD, but when evaluating a system there are certain things that must meet minimum standards. Since I'm not accustomed to using MEGAN I was just curious as to what kind of cut off you may use, to have a frame of reference. I understand that's very subjective and perhaps not something you would publicly say, so I wont press the issue.

Another valuable tool to add though. I'm sure it will be useful for me in the future.


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## Warr87 (12 January 2020)

peter2 said:


> @Skate  You've been busy posting lots of excellent advice and practical applications. Thank you.
> 
> This thread is an excellent educational resource for traders who want to apply an automated system to manage their share portfolios.
> 
> ...




I whole heartedly agree with you. A huge educational resource here. 

I have looked at these signals on daily, and while they work, it is true that they seem to work on the longer time frames more consistently for me. I'm looking forward to @MovingAverage 's monthly system for the same thing you are hinting at: is it possible to get the same kind of results but on a larger time frame (and thus fewer trades and less active, therefore more efficient)? The larger time frames may not be as exciting or 'sexy' and perhaps thats why people don't usually go down that path. Is more always better? haha


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## Skate (12 January 2020)

peter2 said:


> @Skate  You've been busy posting lots of excellent advice and practical applications. Thank you. This thread is an excellent educational resource for traders who want to apply an automated system to manage their share portfolios. I've coded the MAP and CAM buy signals onto my charts and you should see some of the trends you get on monthly and quarterly charts. The trend in CSL (quarterly) has been going for 15 years, RMD +10 years, MFG 9 years, COH 5 years and lots of others for just as long. We have a tendency to think smaller time frames but the same techniques are just as good in the longer time frames and there's much less work involved.




*This thread is for beginners*
@peter2 thank you for your kind words - after reading your thread being "educational" the switch flipped back on to make a few education (pep talk) post to re-energize the "Dump it here" thread.

*Robust Strategy ideas *
All my systems work well in all time frames (getting the Daily time frame parameters was tricky at first) My strategies are robust & work just as well in long time frames (exceptionally well) with less trading emotions as they hold good trending stock for quite a along period of time.

*Monthly Chart*
I'm posting a monthly chart for RMD so others can see the hold period you are explaining. (Forget the title of the chart being Weekly) it's a MONTHLY chart.





*As a "Footnote"*
There has been little made about the Dow Jones topping 29,000 points - in fact The Dow rose 40 points to cross the 29,000 level for the first time in the last session of trading but couldn't sustain its gains & ended the day down 133 point. The Dow futures is down  -5.00  or  -0.02% @  28,772.00 (the last Data update I have is of 4:59pm ET)

*This year is starting out on the right foot*
2020 may be shaping up for a big year with a few minor/major blip along the way, so it's time get our strategy in order, we don't want to miss the next big move.

Skate.


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## jbocker (13 January 2020)

Skate said:


> @jbocker - "A lacky-band gun removed from an algebra class because it was a weapon of math disruption"



After many years I have finally changed my tag @Skate. You can read it below in my sign off. I changed it to this as I feel a greater realisation of it, the older I get.


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## Skate (13 January 2020)

*The article below has been written by:  NextLevelForex (AmiBroker forum member)*
I've been given kind permission to post an article written by "NextLevelForex" a member of the "AmiBroker forum" The article below has been succinctly written by an experience trader in the hope of helping others. IMHO the short article covers it all & is very worthy of a few reads.

*I've made 1,410 posts*
I've made quite a few posts to say what "NextLevelForex" said in one short article - nailing it.. 

*Bullet points taken from the article*
# the "next thing" would solve whatever issues I encountered
# I never really had a system, but it’s only much later that I learned that 
# maybe I would have started it with more preparation and discipline
# I changed many things about myself for the better
# I also seem to (finally) have a system that I trust to trade for the long run.
# the best system is one that you can stick with (and it is assumed that it does have an edge)
# making nice returns when you have a winning year, that's the meaning I give to "consistently profitable".

*Now for a powerful closing statement*
In closing, if someone wants to trade only because of the promises of easy money, I would advise that person to find another reason, or, better yet, reasons. I love numbers and programming more than I love making money. If it was only for the money, I would have quit this journey a long time ago..."

*Appreciation*
My thanks go to "NextLevelForex", his article hit a nerve with me..

The original article can be found here: https://forum.amibroker.com/t/what-is-the-most-profitable-trading-strategy/16227/25

-------------------------------------------

_Hi everyone,

"I started trading in 2002, and till 2013 I switched from one thing to another (from funds to stocks, then to options, next to futures, then to forex, and finally real estate). Probably the biggest mistake was not recognizing what I was doing wrong, for each market and “system”, and instead thinking that the "next thing" would solve whatever issues I encountered. I put system in quotes because I never really had a system, but it’s only much later that I learned that 

In hindsight, I am very happy I persisted, and I'm also glad I did not know how long and hard the journey is. Had I known that, I might have not even started it (or, who knows, maybe I would have started it with more preparation and discipline).

Why am I very happy I persisted? Because, in the end (after about 5 years), not only I changed many things about myself for the better (like being more accepting of the unknowns of life, thanks to lessons learned from a trading perspective), but I also seem to (finally) have a system that I trust to trade for the long run.

As a few people pointed out, the best system is one that you can stick with (and it is assumed that it does have an edge). Looking back, many of the things I tried in my pre-2013 era did have an edge, but I did not stick with those systems through the drawdowns... Plus, as mentioned above, I did not really have all the pieces in place, so they were incomplete systems, which made matters worse.

Am I consistently profitable? That totally depends on so many things, it's genuinely difficult to answer. For example, what is consistent? Not having a losing day, or week or month? If that's the meaning you give it, than I'm not in that bucket, and I may very well never be. Does it mean not having a losing year? Again, not my definition and does not apply to me. Losing small when you have a yearly loss, and making nice returns when you have a winning year, that's the meaning I give to "consistently profitable". (and here, "small loss" and "nice returns" are again what you say they are, not some universally accepted values)

Also, what is the size (depth) and duration (length) of the drawdowns you are willing to go through? A good exercise, in my opinion, is to download SP500 daily data from Yahoo, or any other broad index that you like, and calculate some of its metrics, using Excel. I guess a lot of people are happy with the returns SP500 delivered after March 2009, but they seem to be of the opinion that the index cannot go through another deep drawdown like it did in 2008. But, if it does, would you be ok with that drawdown, for the annual performance it delivered?

In closing, if someone wants to trade only because of the promises of easy money, I would advise that person to find another reason, or, better yet, reasons. I love numbers and programming more than I love making money. If it was only for the money, I would have quit this journey a long time ago..."

Hope this helps!_

-------------------------------------------

*Conclusion*
In this game - help from other is the key to success

Skate.


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## qldfrog (13 January 2020)

Skate said:


> *Conclusion*
> In this game - help from other is the key to success



That is it, and the moral obligation to do the same once you can help in however little way you can.
Good stuff as always.i bookmark


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## frugal.rock (14 January 2020)

Skate said:


> *So why is market acting the way it is? *
> 
> That’s anybody’s guess.
> 
> ...



Did @peter2 do a summary as mentioned above?
Would be interested in it also.
F.Rock


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## frugal.rock (14 January 2020)

Skate said:


> I was asked once at a conference "if you were to give someone only one piece of advice - what would it be?"
> 
> My answer got a reflective nod in return.
> 
> Skate.



And what was the piece of advice?

F.Rock


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## frugal.rock (14 January 2020)

Skate said:


> *Targeted teaching*
> 
> Functions of Trigonometry, Sine, Cosine and Tangent are important when it comes to coding a Trading algorithm-  most trading strategies used in technical analysis are based on advanced mathematics that indicates if a market is trending or in a cycle, whether I should buy or sell.
> 
> ...



Can you please elaborate on particular trig functions used? (what, when, how they are applied... too big an ask?) 
Was also wondering what you taught at TAFE to adults...?
F.Rock


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## frugal.rock (14 January 2020)

Skate said:


> @greggles our community has a wealth of quality posters, unlocking their knowledge would be to the betterment of all our members.
> 
> There are a lot of smart people in our community & when they start to speak the majority of us are not mart enough to listen.
> 
> ...



Thoroughly agree. 
Any further news on @tech/a sons software? 
Finding myself at mental crossroads...do I continue the pathway to registration (surveyor) or do I use transferrable skills and head the trading path, whilst still surveying out of enjoyment? Continue Uni for a piece of paper or to advance the mathematical analysis? Aargh!
What have I done...! 
F.Rock


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## qldfrog (14 January 2020)

frugal.rock said:


> Thoroughly agree.
> Any further news on @tech/a sons software?
> Finding myself at mental crossroads...do I continue the pathway to registration (surveyor) or do I use transferrable skills and head the trading path, whilst still surveying out of enjoyment? Continue Uni for a piece of paper or to advance the mathematical analysis? Aargh!
> What have I done...!
> F.Rock



FRock, if i may ask how old are you: not derails but 20s,30s,40s, etc
Are you working for fun or money?
I would be very careful before even thinking of trading as a career choice unless employed by someone
Self trading can bring money but you will need to build experience and deep pockets..anyway
A few years of stable income and a fall back position may be the way to go
My 2c


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## frugal.rock (14 January 2020)

Hi qldfrog,
I am as old as the dew on the grass, and as old as the hills themselves.
Many moons have I seen, waxed and waned, blood red, orange and blue.
The sun has risen and patinad my face and taught me to seek shelter from it's hue.
The answer you seek is determined by you.
F.Rock
PS; thank you for your concern, much appreciated. I have digested much from the participants on this forum, yourself included, but you need not worry about me, merci beaucoup.


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## Skate (14 January 2020)

frugal.rock said:


> And what was the piece of advice?
> 
> F.Rock




*"Don't waste the dash"*
Before you ask, let me explain what the Dash is. On a Headstone the "DASH" represents a life that was lived.

*"Don't waste your life"*
Don't waste the dash is my cryptic way of say, "don't waste your life" The dash between 1949 - 1996 represents the time Timothy's was alive.




*You are the only one*
@frugal.rock you are the only one who asked "what was my advice that got a nod" - Well done..

*"It's better to remain silent & be thought a fool than open your mouth & remove all doubts"*
People in general don't want to say "I don't know" what that means because it may make them sound like an idiot "not knowing". All I got from the guy was a "NOD" - he was clueless to the advice I had just given him, more importantly - he didn't care.

*Clouds*
I find some people are like clouds. When they go away, it's a brighter day.

Skate.


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## Warr87 (14 January 2020)

qldfrog said:


> FRock, if i may ask how old are you: not derails but 20s,30s,40s, etc
> Are you working for fun or money?
> I would be very careful before even thinking of trading as a career choice unless employed by someone
> Self trading can bring money but you will need to build experience and deep pockets..anyway
> ...




@frugal.rock
I find system development and testing fun, and its great each time I learn something to improve my system. Like skate, I'm not doing this for the money but find it as something enjoyable.

There are a lot of cautionary tales of people going to trading full time and then going back to work, blowing up accounts, etc. If you are trading full time, then your profits are paying for your living expenses. When you hit a drawdown, you are going to be taking money out of your capital to pay your bills making it harder to recover. Some well known traders (I think Nick Radge was one) who said it was a mistake to go full time trading when they did and they probably should have waited a bit longer. They certainly weren't the only ones. You would need enough capital to pay your bills for 2 years without touching your trading account. Not feasible for most.

I would recommend you finish uni. I'm biased though as I actually enjoy uni (and heading back to uni again this year. I start in 2weeks). Get that piece of paper. A lot of companies who like people with degrees also don't usually care about what the degree is, they want to see commitment to see something through for a few years. If you can't commit for a few years, then why would they think you will stay at their company?

I'm content with trading at the end of the week, allowing me to do work and uni and adding to my trading account as I earn a steady income. Nothing wrong with trading on the weekend.


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## Skate (14 January 2020)

frugal.rock said:


> Did @peter2 do a summary as mentioned above?
> Would be interested in it also.
> F.Rock




@frugal.rock - it was a rhetorical question 

*So why do markets act the way do?*
That’s anybody’s guess. Trading is not an exact science. The markets are emotional that’s a given because humans are the emotional drivers of the markets & these emotions never seem to change. I hate when rational people go out of their way to constantly make irrational decision, I find it a battle just to keep up with them.

Skate.


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## Skate (14 January 2020)

frugal.rock said:


> Can you please elaborate on particular trig functions used? (what, when, how they are applied... too big an ask?)
> Was also wondering what you taught at TAFE to adults...?
> F.Rock




@frugal.rock trading using a mechanical system is ideas turned into code & coding is full of mathematical equations - There is a lot of chatter at the moment about Machine Learning & how ML can be incorporated into AmiBroker. If you you like to know more about the subject or the math's behind it read here: https://www.linkedin.com/pulse/how-...time-series-forecasting-vegard-flovik-phd-1f/ or here: https://en.wikipedia.org/wiki/Long_short-term_memory for a better understanding.

*TAFE*
I was approached to teach a two year refresher course in Mechanical Engineering conducted at a TAFE institution. It was boring as Bat$hit.

Skate.


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## Skate (14 January 2020)

frugal.rock said:


> Thoroughly agree.
> Any further news on @tech/a sons software?
> Finding myself at mental crossroads...do I continue the pathway to registration (surveyor) or do I use transferrable skills and head the trading path, whilst still surveying out of enjoyment? Continue Uni for a piece of paper or to advance the mathematical analysis? Aargh!
> What have I done...!
> F.Rock




@tech/a ML software is still in the development stage AFAIK

*Qualification*
Employers love degrees & qualifications - my office wall was once covered in them (they now reside in a plastic bag) @Warr87 has already given you good advice on Uni so I'll leave it at that.

*Being a full time trader*
With bucket-loads of money behind you, full time trading is an option otherwise stick to your day job. As they say with trading "how do you end up with a Million Dollars at the end of the year?" = Start with two (million) @qldfrog has also given you good advice.

Skate.


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## Skate (14 January 2020)

Skate said:


> @Saqeeb sorry for the delay. Let me outline the analysis & reasoning behind the purchase of SRG today, remembering *"One swallow doesn't make a summer" *- meaning the outcome of this or any "one trade" is not guaranteed because of the uncertainties the markets hold.
> 
> *The CAM strategy *
> The CAM strategy has indicated that SRG has started in a “Counter Trend” rally & is a buy today.
> ...




*Skate's hanging his head in shame*
Nah, not really (my paragraph headers are a form of click-baiting) to encourage you to read the next paragraph then the next & so on.

*Update on the purchase of SRG*
SRG was a losing trade - The CAM strategy indicated that SRG had started in a “Counter Trend” rally & was worthy of a punt. My CAM strategy has a 50/50 success rate, the winners I tend to keep & the 'DUDS' don't worry about them, I'll trash them quickly (so I can get into another position quickly)

*Let's talk about PositionScore*
PositionScore is a ranking feature of Amibroker, meaning if you have more signals than funds, which signal do you take first or till your funds are fully invested? We do it by ranking the entry signals to decide which entries are preferred over the others (what method you rank the signals is up to you). Why mention this? If you look at my Buy signals for the 20th December 2019 (that includes SRG) you will notice SRG is well down the list & the positions above have to be taken to get to buy SRG. FYI - all the securities above SRG in the list have been taken first before SRG can be purchased.






*Lets evaluate the positions (Score card) how they went or how they are currently going *
I'll give you today's score card how they have traveled/travelling since being taken. Some positions have been cashed out (losers), some are struggling (hanging in there) & some are winning at the moment. (go you good things -- GO!)

*The Score Card..*
NVL* – WINNING* - Still in the trade & currently a WINNER (at the moment)

QMS* – WINNING* - Still in the trade & currently a WINNER (at the moment)

[VRL] – ## SELL SIGNAL PENDING (currently still in the trade) ##

REH* – WINNING* - Still in the trade & currently a WINNER (at the moment)

APA – is STRUGGLING at the moment

SLR* – WINNING* - Still in the trade & currently a WINNER (at the moment)

SXE* - - - EXITED at a LOSS*

SSM* - - - EXITED at a LOSS*

NUF* – WINNING* - Still in the trade & currently a WINNER (at the moment)

CHC *– WINNING* - Still in the trade & currently a WINNER (at the moment)

NST* – WINNING* - Still in the trade & currently a WINNER (at the moment)

MPL – is STRUGGLING at the moment

CUV – is STRUGGLING at the moment

[VTG] – ## SELL SIGNAL PENDING (currently still in the trade) ##

SRG* - - - EXITED at a LOSS (Boo-hiss, the security in question)*

HT1 – is STRUGGLING at the moment

WPP* – WINNING* - Still in the trade & currently a WINNER (at the moment)

BGA* – WINNING* - Still in the trade & currently a WINNER (at the moment)

NEA* - - EXITED at a LOSS* with a new *“Buy” SIGNAL PENDING*

GTN* – WINNING* - Still in the trade & currently a WINNER (at the moment)


*The Chart of SRG - the loser!*




*Any Interest*
I won't clog up the thread with a heap of charts but if there is any interest in any of the positions taken - just ask & I'll post them up (positions closed or still open)

*Charts have educational value*
Viewing a few charts might be handy to understand why positions were taken (who knows, it may have no value at all), understanding why a positions was taken gives a direct insight to the working of a strategy. Sometimes its nice to see how the previous positions turned out (was that signal a winner or a loser, a visual strike rate)

*Mechanical Trading*
Trading in a disciplined manner by following my trading rules executing the signal without override any - I've found my “Holy Grail”.

Skate.


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## qldfrog (14 January 2020)

Skate said:


> Trading in a disciplined manner by following my trading rules executing the signal without override any - I've found my “Holy Grail”.



So do i but what if the buy is triggered on a takeover announcement..this is the only time so far where i deviated
I took some but the cash is pretty static, a term deposit with negative or positive risk if counteroffer are made etc...
Not really a trading issue as such, yet influence is great


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## Skate (14 January 2020)

qldfrog said:


> So do i but what if the buy is triggered on a takeover announcement..this is the only time so far where i deviated
> I took some but the cash is pretty static, a term deposit with negative or positive risk if counteroffer are made etc...
> Not really a trading issue as such, yet influence is great




@qldfrog said:_ "if the buy is triggered on a takeover announcement..this is the only time so far where i deviated"_

*No No !!*
Your final decision forms your trading plan - that's your plan, you are still following your plan 100% - Amibroker is your strategy & unable to understand when ASX  makes announcements let alone understand there implications - Amibroker handles your strategy - you handle your trading plan, it's up to you to execute your plan, there is a distinction. 

Skate.


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## Skate (14 January 2020)

*Let's talk about irritations*
(a) Have you ever executed a sell only to see the position reverse & take off again. Well it doesn't bother or irritate me. I see it as a potential re-entry, just because the previous position didn't go our way - the next move may be a winner, we might have been too early (that's all). (b) Have you ever caught yourself checking a position that's you have already sold to see if you made a good decision. (don't do that because it can lead to irritations & frustrations) Let sleeping dogs lie, concentrate on executing the next position.

*Selling is easy*
Selling is cheap and easy and can be undone in the blink of an eye.

*A stumbling block*
Too many seem to think that if they sell a stock, they are somehow prevented from buying it back again. Not so. For most traders, the biggest stumbling blocks to selling are mental.

*EXAMPLE of SRG taking off again *(SRG is setting up for the next move)




Skate.


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## Country Lad (14 January 2020)

Skate said:


> (a) Have you ever executed a sell only to see the position reverse & take off again.




Lost count over the years, let's just say - often. 



> (b) Have you ever caught yourself checking a position that's you have already sold to see if you made a good decision.




Not for that reason, but I do follow them on the basis I bought in initially for a good reason. If that good reason is still there, then I look to buy back in at an appropriate time.


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## Skate (14 January 2020)

*The advantage of an edge*

*What's my edge?*
I have a fast exit. (StaleStop) If any position is not performing I'm out of the trade & into another. I keep the winners & the (StaleStop) helps me quickly cull the under-performers. Don't get me wrong - winning trades can equally be under achievers & selling them quickly rather than holding on to them is how my mathematical advantage works. I'm selling winners all the time & not to take profits but just because their momentum has tailed off or slowed.

*Get out quick*
Timing of the exit is critical to any strategy. Cutting trades early is the secret of being a profitable trader. Alternative I could watch the positions & wonder what I should do next, (a favourite pastime with some traders) but really how much latitude should they be given? (Heck None, as far as I'm concerned). Getting the exit timed correctly works better for me.

*The importance of an exit*
Nailing the "EXIT" really determine the final outcome of the trade & don't let anyone convince you otherwise. I'll post a capture from my CommSec account to display the difference between the % of winners compared to the % of losers (they are my top two winners & my top two losers - at the moment) This is an example of my edge (I keep the winners & cull the under-performers - it works for me)

*A timely reminder*
When I post it's from my live trading - I'm one member that post real trades. Its rare on this forum to see members posting true trading results & snippets of trading figures - all done in the hope that traders find an educational value.

*Lets post up some captures (WINNERS)*
These are my best two performers at the moment













*Lets post up some more captures (LOSERS)*
These are my worst two performers at the moment













*Take Notice*
Look at the difference in holding period between winners & the losers

*Disclaimer*
The CAM Strategy just cashed out ADH as a "WINNER" - it's the very reason we need a variety of strategies in our tool box. Having an alternative strategy (a different tool) & how to use the tools in combination means you can get the best of both worlds. Having a variety of tools is a sure fire way of giving yourself a fighting chance of becoming a more effective trader & lessen your overall risk.




*Summary*
IMHO - Strategy combinations is a way of "Having your cake & eating it too"

Skate.


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## Warr87 (14 January 2020)

Skate said:


> @tech/a ML software is still in the development stage AFAIK
> 
> *Qualification*
> Employers love degrees & qualifications - my office wall was once covered in them (they now reside in a plastic bag) @Warr87 has already given you good advice on Uni so I'll leave it at that.
> ...




They do. My issue is usually being over qualified for most jobs, but that hasn't stopped me from going back and studying again. I love it and don't learn for the financial benefit, but it always helps. Uni is more about qualifications and it's meant to teach (outside of the domain specific knowledge) persistence, time management, reasoning skills, and logic. It's a point lost on most and many see it as merely a means for a high paying job. I think there is more to it than that, but I will jump down from that soapbox.

I also had a question about your CAM strategy. You obviously don't position score based on price. Is it ROC * some other indicator? What are some of the positionscoring ideas you like to rotate through when testing your systems?

I also had a question in regards to your CAM strategy (and perhaps its a good question for @qldfrog as well). Do you have a preference to buy the PB or the CT, or it doesn't matter for you?


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## aus_trader (14 January 2020)

Skate said:


> (a) Have you ever executed a sell only to see the position reverse & take off again.



Yes Skate, happens often. But I went back to look at what happens if I just held onto the losers hoping they might take off again. Well the result is comforting, I am glad to have let go of losers when I did. Other than the occasional turn-around winner which I rarely catch as I am already onto researching other stocks or new themes in the market, the bulk of the losers sold tend to drift further down over time.

So emotionally it can be challenging to see a loser turn into a winner and go for a big run without me, but statistically it's re-assuring to stick to what I am doing by letting go of losers once it's dropped far enough.


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## Skate (14 January 2020)

Warr87 said:


> They do. My issue is usually being over qualified for most jobs, but that hasn't stopped me from going back and studying again. I love it and don't learn for the financial benefit, but it always helps. Uni is more about qualifications and it's meant to teach (outside of the domain specific knowledge) persistence, time management, reasoning skills, and logic. It's a point lost on most and many see it as merely a means for a high paying job. I think there is more to it than that, but I will jump down from that soapbox.
> 
> I also had a question about your CAM strategy. *You obviously don't position score based on price. Is it ROC * some other indicator? What are some of the positionscoring ideas you like to rotate through when testing your systems?*
> 
> I also had a question in regards to your CAM strategy (and perhaps its a good question for @qldfrog as well). *Do you have a preference to buy the PB or the CT, or it doesn't matter for you?*




@Warr87 - with PositionScore it's horses for courses - it's about dancing to the music being played, meaning one PositionScore doesn't fit all strategies (they need to be in tune with the strategy). The PositionScore can be one of the deciding factors of the overall profitability of any strategy. There are a multitude listed on the net for you to play with.  I've tried every ranking code I could get my hands on & tested them to death to achieve better results than @captain black suggested one that suited my trading style & strategy & he would have "my guts for garters" if I disclosed it or even spoke about it.



Skate said:


> *Disclaimer*
> I use a proprietary 'Positionscore code' given to me by 'captain black' & if I was to disclose the ranking method or his code he would have my "guts for garters"




*Don't throwaway a good strategy*
At all cost you need to get the ranking correct or you might just throw away a good strategy.

*The CAM Strategy*
To answer your second question the CAM strategy buys "pullbacks" (PB) in existing trends and buys "countertrends" (CT) when the rally continues. There is no preference in selection, the (PositionScore) decides the ranking - meaning the signal that comes first (highest in the list) is the one you buy first whether its a "pullbacks" (PB) or "countertrends" (CT) signal. PositionScore is ranked in decending order.

Skate.


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## Skate (14 January 2020)

aus_trader said:


> Yes Skate, happens often. But I went back to look at what happens if I just held onto the losers hoping they might take off again. Well the result is comforting, I am glad to have let go of losers when I did. Other than the occasional turn-around winner which I rarely catch as I am already onto researching other stocks or new themes in the market, the bulk of the losers sold tend to drift further down over time.
> 
> So emotionally it can be challenging to see a loser turn into a winner and go for a big run without me, but statistically it's re-assuring to stick to what I am doing by letting go of losers once it's dropped far enough.




@aus_trader you are so correct. I hope others take notice of your post, well done on handling positions as you do.

*Selling*
Successful trading is largely the art of selling. Buying a stock is easy. It is determining when to cut our losses or when to take our profits that is hard. Because it is so hard to determine when it is the right time to sell, many just don’t do it.

*Selling is a valuable tactical tool*
Selling a position is by far the most valuable tactical tool that the individual trader has at their disposal. Too many traders seem to think that if they sell a position, they are somehow prevented from buying it back again. You can buy & sell any position any time, with trading there are no rules (having no rules is scary)

*Misery of selling a large loss*
When the misery of a big loss is suddenly removed by selling the position you'll feel a surge of energy - the weight will be lifted & you might be surprised at how readily you can find other opportunities that will help you make up your loss. Don't be a sore loser, take it on the chin & move on & take the next position. (keep pulling the trigger)

*Boxing*
I had to keep throwing punches or the fight would be stopped, it's the same with trading - when you stop pulling the trigger the game is all over. As a boxer I had one job "TO KEEP STANDING" once I hit the canvas the fight would be as good as over. In trading you have one job to do "PROTECT YOU TRADING CAPITAL" if you don't protect your capital the game will be good as over .

Skate.


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## Warr87 (14 January 2020)

I figured that was the case. I have used the PB method of the CAM strategy, added my own flair, and coded a PB system (it worked quite well). 

And you are correct about the importance of positionscore. I know you have looked at my code, changed my positionscore, and the whole system turned around and became a lot more profitable. While exits are key, improving the entries with positionscore certainly helps to improve an edge by building consistency.



aus_trader said:


> Yes Skate, happens often. But I went back to look at what happens if I just held onto the losers hoping they might take off again. Well the result is comforting, I am glad to have let go of losers when I did. Other than the occasional turn-around winner which I rarely catch as I am already onto researching other stocks or new themes in the market, the bulk of the losers sold tend to drift further down over time.
> 
> So emotionally it can be challenging to see a loser turn into a winner and go for a big run without me, but statistically it's re-assuring to stick to what I am doing by letting go of losers once it's dropped far enough.




I haven't done this myself but looking at MAE could also help to narrow down if an exit has been timed well. That wont stop a 'loser' turning into a big winner though. Can't win them all.


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## aus_trader (14 January 2020)

Skate said:


> When the misery of a big loss is suddenly removed by selling the position you'll feel a surge of energy - the weight will be lifted & you might be surprised at how readily you can find other opportunities that will help you make up your loss.




Golden words Skate, I wholeheartedly agree.

Holding onto losing stocks is not only a drain in the trading account but it's a psychological burden as well I find. Once let go, its lighter on your shoulders and helps to clear the head for moving forward.


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## Skate (14 January 2020)

Warr87 said:


> I know you have looked at my code, changed my positionscore, and the whole system turned around and became a lot more profitable. While exits are key, improving the entries with positionscore certainly helps to improve an edge by building consistency.




@Warr87 thank you for publicly acknowledging the small amount of helped I'd given you that was beneficial to your strategy. I appreciate your post.

Skate.


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## qldfrog (14 January 2020)

@Warr87 


Warr87 said:


> I also had a question in regards to your CAM strategy (and perhaps its a good question for @qldfrog as well). Do you have a preference to buy the PB or the CT, or it doesn't matter for you?



I did a lot of tweak on the code, while it does keep a lot of a CAM strategy it does not use the CT anymore ..yeap..
Out of the multiple types of buy signals I get, i do not adopt any preference as my score is used indiscriminately for all..You do not need to be a genius to realise this is not optimum and i am aware but that should be good enough for the time being.This was/is my first go and there are so many more important issues for me to master.The buys are also quite rare so I seldom have to choose between two buys, or at least not yet after a year or so

Maybe misguided pride but I did not want to use a strategy provided as is by @Skate, I would feel like I would be stealing in a way, so added tweak to reach an hopefully similar backtest result


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## Newt (14 January 2020)

frugal.rock said:


> Thoroughly agree.
> Any further news on @tech/a sons software?
> Finding myself at mental crossroads...do I continue the pathway to registration (surveyor) or do I use transferrable skills and head the trading path, whilst still surveying out of enjoyment? Continue Uni for a piece of paper or to advance the mathematical analysis? Aargh!
> What have I done...!
> F.Rock




Trading is something you can commit to or stop doing anytime.  

Gaining a formal tertiary qualification, or finishing one you've started, can be much harder in a few years' time and I've seen many people greatly regret not finishing one they had started.

I've got a few formal qualifications and would strongly argue the effort, commitment and TIME required to become a consistent trader is on a par with gaining a 4 year tertiary degree.  The difference is you'll hopefully be employable with the degree, but some people never get to be profitable or somewhat consistent with trading.

There's nothing to stop you becoming a rock star, pro golfer, world class musician or many professions, but most people of course don't succeed.  Others here have pointed out in the end you have to decide what you're most passionate about.  

One other aspect about trading - it definitely doesn't have to be an "all or nothing" pursuit, especially if you have time and age on your side


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## Newt (14 January 2020)

I left something out - its all about investing in yourself.  People looking for some extra dollars from trading should seriously consider the proposition they could make more stengthening an existing qualification or gaining another in the profession they already practice.

There's no get rich quick in trading, and its takes a lot of capital as skate has mentioned.

Again, not reasons to NOT pursue it or even go F/T, but things that many probably don't truthfully consider before trading had earned dollar, or do so with insufficient or ill-concieved information.

Trading does have the potential to be life changing, in the long run, and can still be pursued beside a career you're already passionate about.


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## frugal.rock (14 January 2020)

*Don't waste the (en) Dash...*

Ok, I won't spray my inner thoughts on the forum late at night again. I know better and this will be a measured response, in keeping with the thread. 

I will not quit my day job. (Sole trader)
I will continue the online Uni course.(finish the course they say...Bachelor o Spatial Sciences (Honours) Major; Surveying -Geomatic Engineering... easy for someone to say that.... a little more time consuming to do...)
I will continue to strive for registration... (I may end up setting a record there... the oldest person to become registered...)
I will manage my time so that I can achieve the end results. 

@Skate you commonly refer to people as stupid or idiots or lacking intelligence. (generalisations)

We're not born with intelligence, we don't inherit it, it's not in our jeans genes. 
Intelligence is a measure created by conformists so they feel intelligent.
(I know you know this... positive re-enforcement for you too!)
A person is the sum of their experiences and unless something (or indeed usually someone) at some stage in one's life, opens the mind to endless possibilities, we remain like water, finding the easiest path, tribal trend...(I prefer electricity analogy...!)
You guys rock. You made me remember a circle geometry spreadsheet I did in 2013 for TAFE diploma. (Circle Master 2000) that took me over 28 hours to put together. I am crap with math's (can't remember it), but succeeded through determined doggedness and the internet. 
(I tell my kids how lucky they are having all the library's in the world available on the internet, so to speak.)
Losing track, getting tired. Dump over for today. Time to crank some zzzzz's
Much obliged to you all, and especially to you @Skate , for not wasting *your* dash!
(Bookie, boxer, engineer, ASF mentor... ___insert more here___)
F.Rock


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## ducati916 (15 January 2020)

Skate said:


> @Warr87 thank you for publicly acknowledging the small amount of helped I'd given you that was beneficial to your strategy. I appreciate your post.
> 
> Skate.





Entry criteria on top of entry criteria (position score). From your previous disclosure, it would seem to improve the results. I'll have a think on this.

jog on
duc


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## ducati916 (15 January 2020)

Re. University.

Qualifications are the entry point to government controlled monopolies (Law, Medicine, etc). Monopolies have pricing power, there are not many poor lawyers/doctors/etc and also provides stability of employment, whether as an employee, contractor or business owner. They are also, to a degree, recession resistant if the economy takes a dive.

As a 'start-up', they are so much easier than a non-professional business. They are in most countries subsidised (educational loans) and have a standardised entry process.

To make real money trading (and everyone's definition of real money will be slightly different) you need to (generally, there are exceptions) turn it into a business. There are a number of models, but they involve OPM, whether as a Hedge Fund, or some other.

You will (and again there can be exceptions) trade 'better' if you have an alternative income. There are any number of day trader videos on Youtube, and I do watch the odd one...I am constantly amazed at how much money they leave on the table. This is due to the fear of turning a good trade (profit) into a bad trade (loss). You can almost feel the mental exhaustion. Swing trading suffers from the same issue, it is just not as visible as it is in the day trader.

To make an equivalent living from trading (outside of managing OPM) as you would from a profession, try calculating (based on % returns) how much capital would be required. It will be substantial.

Of course, as already mentioned, there is nothing preventing someone with a profession, from trading.

jog on
duc


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## Skate (15 January 2020)

*Lets talk about decision making (Faulty Thinking)*
Many years ago I read an article why Doctors make mistakes. I'll write a post about Doctors & faulty thinking later today.

*Think about this*
If highly trained medical practitioners can get it wrong what chance is there of traders getting it constantly right. We "CAN" & we "DO"  make better decisions because of a few reasons, "time" & "technology"

*Doctors*
They make their diagnosis "quickly" because of their lack of time using hunches from incomplete information, what hope have they really got.
*
A serious design flaw - faulty thinking*
People are naturally pleased when processing information that supports their beliefs. Confirmation bias, the tendency to embrace information that supports their beliefs & reject information that contradicts them. Of the many forms of faulty thinking confirmation bias is right up there & it’s hard to conceive of a more serious design flaw than this.

*Another serious design flaw - Conviction*
A person with a conviction is a hard person to change. Tell him you disagree and he turns away. Show him facts or figures & he questions your sources. Appeal to logic & he fails to see your point. People tend not to listen to alternative views. Your belief system defines whether you agree or disagree with them but if you don’t listen you forgo the right to understand their point of view.

*From my experience*
It pays to listen to everyone & than you decide if it’s relevant or helpful. You get to decide what to keep & what to discard. When you don’t listen you forgo the right to learn.

Skate.


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## qldfrog (15 January 2020)

Skate said:


> *Lets talk about decision making (Faulty Thinking)*
> Many years ago I read an article why Doctors make mistakes. I'll write a post about Doctors & faulty thinking later today.
> 
> *Think about this*
> ...



Are we talking global warming here? 
My view is you should not have any conviction unless proven by experience..not foolproof but..do not take anything for granted
Be it trading or else
Did i believe a system would work, or the cam? No, you go thru the hard Yakka and convince yourself based on results, these backtests..always in a context
The sad thing as you age is that you gather this experience, that knowledge, not on just reading books, that is not enough, but thru your dash-content, then few are ready to share accept it, be it family or others, be it investment or science,relationship or other fields
Probably a whole of mankind issue
With no obvious solution.
And getting worse as i believe the investigative mind is disappearing
Convictions are just beliefs unless based on facts


----------



## Skate (15 January 2020)

qldfrog said:


> Are we talking global warming here?  My view is you should not have any conviction unless proven by experience..not foolproof but..do not take anything for granted
> Be it trading or else




@qldfrog we are not talking about global warming & please don't incite an emotive response from others in the "Dump it here" thread, this is a friendly thread. Let me make additional comments about the subject in hand. Lets stick to trading as you have mentioned in your post.

*How we all think*
When trading & under the influence of emotions, we tend to surrender our emotional intelligence & this is why trading is such a difficult endeavour being constantly hijacked by our emotions encouraging us to do the wrong thing at the wrong time. Another crazy fault is that we tend to have a selectively recall of only certain information that validates what we now know to be true & then create a story about it to make sense out of the event as we attempt to explain it to ourselves. Our mind creates stories & over time we start to believe it as fact, being absolutely true (when they aren't)

Skate.


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## Skate (15 January 2020)

*Faulty Thinking* (It's the typical way we tend to think)
I read an article many years ago about how Doctors think leading to patients being misdiagnosed. When you sit down & explain to your Doctor in a few words the reason for the visit most Doctors jump to a conclusion already having in mind two or three possible diagnoses within minutes of meeting you as a patient.

*I'll paraphrase the Story from memory*
First off, I would like to confirm the story I'm about to tell is fictitious & to confirm to readers "I've never forgotten anything that I can remember" (said tongue in cheek)

*It a common condition that would send most of us to the Emergency Room of a hospital *
The story is about a guy who experienced muscle pains, chest pains whilst enjoying his regular evening walk, after a few days the pain never went away  completely. He frequently experienced muscle aches & minor discomfort as his job entailed physical work. This time he decided to see a Doctor taking himself off to the emergency room to save going to his GP taking time off work. He explained to the Doctor in (ER) that the pain was in his chest & didn't spread to his arms, neck or back, with no family history of heart attack, never smoked with no stress & his family life was fine. The doctor checked his vitals & they were in range for a typical  for a 60 year old fit looking athletic man. The Doctor sent him for an ECG, Chest X-Ray & blood tests & all the results looked normal

*The "Diagnosis"*
The Doctor told him that he had probably over exerted himself & strained a muscle & the discomfort in the chest was nothing to be worried about.

*The next morning*
When the guy represent to the (ER) the next morning they discovered he had a heart attack

*Why did the Doctor miss it? *
The Doctor didn’t miss it because of any egregious behaviour, lack of knowledge or negligence. He missed it because of (faulty thinking) as his thinking was overly influenced by how healthy this man looked & the absence of risk factors. It's amazing to read the number of errors made by doctors especially faulty decisions made under the stressful conditions of the emergency room. It's an old saying: "The undertakers "cover-up" Doctors mistakes"

*Time pressures & jumping to conclusions*
Doctors begin to diagnose patients the moment they meet & tend to develop their hunches from incomplete information, jumping to conclusions. Doctors are dealing with uncertainty of symptoms being presented that are conveyed over a short space of time that can lead to mistakes in medical judgment, a misdiagnoses by snapping to the easiest decision is how doctors think.

*As Traders*
It pays for us not to think like a Doctor, we have "time & technology" allowing us to make informed rational decisions - make sure you use both in this game.

Skate.


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## Skate (15 January 2020)

frugal.rock said:


> @Skate *you commonly refer to people as stupid or idiots or lacking intelligence*. (generalisations)




*Let me answer that **sentence** (in my defense)*
Posting words such as those need to be taken textually & the interpretation of those words within the post. Sometimes I uses the words descriptively & never directly at someone. (I tell a lie, I've used it once directed at a member to evoke an emotion & get the response I was looking for - it was to demonstrate a point of a previous post - that was lost on him)

*For the sake of fairness*
I'll post the "flame/serve" to understand textually where it came - in my next post.

*Colourful career*
I'm the typical "jack of all trades, master of none" type. In all my adult life I have never called anyone stupid.

*I know stupid*
I don't know at lot of things but "I know stupid when I hear it or read it"

*Masturbating in public*
"Satisfying your urge to call someone stupid is like masturbating in public. It may feel good to you, but it looks disgusting to everyone else”

*It pays to listen*
When you talk, you are only repeating what you already know. But if you listen, you may learn something new. (this is good advice IMHO)

*Interesting people*
We have all met interesting people, we hang on their every word, we find what they say interesting & stimulating. When you meet someone you find interesting or different that's when a real conversation starts.

Skate.


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## Skate (15 January 2020)

The members name is withheld to protect the innocent

*For the sake of fairness*
In my previous post I said I would re-post the "flame/serve" I gave to a member to understand textually where it came - the post below is unaltered.

*## The post STARTS HERE*
------------------------------------------------------------------------------------------------------------
*I respectively, disagree with your response"*
Thank you for being so polite, speaks volumes & I now have a better understanding why you have taken a stance in the manner that you did.

*"I will just go back to being the norm"*
WOW, upset and with attitude, hopefully after reading my response we will be cordial once more, & build upon our friendship. The last post was written in such a way to evoke your emotions, expressing your beliefs to me.

*Helpful criticism*
Sometimes giving someone an example on the topic being discussed it feels to them as a personal attack instead of helpful criticism.

I'm sorry but you won't get the same feeling again after you know when someone says something to inflame the situation & I'm going to give you another example. *(the next paragraph is only for demonstration purposes only)* it shouldn't cause any emotions

------------------------------------------------------------------------------------------------------------
*EXAMPLE ONLY *(make sure you are in the zone the correct head-space or it will mess with you)
------------------------------------------------------------------------------------------------------------

*"ARE YOU THAT STUPID YOU CAN'T READ*", I re-posted this *"AGAIN"* so you can read it again, reading it the second time you might get it, you can't really be this thick* (this post is off topic & now completed) !!!!! READ IT AGAIN YOU MORON.*

------------------------------------------------------------------------------------------------------------
Now that's an example of flaming, it's designed to inflame your emotions a little more. (It's baiting you so "I" in return can have some more fun, a BIGGER, BETTER experience for me, at your expense) knowing what I said was only an example (for your education) the emotion is not the same, or it shouldn't be & neither should it be an ongoing issue for you.
*
Ambiguity*
Most of my posts I post with ambiguity in mind, other times they are cryptic, you would have read many of my posts without giving them a second thought. People just react & I was politely point this out to you.

*Are we friends again* (I was playing with you to reinforce a point)
I was messing with you, so you better understand manipulation, conditioning, my words were written to achieve the response I wanted. Sometimes you need to be cruel to be kind.

*Feel the words*
I wanted you not only read my post but "FEEL" the words in my post, I wanted to manipulate your emotions.

*Takeaway*
Don't you ever let anyone do that to you again, you'll learn from this experience.

*Oblivious*
Everyone else reading this post or my previous post to you wouldn't have felt the emotions you did because the words were targeted at you, other would be oblivious to what you felt.

*Silver Shoes*
Hopefully other will go back & re-read my original post to you, understand & see your point of view by putting themselves in your shoes.

*I'm sorry*
I'm sorry to use your emotions to express my point of view.

*I understand what Skate did*
You should be now saying.. "ahh, Skate got me"

*Work on your emotions* (90% of trading is how you control your emotion)
If my post is still an issue for you, that's Okay, it means you need to do a little bit more work on controlling your emotions.

Are we mates again ?

------------------------------------------------------------------------------------------------------------
*## The post ENDS HERE*

Skate.


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## barney (15 January 2020)

Skate said:


> *It pays to listen*
> When you talk, you are only repeating what you already know. But if you listen, you may learn something new.




Personally I consider myself a simple man.  One of the smartest chaps I know resembles a walking encyclopedia (he is getting on in years unfortunately)  

When I am fortunate enough to chew a bit of fat with him, I mainly listen as you suggest @Skate

To his absolute credit, he is extremely humble in his knowledge and constantly reminds me "he knows nothing" … he simply repeats what he has read/learned/digested etc etc as part of his life experience.

I guess true knowledge is accepting we know very little in reality and therefore become open to greater possibilities.


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## Skate (15 January 2020)

barney said:


> Personally I consider myself a simple man.  One of the smartest chaps I know resembles a walking encyclopedia (he is getting on in years unfortunately) When I am fortunate enough to chew a bit of fat with him, I mainly listen as you suggest @Skate
> To his absolute credit, he is extremely humble in his knowledge and constantly reminds me "he knows nothing" … he simply repeats what he has read/learned/digested etc etc as part of his life experience. I guess true knowledge is accepting we know very little in reality and therefore become open to greater possibilities.




@barney as usual, you nailed it. Unfortunately your friend is in the minority. I find it difficult to have a stimulating conversation with most. People find it pleasurable chatting about nothing, they simple put all their energy into being polite. You are very fortunate to know of such an person you find interesting to talk & listen too. Stimulating conversation is my true definition of a real conversation.

Skate.


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## barney (15 January 2020)

Skate said:


> You are very [B]fortunate to know of such an person[/B]





That is exactly how I feel every time I experience his profound knowledge flavored with his respectful humility …. it is an unusual blend of humanity in my experience.


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## sptrawler (15 January 2020)

Skate said:


> *Faulty Thinking* (It's the typical way we tend to think)
> I read an article many years ago about how Doctors think leading to patients being misdiagnosed. When you sit down & explain to your Doctor in a few words the reason for the visit most Doctors jump to a conclusion already having in mind two or three possible diagnoses within minutes of meeting you as a patient.
> 
> *I'll paraphrase the Story from memory*
> ...




I think that is another of your classics Skate, a quote from a 'B' grade movie always comes to mind, "assumption, is the mother of all f#%k ups".
As you say, investment isn't life and death, it doesn't require an instant response.
BUT if it requires your attention, spend some time thinking on it.
I just blew $14k, because I didn't stop for a moment and think on it.


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## Skate (15 January 2020)

sptrawler said:


> I think that is another of your classics Skate, a quote from a 'B' grade movie always comes to mind, "assumption, is the mother of all f#%k ups". As you say, investment isn't life and death, it doesn't require an instant response.
> BUT if it requires your attention, spend some time thinking on it.
> I just blew $14k, because I didn't stop for a moment and think on it.




@sptrawler people don’t realise that life is just making one decision after another, making the right decision has a huge bearing on the quality of your life.

Skate.


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## aus_trader (15 January 2020)

sptrawler said:


> I think that is another of your classics Skate, a quote from a 'B' grade movie always comes to mind, "assumption, is the mother of all f#%k ups".
> As you say, investment isn't life and death, it doesn't require an instant response.
> BUT if it requires your attention, spend some time thinking on it.
> I just blew $14k, because I didn't stop for a moment and think on it.



That's a big chunk of money sptrawler!
Hope you have learnt something important from it. I find some of the biggest life lessons including trading lessons come from mistakes.


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## sptrawler (15 January 2020)

aus_trader said:


> That's a big chunk of money sptrawler!
> Hope you have learnt something important from it. I find some of the biggest life lessons including trading lessons come from mistakes.



Absolutely, looking after grandkids, daughter away, son and extra grandkids arrive = bedlam.
I thought jeez I should sell them shares, no too busy do it next week, the next time I look they are $14k less.
Still $13k up but it was a one of, that wont be repeated, I think they will recover and do better but that was just laziness on my part.


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## sptrawler (15 January 2020)

I guess it is like everything, self discipline, repeat self discipline.


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## aus_trader (15 January 2020)

sptrawler said:


> Absolutely, looking after grandkids, daughter away, son and extra grandkids arrive = bedlam.
> I thought jeez I should sell them shares, no too busy do it next week, the next time I look they are $14k less.
> Still $13k up but it was a one of, that wont be repeated, I think they will recover and do better but that was just laziness on my part.




Yes it hurts to give a lot of your open profit back. But I am glad to hear you still make a profit on the trade. I know from my own experience, even a day two early/late in a trade can cost big time !


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## barney (15 January 2020)

Skate said:


> @sptrawler people don’t realise that life is just making one decision after another, making the right decision has a huge bearing on the quality of your life.




Perhaps we could temper that with … "Making the wrong decision" is still better than making no decision at all?! …. and ... 

A "wrong" decision at one point in time can hopefully lead to an even better "right" decision in the future when its even more important!  

I believe they call that experience



aus_trader said:


> I find some of the biggest life lessons including trading lessons come from mistakes.




"Aus" put it in one sentence … It took me three



sptrawler said:


> I thought jeez I should sell them shares, no too busy do it next week.....  that was just laziness on my part




Honesty is also one of my favorite traits Homer …. My trading improved when I started owning up to my mistakes …… I might need to find a Priest again soon based on that revelation


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## qldfrog (16 January 2020)

sptrawler said:


> Still $13k up but it was a one of, that wont be repeated, I think they will recover and do better but that was just laziness on my part.



Hum so did you sell..or are you following the classic:
I wait they will catch up?
Make sure you do not make two mistakes from one.
what were your reasons to sell, and would these reasons have disappeared because the SP fell?
A bit off "dump it " thread topic,but
maybe a good textbook example...


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## Skate (16 January 2020)

For those who subscribe to "Technical Analysis of Stocks & Commodities" magazine.

*Disclaimer*
I have a keen interest in reducing the lag of indicators.

*WOW! *
A Zero-Lag indicator, (honestly I don't believe you can Zero-Lag an indicator otherwise it's the mean)

*Snippet from the magazine*
“Reflex: A New Zero-Lag Indicator” in this issue, author John Ehlers introduces a new averaging indicator that he has designed with reducing lag in mind. According to the author, his new indicator can be used to generate signals in a more timely manner than other lagging calculations. In his article, Ehlers provides TradeStation EasyLanguage.

*Trader Tips*
Also Trader Tips supply a variety of codes for other software. With the supplied indicators code you can develop your own indicators and strategies. "But there is no Amibroker code listed". It needs to be coded.

*REFLEX*
I have just downloaded the February 2020 copy of "Technical Analysis of Stocks & Commodities" & there is an article by John Ehlers who introduces a new averaging indicator (the RELEX indicator) designed with reducing lag in mind.

*Personal Interest*
This has been a subject of interest for me for quite sometime & I've found reducing the lag of the EMA to be a profitable & useful in my trading (the concept to reduce lag is not new, the idea has been around for decades)

*PANDA *(previously discussion of the PANDA Strategy can be found here: https://www.aussiestockforums.com/posts/1051864/ )
I have a strategy devoted to trading signals from the reduced lag of the exponential moving average (EMA) - Moving Average indicators in all forms have two common characteristics - they lag and they smooth data. The PANDA Strategy uses the feature of reducing lag of an (EMA) allowing signals rapid adaptation to volatility in price movement. Some lag is needed & the amount of lag determines the timing of the signals this in turn changes the responsiveness that's best suited for trend-following systems - the very reason I believe it's impossible to achieve Zero Lag. The article is a new way (a different way) to reduce lag (IMHO) & I'm interested to see how it compares to PANDA.

*AmiBroker*
Sometimes they don't include the code for Amibroker but there is code for those who use the software listed below. As there is no code written in AmiBroker for his new "Reflex" Zero-Lag Indicator I thought it might be a worthwhile exercise to code it & check the performance against PANDA.

*REFLEX Code*
For those interested alternative code is kindly supplied for the software below but as I've mentioned there is no AmiBroker code available

*Codes for the REFLEX indicator can be found here:* http://traders.com/Documentation/FEEDbk_docs/2020/02/TradersTips.html

TRADESTATION: FEBRUARY 2020
eSIGNAL: FEBRUARY 2020
WEALTH-LAB: FEBRUARY 2020
NEUROSHELL TRADER: FEBRUARY 2020
NINJATRADER: FEBRUARY 2020
TRADERSSTUDIO: FEBRUARY 2020
MICROSOFT EXCEL: FEBRUARY 2020
THINKORSWIM: FEBRUARY 2020
QUANTACULA STUDIO: FEBRUARY 2020

*Comparison*
After I convert John Ehlers new averaging indicator (the RELEX indicator) to AmiBroker code I'll make a new strategy to take advantage of his ideas & directly compare it to the PANDA strategy. At this stage I'm uncertain how they will compare , for one I'll be interested. If there is anyone else interested in the comparison I'll post it up when its done. All you have to do is ask. Why? I only want to post on subjects members find interesting or educational.

Skate.


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## Skate (16 January 2020)

Skate said:


> For those who subscribe to "Technical Analysis of Stocks & Commodities" magazine.
> 
> *Disclaimer*
> I have a keen interest in reducing the lag of indicators.
> ...




*Nothing new to see here !!*
After reading the article by John Ehlers & his new indicator designed to reduce lag - well frankly, I was doing cartwheels. My excitement got the better of me,  enthusiastically I couldn't wait to make a post on the indicator (a topic I find interesting).

*Sad news*
John Ehlers new averaging indicator (the RELEX indicator) is a rehash of an idea he has written about many, many moons ago (minor parameter changes at best). I believe magazines work on the principle of readers having a bad memory. (they must be working on the theory of: "what's old is new again") 

*Also the indicator is lacking*
John Ehlers new (the RELEX indicator) is slow to catch the signals, causing the greatest concern of lower performance, but the REFLEX indicator displays consistency (meaning: it consistently grabs the signals "late")

*I'll post up some charts of late signals*
As they say a "picture paints a thousand words" - for comparison the charts are displayed together.

*ASX: AVJ *





*ASX:SRG*







*The REFLEX Strategy - Backtest Results (exactly 1 year)*







*The PANDA Strategy - Backtest Results for the same period (exactly 1 year)*




*Summary*
I'm disappointed.. 

Skate.


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## Warr87 (16 January 2020)

Skate said:


> *Nothing new to see here !!*
> After reading the article by John Ehlers & his new indicator designed to reduce lag - well frankly, I was doing cartwheels. My excitement got the better of me,  enthusiastically I couldn't wait to make a post on the indicator (a topic I find interesting).
> 
> *Sad news*
> ...




What about on a longer period? Is it also picking up the same symbols from your other systems? If not, could be a way to diversify (though I know you run 3 systems so you are fairly diversified already).

At the end of the day, that return is still a significant return so could be useful for some depending on what they are after.


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## Skate (16 January 2020)

Warr87 said:


> What about on a longer period? Is it also picking up the same symbols from your other systems? If not, could be a way to diversify (though I know you run 3 systems so you are fairly diversified already). At the end of the day, that return is still a significant return so could be useful for some depending on what they are after.




@Warr87 you have touched on a really import subject about diversification & I'll throw in Correlation of strategies as well.

*Lets talk about diversification*
We will forget about the REFLEX strategy it doesn't deserve another breath. Diversification lessons risk, by trading strategy that are not correlated. Diversification comes in many forms but I'm going to concentrate on Diversification of strategies. Unfortunately sometimes trading any 'trend following systems' there is normally a degree of correlation with the signals, the index being traded usually is reflective of the prevailing market conditions. Meaning: All 'Trend Following Systems' naturally jump on & join trends (the momentum), that's the very nature of the beast. Following trends is one of the simplest form of trading there has ever been & they have a proven track record of making money over time. I for one, can confirm "following trends" has been kind to me. I have 3 diversify strategies that I trade (really there are 4) & thankfully work well together without correlation.

*Lets talk about correlation *
In my early days of trading I was trading 6 strategies, all profitably but highly correlated holding many multi tens of thousands of dollars in the same position (in reflection it was crazy) with a series of highly correlated systems you tend to get the same signals just weeks apart. It was the captain's idea after explaining the problem of high correlation trading 6 trend following strategies, he simply said combine the 3 best strategies into one & write the code so only the first signal is taken, discarding the others. The HYBRID Strategy was born (a combination of 3 of my best strategies) packaged into one master strategy. The CAM & PANDA Strategies have none to little correlated to my Hybrid strategy or correlation to each other. I'm so lucky to have  strategies not correlated as it allows me to trade a large account.

*Discretionary trader*
I've recently posted in @peter2 "p2-starts-another-asx-portfolio-wkly-dly" thread that manually sorting through charts looking for the perfect entry & missing the setup it would be excruciating & lead to being excessively hard on myself - being less than professional would be a hard cross to carry. In saying this it's must be frustrating for a discretionary trader seeing the good moves in hindsight, oblivious to the setups in the 'heat of the battle' whilst trading. Some forum members are gifted, possessing the unique ability to see setups without really looking but if you are more like me you'll fall short in this area. Why do I trade Mechanical systems? - because it suits my temperament.

Skate.


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## Warr87 (16 January 2020)

another way to diversify would be to add in a mean-reversion system. I have tried to code one but haven't got it to work on the ASX. I'm sure its possible, though I think it would be a better strategy run where commissions are really small (US market). It's also the type of system that works well on indexes as indexes tend to range (mean reversion works best in slight trend environments or sideways markets). Happy to be proven wrong and I know if I was better I could get something to work. It's something I'll work on later, for another tool to add to my toolbox. (I'm still a beginner so my focus is on what I have but like to have areas of growth for the future.)

This brings me to a few other points I have been thinking about diversifying though. I think it's possible to run it on different sectors/industries, etc., so you're not taking all the same signals and have a wider base to choose from. Metals may not trending at the same time as the XAO, for example. The other thing, which is what I will do in many years when I am consistent and profitable with what I have, and that is run another trend following system in the US market. I am a trend trader, so I will continue to trade trends, and while the US market is correlated to some extent to the ASX, there isn't a complete correlation.

When I've proven an edge with my current system I will then start to look at these options. Amibroker allows you to do this by using the custom back test and composite ticker. something for the future to consider.


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## Newt (16 January 2020)

Thanks for sharing your work on RELEX Skate.  We know >90% of the ideas we pursue with excitement may not immediately pay off, but when they do - those are the gold nuggets of hope (and profit) that help keep us going.  I've thought about subscribing before and should probably check it out.  (coulda, shoulda??)

PANDA, Trig functions, John Elders.   Hmmm.  PYTHON, (pandas), ARIMA, signal processing and filtering, MESA?

Just hearing someone else is trading a portfolio of strategies and diversifying across systems gets me excited.  Part of why listening to Captain B gets my imagination singing too.....


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## willy1111 (16 January 2020)

barney said:


> Perhaps we could temper that with … "Making the wrong decision" is still better than making no decision at all?! …. and ...
> 
> A "wrong" decision at one point in time can hopefully lead to an even better "right" decision in the future when its even more important!
> 
> I believe they call that experience




Nice...reminds me of something I heard once that I can't recall verbatim but along similar lines...

Make wise decisions, how do I make wise decisions?
Make good decisions, how do I make good decisions?
Make bad decisions, how do I make bad decisions?
By having the courage to make decisions.

Something along those lines, the sad reality is so many fear making decisions in case its the wrong one, as you say barney better to make the wrong decision and correct it than not to make a decision...analysis/paralysis and all that


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## ducati916 (17 January 2020)

Skate said:


> [B]How we all think[/B]
> When trading & under the influence of emotions, we tend to surrender our emotional intelligence & this is why trading is such a difficult endeavour being constantly hijacked by our emotions encouraging us to do the wrong thing at the wrong time. Another crazy fault is that we tend to have a selectively recall of only certain information that validates what we now know to be true & then create a story about it to make sense out of the event as we attempt to explain it to ourselves. Our mind creates stories & over time we start to believe it as fact, being absolutely true (when they aren't)
> 
> Skate.





[ATTACH=full]99736[/ATTACH] 

[ATTACH=full]99737[/ATTACH] 

jog on
duc


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## Warr87 (17 January 2020)

that's an interesting graph. I've looked at the Myer-Briggs tests a few times. I actually score either as an INTJ or an ENTJ, depending on my mood (I gravitate towards the centre of I/E). Can be an interesting tool at times.


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## ducati916 (18 January 2020)

Skate said:


> [B]Lets talk about diversification[/B]
> We will forget about the REFLEX strategy it doesn't deserve another breath. Diversification lessons risk, by trading strategy that are not correlated. Diversification comes in many forms but I'm going to concentrate on Diversification of strategies. Unfortunately sometimes trading any 'trend following systems' there is normally a degree of correlation with the signals, the index being traded usually is reflective of the prevailing market conditions. Meaning: All 'Trend Following Systems' naturally jump on & join trends (the momentum), that's the very nature of the beast. Following trends is one of the simplest form of trading there has ever been & they have a proven track record of making money over time. I for one, can confirm "following trends" has been kind to me. I have 3 diversify strategies that I trade (really there are 4) & thankfully work well together without correlation.
> 
> 
> Skate.





The strategies discussed, are not diversified. They are all buy low sell higher, or a long strategy.

If there was a sell high buy low, or shorting component, that would be a true diversification. Other diversifications would be:

(i) Reversions;
(ii) Trading volatility (long/short);
(iii) Pure Earnings plays;
(iv) Arbitrage;
(v) LBO's;

As examples. There are others I'm sure.

Buying a PB as opposed to a BO (or any variation) are simply tactics within a strategy.

jog on
duc


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## Skate (18 January 2020)

ducati916 said:


> The strategies discussed, are not diversified. They are all buy low sell higher, or a long strategy. Buying a PB as opposed to a BO (or any variation) are simply tactics within a strategy.




The "Dump it here" at its very best, @ducati916 expressed an alternative view & respectfully didn't challenge the point I was expressing - "Diversification" &  "Correlation" of strategies. In my previous post I qualified that _*"Diversification comes in many forms" *_then I went on to say _*"but I'm going to concentrate on Diversification of strategies"*_

_


Skate said:



*Lets talk about diversification*
Diversification lessons risk, by trading strategy that are not correlated. *"Diversification comes in many forms"* but *"I'm going to concentrate on Diversification of strategies".* Unfortunately sometimes trading any *"trend following systems' there is normally a degree of correlation with the signals"*, the index being traded usually is reflective of the prevailing market conditions.
		
Click to expand...


_
*Diversification of strategies


ducati916 said:



			The strategies discussed, are not diversified. They are all buy low sell higher, or a long strategy.
		
Click to expand...


*The strategies I discussed are "buy high & sell higher" & I posted many times "all trading profits comes from trading a trend".

*Mean Reversion Strategy*
Trading a Mean Reversion strategy on the All Ordinaries, equates to a high win rate, with high commission rates  & small profits on each win = "Not Worth The Effort" (Been there done that)

*Entry Criteria* (drives the strategy)


ducati916 said:


> Buying a PB as opposed to a BO (or any variation) are simply tactics within a strategy.



Buying Pull Backs as opposed to buying Breakouts I regard as two different strategies. Diversification (there's that word again) of the entry can lessen the risk whilst riding a position at different stages of the trend, whether it's at the start of a trend, a pullback within a trend or a trend continuation, is what I was referring too in my previous post & as a footnote I then went on to tie "Correlation" & "Diversification" together.

*In my next post*
I'll post up some charts to explain why a variety of strategies are a welcome additions to my (Tool Box)

Skate.


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## Newt (18 January 2020)

ducati916 said:


> The strategies discussed, are not diversified. They are all buy low sell higher, or a long strategy.
> 
> If there was a sell high buy low, or shorting component, that would be a true diversification. Other diversifications would be:
> 
> ...




This worries me too Skate with the long strategies you've described.  Putting myself in your shoes, with a larger capital base to trade, then see pros and cons as:

*Pros:*
* Trading many strategies allows smaller positions, with entries and exits diversified across many more stocks (versus smaller number of very large positions if trading less strategies)
* If done well, potential for equity curve smoothing, taking many different "bites from the cherry" - demonstrated here previously with the same stock being entered/exited at different time points
* Less chance of missing a promising trending stock

*Cons:*
* Rapid market downturns will result in large rapid drawdowns.  Clenow has written on this aspect of stock trading - high correlation
* Labour - likely to be taking many positions, keeping many more records (perhaps less concerning if retired and trading weekly)


Suspect I'll think of others moment I hit post.....


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## Skate (18 January 2020)

I'm unsure how the thread "where-are-you-parking-your-cash" migrated off course - BUT - as I'm a current holder of BFG I'll use that position to clarify the "Correlation" & "Diversification" of my strategies.

@Newt as traders we are all different, the very reason we have a market. I also acknowledge where your post is coming from & they are all valid points you have highlighted.

*Where-are-you-parking-your-cash*
It won't be surprise for those who read this thread that I "park-my-cash" in the markets. Why? - Because the markets are firing on all cylinders (At The Moment) with the Dow Jones Industrial Average exceeding 29,000 points & the All ordinaries/ASX 200 breaching 7,000 points, something not lost on me.

*At the moment* (ATM)
I'm optimistic for 2020 & I'm comfortable with the direction of the markets (ATM) - meaning I want to "make hay while the sun shines" taking advantage of the prevailing conditions. For those who hold an alternative view, don't worry I'll make the necessary correction as conditions unfold. I made a comment in @peter2 thread along the lines of "if you haven't made bucket loads since 1st January this year - it's time to re-evaluate your trading plan".



aus_trader said:


> Also having good open profits on BFG as can be seen in my Speculative Stock Portfolio. Haven't really gone into index/ETF investing yet, but may be time to look into some of these as well, although the buying will be at much higher prices now...






peter2 said:


> Excellent selection.




*I'm currently trading 4 strategies*
Really it's 3 strategies with a modified version of the CAM Strategy making the 4th Strategy - (the CAM SAM Strategy)

*Disclaimer:* I hold BFG

*Charts *
The charts are self explanatory displaying the  "Correlation" & "Diversification" of my strategies. Each strategy name is in the title bar.




*Two Strategies in one chart*
I have combined both strategies (CAM & CAM SAM) into the one chart for easier reading of the entry points.











For @Warr87 - The MAP strategy signal




*Clarification of a previous post* (Update)
If any were confused with a previous post I made about "Correlation" & "Diversification" of strategies I trust this extra information alleviates those concerns.

Skate.


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## Warr87 (18 January 2020)

Newt said:


> *Cons:*
> * Rapid market downturns will result in large rapid drawdowns.  Clenow has written on this aspect of stock trading - high correlation
> * Labour - likely to be taking many positions, keeping many more records (perhaps less concerning if retired and trading weekly)




That point from Clenow has stuck with me. I always remember it whenever I think of diversification. His response to this is more of a mixture of futures and equities and goes over the ideal mixture to maximize returns. I believe it was 40% futures, 60% equities. But his point about large downturns resulting in a correlation I don't take as a reason not to have a variety of long only equity systems. Drawdowns do happen and its why we have market filters. It avoids the massive drawdowns and preserves capital for when the market rebounds (2009 was an amazing year if you were trading equities). From what I remember (I can't remember who made the point) but commodity futures were booming in 2008 as well. Clenow is upfront with his dislike for equities. And his point for high correlation in down markets is definitely something to remember!


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## Skate (18 January 2020)

Newt said:


> Thanks for sharing your work on RELEX Skate.  We know >90% of the ideas we pursue with excitement may not immediately pay off, but when they do - those are the gold nuggets of hope (and profit) that help keep us going.  I've thought about subscribing before and should probably check it out.  (coulda, shoulda??)PANDA, Trig functions, John Elders.   Hmmm.  PYTHON, (pandas), ARIMA, signal processing and filtering, MESA? Just hearing someone else is trading a portfolio of strategies and diversifying across systems gets me excited.  Part of why listening to Captain B gets my imagination singing too.....




The REFLEX indicator
Hey @Newt I have a keen interest in reducing the lag of indicators finding they are beneficial to any strategy. The Amibroker forum has now a code of John Elders new REFLEX indicator found here: https://forum.amibroker.com/t/ehlers-reflex-a-new-zero-lag-indicator/16773/7 from a highly respected member & was wondering if you could code the indicator. Why? The Amibroker code on the forum (IMHO) is not 100% true to John Elders supplied EasyLanguage code.

*The original indicator picks up the signal too late*
John Ehlers new (REFLEX indicator) using the original code parameters are very slow to catch the signals, causing the greatest concern of lower performance. The parameter setting (the original) may have been optimized for the S&P500 but I've found the performance using those setting across the ASX (the All Ordinaries in particular) to be a poor selection.

*This is important & it's lost on most*
The amount of lag determines the "timing of the signals" this in turn changes the responsiveness that's best suited for trend-following systems, systems I use.

*Let me post a few backtest reports*
The Amibroker backtest report are laid side to side for comparison & it's obvious what I'm talking about comparing each report.

*Report (a) Original verses optimized for trading on the ASX*
This first backtest report the (report on the left hand site) displays the ORIGINAL code lifted from the Amiboker forum website - whereas the (report on the right hand site) has been optimized for our markets - thus the improvement






*Report (b) Skate's REFLEX code verses the Original optimized REFLEX code from the Amibroker **forum*
This second backtest report the (report on the left hand site) displays my interpretation of the ORIGINAL code (That I've optimized) - whereas the (report on the right hand site) is the lifted code from the Amibroker forum website that I optimized for our markets.




*My question to anyone*
I was wondering if any forum member has coded John Elders new REFLEX indicator & before anyone points out to me that I said "the REFLEX strategy doesn't deserve another breath" - well I agree it doesn't in its current form - but - the curiosity is killing me thinking there may be improvements in this indicator that I'm missing.

Skate.


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## ducati916 (18 January 2020)

_*Entry Criteria* (drives the strategy)

1. Buying Pull Backs as opposed to buying Breakouts I regard as two different strategies. 

2. Diversification of the entry can lessen the risk whilst riding a position at different stages of the trend, 

3. whether it's at the (i) start of a trend, (ii) a pullback within a trend or a (iii) trend continuation, 
_
1. Fine, this is really only semantics. I would classify it as a tactic within a strategy. I would have accepted it as such, except that your follow on statements [2] and [3] cannot logically follow that position.

2 & 3. Now these are interesting statements. 

So in [3], (i) is very difficult to identify ex ante. (ii) will be also, is it a pullback, or is it the end? (iii) is probably the most robust as far a recognition goes, but again, there is no guarantee that it will continue.

An entry at (i) can only be an entry into an existing downtrend or into an existing sideways trend. Both can give rise to a new uptrend. So entries into these two types of trends have what probability?

Entries into (ii) and (iii) both suffer from the same issue: robust identification of the stage of the trend which will only be known ex post.

If the above is true: how then is risk lessened? They all suffer from the same flaw, which is an inability to predict the future going forward and the reliance on one single variable (price) moving in a linear fashion: therefore, is there truly 'diversification' of strategy and more importantly, is there any true reduction in assumed risk? I would argue that there is not because, the strategy is the same. There is no actual diversification of strategy, hence no reduction of risk. Each new entry is an assumption of risk, un-diversified by strategy and therefore increasing total risk.

A true diversification in strategy would require a strategy that did not depend on higher prices (linear strategy) to profit. That this strategy was totally independent of 'prices' (non-linear). One such strategy is long volatility (dispersion of price). A second could be a move in price after an earnings announcement.

True diversification of strategies is dividing your trading capital into however many pots (of whatever size) and allocating them to different strategies.

If conditions change significantly, some will be hurt, some will benefit, that is the purpose of diversification. Of course it is not widely practiced even by those who could or should. All of us should, but small accounts will find it harder to do so in practice.

A hypothetical to illustrate my point.

Every stock you hold is involved in a trading halt intra-day. Every stock, when the market re-opens, re-opens 50% lower.

Has your entry reduced your risk?
Has your strategy provided loss prevention through diversification?

The answer is no.

With true diversification the answer would be yes.

jog on
duc


----------



## qldfrog (18 January 2020)

Skate said:


> The REFLEX indicator
> Hey @Newt I have a keen interest in reducing the lag of indicators finding they are beneficial to any strategy. The Amibroker forum has now a code of John Elders new REFLEX indicator found here: https://forum.amibroker.com/t/ehlers-reflex-a-new-zero-lag-indicator/16773/7 from a highly respected member & was wondering if you could code the indicator. Why? The Amibroker code on the forum (IMHO) is not 100% true to John Elders supplied EasyLanguage code.
> 
> *The original indicator picks up the signal too late*
> ...



@Skate , your backtest results were for calendar year 2019?.Just for clarity of comparison if i have time to play with reflex


----------



## Skate (18 January 2020)

qldfrog said:


> @Skate , your backtest results were for calendar year 2019?.Just for clarity of comparison if i have time to play with reflex




@qldfrog the backtest period was from 1st January 2019 till today.

Thank you, I’d be interested in the comparison (if time permits)

Skate.


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## Skate (20 January 2020)

*Lets talk about time*


Skate said:


> @barney as usual, you nailed it. Unfortunately your friend is in the minority. I find it difficult to have a stimulating conversation with most. People find it pleasurable chatting about nothing, they simple put all their energy into being polite. You are very fortunate to know of such an person you find interesting to talk & listen too. Stimulating conversation is my true definition of a real conversation.



Our most precious gift, & sharing your time with others is never completely appreciated as it never hits their radar.

*Lets talk about the time it takes for me to trade*


Newt said:


> *many positions, keeping many more records (perhaps less concerning if retired and trading weekly)



I trade 4 strategies & have many multiple entries each week (I have posted a picture of the paperwork a few posts back - paper work of a 6 month period).

*What's involved*


peter2 said:


> Enjoyed the new style scans but there's still too many results to look through.



AmiBroker scans for signals at a push of the button, (this takes no time at all) What consumes my time each week? The 10 minutes is consumed by entering the buy & sell positions into ComSec & Share Trade Tracker. That's it "all over red rover"

*Lets talk about mechanical trading strategies*


peter2 said:


> This weeks workload is *151* charts or *118* (without CAM-PB), much lower than my usual *211*, but there's more focus on finding buy signals near the start of the up trend. I may not need to scan for the CAM-PB(yellow) alerts if I find all I need from the earlier scans because I'll know that I'm buying those with the best RR.



One of the bonuses of trading a mechanical strategy is the time (the lack thereof) it takes to scan for signal that completes in a blink of the eye - hats off to AmiBroker. Upon completion I buy outstanding positions to be filled from the top down of the list, couldn't be easier. PositionScore (the buy order ranking) handles the buy order sequence.

*Parameter settings*


peter2 said:


> Why haven't I got 118 buy signals this week-end? The scan results go through an evaluation stage (checklist) to assess if there's an acceptable trade setup in the stock. The checklist has some additional chart pattern filters, price filters, fundamental info filters, review of recent announcements, scheduled news check, and a RR assessment. If the opportunity is acceptable I'll do the position size calc's and place the orders. If the opportunity is not quite ready I'll place it on a watch list to monitor the chart regularly. If the opportunity is unacceptable then it gets dumped. Next.



I get a limited amount of signals each scan as they have to passed parameter filtering.
*
Hmmm...*
I'll post signals from todays scan so you can visualise what I've been discussing. The name of the strategy is listed in the formula bar.














*Why make this post *(for comparing trading styles)
Mainly for three reasons (1) it's a blatant plug for trading a mechanical strategy & (2) Mechanical strategies do reduce workloads, hands down. (3) Also mechanical strategies can be backtested to give you some idea how they performed on historical data, adding to the confidence in taking the signals. (the future has a habit of repeating the past)

*Reminder*
A mechanical trading strategy is different beast to a trading plan as I described to @qldfrog a few post back.

Skate.


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## Skate (21 January 2020)

*Lets talk about the ZiGZag Indicator*
There has been discussions about how to use a ZigZag indicator correctly. @captain black often spoke of the ZigZag function for use in the development of his systems & went to great lengths to explain the ZigZag function should never used in a trading strategy because the signals keep repainting when more data is received. (Football analogy - the goal posts keep shifting with additional data)

*How to use the ZigZag Indicator*
The ZigZag indicator can be used to reveal the profit potential for different stocks & in different time frames though. Using the ZigZag function gives you a sense of where the profits are & what happens when you reduce trade duration.

*Important drawback of the ZigZag indicator*
The ZigZag function looks into the future & of course, should never be used for trading with real money. It's okay to use the ZigZag function in your strategy development phase - use it as a guide to how accurate your signal are in relationship to the pivot points.

*Here is a novel idea*
What if we "splice & dice" the ZigZag indication & simply cut off the bits we don't need (the Zag) leaving us with only the Zig function to do the heavy lifting. The Zig Strategy hasn't made it to the paper trading phase yet but I do use it as a guide to monitor the accuracy of my strategy signals.

*Pivots repaint*
I don't use pivots for anything other than an indicator, all the Zig function indicates is that the price direction has changed. Waiting for a confirm trend after the pivot is the entry point. If you look at the Zig Strategy chart you can see the Zig pivots are not used as the entry (remembering they shift with additional data) but they do indicate a change in price direction.

*I'll use BFG as the "Example Chart"* (as I've used BFG a few posts back)
Lets see if the PANDA Strategy signals are in the ball park when checked against the Zig indicator (the orange line in the Zig Strategy chart). I have turned the Zig Indicator into a trading strategy with a twist. The initial pivot of the Zig indicator (the orange line) is used as a price directional indicator but a position will only be entered on a confirmed trend of the Zig. Also the Zig indicator plays no part in the exit (the exit is too important to leave up to the Zig indicator) the exit is in the safe hands of (a) A Stale stop or (b) A Trailing Stop.






*Here's the rub*
I don't need the Zig indicator to give me an entry signal (the orange line can shift shape with additional data) my entry is conditional on on the Zig indicator but the entry is taken on a confirmed up-trend. The Zig strategy - displays the Zig indicator as an "orange" line. The Zig Strategy is a weekly system, meaning the only valid generated signals are the ones generated after Fridays close. (The signal MTO has been generated today as an example)




*Indicators can be used differently than intended*
@qldfrog I hope my post gives you an alternative view of indicators & how they can be used.

Skate.


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## Skate (21 January 2020)

*I've been thinking*
After reading @qldfrog posts about the ZigZag indicator (used in the 20% Flipper Strategy) has caused me to pull out my old ZIG Strategy & dust it off. I was always going to paper trade this unique idea (when I had time). The ZIG function is purely to indicate a price pivot & enters once the trend is confirmed.

*A new Calendar year*
As the new year has just kicked off it might be the ideal time to give the ZIG strategy a whirl & post weekly updates each week. Why? Something to do, it will keep the thread active & relevant, also paper trading the ZIG Strategy will confirm if this strategy is tradable with "out of sample" data (OOS Data) .



rnr said:


> Skate said that this is important to read:
> The ZigZag function looks into the future & of course, should never be used for trading with real money."



@rnr the strategy I will be paper trading uses the ZIG function of the ZIGZAG indicator - so yes I believe it's a strategy that would be worth trading in its modified form

*Open positions*
Since the 1st January 2020 there has been 9 positions taken so far & 11 to be filled.

*Reporting*
All reports will be from Share Trade Tracker. (samples report format is below)

*The ZIG Weekly Strategy*
Start Date: 1st January 2020
Portfolio Capital: $300,000
Positions in the Portfolio: 20
Position Sizing: $15,000 initial positions, re-balanced weekly

*Weekly Updates*
The weekly updates will be posted in the format below - we are currently in the middle of week two.







*Clarification*
The ZIG is a weekly strategy & the reporting date (24th January 2020) is for the end of the week tally (end of trade Friday) - I've entered this weeks trading into the mix (the figure in last Total Results yellow column is as at the end of trade today Tuesday 21st January 2020) & the strategy will be updated after Friday's close.







*Another graphic*
The two charts above should be enough for my weekly updates but for accountability I'll post the current open position.





*Minor Hiccup*
I'm eager to start paper trading the ZIG strategy & I didn't want a small hiccup to curb my enthusiasm as my interest has already been sparked. What's the hiccup? I'll be able to post an update at the end of the this week but the next two weeks thereafter I may struggle being out of the country relying on satellite communications.

Skate.


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## qldfrog (21 January 2020)

not to hijack @Skate thread, I have added some relevant infos on https://www.aussiestockforums.com/posts/1053431/
Hope it helps


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## Skate (22 January 2020)

rnr said:


> Hi *@Skate*, Firstly let me clarify a few issues and apologise for any confusion I may have caused. Cheers, Rob




@rnr - Thanks for taking the time to bullet point the clarifications, they are now crystal clear.


qldfrog said:


> not to hijack @Skate thread, I have added some relevant infos on https://www.aussiestockforums.com/posts/1053431/
> Hope it helps




@qldfrog if you want to make a comment on the ZigZag function (or any other matter) fire away, a variety of views & ideas always stimulate - adding to a discussion. It's worth remembering that the 'Dump it here' thread is about ideas - not a contest of ideas.

As I'm posting about the Zig Strategy, (a section of the ZigZag function) I've decided to corral my comments in the 'Dump it here' thread.

Skate.


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## Skate (22 January 2020)

*Lets talk about another indicator for the toolbox*
I would like to qualify recently comments I've made about not trading a strategy that uses the ZigZag function because ZigZag always repaints. In fact, I was alerting others to the fact that the ZigZag recalculates as more data is received.

*The ZigZag function can be misleading*
The ZigZag function is one on those indicators that can be misleading because it accurately pinpoints the "Tops and Bottoms" of a stationary price range. Traders have a habit of falling in love with indicators & the ZigZag indicator is no exception. (we all tend to fall in love with our favourite indicator). Often the technical guys will search for an indicator that will give them an edge & when traders stumble across the ZigZag indicator they believe they have just found it, as it backtests very well. (most times too well).

*Reality is a bit different *
Reality than bites because the ZigZag indicator "repaints" with the arrival of additional data. In other words, the indicator changes the most recent “Top or Bottom” in order to reflect the new price data, the previous signals are now long gone as the market moves on.

*Is the ZigZag indicator worthless?*
No, the ZigZag indicator isn’t worthless, far from it. The ZigZag indicator can be used quite effectively for analysing past data & creating very good setups for many strategies - just not in the way most believe. There are many ways that this indicator can be used effectively & I’m sharing one of my ideas about how to effectively use half of the indicator to formulate my ZIG strategy.

*The Zig Strategy*
Paper trading the ZIG strategy with ongoing weekly updates will be the acid test of its real worthiness. Trading the Zig Strategy on out of sample data (OOS) going forwards will be the decider if my idea develops into a trading strategy - only time will tell.

*Recap*
The orange “Line” on the chart displayed in my previous post shows the “Highest High” and “Lowest Low” for the period, one of parameters of the original indicator. The Zig line on the chart of ASX:BFG (above) displays where the signal bar is in relation to the “Lowest low”. The signal bar only is generated on a confirm trend. Before others point out the obvious - the ZIG Strategy is another trend trading strategy.


rnr said:


> When I say that the HiLoZZ indicator is based on the ZigZag function, my reference is to the way in which it works



@rnr as you have a solid grounding in this function would you care to make additional comments - I for one would be very interested.

@qldfrog any piece of relevant information regarding your research & implementation of the ZigZag function would be welcomed with open arms.

Skate.


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## Skate (22 January 2020)

*Lets talk about what's involved to be a systemic trader*
On reflection @Lone Wolf explains what it takes to be a systemic trader much better than I ever could. The post was made back in 2013 but it's still 100% relevant today. I just love when members nail a post succinctly. 

*It's worthy of a read*
@Lone Wolf post can be found here: https://www.aussiestockforums.com/posts/761345/

*Summary of what's needed*
- Data feed – (Norgate Data)
- System code – thoroughly tested (home grown or purchased)
- Confidence - to actually trade the system (not "if" but "when" the going gets tough)
- A Broker - to place trades with (CommSec)
- Trading capital - The size of your starting capital can have a big impact on the profitability of the system.

*With the passing of time I'm adding this to the list*
- Software to track your trades – (Share Trade Tracker)

Skate.


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## rnr (22 January 2020)

@Skate

As you are aware in Amibroker the Syntax for the  Zig-zag indicator is Zig(ARRAY,change).
The "change", I believe, is referenced as a % which isn't a problem.
That leaves us with ARRAY and the standard options of Open, High, Low and Close but lets scrap those as they are single use only.
ARRAY is where we have the opportunity to get adventurous....e.g. consider a series of rules using IIF statements to determine on a bar by bar basis whether to use the HIGH or LOW value.
Yes, it can be a bit frustrating although very rewarding when you get it right.

Cheers,
Rob


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## Skate (22 January 2020)

rnr said:


> @Skate
> 
> As you are aware in Amibroker the Syntax for the  Zig-zag indicator is Zig(ARRAY,change).
> The "change", I believe, is referenced as a % which isn't a problem.
> ...




@rnr I'm listening...

*Zig(ARRAY,change) *
The (ARRAY) I reference is one of the "price fields" parameters (O,H,L,C, Avg, Vol, OpenInt) - I've settled on the "Close"
Now the (change) - I've settled on is 20%.

*Meaning*
For those who are following the Zig Code = Zig(Pricefield, change)
Price field = close
change = 20%


rnr said:


> ARRAY is where we have the opportunity to get adventurous....e.g. consider a series of rules using *IIF statements to determine on a bar by bar basis whether to use the HIGH or LOW value*.



Okay, I use an IIF statement as a buy condition but never thought about circulation through a list (O,H,L,C, Avg, Vol, OpenInt) as an option. If I may ask what determines the selection of one over the other?

*Why did I settle on 20% rather than 10% *(backtest - 1 year)
Backtesting revels with my other parameter 20% trumps 10% (20% suits my code & parameters as the signal has be in a confirmed up-trend - Rob you code & parameters most like suits 10% or a personal choice, who knows)







rnr said:


> consider a series of rules using IIF statements to determine on a bar by bar basis whether to use the HIGH or LOW value.



@rnr any chance of pointing me to a webpage to have a read, the concept sounds interesting.


rnr said:


> I agree that the last leg of the Zig function is dynamic and when used in system testing it references future data. It is however possible to establish when a Peak or Trough has been locked in which is essential when using the Zig function for system testing.



*The above quote is from 2014 post* - care to elaborate
Another one of your interesting quotes - would you care to explain what condition locks the Peak & the Trough?
*[*QUOTE="rnr, post: 851901, member: 9696"]You will need to use a ZigZag based indicator that works from High to Low and link this with a *binary indicator *which signals when a 20% low has been "locked in".[/QUOTE]
*Also*
Would you care to elaborate on what the *binary indicator *is?

Skate.


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## Skate (22 January 2020)

*What a difference a day makes*
Another great day for our markets. If you listen to the doomsayers, you know the guys who predicts disaster with each dip of the markets - "we are just one day closer to a crash". I say let's worry about this when the time comes.

*Pokie players*
Not related to trading but it's worth remembering never-the-less. "People only tell you when they win on the Pokies" & some may think this post has a resemblance.

*Let me selectively from one of @aus_trader quotes (it's been sliced & diced) *


aus_trader said:


> when the economy and share market is doing well, dance along while the music lasts.



 Yep, I like the quote..

*Lets talk about the ZIG Strategy*
Yesterdays (Tuesday) rolling results reflected in the equity curve & total column






*Lets talk about what a difference a day makes*
Today (Wednesday) rolling results reflected in the equity curve & total column





*Keep in mind the results are a snapshot in time*
Todays results will bear no reflection to the EOW results - it's a snapshot in time (at the end of trade today) - but it is pleasing to see the strategy starting off on the right foots but "one swallow does not make a summer" - the end of week results will be updated on Friday after the markets close.

Skate.


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## rnr (23 January 2020)

Skate said:


> @rnr I'm listening...
> 
> *Zig(ARRAY,change) *
> The (ARRAY) I reference is one of the "price fields" parameters (O,H,L,C, Avg, Vol, OpenInt) - I've settled on the "Close"
> ...



*Also*
Would you care to elaborate on what the *binary indicator *is?

Skate.[/QUOTE]

@Skate
quote "Okay, I use an IIF statement as a buy condition but never thought about circulation through a list (O,H,L,C, Avg, Vol, OpenInt) as an option. If I may ask what determines the selection of one over the other?"
 So I am totally not interested in a ZZ indicator based on the standard options such as High to High, Low to Low, Close to Close...and I think you are getting the idea now! Correct I want High to Low which is not in the standard options list so it's up to me define a HIGH & LOW going forward.
The code you use to determine a HIGH or LOW will govern the output of the indicator. For example when a bar is higher than the high of the previous bar and lower than the low of the previous bar is that a new HIGH or a new LOW? I think you are starting to get the idea now and you are setting the rules.

FYI my code & parameters had zip to do with my choice to use 10% for the Flipper display purposes...it was just different than 20%, nothing more, nothing less.

A binary indicator returns a 1 for correct and 0 for false. An example being H>=Ref(H,-1) where the result is either 1 or 0.

Hopefully I have covered all your questions/requests.

Cheers,
Rob


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## Skate (23 January 2020)

Skate said:


> *Mediocre when it comes to trading*
> Being mediocre sometimes has it place, even the best investor has plenty of lousy picks along the way, but it is the manner in which you handle those investments after their purchase that ultimately determines your level of success.






Skate said:


> *Brains*
> Brains (IMHO) are an overrated attribute when it comes to trading. Smart people tend to think logically and have a hard time dealing with a market that ignores what should be painfully obvious.




*Brains*
I'll have to reword my post about brains being overrated after listening to Mark trying to win a Harley Davidson. 

*Brains (Update) *
You do need a certain level of grey matter to play this game. 

*Listen to the youtube *
It will be the funniest 3 minutes you will every hear & I can guarantee - you will never forget Mark from Greenacre - I like pulling for the underdogs but in this case I'm hoping Mark didn't win the Harley.

*Background*
About ten years ago, a radio station in Sydney (Triple M) had a contest in which callers could qualify to win a Harley-Davidson motorcycle.  Nice prize.  So caller ten rings in, his name is Mark, and he’s from Greenacre, a few miles southwest of Sydney & for being caller #10, Mark can qualify to win the motorcycle. All he has to do … is spell the band’s name.

Yep.  He just has to spell AC/DC.

*Can Mark do it?*



Skate.


----------



## qldfrog (23 January 2020)

Thanks for mandatory voting, Mark vote is as important as yours. I would still recommend Mark avoid discretionary trading


----------



## myrtie100 (23 January 2020)

Awwww, I feel sorry for Mark - he may be dyslexic....


----------



## Newt (23 January 2020)




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## Skate (24 January 2020)

*The ZIG Weekly Strategy*
Start Date: 1st January 2020
Portfolio Capital: $300,000
Positions in the Portfolio: 20
Fixed Position Sizing: $15,000 (No re-balancing)

*Weekly Update Format*
1. The "Share Trade Tracker" Dashboard                                                               
2. Portfolio performance line chart 
3. Open Summary
4. Pending buy & sell positions          



















*For full disclosure - *All the Buys & Sells signals are listed since 1st January 2020 (the ZIG Strategy start date)
The Amibroker buy & sell signals dated 23/01/2020 are normally placed in Monday's pre-auction (it will be Tuesday's pre-auction because of the Australia Day Holiday) I have included all the signals since 1st January 2020 for full disclosure. Going forward I will only post: (the current week signals)

*Buys & Sells Signals this week*
# 2 Buys this week: MTO & WGN
# No Sells.




Skate.


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## Skate (31 January 2020)

*The previous ZIG Strategy updates are now obsolete*
After re-reading a few of @rnr posts regarding the different setups that can be utilised with the ZIG indicator, Rob raised a few good points resulting in the re-working of the parameters & completely changing the entry criteria.

*Obsolete*
The previous updates are now obsolete.

*The re-worked updated & new ZIG Strategy *
Going forward the weekly updates will be the “NEW re-worked ZIG Strategy” & at-the-moment they are in line with current market conditions & strategy expectations.

*Jittery markets*
As we know all too well, any bad news in jittery markets will make traders rush into panic mode, causing huge selloffs. The markets are constantly doing things you don’t expect & it‘s with this in mind why it’s so important to have an exit strategy that will give you the confidence & peace of mind that you’ll get you out of the markets at the right time without panicking.

*Traders, we are all different*
Traders understand the markets are based on human behaviour & our perceptions about what's happening. While one person sees the buying opportunity of a lifetime, another sees the meltdown of the global financial system as we know it. Thus, it’s our perception that creates the value at any given time.

*The Weekly updates of the ZIG Strategy *
The updates in the next post will be the “Updated ZIG Strategy”

Skate.


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## Skate (31 January 2020)

*The updated ZIG Weekly Strategy*
Start Date: 1st January 2020
Portfolio Capital: $300,000
Positions in the Portfolio: 20
Fixed Position Sizing: $15,000 (No re-balancing)

*Weekly Update Format*
1. The "Share Trade Tracker" Dashboard
2. Portfolio performance line chart
3. Open Summary
4. Pending buy & sell positions




















*One Buy, One Sell this week*
ZIG Sell = MNS
ZIG Buy = WAF

Skate.


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## Skate (7 February 2020)

*The ZIG Weekly Strategy*
Start Date: 1st January 2020
Portfolio Capital: $300,000
Positions in the Portfolio: 20
Fixed Position Sizing: $15,000 (No re-balancing)

*Weekly Update Format*
1. The "Share Trade Tracker" Dashboard
2. Portfolio performance line chart
3. Open Summary
4. Pending buy & sell positions




















*2 - ZIG Sells this week*
AML
CAN

*2 - ZIG Buys this week*
LVT
ASB

Skate.


----------



## willoneau (8 February 2020)

Hi Skate, how long do you paper trade new systems for before deciding to go live or not or even before you start to tweak?


----------



## Skate (8 February 2020)

willoneau said:


> Hi Skate, how long do you paper trade new systems for before deciding to go live or not or even before you start to tweak?




@willoneau paper trading is from 6 to 12 months to make sure they are in line with backtesting results.

*OOS*
Out of sample (OOS) results are the only results I’ll take notice of as backtesting only gives an indication of the strategy’s potential.

*Throughly tested*
For a strategy to get to paper trading stage it’s already been through the ringer in terms of system development “but” the ZIG strategy is the exception to the rule as @rnr gave me a few good ideas & such it’s been completely reworked & the backtesting is promising.

*The ZIG Strategy *
The early results of the ZIG strategy aren’t looking too flash at the moment but it’s early days & the current strategy performance is inline with expectations.

*The MAP Strategy *
I’m also paper trading the MAP Strategy at the moment as well as the ZIG strategy. My MAP Strategy has been discussed by other members &  the entry conditions for the MAP strategy has already been posted in this thread.

*Simple buy condition*
The MAP strategy is showing promise & with a simple buy condition - it’s a wonder it works so well.

*2 Weekly reports*
If you are interested or any other member is interested to see both paper trades in the ‘Dump it here’ thread let me know. I’ll paper trade them with the same start date & parameters & run them off against each other & report the result weekly with the ZIG Strategy.

*FYI*
I’m intending to trade one or both of these strategies if the OOS results pull up okay.

Skate.


----------



## willoneau (8 February 2020)

I see you use $300,000 when testing, is this related to if or when you go live?


----------



## Skate (8 February 2020)

willoneau said:


> I see you use $300,000 when testing, is this related to if or when you go live?




*Portfolio size *
All my new strategies start out with a base $300k x 20 (15k) positions. Each strategy needs to prove their worth before ramping up the number of positions & position sizing.

*The strategy is full*
Strategies are considered full when they ramp up to 40 (25k) positions. When this happens I look to start another strategy.

*FYI*
I’m currently trading 3 strategies at the moment & I’m busting to start others - but not before they prove to be worthy of my support.

Skate.


----------



## willoneau (8 February 2020)

Skate said:


> *The strategy is full*
> Strategies are considered full when they ramp up to 40 (25k) positions. When this happens I look to start another strategy.



You made the point about position size affecting price and I wondered once getting up to 25k that became an issue. I also like how you increase position number as peter2 noticed his system improved when number of positions were increased to 40.


----------



## willoneau (8 February 2020)

Skate have you looked at any mean revision systems ? or are you only interested in trend following?


----------



## Skate (8 February 2020)

willoneau said:


> You made the point about position size affecting price and I wondered once getting up to 40k that became an issue.




@willoneau I may not have been clear, it’s 40 position portfolio not $40k position sizing.
*
Then*
I use to trade $100k & $50k position & a couple of $200k trades & found it resulted in slippage. I trade between $15k & $25k each position now.

*Now*
All my systems start out at $15k positions & ramp to a maximum of $25k per positions - $25k is now my maximum position size. 

*It’s a 2 stage process*
(1) Meaning with rebalancing my positions sizing goes from $15k to $25k - once the position size hits $25k (25k X 20), stage one is completed - then I enact step 2.
(2) This step is trying to build a 20 positions portfolio into to 40 positions portfolio.

*FYI*
2 of my strategies are now full & the third is on it’s way, this is why I’m paper trading 2 new strategies (ZIG & MAP) to trade in the near future.

Skate.


----------



## Newt (8 February 2020)

Pretty sure Skate has previously mentioned commission, slippage and costs cut too deeply into profits to make MR successful in Aus.  Not to say it can't be done, just very challenging and possibility of strategy becoming obsolete potentially greater.

From watching what Nick Radge currently does to augment trend following, I have some suspicions on aspects that would help with MR systems:

* Very low commissions - US market still much more efficient in this regard than what we're offered here in Oz
* Very "efficient" mature market much more likely to mean revert (i.e. US > Aus) (read some Kaufman on market "efficiency")
* May be that larger cap stocks more likely to mean revert, depending on strategy
* Need a broker that accepts multiple orders, when you only expect to fill some of them (my Aus brokers don't allow this - but suspect IB and others do - must check)
* Because of last item, will be frequently entering and cancelling orders - greater need for automation or bit more sophistication (Radge has custom programmed API for IB and generates text/CSV orders file from Amibroker than pastes into API)
* Much greater need for strategy modelling work to include commissions, slippage etc in the backtests - tricky but otherwise you get overly optimistic results with flat equity curves that are dangerously tempting (more so than generally occurs with over-fitted optimistic TF system development)

If above points are close to the mark, then I'm intrigued but not ready to go that way.  Still in the Trendnomics camp for trend following personally - push on with robust TF strategy, and be prepared for some weeks to month long wild swings.  Fits my lifestyle, personality and time availability right now however.

p.s.  whenever I think I'm experiencing "unfair" excursions in my capital/equity go back and zoom in on 6 months periods in backtests - they're always in there, but its amazing how they just fade into the background and seem "easy" when you graph out 5 years or more returns on the equity curve.


----------



## Skate (8 February 2020)

willoneau said:


> Skate have you looked at any mean revision systems ? or are you only interested in trend following?




@willoneau I’ve traded a Mean Reversion strategy with limited success as the short holding period & high commission rate is the killer even though it has a high win rate. 

*FYI*
I’m only interested in trading the XAO & that’s it - no foreign markets for me.

Skate.


----------



## Skate (8 February 2020)

Newt said:


> Pretty sure Skate has previously mentioned commission, slippage and costs cut too deeply into profits to make MR successful in Aus.  Not to say it can't be done, just very challenging and possibility of strategy becoming obsolete potentially greater.
> 
> From watching what Nick Radge currently does to augment trend following, I have some suspicions on aspects that would help with MR systems:
> 
> ...




@Newt you nailed it - I couldn’t have explained it any better & (Yes) I have explained it all before. @Newt you have a good memory.

Skate.


----------



## willoneau (8 February 2020)

Skate said:


> @willoneau I may not have been clear, it’s 40 position portfolio not $40k position sizing



Sorry I was not very clear as I meant 40 positions of 25k.


----------



## willoneau (8 February 2020)

Thanx for the insight into position sizing and management, makes it clearer for me and lets me know I'm on the right track.


----------



## Skate (8 February 2020)

Warr87 said:


> I have stopped paper trading system 1 and started live trading system 2. I have 8 open positions that were entered in on Monday, and the rest of the 12 positions have been entered for the pre-market.




As @Warr87 has started live trading system 2 (The MAP Strategy) it's the catalyst for me to report along side of him on a weekly basis (At the same time I report on the ZIG Strategy)



peter2 said:


> No new positions as I was busy and frankly I'm comfortable waiting to see how the markets react to the ongoing virus threat to multiple economies. *No such concerns for the system trader, onwards and upwards and damn the portfolio heat*.




@peter2 nailed it perfectly when he said _"_*No such concerns for the system trader, onwards and upwards and damn the portfolio heat" *As a system trader we roll with the punches (going with the flow, taking signals as they come) - sometimes it's advantageous doing so & at other times it makes us look kind of silly. But as a system trader we don't have (or shouldn't have) the luxury of being a discretionary trader (picking & choosing which signal to take or pass completely), or as I like to call them "Cafeteria traders" - you know the type at a buffet, they just pick & chose what to eat.





*The MAP Weekly Strategy*
Start Date: 1st January 2020
Portfolio Capital: $300,000
Positions in the Portfolio: 20
Fixed Position Sizing: $15,000 (No re-balancing)

*Weekly Update Format*
1. The "Share Trade Tracker" Dashboard
2. Portfolio performance line chart
3. Open Summary
4. Pending buy & sell positions
















*There are NO buys or Sells this week*
When there are no Buys or Sell pending - I will disclose the Exploration report for those who may be interested.




Skate.


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## Warr87 (8 February 2020)

I got those same signals, and a few others.


----------



## Skate (8 February 2020)

Newt said:


> Market has been a rollercoaster on Mon and Tue last 2 weeks.  World is end on Mon, then some stocks rocketing up Tue.  Challenging times - there's always something new to experience in the markets.....




@Newt nail this & I wanted to reinforce the Roller Coaster we are experiencing at the moment & it's hard to follow & digest.

*Last weeks Trading result *
The records below highlights what @Newt is saying (The Roller-coaster ride). These are my last weeks actual daily records from one of one of my 3 strategies (I'm not disclosing which strategy it is, just giving an example)

*Monday* (- $17,619) = Loser
*Tuesday* +$11,398 = Winner
*Wednesday* +$12,359 = Winner
*Thursday* + $6,271 = Winner
*Friday* (- $5858) = Loser

*End of the week results *
Ended the week up +$6,551



*For full disclosure*
The other two strategies - this weeks results (not a bad week considering)




*Any week you don't lose is a good week *
But, I still have the feeling of disappointment, go figure

Skate.


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## Skate (8 February 2020)

Warr87 said:


> I got those same signals, and a few others.




@Warr87, we are running similar strategies, meaning the signals should be close. I'm so please you are forging ahead with the MAP strategy. Don't fiddle with any adjustments I've made to your code (just remember how a few tweaks I made to your MAP strategy gave you massive improvements in a heart beat - so please don't disclose them) 

*My advice* 
Stick with the strategy in good times & bad times, I've put a lot of work into the MAP strategy & it backtests well - just take the signals as they come & let the strategy do the magic over time.

Skate.


----------



## Warr87 (8 February 2020)

Skate said:


> @Warr87, we are running similar strategies, meaning the signals should be close. I'm so please you are forging ahead with the MAP strategy. Don't fiddle with any adjustments I've made to your code (just remember how a few tweaks I made to your MAP strategy gave you massive improvements in a heart beat - so please don't disclose them)
> 
> *My advice*
> Stick with the strategy in good times & bad times, I've put a lot of work into the MAP strategy & it backtests well - just take the signals as they come & let the strategy do the magic over time.
> ...




I haven't really changed much since the adjustments you made (it was all cosmetic really). The core of the code has stayed the same. A few spin-offs have occurred to satisfy my curiosity for other systems, but they are completely different systems and dealt as separate systems in their own right (and intended for other markets/sectors hence the modification).

I definitely intend on following the strat to the letter. I can't be in for the big rides if I've already gotten out. I'm starting small but want to build it up to $15k positions. I know that's where you are starting, but for me, that will be my max position size and represent a huge increase from my initial capital.


----------



## Skate (9 February 2020)

@Warr87 we have to thank @Gringotts Bank for the MAP strategy @Gringotts Bank asked me a simple question "Skate, what do know will work"
*
The MAP strategy was born*
As I've said the MAP strategy came about from an off the cuff question from @Gringotts Bank. We all have opinions of what works & what doesn't when it comes to trading but always find it difficult to have the confidence putting our money on the line trading an idea. So after reading @Gringotts Bank post I set about coding a strategy from what I have learnt over the last few years formulating a new strategy that on paper has the ability to work.

*FYI*
MAP is an acronym for - *M*oving *A*verage *P*eriod Strategy (it's a simple MA strategy)

*Coded & tested*
The idea coded up well & the strategy backtested with pleasing results. The new strategy has only a few conditions when to buy & sell.

*MAP Buy Condition (Amibroker code)*
MapBuyCondition = ( Close > MA( Close, 10 AND ROC(C,10)>0) OR (Close == 1.1 * Ref( Close, -1 ) and V>Ref(MA(V,10),-1)) );

*The MAP Strategy in english*
The MAP Strategy Buys when the closing price is higher than a 10 Period Moving Average conditional that the 10 period ROC filter is above 0% or it Buys when the closing price is at least 10% higher than the previous week close with "*Volume higher than the 10 period Moving Average" (the secret sauce)*.

*Soap Box*
I don't want to get back on my soap box but the secret sauce needs further explanation why strength is so important in trading. *"The whole MAP formula is built on the premise that the position is now stronger than it was previously" *- I'm sad to say but with the passing of time we have lost the art of memorising so if you read something that maybe helpful in any thread "write it down" so its not forgotten.

*Posts worthy of a look*
https://www.aussiestockforums.com/posts/1027039/  and here  https://www.aussiestockforums.com/posts/1028382/

Skate.


----------



## Skate (9 February 2020)

*Lets talk about MAP Buy criteria (in particular item # 3)*
1. Buy whenever the Close is higher than it’s 10-periods Moving Average - OR,
2. Buy when the Closing Price is at least 10% higher than last week’s close - AND,
3. *BUY only when Current Volume is higher than it’s 10-period Moving Average* - AND,
4. BUY when The Rate-of-change Filter of the last 8 periods is higher than 0% - AND,
5. BUY with the appropriate Filters being applied

*Why volume confirmation is so important*
Good volume means strength. With trend trading you need to understand why volume is important when you are considering entering a trend. If an uptrend is not confirmed by an expansion in volume, then what you have is the same number of buyers or worse, fewer buyers. When price rises, it does so because there are even fewer sellers. Once you realize that the market is trending with higher prices without volume confirmation, then you truly are at greater risk of the trend reversing and doing so both quickly and violently.

*How we all think*
When under the influence of emotions, we may at times surrender our emotional intelligence & this is why trading is such a difficult endeavour. Yes, we all feel that sinking feeling in our guts after we enter a trade that goes slightly against us & this is when our emotions rise to the surface. If the fear is strong enough, we might cut the trade short to escape the unpleasantness, hijacked by our emotions encouraging us to do the wrong thing at the wrong time. My advice is to resist the urge & stick to your plan. 

*Summary*
Trading is predicting the value of a security sometime in the future & the idea of qualifying the strength of a trend is so important. Let's be honest not all trends are the same in terms of strength & durability - by qualifying trends provides a trader with an exceptional edge. 

Skate.


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## Skate (9 February 2020)

*Let's not start a debate* (alternative views are welcomed)
As we have seen during the past several weeks, the markets are not based on fundamentals they are based on human behaviour, which is based on perception, "which creates value". The markets are a reflection of the overall belief system of all the traders in the market at any given time & the charts reflect this.

*Let's talk about charts*
With today’s markets, the charts tell us everything we need to know. In trading, our charts are really our best friends as they give us the insight to what we need to know without any additional noise or bias. If an entry signal is there & the capital is available, we place our trades based on our own analysis. The most important thing keeping us from succeeding as a trader is not necessarily our trading strategy, but what we think about trading in general. Once we get our emotional behaviour in check we can work with our strategy, we can effectively trade the strategy as it was designed & not make decisions based on our beliefs about the strategy. (This is a very important point)

*Common trait*
The most common problem that traders have is that they always tend to over complicated their trading & as humans, we have a tendency to overcomplicate everything we touch. But trading doesn't need to be complicated. Whenever we apply our usual learned behaviours to our trading, we complicate something that should be simple. We look for confirmation about a decision that requires time to be confirmed. If we are wrong, then we doubt the strategy. It's important to remember every strategy will have losing trades, accepting this & your half way there as a trader.  

*Remembering *
"Don't get in the ring if you don't want to be hit" 

Skate.


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## Skate (9 February 2020)

*Follow your plan*
Mechanical Trading can be a simple endeavour if you are disciplined to follow the rules & stick to your trading plan. When the appropriate signal shows up, place your order but only when you have a fully tested strategy. With a fully tested strategy there is no need to second guess the signals. 

*The emotional spectrum*
Multiplying the emotions of all the traders & you get a sense of the complexity of the psychological forces at work in the markets. Panic, depression, euphoria (the entire emotional spectrum) all take on a new intensity when your hard earned cash is on the line which is why trading is so scary to beginners. These emotions consequently can generate similar strong feelings in us causing a reaction (that is, to buy or sell).

Skate.


----------



## Nina4 (9 February 2020)

Skate said:


> *Lets talk about MAP Buy criteria (in particular item # 3)*
> 1. Buy whenever the Close is higher than it’s 10-periods Moving Average - OR,
> 2. Buy when the Closing Price is at least 10% higher than last week’s close - AND,
> Skate.




Skate, in your copied and pasted code from post #2325



Skate said:


> *MAP Buy Condition (Amibroker code)*
> MapBuyCondition = ( Close > MA( Close, 10 AND ROC(C,10)>0) OR (Close == 1.1 * Ref( Close, -1 ) and V>Ref(MA(V,10),-1)) );




The OR section ONLY buys if close is 10% greater than the previous bar NOT greater. (Close == 1.1 ).
For anyone wanting to use the provided code change == to >= if you want to include closes greater than 10% above the previous bar..


----------



## Skate (9 February 2020)

*Information*
Often people think about all the technical information available & fail to appreciate one of the most important aspects of becoming a successful trader - "Their own personality traits"

*We tend to seek explanations*
Personality has a lot to do with the ability to grasp & properly execute a mechanical strategy. What seems so natural to many long term traders seems alien to beginners as they seek answers to why & what makes a security move in a manner that it does. We all have a strong desire to understand why the markets move as they do.

*The trading game*
New traders who don’t expect too much too soon, those who understand that this business takes time, money, training & experience tend to survive in this game. If you are serious about trading, then changing your mindset is vital. You must never forget that the objective of trading is making a profit. Not only does that mean learning a winning trading methodology or strategy but it also requires careful risk assessment & management.

*Discipline is the key word*
Disciplined is required in every facet of trading whether it's money management, risk management or strategy execution whilst at all times keeping your emotions in check so you have the ability to execute your trading strategies flawlessly, when the signals present. As I've said previously, losing streaks are a fact of life for a trader & it's vital to manage your risk, your money & your attitude in order to survive those periods when your timing is off or the when the odds are against you.

*Off the soap box for now* 
It feels good to get things off your chest, even a refresher of known facts are sometimes helpful.

Skate.


----------



## Skate (9 February 2020)

Nina4 said:


> Skate, in your copied and pasted code from post #2325 The OR section ONLY buys if close is 10% greater than the previous bar NOT greater. (Close == 1.1 ). For anyone wanting to use the provided code change == to >= if you want to include closes greater than 10% above the previous bar..




@Nina4 thank you for reading my post & adding information with the view of helping others.

*Volume confirmation*
My post was to explain when price is trending higher without volume confirmation, it's risky to enter that position & doing so can result in disappointment.

Skate.


----------



## Newt (9 February 2020)

Thanks for the update and reminders on MAP logic Skate.  Will have to have a play sometime trying to emulate.  You never know when playing with something can lead to a new "aha" moment.

And thaks for elucidating on some "secret sauce".  You've noted before that even one (well tested and robust) condition added to a strategy can make a world of difference.

My TF entry is primarily 3 things - Price, Volume, Time.  Nick Radge's Unholy Grails was a huge influence for me starting out, but don't recall rate of change (first derivative of price vs time) was in there.  Certainly price x volume (turnover) has always been a Radge entry condition.

I keep a record of trading milestones and how/when there were discovered, read, shown.  Some of the biggest positive changes came from going to the weekly timeframe, including ROC, and incorporating robust volume conditions.  Exits are another important "leg of the table", but learning how to use parabolic SAR trailing stops in a way that worked for my trading helped align system performance (and DDs) with my personality and expectations.  Ultimately that builds confidence on when to take on new risk, and when to "take the money and run" (err, or "take the loss and run").

For those wanting ideas on how to incorporate volume and price into systems development, I've found publications by O'Neill and some of those who traded with him very helpful.  Some corney clickbait titles, but definitely worth a read for those feeling their way for a systematic approach.  There are few by O'Neill and his "disciples", but suggest this for a starting point (below). 

https://www.amazon.com.au/Trade-Like-ONeil-Disciple-Trading-ebook/dp/B003Z0CQVS

Minervini's style very close to this too - he has published a few books that are very useful reading for systematic trend traders.


----------



## Skate (9 February 2020)

Newt said:


> Thanks for the update and reminders on MAP logic Skate.  Will have to have a play sometime trying to emulate.  You never know when playing with something can lead to a new "aha" moment.




@Newt, it's pleasing when there is an interest in some of my posts that influence other to take a second look, from @qldfrog starting a "Skate inspired thread" to @Warr87 showing interest in the MAP strategy, even @peter2 remarking that a 40 position portfolio would not beat the index only to acknowledge portfolio size does matter in so many different ways & it also matters psychologically in stock selection. Cudious to @peter2 shifting his opinion after testing the idea of using a larger than usual position size strategy.  

*A recap of what Peter said*
_(a) "My knowledge and experience would say that a portfolio with 50 positions would not beat the market index"_
*to this*
_(b) "It has exceeded my expectations. I was/am pleasantly surprised by the results. There's no doubt that a 30+ portfolio, that is actively managed will thump any index"
_
*StaleStop Exit*
Also my StaleStop exit "in-my-opinion" is another one of my secret sauces. The StaleStop exit works for me. Getting the exit timing correct can be the decider of a strategy.  Entries are a dime-a-dozen.

*A bit disappointing*
I coded my version of @peter2 1st Blue Bar (the SuperTrend Strategy) discussed in his thread & I posted some pleasing backtest results. I went on to say that "I'm now a believer" in Peter's strategy as it performs well. Peter's threads & his posts on the topic of the "1st Blue Bar" setup are pure gold, but my post on the "SuperTrend Strategy" fell on deaf ears, meaning there was no interest at all in the idea.

Skate.


----------



## peter2 (9 February 2020)

@Skate  Thank you for your additional comments on the various strategies you've generously shared with us in this thread. I've bookmarked quite a few of your posts. I  haven't just left your ideas as bookmarks either. As you've seen in some of my threads I've researched them and worked with them in real time to get a better understanding of how to apply them. Some of your ideas that I've looked at;
- increased number of positions to hold in a portfolio (>25)
- coded entry alerts (CAM signals, MAP signal)
- coding these alerts into weekly scans to reduce workload and selection bias in the WE review
- ranking methods (not discussed yet)
- stale stops (not researched yet as it's impossible to do manually.)

As a discretionary trader I strive to act in a more mechanical manner because I understand the benefits of doing so. It's unlikely that I'll convert to a fully automated system because I know that most trend following systems have larger DDs that I am comfortable with. My discretionary input is designed to reduce these DDs without reducing the potential profits too much.

I noted your comment that the ST strategy worked better for you using a parameter of "3". Very little of what you post on trading systems escapes my eye because I can see you've done your own research.


----------



## Rsthree (10 February 2020)

Skate said:


> The 'Dump it here' thread lacks posters..
> 
> *I know it*
> When I'm posting I'm only repeating what I already know, but when others post, I tend to learn something new.
> ...




I'm reading this thread from start to finish and I have questions and comments. However rather than reacting to post only to find my question addressed on the next page I thought it better to wait until the end and then start firing.

I'm looking to get back into trading after putting my toes in the water over 12 years ago. This thread is really helping with my education process but it's also making me question my motives and motivativation to get back into it. I'm still on the fence atm.


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## Skate (10 February 2020)

Rsthree said:


> I'm reading this thread from start to finish and I have questions and comments. However rather than reacting to post only to find my question addressed on the next page I thought it better to wait until the end and then start firing. I'm looking to get back into trading after putting my toes in the water over 12 years ago. This thread is really helping with my education process but it's also making me question my motives and motivation to get back into it. I'm still on the fence atm.




@Rsthree thank you for reading the 'Dump it here' thread, reading the thread from start to finish is a big commitment. Don't forget to "Like" the posts you enjoy as the "Likes" serve an important purpose - (a) I re-read every 'Like' I receive to better understand what members find of interest & (b) it's a confirmation that members are reading my thread & find some value in what I post. Also I appreciate every "Like" that encourages me to keep positing.

*Free eBook*
Also, I have a free eBook (in ePub format) - put on your phone & you read it at your leisure. 

*The 'Dump it here' thread*
The 'Dump it here' thread is an educational thread & all my educational post are located in this one thread. I concentrates on the emotional side of trading giving you a sense of the complexity of the psychological forces at work in the market. 

*Old hand*
As you are an old hand at trading it's always good to refresh & read important information we tend to forget with the passing of time. As I'm a mechanical system trader the 'Dump it here' thread slants in this direction. 

*FYI*
AmiBroker is my trading platform for displayed charts. Share Trade Tracker is the program to generate my posted reports while Norgate is my data supplier.

*Other educational threads*
@peter2 has a similar educational thread concentrating on the discretionary side of trading. Helpful hints & ideas can be found in every one of his post. All his threads are well supported by member contributing on a regular basis. Just remember - I'm suggesting you read the 'Dump it here' thread first. 

*The free 4th edition eBook is found here:*
https://www.aussiestockforums.com/posts/1014728/

Skate.


----------



## willoneau (10 February 2020)

Hi Skate, I am interested in the Share Trade Tracker that you are using and am wondering what your thoughts on it are ?
can I use Premium Data to update stock prices for example?


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## Rsthree (10 February 2020)

Skate said:


> @Rsthree thank you for reading the 'Dump it here' thread, reading the thread from start to finish is a big commitment. Don't forget to "Like" the posts you enjoy as the "Likes" serve an important purpose - (a) I re-read every 'Like' I receive to better understand what members find of interest & (b) it's a confirmation that members are reading my thread & find some value in what I post. Also I appreciate every "Like" that encourages me to keep positing.
> 
> *Free eBook*
> Also, I have a free eBook (in ePub format) - put on your phone & you read it at your leisure.
> ...



Thanks Skate, your correct I'm old, but not an old hand. 

I was in the market for around 18 months and did well in a bull market but gave most of it away in the downturn.  Cant remember why I didnt get back into it, probably lack of motivation given my results.

As the whole game is very complex i tried to keep things as simple as possible. Basically looked for breakouts in charts with basic filters using the software I had at the time. 
I managed to make all the mistakes you've outlined when the  FUD came into play and my approach wasn't structured enough to keep me on track. I remember that the trading fees were also a drain as my starting account was small, $10-20k.

I'm now looking to find a renewed motivation to get back into it as I have around $100k in cash wasting away in bank term deposits.

I'm waiting for a new PC to arrive and I'll be buying Amibroker mainly to due to the wide community support that is available.

I'm on page 50 of reading your thread, mongst others, so slowly working through it. I'll definitely look at the e book.


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## Skate (10 February 2020)

willoneau said:


> Hi Skate, I am interested in the Share Trade Tracker that you are using and *am wondering what your thoughts on it* are ? can I use Premium Data to update stock prices for example?




@willoneau Share Trade Tracker is perfect in every way, I've been using it for years.

*For the record*
Share Trade Tracker is "the best share portfolio software" I've ever used & it's a piece of software I couldn't live without.

*Disclaimer*
I've had a small part in the ongoing development of this software & we are currently in the process of using Norgate data as an alternative data supply. There are a range of free data updates included in the program. I'm unsure how traders keep a track of their trading without this software - it's simple to use, updates at a push of a button, Share Trade Tracker handles it all from auto dividend entries with reports for your accounting. The tracking side of the software is so simple.

*To answer all your questions*
Share Trade Trackers website is brilliant & can be found here: https://xlautomation.com.au/excel-spreadsheets/share-trade-tracker

Check it out..

Skate.


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## Skate (10 February 2020)

*Warning*
This is a lengthy post so please bear with me as it holds some vital information for mechanical system traders (please don't speed read this post)

*Just when you think no one is taking any notice*
I received a PM this morning from a member asking if I would take a look at his SuperTrend Strategy & to my amazement the coding was well above average (actually it was quite good)

*We all need help sometimes*
I get my share of private messages seeking clarification or help in solving a problem. I usually limit my help to a few encouraging words, pointing members in the right direction, giving them hope, reassuring them they can do it.

*Trading is simple*
Trading is a simple endeavour - "Trading profitably is the hard part"

*Multiple private messages*
I've received multiple PM's from this member over the past year or so & it's evident he's keen to learn. After looking at his strategy I made a few additional entries to his code & at the same time I made a few parameter adjustments to improve the performance of a good strategy. It's worth remembering, at times we all get stuck & sometimes a small nudge is all that is required.

*1. Volume confirmation* (This is important to remember)
I've already explained when price is trending higher without volume confirmation, it's risky to enter that position & doing so can result in disappointment.

*2. Buy into trend strength* (This is also important to remember)
Some may have missed my summary in an earlier post when I said: "Trading is predicting the value of a security sometime in the future & the idea of qualifying the strength of a trend is so important. Let's be honest not all trends are the same in terms of strength & durability - by qualifying trends provides a trader with an exceptional edge"

*3. Buy signal strength* (This maybe the most important point to remember - it's the missing ingredient in most strategies)
@peter2 often explains when he scans for signals there are hundreds to look at each week manually separating the wheat from chaff. Let's face it, we all know some signals are stronger than others that's why we "PositionScore" them.

*What improvements did I make to the original SuperTrend Strategy?*
It's novel but I prefer to select the best of the best signals first (I only want the strongest signals) & I do this by gauging the strength of the signals before running them through the PositionScore. Checking the strength of the signals is the logical first step. Pre-checking the signal strength of each security takes the selection process one step further than most.

*Why did I help with his coding?*
I normally don't but in this case it was a perfect opportunity to demonstrate that there is always improvements in any mechanical strategy, strategies evolve, they improve & it happens when you gain additional knowledge when you have the desire to learn. Reading the threads of @qldfrog & @Warr87 they are living testaments that this evolving process works.
*
Backtests - Before & After*
I'm posting a one year backtest (a before & after) comparison to demonstrate what a few improvements can make to the performance of a strategy.




Skate.


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## Warr87 (10 February 2020)

I have been back testing the supertrend strategy, I just haven't put anything in my thread yet. I was curious to find that if I limit my entries to those supertrend bars that have just formed, or only if the close is above the ST?


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## willoneau (10 February 2020)

Skate said:


> @willoneau Share Trade Tracker is perfect in every way, I've been using it for years.
> 
> *For the record*
> Share Trade Tracker is "the best share portfolio software" I've ever used & it's a piece of software I couldn't live without.
> ...



Has it always been subscription based?


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## Skate (10 February 2020)

Rsthree said:


> Thanks Skate, your correct I'm old, but not an old hand.  I'm on page 50 of reading your thread, mongst others, so slowly working through it. I'll definitely look at the e book.




@Rsthree, I'm 66 years old & I'm the splitting image of my avatar (Charles Darwin), the only difference I wear glasses. I've been trading since July 2015 & it's the easiest way I know to make money with little to no effort. 

*Remember*
"Education is the key word" 

*Many thanks*
Thank you for the positive comments about the 'Dump it here' thread - I've condensed what I've found to be helpful to my trading in one thread. 

*#* Also, reading my eBook (multiple times) will save you time reading a multitude of other books early in your renewed journey.

Skate.


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## Skate (10 February 2020)

willoneau said:


> Has it always been subscription based?




*NO ! *

Once you could purchase the software outright but you had to pay for version updates. (the subscription model is better for the end user)  

*One subscription cover everything*
The subscription covers all the improvements, updates & ongoing development of the program in the subscription model - There are no lock in contracts - it's win/win scenario & represents good value for the price of the subscription.

Skate.


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## willoneau (10 February 2020)

Not a fan of subscriptions rather purchase software. It seems everything is going to subscription base and on going fees.
$200 a year or $400 software package, I know which I prefer.


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## Skate (15 February 2020)

*The ZIG Weekly Strategy*
Start Date: 1st January 2020
Portfolio Capital: $300,000
Positions in the Portfolio: 20
Fixed Position Sizing: $15,000 (No re-balancing)

*Weekly Update Format*
1. The "Share Trade Tracker" Dashboard
2. Portfolio performance line chart
3. Open Summary
4. Pending buy & sell positions
























Skate.


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## Skate (15 February 2020)

*The MAP Weekly Strategy*
Start Date: 1st January 2020
Portfolio Capital: $300,000
Positions in the Portfolio: 20
Fixed Position Sizing: $15,000 (No re-balancing)

*Weekly Update Format*
1. The "Share Trade Tracker" Dashboard
2. Portfolio performance line chart
3. Open Summary
4. Pending buy & sell positions























Skate.


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## qldfrog (15 February 2020)

Skate said:


> View attachment 100356
> 
> 
> *The MAP Weekly Strategy*
> ...



@Skate : a detail but in both graphs, the time line values are wrong and increase by a day from 1rst of January, not by a week
Thanks for your work


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## Skate (15 February 2020)

qldfrog said:


> @Skate : a detail but in both graphs, the time line values are wrong and increase by a day from 1rst of January, not by a week
> Thanks for your work




@qldfrog well spotted, that was a cut & paste effort from another strategy. The dates will be corrected for next week. 

Skate.


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## Rsthree (15 February 2020)

Wow, finally made it to the end of the thread, it's only taken a couple of weeks.

Lots of great information to digest and work through. In working through the thread, on many occasions I was vacillating on my level of commitment for the journey ahead. One day I'd be all fired up and the next I'm thinking will the effort be worth the return. 

I did find that even as a beginners thread some of content was still challenging and resulted in me having to dig into the depths of the WWW for answers.  There was lots good technical banter thats sometimes went over my head. I'd reccommend that if members use an acronym in any beginners thread then best to provide a definition.

I've come to a strong conclusion that I really need to use a systematic approach to overcome my psychological barriers. Quite a few of those surfaced in my last attempt at trading.

My only issue moving forward is that I know it will take me quite a while to get a handle on Amibroker and have trust in any sort of system I can cobble together my self. I've decided that I really need a turnkey system that I can use as a learning tool to paper trade and to kick off live trade. When confidence and skill builds I can then start to tweak and develop.

I'm still waiting for my PC to arrive so I can set up my tools. If anyone can point me to a source for a turnkey system code for Amibroker that I can start with, it will be much appreciated. 

Skate I read a post here that you had made one of your systems available at one stage but I couldn't find the thread again. If it's still up for grabs please let me now.


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## Skate (15 February 2020)

Rsthree said:


> Wow, finally made it to the end of the thread, it's only taken a couple of weeks.
> 
> Lots of great information to digest and work through. In working through the thread, on many occasions I was vacillating on my level of commitment for the journey ahead. One day I'd be all fired up and the next I'm thinking will the effort be worth the return.
> 
> ...




@Rsthree, thank you for taking the effort in reading the entire 'Dump it here thread' thread I'll give you a "BIG thumbs up" for that commitment.




*In the mean time*
I'm now suggesting while your computer is coming please re-read a few of my CAM Strategy posts - found here: https://www.aussiestockforums.com/posts/1022296/ & how to request the strategy can be found here: https://www.aussiestockforums.com/posts/1012554/

*I now trade the CAM Strategy*
I've have paper traded the CAM Strategy & posted weekly updates on its progress. I currently trade the strategy with success. My last post of the CAM Strategy before going live can be found here: https://www.aussiestockforums.com/posts/1029825/







*To refresh*
The CAM strategy went live on Tuesday 11th June 2019. The current equity curve is below

*Mission Statement*
I had a mission statement to "Seek to achieve an average weekly profit of $1,000 from a $300,000 investment”.

*Why $1,000 a week? *
It came about from a conversation - a remark was made "I could live on $1,000 a week", so that was the challenge. Could $300k rise to the challenge? (so far so good)

*Current result after 33 weeks*
What can I say, the strategy had a mission statement to average $1,000 a week & after 33 weeks it averaging nearly twice that.




*Trading can be rocky*
Looking at the equity curve, it's plain to see, trading is not always smooth sailing - the last few weeks of turmoil has kinked the equity curve (line)

*All new strategies *
It's timely to remind new traders that all "Strategies take time to develop"

*The "Search" feature*
The search feature can be your friend.
Hint: all my educational posts are located in the 'Dump it here' thread




Read here, this proves it can be done: https://www.aussiestockforums.com/posts/1028219/

Skate.


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## debtfree (16 February 2020)

Rsthree said:


> Skate I read a post here that you had made one of your systems available at one stage but I couldn't find the thread again. If it's still up for grabs please let me now.






debtfree said:


> If this is not possible @peter2 everyone can create their own links using their bookmark list. If they create too many or one they don't really want any more they can easily delete it.
> 
> If I like a post that I want to keep I bookmark it, a box comes up, I put a description in the 'Note:' section that I can quickly understand what it's about so I can find it with ease when looking in my bookmark list.
> 
> ...




@Rsthree Yes it's a big read alright but certainly well worth the time and effort, well done! 

I noticed you couldn't find one of Skate's posts, you are probably aware of the Bookmark link at the bottom of all posts but just in case you aren't it's a very handy tool to use. I put a post in this thread regarding using it (Page 38 - Post #1884), it thought it might help you. I have also put it in the quoted area above, I hope it's of some benefit.


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## Rsthree (16 February 2020)

debtfree said:


> @Rsthree Yes it's a big read alright but certainly well worth the time and effort, well done!
> 
> I noticed you couldn't find one of Skate's posts, you are probably aware of the Bookmark link at the bottom of all posts but just in case you aren't it's a very handy tool to use. I put a post in this thread regarding using it (Page 38 - Post #1884), it thought it might help you. I have also put it in the quoted area above, I hope it's of some benefit.




Thanks, I remember you posting that tip. I looked everywhere in the menus to find the bookmark tag but missed the bleedin obvious.

Yes it was a big read. Not just the post itself but associated material that it led me to. I had questions and I wondered off into the WWW looking for answers rather than being lazy with shallow questions. As a result I've read a few more books and bookmarked many other resources. Now I just need to develop some filters and systems to avoid information overload


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## Saqeeb (16 February 2020)

Before I begin, let me warn you that this is a lengthy post and my apologies upfront!

I started my trading journey in June last year at a time when I was desperately saving to accumulate towards a set life goal. The accumulation was slow and the cash sitting in my bank account prompted me to do something to make this cash work while I save, a story that I am sure will ring a bell with many of us. This brought me to look at the markets.

I had a Comsec account and the eventful morning I was looking through the losers and gainers, I noticed CTX down by ~20% on a market update. I thought to myself that a household name like Caltex cannot be down for long. Next thing, guess what, I plunged in and bought CTX with 60% of my savings....60% of my savings. *Ouch!*
No positing sizing, no risk management, no nothing…. If I only ever knew about these.

Thank heavens, the stock LUCKILY recovered and I made a decent profit from it.

While I was holding CTX for close to month and a half, I started researching and reading more and more about trading. This is when I stumbled upon ASF and, thank God, what a gem of a find this was. As if this was not sufficient, I then stumbled into @peter2's and @Skate's threads. Wow......

I had now learnt about risk management which made me realise how dumb I was to invest 60% of my savings in one security. Could have gone devastatingly wrong.

Peter’s discretionary trading, in which he is so upfront and readily shares and educates his trading style with all of us (how selfless and generous) showed me how important trade management is, among other things, to be a successful trader.

On the other hand Skate’s thread works like a conditioner to the trading game explaining the nuances, the ups, the downs, the positives, the negatives, the emotional roller coasters one can go through being involved with the markets. He does not leave it there but also educates us on how to handle all these to be a successful trader. As if that was not enough, he betters it by giving us ideas to build systems and to test them out to be successful.

Thank you @Skate, Thank you @peter2. And thank you @Joe Blow for providing us such a wonderful and clean forum/platform for us to learn and to discuss various ideas.

For any beginner to trading, I highly recommend Skate’s and Peter’s threads. A must before investing a single cent in the market (in my opinion).

*Now to the point……*
With a lot of motivation, encouragement and help from Skate, I am going to paper trade a weekly system inspired by Skate. The *MAP strategy*. I intend to post the results of my paper trade in “*Dump it Here*” thread. Skate has very kindly given me permission to post the results here in this thread.

*Goal:* To survive and to be make a profit consistently
*Universe:* ASX All ords
*Strategy:
Entry:* MAP conditions that have been previously explained by Skate many times.
*Exit:* Exits will be based on an indicator and two trailing stops (a wide one to catch the unexpected falls and another a tight one for when the index filter turns off).
*Time Frame: *Weekly
*Starting Capital:* $30,000
*Position Sizing:* Fixed Dollar Amount
*Max no. of Positions:* 20
*Risk Management:* With a trailing stop each position is risked 1% of trading capital
*Starting Date: *17/02/2020

I will post the results EOW starting 22/02/2020 after the first week in trade.

Saqeeb


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## Skate (16 February 2020)

Saqeeb said:


> Before I begin, let me warn you that this is a lengthy post and my apologies upfront!
> 
> I started my trading journey in June last year at a time when I was desperately saving to accumulate towards a set life goal. The accumulation was slow and the cash sitting in my bank account prompted me to do something to make this cash work while I save, a story that I am sure will ring a bell with many of us. This brought me to look at the markets.
> 
> ...




@Saqeeb your post couldn't have come at a better time for a few reasons that @Newt has explained in @Warr87 "weekly-portfolio-asx" thread.

*In summary *
A strategy performance can vary even if the entry code is exactly the same because of variables Newt outlines in his post. Newt is talking about the "CAM Strategy" but his message is universal saying that the resulting equity curve can be quite variable according to subtle factors. To save me repeating a brillant post, Newt's full explanation of subtle differences can be found here: https://www.aussiestockforums.com/posts/1056724/

*A good comparison *(Map verses MAP)
Even though we are paper trading the same entry condition the similarities will end there. From the starting date of the strategy to the portfolio size will have a bearing on the trading results without even mentioning the parameter, filter settings or the exit strategy.

*Minor differences*
Just a few minor differences can determine the performance outcome of a strategy.

*FYI*
The MAP strategy looks to enter on strength, a good base ingredient for any trend following strategy. I for one can't wait to see your results bearing in mind all strategies take time to develop, to do their magic as to say.

All the best..

Skate.


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## Joe90 (16 February 2020)

Skate said:


> So after reading @Gringotts Bank post I set about coding a strategy from what I have learnt over the last few years formulating a new strategy that on paper has the ability to work.






Skate said:


> *MAP Buy Condition (Amibroker code)*
> MapBuyCondition = ( Close > MA( Close, 10 AND ROC(C,10)>0) OR (Close == 1.1 * Ref( Close, -1 ) and V>Ref(MA(V,10),-1)) );




This is straight out of the manual, pg 1226. To give credit you've added a ROC filter, still some acknowledgement to Tomasz would be appropriate.



Skate said:


> *Remembering *
> "Don't get in the ring if you don't want to be hit"


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## Saqeeb (16 February 2020)

Skate said:


> @Saqeeb your post couldn't have come at a better time for a few reasons that @Newt has explained in @Warr87 "weekly-portfolio-asx" thread.
> 
> *In summary *
> A strategy performance can vary even if the entry code is exactly the same because of variables Newt outlines in his post. Newt is talking about the "CAM Strategy" but his message is universal saying that the resulting equity curve can be quite variable according to subtle factors. To save me repeating a brillant post, Newt's full explanation of subtle differences can be found here: https://www.aussiestockforums.com/posts/1056724/
> ...



@Skate, I totally understand that the little differences between strategies can make a huge difference to the bottomline even with the same entry condition. I am also aware that any trend following strategy requires time to stabilise before showing any positive results. I am not going to expect my results to be same as yours or for that matter any one else's with the same entry condition.
I intend to paper trade this strategy without any bias. This will condition towards my personal emotions and also give me an understanding as what to expect from the strategy and trading


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## Skate (16 February 2020)

Saqeeb said:


> @Skate, I totally understand that the little differences between strategies can make a huge difference to the bottomline even with the same entry condition. I am also aware that any trend following strategy requires time to stabilise before showing any positive results. I am not going to expect my results to be same as yours or for that matter any one else's with the same entry condition.
> I intend to




@Saqeeb, @Warr87 made a great comment about the starting date can impact the strategy results & that's so true, profitable trading depends on luck 
Read here: https://www.aussiestockforums.com/posts/1056743/

@qldfrog also made a comment that his actual trading results greatly differ from his backtesting. Read here: https://www.aussiestockforums.com/posts/1056737/

*Paper Trading*
I've stated before, backtest results mean "Jack" - but backtesting gives an indication between test results using different parameters for evaluation.

@Newt also made a good comment to remember in the same thread: _"There's no right or wrong implementation of any strategy, but ideally we'd all like to be in a position for robust returns and hopefully a profit over any given 12 months (or at least 2 years)"_

Skate.


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## Newt (16 February 2020)

Agree backtesting results must always be treated with extreme caution, but its fascinating trying to keep your real life trading in sync with your model from start of trading.  You yourself Skate have pushed me and others to stick to their system signals.  Qldfrog and others have noted the dilemmas starting a system from scratch (do you buy all the current strategy positions, or only take new positions?) and what to do if you run out of cash (take partial positions, or only whole)?  what if you find an error - sell a strong stock to re-align with the system or stay in it?

It really is invaluable when systematic traders (and systematic discretionary such as Peter2) share their trades or even just comment generally on equity curve and performance.  It helps give those struggling up the learning mountain an idea what they're aiming for, how much performance can vary between people on a similar strategy, or hint if they've overfitted parameters or aren't trading their system honestly.   

At the end of the day the system is a tool.  If Skate or anyone gives away their entire system, its not much different to a virtuso violinist lending their Stradivarius, Brian May lending you the Red Special, or Jack Nicklaus letting you use his clubs - or Geralt of Rivia giving you his sword (confession:  Watched too much Netflix over Christmas....!).  For the first 5 years or so you have to emulate and copy what you can of those that have succeeded, then eventually you might earn the right to start tweaking bits of the system or re-writing from scratch.  Only then will you understand the subtle trade offs and gains and what you risk losing if start dismantling layers of protection for performance.


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## Skate (16 February 2020)

Newt said:


> Agree backtesting results must always be treated with extreme caution, but its fascinating trying to keep your real life trading in sync with your model from start of trading.  You yourself Skate have pushed me and others to stick to their system signals.  Qldfrog and others have noted the dilemmas starting a system from scratch (do you buy all the current strategy positions, or only take new positions?) and what to do if you run out of cash (take partial positions, or only whole)?  what if you find an error - sell a strong stock to re-align with the system or stay in it?
> 
> It really is invaluable when systematic traders (and systematic discretionary such as Peter2) share their trades or even just comment generally on equity curve and performance.  It helps give those struggling up the learning mountain an idea what they're aiming for, how much performance can vary between people on a similar strategy, or hint if they've overfitted parameters or aren't trading their system honestly.
> 
> At the end of the day the system is a tool.  If Skate or anyone gives away their entire system, its not much different to a virtuso violinist lending their Stradivarius, Brian May lending you the Red Special, or Jack Nicklaus letting you use his clubs - or Geralt of Rivia giving you his sword (confession:  Watched too much Netflix over Christmas....!).  For the first 5 years or so you have to emulate and copy what you can of those that have succeeded, then eventually you might earn the right to start tweaking bits of the system or re-writing from scratch.  Only then will you understand the subtle trade offs and gains and what you risk losing if start dismantling layers of protection for performance.




@Newt,you nailed it again..

*Analogy*
Let me give you another analogy & why we make the different trading a strategy, the analogy serves to reinforce Newt recent remarks.

*Peter Brock* (otherwise known as "Peter Perfect")
He won the Bathurst 1,000 nine times, imagine if he gave you his winning car, do you honestly believe you would be able to win Bathurst even once ?

*It’s not the vehicle *
Peter’s 'ability', 'skill' & his 'mental toughness' decided the win, it's not when he got into the car (*the BUY*), not even when he exited the car (*the SELL*) but how he handled the car during the race. (*the TRADE*)

*Traders are all different*
That is one of the nice thing about traders "we are all so different", trading different styles, trading different markets & as you say -"At the end of the day the system is a tool” (exactly)

Skate.


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## Warr87 (16 February 2020)

Newt said:


> Agree backtesting results must always be treated with extreme caution, but its fascinating trying to keep your real life trading in sync with your model from start of trading.  You yourself Skate have pushed me and others to stick to their system signals.  Qldfrog and others have noted the dilemmas starting a system from scratch (do you buy all the current strategy positions, or only take new positions?) and what to do if you run out of cash (take partial positions, or only whole)?  what if you find an error - sell a strong stock to re-align with the system or stay in it?
> 
> It really is invaluable when systematic traders (and systematic discretionary such as Peter2) share their trades or even just comment generally on equity curve and performance.  It helps give those struggling up the learning mountain an idea what they're aiming for, how much performance can vary between people on a similar strategy, or hint if they've overfitted parameters or aren't trading their system honestly.
> 
> At the end of the day the system is a tool.  If Skate or anyone gives away their entire system, its not much different to a virtuso violinist lending their Stradivarius, Brian May lending you the Red Special, or Jack Nicklaus letting you use his clubs - or Geralt of Rivia giving you his sword (confession:  Watched too much Netflix over Christmas....!).  For the first 5 years or so you have to emulate and copy what you can of those that have succeeded, then eventually you might earn the right to start tweaking bits of the system or re-writing from scratch.  Only then will you understand the subtle trade offs and gains and what you risk losing if start dismantling layers of protection for performance.




Exactly. I could buy a strategy or subscribe to a black box system, but unless I had a hand in it I likely wouldn't be able to follow it 100%. Having code handed to you certainly wont make you a good trader. Plenty of big name traders have said there systems are simple, and they could give it out but no one would follow them 100%, therefore its pointless.

Something to think about. Got to know your system, got to know how it works, and its got to match you as a trader.


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## ducati916 (17 February 2020)

Skate said:


> *It’s not the vehicle *
> Peter’s 'ability', 'skill' & his 'mental toughness' decided the win, it's not when he got into the car (*the BUY*), not even when he exited the car (*the SELL*) but how he handled the car during the race. (*the TRADE*)
> 
> Skate.




But it is the vehicle (combined with a good driver/rider).

If the car/bike is not competitive and set up well, then the skill level of the driver will be inconsequential to the final result.

You see this in F1 constantly. Excellent driver, average car, poor results. Driver changes teams, gets top car, wins championship. Every now and then, you get a driver/rider who is so adept that they can take a bad car and develop it. A bad car becomes a better or even great car, allowing them to win.

Two examples were Schumacher and Rossi. They took poor cars and bikes and developed them (Ferrari and Yamaha).

jog on
duc


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## Roller_1 (17 February 2020)

Skate said:


> I've stated before, backtest results mean "Jack" - but backtesting gives an indication between test results using different parameters for evaluation.




Hi Skate

With regards to your backtest results for various systems why is it that you are only testing or posting the results over 2019, are you testing these systems in the development phase of longer periods?


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## Skate (17 February 2020)

*I have a Confession*
I have made a rookie mistake in reporting the ZIG strategy. After a nudge from @rnr I reworked my ZIG strategy & didn't save & override the original .apx file - meaning I was reporting using the original strategy not the updated & hopefully improved strategy, Sorry about that.

*The Correct results*
I have corrected the error with little effort to update & correct the records. For those who have a pedantic nature I have attached a pdf with all the updated results for verification.















Skate.


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## Skate (17 February 2020)

Roller_1 said:


> Hi Skate With regards to your backtest results for various systems why is it that you are only testing or posting the results over 2019, are you testing these systems in the development phase of longer periods?




@Roller_1 all my strategy development has been completed a year or so ago. Backtesting results from 20 years ago bear no resemblance to current results. I tend to use the last year (the last 365 days) for backtest reports because they are reflective of the recent turbulent times. 

*FYI *
Currently I have only the last 10 years of data (the Silver Norgate Package) but in my development days I had the Platinum Package that included 20 years of data as well as (a) Delisted Equities & (b) Historical index constituents. I've been asked many times before in this thread to supply backtest results for certain years & I'm more than happy to comply.

Skate.


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## Roller_1 (17 February 2020)

Skate said:


> @Roller_1 all my strategy development has been completed a year or so ago. Backtesting results from 20 years ago bear no resemblance to current results. I tend to use the last year (the last 365 days) for backtest reports because they are reflective of the recent turbulent times.
> 
> *FYI *
> Currently I have only the last 10 years of data (the Silver Norgate Package) but in my development days I had the Platinum Package that included 20 years of data as well as (a) Delisted Equities & (b) Historical index constituents. I've been asked many times before in this thread to supply backtest results for certain years & I'm more than happy to comply.
> ...




I agree, anything prior to 2005 i feel doesn't bear as much weight as data after to 05. Don't really have any proof but it would make sense things have changed since around then due to algos and everyday punters having access to online brokers etc.


was that with Norgate or the old premium data?

how does the CAM strategy look from 2014-18?


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## Skate (17 February 2020)

Roller_1 said:


> I agree, anything prior to 2005 i feel doesn't bear as much weight as data after to 05. Don't really have any proof but it would make sense things have changed since around then due to algos and everyday punters having access to online brokers etc. was that with Norgate or the old premium data?
> how does the CAM strategy look from 2014-18?




@Roller_1 I've been using Norgate NDU for many years before it was released to the public. I had Norgate Premium Data before that.

*# The CAM Strategy backtest is from 1/1/2014 to 30/12/2018 inclusive*




Skate.


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## Roller_1 (17 February 2020)

Skate said:


> @Roller_1 I've been using Norgate NDU for many years before it was released to the public. I had Norgate Premium Data before that.
> 
> *# The CAM Strategy backtest is from 1/1/2014 to 30/12/2018 inclusive*
> 
> ...




Thanks


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## qldfrog (17 February 2020)

One of the ideas i have been toying with lately is a repository of backtest results on recent periods
Whole of 2019
01/7/19 to 1/1/20
01/7/18 to 1/1/19
This covers a few interesting period
I would happily share my system 1 and 2, zigzag mod system and current work on 123 system
Would you agree on sharing your or some of your results @Skate?
And should it not be better to create a new thread for that.
Any feedback on this idea
I know i woukd find it useful to have benchmarks
In AI, there are whole sets of predetermined images etc to be used by developers to test and rate their different software..be it face or gait recognition, etc etc


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## Skate (17 February 2020)

qldfrog said:


> One of the ideas i have been toying with lately is a repository of backtest results on recent periods
> Whole of 2019
> 01/7/19 to 1/1/20
> 01/7/18 to 1/1/19
> ...




@qldfrog, sure I'll willing to share any of my backtest results if it help anyone, all you need to do is come up with a format that is consistent across the board for others to follow along & compare.

*My suggestion*
Lets make it a garden variety backtest. ($100k X 20 positions)

*EXAMPLE*
Portfolio size $100k
Positions 20

Is that okay with you?

Let me know when you have the thread set up.

*Clarification*
1. Did you mean a 6 months period ?
2. Or do you want the backtest report for a calendar year ?
3. Or do you want to backtest for a financial year ?

You posted = 01/7/19 to 1/1/20 ??
You posted = 01/7/18 to 1/1/19 ??

*Backtest comparisons*
I've stated before, backtest results mean "Jack" - but backtesting gives an indication between test results using different parameters for evaluation. Comparisons between strategies, not so much.

Skate.


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## qldfrog (17 February 2020)

Skate said:


> @qldfrog, sure I'll willing to share any of my backtest results if it help anyone, all you need to do is come up with a format that is consistent across the board for others to follow along & compare.
> 
> *My suggestion*
> Lets make it a garden variety backtest. ($100k X 20 positions)
> ...



OK, will try to nail this in the next 2 days and create /populate that thread
I was interested in the 6 months for the following reasons
01/07/18 to dec 18 was a down period,
the 1/1/19 to 1/1/20 full calendar year was a great up momentum
but second half of that year was very up/down and gave a bit of weird signals

I like the ideal of separate 01/07/19 to 1/1/20 as to what a start in an irregular period would give
and the whole year would display the behaviour of a mature portfolio reaching that period

As you may remember one of my portfolio system has a slow ramp up... and so I do not believe the overlapping period is a waste of time?
*You said:*
Portfolio size $100k
Positions 20

*fine with me *:neither you or I use this setting but it is a clean neat one, let's use it
Lastly: what is our realm? all ord?(XAO)
Many thanks and yes I try to create a thread this evening and populate it with my results..nothing as good as yours but benchmarks nevertheless


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## Skate (17 February 2020)

qldfrog said:


> OK, will try to nail this in the next 2 days and create /popu late that thread
> I was interested in the 6 months for the following reasons
> 01/07/18 to dec 18 was a down period,
> the 1/1/19 to 1/1/20 full calendar year was a great up momentum
> ...




Sure, let's stick with the All Ordinaries (XAO) - it will be your thread so you get to dictate the backtests period.

*'The Dump it here' thread*
@qldfrog you have come up with a good idea. In the meantime I might post some of my strategies backtests reports tomorrow using my standard backtest setting for readers of this thread.

Skate.


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## qldfrog (17 February 2020)

Some entries for a benchmark repository here: any feedback welcome
https://www.aussiestockforums.com/threads/xao-backtest-benchmarks-for-2018-2020.35204/
Thanks @Skate for letting me hijack temporarily your thread


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## Saqeeb (17 February 2020)

*Saqeeb's MAP System:
Week 1 update:*
I started paper trading my MAP system today and this post is my first reporting update. Below are the buys made by my system today. 6 positions out of 20 filled this week. Going forward, I intend to post the trade updates (buys and sells) and an equity curve to go with it every Monday evening.

Thanks 
Saqeeb


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## Skate (18 February 2020)

qldfrog said:


> One of the ideas i have been toying with lately is a repository of backtest results on recent periods






Skate said:


> @qldfrog you have come up with a good idea. In the meantime I might post some of my strategies backtests reports tomorrow using my standard backtest settings for readers of this thread. Skate.




*My first post*


Skate said:


> *Helping Others *You might want to dump stuff here to help others




*The 'Dump it here' thread *
The sole purpose of this thread is to help others gain knowledge. I have a good memory & post what I've found beneficial in my trading experience. The thread is for the exchange of ideas, not a contest of ideas. 

*Dicks*
I've found some members can't help themselves by posting to point-score at every turn, belittling or ridiculing others & in my opinion it's not the way forward. We are a community of like minded people who have common interests & goals. All members who are at different stages & levels of experience can still make a contribution to this thread if they have the desire to help others. 

*Before posting T.H.I.N.K.*
*T* - is it *true*?
*H* - is it *helpful*?
*I* - is it *inspiring*?
*N* - is it *necessary*?
*K* - is it *kind*?

*Respect*
Over time you value some posters more than others, some have the knack of nailing posts accurately & succinctly. 


Newt said:


> There's no get rich quick in trading. Trading does have the potential to be life changing.




*My views*
The views expressed by me in the 'Dump it here' thread are my ideas whether you agree with them or not isn't the point, if I'm right or wrong isn't important - all members have the right to freely express a view or an alternative view without being challenged or ridiculed, the essence of the thread. 

*Alternative view*
When @ducati916 posts I take notice, he is one member whose views are always "on the money". It's refreshing when members take the time & effort to post alternative points of view.


ducati916 said:


> But it is the vehicle (combined with a good driver/rider). duc




*Before I make a series of posts* 
I'm planning to background my trading, explaining how & what strategies I trade before flooding the thread with a load of backtests of my current trading systems as well as a few backtests of systems I'm paper trading at the moment. I take the view that there is no right or wrong way to trade but whatever way you decide to trade you need to be consistently profitable to make a "few bucks" in this game. How do we do that? Exactly as the Duc has said: "it is the vehicle (the Strategy) combined with a good driver/rider" (a good trader) This combination gets you a "foot in the door" giving you a "fighting chance" of being a profitable trader.

Skate.


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## Skate (18 February 2020)

*Over the next few post I'll explain what Strategy I trade & how I trade them*
Shortly I'll be posting a few backtests to give a direct comparison between my strategies. Recently there have been some helpful posts by @peter2, @tech/a, @qldfrog & @Warr87 giving us a glimpse of their trading style. With sports betting there a a myriad of ways to bet & the trading game is no different, meaning there is no one single way to trade. My business & Bookmaking background has shaped my risk tolerance & the way I think about making money.

*Here is an alternative view to mine when it comes to trading*


peter2 said:


> Newer traders should review @tech/a 's trade management closely.
> 1. The initial risk is fully accepted and if price goes down after entry he'll take the loss.
> 2. Price only has to sneak up a little and tech/a will reduce the initial risk significantly (approx by 1/2).
> 3. If price goes up a little more. The trailing stop is moved to break-even quickly.
> ...




*Education*
@tech/a has demonstrated with TechTrader it's possible to make money trading a mechanical trading system, @captain black explained how it's done. Recently, fundamentals of companies have played no part in the erratic behaviour of the markets, the technicals display all the emotions of the markets & that's what I'm trying to garner when I trade.

*My idea*
To make money in the markets you need to catch a trend, without a trend you are dog paddling in a cesspool with a bunch of others. Trading to me is all about consistency of returns, McDonalds have built an entire empire on the consistency of their food on offer in their restaurants around the world & if it good enough for them it's good enough for me. My main concern is the protection of my funds by having strategies with drawdowns within acceptable limits, the lower the better. I'm not chancing my luck seeking high profitable trades, nope - no way I'll do that.

*What am I trying to do?*
I'm simply trying to catch a confirmed trend & front run other traders hoping they join in later & push the price higher, I also want to get off the trade before them as well. Heck, I know we are all getting the same signals as trend followers. I even know trends can't last forever - they slow, stall & sometimes stop, even at times they retreat back to where they came from - I want to exit in an orderly manner beating the rush to the door. I know all these things & so does everyone else worth their salt.

*What I don't do*
I don't micro-manage my positions, I don't enter or exit a position thinking I know better than my strategy, I know about risks but r-multiples are not even on my radar, I'll take what the markets are willing to give. Comparing my results to others or the index for that matter I frankly can't see the point. I want to be like Frank Sinatra & do it "My Way"

*What I do*
I buy into positions that have strength in confirmed strong trends in the hope of offloading my positions onto others at a higher price. I don't care what the company is or what they do - it's a pure numbers game to me.

*AmiBroker*
This is a brilliant piece of software, basically it's a big dumb programmable scientific calculator. AmiBroker crunches numbers & the backtest results are a multiplication of share times the "opening share price". Knowing this fact & replicating this forces me to trade in the pre-auction with the expectation of snagging the opening price. Using this method slippage can be controlled & calculated in your returns.

Skate.


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## Skate (18 February 2020)

*Now an insight to what I trade*
I trade only "Weekly Trend Trading Systems" & multiples of them in fact. It's amazing - none of these strategies are highly correlated.

*Let me list them..*
1. The CAM Strategy - standard entry, system parameters & exit
2. The CAM Strategy with the inclusion of a stalestop & a different exit
3. The BOX Strategy
4. The Hybrid Strategy
5. The PANDA Strategy

*Position Size*
Minimum Positions size: $15k each position (re-balanced weekly)
Maximum Position size: $25k capped (excess funds are re-balanced weekly to other strategies)

*Current number of positions of each strategy*
1. The CAM Strategy - 29 positions
2. The CAM Strategy with the inclusion of a stalestop & a completely different exit - 35 positions
3. The BOX Strategy - 20 positions
4. The Hybrid Strategy - 35 positions
5. The PANDA Strategy - 68 positions

*FYI*
I'm not happy with the BOX strategy results as it's treading water at the moment being down (-$2k) the rest of my strategies are exceeding my expectations

Skate.


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## Skate (18 February 2020)

*Strategies development *(entry & exit)
Entry, getting into a trend isn't hard at all - there are multiple entry points in a trend & within a trend to chose from each & every week, they come along with such regularity. Buying into strength is critical, so let's not waste our time on "weak" positions by filtering them out. Sorting the "wheat from the chaff" has to be done well before PostionScoring them.

*Nailing the exit*
This is little more tricky. I use two exits in most of my strategies (1) a looping stalestop exit & (2) a looping chandelier variable trailing stop tuned to the strategy being traded, meaning one exit condition is not used across the board. The standard CAM Strategy exits is the exception to the rule as it exits on a red downbar with a close under a 13 EMA.

*Complexity of code*
Amibroker formula language is similar to C, C++ using "arrays" & this is the reason why the code is so efficient & quick. Extra lines in a code can be cosmetic as well as functional. Extra lines of code allows for the inclusion of multiple filters using a large variety of parameters. Extra lines of code can smooth the results rather than determine the results. I have freely discussed my strategies, duplicating them would be near impossible. I was amazed when I had some of my strategies evaluated overseas necessitating the code to be explained to them in english, that's how complex strategies can be. Two different testers one in Europe & the other in the States couldn't understand my exploration formula till it was explained to them.

*Lines of code*
1. The CAM Strategy - 541 lines of code
2. The CAM Strategy with the inclusion of a stalestop & a completely different exit - 566 lines of code
3. The BOX Strategy - 1258 lines of code
4. The Hybrid Strategy - 1302 lines of code
5. The PANDA Strategy - 1108 lines of code

Skate.


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## Skate (18 February 2020)

*Lets post some backtest comparisons of each of my trading strategies *
So there is consistency across the board I'll use my starting value of new strategy, being: Portfolio $300k X 20 positions ($15k PositionsSize) with NO re-balancing. I'll use a backtest period of exactly 3 calendar years as its good to get an average rather than a spike in either direct.
*
1. Skate's modified CAM Strategy*
Start Date: 18th February 2017
End Date: 18th February 2020
Portfolio Capital: $300,000
Positions in the Portfolio: 20
Fixed Position Sizing: $15,000 (No re-balancing)





Skate.


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## Skate (18 February 2020)

*Lets post some backtest comparisons of each of my trading strategies*
So there is consistency across the board I'll use my starting value of new strategy, being: Portfolio $300k X 20 positions ($15k PositionsSize) with NO re-balancing. I'll use a backtest period of exactly 3 calendar years as its good to get an average rather than a spike in either direct.
*
2. Skate's modified CAM Strategy with the inclusion of a stalestop*
Start Date: 18th February 2017
End Date: 18th February 2020
Portfolio Capital: $300,000
Positions in the Portfolio: 20
Fixed Position Sizing: $15,000 (No re-balancing)




Skate.


----------



## Skate (18 February 2020)

*Lets post some backtest comparisons of each of my trading strategies*
So there is consistency across the board I'll use my starting value of new strategy, being: Portfolio $300k X 20 positions ($15k PositionsSize) with NO re-balancing. I'll use a backtest period of exactly 3 calendar years as its good to get an average rather than a spike in either direct.
*
3. The BOX Strategy*
Start Date: 18th February 2017
End Date: 18th February 2020
Portfolio Capital: $300,000
Positions in the Portfolio: 20
Fixed Position Sizing: $15,000 (No re-balancing)




Skate.


----------



## Skate (18 February 2020)

*Lets post some backtest comparisons of each of my trading strategies*
So there is consistency across the board I'll use my starting value of new strategy, being: Portfolio $300k X 20 positions ($15k PositionsSize) with NO re-balancing. I'll use a backtest period of exactly 3 calendar years as its good to get an average rather than a spike in either direct.
*
4. The Hybrid Strategy *
Start Date: 18th February 2017
End Date: 18th February 2020
Portfolio Capital: $300,000
Positions in the Portfolio: 20
Fixed Position Sizing: $15,000 (No re-balancing)




Skate.


----------



## Skate (18 February 2020)

*Lets post some backtest comparisons of each of my trading strategies*
So there is consistency across the board I'll use my starting value of new strategy, being: Portfolio $300k X 20 positions ($15k PositionsSize) with NO re-balancing. I'll use a backtest period of exactly 3 calendar years as its good to get an average rather than a spike in either direct.
*
5. The PANDA Strategy*
Start Date: 18th February 2017
End Date: 18th February 2020
Portfolio Capital: $300,000
Positions in the Portfolio: 20
Fixed Position Sizing: $15,000 (No re-balancing)




Skate.


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## Skate (18 February 2020)

*Lets post some backtest comparisons of each of my PAPER TRADING strategies*
So there is consistency across the board I'll use my starting value of new strategy, being: Portfolio $300k X 20 positions ($15k PositionsSize) with NO re-balancing. I'll use a backtest period of exactly 3 calendar years as its good to get an average rather than a spike in either direct.

*Strategies being paper traded*
1. The Weekly MAP Strategy
2. The Weekly ZIG Strategy
3. The Weekly 20% Flipper Strategy
4. The DAILY BlueWren Strategy

Skate.


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## Skate (18 February 2020)

*# PAPER TRADING strategies*
Lets post some backtest comparisons of each of my paper trading strategies - so there is consistency across the board I'll use my starting value of new strategy, being: Portfolio $300k X 20 positions ($15k PositionsSize) with NO re-balancing. I'll use a backtest period of exactly 3 calendar years as its good to get an average rather than a spike in either direct.

*1. The Weekly MAP "PAPER TRADING" strategy*
*


*
Skate.


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## Skate (18 February 2020)

*# PAPER TRADING strategies*
Lets post some backtest comparisons of each of my paper trading strategies - so there is consistency across the board I'll use my starting value of new strategy, being: Portfolio $300k X 20 positions ($15k PositionsSize) with NO re-balancing. I'll use a backtest period of exactly 3 calendar years as its good to get an average rather than a spike in either direct.

*2. The Weekly ZIG "PAPER TRADING" strategy



*
Skate.


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## Skate (18 February 2020)

*# PAPER TRADING strategies*
Lets post some backtest comparisons of each of my paper trading strategies - so there is consistency across the board I'll use my starting value of new strategy, being: Portfolio $300k X 20 positions ($15k PositionsSize) with NO re-balancing. I'll use a backtest period of exactly 3 calendar years as its good to get an average rather than a spike in either direct.

*3. The Weekly 20% Flipper "PAPER TRADING" strategy*
*


*
Skate.


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## DaveDaGr8 (18 February 2020)

Hi Skate,

Just a question, Then numbers between your box and hybrid look very similar ( Like almost identical ). Is there a high correlation between the strategies, or a high correlation between the trades they take.

Sorry if this has been asked before, i have read a lot of your posts and even tried to disseminate what i can of your strategies, but sadly i don't remember much of what i read these days.


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## Skate (18 February 2020)

*



# This a break from tradition - THIS IS A DAILY PAPER TRADING strategy (my only one)*
Lets post a backtest comparisons of my ONLY Daily paper trading strategies - so there is consistency across the board I'll use my starting value of new strategy, being: Portfolio $300k X 20 positions ($15k PositionsSize) with NO re-balancing. I'll use a backtest period of exactly 3 calendar years as its good to get an average rather than a spike in either direct.

*** Below is my only DAILY Strategy ***

*4. The "DAILY"  BlueWren "PAPER TRADING" strategy*




*END !*

Skate.


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## Skate (18 February 2020)

DaveDaGr8 said:


> Hi Skate, Just a question, Then numbers between your box and hybrid look very similar ( Like almost identical ). Is there a high correlation between the strategies, or a high correlation between the trades they take. Sorry if this has been asked before, i have read a lot of your posts and even tried to disseminate what i can of your strategies, but sadly i don't remember much of what i read these days.




@DaveDaGr8 thank you for the question, the box strategy is rather new & traded outside my SMSF & it's only a few months old - the returns look similar because the strategies are the same (meaning the name has been changed to distinguish between being traded inside or outside of a our SMSF) Surprisingly they are correlated to a degree, But there is a real difference in the return of both portfolios. The HYBRID Strategy has been trading for 3 years, its a very mature stable strategy. The BOX Strategy is a 20 position portfolio, The Hybrid Strategy is a 40 position strategy, the HYBRID strategy trades many multiple of the value of the BOX Strategy. The PANDA strategy is my best performer & I haven't discussed this strategy for a reason.

*The backtest results*
The posted backtest results mean "Jack All" I posted the backtest results because of the remark made by @qldfrog - it gave me something to post, without new posts no one & I mean no one would read the thread, no one reads old news. Also there are nuances with each strategy & some similarities. I'm trading a lot of positions & "touch wood" I hope trading keeps going the way it has. I've been very lucky with my trading, education has paid dividends, trading a large account helps as well.

Skate.


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## Warr87 (18 February 2020)

What I notice in your backtests is the maxDD. Probably because this is an important metric for me as I will only consider a strategy that I think I can weather the maxDD. Have your live results been accurate in regards to your maxDD levels?


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## Skate (18 February 2020)

Warr87 said:


> What I notice in your backtests is the maxDD. Probably because this is an important metric for me as I will only consider a strategy that I think I can weather the maxDD. Have your live results been accurate in regards to your maxDD levels?




@Warr87 MaxDD is a major consideration for every trader, consistency of returns is another, Car/MDD is a nice measure between strategies - but the return on $100 is also a very important metric, because when we invest our cash we want to have an indication of the rate of return (I've discussed this in previous posts). Whatever the metric you use, use it consistently to qualify a strategy & you are assured of measuring apples & apples - not apples & oranges..

*I want to tell you a story, I'm guessing most have heard it before *
Two friends walking in the woods & they spot a bear running at them one says to the other  “Do you think we can outrun the bear!” -- “I don’t have to outrun the bear,” said the other.  “I only have to outrun you.”

*Meaning *
“You don’t have to run faster than the bear to get away. You just have to run faster than the guy next to you.” This also applies to trading, you don’t have to be the best trader in the world, you only have to know more than the next trader.

*Mechanical strategies *
This style of trading is easy, it reduces your trading workload, the strategy can be backtested to give you some idea how it performed on historical data, the added metrics of a backtest will add to your confidence that you are trading a good strategy. 

Skate.


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## Warr87 (18 February 2020)

I've personally found the CAR/MDD ratio to be useful. I also like the $ per $100 too. But you are right, consistency is important.

I would also take a guess that  your strategies generate a significant amount of alpha as well given your CAR/MDD.


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## DaveDaGr8 (18 February 2020)

Warr87 said:


> I've personally found the CAR/MDD ratio to be useful. I also like the $ per $100 too. But you are right, consistency is important.
> 
> I would also take a guess that  your strategies generate a significant amount of alpha as well given your CAR/MDD.




I don't want to hijack this thread, so i'll be as brief as i can.




So this is one of my actively traded systems ( DAILY / actually intraday). The second most important thing about this system is it's exposure ... it runs at just over 10% ... ( yes these metrics show 11.86% because i aligned it with @skates dates 18-2-2017 ) but from 2000 is just over 10%. Increasing exposure really degrades performance ( SIGNIFICANTLY ), so it's a* sniper*. In my head now i really call it "Deadshot", but it's been around so long i find it hard to rename it ( kinda like my kids ).

This system sits in the background, but due to its high RAR, any signals will override my primary systems ... ISH. So it will reduce other systems capital ( SELL ) to buy into this one. 

The most important thing about this system is that it is not correlated at all to my other systems. SO what this means is that in the long term it REDUCES the maxDD and INCREASES the overall CAR, because as the other systems fail, this one thrives .. as this one fails the others thrive. It creates balance in my universe ..... THIS IS WHY I TRADE IT  ..... I don't trade it because of it's CAR, MDD or any other metric on here at all. I trade it because of how it balances out my other systems, portfolio and in general increases profits. 

I'll stop now  ...   Sorry .... I tried to be brief, but i tend to rant !


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## Skate (19 February 2020)

Warr87 said:


> I've personally found the CAR/MDD ratio to be useful. I also like the $ per $100 too. But you are right, consistency is important. I would also take a guess that  your strategies generate a significant amount of alpha as well given your CAR/MDD.




@Warr87 it would be remiss of me not to follow up your post without clarification of a few points that may help others & reinforce a good comment made by @Roller_1


Roller_1 said:


> I agree, anything prior to 2005 i feel doesn't bear as much weight as data after to 05. Don't really have any proof but it would make sense things have changed since around then




*Lets talk about backtesting* (the period selected)
Backtesting over a lot of data can be good but however the more data backtested, there are always randomness of outliers skewing the results leading you down the path of changing the code to fit the randomness of outliers. Meaning, just be aware of randomness of outliers before making any significant changes to your strategy.

*It can mess with you *(Monte Carlo is important)
Backtesting over a large data set "randomness" can mess with you & your strategy results "OR" strategy development. Monte Carlo “Out Of Sample” results (OOS) levels this bias out. It's so important for you to take the time to run your strategy using Monte Carlo. I have a suggestion - DON'T take any notice of the Monte Carlo “In Sample” results only take notice of the Monte Carlo “Out Of Sample” results. Monte Carlo "in sample" results mean "JACK" 

*It's important*
Monte Carlo results can be a missing metric in the development of a strategy. In reality, outliers can falsely lead you down a path of strategy correction lowering the probability of returns when actively trading the system compared to your backtesting results.

Skate.


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## Skate (19 February 2020)

Newt said:


> I've found publications by O'Neill and some of those who traded with him very helpful.  Some corney clickbait titles, but definitely worth a read for those feeling their way for a systematic approach.  There are few by O'Neill and his "disciples", but suggest this for a starting point. https://www.amazon.com.au/Trade-Like-ONeil-Disciple-Trading-ebook/dp/B003Z0CQVS




*I've been re-read some old posts*
I'm now of the opinion that @Newt needs to post a lot more in the 'Dump it here' thread' as all his posts are on point.

*Trade like an O'Neil disciple*
I want to endorse the book "Trade Like an O'Neil Disciple: How We Made Over 18,000% in the Stock Market" as suggested by Newt - IMHO, it's a worthy book to have in your library.

*A quote from the book that's resonated with me*
_"In our experience, there is nothing easier than making big money in the market once you have latched onto a big winner, because at that point all you are doing is sitting more and *thinking less*. When your stocks are trending nicely to the upside and you are fully invested, there is, from a practical standpoint, very little to do. You are simply letting your winners run. This is what we like to call “being in the zone,” a mental space that derives from Livermore’s principle: *“It never is your thinking that makes big money. It’s the sitting” 
*_
Skate.


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## Skate (19 February 2020)

@Saqeeb as you have "Liked" my previous post it has encouraged me to make another post quoting from the same book that applies to us both. When you read a lot of threads you will soon realise an underlining pattern where members panic, overriding their trading system, exiting a position on what they "think" will happen. 

*Let me reinforce a point* 
"Thinking" plays no part in being a systematic trend trader.

*Another quote from "Trade like an O'Neil disciple"*
_"Trading the market is a very “Zen” activity, where you stay in the now, not worrying about what the market will do in the future, and not getting upset about a bad trade you may have made in the past. Instead one should stay focused in the present, reacting in real time to the evidence that the market is constantly presenting. No one has ever been able to predict market direction with any consistent reliability, but that is wholly unnecessary to being a successful investor. Successful investing is about watching the market day-to-day and acting accordingly. In fact, attempting to predict the market often leads to over-intellectualization, which is usually a recipe for losing money in the market. *When the market goes against your own intellectualized “conclusions,” you may be less likely to reverse your position, even in the face of factual price/volume action that is telling you that you are wrong*. Pay less attention to what you think the market should be doing, and more to what the market is actually doing. As Livermore wrote, “Don’t try and anticipate what the market will do next simply go with the evidence of what the market is telling you—presenting you.” _

Skate.


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## Saqeeb (19 February 2020)

Skate said:


> @Saqeeb as you have "Liked" my previous post it has encouraged me to make another post quoting from the same book that applies to us both. When you read a lot of threads you will soon realise an underlining pattern where members panic, overriding their trading system, exiting a position on what they "think" will happen.
> 
> *Let me reinforce a point*
> "Thinking" plays no part in being a systematic trend trader.
> ...



Hi Skate,

I have done all of the anticipating and predicting of the markets in the short time I have been involved with the markets and I learnt quickly how lousy predictor I was. I do not do this anymore. I am happy to stick to my system knowing it has been tested and paper traded.

One thing that I had not done so far into my journey is to get upset over losing trades and revenge trading. Before I could do this I came across a very good e-book (which did not cost me a single cent) and taught me how bad all of these emotions can be and how emotions have to be left outside of trading.

I still tend to look at the markets during the day, however, every time I look at the markets, I am telling myself that this is of no point and it is not going to change the outcome of my trades as I only action my trades EOW. Talking to myself is conditioning and I am noticing that I am looking at the markets less now.

Lots to learn and one step at a time. Thanks for your thread and the time and effort you have put into it.

Saqeeb


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## Saqeeb (19 February 2020)

Today I noticed one of my positions (CGL) in my MAP paper trade portfolio got smashed (down by ~18%). CGL announced a capital raise yesterday and went into trading halt to complete the placement. They were back trading today and got beaten down. I entered the markets knowing very well that this can happen.

What do I do with this position now? *NOTHING until my system generates a Sell signal. *I will keep my emotions in check and do nothing for now. My MAP strategy is a weekly system and I will stick with it, follow it to the word knowing well that there are checks in place to mitigate the downside risk and my system will cut the position out if it does not behave limiting my losses.

Saqeeb


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## Newt (19 February 2020)

Thanks for the encouragements Skate.  I have some personal goals for new highs, DD and hopefully further new highs I'd like achieve before get too vocal on ASF.  Systematic trading is a quantitative activity and until I've got at least a couple more years of modelled returns under my belt don't wanting to be swaying anyone just starting out.  Heck, all the ASF value investors that have put us on Ignore would probably say I'm too vocal already 

With that out of the way, I do really think O'Neill, his "disciples" (Morales and Kacher) and  Mark Minervini should on the reading list for all systematic trend followers.  I'm yet to put any decent FA in my trading but perhaps having the latest Norgate Data subscription makes this something worth investigating.  My understanding is that US stocks report quarterly which generally means more results updates than here in Aus.

The "pocket pivots", volume patterns and price movements described in these books offer decent system development options definitely worth trying, at least in my experience.


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## peter2 (19 February 2020)

Newt said:


> The "pocket pivots", volume patterns and price movements described in these books offer decent system development options definitely worth trying, at least in my experience.




Worth trying(?), absolutely, they're the underlying idea for my "bullish bars". 
Many of the bullish 1st CAM-UP (green) and CAM-blue bars are also Morales & Karcher "pocket pivot" buy signals. I use them as a method to get into the trend before the obvious BO-HR. 

There's very little that's new in the market except for the new names that are created for classic robust patterns.


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## ducati916 (20 February 2020)

Skate said:


> *Lets talk about backtesting* (the period selected)
> Backtesting over a lot of data can be good but however the more data backtested, there are always randomness of outliers skewing the results leading you down the path of changing the code to fit the randomness of outliers. Meaning, just be aware of randomness of outliers before making any significant changes to your strategy.
> Skate.




I'm curious, have you ever either (a) backtested your systems on the US or traded the US or (b) backtested (traded) the various futures markets?

The reason I'm curious is that to the naked eye (mine) the US market trades very differently to the Aus market. This in the absence of evidence (merely my impression) still makes sense due to the greater range of participants and money flows (strategies) that are present in the US markets.

jog on
duc


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## Skate (20 February 2020)

ducati916 said:


> I'm curious, have you ever either (a) backtested your systems on the US or traded the US or (b) backtested (traded) the various futures markets?
> 
> The reason I'm curious is that to the naked eye (mine) the US market trades very differently to the Aus market. This in the absence of evidence (merely my impression) still makes sense due to the greater range of participants and money flows (strategies) that are present in the US markets.
> 
> ...




@ducati916 thank you for your question

I've had my strategy evaluated in the US (on the US markets) & in Europe (in their market) as I was curious if my HYBRID Strategy in its current form would be a tradable system.

*Overseas Strategy Evaluation *(evaluation email from Europe)
This is an (unaltered copy) of "one" email in a series that I'm prepared to share about the overseas testing of my Hybrid Strategy. I'm not prepared to discuss the results any further. The email returned to me is an unaltered summary of the Hybrid Strategy tested in Europe on a variety of markets around the world. Believing your own research is typically fraught with danger & when my money is on the line I try not to leave anything to chance.

-----------------------------------------------------------------------------------------------------------------------------------------
*# email START
*
I found that in general, the strategy works well also in other international markets where there are a lot of inexpensive stocks. I tried some alternatives for the PositionScore but found that your criteria to be a very good fit for this system.

Thanks for the very detailed answer. Now I better understand your code and logic.

Your coding skill, in my opinion, is already pretty good since you implemented some features that are for sure far above the basics. While the original code could be refactored to achieve greater readability (something that in any case is opinionable), I did not find any major issues (the gfx part is pure aesthetics so it does not interfere with the actual trading system).
*
#email END*
-----------------------------------------------------------------------------------------------------------------------------------------

*In Short to your question*
I've posted a long reply to say.. "Yes I test all my strategy constantly, testing never stops"

Skate.


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## Skate (20 February 2020)

@Saqeeb I would like to make a few comments about your last post for others to understand that trading is full of surprises..

*Trading a weekly strategy - take the good with the bad*
With a weekly strategy you have to hold the position up to week even when the price falling rapidly. With a weekly system you have to stick to the plan even if it means a bigger loss (I never override my strategy) Keep the system as simple as possible, validate it (robust backtesting) and trade it.

*Make sure you test it*
Stress test your strategy, backtest the strategy, test it with in-sample and out-of-sample data, and test it over different Indexes and over different time frames, even different markets around the world as your strategy needs to work under all conditions.

*# The way I trade is not rocket science, it's boring as Bat$hit*.

*You can listen to too many*
Reading various trading threads here at ASF sounds good in theory, but the problem is that getting so many different trading opinions & trading styles becomes confusing & in the end you won't know who to believe thus putting a handbrake on your trading.

*Find your comfort level*
By reading various trading threads you'll find out what works and what doesn't. The hardest part is finding yourself a setup you like, one that's simple and suits your mindset.

Skate.


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## qldfrog (20 February 2020)

Hi Skate,


Skate said:


> test it over different Indexes and over different time frames, even different markets around the world as your strategy needs to work under all conditions



Should it really?
Would you not agree that having strategies based on different markets and realms would make sense?
True it could be a combined/hybrid single code with different code path based on either the realm, market trend and volatility.
My dream systems would be made of different strategirs to leverage different markets/realms and bring overall consistency (and $)
Not trying to argue for the sake of it, but wondering if you have thought of let's say a strategy for falling market, another for indecisive one and another one for the rising market.
Are they all embedded in your hybrid solution?
This is definitely something i i ha in mind


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## Skate (20 February 2020)

qldfrog said:


> Hi Skate, *Should it really?*
> Would you not agree that having strategies based on different markets and realms would make sense?
> True it could be a combined/hybrid single code with different code path based on either the realm, market trend and volatility.
> My dream systems would be made of different strategirs to leverage different markets/realms and bring overall consistency (and $)
> ...




*# Should it really?*
@qldfrog a good trend trading strategy has to work in all markets, having a robust strategy is the first essential ingredient of new strategy in development.

*# My dream systems would be made of different strategies to leverage different markets/realms and bring overall consistency (and $)*
I have to totally agree with you there - "it's a dream" & not a reflection of reality as far as I'm concerned.

*# Not trying to argue for the sake of it, but wondering if you have thought of let's say a strategy for falling market, another for indecisive one and another one for the rising market.*
FALLING market: If you mean falling markets "as in pullbacks within a trend" yes it called the CAM Strategy - I have a Mean Reversion strategy, but don't trade it (I have discussed why many times before)
INDECISIVE market:I have my StaleStop to handle "indecisive markets", I take indecisive to mean a side way trend (there are only 3 types of trends  (1) UP (2) Down & (3) Sideways - you don't make money when a trend slows or stops, I simply exit & look for better opportunities.
RISING market: All my trading strategies manages trending markets just nicely.

*#Are they all embedded in your hybrid solution?*
Let me explain the purpose of my HYBRID Strategy. The HYBRID strategy is complex to summarise (The HYBRID Strategy has been detailed in previous posts) & the HYBRID Strategy is a modified version of these three codes.

(1) a modified version of Captain Black breakout strategy (BlueWren strategy)
(2) a modified version of Nicholas Darvas, (Darvas box system)
(3) a modified version of John Bollinger, (Bollinger Bands Breakout system)

*The purpose of the HYBRID Strategy*
The sole purpose is the HYBRID strategy is to enter a confirmed trend quickly. The combination of these three different highly modified trend trading systems assures that I enter the trend as quick as humanly possible, that's all.

*Why modify the 3 of them ?*
Having a base code is great, but it's like shoes, we have shoes best suited for the job, whether it be for running, walking, formal events & even dancing. They are in essences all shoes, modified to suit the activity.  Meaning: I modify the strategy (code) to suit the job I want it to achieve.

*Why invent the wheel*
My HYBRID trading results stands on the shoulders of those three men.

Skate.


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## Skate (20 February 2020)

*Let's talk about strategy development*
When I test a new strategy the first thing i want to know is "How did it handle trading in the year 2011" - (2011) was a savage year for those who traded through it, hindsight is a good measure of any strategy worth its salt. My initial testing of a new strategy in development has to pass the basic metric before moving on by stress testing it against my favourite metrics (that have been discussed in previous posts). 

*Sticking with the All Ordinaries*
My initial testing concentrates on the All Ordinaries, the market I trade as it has a goldilock level of volatility that we as traders all need. Before you ask, the ASX 200 is not suitable if you are planning to make some serious coin quickly in the markets (I'm first to admit the ASX 200 is a safer alternative if you have a lower risk profile) Moving on - the strategy has to perform over the entire Australian market, a good test but less meaning full. 

*You can buy a robust strategy*
Some commercial strategies that you can buy are suitable for a range of markets no matter where you are in the world - they are generic in nature with patchy results at best, meaning the commercial strategy "is a one size fits all approach". What's the advantage of buying a strategy - (a) saves time trying to learn how to code & (b) it lets you gets a foot in the door quickly. Most commercial strategies contain parameter setting so you can alter, tuning them into the markets being traded. To be fair, (a) commercial turn-key strategies are cheap (b) they have been robustly developed & tested (c) the coder has no idea how & where the strategies are going to be traded. Just remember: one strategy doesn't fit all.

*It's worth remembering*
You're up against traders who will have more experience, more information & much more money than you so leave all your dreams of making quick and easy money, behind & concentrate on your survival. Your absolute first goal is to learn how to stay in the game & as with boxing you need to keep on your feet at all times, that's your one job.

*A suggested "good read"*
@Newt suggested a great book, endorsed by myself & @peter2 - "Trade Like an O'Neil Disciple: How We Made Over 18,000% in the Stock Market" Now I'm suggestion another book not related to trading but in my opinion a must read for everyone.

*Fooled by Randomness*
"Fooled by Randomness" by Nassim Nicholas Taleb
This book explains why some people are successful where others aren't so lucky.

Skate.


----------



## Newt (20 February 2020)

peter2 said:


> Worth trying(?), absolutely, they're the underlying idea for my "bullish bars".
> Many of the bullish 1st CAM-UP (green) and CAM-blue bars are also Morales & Karcher "pocket pivot" buy signals. I use them as a method to get into the trend before the obvious BO-HR.
> 
> There's very little that's new in the market except for the new names that are created for classic robust patterns.




Thanks Peter.  I do recall these guys and O'Neill standing out like a beacon many years ago when I was floundering to understand what sort of "footprints" to look for in a price chart.  Very re-assuring to hear this is what you and other experienced traders are focused on for BOs.  

Wish I could go back in time and pick up what you knew then, but happy to be slowly climbing up the learning curve....


----------



## Newt (20 February 2020)

Saqeeb said:


> Today I noticed one of my positions (CGL) in my MAP paper trade portfolio got smashed (down by ~18%). CGL announced a capital raise yesterday and went into trading halt to complete the placement. They were back trading today and got beaten down. I entered the markets knowing very well that this can happen.
> 
> What do I do with this position now? *NOTHING until my system generates a Sell signal. *I will keep my emotions in check and do nothing for now. My MAP strategy is a weekly system and I will stick with it, follow it to the word knowing well that there are checks in place to mitigate the downside risk and my system will cut the position out if it does not behave limiting my losses.
> 
> Saqeeb




Congrats on conditioning yourself into the right mindset Saqeeb.  Difficult but valuable lesson to learn. 

I like to share good podcast presentations when I find them.  If I can pick up just one useful idea a week while commuting that's another small step in my trading journey.  This one by Philip Teo interviewing Australian trader Adrian Reid really resonated with me on many points .  I haven't heard of his coaching service before or used them, but his insights into ASX trend trading sound excellent.

https://www.traderwave.com/blog/trading-conversations/adrian-reid/

At one point there is mention of how he responds to learning traders that are worried about a particular trade entry signal - e.g. if it looks to have rushed up too quickly and now be "over-bought".  Reid basically recommends doing a test modification of your existing strategy with a new condition that best describes the trade you wish to avoid and backtesting the hell out of it.

If you find a robust improvement then use it.  However I think most of us know how this usually plays out - results go down, then you have to face the fact your system knows what its doing.  Stop predicting and go back to properly executing the process.

Still, rather than playing mind games with yourself about psychology, this sounds a very practical way of broadening your knowledge while learning to avoid "fudging" trade signals.


----------



## Skate (21 February 2020)

Newt said:


> *I like to share good podcast presentations when I find them.* At one point there is mention of how he responds to learning traders that are worried about a particular trade entry signals. If you find a robust improvement then use it. *Stop predicting and go back to properly executing the process to avoid "fudging" trade signals*.




@Newt another great find. Moreover, Philip Teo as you say is a trading coach who specialises in the field of Technical Analysis & freely posts helpful information on his website.

*For members who are time poor*
I've had a good look at his site, it was time consuming but educational. Most of what Philip Teo blogs about "align with my views" so it's appropriate to selectively post from his website. My ulterior motive in doing so is because it follow the theme of the last few posts in the 'Dump it here' thread.

*Stock Charts - price action*
_"Technical analysis of the stock market is basically the use of a stock chart with past price action to anticipate future price trends. While fundamental analysis is helpful in studying the business potential of a listed company, technical analysis is as important in determining the optimal time to buy and sell the stock. The rationale behind the use of technical analysis is that price movements of stocks are not totally random. Stock prices do trend and by charting these price trends, an investor can determine when the existing downtrend of a stock has ended and an uptrend has started"
_
*Indicators*
_"Technical indicators are essentially derived from some formulae based on price action. As such, trading decisions should always be based upon price actions first, with technical indicators acting as secondary tools. Price action and price trend shows what people do with their real money, not what they say with their mouth"
_
*Learn to read critically on news articles. *
_"Some articles in newspapers or financial websites are written to deliberately trick you into buying or selling"
_
*Mark Twain*
_“If you don’t read the newspaper, you’re uninformed. If you read the newspaper, you’re misinformed.”  
_
*The emotional side of trading*
_"Trading can be a very emotional thing for many of us as it involves money. We need money to pay our bills and losing money can be a very painful experience for us. Have you experienced seeing a losing trade and then you decided to cut loss, the next thing you see, the trade that you cut with losses suddenly went into huge profit and you kicked yourself for exiting that trade? Or you took a small profit when you see your trade move to the right direction, then you see it move even further up and you enter the trade again. The next thing the trade moves in the opposite direction and you lost all your profit you just made. Many traders made these mistakes because they are driven by fear and greed"
_
*Summary*
_"It’s how you manage these emotions which will give you advantage over the other traders"
_
Skate.


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## Skate (21 February 2020)

*The ZIG Weekly Strategy*
Start Date: 1st January 2020
Portfolio Capital: $300,000
Positions in the Portfolio: 20
Fixed Position Sizing: $15,000 (No re-balancing)

*Weekly Update Format*
1. The "Share Trade Tracker" Dashboard
2. Portfolio performance line chart
3. Open Summary
4. Pending buy & sell positions


































Skate.


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## Skate (21 February 2020)

*The MAP Weekly Strategy*
Start Date: 1st January 2020
Portfolio Capital: $300,000
Positions in the Portfolio: 20
Fixed Position Sizing: $15,000 (No re-balancing)

*Weekly Update Format*
1. The "Share Trade Tracker" Dashboard
2. Portfolio performance line chart
3. Open Summary
4. Pending buy & sell positions


































This weeks sells
BWX
CSR
IMF

This weeks buys
AVZ
GOR
EHL

Skate.


----------



## Skate (21 February 2020)

*The 20% Flipper Weekly Strategy*
Start Date: 1st January 2020
Portfolio Capital: $300,000
Positions in the Portfolio: 20
Fixed Position Sizing: $15,000 (No re-balancing)

*Weekly Update Format*
1. The "Share Trade Tracker" Dashboard
2. Portfolio performance line chart
3. Open Summary
4. Pending buy & sell positions































*This weeks sells*
FXL
MGX
MMI

*This weeks buys*
MAH
GOR
EHL
NSR

Skate.


----------



## ducati916 (22 February 2020)

Skate said:


> [B]The emotional side of trading[/B]
> [I] Many traders made these mistakes because they are driven by fear and greed"[/I]
> Skate.







There is a third, far more more insidious state of mind....'_need_'. This covers both fund managers being measured against a metric and individuals who have given up work to trade for a living.

The need to earn/win, forces marginal trade decisions.

jog on
duc


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## qldfrog (22 February 2020)

Indeed, look at index tracking etf managers who need to offload or enter a code just because its position in the index has changed.
With ETF popularity, it must be substantial and increase all swing movements


----------



## Trav. (22 February 2020)

Newt said:


> For those wanting ideas on how to incorporate volume and price into systems development, I've found publications by O'Neill and some of those who traded with him very helpful.  Some corney clickbait titles, but definitely worth a read for those *feeling their way for a systematic approach*.  There are few by O'Neill and his "disciples", but suggest this for a starting point (below).
> 
> https://www.amazon.com.au/Trade-Like-ONeil-Disciple-Trading-ebook/dp/B003Z0CQVS




@Newt thanks for suggesting this book and one section that struck a chord with me was Position Concentration as recently I had a number of winning positions but position sizes were diluted and gains were minimal so when I read this the timing was uncanny ( extract below )

*POSITION CONCENTRATION*
_A big part of handling a winning stock correctly is properly scaling one’s position size. If you only want to *make average market returns*, then scale_
_your positions to a very small size, and your portfolio will act very much like a market index. _

_If you want to *make big returns*, then you absolutely must concentrate your capital in a strongly-trending_
_stock, and position sizes of 1 to 2 percent of one’s total portfolio equity are, to put it bluntly, quite wimpy from an O’Neil perspective. The O’Neil_
_method of pyramiding into strongly acting positions while weeding out weaker ones generally gets an investor concentrated in the right stocks_
_during a bull market cycle. _​
So for me this has resulted in me looking at 1. Pyramiding my positions 2. Less open positions. 

How to apply this in a system? well I have not coded this yet but discretionary trading this way over the last couple of weeks has seen some positive results. So as usual more food for thought and the journey continues.

Thanks again


----------



## Skate (22 February 2020)

Trav. said:


> So for me this has resulted in me looking at 1. *Pyramiding my positions *2. *Less open positions*. How to apply this in a system? well I have not coded this yet but discretionary trading this way over the last couple of weeks has seen some positive results. *So as usual more food for thought* and the journey continues.




@Trav. comments on pyramiding into winning positions referencing quotes from the book "Trade Like an O'Neil Disciple: How We Made Over 18,000% in the Stock Market" gives food for thought as he mentioned that discretionary entries over the last couple of weeks has seen some positive results, going on to say it's worthy of looking into having less open positions.

*It's worthy to remember*
The direct quotes are from the disciples of O'Neil who went on to make 18,241% over a 7 year period from January 1996 to December 2002 - In terms I can understand, this works out be be just over 110% annualised over the 7 years, not bad at all. But, there is always a "but" - but to achieve this result they had to endure a few "massive drawdowns" including one un-stomachable drawdown of over 50% in 1999. ("ouch")

*Helpful quotes*
It's pleasing to see quotes being made in the 'Dump it here' thread that has the ability to influence thinking on a deeper level. Also, it's timely to reflect that "all advances" in any field comes off the shoulders of others who have come before & trading is no different.

*Personally I'm not in alignment*
I don't align myself with the views expressed above about "pyramiding into winning positions" - Micro-managing positions or discretionary trading "it's just not for me" - The 'Dump it here' thread is about expressing alternative ideas not contesting them.

*From my experience*
It pays to listen to everyone & by doing so you decide if it’s relevant or helpful to you, allowing you to decide what information to keep & what to discard. "When you don’t listen you forgo the right to learn"

*Another useful quote from the book*
_"*It is important to stick with a winning strategy, in good times and bad*. I have lived with my strategy since 1991. This gave me the *confidence* to stick with it even during the treacherous second and third quarters of 1999. I never lost sleep during this period, nor have I ever lost sleep over the market. The key is to always understand why one is making or losing money. That said, periods of steep drawdowns are part and parcel of trend following. *It is critical to stick with the strategy in both good times and bad*. As shown by Dunn, Henry, O’Neil, and other successful trend followers, the profits made during the good times more than make up for the losses during difficult, trendless periods"._ (my bolding)

Skate.


----------



## Newt (22 February 2020)

Pyramiding is a fascinating topic.  Howard Bandy always talked about the need for Position Sizing and Risk Management to sit outside the trading algorithm.  I agree with Skate about the critical issue of concentration of returns also risking "concentration of drawdown".

Suspect most of need to focus on proper execution of our system for an extended period before being tempted into complicating matters with variable position sizing.  It will probably be quite difficult to get decent statistical verification of any pyramiding or downsizing additions to your system, which greatly increases the chance of curve-fitting or backtesting returns that may far exceed future real returns.

That doesn't mean it can't be done.  You would probably need to ensure any future additions to a positions continue to be smaller and smaller, and presumably only after each proceeding position is well into profit. 

Another thing to be mindful of is that any long term "multi-baggers" you manage to lock on to should be experiencing compound growth, not linear.  The human mind doesn't intuitively handle compounding well, but a stock with say 80% compound growth held for 3 years really does undergo amazing increases in size and profits of course in that final 12 months. (e.g. $15k position becomes $27k in one year, then $49k, then $87k - without tax!).  Adding in an extra 50% position at 1 yr, then 25% more at 2 years means final $119k (without tax).

The volatility of price often also increases exponentially towards the end of a multi-year run for a single stock, so you must ensure you have proper stops for the late pyramid positions and there could be an even greater chance they'll be hit quickly.


----------



## Newt (22 February 2020)

Listening to that Adrian Reid podcast really got me thinking about DDs differently this week.  

https://www.traderwave.com/blog/trading-conversations/adrian-reid/

He strongly argues that traders (especially new and learning ones!) should foremost figure out the maximum loss they can tolerate as part of the essential "personality fitting" of their chosen trading system.  

Skate gave an excellent example recently by showing the returns for his "Skate modified CAM strategy" versus "Skate modified CAM with stale stop".

*Over a 3 year period (18/2/17 - 18/2/20):*



Nick Radge is fond of saying new traders should estimate the maximum DD they think they can tolerate, then divide by 2 (or some factor - can't remember exactly).  Frankly 15.75% DD is a pretty amazing figure for most systems.  The key point is as tempting as the first column is, you have to start honestly with the 2nd column to help you choose which system to run.


So with pyramdiing, if you do it very well, you may end up with even better than 37.5% max return, but you would want to be VERY careful looking at the Max DD - it may have increased well above the example -15.75% in the table above.....


----------



## Skate (24 February 2020)

ducati916 said:


> I'm curious, have you ever either (a) backtested your systems on the US or traded the US or (b) backtested (traded) the various futures markets? The reason I'm curious is that to the naked eye (mine) the US market trades very differently to the Aus market.





ducati916 said:


> There are a significant number of differences in the US. I was not sure that they (could/would) make a difference (hence my question to Skate) to automated trading strategies (weekly) etc.




@ducati916 is another member who nails alternative point of views & even at times clarifies missed information in a previous post in the vein of helping others. When there is a variety of views expressed - the education value increases. 

*Let's talk about the U.S markets*
I'm the first to admit that I have no interest in the US Markets but I do read @bigdog "NYSE Dow Jones thread" religiously. I'm also first to concede there is a correlation "a cause & effect" relationship between our market & the U.S markets. This correlation has prompted me to make a few comments of Trump, the pending US elections & the relationship to the U.S. markets.

*Stocks have surged under Trump*
At the moment the markets are cheering for Trump's re-election at the end of the year. Collectively traders are relieved that the US-China trade war has cooled - now the next hurdle to overcome is India.

*Consensus*
IMHO - Traders around the world will be happy with another 4 years of Trump. It's worth remembering the S&P 500 has climbed nearly 50% with the Dow's annualised gain of 13% since Trump took office. Another consideration, the Nasdaq has had an 8% gain this year. After reading the stats above, to me an alternative President in the White House looks bleak for traders.

*Here comes Bernie*
It's early days but at the moment Bernie Sanders is the current frontrunner for the Democratic presidential nomination & surprise, surprise the markets are still going up, nudging higher to near 30,000 points. (discounting for the minor daily blips along the way)

*Why are the markets bullish?*
If Bernie keeps going that's a positive for traders & for Trump, in a nutshell Trump is pro-business.

*Summary*
We are all cheering for Bernie & if we aren't "we should be" because Bernie is actually making the markets bullish at the moment. Trump versus Sanders is a chalk & cheese comparison, meaning this match off (IMO) adds weight to the re-election of Trump - the main reason the markets are currently bullish.

Skate.


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## qldfrog (24 February 2020)

Skate said:


> @ducati916 is another member who nails alternative point of views & even at times clarifies missed information in a previous post in the vein of helping others. When there is a variety of views expressed - the education value increases.
> 
> *Let's talk about the U.S markets*
> I'm the first to admit that I have no interest in the US Markets but I do read @bigdog "NYSE Dow Jones thread" religiously. I'm also first to concede there is a correlation "a cause & effect" relationship between our market & the U.S markets. This correlation has prompted me to make a few comments of Trump, the pending US elections & the relationship to the U.S. markets.
> ...



Fully agree cf Bernie, even with the millennials, a communist dinosaur has no chance against Trump so what is the market cheering is Trump reelection odds increasing.
Same as locally ASX was going up with bad news cf virus as this implied future rate cuts.problem is virus is actually sabotaging the actual profits on the asx....


----------



## Skate (24 February 2020)

qldfrog said:


> Fully agree cf Bernie, even with the millennials, a communist dinosaur has no chance against Trump so what is the market cheering is Trump reelection odds increasing. Same as locally ASX was going up with bad news cf virus as this implied future rate cuts.problem is virus is actually sabotaging the actual profits on the asx....




*Trading*
@qldfrog with life as well as trading we tend to skip from one drama to another, if it wasn't "this" it would be "that".

*Thinking & Decision making*
After reading your post above & the one you made in your thread this morning let me make a few observations & general comments. My post is not directed at you but it's the reason for making a few comments.


qldfrog said:


> Following both a change of circumstances and the trigger of the Dump it thread by Skate, I decided to plunge again into system trading.Based on code provided initially by Skate and after discussions with @Lone Wolf, @Newt, @jjbinks and @Habakkuk and @Wyatt, I heavily tweaked the initial code and ended up with a relatively stable system various backtests on various periods as well as some walk forward  tended to reassure me a bit. Note that I am not fully happy with the exit and DD, and as time goes I might refine the systems with conditional stop loss etc




*Looking back*
12 months has flown by & it's evident by the level of commitment to your thread you have never wavered while at times experiencing a few bumps along your renewed trading journey. Some members are smart bunnies on this forum & @qldfrog you are no exception (emotional, "yes" - that's a given)


qldfrog said:


> Thinking along and welcoming your inputs: I currently have 2 systems live: 1 & 2 with #1 first anniversary tomorrow to the day I am happy with the decent performance of system1 and the learning process and discipline gathered along; System2 is a system1 improved version under certain market behaviours so not always better but sometime I do not have extra cash available for play at the moment: I am playing with 2 others systems on paper, both better in backtests than these 2  (and this does not include the zigzag grail) What would you do? Close slowly one of your running system (slowly, just not investing anymore to let winners go as it took long enough to get these selected, but not investing anymore) and ramp up system 3 or 4? Have you met such dilemma? Up to you




*Now a few GENERAL comments*
Planning for the next 12 months - I'm an avid reader of @qldfrog thread & after 12 months of successful trading it's the perfect time for him to do an evaluation of his trading methodology weighting up his options going forward, seeking input from members at this time rather than advice.

*Decision making*
Instead of making a general post in his thread I would rather use his post as the catalyst to explain the importance of decision making & how it shapes not only your life but your financial future. I'd love to have a dollar for every time someone asked me for advice (I'd be rolling in it), my fallback response is always "not to give advice" because people will do what pleases them & "not what's in their best interest".

*If I was in the same circumstance "what I would do".*
I would formulate one trading strategy & nailed it down completely before moving on to something more exotic. Often friendly advice, gives you choices, challenging your own way of thinking but after saying all this - "I would stay within my circle of competence when it comes to trading"

*General advice*
You also need to understand how to deal with the stress of trading - stressful situations & how you "respond" rather then "reacting" will eventually decide your trading fate, concentrate on this & your part way there to being a half decent trader.

*The law of least effort*
Many receive advice "only the wise profit from it". People in general will think as little as possible because most of our lives, we spend our time listening to someone else feed us information but when it comes time to take responsibility for our decision making, we are constantly waiting for someone else to tell us what to do or checking to see what others are doing.

*Thinking *
Thinking & curiosity has been pulled out from under us & as traders it's time for us to reclaim this area. Critical thinking is important but not as important as discovering new ways of thinking about them.

Skate.


----------



## Saqeeb (24 February 2020)

*Saqeeb’s MAP Strategy - EOW 1 Weekly Update*

First week into paper trading, my system sold CGL today at open after the thumping it received last week. 

My system also entered 6 new positions today (APD, GOR, EHL, NSR, MNY and BVS), bringing the total open positions to 11.

I have included a snapshot of open / closed trades and equity curve for interested.

With @Skate ‘s advice and help, the total purchase value in each position moving forward will be based on a limit offer price to keep it realistic in attempting to purchase at market open.


----------



## Skate (25 February 2020)

I received a PM a few days ago regarding the coding of a Bollinger Bands Breakout Strategy. Sometimes you forget about an old friend till you are reminded. There are many who trade a variation of the BBO strategy as it's a trusted workhorse that works in all periods. My only gripe with the BBO Strategy is the standard setting & parameters no longer work as originally intended so it's important to discover new ways to implement this brilliant idea of John Bollinger.

*Let's talk about my old friend - the trusty BBO Strategy*
I've traded a standalone Weekly Strategy a few years ago (with good success) over a 2 year period before combining it with two other strategies to form the basis of my HYBRID Strategy. I don't really care what breakout strategy you use they will all get you into a trend & the Bollinger Bands Strategy is no different. 

*No need to re-invent the wheel*
My HYBRID Strategy is a modified version of these three strategies (a) BlueWren, (b) Darvas Box & (c) Bollinger Bands Breakout. The sole purpose of combining them into one strategy is to enter a confirmed trend quickly. Each strategy in their own right is a top performer, combining them turns a good system into a better strategy (IMHO).  

*2019 what a great year*
@qldfrog made the remark the 2019 calendar year was a year that had great growth momentum overall. I have to agree wholeheartedly with him prompting me to make the off the cuff comment in his thread - "Any trader who is not rolling in it at the moment should be re-evaluating their strategy to understand why they missed a great trading opportunity"

*Backtest*
I'll post 3 backtests of my original old friend the (BBO strategy). With the passing of a few years I myself was wondering if John Bollinger's idea (my Weekly BBO strategy) would still punch-out a profit in turbulent times. Lets see..

*Backtest (1) Skate's original BBO Weekly Strategy - (One Calendar Year)*
Start Date: 1st January 2019
End Date: 1st January 2020
Portfolio Capital: $300,000
Positions in the Portfolio: 20
Fixed Position Sizing: $15,000 (No re-balancing)







*Backtest (2) Skate's original BBO Weekly Strategy - (2 Calendar Years)*
Start Date: 1st January 2018
End Date: 1st January 2020
Portfolio Capital: $300,000
Positions in the Portfolio: 20
Fixed Position Sizing: $15,000 (No re-balancing)







*Backtest (3) Skate's original BBO Weekly Strategy - (3 Calendar Years)*
Start Date: 1st January 2017
End Date: 1st January 2020
Portfolio Capital: $300,000
Positions in the Portfolio: 20
Fixed Position Sizing: $15,000 (No re-balancing)




*Let me quote the guy from the Toyota Television add*
Yep' - I'm still feeling it.

The Weekly BBO Strategy still works...

Skate.


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## qldfrog (25 February 2020)

Did i hinted that to you Skate.? Or great spirits meeting?
I spent the last week on a very decent version of bband with tweaks and that is the system i plan to replace one of my cam live system with.
Timely post as i can now compare the backtests


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## qldfrog (25 February 2020)

if of interest, QF's under dev BBand system:
*Backtest (1) QF's under dev BBand  Weekly Strategy - (One Calendar Year)*
Start Date: 1st January 2019
End Date: 1st January 2020
Portfolio Capital: $300,000
Positions in the Portfolio: 20
*SetPositionSize( 15000,1 )*..this is not my usual setting I usually use
 SetPositionSize( 100 / maxOpenPositions, spsPercentOfEquity ); // Fixed Fractional Sizing 




*Backtest (2) QF's under dev BBand   Weekly Strategy - (2 Calendar Years)*
Start Date: 1st January 2018
End Date: 1st January 2020
Portfolio Capital: $300,000
Positions in the Portfolio: 20
SetPositionSize( 15000,1 )





*Backtest (3) QF's under dev BBand   Weekly Strategy - (3 Calendar Years)*
Start Date: 1st January 2017
End Date: 1st January 2020
Portfolio Capital: $300,000
Positions in the Portfolio: 20
SetPositionSize( 15000,1 )


discussion on differences follows


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## qldfrog (25 February 2020)

QF apprentice system:
One year: much lower return:half risk adjusted returns, far less trades and positions held far longuer
2 years: similar to 1 year,
3 years.Not too bad but well below Master Skate 
There are clear leads to follow: average bar helds which would obviously increase the number of trades and allow more chances to pic the big winners
To be considered: even as is, my clanky system would be quite decent vs an eps expected returns so I will definitively carry on work to improve my design
Thanks Skate for the never ending motivation you provide, even on days where my systems will soon go back to 0 or negative annual returns if the trends carry on :-(


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## Skate (26 February 2020)

qldfrog said:


> There are clear leads to follow so I will definitively carry on work to improve my design




@qldfrog I'm posting the paper trading results of the BBO Strategy for two reasons.. (1) Comparison of Signals & (2) what can happen to a structurally sound strategy hitting turbulent times. The Reports & line chart is from 1:34pm today.




*The BBO Weekly Strategy*
Start Date: 1st January 2020
Portfolio Capital: $300,000
Positions in the Portfolio: 20
Fixed Position Sizing: $15,000 (No re-balancing)

*Weekly Update Format*
1. The "Share Trade Tracker" Dashboard
2. Portfolio performance line chart
3. Open Summary
4. Pending buy & sell positions





















qldfrog said:


> my systems will soon go back to 0 or negative annual returns if the trends carry on :-(




*Verbalizing our Prime Minister Scott Morrison*
“How good is Trading?"  a rhetorical question that requires no answer (at the moment)

Skate.


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## Skate (26 February 2020)

@Triple_Witching posted a brilliant article in the "equititrust thread" - I could condense the article by repeating my matra of *"Don't waste the dash"* but that wouldn't do the article justice.  

*"Don't waste the dash"*
Before you ask, let me explain what the "Dash" is. On a Headstone the "DASH" represents a life that was lived. Don't waste the dash is my cryptic way of say, *"don't waste your life" *

The dash between 1949 - 1996 represents the period of time Timothy's was alive.







*I'm re-posting @Triple_Witching post without permission as it's an important read..*

_*Life Is Not A Practice Run*
A few weeks ago I was handed a copy of Paulo Coelho’s, The Alchemist. I’ve heard this book finds you when you need it the most and so I set about reading it with intention. There were many lessons and thought-provoking ideas scattered throughout the text, but perhaps one of the most striking to me was this: “To realize one’s destiny is a person’s only obligation.”

Here’s the thing: your life isn’t a practice run. You only get one go at it and it’s your responsibility to make the most of it, to live it fully and make it count. So few people ever give much more than a fleeting thought to their destiny or purpose and even fewer people take a deliberate path to find theirs and live it. I’m not an expert in purpose but here’s what I’ve observed: when you meet someone who is authentically living their purpose, they’re magnetic. They live their life on fire.

So why is it that we waste so much time living default setting lives that are not aligned with our destinies? Again, I’m no expert, but I think it’s because in the madness of daily living so many of us have stopped listening to our inner voice. We’ve collectively buried our hopes and dreams under responsibilities and fears and one by one when we emerge from under the weight of these things, we don’t even know where to start looking for our purpose. There is no key on Earth that will unlock the door to instant happiness and purpose, but there are three key things you could do right now to start taking the first steps on a journey to realizing your destiny.

Stop looking for purpose and start living on purpose. Desperately overthinking your purpose turns your focus inwards. Living on purpose turns this on its head because it moves us from overanalyzing every detail of our lives to being an active participant in our lives. Nothing ever happens to us, but everything happens for us. When we develop an attitude independent of circumstance and when we cultivate gratitude in our lives daily, we will find that our capacity increases and our focus changes

Ask where you are needed. Purpose is focused outwards and meaning is found in serving others. Just look around you and I’m sure it won’t take you long to identify a need that your talents and skills could help solve. What we often take for granted in ourselves can be an enormous blessing to other people if we are open to sharing our own knowledge, skills and talents without expectation or desire for any return action.

Move, damn it! Actions speak louder than words every day of the week and no amount of reading and researching is going to move you any closer to your destiny. If you’re afraid, you don’t need to make big moves. Small consistent steps repeated over time produce profound results, but you’ve got to get started. Craft a plan, get a coach or mentor and set a goal. Without structured support and a clear plan of action, it’s easy to give up when the first tough day comes, but when we’re focused on the end goal it’s incredible how much more we can endure than when we focus on right now.

Perhaps the great Roman Emperor Marcus Aurelius summed up the brevity of life in this quote: “When you arise in the morning, think of what a precious privilege it is to be alive – to breathe, to think, to enjoy, to love.” My question to you is this – are you making the most of this one life that you’ve been given to live and are you chasing your destiny with all your heart or are you living your life on autopilot, waiting for the next thing to happen to you? Whether you realize it or not, you’re in control. This isn’t a rehearsal so get busy living._

Skate.


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## qldfrog (27 February 2020)

@Skate,
Comparing my weekly system results, i noticed that my #bars reflected nb of days..not weeks
https://www.aussiestockforums.com/posts/1058331/
Is this something you experienced during your systems development?
By providing a comparison on Bollinger, i went to improved my code further, up to a decent system
And will start winding down my second Cam live system and replace it with that Bollinger bands based one, thanks for the inspiration in this journey


----------



## Skate (27 February 2020)

qldfrog said:


> @Skate, Comparing my weekly system results, i noticed that my #bars reflected nb of days..not weeks. Is this something you experienced during your systems development?




@qldfrog first off, I've never experienced the issue that you are describing but I can say "minor coding or parameter settings" can cause headaches as minor issues can replicate themselves throughout the backtest & exploration. @Nina4 has given you some great examples but as you have directed a question to me I'll give you a few ideas from my perspective.

*Making suggestions without the facts*
I've neglected to make a comment previously in your thread as an examination of your code is required. Let me put it another way: it's like being at the doctors for a checkup & while you are there you ask the doctor a simple question "my wife is not feeling well, what do you think is wrong with her"

*Suggestions*
1. Open your .apx file as it contains every bit of information contained in your strategy as all of the parameters & settings are contained in this one file. If you don't use an .apx file to load your strategy "you should" If you don't have an .apx file make one & by examining it I'm sure you will find the issue.




2. Make sure the periodicity in your Analysis setting is correctly selected




3. Write a periodicity check in your code - so it's Okay to execute (example below)
OkToExecute = Interval() == inWeekly;

4. Also, you can write an "else statement" to verbally warn you, stopping the execution of your code till the periodicity is corrected - meaning if the periodicity is wrong a display message will be displayed with a verbal warning why the execution cannot proceed. (example below) - The reason for the warning below: the last analysis was set to "Daily".




*Sample of an else statement *
else
{
msg = "Skate, this formula needs to be executed in WEEKLY timeframe.";
Say( msg );
    else
        DisplayGfxTitle( msg );
}

*I have checks & balances in all my strategies*
The above code is supplied as an example "only" of the checks & balances I have coded in to every strategy as I run many Backtesting/Explorations over many different time frames. The additional code also executes the same warning on the charts. With the amount of coding & variety of strategies we all test I for one couldn't live without running my tests without first using the Analysis Project File (.apx file) to load the .afl. Without checks & balances when executing a strategy I believe mistakes would be frequent.

*Chart Example*
Check & Balances in the coding - "Nothing to see here as the " CORRECT periodosity is selected (Weekly)






*Peridosity Chart Checks & Balances *
Check & Balances in the coding - "A warning message is displayed with an audible alert" as the INCORRECT periodicity has been selected (Daily) - the strategy is weekly




Skate.


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## qldfrog (27 February 2020)

Skate said:


> @qldfrog first off, I've never experienced the issue that you are describing but I can say "minor coding or parameter settings" can cause headaches as minor issues can replicate themselves throughout the backtest & exploration. @Nina4 has given you some great examples but as you have directed a question to me I'll give you a few ideas from my perspective.
> 
> *Making suggestions without the facts*
> I've neglected to make a comment previously in your thread as an examination of your code is required. Let me put it another way: it's like being at the doctors for a checkup & while you are there you ask the doctor a simple question "my wife is not feeling well, what do you think is wrong with her"
> ...



Thanks for the clear answers.plenty of good advices and hints..i know it is AB focused but i hope this will help others.
Indeed @Nina4  has been much helpful and i think she pointed to the issue.will check as soon as on my pc.many thanks all


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## Skate (27 February 2020)

*Don't throw away a good strategy because of a small sample size*
Meaning, "Don't throw the baby out with the bath water". Tomorrow I'll be reporting on my 4 strategies being paper traded & this weeks results are looking very sad indeed. There would be few members game enough to trade any of my systems going on this weeks results.

*I've condensed the 4 strategy backtests in one report*
The backtesting has been performed over 1, 2 & 3 years & the strategy with the worst performance isn't a shabby system, far from it. To stay true with @qldfrog backtest parameters I've used ($100k X 20 position Portfolio). 

Each strategy is listed in order of the "Annual Returns", just for the records.

*Backtest Parameters*
Portfolio Capital: $100,000
Positions in the Portfolio: 20
Fixed Position Sizing: $5,000 (No re-balancing)





Skate.


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## Warr87 (27 February 2020)

I still can't get over those CAR/MDD ratio's. Crazy good.

I just checked my system. It's going from +1.5% to -7.7%. Am I worried? Nope. It's not ideal, but I am exciting to catch the moment when it rebounds. I can't get my +30-60% that my ssytem trades at if I wont weather the -15-25% MDD that goes with it.

My account size is much smaller than a lot of others so there is that psychological help. But that being said, if I lost my account it would still hurt.


----------



## Newt (27 February 2020)

I'd love to be able to code strategies that get into profit so agressively, but not something I've even been able to nut out.  Thanks for sharing all this Skate.  Very thought provoking.

And thanks for not dodging the elephant in the room (re the terrible week on the markets so far) - the show must go on.....!


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## jbocker (28 February 2020)

Plan B
Going to a beach wedding today 3 PM at a Beach in Perth. If you live here and look out the window at the current storm lightening and rain you would hope the Bride and Groom have a Plan B.

I guess a lot of people are looking at their plan B's over the last week in this market.

I feel sorry for my nephews new bride a beautiful English Lass who decided to come to sunny Australia and has dreamt of a beach wedding on some of the best beaches in the world, probably would not have dreamed or risked a beach wedding in England.

Dreams. Reality. Plan B.
It is still beautiful.


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## Skate (28 February 2020)

*Well what a week !!*
I've looked back at the markets over many decades trying to understand the natural patterns of falls but this time the pattern was "servere & quick", the quickness has caught most out, not only Weekly Trend Traders. My only advice is to put dollar amounts into percentages so the evaluation of this week results retains perspective.

*Tend Trading Systems*
This weeks reporting is worse than I said a few days ago. @aus_trader new tag this week should be corrected to: _Another Day Another Dollar._.."DOWN" (smiley face removed) In tough times let's remember @jbocker tag: "Stay Cool"

*A few more paragraphs*
Another quote from the book "Trade Like an O'Neil Disciple: How We Made Over 18,000% in the Stock Market". The lifted paragraph has kind words to say about "Trend Following Strategies"

_*New Trading Strategies Can Derail Your Trading*
"New strategies sound tempting to try because some well-known investor has used the strategy with success. A successful trader knows his strategy must always correspond to his trading personality. Otherwise you are more than likely to abandon your position prematurely when it moves against you, or worse, you may get caught holding a particularly volatile position too long if it suddenly slips well beyond your mental stop alerts, thus psychologically trapping you, as you now are put in the position of hoping the position moves higher so you can recover part of your loss before selling it, a dangerous psychological trap"

"Those who are particularly vulnerable to this problem may be going through a weak spell due to a specific market period that does not work well with their strategy, such as the way choppy, trendless periods can cross-up trend followers"

"There have been times when changes in the market were only temporary but lasted just long enough for many investors to adjust their strategy. There have been several periods throughout the past 30 years when it has been declared that trend following was dead. Yet the best traders with exemplary 25+ year track records such as Bill Dunn and John Henry, as interviewed in Trend Following by Michael Covel, *prove that a consistent* *trend-following approach works brilliantly. These traders are the rare few who continue to trade their strategy even during difficult times when the market is trendless rather than abandoning their strategy and succumbing to the “this time is different” view"*
_
*My Paper trading reports to follow*
After viewing my 4 trend trading strategies weekly results keep in mind the highlighted words above.

Skate.


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## Skate (28 February 2020)

*



The ZIG Weekly Strategy*
Start Date: 1st January 2020
Portfolio Capital: $300,000
Positions in the Portfolio: 20
Fixed Position Sizing: $15,000 (No re-balancing)

*Weekly Update Format*
1. The "Share Trade Tracker" Dashboard
2. Portfolio performance line chart
3. Open Summary
4. Pending buy & sell positions
*




























This weeks sells*
ABC
MMI
PAR
PNV

*Perfect scenario*
This week hasn't been kind to traders but it's the perfect scenario for paper trading (let's see if the strategy can recover)

Skate.


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## Skate (28 February 2020)

*The MAP Weekly Strategy*
Start Date: 1st January 2020
Portfolio Capital: $300,000
Positions in the Portfolio: 20
Fixed Position Sizing: $15,000 (No re-balancing)

*Weekly Update Format*
1. The "Share Trade Tracker" Dashboard
2. Portfolio performance line chart
3. Open Summary
4. Pending buy & sell positions






























*This weeks Sells*
ALG
BFG
CCX
CL1
MCP
MMI
NEU
ORE
PAR
PNV

*Perfect scenario*
This week hasn't been kind to traders but it's the perfect scenario for paper trading (let's see if the strategy can recover)

Skate.


----------



## Skate (28 February 2020)

*The FLIPPER Weekly Strategy*
Start Date: 1st January 2020
Portfolio Capital: $300,000
Positions in the Portfolio: 20
Fixed Position Sizing: $15,000 (No re-balancing)

*Weekly Update Format*
1. The "Share Trade Tracker" Dashboard
2. Portfolio performance line chart
3. Open Summary
4. Pending buy & sell positions





























*This weeks sells*
ABC
ALG
BFG
CAT
ORE
PAR
PNI
PNV

*Perfect scenario*
This week hasn't been kind to traders but it's the perfect scenario for paper trading (let's see if the strategy can recover)

Skate.


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## Skate (28 February 2020)

*The BBO Weekly Strategy*
Start Date: 1st January 2020
Portfolio Capital: $300,000
Positions in the Portfolio: 20
Fixed Position Sizing: $15,000 (No re-balancing)

*Weekly Update Format*
1. The "Share Trade Tracker" Dashboard
2. Portfolio performance line chart
3. Open Summary
4. Pending buy & sell positions





























*Perfect scenario*
This week hasn't been kind to traders but it's the perfect scenario for paper trading (let's see if the strategy can recover)

Skate.


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## Newt (28 February 2020)

Phillip Lasker gave the ABC News business report tonight, and put up the graph below.  This week we had the dubious honour of experiencing the fastest Wall St correction (>10% fall) ever:

The link probably won't stay current for long, but full report for today (Friday) here:
https://www.abc.net.au/news/business/kohler-report/


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## Skate (29 February 2020)

Newt said:


> Phillip Lasker gave the ABC News business report tonight, and put up the graph below.  This week we had the dubious honour of experiencing the fastest Wall St correction (>10% fall) ever: The link probably won't stay current for long, but full report for today (Friday) here: https://www.abc.net.au/news/business/kohler-report/
> View attachment 100876






Skate said:


> *Well what a week !! *I've looked back at the markets over many decades trying to understand the natural patterns of falls but *this time the pattern was "servere & quick", the quickness has caught most out*, not only Weekly Trend Traders. My only advice is to put dollar amounts into percentages so the evaluation of this week results retains perspective.




@Newt the graph posted above "time taken to fall 10%" sums up the current situation nicely putting this week into perspective confirming this pattern (fall) is different to most others as this fall has happened so quickly.

*WTF - what's going on?*
That's an acronym for (*W*ay* T*o* F*unny)* - *The Pre-Market Trading (futures contracts) below has put a "smile on my dial" (go figure) - what are we to think? It's an important point that most may not be aware of: "The Dow was down nearly 1,086 points on Friday before closing down -357 points", nice late recovery. Again, what are we to make of this?




*Dow in perspective *(down 3,583 points this week)
The Dow (INDU) closed 357 points, or 1.4%, lower, on its seventh day in the red. At its worst, "*the index was down nearly 1,086 points on Friday" *The DOW dropped 3,583 points this week, including its worst one-day point drop in history on Thursday. On a percentage basis, it was its worst week since October 2008, as it fell 12.4%.
*
S&P 500 this week *(down 11.5%)
The S&P 500, the broadest measure of the stock market, fell 0.8%. It dropped 11.5% this week, its worst weekly percentage drop since October 2008 as well. The selloff has shaved $3.2 trillion off the S&P this week. It has dropped $3.6 trillion from its February 2019 high.
*
Nasdaq *(-10.5% down this week)
The Nasdaq Composite ended flat. The index fell 10.5% for the week.

Skate.


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## kid hustlr (29 February 2020)

I think the chart about fastest fall is interesting but there have been far worse weeks in the history of the mkt to my understanding.

Not denying it was a tough week.

Disclosure 1 my buy and hold etc portfolio got hammered.

Disclosure 2 I bought a parcel on Friday.


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## Newt (29 February 2020)

You're probably right about size of rapid drops kid hustler - I should have clarified that is time to fall 10% from a market peak.....


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## jbocker (29 February 2020)

jbocker said:


> Plan B
> Going to a beach wedding today 3 PM at a Beach in Perth. If you live here and look out the window at the current storm lightening and rain you would hope the Bride and Groom have a Plan B.
> 
> I guess a lot of people are looking at their plan B's over the last week in this market.
> ...



...and sometimes despite the odds, Plan A still comes off. The wedding was done on the beach after all.Here is a shot of the beach from the reception later after the wedding


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## aus_trader (29 February 2020)

kid hustlr said:


> I think the chart about fastest fall is interesting but there have been far worse weeks in the history of the mkt to my understanding.
> 
> Not denying it was a tough week.
> 
> ...




Yes as Skate also mentioned, things have to be put into perspective in % terms. It's bad what happened last week, but not the worst week in history. The 1929 falls were so quick and sharp, which eventually lead to the great depression and were far worst in % terms. Most weren't around including myself to remember or to reflect on... which would have helped us to really look at the current falls with more experienced eyes.


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## Newt (1 March 2020)

Another chart.....


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## Skate (1 March 2020)

peter2 said:


> P2 Wkly/Dly portfolio: Update after the virus panic selloff week. We'll all remember this week and we'll be better for the experience. If we didn't know that the market can fall this hard, we do now. When the market falls this hard, diversification across few or many positions means nothing. Everything gets hit, hard. All portfolios got hit. Hopefully many of you will now know that real diversification is a much broader concept than how many stock positions we hold.
> *Now, what are you going to do?  Hopefully the system traders will continue following there plans without any adjustments. One disastrous week shouldn't invalidate their systems. *






Newt said:


> Its a bit easier to take and work through knowing others are also coping and working through their trading plans.  Thanks for these wise words Peter2.




@peter2 made a great post recently about diversification & why one disastrous week shouldn't invalidate a system traders strategy.

*Let's look at 2 backtests over a different period of a few systems*
There is a fine line when it comes to the period used for backtesting as the results can vary significantly. This last disastrous week can cause traders to reflect if their trading systems is still robust enough going forward. This weekend gives you the time to validate a system if you are concerned before the next open on Monday to confirm that the current parameters are still within an acceptable average range.

*Examples below*
To give an example I've posted a few strategies with backtest results for a short period (this financial year) compared to the same unaltered system averaged over the last 3 years. Some of the results are like chalk & cheese. The CAM Strategy blossomed compared to the other systems for this financial year & it's not hard to understand why, the CAM strategy enters on pullbacks & trend continuations where the other strategies all jump on uptrend as early as possible.

* This "Financial year backtest" from  (1/7/2019  to   28/2/2020) *
@qldfrog settings used: $100K x 20 ($5k fixed PositionSize) Portfolio (Alphabetical Order)





*3 year average period Backtest from  (28/2/2017  to   28/2/2020) *
@qldfrog settings used: $100K x 20 ($5k fixed PositionSize) Portfolio (Alphabetical Order)




Skate.


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## Newt (1 March 2020)

Many many thanks Skate for openly sharing these tests.  Its incredibly helpful seeing a population of alternative strategies with subtle or large differences to those a trader has developed him/herself.  For myself it certainly helps broaden perspective and confidence at all times, not just in the midst of the current panic selling.  Thanks for Qldfrog too for stimulating so much useful discussion in recent weeks around backtesting benchmarking.


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## peter2 (1 March 2020)

Hmm. . . I assume the backtest results are from one sample run rather than averages of many run throughs.  If last weeks market fall produced the max DD  (indicated by the one year results) then the results from the three year sampling should have similar max DDs since they include the period producing the max DD.


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## Skate (1 March 2020)

peter2 said:


> Hmm. . . I assume the backtest results are from one sample run rather than averages of many run throughs.  If last weeks market fall produced the max DD  (indicated by the one year results) then the results from the three year sampling should have similar max DDs since they include the period producing the max DD.




@peter2 by using (Hmm...) I'm at a loss what you are implying or what you are saying? 

*Your Statement*
_"If last weeks market fall produced the max DD  (indicated by the one year results) then the results from the three year sampling should have similar max DDs since they include the period producing the max DD" - _No this is not necessarily so, the mathematics used belies those assertions. 

*Clarification*
When backtesting I don't use the "AmiBroker mtRandom function", meaning all my runs are fixed (single runs). The "AmiBroker mtRandom" function is used for Monte Carlo runs. Avoiding the use of the "mtRandom function" in a single backtest allows for consistency of results between strategies. Also it's important to comment that when a "Maximum or Minimum" is set for any metric doesn't translate to every backtest period used thereafter. Using this logic is a fallacy not a fact.

*Keeping it in context*
Also it should be noted that the maxDD of the last week is un-proportional in relation to maxDD for the previous 7 months. The 3 years of backtesting also include the results of this week & in the scheme of things didn't rate highly at all. A larger time frame for backtesting naturally smooths the maxDD because of the averaging, mathematics & entry timing used for the calculations. In the first run (8 months) the maxDD is concentrated in a few weeks of that period. FYI, the first backtest run is for this "Financial year" (8 months) not a "calendar year" (12 months) as you have indicated. 

*The look back period of Moving averages verses Exponential moving averages*
Let me try to explain it to others. Selecting different look back periods using moving averages, the longer the period the smoother the average. Using the exponential moving averages formula for the same period gives more weight to the most recent period. It's the same with Backtesting - a longer Backtest period has a greater smoothing effect than a backtest of a short duration. One trading day doesn't break a system, similarly one week of trading is but a heartbeat in the scheme of things. Long term results of a strategy should be measured in years.

*Summary*
My previous post was to highlight "using different time frames" has a big bearing on the strategy results as indicated in the graphs above.

Skate.


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## peter2 (1 March 2020)

Apologies if my post was unclear. "Hmm" indicates that there's something I don't understand or can't work out.  ". . . " indicates that I've got to carefully think about how to express myself in order to get more information to resolve my conundrum. 

A maximum drawdown (MaxDD) is the maximum observed loss (expressed as a percentage) from a peak to a trough of a portfolio, before a new peak is attained. 

I understood that a MaxDD is a single point result that occurs sometime throughout the testing period. This value doesn't get modified in any way. It most certainly doesn't get smoothed. If the MaxDD is expressed as a percentage then yes it is proportional to the prior account equity high. 

If there's a 14% DD in the results of the fin year (8 mths) back test, then I'd expect to see it reflected in the 3 year results unless a larger DD was present in the additional preceding time period.


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## peter2 (1 March 2020)

Skate said:


> *Summary*
> My previous post was to highlight "using different time frames" has a big bearing on the strategy results as indicated in the graphs above.




I understand this. eg When starting the testing 8 months ago 20 new positions were required to populate the portfolio where as a test period started much earlier may only require one or two replacements at this time. 

I'm making the assumption (that could be wrong) that last weeks market fall was so severe that ~95% of stocks were sold off significantly and all long only portfolios would be experiencing a 10-15% DD currently as shown by your fin year (8 mths) back testing results. I assume that portfolios started years earlier would also have been hit by the same % amount and I'm surprised that your results show that they haven't.


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## Skate (1 March 2020)

peter2 said:


> If there's a 14% DD in the results of the fin year (8 mths) back test, then I'd expect to see it reflected in the 3 year results unless a larger DD was present in the additional preceding time period.






peter2 said:


> I understand this. eg When starting the testing 8 months ago 20 new positions were required to populate the portfolio where as a test period started much earlier may only require one or two replacements at this time. I'm making the assumption (that could be wrong) that last weeks market fall was so severe that ~95% of stocks were sold off significantly and all long only portfolios would be experiencing a 10-15% DD currently as shown by your fin year (8 mths) back testing results. *I assume that portfolios started years earlier would also have been hit by the same % amount and I'm surprised that your results show that they haven't.*




@peter2 if all the positions were exactly the same in a backtest period your premise would be correct, different time frames result in different positions being taken at different times.

*Backtest metric doesn't translate*
The "Maximum or Minimum" metrics changes because of position selection, that's why the starting date of any strategy can be the decider if a strategy will be profitable or not, the Net Profit, AR% as well as maxDD changes & belies the expectations you have of "if it happened once it should be always reflected in all other results"

Skate.


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## Saqeeb (1 March 2020)

Time for me to post my weekly update on my *MAP *paper trading portfolio.
A wounderful timing to have started this portfolio as this will be a very good stress test for my system. As @Skate noted in his weekly reports *"let's see if the strategy can recover"*. I can only wish that I had started my paper trading a week earlier, that way I would have been fully invested and my drawdown would have been a lot more than it is for the system to recover from.

*BUYS:*
No buys for this week

*SELLS:*
7 sells this week - PNI, BVS, VUK, BIN, EHL, NEU, GOR
This leaves my portfolio with just 4 open positions. Let's see what this week will bring!


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## qldfrog (1 March 2020)

Saqeeb said:


> . I can only wish that I had started my paper trading a week earlier, that way I would have been fully invested and my drawdown would have been a lot more than it is for the system to recover from



And you can really thank whatever God of your choice that you are dealing with paper only, I so wish i had not enough (real) open position to test my draw down


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## rnr (2 March 2020)

peter2 said:


> Hmm. . . I assume the backtest results are from one sample run rather than averages of many run throughs.  If last weeks market fall produced the max DD  (indicated by the one year results) then the results from the three year sampling should have similar max DDs since they include the period producing the max DD.




Hi @peter2,

Whilst I get where you are coming from in one sense, given the longer time frame, you need to allow for alternate trades being taken which may result in a earlier or later exit (resulting in a higher/lower profit or loss) and in the application of "position score" over a larger/smaller range of available stocks, if I understand the code applied, then open positions may exist which are totally different from those taken with a shorter time frame.
Hopefully the above comments make sense!

Cheers,
Rob


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## Lone Wolf (2 March 2020)

peter2 said:


> Hmm. . . I assume the backtest results are from one sample run rather than averages of many run throughs.  If last weeks market fall produced the max DD  (indicated by the one year results) then the results from the three year sampling should have similar max DDs since they include the period producing the max DD.




I believe the answer to your question might be in the position sizing settings.



Skate said:


> @qldfrog settings used: $100K x 20 ($5k fixed PositionSize) Portfolio (Alphabetical Order)




If I understand correctly, the system will only ever invest a maximum of 100k in the form of 20 x 5K positions. No compounding.

The financial year backtest hit the recent drawdown period while still only having an account size of around 100K (fully invested). The 3 year test hit the recent drawdown period after doubling the account size (only 50% exposed)

Both tests show a similar loss in terms of dollars, but the % loss is different due to the size of the accounts.

Using fixed position size is misleading in terms of the real max drawdown you'll suffer assuming you intend to compound.


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## Newt (2 March 2020)

Lone Wolf said:


> I believe the answer to your question might be in the position sizing settings.
> 
> 
> 
> ...




Hmmm, I rarely backtest in this way, but must admit to a mindset this will be "worse case", but as you rightly point out MaxDD will be too conservative....


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## Skate (5 March 2020)

peter2 said:


> It's a good thing I like trading reversals because there's going to be plenty of them when the market sentiment turns bullish.






peter2 said:


> Many of the bullish 1st CAM-UP (green) and CAM-blue bars are also Morales & Karcher "pocket pivot" buy signals. I use them as a method to get into the trend before the obvious BO-HR.




*Lets talk about strategy design & what a strategy hopes to achieve*
@peter2 has made some great comments lately "thinking out loud" giving us an insight into his current line of thinking. A lot of forum members trade breakout strategies & I have noticed some are buying in this downtrend "which is hard for me to get my head around". It goes to prove as traders we are all different.

*Lets talk about breakouts strategies *
Most would have noticed that the most robust breakout strategies work poorly when markets are declining or selling off sharply. I know of no mechanical trend trading strategy that enters a declining market with low risk as breakouts tend to fail at a consistent rate. (shorting is not in the mix)

*"Pocket Pivots" versus a breakout strategy.*
Another quote from the book _"Trade Like an O'Neil Disciple: How We Made Over 18,000% in the Stock Market"_ talks about using "Pocket Pivots" (in the pocket trading) versus entering using a breakout strategy in shallow, sideways or tanking markets. Breakouts to a new high have a high failure rate because the breakout fails to carry through in these types of trading conditions. (as they lead to false breakout signals)

*A few more paragraphs*
_"The premise of the pocket pivot is simple, buying the bottom of a constructive base could offer optimal, low-risk entry points to begin taking a position, particularly if the stock is a proven market leader. The pocket pivot can give an investor a head start where standard breakouts are more often “fake outs” the pocket pivot buy point technique can get an investor into a stock at a lower-risk price point and thereby make it more possible for the investor to sit through a pullback if the all-too-obvious new- high breakout buy point fails initially and the stock retrenches, corrects, or sells off"

"When standard new high base breakouts that are not working in the shallow and sideways moving markets many initial buys at standard, new-high buy points can quickly turn into 7% to 8% losers within a few days. If investors had bought the breakout to new highs, the sharp pullback might cause them to be shaken out of their position. However, buying on the pocket pivot would give investors buying the stock a head start putting them in a better position to weather any pullback"_

*Summary*
I'm with Peter on this one - I'll be returning to the markets "only" when the sentiment turns bullish.

Skate.


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## Skate (5 March 2020)

peter2 said:


> Worth trying(?), absolutely, they're the underlying idea for my "bullish bars". *Many of the bullish 1st CAM-UP (green)* and CAM-blue bars *are also Morales & Karcher "pocket pivot" buy signals*. I use them as a method to get into the trend before the obvious BO-HR. There's very little that's new in the market except for the new names that are created for classic robust patterns.




*Well I've been thinking & testing*
This post reaches beyond the beginner level but never-the-less it should have some educational value. @peter2 made a remark about using the 1st Green Up-Bar of the CAM Strategy (in a bullish market) sparked my interest in coding "Pocket Pivots" using the first green bar of the CAM strategy (for the entry condition)

*The CAM Strategy versus 1st Green Bar Entry Strategy*
I was interested to know how the two strategies would fare against each other - a match off (CAM Strategy "versus" 1st Green Bar Strategy)

*Taking it one step further - 1st Green Bar Strategy "versus" Pocket Pivot Strategy*
The match off - I'm now interested to find out how the (1st Green Bar Strategy "versus" Pocket Pivot Strategy) would compare.

*Background information of finding "Pocket Pivots"*
For those who are unaware of the idea of using "Pocket Pivots" as a low risk entry it's fitting for me to give you a bit of background of the idea. FYI - It also should be noted that there are a large variety, many ways to calculate the "Pocket Pivot" but I'll be concentrating on the simple standard pivot points (the garden variety) for my example. Pivot Pockets is commonly known as trading in the pocket. Pivots Points can be use to determine directional movement and potential support/resistance levels. Pivot Points is simply an average of the prior period's high, low and close to estimate future support and resistance levels. The idea is that "Pivot Points" can be utilised as a predictive indicator.  

*Standard Pivot Points*
Standard Pivot Points begin with a base Pivot Point. A base Pivot Point is a simple average of the high, low and close to establish support & resistance areas. It worth pointing out that the high, low and close are all from the prior period.

*Standard Formula (AmiBroker formula is easily coded from this information)*
To calculate the standard pivot point below is easy to understand. (coding it to AmiBroker is simple)
1. Pivot Point (P) = (High + Low + Close)/3 (the average)
2. Support 1 (S1) = (P x 2) - High
3. Support 2 (S2) = P - (High  -  Low)
4. Resistance 1 (R1) = (P x 2) - Low
5. Resistance 2 (R2) = P + (High  -  Low)

*Pivot Points (Support and resistance)*
Support and resistance levels based on Pivot Points can be used just like traditional support and resistance levels. The support and resistance levels become important when prices decline to a support level. A bounce off support (a successful test) with a bullish indicator helps to confirm the up-turn from support. It's also worthy to note that I have not used the standard definition or code to decide when prices stall (hitting resistance levels) to exit a position as my "StaleStop" code evaluates the situation much better than the normal bearish indicators used to confirm the downturn from resistance.

*To free up this lengthy post *
The two comparison charts will be in the next post being (a) the CAM Strategy versus 1st Green Bar Entry Strategy & (b) how the 1st Green Up-Bar Strategy compares to a dedicated "Pocket Pivots" Strategy.

Skate.


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## Skate (5 March 2020)

*Weekly Strategy Backtest report *(2 comparison backtests) 
1. The CAM Strategy "versus" 1st Green Bar Entry Strategy
2. 1st Green Bar Strategy "versus" dedicated Pocket Pivot Strategy

*Parameters of the Backtest - (three Calendar year backtest)*
Weekly Strategy
Start Date: 5th March 2017
End Date: 5th March 2020
Portfolio Capital: $300,000
Positions in the Portfolio: 20
Fixed Position Sizing: $15,000 (No re-balancing)


*1. The CAM Strategy "versus" 1st Green Bar Entry Strategy*




*2. 1st Green Bar Strategy "versus" dedicated Pocket Pivot Strategy




Summary*
It's been proven to me that using the 1st Green Bar Entry Strategy (one backtest pass over a 3 year period) to enter a position works. The backtest results indicates that the CAM strategy "as-well-as" a dedicated Pocket Pivot Strategy works a little better than the 1st Green Bar Entry. 

*# For those who like to drill down into the results *
I have attached the relevant backtest reports for the 3 weekly strategies in question.

*1. CAM Strategy (three Calendar year backtest)






2.  1st Green Bar Strategy (three Calendar year backtest)






3. Pocket Pivot Strategy



*
Skate.


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## Skate (5 March 2020)

*I wish to make a final post on "Pocket Pivots" *
While researching "Pocket Pivots" it was soon apparent that there are multiple ways to calculate the "Pocket Pivot" & I was curious to find which calculation worked better (better is very subjective) & frankly the methods used to establish a "Pocket Pivot" is just pushing around the edges, meaning the differences don't really matter that much.

*The book - "Trade Like an O'Neil Disciple: How We Made Over 18,000% in the Stock Market"*
Pocket Pivots are featured in the book. Throughout the book "O'Neils disciples" explains in detail how O'Neil used "Pocket Pivots" in a discretionary manner. O'Neil's ability to read a chart ultimately decided the timing of the entry. Many times they refer to a base formation & strength of the position within a consolidation period. I find it very hard to code all the parameters that eventually goes into making a discretionary decision, frankly I believe it would be impossible with so many variables. Having a feel for the markets is not a parameter that can be coded & this "feel" is the very reason O'Neil was a freak trader.

*I've been pondering the question - How to gauge strength in a position?*
In the previous paragraph I referred to the strength of a position in base formations. How do I quantify strength?, how do you code that strength? as strength can be subjective. I believe O'Neil was looking for strength to make a discretionary call (the timing entry). I kept reading one paragraph over & over looking to garner a key word to lead me to my next move. I kept referring to the printed charts in the book looking for repeatable patterns - "then it clicked".

*The solution was in the charts*
The charts have a series of moving averages & under certain conditions they come into play - it was a matter of matching the play book with the moving average in play, sometimes it's a combination of moving averages, even reflection points within the averages.

*I'm not fully there yet*
Coding & adding these additional reflection points to my original strategy has given me a clearer picture "an insight" to better understanding why "Pocket Pivots" worked so well for the O'Neil disciples. I'm going to post the results of a new version "PocketPivots Strategy + Strength". I've burnt too many brain cells on this project already knowing that I won't be using this strategy going forward - "it was just an exercise to satisfy a curiosity" I'm like a dog on a bone, somethings I find it hard to let somethings go. (putting it down on paper certainly helps)

*Pocket Pivot Strategy "versus" PocketPivot Strategy + 'Strength'*



*# For those who like to drill down into the results*
I have attached the relevant backtest reports for comparisons. I've placed the new & improved PocketPivots + Strength Strategy backtest results first. The second report is a carbon copy from the previous post.


*1. PocketPivots + Strength* *Strategy (three Calendar year backtest)*








*1. Pocket Pivots ORIGINAL* *Strategy (three Calendar year backtest)




Phew..*
My reporting on Pocket Pivots is now complete..

Skate.


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## Newt (5 March 2020)

Fascinating posts - thanks for sharing all those thoughts Skate.
There is a lot of useful info on what constitutes tradeable volume in those books too, but very interesting to hear your thoughts on coding the price structures, particular some strategies compared to CAM.


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## peter2 (5 March 2020)

Thanks for sharing this project on "pocket pivots". I was interested in how you were going to code the pocket pivot (PP) The PP seems to be a better entry into a trend than the regular break-out of horizontal resistance. The main benefit is the smaller initial risk when compared to the standard BO-HR. Smaller initial risk allows for larger size winners. 

My recent project to code the CAM, MAP and P2 alerts into my charts highlighted the difficulty. The PPs are easily seen in hindsight but coding them was difficult. Some PPs are the same as a BO-HR bar, some are indicated by the CAM blue or green bars and others are marked by the MAP and P2 alerts. 

As mentioned, some of the PPs are the BO-HR bars while others appear in the first shallow price pull-back that tests the prior BO. The PPs that provide the best RR form below the HR and before the BO (MAP, CAM-blue).

Your Hybrid system with its triple setups probably finds a lot of PPs and this contributes to its overall success.


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## qldfrog (5 March 2020)

Skate said:


> *I wish to make a final post on "Pocket Pivots" *
> While researching "Pocket Pivots" it was soon apparent that there are multiple ways to calculate the "Pocket Pivot" & I was curious to find which calculation worked better (better is very subjective) & frankly the methods used to establish a "Pocket Pivot" is just pushing around the edges, meaning the differences don't really matter that much.
> 
> *The book - "Trade Like an O'Neil Disciple: How We Made Over 18,000% in the Stock Market"*
> ...



Just to confirm:
Results are for 5/03/2017 to today?


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## Skate (5 March 2020)

qldfrog said:


> Just to confirm:
> Results are for 5/03/2017 to today?




Correct.

*A three (Calendar) year backtest for smoothing*
Start Date: 5th March 2017
End Date: 5th March 2020

Skate.


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## Skate (6 March 2020)

*The ZIG Weekly Strategy*
Start Date: 1st January 2020
Portfolio Capital: $300,000
Positions in the Portfolio: 20
Fixed Position Sizing: $15,000 (No re-balancing)

*Weekly Update Format*
1. The "Share Trade Tracker" Dashboard
2. Portfolio performance line chart
3. Open Summary
4. Pending buy & sell positions





























*This weeks sells*
EHL
RMC

Skate.


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## Skate (6 March 2020)

*The MAP Weekly Strategy*
Start Date: 1st January 2020
Portfolio Capital: $300,000
Positions in the Portfolio: 20
Fixed Position Sizing: $15,000 (No re-balancing)

*Weekly Update Format*
1. The "Share Trade Tracker" Dashboard
2. Portfolio performance line chart
3. Open Summary
4. Pending buy & sell positions




























*This weeks sells*
ADH
AVZ
CDA
EHL

Skate.


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## Skate (6 March 2020)

*The FLIPPER Weekly Strategy*
Start Date: 1st January 2020
Portfolio Capital: $300,000
Positions in the Portfolio: 20
Fixed Position Sizing: $15,000 (No re-balancing)

*Weekly Update Format*
1. The "Share Trade Tracker" Dashboard
2. Portfolio performance line chart
3. Open Summary
4. Pending buy & sell positions





























*This weeks sells*
AVZ
CGL
EHL
RMC
VUK

Skate.


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## Skate (6 March 2020)

*The BBO Weekly Strategy*
Start Date: 1st January 2020
Portfolio Capital: $300,000
Positions in the Portfolio: 20
Fixed Position Sizing: $15,000 (No re-balancing)

*Weekly Update Format*
1. The "Share Trade Tracker" Dashboard
2. Portfolio performance line chart
3. Open Summary
4. Pending buy & sell positions





























*This weeks sells*
ADH
CAT
CCX
EOS
MCP
MNY
RMC

Skate.


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## Skate (6 March 2020)

Skate.


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## Skate (7 March 2020)

*Let’s talk about how changes in circumstances make us reflective*
An adverse medical diagnosis can cause us to reflect about current life choices & relationships. When adverse situations arise we tend to be more reflective & focused on both, life choices & relationships. The fear of the coronavirus has served such a purpose & it’s a timely reminder that the markets can plunge unexpectedly causing panic & mayhem. As traders we become reflective of our trading plan & even our trading strategy resulting in fiddling with our strategies when no fiddling is required as most strategies don't play well when the unexpected happens. (that's just a fact, not a failing)

*Let’s talk about trading plans *
With trading there are no rules & having no rules is scary. Some traders fail to do the “what if” scenario when they are formulating their trading plan. Traders without a solid trading plan wonder how to respond or what do after the horse has bolted. Seasoned traders are constantly monitoring that the horse is corralled securely on an ongoing regular basis.

*It’s time for discipline*
When you buy a position your control is now limited to executing the sell. The uncertainly of not knowing what will happen next after placing a buy order is the scary part of trading. Being disciplined by following your trading plan may at times "override your trading strategy". Most traders fail to make the distinction between their "trading plan" & their "trading strategy" - failing at time to understand that their "trading plan" overrides their "trading strategy" as trading is all about "capital preservation". How you handle your positions while controlling your emotions (the mental gymnastics) will eventually decide how successful you will be as a trader - the decider if you will live to fight another day. Trading has a high attrition rate when the going gets tough.

Skate.


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## Skate (7 March 2020)

*Emotions at work*
Multiplying the emotions of all the traders in the past few weeks & you'll soon get a sense of the complexity of the psychological forces at work in the markets at the moment. Panic can quickly turn into depression, soul searching if you have just made the correct trading decision. Making these decision can take on a new intensity when your hard earned cash is on the line, sometimes it's money “you can’t afford to lose” - the very reason why trading is so scary for beginners. These emotions can have serious consequences that can generate similar strong feelings in all of us causing a reaction to buy, double down or sell "overriding our trading plan" because we have suffered large losses while still holding a number of positions that are falling.

*Mechanical weekly system traders has had a check these past two weeks *
There are times when trading can go south for no good reason & at other times the **** can hit the fan that will be unavoidable. Traders with strategies that have inherent risks should take this time to reflect & make minor adjustments if needed, so they can take full advantage "when" (not if) the market rebounds. Strategy adjustments shouldn't be ignored when trading improves as fine tuning of a strategy is a never ending process.

*There is a saying..*
If you think your diet is going well, get into a bathing suit – then make your re-assessment. It’s the same with trading, if you think you have a good strategy, backtest it against 2011 & make your re-assessment. Meaning 2011 was not a kind year for trader's. If your strategy backtests well over this period I believe you have a good strategy for further development. (adjustments & improvements without curve fitting is essential)

Skate.


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## Skate (7 March 2020)

*Are we there yet?*
It's never clear when the markets start a correction phase, the "not knowing" is the concern of many traders trying to understand if the correction will be minor & short lived. Some traders are pessimistic by nature having a gut feeling that this correction will turn into a sharper decline lasting longer than the normal fluctuations of the markets adding to the problem. We all know & accept minor corrections are a regular occurrence but it’s worth noting that deeper corrections seem to happen every few years. These deeper corrections can last for months with losses of 20% to 30% - a recent case of the GFC in 2007/2008 losses of 50% were experienced. (ouch!!)

*There will be a next time*
Taking corrective action now & being prepared for the next downturn at some point in the future.


By making sure your investments aren’t too aggressive for your risk tolerance, the key to longevity as a trader, mental preparation is another so you can calmly execute your trading plan to the letter.

*What lies ahead* ("in my opinion")



Skate.


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## Skate (7 March 2020)

Skate said:


> *There is a saying..*
> If you think your diet is going well, get into a bathing suit – then make your re-assessment. *It’s the same with trading, if you think you have a good strategy, backtest it against 2011 & make your re-assessment.* Meaning 2011 was not a kind year for trader's. If your strategy backtests well over this period I believe you have a good strategy for further development. (adjustments & improvements without curve fitting is essential)



*Let's put a few strategies to the test & see how they handle trading in 2011*
2011 is my benchmark test, my "acid test" to evaluate any new strategy or idea. Curve fitting a strategy to handle 2011 is not the point (& discouraged) as I use 2011 exclusively for all my "Out Of Sample" testing (OOS) Recently I did a lot of work coding, testing & reporting on a dedicated "Weekly Pocket Pivot Strategy" & the virtues, methodology & formula behind the strategy.



Skate said:


> *I'm not fully there yet*
> Coding & adding these additional reflection points to my original strategy has given me a clearer picture "an insight" to better understanding why "Pocket Pivots" worked so well for the O'Neil disciples. I'm going to post the results of a new version "PocketPivots Strategy + Strength". I've burnt too many brain cells on this project already knowing that *I won't be using this strategy going forward* - "it was just an exercise to satisfy a curiosity" I'm like a dog on a bone, sometimes I find it hard to let somethings go. (putting it down on paper certainly helps)




*The Pocket Pivot strategy is not for me*
I explained that I wouldn't be doing anymore development of the "Pocket Pivot" strategy even after the results proved impressive. I made the comment _"_*I won't be using this strategy going forward". *My comment may have been "overlooked" as there was no curiosity why. A similar strategy traded by O'Neil & his disciples made them a fortune over a 7 year period. (averaged 110% per year over 7 years, not too shabby at all) If that is the case - why wouldn't I want to develop it further eventually trading it ? (as there was no interest I'll keep the reason a secret)

*# Let's put the "Pocket Pivot" strategy to my ultimate test (300k portfolio X 20 positions)*
I always use the backtest period from 1/7/2010 to 30/6/2012 - 6 months either side of 2011 - why? to be loaded with positions 6 months prior to 2011 & how those positions carried over into the next 6 months (2012). It's a simple but effective first step in strategy development. (the acid test)

*The Weekly Pocket Pivot Strategy*
Portfolio: 300k
Positions: 20
Start Date: 1/7/2010
End Date: 30/6/2012







*# How did my CAM Strategy handle 2011 (300k portfolio X 20 positions)*
Yes, it handled 2011 with flying colours. The backtest is not looking at the percentage achieved overall "but" rather if the strategy was profitable in this narrow period range.

*The Weekly CAM StaleStop Strategy *
Portfolio: 300k
Positions: 20
Start Date: 1/7/2010
End Date: 30/6/2012








*# Let's now give the MAP Strategy a go (300k portfolio X 20 positions)*
There has been interest in the MAP Strategy so I've included the backtest results for the same period. The results proved that this strategy is effective, worthy of being traded on the results achieved. But as usual "backtesting" means "Jack" to me. Backtesting is just a starting point in system development. It's so important to paper trade an idea or strategy before committing real money. Backtesting has its place & merits but paper trading is worth so much more.

*The Weekly MAP Strategy *
Portfolio: 300k
Positions: 20
Start Date: 1/7/2010
End Date: 30/6/2012




*Here is a request &/OR challenge*
Backtest your strategy & post your results in the same format that I have.

*It's really not confidential*
Rest assured by posting your results there is no information about your strategy or "secret sauce" on display. The small window of the backtest will demonstrate how your strategy would handled my "acid test". As I said before the profit percentage "isn't important" at all - but a "positive result" for 2011 is.

*I'm hoping for some involvement*
Without member involvement the "Dump it here" thread becomes less relevant. I'm doing my best to encourage an interest in systematic trading, a thread dedicated to all things educational. Mechanical system trading has been a passion of mine for a few years & I know it's a passion of others as well. Hopefully by bouncing a few of my ideas around may spark some interest in others - who knows.

*It's worth remembering*
When I post - I'm just posting information I already know.

Skate.


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## peter2 (7 March 2020)

Arrgh!  Don't remind me about 2011.
Apologies as I'm not posting results of a backtest. I'm happy sharing my real time performance for that time because I learned something very important.

I established my SMSF in June 07 and decided to manage it myself. As a complete newbie I handled the GFC like a champ. My market filter kept me safely out of the market and when the market recovered I pounced on the opportunities. I was into my fourth year of managing my SMSF and was feeling really good about my performance. 


	

		
			
		

		
	
   Then, 2011 started. This was the year of my max DD -17%. 
I struggled to beat the market. I didn't stand aside like I did during the GFC but traded through it. What a dummy. From champ to chump. The DD happened in slow motion and I didn't see it happening.


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## peter2 (7 March 2020)

My comment to the systematic traders and wannabe systematic traders is that you don't know how you're going to handle yourself in a larger draw down situation until you've traded through one and come out the other side.

Backtest draw downs are meaningless. They're just numbers. It's vital that you stick to your proven systems when you experience a draw down like we're all going through currently. The current fall in the market is putting us to the test. It's a good opportunity to see if we've got what it takes to be profitable traders.


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## Saqeeb (8 March 2020)

@Skate 's post prompted me to see how my MAP Strategy fared during the 2011 down turn.
Below are the backtest results. As @peter2 rightly noted these are just numbers and mean nothing unless I am able to stick to my system. They, however, give me confidence to trade this system!

*Backtest settings:*
Portfolio: $30,000
Positions: 20
Commission: $6.60
Start Date: 1/7/2010
End Date: 30/6/2012


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## Skate (8 March 2020)

peter2 said:


> Arrgh!  Don't remind me about 2011.
> Apologies as I'm not posting results of a backtest. I'm happy sharing my real time performance for that time because I learned something very important.
> 
> I established my SMSF in June 07 and decided to manage it myself. As a complete newbie I handled the GFC like a champ. My market filter kept me safely out of the market and when the market recovered I pounced on the opportunities. I was into my fourth year of managing my SMSF and was feeling really good about my performance.
> ...




@peter2, thanks for the raw post. I would say we have both learnt lessons from 2011 even though yours carried a financial burden. It appears luck was on my side as my trading career didn’t start until July 2015.



peter2 said:


> My comment to the systematic traders and wannabe systematic traders is that you don't know how you're going to handle yourself in a larger draw down situation until you've traded through one and come out the other side.
> 
> Backtest draw downs are meaningless. They're just numbers. It's vital that you stick to your proven systems when you experience a draw down like we're all going through currently. The current fall in the market is putting us to the test. It's a good opportunity to see if we've got what it takes to be profitable traders.




*On the money*
Your last post sums the current situation up perfectly, well done. The rapid decline of the last few weeks has caught everyone by surprise. Weekly systematic traders would have felt the burn that was unavoidable. My posts today reinforces why a trading plan is critical to our survival while reinforcing why a trading plan trumps a trading strategy.

Skate.


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## Skate (8 March 2020)

Saqeeb said:


> @Skate 's post prompted me to see how my MAP Strategy fared during the 2011 down turn.
> Below are the backtest results. As @peter2 rightly noted these are just numbers and mean nothing unless I am able to stick to my system. They, however, give me confidence to trade this system!
> 
> *Backtest settings:*
> ...




@Saqeeb, thank you for posting your backtest results & you should have confidence in your strategy. There are trading period where even the best strategies struggle against the tide.

*Comparison between our MAP Strategy* 
IMHO, the reason why our results vary maybe due to (a) the added protection a StaleStop exit that’s included in my MAP Strategy. The StaleStop exit affords me the luxury of getting off a position quicker than most. (b) Another reason might be the inclusion of a ranking filter not only of the trend but also of individual positions - filtering the wheat from the chaff before making it to the buy condition.

Skate.


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## Newt (8 March 2020)

I'm curious Skate - the PP strategy results you posted seem to have sailed through that period better than CAM and MAP, or am I mis-reading?

Here's some results from my current strategy over that difficult period, on historical All Ords, $300k, 20 positions:


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## qldfrog (8 March 2020)

acid test: 

300k 20 pos I reinvest using
SetPositionSize( 100 / maxOpenPositions, spsPercentOfEquity ); // Fixed Fractional Sizing
System 1my oldest live one) CAM based supposedly conservative entry




System2: CAM twist live, more dynamic and winding down as replaced by BBand





New system BBand with a twist (ramping up):




hope it helps


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## Warr87 (8 March 2020)




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## qldfrog (8 March 2020)

Noticed bband graph not up?I will add the graph again asap
This reflection is must welcomed as I wonder if I should wind down system2 with better paper results or my old faithful system1 both live at the moment:
Go with the bright new mistress or keep the older faithful wife..;-)


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## qldfrog (8 March 2020)

new BBand system


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## Newt (8 March 2020)

One of the indicators I put up on my Equity curve backtests is a count of weeks in DD.  The depletion of "trading morale capital" will of course depend on how deep but also how long a DD lasts.  Another tool for judging "would I really be able to keep trading consistently through such a period?".

I wonder what is the lesser evil - a strategy the quietly keeps making new highs or stays flat in this difficult period, or acceptance of a more aggressive strategy that surges quickly to significant new high but suffers a much larger DD in the difficult period (then hopefully surges aggressively to significant new highs in 2012 onwards)?

While we're flirting with mistresses  here is my weekly strategy on its usual universe (full ASX listed and delisted) with slippage modelling turned off.  I love the curves of my mistress in 2010 and 2012, but try not to notice the lengthy acid test DD length and depth bump in the middle.....

p.s. if change to usual 15 positions (versus 20 shown here), equity pushes a bit higher up to $1m before finishing around $958k.  Time to stop flirting and daydreaming now.....


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## Skate (8 March 2020)

Newt said:


> One of the indicators I put up on my Equity curve backtests is a count of weeks in DD.  The depletion of "trading morale capital" will of course depend on how deep but also how long a DD lasts.  Another tool for judging "would I really be able to keep trading consistently through such a period?".




@Newt, that is also an important metric for me as well. It's so important I have it coded into all my strategies having it displayed in every "Exploration Analysis" report.






Newt said:


> I'm curious Skate - the PP strategy results you posted seem to have sailed through that period better than CAM and MAP, or am I mis-reading?




@Newt - here's the rub. On face value the "Pocket Pivot" Strategy looks an outright winner. I measure a strategy worth by the consistency of the results not the profitability of a strategy. With all strategies there is a trade off between the two. I personally find the "consistency metric" the easiest to trade & live with.

*Warning*
This is going to be a boring long post to many but staying with me will give an insight into the amount of research that goes into any report.

*Let's talk about flaws*
Backtesting O'Neil's methodology raised a few concerns (inherent flaws IMO) but what saved O'Neil trading a "Pocket Pivot" strategy was his ability to make judgement calls using his experience leading him to "take some signals while bypassing others" - that was "IMHO" his secret in trading the "Pocket Pivot" strategy with success.

*O'Neils saving grace*
What saved the day for O'Neil was his ability to pick which signals that had the best chance of a follow through, a visual of the charts & what he gleaned was held tightly to his chest & rarely discussed. Now combine that with his uncanny ability to have a "feel" for the markets & his unique way of reading charts & the market direction - the gift he has honed over many years of trading. I now better understand when one of his disciples made a quote "trading his own account" that he had to endure a few "massive drawdowns" including some over 50% highlighting one of those flaws.

*"Pocket Pivot"*
O'Neil used a "Pocket Pivots" strategy to find initial candidates than they were filtered in a discretionary manner. O'Neil's ability to read a chart ultimately decided the timing of the entry. Many times O'Neil refers to a "base formation & strength of the position within a consolidation period".

*Research*
While I was researching "Pocket Pivots" it was apparent there are multiple ways to calculate the "Pocket Pivots" & as they say "all roads lead to Rome". As there are many different ways to code "Pocket Pivots" entry signal I decided on the most basic, passing up the more elaborate ways to get to the same place. @peter2 in a previous post gave an alternative view regarding how the entry makes a difference to the RR. (alternative views are the heart & soul of this thread)

*It's worth repeating*
O'Neil used the "base formation & strength of the position within a consolidation period" to enter a position from support, not a breakout from resistance. Entering a position from resistance is the most common way being utilised by current crop of traders. I've tested most of the common entry conditions off the "Pocket Pivots" leading me to the conclusion of "entering a position off support rather than resistance" I believe this is the best use of the "Pocket Pivot" indicator.

*Staying true*
When I coded my "Pocket Pivot" Strategy I stayed true to O'Neil's original concept of buying from a consolidation period - whereas I enter a position off a "secondary support". Yes, my code uses two "Support" lines. The first support (S1) is the consolidation period, the second support line (S2) demonstrates the strength of the position in the consolidation period. When the second support is breached this generates the buy signal. This was O'Neil's secret that I found the most difficult to code. O'Neil gauged the strength of a position by looking at the charts, using his wealth of experience.

*Remarks about the charts*
I'm posting two charts, the first chart is the "Pocket Pivots" strategy so you can see why O'Neil prefered buying in a "consolidation zone" picking the move "before the breakout" ensuring a higher RR ratio. The second chart is the "1st Green Bar CAM Strategy" buying the breakout as discussed by Peter in his previous post. (NEXT: I'll make a few additional comments that Peter has raised in my next post)

*Bullet points*
1. O'Neil would sit in a consolidation zone for lengthy periods if the underlying strength of the position was being maintained (evident by the chart)
2. My StaleStop exit "is not time dependent" as mentioned recently. My StaleStop exit code uses a few metrics to measure & ultimately deciding when momentum is slowing, stagnating, stopped or heaven forbid "retreating" to generate an exit signal. FYI - my StaleStop is not time dependant - it's a woven part of my Looping trailing stop.
3. The charts - As they say: "a picture paints a thousand words"


*# The O'Neil methodology of the Pocket Pivot Strategy (Enters off support)*








*# The 1st Green Bar CAM Strategy (Enters on a confirmed Breakout)*





Skate.


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## Skate (8 March 2020)

peter2 said:


> Thanks for sharing this project on "pocket pivots". I was interested in how you were going to code the pocket pivot (PP) *The PP seems to be a better entry into a trend than the regular break-out of horizontal resistance.*




*The Entry*
_"The "Pocket Pivots"  seems to be a better entry into a trend than the regular break-out of horizontal resistance"_, Pete you nailed it..

*Talk is cheap*
We are all conditioned to believe when starting out on our trading journey to "Buy low & Sell high" & on face value the statement resonates with most - having merit - "but" - they never explain "how to do it". Shame on them.

*Summing up the differences*
(a) The "Pocket Pivots" Strategy someways goes to rectify how to "Buy low & Sell high" by calculating Pivot Points that form Support & Resistance areas on a chart. O'Neil's novel way of entering was off "support" giving him the "Buy Low" part of the equation whereas selling positions off the Resistance gave him the "Sell High" part.
(b) All Breakout Strategies - "buy high & sell higher", well that's the plan.

*FYI *
Over a 7 year period O'Neil's Trading Strategy made an average of "110% per annum" proving the worth of trading a "Pocket Pivots" Strategy.


peter2 said:


> The PPs are easily seen in hindsight but coding them was difficult. Some PPs are the same as a BO-HR bar, *some are indicated by the CAM blue or green bars and others are marked by the MAP and P2 alerts*. As mentioned, some of the PPs are the BO-HR bars while others appear in the first shallow price pull-back that tests the prior BO.




@peter2 gave alternative views how "Pocket Pivots" can enter a position making a direct reference to the "blue & green bars" of the CAM Strategy. It's noteworthy to understand O'Neil entered multiple times after the initial entry using the (consolidation period method). Pyramiding into current positions (on pullbacks within the trend) had a multiplying factor on his returns.


peter2 said:


> *The PPs that provide the best RR form below the HR and "before the BO" *(MAP, CAM-blue). Your Hybrid system with its triple setups probably finds a lot of PPs and this contributes to its overall success.



*O'Neil knew*
_"The "Pocket Pivots" provide "the best RR" form below the HR and "before the BO"_ - Pete, you nailed it again..

Skate.


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## rnr (8 March 2020)

Hi @Skate,

If you don't mind me asking, how did you deal with O'Neil's volume requirement used to define his "Pocket Pivot"?

Cheers,
Rob


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## Newt (8 March 2020)

Warr87, I see you provided MEGAN and Expectancy in your results.  Skate has spoken on these before, but I have to confess I'm yet to "get it".  Is MEGAN relevant to this currently thread direction about comparing backtest performance over historically difficult periods?  Tried again today, but need more caffeine perhaps:
http://traders.com/Documentation/FEEDbk_docs/2009/01/cagigas.html

I suspect backtesting is a bit like strategies - there is obviously no one perfect metric that encapsulates all aspects of performance.  Over a long period we gradually learn which backtest metrics provide insight into aspects of our strategy that were built in to match our goals and personality.  I'm fairly sure there will always be something new to learn about Amibroker.  My current level of knowledge leads me to emphasise these aspects in backtests I suppose:

1.  What is the risk of going broke?  (e.g. in a Monto Carlo run how often, hopefully never, does the strategy go broke, or exceed a max acceptable DD level)
2.  What is the risk of losing faith (failing to continue following strategy signals) - %DD and length of DD typically very important here
3.  What is average CAR over an extended period of poor and excellent momentum trading time periods?
(4.  What is performance over GFC)
5.  How smooth is equity curve, what is ratio of average profit/loss
?????

Incidentally, Amibroker is insanely helpful with backtest reports.  Depending on your directory and backup structure, you probably have ever single backtest report you've even run if you do looking for the directly.

Looking at what I was doing in the first 6 months of owning Amibroker, I now just shake my head - wish I could go back and slap myself over the noggin.....


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## Skate (8 March 2020)

rnr said:


> Hi @Skate, If you don't mind me asking, how did you deal with *O'Neil's volume requirement used to define his "Pocket Pivot"?*
> Cheers,
> Rob




@rnr, when reading my answer bear in mind O'Neil was trading in a different era not to mention a different market. Translating the "Pocket Pivot" codes came down to: "horses for courses".

*Nuances*
There are a few nuances that O'Neil uses that doesn't transfer over well into our market (the "All Ordinaries") in particular Volume & Liquidity compared to the US markets. Volume & Liquidity was one of his  primary objectives, going into great detail explaining that his "Pocket Pivots" Strategy was only suited when Volume & Liquidity volumes exceeded the average - also these few bullet points added to his overall results:

(a) Only trading in a trending bull market,
(b) Trading only the most liquid of stocks (meaning the top stocks by market capitalisation),
(c) Volume & Liquidity had to exceed their previous levels over the last nPeriods (meaning they had to be trading in excessive of their average) &
(d) Discretionary calls for taking positions, O'Neil by "my definition" was a "cafeteria trader" - picking & choosing which position to enter & which positions to pass by.

*Liquidity & volatility*
With all this being considered his methodology wouldn't work in our markets because the liquidity & volatility is lacking in our top stocks. (without volatility you have nothing)

*There was a fine line*
I understand where O'Neil made his money trading a "Pocket Pivot" strategy - let me quickly explain how

*How?*
(1) By trading large cap (long & short)
(2) Pyramiding into a trend using pullbacks (something I'm not a fan of)
(3) Excessive Volume & Liquidity was also a requirement (O'Neil's sizing model fails to translate into our markets)

*I did my best*
I coded O'Neil original idea from the book, using all the filters that are applicable to our markets being of the garden variety type: a Price Filter, a Turn Over Filter, a Volume Filter, a Rate of Change Filter & now the all important addition of a "Strength Filter". The concept of my "Pocket Pivot" strategy is as close to O'Neil's ideal as possible. My final "Pocket Pivot" strategy is now tuned to our markets. The backtests results of my "Pocket Pivot" strategy are impressive - but - at other times it can suffer a series of disastrous trades because of the strength of a trend at times. The "Pocket Pivot" strategy performs at it's best under strong trending markets. It's similar to having a thoroughbred that prefers a wet track (when racing or trading you don't get to pick the ideal situation that suits your "race horse" or "your strategy")

*What I have found*
If you follow O'Neils exit rules it's a surefire way to disaster

*Here's the rub *
Trading O'Neil's "Pocket Pivot" strategy without modifications or my StaleStop exit you would need "nerves of steel" or at least have a heart as big as "Phar Lap"

*Final observation *
_"The premise of the pocket pivot is simple, buying the bottom of a constructive base could offer optimal, low-risk entry points to begin taking a position, particularly if the stock is a proven market leader. The pocket pivot can give an investor a head start where standard breakouts are more often “fake outs” the pocket pivot buy point technique can get an investor into a stock at a lower-risk price point and thereby make it more possible for the investor to sit through a pullback if the all-too-obvious new- high breakout buy point fails initially and the stock retrenches, corrects, or sells off"_

Skate.


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## Warr87 (8 March 2020)

Newt said:


> Warr87, I see you provided MEGAN and Expectancy in your results.  Skate has spoken on these before, but I have to confess I'm yet to "get it".  Is MEGAN relevant to this currently thread direction about comparing backtest performance over historically difficult periods?  Tried again today, but need more caffeine perhaps:
> http://traders.com/Documentation/FEEDbk_docs/2009/01/cagigas.html
> 
> I suspect backtesting is a bit like strategies - there is obviously no one perfect metric that encapsulates all aspects of performance.  Over a long period we gradually learn which backtest metrics provide insight into aspects of our strategy that were built in to match our goals and personality.  I'm fairly sure there will always be something new to learn about Amibroker.  My current level of knowledge leads me to emphasise these aspects in backtests I suppose:
> ...




I think @Skate would be better explaining the importance of the MEGAN ratio. I added it as a standard to all of my backtests.

I am also very interested in points #1 & 2. I don't find AB's MC to be entirely useful, including the risk of ruin. This is something particularly useful for evaluating a system. I also didn't think of adding #2. That would also be a good metric to add in the evaluation of a system.

If you have a way to add these metrics into your backtest results, let me know.


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## Skate (8 March 2020)

Warr87 said:


> I think @Skate would be better explaining the importance of the MEGAN ratio.




@Warr87 to save me making another post I’ll hyperlinks a few of my previous posts on the subject for those who are interested.

https://www.aussiestockforums.com/posts/1052081/ & here https://www.aussiestockforums.com/posts/1052241/ & here
https://www.aussiestockforums.com/posts/1052249/

Skate.


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## Saqeeb (8 March 2020)

Week 3 weekly update on my *MAP *paper trading portfolio.

*BUYS:*
No buys for this week

*SELLS:*
2 sells this week - APD and MNY
This leaves my portfolio with just 2 open positions.


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## Nina4 (9 March 2020)

I'm loving the conversations during this downturn.
Been tramping in NZ and won't be back for a few weeks.
Trying to keep informed when I have internet.
Thanks to all contributors.


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## Skate (9 March 2020)

Nina4 said:


> I'm loving the conversations during this downturn. Been tramping in NZ and won't be back for a few weeks. Trying to keep informed when I have internet. Thanks to all contributors.







These last few weeks of trading have been significant and concerning & the longer it lasts the more market & economic damage will be done. Today's panic selling reinforces that most of us don’t know what the long term impact are going to have on the markets, let alone our market. It's this uncertainty that is having the greatest impact but "we may not have seen nothing yet" compared to interruption to global supply chains. The ongoing interruption & knock on effects to global supply chains may result in further corrections to not only our market but markets in general around the world. Combine all our current issues impacting us as a society the images I'm seeing on the TV & the markets are understandable. The longer it takes to contain the spread of the virus the longer it will take to restore confidence for markets to turn the corner & start to improve.




Skate.


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## Skate (9 March 2020)

*Let's talk about something other than doom & gloom*
We have a new member @jmbonni who recently started a new thread "djia-next-day-forecast" - on face value it appears to me to be an interesting topic. The charts posted in his thread are attempting to look into the future predicting a forward looking pattern.

*So let's talk about patterns *
While on the topic of patterns & pattern recognition it maybe the perfect opportunity to discuss the value they may hold. Machine Learning has been discussed in other threads & lightly touched on in "Dump it here" thread so a follow-up post maybe in order. The advances being made in the medical industry combining that with Neutral Networks this may be the future of trading as we know it. My apologies in advance - my comments below have already been made in the "djia-next-day-forecast" thread, but worthy of repeating to keep most of my posts corralled in one thread.
*
Trading applications*
Pattern, chart patterns in particular & how they apply when it comes to trading plays a large part in how I trade. As a mechanical system trader I'm constantly looking for repeatable chart patterns that can be coded & backtested confirming the validity, profitability & if that pattern can be turned into a trading strategy.

*Chart Patterns*
Patterns are everywhere. Some Patterns are deadly leading us into making a poor or wrong decisions. In the picture below Knowing that these two tables are "EXACTLY" the same size - why won't our mind allow us to see it. Sometimes what we see our mind  reality not align for us.




*Stocks are just like people*
Understanding traders past behaviour, may allow you to predict their future behaviour. Stocks are just like people, because that is who makes them look the way they do. The buying and selling creates an emotional ebb and flow pattern & just like people, stocks can be unpredictable, but certain emotions and behaviours do occur regularly. Chart patterns tell us a story of what happened in the past but unfortunately not will happen tomorrow.

*We see patterns everywhere*
Humans have a unique ability to spot patterns that has been fine tuned by evolution & we superbly adapted to understand the visual world. Pattern recognition is for our survival as a species & it's the very reason a cloud formation looks like a bunny or Elvis. Sometimes our mind deceives us presenting pattern when in fact there isn't any. We unconsciously take for granted how good we are we at making sense of what our eyes show us & sometimes we don't appreciate how tough sometimes being shown a new patterns without an explanation is difficult for our visual system to solve.

*A few squiggles & the patterns needs no explanation *
Looking at the squiggles below, you will start to see a pattern - your mind will be jumping to conclusions - trying to understand what the pattern is.

*Is your mind guessing - what does the squiggles look like to you?*




Skate.


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## Saqeeb (9 March 2020)

*Is your mind guessing - what does the squiggles look like to you?*

View attachment 101133


Skate.[/QUOTE]

Our mind is obviously tricked into recognising the pattern as the body of a zebra, but with a lot of effort and concentration you can also see a face within the squiggles towards the right side of the image. Our brains tend to assume the pattern from the larger picture unless we force it to look at the smaller details.


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## Skate (12 March 2020)

peter2 said:


> If you've read my ASX portfolio threads then you'll be familiar with how I use a market filter in a long only portfolio. The filter guides my trade management and helps me manage the total portfolio heat. When the market filter is downgraded it's time to tighten the exit stops and reduce the number of open positions. My outlook was biased. It's not an easy thing to create and maintain a balanced outlook on the market. There are too many psychological biases to overcome. I'm interested in your thoughts on what we may use.




*I'm posting about one of my filters (the "GTFO" Filter)*
@peter2 has raised some very good points about exit/stops & their relationship to a Market Filter. I've exited all my positions (28th February signals) & now I'm in (100% cash) sitting on my hands these last few weeks. The last few weeks have highlighted the importance of an "exit strategy" & why the timing of an exit is so critical. I thought it would be appropriate to make a post about the added protection I have built into all my strategies, the "GTFO" filter. 

*The key element*
Capital preservation is the key to the longevity of a trader. 

*Let's talk about my "GTFO" filter* (a filter I haven't discussed before)
I've posted on many occasions that I'm a wimpy trader & when a position falters I'm off it quick smart. The "GTFO" filter decided that I had to sit out the last quarter of 2018 going into 100% cash. A few weeks ago the "GTFO" filter resulted in a mass exit of all my open positions whereas normally there would only be a few sells at any one time. This decline was sharp & quick & I've given back some open profits in doing so. I'm currently in 100% cash sitting on the sideline. Giving back open profits always hurts but it's the way I trade.

*It's worth remember*
Open profits & loses = "Belong to the Market"
Closed Profits & loses = "Belong to you"

*How does the "GTFO" Filter work?*
The GTFO filter has one job & that job is to protect my capital when trading goes pear shape quickly. The GTFO filter has only activated a "mass exit" twice since 2015, once in (2018) & again a few weeks ago. The GTFO filter has saved my bacon twice, the lesson I'd learnt from the (2008 & 2011) trading period. 

*"GTFO" is a crude acronym* 
The acronym stands for "Get The Fu#k Out" & exit the position quickly "with no questions asked". My "StaleStop" exit strategy is a recent addition to my "GTFO" filter. The StaleStop exit limits my Drawdowns where the "GTFO" filter protects against a pending disaster. If the "GTFO" filter gets it wrong no harm done "it's better to be safe than sorry". If the pending doom didn't eventuate, I have the option to re-enter that position again.

*What does a "GTFO" filter look like*
It's a pattern of two filters agreeing by sitting on top of each other & when this occurs it's time to exit. It should be noted the "GTFO" filter works equally well in all time frames. 

*What does the "Coloured Ribbons" at the bottom of the chart mean?*
Green = Index Filter on
Red = Index Filter off
Yellow = Caution 
Yellow sitting on top of Red = "EXIT IMMEDIATELY" 

*Let me show you the "GTFO" pattern*
This is the chart of the All Ordinaries to show the "GTFO" filter in action & how accurate it is.








*Now let me show you the same pattern on an actual position *(recently sold)
28th February 2020 the "GTFO" filter activated & every open position (in all my strategies) had a sell signal. The volume of open positions took 4/5 hours to complete the sell orders for Monday's pre-auction whereas normally it takes 10 minutes a week to enter the buys & sells in total. (FYI - all the sells settled at the opening auction price) 

*Charts *
The next few charts are actual positions executed in the last few weeks because of the "GTFO" filter activating. 

*FYI *
When the "Yellow & Red Ribbon overlap" in a currently held position the "GTFO" filter signals a sell. If the exit is a "yellow arrow" its either (a) StaleStop exit or (b) a "GTFO" exit. The "Magenta arrow" is a Trailing Stop Exit. The "Colours" on the charts identifies conditions important to me while making the chart easier for me to read (I'm a visual guy that's why colour coding helps)











*The GTFO Filter*
In the next post I'll upload a few more charts to display the "GTFO" filter in action over the past few weeks.

Skate.


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## qldfrog (12 March 2020)

Interesting, i will make sure i will add a more stringent exit after our experience of the last weeks
Too late for the losses on my system


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## Skate (12 March 2020)

*More charts*
Others may be interested. The Exploration Analysis "sell signals" for the 28th February never seem to finish, they went on & on (the screen capture below is about a quarter of the list)






































































Skate.


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## Skate (12 March 2020)

*Why upload so many charts?*
It's a multitude of examples how the "GTFO" filter works. Also it displays why the "GTFO" is an integral part of my Looping StaleStop "proving" its effectiveness as far as I'm concerned.
























*The "GTFO" filter is my umbrella *
No one likes to be caught in a rain storm. Before leaving home if it looks like rain (cloudy skies) I prepare & carry an (umbrella). With two confirmations (1) clouds & (2) falling water droplets, confirms it's raining so it's time the umbrella went up to protect me from getting wet. The "GTFO" filter does exactly the same, two confirmations (1) Index Filter is off & (2) My optimized ROC filter sitting on top of it - my umbrella goes up, err.. I mean "I'm off the position quick smart"

Skate.


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## Skate (12 March 2020)

qldfrog said:


> Interesting, i will make sure i will add a more stringent exit after our experience of the last weeks
> Too late for the losses on my system




@qldfrog, you "live & learn" - traders will learn from this experience.

*It's not easy*
Profiting from the stock market is exceedingly difficult to do consistently over a long period because the market is irrational & reflects the emotions of all the participants. The market moves in a manner that has little appreciation for what we might think. It's handy having a suite of tools giving you a fighting chance when the unforeseen happens. Some traders don't minimise their risk by selling quickly & decisively. Being quick & nimble to act when the "proverbial hits the fan" & being quick to retreat and sell at the first sign of trouble really helps. In fact, I’ll go so far as to claim that a smart wimp who runs and hides when the going gets tough generally produces better results than brave souls who are proud of their ability to suffer great monetary pains while they wait for their convictions to be rewarded.

Skate.


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## peter2 (12 March 2020)

Ah ha! I was unaware of your GFTO exit. That's why I was confused by the lower DDs of your 3yr vs 8mth backtest results shown earlier.  Thanks for the additional educational information.


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## qldfrog (12 March 2020)

Skate said:


> @qldfrog, you "live & learn" - traders will learn from this experience.
> 
> *It's not easy*
> Profiting from the stock market is exceedingly difficult to do consistently over a long period because the market is irrational & reflects the emotions of all the participants. The market moves in a manner that has little appreciation for what we might think. It's handy having a suite of tools giving you a fighting chance when the unforeseen happens. Some traders don't minimise their risk by selling quickly & decisively. Being quick & nimble to act when the "proverbial hits the fan" & being quick to retreat and sell at the first sign of trouble really helps. In fact, I’ll go so far as to claim that a smart wimp who runs and hides when the going gets tough generally produces better results than brave souls who are proud of their ability to suffer great monetary pains while they wait for their convictions to be rewarded.
> ...



I think what hit me and probably other system traders was the severity of the fall: so fast so quick:
I have stale and SL based on usual criterias but were too conservative..most so near the exit last friday it was not funny...
we learn with pain,
let's be honest nothing dramatic yet:
last friday 5k in the red on 2*100k in systems,and 85k already back in cash will be much worse this week but by Monday I will not have much left in the market ....., and 3rd system is only having minor losses as its start timing was good
Hopefully by Sunday night my stop losses and exit algos will have been refined and avoid any repeat.
And next time, I could save my profit!! Not disillusioned yet


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## Newt (12 March 2020)

Thanks for showing that final layer of protection in more detail Skate.   3 weeks from (almost) new equity highs to close to Max expected DD was quite a ride.  My entries and exits and emergency exit are more conservative than your trading style Skate, but finally all cash early this week and at least in one piece to start again when the weather eventually clears.

Work and life have been exceptionally busy over last month, and generally pleased that my strategy has still fitted in with time and energy constraints in a (hopefully!) worst case scenario.  Pleased to have survived with more life/trading lessons learned, but will have to adjust my day-dreaming Excel spreadsheet with compounding returns where I was on track to buy a small island within 20 years  

Strange thing is emotionally these few weeks have "hurt" less than smaller $ DDs in 2016 and 2018.  Would like to think that reflects greater trading maturity - but perhaps my brain is yet to catch up with world events.


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## Skate (13 March 2020)

*Update*
The paper trading of the "Zig Strategy" has been discontinued..

*Why?*
The strategy didn't meet expectations...

Skate.


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## Skate (13 March 2020)

*The MAP Weekly Strategy*
Start Date: 1st January 2020
Portfolio Capital: $300,000
Positions in the Portfolio: 20
Fixed Position Sizing: $15,000 (No re-balancing)

*Weekly Update Format*
1. The "Share Trade Tracker" Dashboard
2. Portfolio performance line chart
3. Open Summary
4. Pending buy & sell positions






























*All remaining positions are being sold* *on Monday* (as per the strategy)
APD
GOR
IDX
MAH
RUL
SLR

Skate.


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## Skate (13 March 2020)

*Update*
The paper trading of the "Flipper Strategy" has been discontinued..

*Why?*
The strategy didn't meet expectations...

Skate.


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## Skate (13 March 2020)

*Update*
The paper trading of the "BBO Strategy" has been discontinued..

*Why?*
The strategy didn't meet expectations...

Skate.


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## Rsthree (14 March 2020)

Well I certainly picked an intresting time to get back into trading!!

I should probably be grateful for the startup delays I've had. Eg. My new PC was lost in transit  (I have the replacement now), long learning curve with Amibroker, systems testing etc. I'm usually very impatient so this is a good lesson.

I started my paper trading a couple of weeks ago but with the current market my results will be very skewed and my trend following system will provide no incentive to part with my cash.

On a positive note, once the dust settles there should be some bargains for the more experienced investor, which means I may be sitting on the side line. I'm not sure that my constitution will be equipped to handle the volatility. 

I'm guessing I'll have some time up my sleeve to get my skills and systems up to scratch while waiting for the craziness to subside. I'll be monitoring the toilet paper index very closely.


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## Skate (14 March 2020)

Rsthree said:


> Well I certainly picked an intresting time to get back into trading!! I started my paper trading a couple of weeks ago but with the current market my results will be very skewed and my trend following system will provide no incentive to part with my cash. On a positive note, once the dust settles there should be some bargains for the more experienced investor, which means I may be sitting on the side line. I'm not sure that my constitution will be equipped to handle the volatility. I'm guessing I'll have some time up my sleeve to get my skills and systems up to scratch while waiting for the craziness to subside. I'll be monitoring the toilet paper index very closely.




@Rsthree you are in good company, even seasoned traders take this time to reflect on their trading past results & in particular how they can make improvements using this recent experience.

*Unforeseeable & unavoidable*
The rapid decline of the last few weeks has caught everyone by surprise. Systematic traders & traders in general would have had no time to react as the rapid drop was unforeseeable & unavoidable. My posts today reinforces why having a trading plan is critical to our survival as a trader. There have been some great comments lately, members "thinking out loud" that would be worthy for you to read.

*Trading systems need market luck*
Don't be disheartened, follow your plan, prepare & self educate while at the same time knowing that most robust breakout strategies work poorly when markets are declining or selling off sharply. I know for a fact "Trend Trading Strategies" buying into a declining market tend to fail at a consistent rate.

*Read these comments*


peter2 said:


> Actually the graphs hide quite a few mistakes in the last two weeks. The perfect exit would have been the GTFO exit after the first huge bar down. (Thanks @Skate I like that acronym)





Newt said:


> We're fortunate to have a decent "brotherhood" of regularly posting system traders in recent years on ASF. It certainly helps psychologically being able to benchmark both good and bad times against others here.





Newt said:


> We're fortunate to have a decent "brotherhood" of regularly posting system traders in recent years on ASF. It certainly helps psychologically being able to benchmark both good and bad times against others here.





qldfrog said:


> ok another terrible week, I will work on the exit code this week end so that this does not happen again





sptrawler said:


> Next time you will be a lot better prepared, there is no way you can learn this experience, other than living it.





MovingAverage said:


> Crazy times indeed. We all need to sleep at night so we all need to do what allows us to sleep.





frugal.rock said:


> have also decided to let the portfolio sit inactive for a while, active trading is also doing my head in





myrtie100 said:


> My drawdown is 18% and that's not including this weeks drop, I'm not looking forward to updating the spreadsheet tomorrow. The trick is to keep your emotions in check, don't freak out and follow your plan





InsvestoBoy said:


> I bet you, if you buy the breakouts that start when the market stops going down, they will be long term winners.





Knobby22 said:


> I bet you many are not actually on the sidelines and have been frozen into inaction. I, as a fundamental investor sold everything 3 weeks ago but held on to 15% of my shares, I do not know why in hindsight.





qldfrog said:


> I will definitively carry on work to improve my design




*Pay particular notice of this quote*


peter2 said:


> My comment to the systematic traders and wannabe systematic traders is that you don't know how you're going to handle yourself in a larger draw down situation until you've traded through one and come out the other side. Backtest draw downs are meaningless. They're just numbers. It's vital that you stick to your proven systems when you experience a draw down like we're all going through currently. The current fall in the market is putting us to the test. It's a good opportunity to see if we've got what it takes to be profitable traders.




*Commandments*
This might be the ideal time to list the 10 trading commandments from one of the best traders ever. I'll list one commandment per post so other don't skim read them as they hold a wealth of information.

Thanks for the idea..

Skate.


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## frugal.rock (14 March 2020)

Rsthree said:


> Well I certainly picked an intresting time to get back into trading!
> I'll be monitoring the toilet paper index very closely.



Your timing is impeccable!
It's not hard to envisage decent returns in a year or so for portfolios starting soonish...
Good luck with the TPI toilet paper index... ! It's gonna drop faster than a plopper... indicating oversupply... some get rich quick sucker's will end up with big roll mountains.
A TPI index would be an interesting indicator when studied country by country. Not so much for current situation, but for development, population growth and growth economies.
Are there any real TPI's out there?
I guess after you see the bog/ date roll aisle fully stocked again...

F.Rock


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## Skate (14 March 2020)

frugal.rock said:


> Your timing is impeccable! - It's not hard to envisage decent returns in a year or so for portfolios starting soonish




@frugal.rock, you made it into my list of quotes "to give others a sense of current sediment" of members. @Rsthree gave me the idea to list the 10 commandments in order from the book "Trade Like an O'Neil Disciple: How We Made Over 18,000% in the Stock Market" as they will have educational value for beginners & a refresher for the seasoned trader.

*THE FIRST COMMANDMENT*
The First Commandment among the many rules and principles applicable to life in general and stock market investing in specific that we heard many times from Bill was “Never get carried away with yourself.” The basic idea is that one should remain impervious to the illusions and trappings of wealth, as they often lead one to become “carried away” to the point where excess of one sort or another ultimately leads to one’s demise. This is critical.

Skate.


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## Skate (14 March 2020)

*THE SECOND COMMANDMENT*
The ability to come back from periods of difficulty with courage and persistence is embodied in O’Neil’s Second Commandment: “Never operate from a position of fear.” If you are fearful in the markets, either as a result of taking a recent loss or some other mistake, or even as a result of being nervous about the level of risk you are taking, then you are putting yourself in the position of making an unclear and hence incorrect decision. Either adjust your position to eliminate the fear, or come to the realization that if you are chronically fearful in the markets, then you have no business investing in them.

Skate.


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## Skate (14 March 2020)

*THE THIRD COMMANDMENT*
O’Neil deals with detractors and critics by turning their negativity into a positive. When it came to naysayers and backbiters, O’Neil simply invoked what we have labeled O’Neil’s Third Commandment, and that is that “You learn more from your enemies than you do from your friends.” In typical O’Neil fashion, a negative is turned into a positive, and criticism from third parties is seen as little more than a potential learning experience. 

Skate.


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## Skate (14 March 2020)

*THE FOURTH COMMANDMENT*
In this way, we became acquainted with O’Neil’s Fourth Commandment: “Never stop learning and improving, and the only way to do this is by constantly analyzing your mistakes and correcting them.” As we all know, everyone constantly talks about their successes in the stock market, but few focus on their mistakes. O’Neil makes a point of focusing on his mistakes.

Skate.


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## Skate (14 March 2020)

*THE FIFTH COMMANDMENT*
To this end, O’Neil invokes the Fifth Commandment: “Never talk about your stocks.” The tendency to get excited and tell everyone how well you are doing in the markets is one that O’Neil abhors. By sticking to a simple policy of never talking about your stocks, you eliminate the ego-feeding urge to trumpet your success. Try implementing this rule, and see how it changes your perspective on how you handle your stocks.

Skate.


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## Skate (14 March 2020)

*THE SIXTH COMMANDMENT*
The Fifth Commandment may in fact help you stick to the Sixth Commandment: “Don’t get giddy at the top,” because that is usually the time to be selling. If Bill O’Neil were given a choice of being able to use only one type of chart interval, he would pick weekly charts. At least this is what he once told us, and there is good reason for this. First of all, O’Neil shuns reacting to news and other noise, including unusual intraday price swings. Intraday charts to O’Neil are virtually useless. O’Neil is on the hunt for “big stocks” that are heavily trafficked in by institutional investors, who buy and sell their stock positions over a period of many weeks, sometimes even months, so their activities are not likely to be picked up by an intraday chart, and in most cases probably not by a daily chart either. For this reason, weekly charts are the preferred “visual tool of choice.”

Skate.


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## Skate (14 March 2020)

*THE SEVENTH COMMANDMENT*
Thus the Seventh Commandment is, “Use weekly charts first, and daily charts second. Ignore intraday charts.” Weekly charts eliminate a lot of the noise inherent in short term fluctuations while providing meaningful clues with respect to potential accumulation by institutional investors.

Skate.


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## Skate (14 March 2020)

*THE EIGHTH COMMANDMENT*
The use of weekly charts as one’s primary method of discerning accumulation in a particular stock is also in keeping with what we call the Big Stock Principle. Find a big stock and then find a way to own it in size. 

Skate.


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## Skate (14 March 2020)

*THE NINTH COMMANDMENT*
Probably one of the most important rules that O’Neil taught us, and one which we have not always found it easy to abide by is the Ninth Commandment, “Be careful who you get into bed with.” O’Neil believes strongly that trust and integrity between two people are the most important variables in life and in business. When you do find people with whom you share deep integrity and trust, they become colleagues worth keeping.

Skate.


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## Skate (14 March 2020)

*THE TENTH COMMANDMENT*
One of O’Neil’s overwhelming traits is his intense dedication and passion for the markets, something that led us to postulate the Tenth and Final Commandment, “Always maintain insane focus.” Maintaining “insane focus” doesn’t mean becoming a workaholic, since this implies that one is simply a mindless slave to one’s job. What it means is finding one’s passions in life so that the “work” that we do as we express these passions of ours is never really work. Not everyone is lucky enough to work at what they love, but to O’Neil it was something to strive for in life, and maintaining insane focus is another way of saying that people should always seek and pursue their passions in life, one way or the other. 

Skate.


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## Skate (14 March 2020)

*We must thank Newt *
@Newt suggested a great book to read a few posts back - "Trade Like an O'Neil Disciple: How We Made Over 18,000% in the Stock Market" It amazing when you re-read a book or  re-read a post you tend to glean more from it the second or third time round. Newt, your post suggesting the book has given rise to a multitude of follow up posts from "Pocket Pivots" to a barrage of educational material. In saying this a "thank you is not enough"..




Skate.


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## myrtie100 (14 March 2020)

Skate said:


> *We must thank Newt *
> @Newt suggested a great book to read a few posts back - "Trade Like an O'Neil Disciple: How We Made Over 18,000% in the Stock Market" It amazing when you re-read a book or re-read a post you tend to glean more from it the second or third time round. Newt, your post suggesting the book has given rise to a multitude of follow up posts from "Pocket Pivots" to a barrage of educational material. In saying this a "thank you is not enough"..




I went looking for the book and found this PDF.
http://1.droppdf.com/files/crKL5/trade-like-an-o-neill-disciple-2010.pdf


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## Knobby22 (14 March 2020)

Commandment number 10 is a difficult one.
I consider my focus and concentration as excellent but like all humanity it can wax and wain.


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## Newt (14 March 2020)

Thanks Skate.  I'm not a CANSLIM trader/investor, but the books by O'Neill and his "disciples" made sense, could be programmed and backtested (to a reasonable extent), and sounded "right".  Perhaps its just a natural resonance with a style of trading that fits me, but think they're all worth buying and reading many times.

Have been fascintated actually by not only your comments, but your interpretation and programming of their work.  Opinions and interpretations are good, but nothing beats cold hard data and backtests backing them (opinions) up - something that isn't always provided and should be a warning for scepticism when absent.  

Suspect we'll have quite a few months now to reflect on what we wish to be in the markets when the time is right again.


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## Saqeeb (14 March 2020)

Week 4 - Weekly update on my *MAP *paper trading portfolio.

What a roller coaster of a week it has been! Good thing about following a system is that I do not have to make any emotional decisions and sell when it asks me to. 

I sold 2 postions last week *APD *and *MNY*.

*This week's scan results:*
*BUYS:*
No buys for this week

*SELLS:*
1 sell this week - *NSR
*
This leaves my portfolio with just 1 open position, *ELD*.


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## Nina4 (16 March 2020)

I'm out of the bush in NZ catching up with the latest posts.
Thanks again to all the contributors.

It looks like it's been a bloodbath in the markets.
I had placed market sell orders on all my holdings before I left Australia knowing I wouldn't be able to actively manage my account while away.
I don't wish, pray or gamble when it comes to the markets so it was my only option.
It's nice when your trading plan keeps you out of a large drawdown.

I've got two weeks of self isolation to look forward to when I come home next week so there'll be plenty of time to study and plan for the next phase.


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## Skate (16 March 2020)

Nina4 said:


> I'm out of the bush in NZ catching up with the latest posts. Thanks again to all the contributors. It looks like it's been a bloodbath in the markets. I had placed market sell orders on all my holdings before I left Australia knowing I wouldn't be able to actively manage my account while away.




@Nina4 you are in good company, Marcus Padley back in 2007 cashed out his entire portfolio to save an impending argument with his wife of being "constantly on his phone" rather than engaging with his family. Surprisingly the GFC hit whilst he was enjoying his family vacation & cashing out prior made him look like a genius. It just goes to prove "Randomness" plays a big part in our lives. 

Keep enjoying your NZ holiday & thanks for checking in.

Skate.


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## Skate (16 March 2020)

Nina4 said:


> I've got two weeks of self isolation to look forward to when I come home next week so there'll be plenty of time to study and plan for the next phase.




@Nina4 the current market downturn is the time for reflection, looking for ways to better prepare for the next major correction. Knowing we all have to do better next time round is the key to improvement. As a systematic trader, I rely entirely on technical analysis, I know nothing about companies, I'm not trading for dividends or franking credits - they are just the icing on the cake. 



Saqeeb said:


> What a roller coaster of a week it has been! Good thing about following a system is that I do not have to make any emotional decisions and sell when it asks me to.




*Self Belief in our Trading Strategy *
Mechanical system traders have exactly the same ambition as discretionary traders, the ambition to buy positions that keep going up forever. The difference between systematic traders & discretionary traders is that we have (or should have) a trading plan that allows us to never miss a night’s sleep. A quality trading strategy should also incorporate a strong, reliable exit & as @Saqeeb has said "I do not have to make any emotional decisions and sell when it asks me to". Systematic trading eliminates the "discretionary decisions" process - sometimes making a judgements call is prone to have a high degree of failure because of the (50/50 - "80 rule") for those who understand.

*Systematic Traders should be decisive*
Systematic Traders should be unemotional & decisive in their actions. Mechanical system traders know from the moment they buy a position they have a system with a high probability of going up. It's not about predicting the future, no-one can do that but they can accept things do change & at times trading can go horribly wrong getting them into a pickle. The difference is that when they do they act, they don’t standby to see what will happen next, they follow their strategy, they see the market as a battlefield, a one on one fight. They know they are in a war with an emotional herd, unpredictable at times. Capital preservation, utilising a correctly timed "exit" wins the war.

*As Nina has pointed out *
Good traders constantly analyse, adapt, educate & improve - that's one of our strengths.

Skate.


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## Skate (16 March 2020)

bigdog said:


> The ASX 200 looks set to push higher again on Monday. *According to the latest SPI futures, the benchmark index is expected to open the week 54 points or 1% higher.* This follows an incredibly strong finish to the week on Wall Street on Friday night. The Dow Jones jumped 9.4% higher, the S&P 500 index raced 9.3% higher, and the Nasdaq index stormed 9.4% higher.




*Well today didn't go as expected*
There are traders at the moment holding shares whilst the markets are in free fall. Some have outwardly justified that they are not worried by exclaiming they are in it for the long haul so they haven’t sold anything yet "even justifying" that it's too late to sell now (that was a week ago) while others have responded by declaring "I've held these positions this long I might as well keep holding them".

*Fear is setting in*
Those same traders are getting fearful if today selling is any indication as they are realising we may have another GFC style correction on our hands believing the bottom could still be a long way off. It appears some attitudes have shifted thinking it would be better to sell & come back in later, hopefully when the shares have sold down further, purchasing them cheaper sometime in the future.

*I'm just expressing my opinion*
Let's not get into a debate about fundamental traders verses technical traders but as a 100% tech guy these past few weeks highlights the shortcoming of a fundamentalist. Traders who use fundamental analysts are good at identifying companies with good management that make money (as well a myriad of other things) - they often get the “what to buy" part correct but they but they sometimes fall short getting the “when to buy” timing correct because they declare that you can’t time the market.

*It's all about timing*
Trading using technical analysis gets not only “what to buy" but also "when to buy”. Buying good companies at the wrong time or price can be a recipe for disaster & (IMHO) if you are not able to get the “when” correct (the timing) you can start off being behind the "eight ball" as you are simply relying on the hope that in the short term your analysis is borne out in the share price in the long term.

Skate.


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## Skate (16 March 2020)

*The GTFO indicator*
I recently posted about how the GTFO indicator works that may have been confusing to some. I've been using the GTFO indicator long before combining a StaleStop exit into the mix. The StaleStop exit came about because some positions were being held too long when momentum had slowed realising those funds could be deployed elsewhere. The GTFO is my get-out-of-Jail card & after re-reading my previous posts may have given some the wrong idea of its functionality. 

*It's a crude measure*
The ROC filter of the GTFO indicator is tuned (optimised) to the XAO Index Filter "off period". The GTFO indicator is only deployed against individual positions. A mass exit of all positions is rare but the GTFO often kicks me out of individual positions over time. 

*When do I sell?*
You first have to consider all your holdings as individual trades not as one portfolio because that’s what they are. Your portfolio is a collection of individual trades & every stock presents its own individual trading challenge, its own separate battle to fight. No trader is smart enough to make one decision that will be successful in exiting every position at the same time but the GTFO indicator has displayed that it has this ability twice now. It's important to remember that selling positions should be done on their own merits, the GTFO indicator activates a mass exit only when trading across the board goes pear shape.

*When do you get out of the markets completely?*
Half the reason traders have trouble getting out of the markets "in one go" is because it’s close to impossible in making a "grand deliberation" when the market are in free fall. Occasional those few "up days" when the market are in free fall only adds confusion to the mix. My GTFO is a rough & crude measure but somehow seems to work well for me - the StaleStop combined with the GTFO indicator works hand-in-glove complimenting each other. The GTFO/StaleStop indicator combined into my looping variable trailing stop certainly adds value to my strategies. 

Skate.


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## ducati916 (17 March 2020)

Skate said:


> *1. I'm just expressing my opinion*
> Let's not get into a debate about fundamental traders verses technical traders but as a 100% tech guy these past few weeks highlights the shortcoming of a fundamentalist. Traders who use fundamental analysts are good at identifying companies with good management that make money (as well a myriad of other things) - they often get the “what to buy" part correct but they but they sometimes fall short getting the “when to buy” timing correct because they declare that you can’t time the market.
> 
> *2. It's all about timing*
> ...




1. I think that this simply reflects a misconception with regard to FA. Intelligent FA also incorporates timing into both purchase and sales. Also, I think nowadays, FA will also incorporate charts into their thinking. It is more that the chart only forms a variable in the overall analysis rather than the final arbiter.

2. What we are actually discussing are 'drawdowns'. Mechanical systems have drawdowns. Any and all trading methodologies encounter drawdowns. What is important is whether the 'system/strategy' is profitable over time, not whether it experiences drawdowns.

The more interesting variable is investment of available funds. From following this thread, it is fairly clear that mechanical traders are looking to keep close to 100% invested, recycling funds as exits are hit. In this way a return is being earned on total capital.

Clearly in a market wide turndown, for mechanical based systems, 100% exits are required, otherwise you are stuck and the entire system grinds to a halt. Obviously the sooner you exit, the better.

This is contrasted with the FA approach where less than 100% would be invested. You hold dry powder. This reduces returns when markets trend for long periods in one direction as you will not have all funds invested. However, in market dislocations as we have currently, it allows for investment of those funds at attractive pricing.

Further, that 'cash' (held by FA) need not be idle. Numerous Options strategies are available against held positions which generate attractive returns (because of the heavy leverage in Options) and provides an answer to the TA chaps who advocate 100% funds in the market as equity positions.

Various trading strategies are not necessarily better/worse, they are simply different. The difference is to allow for differences in emotional makeup and approach. There is no one size fits all in trading/investment.

jog on
duc


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## Dona Ferentes (17 March 2020)

Am I meant to get outraged?

Tax deductible iceberg experience?  







> More than 100 Australian doctors, dentists and nurses taking part in a health convention on board a cruise ship are stranded off the coast of Chile.




Coronavirus, almost as big a bitch as karma.


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## Dona Ferentes (17 March 2020)

Dona Ferentes said:


> Coronavirus, almost as big a bitch as karma.



Or, do you think we're stupid?







> She had travelled to Austria last month to conduct research at the Medical University of Vienna, and at Vienna General Hospital, taking time off to go on a team-building snowboarding trip



now in 14 day self-isolation


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## Skate (18 March 2020)

bigdog said:


> “*I don’t think we’re going to be able to trust movements in the market for some time*,” said Tom Martin, senior portfolio manager with Globalt Investments.




*What a worrying comment *
After reading the comment made by Tom Martin in @bigdog "nyse-dow-jones-finished-today-at" thread totally summed it up for me. Systematic trend traders rely heavily on technical analysis to pick the "price movements" & in trading those price movements profitably it's dependent on the consistency of those signals. Until the erratic behaviour, the "wild gyrations" of the markets cease I will be not be able to recommence trading.

Skate.


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## Skate (18 March 2020)

frugal.rock said:


> *If consolidation or stalling starts after any BO, I'm out as quick as a jack rabbit*, because, and as @Skate says, 'selling is a decision that is easily reversed and cheap', or words to that effect, chunked into bite sized paragraphs of course! Thanks Skate.




@frugal.rock has highlighted one of my concerns "knowing when" is the optimal time to "hop off" a position as quick as a "jack rabbit" so it's timely I make a post "chunked into bite sized paragraphs of course" to answer my rhetorical question.

*I'm torn*
Like most, I've been soul searching looking for improvement in timing the exit a little better. I don't know if I'm disappointed or happy that "at-this-stage" I can't find any improvements, there is nothing that could have caught the rapid fall in the markets any sooner than the indicators I currently have. In hindsight making a "discretionary call" at the first sign of trouble or trading a daily system would have saved a few dollars but in the scheme of things the saving would have been negligible.

*How to minimise losses*
System trading is not about making easy money - it's about tilting the odds of success in your favour by minimizing losses. You will still need to enter positions at the right time but your exit serves a dual purpose of limiting losses whilst at the same time providing a mechanism to take profits "short circuiting" your emotion. If you execute your exits diligently you will find each position will be sold on its own merits without having to make some impossible call to exit all your positions at once.

Skate.


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## Rsthree (18 March 2020)

ducati916 said:


> 1.
> Various trading strategies are not necessarily better/worse, they are simply different. The difference is to allow for differences in emotional makeup and approach. There is no one size fits all in trading/investment.
> 
> jog on
> duc




This resonates with me!

In my previous foray into trading I used technical indicators to get into a stock but I had a number of filters to qualify a stock for my chart list analysis.
I excluded exploration miners & tech research stocks, they had to be producers. I also used some basic fundamental filters like debt, cashflow, pe. Liquidity was a also a factor, but I was prepared to make some compromises for shining stars

My exits were set a just below the stocks trading range, but if the range too volatile then it wouldn't meet the risk profile.

I have no idea if my approach was delivering better results than a vanilla trading system, but it made me feel better in terms of risk. I guess that all these the rules could have been back tested (I did have fundamentals data in my previous trading software) but it would have been messy.

This time around I would like to be more system focused to reduce the number of variables and the ratholes they can lead to in the decision process.


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## investtrader (20 March 2020)

I've been more worried about my business than trading, so just back here having a bit of a look. Skate I like your term GTFO indicator. Great name. As someone who has been through the 2008 crash I ran for the hills weeks ago. Loosely my GTFO indicator is if I see a 10% drawdown than doesn't feel right - I'm out. I did leave a gold position(mistake) and another which is actually still open. I'm not that smart, just chicken!!!
Now I'm seeing some great value ( not talking about my TF system) and thinking maybe put some cash into some ultra high quality in my Super Fund. But when to buy??? 
As a random point of interest I track some different types of portfolios. Quant style plus just fundamental. Been doing this for years and years. The portfolio that has held up amazingly well is Intelligent Investors 'Never Sell List". I won't share it here as it is a paid subscription. But It has the best businesses n Australia ( their term). example CSL, which is not yet a buy. Total 16 businesses.
Any way , some random thoughts.


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## Skate (20 March 2020)

investtrader said:


> Now *I'm seeing some great value* ( not talking about my TF system) and thinking maybe put some cash into some ultra high quality in my Super Fund. *But when to buy???*  Any way , some random thoughts.




@investtrader thanks for detailing your "random thoughts" - seasoned traders realise there are times when opportunities rise to the surface, sometimes buying those opportunities work out while other times you do wonder "what was I thinking"

*Timing the markets*
Systematic Trend Traders rely heavily on "timing the markets" buying & selling positions at the wrong time is a recipe for disaster. Whereas positions purchased on "perceived value" is a different kettle of fish altogether where timing is irrelevant in the scheme of things as the holding period is irrelevant. 

*We all have "Set & Forget" / "Never Sell list"*
I call it my "Buy & Hold Portfolio"

*But when to buy???*
Timing the purchase of "Set & Forget", "Never Sell List" or a "Buy & Hold Portfolio" is not worth the worry. Once you buy a position on "perceived value" it's important to get in the correct headspace because you will not pick the bottom of this current cycle or any cycle for that matter - if you do buy at the bottom it's luck not skill. To answer your question of "when to buy?" is quite simple, use your trading skills to make that decision & live with it. I can guarantee you this, the fluctuation of the next few weeks/months will bear no resemblance to the value in a few years from now, so "why worry" in the short term. 

*I just purchased & it went lower !!!!*
"Bloody hell, I'm pi$$ed" - this is a common emotion, but if the reverse happens & it goes up in value you are "punching the air". Self-punishment is typically a coping mechanism because as traders we are motivated to avoid financial harm. 

*Long term purchases*
"Perceived value" purchases rely on the hope that your analysis is rewarded in the long term not in the short term.

Skate.


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## investtrader (20 March 2020)

Very good advice. I guess my 'when to buy' is mainly about the macro picture. When the number of new cases starts to recede, then we will see a sustained rally. I think. Who knows. So I agree with your view.


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## Skate (20 March 2020)

investtrader said:


> The portfolio that has held up amazingly well is Intelligent Investors 'Never Sell List". I won't share it here as it is a paid subscription. But It has the best businesses n Australia ( their term). *example CSL, which is not yet a buy*.






investtrader said:


> I guess my 'when to buy' is mainly about the macro picture. When the number of new cases starts to recede, *then we will see a sustained rally*. I think. *Who knows*. So I agree with your view.




@investtrader this "perceived value" style of trading is not dependant on a "sustained rally" but buying in the "hope" that sometime in the future the price will go back to the mean - using our trading experience. I imagine there will not be a trigger for upside volatility in the short term & having money sitting in cash is unproductive. Making large investments in quality shares at a lower price has three benefits (1) Price appreciation over time (2) Dividends being paid along the way & (3) Idol money being put to work.

*Two recent purchases *
I have recently purchased $200k of each (1) BHP & (2) ANZ for the three reasons I mentioned above. (buy = aqua line on the charts)

*Charts - a picture paints a thousand words*
I'll throw up 3 charts, BHP, ANZ & CSL that you have highlighted. The "aqua line" on the chart of BHP & ANZ is my buy price. Looking at CSL (Dividends & Price appreciations is lacking IMHO) I'm in agreeance with you "*CSL, which is not yet a buy"

ANZ











BHP










CSL, as you say: "which is not yet a buy"*
Below explains why CSL falls short of my expectations & is not on my buy list
*
CSL







*
Skate.


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## Skate (20 March 2020)

The MAP strategy reporting will be back, just not anytime soon..

Skate.


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## Rsthree (20 March 2020)

investtrader said:


> Very good advice. I guess my 'when to buy' is mainly about the macro picture. When the number of new cases starts to recede, then we will see a sustained rally. I think. Who knows. So I agree with your view.




I've set up a watch list of all the stocks that were trending strongly before the bomb went off. I'll be monitoring those over the next few months, working on the assumption that if they haven't gone broke then they may resume their trend.


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## Skate (21 March 2020)

Rsthree said:


> I've set up a watch list of all the stocks that were trending strongly before the bomb went off. I'll be monitoring those over the next few months, working on the assumption that if they haven't gone broke then they may resume their trend.




@Rsthree, it appears you're not so rusty after all as your plan to monitor strong trending stocks in your watch list comes from experience.


Lone Wolf said:


> (a) *Many system traders stick to one system that only works in one market type and build in a safety net to control losses when conditions aren't ideal.* But does a (b) *good discretionary trader adjust their methods to match the expected market?* (c) *Finding good repeating patterns to trade is a starting point. Knowing under what conditions those patterns work is another point.* Being able to anticipate when the conditions will be right for the patterns you want to trade is probably where I would struggle the most.




*A post from April 2013 *
@Lone Wolf comments from April 2013 resonated with me back then as it does to this day. There is so much value in his post. "It's Pure Gold"

*This sound like me (@Skate)*
_(a) "System traders stick to one system that only works in one market type and build in a safety net to control losses when conditions aren't ideal"_

*This sound like (@peter2)*
_(b) "A good discretionary trader adjust their methods to match the expected market"
_
*Our end game *
_(c) "Finding good repeating patterns to trade is a starting point. Knowing under what conditions those patterns work is another point"
_
Skate.


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## Skate (22 March 2020)

ducati916 said:


> *Flat markets, with chop, can characterise the 'bottom'. This type of market (could) present difficulties to purely mechanical based traders?* I'd be interested to hear their opinion on this (Skate, Peter, QFrog, et al).




@ducati916, you have made a great post asking a very good question along the way about how mechanical system traders handle flat, choppy & declining markets. I've picked a period around the time I started out on my trading journey (23rd March 2015 to 26th February 2016) a period of time where the All Ordinaries (XAO) meets your market conditions. The XAO chart in my next post shows not only a flat market but also a declining market which is a period of concern not only to mechanical based traders but all traders in general.

*Short posts are always appreciated*
Previously @frugal.rock highlighted his concerns of "knowing when" is the optimal time to "hop off" a position as quick as a "jack rabbit" - it's timely to make a few posts & comments to address his concerns when to exit in a falling market. I also want to make a comment about a post by @gartley & his indicator while answering "duc's" question as comprehensively as possible. I'll be using charts from my PANDA Strategy - a system that uses an indicator by John Ehlers whilst displaying a bit more about the "GTFO" indicator.

*Style of posts*
@kahuna1 posts are always a good read, lengthy I have to agree but that's only because he has a lot to say & I like his double spacing between paragraphs. I'll be breaking my posts into a few as I also have a lot to say keeping the length of my posts within limits, staying with a style I believe will keep a readers interest - that being "chunked into bite sized paragraphs"



gartley said:


> To answer your question I have run the charts on the day after the peak in the market. Do they repaint? In this instance: NO. Do they ever repaint: YES but not by much, and I have done a statistical analysis and they repaint approx 14% of the time. As you said, no one can predict the future. *These indicators are cycles based, and I have used the lowest lag filter I can find for the Trend Indicator the Hull. Having said that, the Hull is not actually a zero lag filter and I used an 8 period offset to centre it. *That's still 8 periods of lag which is much better than 43 periods when using a simple MA for an 86 period average. From the remaining 8 data points I have created an estimate by way of an algorithm. The signal FT I am using a weighted MA but it's offset by only 3 bars, so it's even better.





gartley said:


> It's not always ahead of price, it can lag by in sync or be ahead. *The weakness in the approach is in slow grinding markets.*




*Killing two birds with one stone*
In answering the "duc" I'll be using charts from my PANDA strategy, a strategy that isn't too shabby, explaining how John Ehlers mathematical genius helps in my trading. There is so much information out there so there is no reason why we have to re-invent the wheel. John Ehlers ideas are pure magic "but" his parameter settings or any parameters I've found on the net "just don't work" for our markets - so be careful applying his idea to your trading system. 

*It's all about indicators*
Building robust trading strategies that can detect & adapt to market conditions can be a real challenge & failure to do so can often result in poor trading performance & drawdowns. So, how can we build more robust trading strategies that adapt to market conditions as they change? @gartley explained his method whereas my PANDA Strategy uses John Ehlers variable-period (adaptive) exponential moving average method.

*Nice quote*


gartley said:


> *"The best trading educational book you can read is the one written by yourself"*




More to come...

Skate.


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## kahuna1 (22 March 2020)

Agreed. I tend to ramble ... or explain so a novice can follow. 

Cant please all and at times none.

Take care


----------



## Garpal Gumnut (22 March 2020)

Five things to help stop the spread of coronavirus
The World Health Organization is advising people to follow five simple steps to help prevent the spread of COVID-19:







 1. Wash your hands






 2. Cough/sneeze into your elbow






 3. Don't touch your face






 4. Stay more than 1m away from others






 5. Stay home if you feel sick

gg


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## Skate (22 March 2020)

Skate said:


> @ducati916, you have made a great post asking a very good question along the way about *how mechanical system traders handle flat, choppy & declining markets*. I've picked a period around the time I started out on my trading journey (23rd March 2015 to 26th February 2016) a period of time where the All Ordinaries (XAO) meets your market conditions. The XAO chart in my next post shows not only a flat market but also a declining market which is a period of concern not only to mechanical based traders but all traders in general.




*The period *
The (23rd March 2015 to 26th February 2016) XAO chart shows not only a flat market but also a declining market which is a period of concern not only to mechanical based traders but all traders in general. Well first off, the trading results were acceptable under the circumstances. How did a mechanical system handle a flat, choppy, declining market? I'll let the charts do the talking.








*The Backtest result*
The PANDA Strategy between (23rd March 2015 to 26th February 2016)




*In the next post*
The next post I will display a few charts showing how nibbling away on a up-trend & getting off using the "GTFO" indicator has its benefits.

Skate.


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## ducati916 (22 March 2020)

Ok, those were rather tame wiggles.







How about some real wiggles?

The most recent 'Bear', which was 2008, was kinda V shaped and would have worked really well for mechanical traders such as yourself who followed the system with a GTFO and then re-entered on signals.

The 2008 Bear was however a financial bear.

I think we are looking at a very different proposition currently. Hence, I'm looking at the historical bears, where, there were wiggles of serious amplitude.

jog on
duc


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## Skate (22 March 2020)

ducati916 said:


> Ok, those were rather tame wiggles. How about some real wiggles? Hence, I'm looking at the historical bears, where, there were wiggles of serious amplitude.




@ducati916, I'll post a few charts from the period (23rd March 2015 to 26th February 2016) as I don't have historical data going back that far. The charts between the date I've listed will still have educational value displaying how to trade profitably when the markets are declining. I'll mark up a few charts & then the rest of the charts others can decipher.

*The Charts*
The (23rd March 2015 to 26th February 2016) is between the "aqua" vertical lines. The charts show not only the entry but also the exit, (the GTFO exit) when the XAO index was flat & declining, a period of concern to all traders in general.
















































*More to come*
In the next post I'll explain the motor that drives my PANDA Strategy. The explanation will go someway to explain the similarities between @gartley low lag indicator & John Ehlers indicator.

Skate.


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## Skate (22 March 2020)

gartley said:


> These indicators are cycles based, and I have used the lowest lag filter I can find for the Trend Indicator the Hull. Having said that, the Hull is not actually a zero lag filter and I used an 8 period offset to centre it. That's still 8 periods of lag which is much better than 43 periods when using a simple MA for an 86 period average. From the remaining 8 data points I have created an estimate by way of an algorithm. The trend indicator suggests the trend, the signal FT is for entries and exits within that trend. So I just follow the buys and sells that are generated.




@gartley, John Ehlers has a series of low lag indicator & even one of his indicators is call the "Zero Lag" indicator which is a "furphy" - but John Ehlers mathematical skills are unquestionably the best I've seen to consistently pick clean entry points. His variable-period (adaptive) exponential moving average indicator is no exception. 

*Be careful*
All John Ehlers indicators of recent are just rehashed indicators that are decade old - repackaged & renamed.  

*The PANDA Strategy *
The heart of my PANDA Strategy is John Ehlers DSMA indicator. The deviation-scaled moving average is an adaptive moving average that rapidly adapts to volatility in price movement. It accomplishes this by modifying the alpha term of an EMA by the amplitude of an oscillator scaled in standard deviations from the mean. The DSMA's responsiveness can be changed by using different values for the input parameter period.

*What's so special about the DSMA?*
The DSMA is a data smoothing technique that acts as an exponential moving average (EMA) with a dynamic smoothing coefficient. The smoothing coefficient is automatically updated based on the magnitude of price changes. I've chosen the standard deviation from the mean to be the measure of this magnitude. The resulting DSMA indicator provides substantial smoothing of the data even when price changes are small while quickly adapting to these changes, a win/win scenario.

*Trade with caution* 
If you research the DSMA indicator just be careful as John Ehlers idea has been "mongrelised" beyond belief, getting the coding & parameter for the entry has been a challenge but rewarding. 

Skate.


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## Skate (22 March 2020)

*The ZIG Strategy*
The DSMA indicator had been incorporated into my ZIG Strategy - currently under evaluation because of signals repainting. The DSMA resolved the repainting of the signals so I'll give a condensed explanation how it was achieved.

*The Peak & Trough is used as a call signal (ONLY)*
I've used the peak & the trough to call a Deviation Scaled Moving Average Indicator (DSMA) for the entry signal, the exit is another kettle of fish. As explained in my previous post the "DSMA indicator" is an adaptive moving average that features rapid adaptation to volatility in price movement & it accomplishes this adaptation by modifying the alpha term of an EMA by the amplitude of an oscillator scaled in standard deviations from the mean, it's a bit of a mouth full but it's only a few lines of code. The DSMA has been around for many years but rarely used as far as I know. I've adapted the DSMA’s responsiveness by changing different values for the input parameter period.

*It's an all round indicator*
The DSMA indicator is well suited for any trend-following system (PANDA Strategy included) The DSMA indicator was adapted & modified for the ZIG strategy eliminating the repainting of signals that the ZIG-ZAG indicator suffered from.

*What's so special about the DSMA?*
The DSMA is a data smoothing technique that acts as an exponential moving average (EMA) with a dynamic smoothing coefficient. The smoothing coefficient is automatically updated based on the magnitude of price changes. I've chosen the standard deviation from the mean to be the measure of this magnitude. The resulting DSMA indicator provides substantial smoothing of the data even when price changes are small while quickly adapting to these changes, a win/win scenario.

*The original ZIG indicator*
I thought I had solved the repainting issue with the ZIG-ZAG indicator by only using the "ZIG side" of the formula but on occasions it repainted a few signals. With the signal repainting occasionally I felt it wouldn't be an issue as they were far & few between. I had intended to sell the repaints on the next open "as-the-fix" but after reading @rnr helpful hints I had to do a complete rethink to solve the repainting issue.

*Summary*
The ZIG indicator in its current form has been decommissioned as it fails to handle current trading conditions.

Skate.


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## Saqeeb (22 March 2020)

Week 5 - Weekly update on my *MAP *paper trading portfolio.

My system has finally exited the last open position. The system will now be fully in cash after Monday.

*This week's scan results:*
*BUYS:*
No buys for this week

*SELLS:*
1 sell this week - *ELD*


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## Newt (22 March 2020)

Skate said:


> @gartley, John Ehlers has a series of low lag indicator & even one of his indicators is call the "Zero Lag" indicator which is a "furphy" - but John Ehlers mathematical skills are unquestionably the best I've seen to consistently pick clean entry points. His variable-period (adaptive) exponential moving average indicator is no exception.
> 
> *Be careful*
> All John Ehlers indicators of recent are just rehashed indicators that are decade old - repackaged & renamed.
> ...




Thanks for sharing on PANDA Skate.  You have no real reason to do so, other than giving to the ASF community.  I had the opportunity to digest a couple of Ehler books late last year while on various flights and work trips but haven't found time/motiviation to explore his ideas further.

Just knowing someone has found value and parameters that work for a strategy is inspiration enough sometimes for others to push a bit harder.  Who knows how much time we'll have soon for system development and backtesting... 

Stay safe everyone


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## gartley (24 March 2020)

Skate said:


> @gartley, John Ehlers has a series of low lag indicator & even one of his indicators is call the "Zero Lag" indicator which is a "furphy" - but John Ehlers mathematical skills are unquestionably the best I've seen to consistently pick clean entry points. His variable-period (adaptive) exponential moving average indicator is no exception.
> 
> Skate.




Hello Skate,
None of what I use is based on Ehlers work or indicators. This is something that I have been working on for 15 years originally based on the work of Hurst and James Maggio and has undergone a lot of trial and error. As mentioned to  a reply in another thread about repainting. One indicator does not at all, the other does a small percentage of the time and by with a negligible change in the curve as proved in a historical graph. Any indicator based on closing price repaints assuming price is changing and until that bar is almost complete.
For me an indi that repaints a small % of the time but keeps you in the right side most of the time, far outweighs a useless lagging indicator that does not repaint.


----------



## gartley (24 March 2020)

Further to last post. This morning a buy was signaled on the AUS200 off the 3h chart. These trades always taken and not knowing if this a counter trend or not initial TP(50%) is set at value of 3hr 20 EMA of 14ATR at time of trade and SL moved to BE for the rest. SL set to 1.5X ATR. To understand if this move will be anything more sustained I consult the daily Trend Indicator which at the moment has not crossed above -100 as such the trend is still assumed down. A cross above -100 can only be generated by higher prices or wait till tomorrows opening to confirm and check again.


----------



## Skate (24 March 2020)

gartley said:


> Hello Skate,
> None of what I use is based on Ehlers work or indicators. This is something that I have been working on for 15 years originally based on the work of Hurst and James Maggio and has undergone a lot of trial and error. As mentioned to  a reply in another thread about repainting. One indicator does not at all, the other does a small percentage of the time and by with a negligible change in the curve as proved in a historical graph. Any indicator based on closing price repaints assuming price is changing and until that bar is almost complete. For me an indi that repaints a small % of the time but keeps you in the right side most of the time, far outweighs a useless lagging indicator that does not repaint.






gartley said:


> Further to last post. This morning a buy was signaled on the AUS200 off the 3h chart. These trades always taken and not knowing if this a counter trend or not initial TP(50%) is set at value of 3hr 20 EMA of 14ATR at time of trade and SL moved to BE for the rest. SL set to 1.5X ATR. To understand if this move will be anything more sustained I consult the daily Trend Indicator which at the moment has not crossed above -100 as such the trend is still assumed down. A cross above -100 can only be generated by higher prices or wait till tomorrows opening to confirm and check again.




@gartley, where have you been? Your recent posts are so informative with educational value that is very close to my current thinking about system coding (I'm very impressed). It's taken me a few years to accept that successful traders are not perfectionists knowing we all have losing trades, that's why money management, stop losses & indicators (tools) are so important.

*Indicators*
Our species use indicators (more often then anyone realises) to make our next decision & trading is no different. We tend to use our "pet" indicators that gives us a high probability entering a trade at the correct time, (timing is everything in this game). The perfect trading system or approach does not exist, we all know this but Ehlers & Hurst may give us the opportunity to incorporate some new ideas to our way of thinking about the markets & market timing.

*Tools*
Any good trader know's that using one tool is not enough, using indicators in conjunction with each other has an ability to improve any strategy. At this point let me make a disclaimer - we all know that we shouldn't rely on the signals to be accurate all the time, just most of the time. I will be looking closely at your last post to decipher the methodology behind the charts as I believe many others will also do.

*J.M. Hurst in his book "Cycle Trading without the Rocket Maths" is my next read*
I have read somewhere that Hurst never actually described the mathematics behind his systems so it will be interesting to learn more. John Ehlers work dives deep into the mathematical cycles of the markets & I imagine Hurt will do much of the same as the title of his book suggests. It's quite an old book, so what was old may be new again, if you know what I mean.

Skate.


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## Skate (24 March 2020)

Newt said:


> Thanks for sharing on PANDA Skate.  You have no real reason to do so, other than *giving to the ASF community*.  I had the opportunity to digest a couple of Ehler books late last year while on various flights and work trips but haven't found time/motivation to explore his ideas further. Just knowing someone has found value and parameters that work for a strategy is inspiration enough sometimes for others to push a bit harder.  Who knows how much time we'll have soon for system development and backtesting.




@Newt, I have found value in Ehler ideas as his mathematical equations are clean & simple. The maths to arrive at his Deviation Scaled Moving Average Indicator (DSMA) is simply stunning to say the least. The DSMA indicator is only a few lines of code that smooths the data of an exponential moving average (EMA) that incorporates a "dynamic" smoothing coefficient that is "updated" based on the magnitude of price changes. (brilliant)

@gartley has been been fine tuning "Hurst and James Maggio" work for 15 years, something that I find stimulating & fresh. We all post in the "Dump it here" thread in the hope of "giving to the ASF community" by sharing ideas, knowledge & experience. Educational posts displays a level of caring by passing information on to others in the hope of helping, what they do with the informations depends if it engages them, without engagement "thinking on a deeper level" won't happen.

Skate.


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## gartley (24 March 2020)

Skate said:


> @Newt, I have found value in Ehler ideas as his mathematical equations are clean & simple. The maths to arrive at his Deviation Scaled Moving Average Indicator (DSMA) is simply stunning to say the least. The DSMA indicator is only a few lines of code that smooths the data of an exponential moving average (EMA) that incorporates a "dynamic" smoothing coefficient that is "updated" based on the magnitude of price changes. (brilliant)
> 
> @gartley has been been fine tuning "Hurst and James Maggio" work for 15 years, something that I find stimulating & fresh. We all post in the "Dump it here" thread in the hope of "giving to the ASF community" by sharing ideas, knowledge & experience. Educational posts displays a level of caring by passing information on to others in the hope of helping, what they do with the informations depends if it engages them, without engagement "thinking on a deeper level" won't happen.
> 
> Skate.



Hello Skate,  I have not come across DSMA before but what you describe sounds somewhat similar to the Kaufman Adaptive MA and possibly the Mcgingly Dynamic. Correct me if I'm wrong. 
The Hurst without the rocket math book ( from tradingfives) is a simplified version of Hurst's price projection using centered moving averages and has been around for 15 years. Firstly the dominant cycle is determined in a time series and thereafter harmonics of this are chosen as periods of simple moving averages ( centered). Just as the MA's start to roll over in a turning market, straight lines are extrapolated into the future. The intersection point is then determined and the distance to price price is found and the same distance is projected to determine a price projection. It should be noted this concept of determining a price projection can only be done when price is half wa through it's cycle or swing. Hurst also used FLD's (future lines of demarcation) for the same purpose. He created these lines using 2 period MA using midpoint of bar, and then offseting this into the future. Peter Eliades ( do a youtube search) has done a lot of work with this and will soon release specialized software that dealswith this concept. His calls have been spectacular to date). Below is my version of price projection on a monthly chart of the XAO. That projection called for 4570, but has been exceeded. This not because the projection was wrong but rather because it soemtimes "loops" and is part of a bigger cycle but I have not looked at a bigger timeframe yet. These are extreme events we are dealing with in the market 
	

		
			
		

		
	



	

		
			
		

		
	
 at the moment.....


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## Skate (24 March 2020)

Skate said:


> "*thinking on a deeper level*"




*Bankcard*
If I may take a small indulgent to explain about being offered a job with Bankcard in 1986 (it was so long ago)

*Background*
I was a manager in a large organisation & I was tasked with overseeing the installation of "Bankcard" facilities throughout all the department of the organisation. It was a big deal back then, two weeks was allocated to install & train as Bankcard was relatively new to Australia but not in parts of Europe (today, it plug-and-play as any business owner knows). 

*Idol chit-chat*
Looking over his shoulder making small talk I asked if "he enjoyed his job" I was shocked to find out he was a "recruitment officer" for Bankcard. Because of the high demand for Bankcard he was temporarily assigned to "installations" for a few months. One question led to other when he said "I have an exam with me" if you are interested in a position with us. Nah, I told him I already have a career path but "as I knew a lot about Bankcard" I agreed to do the exam anyway.

*It was a 2 hour exam*
We were in a dedicated temperature & humidity controlled computer room (remember this was back in 1986) The computer was used for data entry & had a few desks in the room. He opened his brief case & placed the exam face down on the desk. He preceded to pull out a "half pencil" & "what I thought was an old fashion fob watch" out of his brief case that turned out to be a "stopwatch". I commented that this is a bit serious. 

*Exam Rules*
He went on to explain there are only a few rules (1) Once you start the test you are not allowed to speak for any reason (2) You have a maximum of 2 hours to complete (the time to complete the exam is critical for the evaluation of the candidate). (3) I was not to turn over the exam paper till instructed to do so. The exam paper was one sheet of A4 paper & one small pencil, my mind was racing wondering what the test would involve. To keep the post to a reasonable length so I'll break it into two parts. (to keep the interest going) 

Skate.


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## Skate (24 March 2020)

Moreover...

*The stopwatch was started*
I was nervous when he said "turn over the exam, you have two hours, no talking"

*I turned over the paper*
I was taken aback, I thought it was going to be an exam about Bankcard. I was confident as I had done my homework, I knew the process well but it didn't prepare me for what I was looking at.

*Bloody hell*
There were no questions, just some funny hieroglyphics - at first I didn't understand what it all ment let alone what the answer could be. I was just about to ask a question - till I realised the reason for the "no talking" rule. When I said I was finished he said 4:52 - I thought it was the current time as it was well into the afternoon but it was a reference to the time I had taken to completed the exam "4 minutes 52 seconds" that's why I remember the time exactly.

*Turning over the paper*
When I turned over the exam paper this confronted me. The hieroglyphics below was "all" that was on the paper.




Skate.


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## Skate (24 March 2020)

gartley said:


> Peter Eliades (do a youtube search) has done a lot of work with this and will soon release specialized software that deals with this concept. His calls have been spectacular to date).




@gartley thanks for your concise in depth answer with additional charts that raises more interest to understand your methodology. Peter Eliades appears to have credibility as his YouTube channel has 1,450 subscribers. 

*FYI*
Peter Eliades youtube channel can be found here:  https://www.youtube.com/c/stockmarketcycles

*Educational references are always handy*
The YouTube videos are short in duration so I'm planning to consume them all tomorrow before reading Hurst book. Thanks for the additional explanation of your trading methodology. I'm sure we'll all be scrambling to learn more to better understand.

Thanks again for your posts in the "Dump it here" thread...

Skate.


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## qldfrog (24 March 2020)

defeated, sought take step back, these are  letters 8 for B etc,nope 
then suite what is next?  (in this case next triplet or just linear sequence)
or 
if suite :what is the intruder?
Anyway, I would have failed
I had a quick discard at mirror, inverse etc 
As I do not find the answer i reply here, obviously if you find the answer , if there is one, do not spoil it and PM @Skate 
BTW, if confronted to such a test, i would not even try to do it and would just say thanks, no time for that and this type of employer


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## Skate (24 March 2020)

qldfrog said:


> defeated, sought take step back, these are  letters 8 for B etc,nope then suite what is next?  (in this case next triplet or just linear sequence) or if suite :what is the intruder? Anyway, I would have failed I had a quick discard at mirror, inverse etc As I do not find the answer i reply here, obviously if you find the answer , if there is one, do not spoil it and PM @Skate BTW, if confronted to such a test, i would not even try to do it and would just say thanks, no time for that and this type of employer




@qldfrog I was told "real" candidates weren't informed if they pass the exam on-the-day but rather informed by letter a week later. He was shocked I got the answer correct, let alone so quickly. I wish I could remember his name but he remarked he was looking for people who had specialised problem solving skills.

Skate.


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## qldfrog (24 March 2020)

A shame, problem solving was my forte..and outside the box thinking but probably not on this quizzes


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## Skate (25 March 2020)

Garpal Gumnut said:


> To help stop the spread of coronavirus - Wash your hands to help prevent the spread of COVID-19




*Proper Hand Washing Technique*
If you think you are washing your hands correctly, think again. I've been washing my hands the wrong way after watching this short 45 second video - it's a real eye opener !!

*Pretend the black ink is soap! *
Also don't forget to wash the tips of your fingers, thumbs & under your fingernails.



@Garpal Gumnut thanks for posting the WHO health warnings in the "Dump it here" thread.

Skate.


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## gartley (25 March 2020)

Yesterday, I posted a buy signal off the 3h which at the time was not confirmed as the start of a new trend off the 3h. My position is to take all trades when signalled and employ suitable money management in the process. Today with the 3 hour trend indicator above 100, the 3h trend is confirmed and remains in effect until we get a cross below 100. As long as this stays at or above 100, new longs can be initiated by a cross of the signal FT back above midline if it falls back below. The daily Trend Indicator also suggests this trend will persists with a marginal cross above -100 already in place.


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## Skate (27 March 2020)

bfhoon said:


> *Is there a beginners guide or a good read up on the net somewhere*. Maybe something like the ASX explained for dummies? I have really taken a step back now after reading alo on this forum seems like *alot of people lose money on the ASX *and the only people that make it are the very smart investors with *bucketloads of experience*.





bfhoon said:


> *There is a lot to learn and I'm as keen as mustard* would have been a bit better if I started researching 6 months ago. Its hopefully going to be a fun journey and an educational eye opener for me.





bfhoon said:


> Bit of background - first time ASX investor, *I'm willing to hold for 3-5 years to make a profit or even much longer*, don't mind dividends either but not fussed if I invest in a no dividend paying company. *Eventually I would really like to have a fair bit of money tied up in the ASX that could potentially earn me at least 50 to 60K after tax via dividend payments*. I know this is no easy feat and from some rough calculations and some extremely good stock picks I'm thinking I would at least need to pick the best dividends stocks and probably have *at least $800,000 invested for that kind of return*.





Smurf1976 said:


> Some beaten up large caps which have come to my attention include: ANZ, CIM, FMG, MQG, NAB, ORG, RIO, SCG, STO, WBC. Disclosure - I've recently bought some of these.




*Inspiration for another post*
I'm constantly amazed that some people throw thousands of dollars at the markets with zero education, money they have worked hard for only to read that in a few short years they have managed to lose most of their nest egg through investing. The reason we invest/trade is to grow our nest egg not the reverse.

*Investing rather than trading*
@Smurf1976 without even realising has given @bfhoon some really sound investing advice to make a profit over a 3-5 year period, opportunities like these don't come around all that often. @bfhoon has already stated: _"Eventually I would really like to have a fair bit of money tied up in the ASX that could potentially earn me at least 50 to 60K after tax via dividend payments at least $800,000 invested for that kind of return" _I've recently invested $800k equally in ANZ, BHP, CBA & MQG - @Smurf1976 calls them "beaten up large caps" which is a good analogy. If those 4 positions can reclaim their former glory over the next 2 years with dividends along the way they have the potential to represent a good risk/reward investment that will not only meet @bfhoon's criteria but hopefully exceed it - only time will tell.

*When it comes to trading it's not a level playing field*
There is no way any of us sitting at home with limited information, slow internet service, using off the shelf trading software can find better opportunities than the professional trader or the multi nationals that spends millions of dollars on research having easy access to company management. These companies employ teams of traders who have the sharpest, fastest & sometimes the most "unethical minds" in the world - "that's who you are trading against". 

*Summary*
Investing can sometimes be a little more easier to mentally handle than trading.

Skate.


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## Skate (27 March 2020)

Skate said:


> Investing can sometimes be a little more easier to mentally handle than trading.




*It's worth remembering*
You're up against traders who will have more experience, more information & much more money than you, so leave all your dreams of making quick and easy money behind & concentrate on your survival. Your absolute first goal should be to "learn how to stay in the game" - that's your most important job.

*Successful trading*
Successful trading is like getting pregnant. Everyone congratulates you when you manage it but no one asks how many times you got fu¢ked first. You need to mentally prepare yourself to accept losses & on occasions prepared to accept a few larger losses as losing is part of the trading game.

*It's complicated*
First off, when it comes to risk you need to find your level that you are willing to accept as an acceptable level of risk varies between individual traders. There is a difference between Trading & Investing but in both cases, evaluating whether a position represents a good level of "risk/reward" is essential.

*Capturing a price trend*
There is a difference between buying into great companies & investing in companies just to capture a profit from a price trend. A lot of money can be made doing both regardless of the aspects of the ongoing businesses. Traders try to capture the small price trends within a long term trend where investors "over time" hopes to capture the full price trend discarding the minor fluctuations in price along the way. 

*Position management is critical*
Recent times highlight the importance of managing positions whether you are a trader or an investor. Without managing your positions a "Set & Forget" strategy can sometimes be fraught with danger.

Skate.


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## investtrader (3 April 2020)

Okay ... still waiting Skate???


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## Skate (3 April 2020)

investtrader said:


> Okay ... still waiting Skate???




What are you waiting for?

Skate.


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## Skate (3 April 2020)

investtrader said:


> Okay ... still waiting Skate???




Ok, now I understand the question.

*What was the answer to the puzzle*
When I turned over the exam paper I was taken back to say the least, it caught me off guard then I focused on a few things, the hieroglyphics & the pencil. When I turned over the exam paper this confronted me. The hieroglyphics below was "all" that was on the paper.




*I was thinking*
1. Why the half pencil & not a full pencil ? (quickly dismissed as irrelevant)
2. The pencil was supplied so I could give my answer in words or to draw a pattern that links the patterns
3. After studying the pattern - did they (a) require an explanation what the pattern was or (b) did they want the next pattern to be drawn (that was a major decision)
4. My thinking was that "a pencil is for drawing" - so I drew the next pattern
5. The exam seem to last forever but the answer came to me in a few minutes, the rest of the time I was struggling with what the question was that they wanted - explanation in words or the next image drawn.

*We see patterns everywhere*
Humans have a unique ability to spot patterns that has been fine tuned by evolution & we superbly adapted to understand the visual world. Pattern recognition is for our survival as a species & it's the very reason a cloud formation looks like a bunny or Elvis. Sometimes our mind deceives us presenting pattern when in fact there isn't any. We unconsciously take for granted how good we are at making sense of what our eyes show us & sometimes we don't appreciate how difficult it is when we are shown a new pattern without an explanation can be difficult to understand.

*The answer I gave*
I drew the next image, which was correct.




Skate.


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## investtrader (3 April 2020)

I may as well post this here, to get it off my chest.
Let's just say this a theoretical discussion about a listed company that belongs to the All Ords. A few founders own a very large chunk of shares and  are involved in the daily running of the business. COV19 has hit but the company can still keep trading, which can't be said of a lot of businesses. It is in retail but doesn't operate in shopping centres. Trade to the end of March has so far been unaffected, but the next few months are uncertain.
They think trade may drop off (but just a guess)by more than 30% for a few months and would be eligible for over a million per month in government wage subsidies. They decide to sack 20% of the workforce. They also decide to cut wages to everyone by 25% to 50%. No reagrds to Fair Work Act. Staff are too scared to complain.  In most cases staff are asked to work more unpaid hours due to the difficult trading conditions. They use a tactic of cutting rates per hour and after an agreement is in place say sorry you now only have 4 days per week work.
The major shareholders stand to be unaffected.
Is this the intent of the JobKeeper subsidy?  
After this is over, they will loose most of their long term best staff which may the ultimate cost.


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## Newt (3 April 2020)

Skate said:


> Ok, now I understand the question.
> 
> *What was the answer to the puzzle*
> When I turned over the exam paper I was taken back to say the least, it caught me off guard then I focused on a few things, the hieroglyphics & the pencil. When I turned over the exam paper this confronted me. The hieroglyphics below was "all" that was on the paper.
> ...




aGGGGHHHHH!!!
I'm still a fail!


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## qldfrog (3 April 2020)

Newt said:


> aGGGGHHHHH!!!
> I'm still a fail!



You aren't alone


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## Skate (4 April 2020)

Newt said:


> aGGGGHHHHH!!!
> I'm still a fail!





qldfrog said:


> You aren't alone




*It's a mirror of itself*
The pattern is just mirror of itself, if that helps - If you can't work it out - let me know & I'll show you the mirrored pattern.




*This is the answer




We see patterns everywhere*
Humans have a unique ability to spot patterns to understand the visual world. Pattern recognition is for our survival as a species & sometimes our mind deceives us presenting pattern when in fact there isn't any. We unconsciously take for granted how good we are we at making sense of what our eyes show us but sometimes we don't appreciate how tough some are to solve.

Skate.


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## Skate (4 April 2020)

ducati916 said:


> So here we have the systems traders v the discretionary chaps: this pretty much mirrors the ASF community atm.
> 
> View attachment 101944
> 
> ...




@ducati916 expanding on your post (systems traders v the discretionary chaps) would be perfect for the "Dump it here" thread. The reason I'm a mechanical system trader is twofold (1) I lack the required skills & (2) I wouldn't trust myself to make the correct decision on a constant basis.

*Weekly verses a Daily system*
There is merits in both time frames but for "me" I prefer a weekly system, it also reduces the workload & to me it's like boxing in slow motion. There is always a discussion when "Discretionary trading verses Technical trading" is raised - I'm a believer if it works for you it's right for you & the merits of both can be posted & discussed.

*Exits are important*
Duc, you now have to admit after watching the extreme volatility these past few weeks the exit carries more weight than timing the entry. There is always a robust discussion when I raise the question around the "entry verses the exit" & which is considered more important when it comes to the profitability of any trading plan. I still hold the position that "exits" is where the money is made, when others disagree the "Dump it here" thread gives a perfect platform for others to express an alternative.

*The last 3 weeks*
I killed so many brain cells testing alternative exits in the desire to find a cleaner & quicker exit than the ones I already have. The results so far have been unspectacular to say the least as I'm unable find anything that works better than my "GTFO" indicator. I'm open to suggestions.

Skate.


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## ducati916 (4 April 2020)

Skate said:


> 1. @ducati916 expanding on your post (systems traders v the discretionary chaps) would be perfect for the "Dump it here" thread. The reason I'm a mechanical system trader is twofold (1) I lack the required skills & (2) I wouldn't trust myself to make the correct decision on a constant basis.
> 
> 
> 
> ...




1. Because I trade the US, I am aware of the 'algos', which I cannot clearly define, but are present nonetheless. They are often visible during low volume periods intra-day, when, the trend will suddenly reverse for no apparent reason. It is not enough to break the 'trend' of the stock as it is short term and reverses itself, whereupon the 'trend' for the day is restored. I have never bothered pursuing this, but it 'seems' the reverse is tied to a volatility measure (which for a few years has been low) in some way within the programme.

The algos programmers will have used multiple variables as inputs, in as much the same way as systems traders have done. I have no particular knowledge as to what the majority of these inputs are. However one variable that I believe they use is 'volatility'. Whether this is taken from the VIX or other sources of volatility, who knows, but I use the VIX as a proxy for the algo traders.

So when an exogenous event ramps up volatility, in this case COVID-19, the algos build on that volatility expanding it: they stay in a trade longer (their programmes seem to adapt to it) expanding the ranges...which, affects other market participants, which can extend the ranges further still, and you get a self-reinforcing feed forward loop, which happens to mirror a number of biological systems.

Recently, volatility as measured by the VIX has been dropping. Ranges in the indices have been contracting, as are the ranges in stocks. They are still obviously higher than previously, but down on the really volatile patch that we had. This was part of the bottoming process in 2009, 2018, 2019.

A further observation (take it with a pinch of salt) is that the 'long' side (Value Funds, etc) will not buy long into high volatility. They will wait for a lower volatility environment before committing to new buying. Their buying, also starts to create a bottom in the market. This buying also has that same feed-forward loop and volatility drops further, restricting the algos in pushing volatility higher through range expansion. So volatility and cash/volume are two inputs to the algos. At this point, fundamental market valuations will have an impact. Value funds will live through further 'small' declines on new purchases. Thus a further volatility expansion is muted through stability in this buying. Often (as long as volatility does not ramp up) they (Value) will add to positions on further declines.

You also have the market makers who will hedge their positions, they also serve to dampen volatility. For example in the Options markets, sellers of Puts will hedge with long stock/futures gamma scalping (which is highly profitable as long as your execution costs are low) to offset the high volatility.

At some point, the general market will move higher from the (true) bottom. This is where systems traders systems will start to activate and if we have had a market decline, buying long.

Which is why I watch the various systems here on ASF (as the ASX follows the US) for the start of buying long positions. Not so much for my taking a position as I trade volatility, but more for the establishment of a general market bottom.

2. Not necessarily. If you had bought the 'bottom' in 2009 and had held long, you would still be holding a profit and possibly thinking about adding to the position.

If of course some of your purchases were recent, then an exit to protect against a loss is critical. Given that your systems are cycling you in and out of stocks, from your perspective, I agree the entry is almost irrelevant as you buy high to sell higher. In this scenario, the exit is all encompassing. Your GTFO trigger seemed to work as well as anything and better than most.

3. You will (obviously) have to programme into your systems some form of indicator. Two that you could use are (a) VIX and (b) Put/Call ratio (if you do not already use them).

jog on
duc


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## Skate (4 April 2020)

ducati916 said:


> You will (obviously) have to programme into your systems some form of indicator. Two that you could use are (a) VIX and (b) Put/Call ratio (if you do not already use them).




*Living & trading in a bubble*
@ducati916 has given me a few ideas that I wish to share. As usual "for me" it's all about jumping on trends & now with a few new ideas from the "Duc" I'm using those indicators to guide when its optimal to buy & sell. I have a simple trading method of riding trends.

*Explanation*
I've used @peter2 idea of colour coding the trend with "Blue Bars" so it's simple to follow along by looking at the charts. The first "blue bar" is the signal bar (the white arrow) & we buy on the "next daily blue bar" at the open (the white square). The position is held till the first "red bar" & sell that position on the open on the next "red bar". It's a simple strategy I have to admit.



peter2 said:


> This only leaves three, BTH, NXT, TNE.  (It rhymes)
> BTH: Not a clear higher swing low. Still in trending down. Discard
> NXT: Currently too volatile buy at 8.00 with a SL at 6.5 is too much. Discard
> TNE: Interesting, but also too volatile at the moment. Put in the watch list.
> A glimpse of how I review the scan results each afternoon before the close. A one day rally doesn't change the down trend. It's going to take much longer. The current high volatility makes the initial risk sizes much too big. It's worth waiting for the volatility to decrease.



*
Charts*
As I'm using Pete's blue bars, I'll chart up the 3 securities from Pete's post above being: BTH, NXT & TNE so you can see the charts aren't cherry picked.
















*Well done*
@peter2 picks are on the money (as usual)



bfhoon said:


> Had my first trade today I didn't understand everything 100% but I bought 2000 shares in PNV Polynovo. Anyways glad to have my first trade under my belt still got heaps to learn.




*Let's examine another post*
@bfhoon had his first trade & he purchased "PNV" Polynovo - so let's examine what "The Ducati Daily Blue Bar strategy" thinks of this purchase of "PNV"




*Well done *
"The Ducati Daily Blue Bar strategy" gave a signal on the 24th March, the buy on the 25th March so well done @bfhoon at this stage we would hold that position till we get our first red bar, than sell on the next open.

*Chatter in a few threads*
There has been some recent chatter in the relevant threads of PPH, NAN & SLC - so let's examine them by applying "The Ducati Daily Blue Bar strategy"

*PPH*
@Trav. @galumay & @Dona Ferentes - might find interest in this chart as they have made comments recently in the "PPH" thread.








*NAN*
@Dona Ferentes @Country Lad @finicky & @sptrawler may find interest in this chart from their recent comments in the "NAN" thread.








*SLC*
@Dona Ferentes @Iggy_Pop @galumay & @peter2 may find interest in this chart from their recent comments in the "SLC" thread.





*Summary*
The ideas I've gained from @ducati916 recent post has been educational helping me to code "The Ducati Daily Blue Bar strategy" that on face value has merit for a simple strategy - it's not too shabby at all.

Skate.


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## Skate (4 April 2020)

*Let me make a few more comments*
Eyeballing a few charts with "The Ducati Daily Blue Bar strategy" applied I'm amazed how simply it plots a trend. Buying the first "blue bar" & selling the first "red bar" is simple & effective. I'm first to admit the strategy needs further development (my "To-do-List" is forever growing)

*New strategies*
With each new "Trading Strategy" or "Trading Idea" it's not about making easy money but rather tilting the odds of success in our favour by buying into trends whilst minimizing our losses. Trading is all about buying good companies at the "right time" & getting off quickly when the position turns south. It's also worth noting "some" traders forget to have a mechanism in place to take profits.

*Who knows what the future holds*
After reading @bigdog thread today it paints a grim picture for trading on Monday. Let’s assume @bigdog post is correct, some traders could be fearful of another huge sell off & their plan might be to sell now & buy back later, who knows. One man's trash is another man's treasure.

*What should we do?*
Too much advice in my opinion is flawed as the advice focuses on what to "buy & sell" & it never focuses on "when to buy". "The Ducati Daily Blue Bar strategy" can alleviate this concern as the ‘timing’ is governed by the "blue bar" driven by the most recent trading results. There are still bargains to be had & odds of picking these are favourable (IMHO) using "The Ducati Daily Blue Bar strategy".

*It looks ok*
“The Ducati Daily Blue Bar Strategy” is successful entering the trend early & "staying in the trend" as long as possible is the key to its profitability. When the position goes against the trend we simply hop off on the next "red bar", it couldn't be simpler.

*These are difficult times*
We all have to do better to understand technical analysis a little better so we can improve our trading skills. Having an open mind to new trading ideas "could be the key". We all know things will change, "for better or worse" & if we are trading at the moment, it can get us into a pickle - or - on the flip side, it can make us a lot of money. Opportunities don’t come around all that often & having the correct trading plan can "save" or "make" us a lot of money. Individual traders need to decide their course of action because we all need to sleep at night. Your trading plan & trading strategy are different so let’s not confuse the two.

Skate.


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## ducati916 (5 April 2020)

Mr Skate,

I hope you will update the various charts already posted. I am interested how my eponymous strategy works out. Hopefully it is wildly successful and not a dog's dinner.

jog on
duc


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## Skate (5 April 2020)

ducati916 said:


> Mr Skate, I hope you will update the various charts already posted. I am interested how my eponymous strategy works out. Hopefully it is wildly successful and not a dog's dinner.




@ducati916 as you have asked I've taken the liberty to track the positions listed  in the charts above being: BTH, NXT, TNE, PNV, PPH, NAN, & SLC. The securities haven't been cherry picked - I have used a few securities that @peter2 has recently posted in his thread, also @bfhoon reported his first buy so I grabbed that as well. The rest of the securities were picked from recent chatter in their respective thread, so overall it was mix of securities.

*Duc, let's see how your eponymous strategy works out*
I have the Portfolio up & running with up-to-date trading results for the 7 charts listed above. The Buys were taken as per your strategy.

*The Ducati Daily Strategy*
Start Date: 18th March 2020
Portfolio Capital: $105,000
Positions in the Portfolio: 7
Fixed Position Sizing: $15,000
No re-balancing or additional purchases



*The buys in order*
TNE @ $7.00 for 2142 shares on the 18th March 2020
PPH @ $2.99 for 5016 shares on the 23rd March 2020
BTH @ $0.47 for 31914 shares on the 25th March 2020
NXT @ $7.94 for 1889 shares on the 25th March 2020
PNV @ $1.53 for 9803 shares on the 25th March 2020
NAN @ $5.45 for 2752 shares on the 27th March 2020
SLC @ $0.54 for 27777 shares on the 27th March 2020




























*Tracking*
I'll report when positions are sold & a summary at the end when the last position is sold. With the current turbulent trading at the moment every strategy will be under pressure to perform so the next few weeks will be a good test to see if "The Ducati Daily Strategy" from Duc ideas are "wildly successful or a dog's dinner" - his words not mine.

*So far so good*
Two thumbs up at this stage..






Skate.


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## frugal.rock (5 April 2020)

Mr Skate esquire,
I would be interested to see the ducs blue bars indicator on NCZ ?
Wondering what I am seeing that others aren't?

F.Rock


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## Skate (5 April 2020)

frugal.rock said:


> Mr Skate esquire, I would be interested to see the ducs blue bars indicator on NCZ ?
> Wondering what I am seeing that others aren't? F.Rock




@frugal.rock thank you for your enquiry about NCZ. "The Ducati Daily Blue Bar strategy" chart is easy to understand as the first "Blue Bar" is the signal bar, meaning we enter the position on the next day at the open. We sell the position on the 2nd red bar as the first "red" bar is the signal bar.

*In a nutshell*
We buy on the 2nd "Blue" bar & sell on the 2nd "Red Bar"

*The Ducati Daily Strategy*
Start Date: 27th March 2020
Portfolio Capital: $15,000
Positions in the Portfolio: 1 (NCZ)
Fixed Position Sizing: $15,000

*"The Ducati Daily Blue Bar strategy"*
NCZ would have been purchased on 27th March @ $0.076 (197,368 shares = $15k my minimum purchase amount)







*Portfolio Dashboard Results*
The Dashboard is easy to read as each cell is colour coded with the corresponding results











*A picture paints a thousand words*
I hope the chart & the Dashboard alleviates wondering about what others are seeing.

*Summary*
"The Ducati Daily Blue Bar strategy" hasn't let us down yet as the "Blue" bars signaled that NCZ is on the move.

Skate.


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## ducati916 (6 April 2020)

Skate said:


> @ducati916 as you have asked I've taken the liberty to track the positions listed  in the charts above being: BTH, NXT, TNE, PNV, PPH, NAN, & SLC. The securities haven't been cherry picked - I have used a few securities that @peter2 has recently posted in his thread, also @bfhoon reported his first buy so I grabbed that as well. The rest of the securities were picked from recent chatter in their respective thread, so overall it was mix of securities.
> 
> *Duc, let's see how your eponymous strategy works out*
> I have the Portfolio up & running with up-to-date trading results for the 7 charts listed above. The Buys were taken as per your strategy.
> ...





So they seem to be jogging along nicely atm. I'll check back later today after work and see how they are doing.

BTW, you coded (whatever you actually coded) impressively fast.

jog on
duc


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## lindsayf (6 April 2020)

Skate said:


> *It's a mirror of itself*
> The pattern is just mirror of itself, if that helps - If you can't work it out - let me know & I'll show you the mirrored pattern.
> 
> View attachment 101963
> ...



Hmmm...I still dont see how that is the ‘solution’ to that problem, based on how you have described it.  Can you explain further?


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## Skate (6 April 2020)

lindsayf said:


> Hmmm...I still dont see how that is the ‘solution’ to that problem, based on how you have described it.  Can you explain further?




*What was the answer to the puzzle*
When I turned over the exam paper I was taken back to say the least, it caught me off guard then I focused on a few things, the hieroglyphics & the pencil. The hieroglyphics below was "all" that was on the paper. After studying the pattern I wondered if they required:

(a) an explanation what the pattern was or
(b) did they want the next pattern to be drawn (that was a major decision)

*My thinking *
@lindsayf,  let me walk you through it. My thinking was that the "pencil is for drawing" - so I drew the next pattern. In my mind I had a 50/50 chance of getting it correct.

*The test*







*The answer*






*With the mirror removed*






Skate.


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## Skate (6 April 2020)

ducati916 said:


> I am aware of the 'algos', are often visible during low volume periods that is not enough to break *the 'trend' *that* is tied to a volatility measure*. The programmers use multiple inputs that I believe is 'volatility' & Value Funds, will not buy long into high volatility. *Their buying, creates a bottom in the market that pushes volatility higher* *so "volatility* *and* cash/*volume are two inputs*". Given that your systems are cycling you in and out of stocks, from your perspective, I agree the entry is almost irrelevant as you buy high to sell higher. In this scenario, the exit is all encompassing. Your GTFO trigger seemed to work as well as anything and better than most. You will (obviously) have to programme into your systems some form of indicator. (Volatility & Volume) within a trend






ducati916 said:


> So they seem to be jogging along nicely atm. I'll check back later today after work and see how they are doing. BTW, you coded (whatever you actually coded) impressively fast. duc




@ducati916, I hope you don't mind but I have condensed your post so you can understand what motivated me to code "The Ducati Daily Blue Bar strategy". The hardest part was using two indicators that I've not used before making them work "hand in glove". There is only 5 lines of actual code doing all the heavy lifting - the rest of the coding is to make the chart look pretty & easy to read.

*Duc's key words.*
1. "Volume"
2. The trend is tied to a "volatility measure" taken from the VIX or "other sources"
3. So "volatility & volume" are the two inputs

*"The Ducati Daily Blue Bar strategy"* 
The strategy was quick to code because you stripped trading back to the bare basics "volatility & volume" the drivers of a trend. Once again it proves "simple" works. 

Skate.


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## Skate (6 April 2020)

frugal.rock said:


> Mr Skate esquire, I would be interested to see the ducs blue bars indicator on NCZ ? Wondering what I am seeing that others aren't? F.Rock




*Minor update*
As @frugal.rock has shown interest in the security "NCZ" it's been added to the buy list of "The Ducati Daily Blue Bar strategy" making a 8 position portfolio. 

*The Ducati Daily Strategy*
Start Date: 18th March 2020
Portfolio Capital: $120,000
Positions in the Portfolio: 8
Fixed Position Sizing: $15,000






*The buys have increased by one *
TNE @ $7.00 for 2142 shares on the 18th March 2020
PPH @ $2.99 for 5016 shares on the 23rd March 2020
BTH @ $0.47 for 31914 shares on the 25th March 2020
NXT @ $7.94 for 1889 shares on the 25th March 2020
PNV @ $1.53 for 9803 shares on the 25th March 2020
NAN @ $5.45 for 2752 shares on the 27th March 2020
SLC @ $0.54 for 27777 shares on the 27th March 2020
*NCZ @ $0.076 for 197368 shares on the 27th March 2020*

Skate.


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## Newt (6 April 2020)

Skate said:


> *What was the answer to the puzzle*
> When I turned over the exam paper I was taken back to say the least, it caught me off guard then I focused on a few things, the hieroglyphics & the pencil. The hieroglyphics below was "all" that was on the paper. After studying the pattern I wondered if they required:
> 
> (a) an explanation what the pattern was or
> ...





NOOooooo.....! - the pics for the answer are missing.  
Please put us out of our misery Skate!


----------



## Skate (6 April 2020)

Newt said:


> NOOooooo.....! - the pics for the answer are missing.
> Please put us out of our misery Skate!




Sorry @Newt, I'm at a loss to what happened with the pictures all I can say it worked my end - I'm attaching a screen capture to display that my previous post had the graphic attached.




Let me know if you can't see the pictures & I'll upload them again separately.

Skate.


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## Country Lad (6 April 2020)

Mr Skate, I have not been following "The Ducati Daily Blue Bar strategy" closely and had only a quick look at the charts.  However, looking at some companies I am following/trading, it appears to me that the strategy would have given blue bar “Buy”, particularly around the 20 to 26 March time frame for those numerous shares which are following the XAO pattern.


----------



## Newt (6 April 2020)

Skate said:


> Sorry @Newt, I'm at a loss to what happened with the pictures all I can say it worked my end - I'm attaching a screen capture to display that my previous post had the graphic attached.
> 
> View attachment 102031
> 
> ...




Wow.  I seem to recall Bankcard numerals being very skewed and "70s font" - probably so computer legible.  Have always been crap at cryptic crosswords, but I wouldn't have seen this before the sun froze over!!!  

They were a bit evil with the characters used - if 2 and 4 were a bit more obvious for example would have made it a lot easier.

Well done figuring it out too BTW Skate......


----------



## qldfrog (6 April 2020)

Skate said:


> Sorry @Newt, I'm at a loss to what happened with the pictures all I can say it worked my end - I'm attaching a screen capture to display that my previous post had the graphic attached.
> 
> View attachment 102031
> 
> ...



Thanks, the funny thing is that i though mirror..as noted at the time but did it against the whole image horizontal and went no where
Well done to have found it, i would not...


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## Skate (6 April 2020)

Country Lad said:


> Mr Skate, I have not been following "The Ducati Daily Blue Bar strategy" closely and had only a quick look at the charts.  However, looking at some companies I am following/trading, it appears to me that the strategy would have given blue bar “Buy”, particularly around the 20 to 26 March time frame for those numerous shares which are following the XAO pattern.




*Volatility & volume within a up-trend*
"The Ducati Daily Blue Bar strategy" signaled the turn in "volatility & volume" (the first blue bar) on 25th March 2020 & those numerous positions share a correlation because they are following the upswing of the "XAO" pattern. Just to be clear, not all securities are enjoying today's recovery proving the positions that you are following/trading are enjoying increased "volatility & volume" at the moment.

@Country Lad thank you for taking an interest in "The Ducati Daily Blue Bar strategy". On face value, Duc's idea works seamlessly picking the increased "volatility & volume" of individual positions as well as the "XAO".

*The XAO Chart*
I have attached the chart for the All Ordinaries "XAO" to display that the increased "volatility & volume" indicated by the "Blue" bars commencing on the 25th March 2020.




*Also*
I don't know if you can see the little dot on the end of the price bars, they signal whether it was an up day or not - minor but important to me

Skate.


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## aus_trader (6 April 2020)

Thank you for the good work you are doing Skate.

Markets can be scary in times of big falls (like at the end of 2018) and crashes like this one. I missed the bulk of the recovery that started in 2019 due to staying out of the market because of the fear , having liquidated late 2018. Should've stayed glued to this thread and those of Peter2's as you guys were investing right from the start of 2019 recovery.

Although we don't know if the bottom has been reached I think it gives me enough confidence to have a nibble here and there.

Cheers and off to do some research to find if there is any diamonds in the rough...


----------



## frugal.rock (7 April 2020)

G'day Skate,
Your NCZ chart shows a change from red bars to blue around early March then a run of blue despite the price trending down.
I can see the flutter that starts the first blue bar, and maybe 1 or 2 more, but I would have expected red bars on and down?
It picked up a very good short trade though?!
Makes me wonder what sort of trading took place to trick the system to stay blue?
Cheers.
I am now onto Prospa Group PGL.
Show me the blue bars...!

NCZ seems to be crackin on, but I'm out.

Thanks for your efforts Skate.

F.Rock


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## Skate (7 April 2020)

frugal.rock said:


> G'day Skate,
> Your NCZ chart shows a change from red bars to blue around early March then a run of blue despite the price trending down.
> I can see the flutter that starts the first blue bar, and maybe 1 or 2 more, but I would have expected red bars on and down?
> It picked up a very good short trade though?!
> ...







Skate.


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## Country Lad (7 April 2020)

There seem to be some correlation between the Blue Bar and my system. If so, NXT and possibly TNE & NAN could at the end of the run as well.


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## Skate (7 April 2020)

Country Lad said:


> There seem to be some correlation between the Blue Bar and my system. If so, NXT and possibly TNE & NAN could at the end of the run as well.




@Country Lad, thank you for your additional comments & would you care to elaborate why NXT "could at the end of the run", is it because of the pullback ?

*Tell me more*
You are also implying that "TNE & NAN" could at the end of the run as well - would you care to explain further ?

*Indicator or gut feeling*
I'll be very interested to see how your predictions goes. "The Ducati Daily Blue Bar Strategy" sells only after the first "Red" bar which is the signal bar - even if the next bar after the signal bar is "Blue" bar.

*For comparison*
Would you be kind enough to explain your system (in general terms) & throw up a chart or two for comparison please. If I'm interested other would be as well.

*Updated Charts*
















Skate.


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## Skate (8 April 2020)

Country Lad said:


> There seem to be some correlation between the Blue Bar and my system. *If so, NXT* and possibly TNE & NAN *could be at the end of the run* as well.




*In early trading*
@Country Lad is spot on the money about NXT in early trading we have a "Red" signal bar, well done. If there is still a "Red" Bar at the close today it will be sold at tomorrows open.




Skate.


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## Country Lad (8 April 2020)

Skate said:


> @Country Lad, thank you for your additional comments & would you care to elaborate why NXT "could at the end of the run", is it because of the pullback ?
> 
> *Tell me more*
> You are also implying that "TNE & NAN" could at the end of the run as well - would you care to explain further ?
> ...




Apologies for not responding earlier but have been involved in submissions and in this day and age zoom has become my best friend.

*gut feeling*
No, not a gut feeling.  After the years I have been playing this game I think I have pretty well understood by now that going by “gut feelings” leads only to losing a lot of money, and that is not a habit I wish to adopt.

*My System*
As I have said here on a number of occasions, I am not into deep and meaningful technical trading.  Tried it a few times many years ago after meeting and having discussions with tech/a who convinced me to give it a go.
In summary, it was not for me and even now I reckon that Elliot Wave theory is witchcraft using a crystal ball.  Mind you, I do use P&F charting which most here would consider in the same terms, and would not contemplate using.

I have discussed the way I trade a few times without a great deal of comment, so I won’t go through that here again except to point you to 2 particular posts:

https://www.aussiestockforums.com/t...on-channel-forward-testing.26451/#post-760278
https://www.aussiestockforums.com/threads/pnv-polynovo-limited.19606/#post-1022618

*A Possible Entry*
The charts below explain where I may have entered the trade.  In reality, I would not have done so because:
1.    I do not need to trade;
2.    When I do trade, it is mainly for fun and to keep my hand in or when Country Lass decides we need to do some expensive travel;
3.    Been there done that in previous downturns and I do not need to the risk of this uncharted and erratic market;
4.    There was not the strong buy signal I require and I am otherwise occupied away from the market at the moment anyway.

*Charts*
The comments on the charts should make it clear why I have the view that the uptrend could be interrupted either as a hiccup or a bit longer term.




There are similarities to the timing of an entry with the other “Duc Blue Bar” system for which you have posted charts.  Mind you, the same can be said for numerous of the other companies which are following the XAO trend, as I mentioned previously.


----------



## Bazzi (8 April 2020)

Skate said:


> *The Ducati Daily Strategy*



Hi @Skate, Thank you for your good work and @peter2!
Excuse my upcoming question since I am a newbie to this forum and to ASX trading; You mentioned "The Ducati Daily Strategy" and I can see it named in the charts title, is that a charting tool created by you? Is it something we can lay our virtual hands on


----------



## Skate (8 April 2020)

Bazzi said:


> Hi @Skate, Thank you for your good work and @peter2!
> Excuse my upcoming question since I am a newbie to this forum and to ASX trading; You mentioned "The Ducati Daily Strategy" and I can see it named in the charts title, is that a charting tool created by you? Is it something we can lay our virtual hands on




@Bazzi, welcome to the "Dump it here" thread - it's always refreshing when new members make comments or ask a question.

*Amibroker*
The charts are created in Amibroker. The two tone banding displaying the company name, strategy name, number of weeks in a trade & price points is coded within each strategy coding. As they say with Amibroker "all things are possible". I've coded each individual strategy to display information that is important to me (but maybe not to others). The header displayed below is 138 lines of code, evolving over time to get where it is today. Choosing the gradient grey colour & font was a pain but the biggest hurdle to overcome was to have the chart "auto resize" to whichever screen or monitor I decided to use "without adjustments" being made to the chart coding. 

*This header is 138 lines of code*



*FYI*
My Amibroker "Custom folder" is located on the "One Drive" cloud server so no matter where I am or what strategy I select to use the chart display & strategy parameters stay constant between computers. I have also added an ".apx menu" to the "top main menu bar" to load my strategies into the "Analysis" window - this is so important to keep the strategy parameter 100% correlated in relation to whichever computer I select to use.
*
Charting tool*
As I said there is no tool it's just lines of code. There is so much help & code samples everywhere on the net so really it's a mishmash of codes displaying the information that's important to me. I have multiple computers, two large external monitors, two TV's (55 & 65 inch screens) & they all display the same chart without a hiccup. Amibroker coding is so clever it can handle any technology thrown at it. 

*Being lazy*
I also have imbedded speech & chart messaging to advise me if the wrong chart or analysis periodicity is selected for a corresponding strategy, (take it from me it's easy done swapping between strategies & backtests) I trade quite a few different strategies & without the necessary warnings I'd be lost - it's the very reason for the bells & whistles. 

*The Analysis window *
This is a whole other story - it looks pretty, displaying all the information I need to make a trade. Trading doesn't come any easier than this - Sample attached.





Skate.


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## Skate (8 April 2020)

Skate said:


> *In early trading*
> @Country Lad is spot on the money about NXT in early trading we have a "Red" signal bar, well done. If there is still a "Red" Bar at the close today it will be sold at tomorrows open.
> 
> View attachment 102086
> ...




*NXT *
As indicated by my previous post "NXT" at the close today is displaying a "Red" bar so it will be sold at the open - tomorrow.




Skate.


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## ducati916 (9 April 2020)

So the exit is taken today, even if the new bar is blue.
How does that compare to exits (in regards to sensitivity) on your other systems?

jog on
duc


----------



## ducati916 (9 April 2020)

Had a look at systems ages ago, this company had loads on offer: 




It’s come to our attention that a number of our clients and other interested persons may have some questions regarding systems trading at Striker, and systems in general. While we have covered some of the following topics in the past, we feel that given the increasing interest in the systematic approach to trading futures and trading in general, it is only appropriate to revisit some of these themes.

*Is system trading a valid approach to trading futures?*

We feel certain that it is, and that it is reasonably safe to say that most professional traders will trade using a system of some sort in trading the futures markets. A system in this regard can be any strategy ranging from simple entry and exit criteria, money management rules, the use of stop losses to protect positions or lock in profits, to the more complex use of technical indicators and mathematical formulae. A system provides a consistent and logical approach to trading. Whether simple or complex, a trading system is usually most effective when implemented consistently. One problem frequently encountered by individual traders is the difficulty in following a system, whether their own or a professional developer’s. Sticking to a system requires discipline, and discipline is often difficult to maintain in the heat of live market action, where emotions can rule the day, and a trader may be tempted to second-guess his or her system. Striker’s clients enjoy the disciplined execution of system signals, since our professional operations team has been specifically trained to faithfully execute these strategies.

*I have purchased a system which is currently being traded at Striker. What is the relationship between Striker and the system developer?*

One of our goals at Striker is the unbiased evaluation of system performance. To this end, Striker has no financial ties to systems developers, nor does Striker have any in-house systems. Our financial independence allows us to be objective in evaluating systems. The leasing or purchasing of proprietary systems is a matter between the client and the developer. While we strive to work with reputable developers of robust and legitimate systems, we see our role as primarily one of service, execution, and the accurate reporting of information. To this end, we do not tamper with system signals, but faithfully strive to execute them in a timely fashion. We then report the actual trading performance at striker.com.

*Help! The system I’m trading isn’t doing as well as I thought it would. What can I do?*

While it is always preferable to see winning trades in one’s account, the fact remains that the futures markets, like other markets, tend to fluctuate. Futures markets can also be more volatile than equity (stock) markets. Trading futures using a systematic approach offers specific advantages (such as establishing rules of risk and money management), but does not guarantee success. Nevertheless, merely because a system is struggling at the moment does not mean that it will not offer positive returns over the long run. A number of systems traded at Striker have gone through periods of “draw downs”, but have gone on to make money for our clients. For example, the Compass S&P day trading system, which trades the S&P futures on $30,000 has returned over 235.29% since January 2000 as of April, 2007. However, the system, which can also trade the e-mini S&P on $5000, actually lost money in 2004, but went on to continue to return profits in 2005. In its trading life at Striker, it has averaged over 32% a year, as of April, 2007. In other words, patience and an accurate assessment of one’s financial situation are key factors in systems trading. However, Striker’s professional staff is happy to work with clients in terms of recommending alternatives if a system appears to be underperforming.

*Why are Striker’s results different than the developer’s?*

Striker reports only actual trading performance, where a number of developers report hypothetical performance. The difference is that hypothetical reports do not represent actual account activity, but rather represent a computer generated snapshot of the system’s trading signals. In the case of systems traded at Striker, these signals are generally identical to those generated in our operations center, but where a hypothetical report begins and ends in the computer, Striker takes these signals “live”, and in to the hurly burly of real market trading conditions, where they must compete with other traders’ orders. Market conditions can change very rapidly, and even with Striker’s superior execution and expertise, fill prices can vary depending on the market. The difference between an ideal price and the actual price fill is known as “slippage”, and is an inevitable component of futures trading. Nevertheless, Striker’s experienced team works hard to get the best price fills for our clients, and our results always reflect any slippage.

*I’ve been looking at systems on the Internet. There are quite a variety of them. Can Striker recommend one in particular?*

In the client section at http://www.striker.com, we keep actual trading performance records for systems that have traded or are trading at Striker, with commissions included. These records represent real trades for our clients’ accounts. We feel these records can be highly useful in evaluating and choosing a system. However, we are aware that there are many programs available for sale or lease on the Internet and elsewhere that have not been traded at Striker, and we recommend that you engage in careful due diligence in evaluating these systems and their developers.

For example, it is important to do your homework in looking at the developer’s background. What is their trading and business history? Are they registered with a regulatory body such as the NFA? Do they have a good business record? Have they had complaints registered against them with the Better Business Bureau, or other consumer protection agencies? These are all questions to consider when investigating a system developer.

There are a number of important questions to ask when evaluating a given program’s trading record. Are the trades shown actual, or hypothetical? If they are hypothetical, what methodology was used in implementing the hypothetical model? Has the model attempted to accurately reflect a real trading environment, with slippage and commissions factored in?

Finally, if you are looking for a specific recommendation when looking at systems traded at Striker, don’t hesitate to contact system specialist Dan Neenan.

*I see some of the systems traded at Striker are struggling. Do systems ever completely fail?*

The systems you see at Striker are not “ours”; we do not sell systems. These are third-party trading programs for which we are doing the execution. In many cases, they are systems that clients have purchased on their own, and have decided that they prefer to have Striker execute the trading for them. We only show trading performance for systems actively traded at Striker. Should a system show little or no promise at all over a period of time, our clients are likely to stop trading it, and the performance record for the system would end. So to answer the second qustion, systems do on occasion chronically underperform. Futures trading is inherently risky, and while systems in general are developed in order to manage risk and improve a trader’s chances of obtaining a successful outcome, traders should nevertheless trade using only risk capital.

*My system is losing money. What should I do?*

At Striker, our priority is your comfort in trading. While we don’t advise that clients abandon a system merely because a series of losing trades, we are here to take your direction in trading your account. If you feel uncomfortable with the direction of your current trading approach, we recommend that you stop trading, take a deep breath, and look at your options in terms of exploring an alternative or more conservative strategy.


jog on
duc


----------



## Skate (9 April 2020)

ducati916 said:


> *So the exit is taken today, even if the new bar is blue*. How does that compare to exits (in regards to sensitivity) on your other systems?




@ducati916, your "The Ducati Daily Blue Bar Strategy" was coded from your post & it was clear for me to understand. The first "blue bar" is the signal bar (the white arrow) & we buy on the "next daily blue bar" at the open (the white square). The position is held till the first "red bar" & sell that position on the open on the next "red bar". It's a simple strategy I have to admit. 

*Explanation of the bar colours*
I've used @peter2 idea of colour coding the trend with "Blue Bars" so it's simple to follow along by looking at the charts. The "Blue" bars meets Duc's two conditions & the "Red" bars are when Duc's conditions "are not met" - the strategy is easy to follow as there are only two rules.

*2 Rules*
1. Buy on the next bar after the signal bar - the 1st "Blue" bar & 
2. Sell on the next bar after the signal bar - the 1st "Red" 

*Questions*
_1. "So the exit is taken today, even if the new bar is blue ?"_
Correct, by selling in the pre-auction we don't know what the colour of the next bar will be. If the strategy gets it wrong we can re-enter the position on the next "Blue" bar.

_2. "How does that compare to exits (in regards to sensitivity) on your other systems?"_
To be honest there is no fancy exit strategy other than to exit on the first bar after the "Red" signal bar. The "Red" bar just means the "entry condition is no longer being met". There is no comparison to any of my trading systems when it comes to exiting a position. All my trading systems will hang onto a trend as long as possible giving the position some wriggle room along the way whereas "The Ducati Daily Blue Bar Strategy" is clear cut - it either a "Blue" or "Red" bar. 

*Bar colour*
1. A "Blue" bar means = BUY whereas 
2. A "Red" bar means = SELL

*Duc's two key words.*
"Volatility & Volume" are the two inputs that I get to use that are the real drivers of a trend. Duc, you suggested using only two indicators to guide when it's optimal to buy & sell. I took your words to mean that we enter a trend on volatility & volume - getting off when the trend turns. 

*One position down - seven positions to go*
NXT was sold on the open today, charts & explanations to follow in the next post showing the execution of the sale & the trading result of NXT.

Skate.


----------



## Skate (9 April 2020)

Skate said:


> NXT was sold on the open today, charts & explanations to follow in the next post showing the execution of the sale & the trading result of NXT.




*NXT has been sold - Trading Result*
Share Trade Tracker "Portfolio Manager" displaying the trading results for NXT.







*The chart*
The chart displays two winning trades & one losing trade since January 2020. The chart also shows "the exit" can sometimes be quick & brutal. The exit "Red" bar means the entry condition is no longer met.








*NXT - rebounded after the open today




Next*
I'll post the backtest results for "The Ducati Daily Blue Bar Strategy" (2019 calendar year)

*FYI*
It's worth remembering that this strategy has not been developed - it simply buys when Duc's two conditions are met & it sells those positions when the entry condition is no longer met. Buy "Blue" bars & Sells "Red" bars.

Skate.


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## Skate (9 April 2020)

*"The Ducati Daily Blue Bar Strategy" *
Backtest results for the 2019 calendar year (this strategy has not been developed )




*The strategy isn't too shabby*
The low system drawdown is very pleasing.

Skate.


----------



## ducati916 (9 April 2020)

Skate said:


> *"The Ducati Daily Blue Bar Strategy" *
> Backtest results for the 2019 calendar year (this strategy has not been developed )
> 
> View attachment 102118
> ...





Mr Skate, very nice.

Now this will actually be a nice addition to your weekly systems as this is a day trading (not intra-day) system. Due to your position size, brokerage is not an issue. This might be an issue for small accounts, as the number of trades taken will almost certainly be higher.

I'll be watching with great interest.

jog on
duc


----------



## Skate (9 April 2020)

ducati916 said:


> Had a look at systems ages ago, this company had loads on offer:
> 
> View attachment 102113
> 
> ...




*Condensed takeaway*
A few paragraphs sums up system trading in a nutshell that's well worth remembering when the going gets tough.

_"A trading system is usually most effective when "implemented consistently". One problem frequently encountered by individual traders is the "difficulty" in following a system. Sticking to a system requires discipline, and discipline is often difficult to maintain in the heat of live market action, where "emotions" can rule the day, and a trader may be tempted to second-guess his or her system". _

Skate.


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## Newt (9 April 2020)

Skate said:


> @ducati916, your "The Ducati Daily Blue Bar Strategy" was coded from your post & it was clear for me to understand. The first "blue bar" is the signal bar (the white arrow) & we buy on the "next daily blue bar" at the open (the white square). The position is held till the first "red bar" & sell that position on the open on the next "red bar". It's a simple strategy I have to admit.
> 
> *Explanation of the bar colours*
> I've used @peter2 idea of colour coding the trend with "Blue Bars" so it's simple to follow along by looking at the charts. The "Blue" bars meets Duc's two conditions & the "Red" bars are when Duc's conditions "are not met" - the strategy is easy to follow as there are only two rules.
> ...




It would be good to know what volume and volatility conditios you're using Skate?  
Even a general description.  I thought you might have been using Supertrend or something ala Peter 2 but see now you've created custom "Duc" criteria.


----------



## Skate (9 April 2020)

Newt said:


> It would be good to know what volume and volatility conditios you're using Skate?
> Even a general description.  I thought you might have been using Supertrend or something ala Peter 2 but see now you've created custom "Duc" criteria.




*1st off*
"The Ducati Blue Bar Strategy" bears no resemblance to any strategy that I have previously posted & in no way mimics or uses any part of the "SuperTrend Strategy" or infact any of the ideas @peter2 has posted about. The idea has been coded from Duc's previous post. The two indicators are indicator I've never used before so the strategy is even completely new to me as well. Any resemblance to any other strategy would be coincidental.

*Volatility & Volume*
Newt, the Duc described using two indicators to measure "Volatility & Volume" the real drivers of a trend - meaning we enter a trend on volatility & volume - getting off when the trend turns. There are so many indicators that measure both of these, the trick was getting two indicators to work in unison. Once I got the parameters nutted down it was as simple exercise in comparing today's results to the previous day. The downside is that we can jump in & out of positions quickly giving the positions no latitude for the daily price fluctuations of the markets.

*The two indicators*
It would be unfair for me to mention the two "off the shelf indicators" because even having the same indicators the parameter setting can make or break the profitability or performance of the strategy. If others are interested they will do their own research to find indicators that will work for them.

*Indicators*
Getting into a trend is not that difficult using an indicator, using two is sometimes better & that's what I believe Duc's message was. Getting out of a trend & timing the exit is a little more complex but as the Duc didn't elaborate on an exit strategy I just used the reverse of his entry condition.

*Mental toughness*
I've used this analogy before referring to Peter Brock who won the "Bathurst 1,000" nine times. Imagine, giving a good strategy to someone else would be the equivalent of giving Peter Brock's winning car to the same person. Does anyone honestly believe they would be able to win Bathurst even once ? It’s not the vehicle, it's not the strategy it's the 'mental toughness' that is the real decider if you'll be a winner or not.

*Repeat it - till it sinks in*
It's the very reason why we need this to sink in: _"A trading system is usually most effective when "implemented consistently". One problem frequently encountered by individual traders is the "difficulty" in following a system. Sticking to a system requires discipline, and discipline is often difficult to maintain in the heat of live market action, where "emotions" can rule the day, and a trader may be tempted to second-guess his or her system"._

Skate.


----------



## Skate (9 April 2020)

*


Start Date: *18th March 2020
*Portfolio Capital:* $120,000
*Positions in the Portfolio*: 8
*Fixed Position Sizing*: $15,000



1. TNE @ $7.00 for 2142 shares on the 18th March 2020
2. PPH @ $2.99 for 5016 shares on the 23rd March 2020
3. BTH @ $0.47 for 31914 shares on the 25th March 2020
*4.* *NXT @ $7.94 for 1889 shares on the 25th March 2020 - # SOLD 9th April 2020 @ $8.46*
5. PNV @ $1.53 for 9803 shares on the 25th March 2020
6. NAN @ $5.45 for 2752 shares on the 27th March 2020
7. SLC @ $0.54 for 27777 shares on the 27th March 2020
8. NCZ @ $0.076 for 197368 shares on the 27th March 2020





























Skate.


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## frugal.rock (9 April 2020)

Thanks Skate.
Happy Easter.

Hope you have a coin or 2 on NCZ and PGL.
PGL closed 42% up... had thought you may have added to the trades as you did the chart for it ?
It would look good amongst the laggards! Not as good as NCZ though.

F.Rock


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## Newt (9 April 2020)

Skate said:


> *1st off*
> "The Ducati Blue Bar Strategy" bears no resemblance to any strategy that I have previously posted & in no way mimics or uses any part of the "SuperTrend Strategy" or infact any of the ideas @peter2 has posted about. The idea has been coded from Duc's previous post. The two indicators are indicator I've never used before so the strategy is even completely new to me as well. Any resemblance to any other strategy would be coincidental.
> 
> *Volatility & Volume*
> ...




Intruiging, but thanks for extra detail  

I thought I had read back for mention of drivers for Duc's thinking, but will have to do so again and see what was missed or not understood.  Somehow it seems frustrating to see such wonderful and detailed weekly strategy summaries, without grasping the broad and finer detail of what the strategy is doing.  

However can also understand your concern and reticence to be spoon feeding people Skate.


----------



## Skate (10 April 2020)

peter2 said:


> how would I feel about missing out on MCT?





frugal.rock said:


> PGL closed 42% up





sptrawler said:


> I bought, PPS, CWY, VUK and MCR on 23/03 or 24/03 from memory




@frugal.rock I originally posted a bare chart for "PGL" & at the time I was going to make a comment that a breakout from a consolidation zone can eventuate into a strong move but at the time I was watching TV. I'm sure glad you were on it. I was also impressed that @peter2 snagged a ride on "MCT" & @sptrawler recently grabbed as few nice ones as well. 

*"The Ducati Blue Bar Strategy" *
Picked all the moves: PGL, MTC, PPS, CWY, VUK & MCR. 

*A simple strategy *
"The Ducati Blue Bar Strategy" is such a simple strategy but very effective. From the list above I'll chart up the first two "PGL" & "MTC" to display. @sptrawler has already given the entry dates for the securities he has entered.











*I'll let Peter has the final say*


peter2 said:


> The market provides plenty of learning opportunities if you're looking for them. Increases in price, volume and volatility may indicate further price increases. Sometimes it works and sometimes it doesn't. Managing all the opportunities that we undertake in a profitable manner is key to success.




Skate.


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## Skate (10 April 2020)

Newt said:


> Intruiging, but thanks for extra detail   I thought I had read back for mention of drivers for Duc's thinking, but will have to do so again and see what was missed or not understood.  *Somehow it seems frustrating *to see such wonderful and detailed weekly strategy summaries, without grasping the broad and finer detail of what the strategy is doing. However can also understand your concern and reticence to be *spoon feeding people* Skate.




@Newt, I don't post to frustrate but I try hard to add ambiguity into the mix so others have to think.


Newt said:


> aGGGGHHHHH!!! - I'm still a fail!




*Patterns*
I recently posted about a Bankcard exam I had taken back in the '70s, I posted the exam as it was a "quiet day". The educational value was not in the answer. The educational value was in the thinking of what the answer could be. A few days later I detailed the answer in such a way more thinking was required. I felt your frustration then as well. Knowing the answer wasn't important but the thinking exercise was.

*Indicators*
Systematic traders use indicators to make trading decisions & we all tend to fall into the trap of using our "pet" indicators. Trying out new indicators & ideas may lead us to a better way of thinking about market timing.

*Tools*
Some traders know, (Duc included) that using one tool is sometimes not enough, using a combination of indicators has the ability to improve any strategy. @peter2 made a great comment confirming some signals are accurate some of the time. 

*Peter's comments*
_"The market provides plenty of learning opportunities if you're looking for them. Increases in price, volume and volatility may indicate further price increases. "Sometimes it works and sometimes it doesn't". Managing all the opportunities that we undertake in a profitable manner is key to success"_

Skate.


----------



## frugal.rock (10 April 2020)

When you get a chance Skate, can you look at the NCZ chart around the 6th March?
Am intrigued why the blue bars didn't turn red?
Cheers.

F.Rock


----------



## Skate (10 April 2020)

frugal.rock said:


> When you get a chance Skate, can you look at the NCZ chart around the 6th March? Am intrigued why the blue bars didn't turn red?




@frugal.rock, why didn't the "Red" bars stay "Red" - Or - better still why did the "Red" bar turn "Blue". 

*The answer*
"The Ducati Blue Bar Strategy" compares today price bar to the previous day. I have marked the trigger on the chart (the thick UP white line) to help you better understand. Trading isn't an exact science - system traders rely on the "probability" of being correct - our mathematical edge makes the money (over time)




Skate.


----------



## ducati916 (10 April 2020)

Skate said:


> @Newt
> 
> *Indicators*
> Systematic traders use indicators to make trading decisions & we all tend to fall into the trap of using our "pet" indicators. Trying out new indicators & ideas may lead us to a better way of thinking about market timing.
> ...




There are myriads of 'indicators', that examine different areas of markets, economies, sentiment, value, timing, etc. There are so many that you can suffer indicator overkill and just end up confusing yourself.

My suite of indicators comprises:

(a) Macro, what is the state of the economy, a 'get ready' to do something, if something happens. This is obviously a longer term indicator that is coarse and granular. I'll probably run this single indicator through a number of different studies however. (Yield analysis)

(b) Inter-market comparisons: (Dollar/Bonds/Commodities/Equity). Looking for confirmation or disconfirmation.

(c) Market internals: these probably number 3 in total, for both tops and bottoms. (Volatility, Put/Call ratios, Advance/Decline).

(d) Chart based: (200EMA/20EMA, Bollinger Bands, MACD).

That's it.

jog on
duc


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## Skate (10 April 2020)

Newt said:


> Somehow it seems frustrating




@Newt, I pride myself in exiting a position quickly to protect profits or to limit my loses. Trading a weekly system can sometimes be "frustrating" because of the inherent lag, at other times trading a weekly system can pay dividends by allowing for the daily gyration of the markets to settle by weeks end.

*I was thinking like a "crazy person"*
In hindsight I felt "frustrated" not being able to find a better solution that would have minimised the loss in my open profits. The market fell so sharply & so quickly I've come to the realisation that my systems did their best. The "crazy man" (my inner self) simmered to the surface "thinking" I have to get "*MY MONEY BACK*" forgetting the all important mantra: "Open profits belong to the market, closed profits belong to you"

*Trading was looking great this Financial year*
The "virus" has affected so many lives as well as the markets. I was having a good year taking 8 months to accumulate a good deal of open profits only to see some of it evaporate over a two week period.
*
Small snippet*
This is a small snippet of my "current financial year" (my equity curve) The large drop wiped off nearly 70% off my open profits. The crash came so swiftly, something I had not experienced in my 5 years of trading. But the good news is - I'm fighting my way back.




*FYI*
I don't care about the mantra -- I want "*MY MONEY BACK*" & I won't rest till I have it back.

Skate.


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## Skate (10 April 2020)

ducati916 said:


> There are myriads of 'indicators' & you can suffer indicator overkill and just end up confusing yourself.




*Caring is sharing*
Back in my research days (2014) I was speaking to an author & podcast presenter. Long story short he traded funds for many & after building a friendship he gave me his metastock code that he trades - others might like to make a few comments on. He explained that his trading methodology was kept to the minimum. He did remark that I could share the MetaStock formula amongst friends but not to mention his name or firm. MetaStock coders will see it's pretty basic.

*This is a copy of one of his email to me* (one of many)
_Here you go...Please bare in mind...indicators and systems are just the beginning of building your trading plan. It is all about risk management and trading psychology. If I can assist you please let me know..thank you._

*This is his MetaStock code*
{ Plots breakout long/short signals }
{ http://www.metastocktools.com }
{ With thanks to Roy Larsen for Init idea }

pds1:=Input("HHV (long) breakout periods", 1,252,21);
pds2:=Input("LLV (short) breakout periods", 1,252,10);
display:=Input("display: signals=1, in-trade binary=2",1,2,1);
x:=Input("use Open=1 High=2 Low=3 Close=4 Volume=5 P=6",1,6,4);
delay:=Input("Entry and Exit delay",0,3,0);

x:=If(x=1,O,If(x=2,H,If(x=3,L,If(x=5,V,If(x=6,P,C)))));
In:=x>Ref(HHV(x,pds1),-1);
Out:=x<Ref(LLV(x,pds2),-1);

Init:=Cum(In+Out>-1)=1;
InInit:=Cum(In)=1;
Flag:=BarsSince(Init OR In) < BarsSince(Init OR Out)+InInit;
In1:=Cum(Cum(In))=1;
Out1:=Cum(Cum(Out))=1;

If(display=1,Ref(Cum(Cum(In))=1,-delay),0);
If(display=1,-Ref(Out1 AND BarsSince(In1)>=BarsSince(Out1),-delay),0);
If(display=1,Ref((InInit AND Alert(InInit=0,2)
OR Flag AND Alert(Flag=0,2)) - (Flag=0 AND Alert(Flag,2)),-delay),Flag)

*Kindness of others*
After his podcast he told me that I was the only one that approached him for additional information. After building a friendship he was kind enough to send me his 3 books (FREE) & not long after I migrated to AmiBroker.

Skate.


----------



## Newt (10 April 2020)

Thanks Duc and Skate.  You have again given much to think over.

And congrats Skate on your equity curve rebound.  There is enough frustration and craziness right now to last a lifetime!


----------



## ducati916 (11 April 2020)

Skate said:


> @Newt,
> 
> 1. I pride myself in exiting a position quickly to protect profits or to limit my loses. Trading a weekly system can sometimes be "frustrating" because of the inherent lag, at other times trading a weekly system can pay dividends by allowing for the daily gyration of the markets to settle by weeks end.
> 
> ...




1. This is the conundrum: the grail of maximising profit. (a) Exit too early, lose potential profits, (b) exit too late, lose paper profits. There is no perfect answer. The answer is: psychologically which hurts less; (a) or (b). I am assuming that in backtesting, your answer was (b) but not for the psychological reason, rather, the testing suggested that (b) was the more profitable. Unless you had the data for 1987, or 1929, nothing else has really matched this decline for speed.

For completeness I am an (a) person. Why? Once that profit is in my account, it is mine. I can always re-enter a trade, as a new trade. The other risk management related to exits is I tend to exit long positions on market conditions, rather than on individual stocks. That is quite a significant difference. Why? I started trading in March 2000.

2. Frustration is important. It leads to some hard thinking.

3. You need to consider a system that embraces (a) more and (b) less. The balance will of course be extremely tricky. But you will sleep ever so soundly at night once you find it.

4. It is brutal and I had pretty much the same experience in 2000, except that was not 'open profits' but starting capital.

5. Beware revenge trading (not really aimed at you) a psychological trap for novices.

jog on
duc


----------



## qldfrog (11 April 2020)

ducati916 said:


> 1. This is the conundrum: the grail of maximising profit. (a) Exit too early, lose potential profits, (b) exit too late, lose paper profits. There is no perfect answer. The answer is: psychologically which hurts less; (a) or (b). I am assuming that in backtesting, your answer was (b) but not for the psychological reason, rather, the testing suggested that (b) was the more profitable. Unless you had the data for 1987, or 1929, nothing else has really matched this decline for speed.
> 
> For completeness I am an (a) person. Why? Once that profit is in my account, it is mine. I can always re-enter a trade, as a new trade. The other risk management related to exits is I tend to exit long positions on market conditions, rather than on individual stocks. That is quite a significant difference. Why? I started trading in March 2000.
> 
> ...



Thanks Duc, a nice slightly alternative view to @Skate


----------



## ducati916 (11 April 2020)

On indicators:

(a) You need indicators from multiple markets Equity, Commodity, Bond, Options, Internals; 
(b) They must all (or a majority) confirm each other in a timely fashion;
(c) You need a timeframe that allows for a signal, rather than noise;
(d) They must however remain timely, otherwise a waste of time;
(e) They must be robust, not too many false positives;
(f) If they are prone to too many false positives, you will not have confidence in them;
(g) You need a plan, that if you do act on a false positive, what you do next;
(h) A comprehensive understanding of your indicators will reduce or filter the odd false positive;
(i) You actually execute, see (g).


jog on
duc


----------



## Skate (11 April 2020)

ducati916 said:


> 1. This is the conundrum: the grail of maximising profit. (a) Exit too early, lose potential profits, (b) exit too late, lose paper profits. There is no perfect answer




@ducati916, I'm with @qldfrog - What a great post about maximising profits, linked to the timing of the exit. Yes, it's a fine line exiting a position too early compared to exiting a position too late. 

*Conundrum*
The timing of the exit can be very confusing & difficult to solve & overcome. As coders, we are tasked to navigate between the two. I also like the distinction you draw between "potential profits" & "paper profits" exiting early versus exiting late, the wording used was not lost on me.

*Grail*
As you have used the word "grail" it's only fitting I make an additional reference to Nick Radge's book "Unholy Grails" just for @Newt - quoting a passage from his book.

*To add to Duc's post*
Returns alone cannot be a benchmark of robustness of any system. CAR/MaxDD is as good as any metric to measure the "Risk adjusted returns" 

*For completeness*
Duc's an (a)  
I'm more of a (a) + (b) guy - so lets call me (c) 
(c) Exiting a position quickly after confirmation that the move is over to protect profits or to limit my loses - the metric to measure this is CAR/MaxDD

*CAR/MaxDD*
In english, the Compound Annual % Return / divided by Max. system % drawdown is a good measure to use in the strategy development phase.

*System Drawdown versus Trade Drawdown*
When running a backtest some get confused how the strategy handles System Drawdown versus Trade Drawdown as both are important. In a nutshell, system drawdown is calculated on entire portfolio, while trade drawdown is calculated on a particular trade.

*Just for* *Newt *
This an extract from Nick's book - Unholy Grails: A New Road to Wealth confirming we both value the metric "CAR/MaxDD" the risk-adjusted measure of any trading system.
https://books.google.com.au/books?i...Q6AEwB3oECAwQKw#v=onepage&q=CAR/MaxDD&f=false




Skate.


----------



## frugal.rock (11 April 2020)

Have just thought I'd like a "Pool" indicator. 
By pool, I am thinking of all the ASX sectors combined with the intention of understanding if the market liquidity generally is substantially increasing or decreasing at any particular time. A live indicator.
Is the money flooding in or draining out or just milling around?
I guess it could also be used as a current sentiment indicator, bullish or bearish. 

F.Rock


----------



## Newt (11 April 2020)

ducati916 said:


> 2. Frustration is important. It leads to some hard thinking.
> 
> jog on
> duc



Gold in those last 2 posts thanks Duc

Particularly like this one - nothing wrong with letting some frustration through at times to push you to look for the next tool, strategy, filter, etc....

Thanks for sharing your taking on market regime filters too Duc.  Suspect you're right about using market regime more than criteria on individual stocks for exits in tough times.


----------



## Newt (11 April 2020)

Have to confess CAR/MDD is still a parameter I always check over during system development and review.  

Skate, how the h#ll have you got our equity curve heading up again so quick.  Can I ask, are those mainly daily positions/systems that have helped you nudge up of DD, or still a majority of weekly ASX?


----------



## Skate (11 April 2020)

frugal.rock said:


> Have just thought I'd like a "Pool" indicator.
> By pool, I am thinking of all the ASX sectors combined with the intention of understanding if the market liquidity generally is substantially increasing or decreasing at any particular time. *A live indicator. Is the money flooding in or draining out or just milling around?* I guess it could also be used as a current sentiment indicator, bullish or bearish.F.Rock




@frugal.rock there is already an indicator to measure if "money is flooding in or draining out" The "Indicator" is called the "Buy and sell pressure indicator" with a smoothed Histogram. The indicator is the work of Karthik Marar & is freely found here: http://karthikmarar.blogspot.com/2012/09/buying-and-selling-pressure-indicator.html - "there is no reason to reinvent the wheel"



frugal.rock said:


> Skate, can you look at the NCZ & PGL




*A picture paints a thousand words*
Study the "Buy & Sell" indicator in action - better still, download the indicator & play with it.
















Skate.


----------



## ducati916 (11 April 2020)

Skate said:


> @frugal.rock there is already an indicator to measure if "money is flooding in or draining out" The "Indicator" is called the "Buy and sell pressure indicator" with a smoothed Histogram. The indicator is the work of Karthik Marar & is freely found here: http://karthikmarar.blogspot.com/2012/09/buying-and-selling-pressure-indicator.html - "there is no reason to reinvent the wheel"
> 
> 
> 
> ...




Mr Skate,

Rather reminds me of the MACD, which provides that lovely divergence indication!




jog on
duc


----------



## Skate (11 April 2020)

Newt said:


> Skate, how the h#ll have you got our equity curve heading up again so quick.  Can I ask, are those mainly daily positions/systems that have helped you nudge up of DD, or still a majority of weekly ASX?




@Newt, I trade a lot of systems, some strategies have an "index filter" others don't. I have a "partly dormant system" that seeks under value securities (no, it's not a reversion style system) & it rarely gives signals but of late it has been jumping out of it's skin. Having a large amount sitting on the sidelines the opportunity was too good to pass up, I've aggressively traded the strategy. (with luck so far) The name of the strategy & the finer details is not important or worthy of discussing.

Skate.


----------



## Skate (11 April 2020)

Newt said:


> Skate, how the h#ll have you got our equity curve heading up again so quick






Skate said:


> @Newt. I totally agree, I snagged $79k on Tuesday only to give $55k back on Friday, but overall it was a good week all things considered. Skate.




*Daily fluctuations*
I'm trading aggressively at the moment & my daily swings range between -$60k & +$90k so it's not for the faint hearted.

*Some have stopped trading*
Traders at the moment are torn between being scared & resentful they are missing out, some have stopped trading altogether waiting for the good times to return while others are fearful that the worst is still to come. (read some of recent posts here on ASF - it doesn't take long to form that opinion)

*Perceived value*
Good quality companies have been sold down so cheaply representing good value to “me” (if not now, they represent value well into the future). The recent sell off was panic selling without realising the markets around the world won’t be allowed to collapse. If you are interested in which sectors to have a dabble in, read @peter2 thread he lists them for you.

*Market timing*
Timing the market when volatility is extreme can be done quite easily with a few indicators. The majority of traders are happy to sit on the sideline watching the recent falls without capitalising on the recent spike doing nothing about it. They have felt or experienced value being destroyed without applying a strategy to pick up a few bargains at "basement prices". I’m just picking up perceived bargains. (Bottom feeding for a better word) The bigger the loss traders endure the more likely they are to persist doing nothing just watching from the sidelines.

*A timely post*


aus_trader said:


> Thank you for the good work you are doing Skate. Markets can be scary in times of big falls (like at the end of 2018) and crashes like this one. *I missed the bulk of the recovery that started in 2019 due to staying out of the market because of the fear *, having liquidated late 2018. Should've stayed glued to this thread and those of Peter2's as you guys were investing right from the start of 2019 recovery. *Although we don't know if the bottom has been reached I think it gives me enough confidence to have a nibble here and there.* Cheers and off to do some research to find if there is any diamonds in the rough...




There you go, @aus_trader gets it.

Skate.


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## qldfrog (11 April 2020)

Or the systems, backtested on multiple market phases does not sell buy yet, why would someone take a discretionary position then?
Do not let either fear or FOMO control a systematic trading


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## ducati916 (11 April 2020)

Skate said:


> *
> 1. Daily fluctuations*
> I'm trading aggressively at the moment & my daily swings range between -$60k & +$90k so it's not for the faint hearted.
> 
> ...




1. Volatility is still higher than it was prior to the collapse, but far lower than during the collapse. There is lots of money to be made trading the expanded volatility.

2. And they probably should have stopped trading. These are not the market conditions for novice/inexperienced traders. But it is and should be an invaluable trading education going forward. They should be following the market very closely and looking at the variables that they believe have value going forward. For example: for months (even years) there has been a crescendo of pundits proclaiming the market (US) as overvalued. COVID-19 was a 'variable', but it was a variable that didn't seem important and then suddenly was. Was COVID-19 a cause, or simply a catalyst? Are the fundamentals subjected to a cyclical or secular change?

3. There are many ways to measure value. Find one that suits you and act upon it.

4. This really relates to your CAGR/MaxDD and other risk management strategies, on which I have some further thoughts. However, the current decline, much like '87, was a market downdraft as opposed to individual securities crashing. You trade predominantly individual stocks. I trade predominantly ETFs (as I cannot be bothered to analyse fundamentally individual stocks and I don't have the time either) which tend to encompass market sectors, rather than market based indices. For that reason I am more macro than micro. I assert that there is a significant difference twixt the two.

jog on
duc


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## Newt (11 April 2020)

Thanks Skate.  Apologies for typos in my last post - wasn't proof read well at all obviously.

ASF can be so incredibly thought provoking at times.  I've mentioned before how invaluable it is to be able to benchmark even roughly against other system traders.  Some envy is envitable reading posts where others are doing well, but Duc noted earlier "_Frustration is important"_ as it can force us to reconsider our goals, performance, diversification of systems and where we want to go next. 

I've probably spent too much time doing so ("reconsidering") this Easter, but there has been opportunity to try and learn some things in Amibroker that had been on the "To Do List" for too long. 

For some time now I've been considering diversifying into a 2nd system, and its fascinating comparing the pros/cons/goals of different trader approaches here.  Duc's post on the conundrum of early versus late exits was very timely and helped crystallize the "big picture" of something I was was playing around with at the time.  I'm not unhappy with my primary system - it has done what it was designed to do and I will take new trades it offers when that time comes (that is unlikely to happen until some less volatile and extended trends appear).

Two systems probably seems a major under-commitment to those here routinely running many!


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## Newt (11 April 2020)

ducati916 said:


> 1You trade predominantly individual stocks. I trade predominantly ETFs (as I cannot be bothered to analyse fundamentally individual stocks and I don't have the time either) which tend to encompass market sectors, rather than market based indices. For that reason I am more macro than micro. I assert that there is a significant difference twixt the two.
> 
> jog on
> duc




Lots of valuable points shared, but now understand even better why you would use your "broad market parameters" to control and override exits Duc - was wondering where your trading effort was most directed and ETFs make a lot of sense against what you've described.


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## qldfrog (11 April 2020)

Newt said:


> Lots of valuable points shared, but now understand even better why you would use your "broad market parameters" to control and override exits Duc - was wondering where your trading effort was most directed and ETFs make a lot of sense against what you've described.



Interesting discussion:
The following  in a weekly systemic only view:
I got an indicator quite agile and giving me great in/out signal;
I thought: what about using it on let's say an index XJO and use ETF to play both way:
BBOZ and GEAR;
so I got a good signal, I enter leveraged (x2) ETF and so can win in both market even in down trend via the GEAR ETF;
The backtest result was pretty poor;
Basically we can not capture any of the big wins you get with individual shares 
But worse: you got hit by the leverage trap
to demonstrate
last close: BBOZ @ $12.05 matching XJO at 5387
In the past:  BBOZ was at $12.05 
on the 16/05/2019 which was matching XJO at 6300
quite a difference and  all this in less than a year
My conclusion was that system trading ETF sectors etc on a weekly basis was a waste of time and money


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## Newt (11 April 2020)

Perhaps more ETF choice and lower margins in US market?


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## ducati916 (12 April 2020)

qldfrog said:


> Interesting discussion:
> The following  in a weekly systemic only view:
> I got an indicator quite agile and giving me great in/out signal;
> I thought: what about using it on let's say an index XJO and use ETF to play both way:
> ...





So I had a look at BBOZ




So a couple of points:

(a) Tracking the underlying: the argument seems to be that it does not track the underlying particularly well. This is probably true of all ETFs in that they may not track their underlying stocks that well (examples include CEFs that are far below NAV) and their values drift from being able to exchange 1:1. Add in leverage and (I'm sure) this problem is magnified. The question for me though is: are they reflecting their stated purpose of moving x2 when trading? Volatility should add to the number of trading opportunities available. Looking at the comparison (XJO):




Agreed. That is pretty woeful.

By comparison: XLF:FAS




Which is what (pretty much) what you want to see. I have done the straight price as opposed to percentage as you want to see the tracking of trends rather than the absolute effect of x3 leverage.

(b) The x3 leverage means that if you (or your system) is somewhat under development, substituting x3 into your holdings might give you pause (heart failure). I have been trading 20yrs and x1 leverage has me comatose. I'm waiting for the x6 leverage to be introduced!

(c) In principle, trading x3 leverage is actually no different, you just have to expand your risk tolerances (which could just mean smaller size) to trade them. However as you have probably already gleaned, my trading plan is materially different from Mr Skate's trading plan and this is no accident: this is as a direct result of x3 leverage. You cannot (or with great difficulty) implement a pure type (b) plan. Hence my type (a) plan.

jog on
duc


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## ducati916 (12 April 2020)

Newt said:


> Perhaps more ETF choice and lower margins in US market?





Spot on.

jog on
duc


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## qldfrog (12 April 2020)

ducati916 said:


> So I had a look at BBOZ
> 
> View attachment 102192
> 
> ...



Thanks @ducati916 
Very in depth answer
I definitely see your point.
The concept is right but unlucky for us, not with the asx available etfs and probably not for a weekly system  with the current volatility


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## Skate (12 April 2020)

I may look like Santa but the Easter Bunny has to be right up there - more goodies for the office.










Skate.


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## ducati916 (12 April 2020)

Skate said:


> @ducati916, I'm with @qldfrog - What a great post about maximising profits, linked to the timing of the exit. Yes, it's a fine line exiting a position too early compared to exiting a position too late.
> 
> *1. Conundrum*
> The timing of the exit can be very confusing & difficult to solve & overcome. As coders, we are tasked to navigate between the two. I also like the distinction you draw between "potential profits" & "paper profits" exiting early versus exiting late, the wording used was not lost on me.
> ...




1. I'm sure it wasn't. Part of the issue here is separating  (a) Market risk from (b) Credit risk. Simply (a) measures where the entire market is going to fall and (b) is simply the individual risk associated with individual companies (securities). So you can have (b) while a is stable and you can have (a) while (b) is stable. The difference is that if (a) is operative, (b) is also custard. If (b) is operative, there is not necessarily (a) based risk (but this can depend on the index: eg Dow Jones being $weighted).

It is very difficult to run simultaneous risk management for both (a) and (b). The GTFO exit is a market based risk exit, which is really a derivative of your credit based risk management.

My system ignores (b) as they are ETFs. My entire (GTFO) exit strategy is 100% based on (a). It is primary, rather than derivative in nature. In addition to an exit to cash, I'll go short via Puts (which are a limited loss strategy) on the index (SPY/DIA/QQQ). Depending on my exit signal, it may be a directional bet, or only a hedge. I may not exit 100% of equity positions: I may only exit 50% or 75%. But I will exit a certain % regardless. 

2. I'm not overly familiar with those two measures as I do not use them: however, they appear to be consistent with risk management in system (b). Numbers (3),(4) and (5) are really addressing the issues already raised in my (1) re.: (a) and (b).

Returning to the issue of potential profits as opposed to paper profits and psychological pain.

Potential Profits: if the GTFO exit is triggered, but, it is incorrect:

(i) are not known (hence less psychic pain) at the time, trade can always be re-entered (not as easy as it sounds however);
(ii) monetises open profits, allows (pressure free thinking time) to adjust positions;


However if correct (market falls)

(iii) money in the bank, can either sit out, or go short, or hedge;
(iv) plenty of thinking time;
(v) sets you up well for the bottom/bounce/etc;
(vi) increases profits from hedges/short positions

Loss of paper profits:

(i) leaves you angry and prone to revenge trading;
(ii) lots of psychic pain, impairs decision making;
(iii) loss of trading capital (in that had trades been closed, capital that much higher);
(iv) badly positioned for any bounce recovery;
(v) hard to get short, hedge, etc as a certain level of deer-in-the-headlights mentality sets in;
(vi) slippage increases if the fall is sharp and you have size.

jog on
duc


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## Skate (12 April 2020)

ducati916 said:


> Frustration is important. It leads to some hard thinking.





Newt said:


> Gold in those last 2 posts thanks Duc - Particularly like this one - nothing wrong with letting some frustration through at times to push you to look for the next tool, strategy, filter, etc....





Newt said:


> Duc noted earlier "_Frustration is important"_ as it can force us to reconsider our goals, performance, diversification of systems and where we want to go next.




*Frustration*
I been working hard to sharpen each of my strategies to pick a turn in the markets quicker than they currently do - its been an annoying process as the coding effort hasn't been rewarded. Maybe it's not that I'm annoyed with myself rather it's "frustration" that I can't find a better exit than the ones I already have.


ducati916 said:


> I'm not overly familiar with those two measures as I do not use them:




*Metrics*
I've placed arrows on the backtest report to indicate important metric "as far as I'm concerned" - where others may have a better metric to measure the "Risk adjusted returns"

*The PANDA Strategy *
Duc, my "PANDA Strategy" isn't too shabby "I thought" but when the pressure was applied with the recent panic selling it fell short of my expectations reacting too slowly. The GTFO filter was designed especially for such situations - I now realise the lag of the indicator let me down (the idea is still valid). As @Newt likes to compare strategies results I've posted the backtest caption for the last three calendar years of my PANDA Strategy using a $300k portfolio. Looking at the 2020 results you wouldn't guess it's the same strategy (2020 - 3 months & 12 days of trading so early days)




*Yes, I'm frustrated & annoyed at the same time*
I take pride in leaving no stone unturned when my dollars are on the line - 2020 is a great example "how a good strategy" can unravel so quickly.

Skate.


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## Newt (12 April 2020)

Fantastic post Skate.  I do like comparisons and benchmarks.  Seeing that PANDA and Skate aren't perfect let's us know you're still a mortal with the rest of us then!   

We all know as traders we have to be good losers, and that includes accepting risk and drawdowns.  Totally agree there is also frustration in system development that we can never cater for ever market regime, and you have to make compromises about accept average % loss, system DD, CAR, CAR/MDD etc etc.

Pardon the graphics explosion, but here are some graphs from the system I've been developing of late.  I couldn't help but use the now famous "GTFO" acronym for how the system tightens a trailing % stop in market downturns.  Technically of course its not really "GTFO" if you're tigthening at stop rather than exiting, but what the heck....


So, over the last 6 years All Ords universe..........

Normal % stop is the trailing stop, GTFO % stop is the tightened stop during XAO downturns.  We know we usually need a very wide trailing stop, but can value be added with GTFO tighened stop?





Yay - 40% trailing and about 20-25% GTFO tightened stop look promising.

So far I haven't spent a lot of time on the exit parameter,s so a bit soon to be locking anything in.  One thing I don't like is the Av. % loss.  Does GTFO tightened stop help with that?




You bet, but from the first graph it affects profits.  What about CAR/MDD?






Far enough - many might prefer to forgo returns (CAR) to stay on the left side of the graph.
What about total system drawdown?  No prize for guessing over this period (2014 to 2020) the recent crash is the largest DD, and this is the effect of both stops on total DD:




Mmmm - so without some more clever logic in the system, there's no avoiding a 25% toll trading through that recent hell'ish period.  In fact optimal CAR/returns is even a bit worse than all other parameter options.

Finally, what are returns distributions like in terms of Sharpe ratio?





*Conclusions:*  I don't have a neat way of graphing Risk of Ruin in Amibroker, but running this system at optimal number of positions, trailing % stop and optimal GTFO % stop would probably be "courageous" in the current market environment.  I'll keep working on this, but it could be that for the first 12 months (or however long it takes to get say 30% open profits) it would make more sense to:
-  run tighter stops (left side of all these graphs)
- more than optimal number of positions
- with smaller than normal total capital pool

Its not like you have to work out optimal settings then leave them there forever.  It'd be interesting to know if people have a hands off approach to their system parameters, or consider "dialling them back" to something more conservative when starting out with the new system?  Expect this will be a very personal thing again depending on risk tolerance and available funds. 

I need some chocolate now.......


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## rnr (12 April 2020)

Hey @Newt , whilst you probably don't a reminder....red wine goes well with chocolate.


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## qldfrog (12 April 2020)

That last comment @rnr is the top value ASF post of this Easter weekend, by far


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## Newt (12 April 2020)

Of course - what was I thinking? - all backtests run better with red wine too.....


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## Skate (12 April 2020)

Newt said:


> Seeing that PANDA and Skate aren't perfect let's us know you're still a mortal with the rest of us then!
> We all know as traders we have to be good losers, and that includes accepting risk and drawdowns.  Totally agree *there is also frustration in system development that we can never cater for ever market regime*, and you have to make compromises about accept average % loss, system DD, CAR, CAR/MDD etc etc. Its not like you have to work out optimal settings then leave them there forever.  It'd be interesting to know if people have a hands off approach to their system parameters, or consider "dialling them back" to something more conservative when starting out with the new system?  Expect this will be a very personal thing again depending on risk tolerance and available funds.




Newt, what a fantastic post. I always appreciate as much detail as possible to better understand the point of view that others are trying to make. Duc, has the very same approach detailing his responses so others can understand. One liners are not normally helpful for others to understand the point of view clearly.

*Facts*
The backtest results I post are always 100% accurate but that's where reality ends. I don't trade any $330k portfolios that have 20 positions. The backtest displayed is so others can get a general idea without being specific. I know we don't agree on position sizing but all my systems hover between 35 & 65 positions each, my bets are between $15k & $25k & I trade multiple strategies (all systematic trend trading strategies) Each strategy is tasked to do different things at different times with each strategy having their position sizing re-balanced weekly. Both you & Duc have made me aware that "in your opinion" my trading is not diversified, where as my investment strategy is.

*Truths*
The recent drop in my portfolio has been horrendous to say the least & the value in dollar terms was quite high - which brings me to a few different observations & points of view.
1. My wife said "you have just given back some of their money"
2. I say no, it was my money & "I want it back"

*I'm lucky but also feel sorry*
I'm lucky I was in large profits & gave back a percentage - I'm sorry for others who were not in the same position & lost some of their stake money. I'm with @peter2 on this one, the "time" you start to trade can be crucial to the luck you enjoy. It's the luck of the draw.

*Newt, my HYBRID Strategy backtest for comparison*




# Newt, I'm expecting more posts as your research progresses.

*Side note*
When drinking, eating is cheating

Skate.


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## peter2 (12 April 2020)

This thread has seen another interesting twist. One that both surprises and disappoints me. The major reason for advocating a fully systematic trading approach is to minimise the emotional interference that plagues discretionary traders. 

Currently the emotions are in control of the systematic trader(s). They're doubting the effectiveness of their systems. They're looking for better exits strategies. The recent market behaviour was so unexpected that they're reacting purely on emotions.  May I shout, "STOP IT, GET A GRIP".

Respectfully @Skate I was disappointed to read of your doubts regarding this system.



Skate said:


> *The PANDA Strategy*
> Duc, my "PANDA Strategy" isn't too shabby "I thought" but when the pressure was applied with the recent panic selling it fell short of my expectations reacting too slowly. The GTFO filter was designed especially for such situations - I now realise the lag of the indicator let me down (the idea is still valid). As @Newt likes to compare strategies results I've posted the backtest caption for the last three calendar years of my PANDA Strategy using a $300k portfolio. Looking at the 2020 results you wouldn't guess it's the same strategy (2020 - 3 months & 12 days of trading so early days)




IMO the PANDA system is one of the best I've seen. It works brilliantly in mildly bullish markets and kills it in fully bullish markets. It's a seriously good system. So is your Hybrid system. How can you now be in any doubt?

"it fell short of my expectations" :  I'd suggest that your expectations were wrong then. Didn't you back test this system to your satisfaction? Didn't you try to break it? Didn't you test it to see what would happen if the market suddenly tanked? 

Looking at the 2020 test results shows me exactly what I'd expect to see when the underlying market falls 35% suddenly. A 17% DD is within the normal range for a trend following DD.  I remember remarking on some back test results posted her earlier that the DD shown was too low. It was suggested that it was a timing issue. Portfolios started earlier wouldn't have such a large DD. Now we're seeing the larger DDs. 

All long only equity systems have been thumped by this sudden selloff. Trend following systems require wide trailing stops (large downside exposure) for maximum reward. The market price action triggered the GTFO exit and we followed our plan.


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## peter2 (12 April 2020)

In the third week of Feb 2020 the XAO hit an all time high. The next week of Feb 2020 the XAO fell 10%. Could this be the GTFO rule? If the market falls 10% in a week in a bullish market, GTFO. 

The previous time the XAO fell 10% or more in a week was Oct 2008. That could have been another GTFO event except at that time the market was already bearish and most trend following systems would have been exiting trades well before this down week. 

A GTFO exit alert doesn't have to be complicated because it doesn't trigger very often.


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## Skate (12 April 2020)

peter2 said:


> This thread has seen another interesting twist. One that both surprises and disappoints me. The major reason for advocating a fully systematic trading approach is to minimise the emotional interference that plagues discretionary traders.
> 
> Currently the emotions are in control of the systematic trader(s). They're doubting the effectiveness of their systems. They're looking for better exits strategies. The recent market behaviour was so unexpected that they're reacting purely on emotions.  May I shout, "STOP IT, GET A GRIP".
> 
> ...




Peter, now that’s a powerful post with great educational value.

*I was disappointed with myself not the strategy *
Peter, admittedly I’ve been extremely hard on myself - I vigorously test all my systems to weather the harshest trading conditions but obviously not enough as I’ve fallen well short of my expectations. Frankly I expected my coding to handle a brutal sell off much better then it did.

*Better was expected*
The HYBRID & PANDA strategies are good, but good is not good enough when better is expected. The frustration comes from not finding a better exit strategy going forward.

Skate.


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## qldfrog (12 April 2020)

If trading a purely weekly system, you can have up to 5 down sessions
A DD of 20/25% would still be reasonably possible even if you trigger the gtfo on that friday night
And an average fall of 4 or 5 pc per session is not exactly unrealistic coming from our highs
The only way to reduce the risk is to have a daily SL ..i toyed with that idea in January i initiated then canned it and lost 20k minimum the following month.


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## Bazzi (12 April 2020)

qldfrog said:


> If trading a purely weekly system, you can have up to 5 down sessions
> A DD of 20/25% would still be reasonably possible even if you trigger the gtfo on that friday night
> And an average fall of 4 or 5 pc per session is not exactly unrealistic coming from our highs
> The only way to reduce the risk is to have a daily SL ..i toyed with that idea in January i initiated then canned it and lost 20k minimum the following month.




Hi @qldfrog Do you use SL in all trades now? Any maximum SL or a guideline you follow in general?


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## aus_trader (13 April 2020)

qldfrog said:


> If trading a purely weekly system, you can have up to 5 down sessions
> A DD of 20/25% would still be reasonably possible even if you trigger the gtfo on that friday night
> And an average fall of 4 or 5 pc per session is not exactly unrealistic coming from our highs
> The only way to reduce the risk is to have a daily SL ..i toyed with that idea in January i initiated then canned it and lost 20k minimum the following month.



I remember you mentioning about this earlier actually. The reasons were valid at the time and I agreed with the reasoning that positions can be exited too early if there was an intra-week low that reversed and closed higher by the end of the week. This time it happened so quickly that an over-riding GTFO type of exit was probably the only way to reduce the draw down as Peter2 mentioned earlier.


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## ducati916 (13 April 2020)

peter2 said:


> 1. This thread has seen another interesting twist. One that both surprises and disappoints me. The major reason for advocating a fully systematic trading approach is to minimise the emotional interference that plagues discretionary traders.
> 
> 2. Currently the emotions are in control of the systematic trader(s). They're doubting the effectiveness of their systems. They're looking for better exits strategies. The recent market behaviour was so unexpected that they're reacting purely on emotions.  May I shout, "STOP IT, GET A GRIP".
> 
> ...




1. I would argue that such introspection and reflection on the various systems and underlying philosophy of system based trading are extremely valuable. Without it, progress grinds to a halt. From what I have seen, discipline was maintained, the systems followed: discipline is an emotional state. 

2. The emotion of disappointment is also valuable in that it drives the discipline of looking for improvement. The recent market fall highlighted a weakness in the system(s). The important point here is that these 'types' of markets are rare. To date 1987 and 2020. The search for improvement that is currently underway I agree is (IMO) misguided in that it is addressed intrinsically to the system, when in reality it should be addressed extrinsically to the market [my previous (a) and (b)].

3. I agree. In the right _*conditions*_, it printed money. Thus, the fix is not in the system, it is in the 'conditions', ie: correct market conditions, which is extrinsic to the system. Now given the rarity of the wrong conditions, this should be eminently fixable and well worth the time in considering (searching for) answers that result in improvement.

4. I would agree with this through observation of the various systems disclosed here on ASF.

I already have the fix. The problem is whether it can be coded. I am going to converse with Mr Skate and see if he can code it. If he can, it may well be problem solved.

jog on
duc


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## qldfrog (13 April 2020)

Bazzi said:


> Hi @qldfrog Do you use SL in all trades now? Any maximum SL or a guideline you follow in general?



No as i do not believe the next down will be as brutal nor do i have enough invested at this stage.
As we have more time at home and a new interesting period to backtest against, i am fine tuning my 2 systems.live they are but hardly invested so this is a good time for fine tuning
To get the best average return, SL have to allow 20 -25pc fall from peak on a daily view..not much which is not caught by existing exits


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## Rsthree (13 April 2020)

SL = ??     Probably obvious, but not forgetting that we are in a beginners thread.


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## rederob (13 April 2020)

Rsthree said:


> SL = ??     Probably obvious, but not forgetting that we are in a beginners thread.



*S*top *L*oss


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## Rsthree (13 April 2020)

DOH...totally obvious    I was looking for a more complex answer.


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## frugal.rock (13 April 2020)

Another meaning could be
SL = screamingly late

Am wondering if/ how dark orders and centre point trading methods could be taken advantage of by the coders? 
From my understanding, the systems/ strategies used for backtesting could be forward implemented into special dark orders with the right order coding. 

The trick as I see it is getting the order coding correct. 
From my basic understanding, orders can be coded with probably pretty much any conditions nests you can think of... and am thinking that some of you on this thread would be capable of doing it.

Personally, have been working on identifying algo/bot trading and the desired outcome of the algo, intended to take advantage of the money flow.
As most here know, the DOM  (depth of market) that is visible is just the tip of the iceberg. 
The rest of the burg is what interests me, the darkness... 

@Skate, the buy sell pressure indicator you mentioned (Karthik?) and posted charts of, look interesting, but seem to be stock specific?
(Was thinking of using indices as a combination. A gross tide change indicator.)
In any case I don't have any software as yet to be able to use it. 
My problem.

F.Rock


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## Skate (13 April 2020)

frugal.rock said:


> Am wondering if/ how dark orders and centre point trading methods could be taken advantage of by the coders?
> @Skate, the buy sell pressure indicator you mentioned (Karthik?) and posted charts of, look interesting, but seem to be stock specific?




@frugal.rock I've done some research how to identify Dark Pools Patterns using Technical Analysis but it's above my pay grade. What I have found - Pool Chart Patterns are mostly bottoming formations that move erratically sideways, violently up and down causing most traders to be whipsawed out with losses, so this style of trading is better left to the big boys.

*Here is an interesting fact* 
Did you know that the Flash Crash of May 2010 was caused by a simple error of the wrong order type being used. Instead of using a Time Weighted Average Price (TWAP) order, the trader used a Volume Weighted Average Price (VWAP) order. The order resulted in a spike in the "Volume" which then in turn triggered more and more orders thus causing the crash. It was as easy as confusing (TWAP) orders with (VWAP) orders - who would have thunk it !

*Karthik Marar Buy and Sell pressure indicator*
The Buy and Sell pressure indicator & smoothed histogram is not stock specific as it handles all markets no matter the periodosity used. I have attached a daily chart for the Dow Jones as well as the All Ordinaries as examples. 

*Summary*
I've not been able to capitalise using the "Buy and Sell pressure indicator" in any of my trading strategies - its not been for the lack of trying though. 

*The Dow Jones*







*The All Ordinaries*





Skate.


----------



## Newt (13 April 2020)

Skate said:


> @frugal.rock
> *Karthik Marar Buy and Sell pressure indicator*
> The Buy and Sell pressure indicator & smoothed histogram is not stock specific as it handles all markets no matter the periodosity used. I have attached a daily chart for the Dow Jones as well as the All Ordinaries as examples.
> 
> ...




You've shared this a few times Skate - wondered if/how you employed it.


----------



## Newt (13 April 2020)

qldfrog said:


> If trading a purely weekly system, you can have up to 5 down sessions
> A DD of 20/25% would still be reasonably possible even if you trigger the gtfo on that friday night
> And an average fall of 4 or 5 pc per session is not exactly unrealistic coming from our highs
> The only way to reduce the risk is to have a daily SL ..i toyed with that idea in January i initiated then canned it and lost 20k minimum the following month.




In the spirit of what Peter2 said don't think you should beat yourself up QF.  As alluring as "intrabar" stops are (and Amibroker makes them very possible), the stark reality is that trend following over the medium to long term benefits from wide trailing stops.  The short term benefit is usually far exceeded by the extra profit potential of wide stops in the long run.

We're experiencing some extremely unusual circumstances lately, and modern financial markets are so automated and quick to respond the positive feedback loops have been crazy.  I think I read somewhere recently US employment weekly data last month spiked to 30 SDs.  6 SDs is getting close to 1/million so goodness knows what 30 SDs is.  

Pretty tough times to have every angle covered.


----------



## Newt (13 April 2020)

ducati916 said:


> 1. I would argue that such introspection and reflection on the various systems and underlying philosophy of system based trading are extremely valuable. Without it, progress grinds to a halt. From what I have seen, discipline was maintained, the systems followed: discipline is an emotional state.
> 
> 2. The emotion of disappointment is also valuable in that it drives the discipline of looking for improvement. The recent market fall highlighted a weakness in the system(s). The important point here is that these 'types' of markets are rare. To date 1987 and 2020. The search for improvement that is currently underway I agree is (IMO) misguided in that it is addressed intrinsically to the system, when in reality it should be addressed extrinsically to the market [my previous (a) and (b)].
> 
> ...




Duc, would love to know if this ever comes to something.  Knitting such a diverse set of macro/commodity/stock data into a cohesive filter would certainly be something.  Suspect it would envitably involve observations, experiences, opinions that were heavilty dependent on the experience of the observer - not something many people could do no matter how much raw data you started with.  You could go mad trying to do multi-variate regressions or goodness knows what.


----------



## qldfrog (13 April 2020)

rederob said:


> *S*top *L*oss



Indeed apologies for using the acronym without first explanation
Phone typing is not an easy sport


----------



## frugal.rock (13 April 2020)

Can the Karthik indicator average all ASX indices on the 1 chart?
Really just looking for a overall indicator. 

The dark pool thing still interests me. Have seen stocks with selling pressure that largely absorb the pressure with little to no price movements, which to me indicates hidden support.
Eg,  A smaller priced stock may absorb relatively large sell downs with no apparent support. Will trade the daily average volume at one price all day, with apparent support vacant.
Large volume trades go through, the buying volume-  usually only a pathetic visible amount, remains similar after a trade size that has the capability of knocking the SP down a tick or 3 if allowed. Just some observations.

F.Rock


----------



## qldfrog (13 April 2020)

One more point to add regarding stop loss:SL
Used in that context during drastic movement, it is easy to actually miss the falling knives
If you trigger your SLat $n, what is your sell order at?
2pc below?, more? From previous old experience on daily trading attempts you have to go a wide berth from trigger point to be executed and are often getting the low of the bar
You would need to add consequent slippage in your backtest
Disclaimer: i always assume a weekly system with present orders and potentially SL, with no human interaction during the week /day


----------



## Skate (13 April 2020)

Newt said:


> You've shared this a few times Skate - wondered if/how you employed it.




*The logic*
The best solution so far was applying the Buy and Sell pressure indicator as a directional price indicator that displayed better than average volume - sometimes it worked perfectly, at other times it produced many false signals. Frankly it's an unreliable indicator & I haven't found any trading value using this indicator to date.

*How do I use the Buy and Sell pressure indicator these days*
I use the "Buy and Sell pressure indicator" as a "snooping tool" to satisfy my curiosity judging market sediment & at times understanding the sediment of individual stocks.


Newt said:


> In the spirit of what Peter2 said don't think you should beat yourself up QF



# Easier said than done.

Skate.


----------



## ducati916 (13 April 2020)

Newt said:


> Duc, would love to know if this ever comes to something.  Knitting such a diverse set of macro/commodity/stock data into a cohesive filter would certainly be something.  Suspect it would envitably involve observations, experiences, opinions that were heavilty dependent on the experience of the observer - not something many people could do no matter how much raw data you started with.  You could go mad trying to do multi-variate regressions or goodness knows what.





Well I have just PM'd Mr Skate to see if he can code it up. Actually, all but 1 should be relatively straightforward. I guess we wait and see if he can.

As to the issue of 'objectivity' (coded) and subjectivity (observation), there may be issues, hence my initial challenge to Mr Skate (to see if it is possible) to code it, taking it from discretionary to systematic.

jog on
duc


----------



## qldfrog (13 April 2020)

Skate said:


> # Easier said than done.



Indeed, so far rational thinking still winning so was tempted but did not go that way, more generic weekly exits checks in GTFO style


----------



## Trendnomics (13 April 2020)

peter2 said:


> This thread has seen another interesting twist. One that both surprises and disappoints me. The major reason for advocating a fully systematic trading approach is to minimise the emotional interference that plagues discretionary traders.
> 
> Currently the emotions are in control of the systematic trader(s). They're doubting the effectiveness of their systems. They're looking for better exits strategies. The recent market behaviour was so unexpected that they're reacting purely on emotions.  *May I shout, "STOP IT, GET A GRIP*".
> 
> ...




Boom! Best post on this whole thread!

I've been a long time reader of this thread, and two notable things have become apparent:

Most of the traders on here, still haven't *FULLY* accepted that systematic trend-following, will always involve losses and large draw-downs - the whole design basis of all systematic trend-following systems are to take losses consistently (<50% win rate) - this is what makes these systems so robust (you have to become comfortable with something that can be unbearable at times, to avoid emotional tinkering - in a few months it'll be my system's 7 year live-traded-non-stop-un-tinkered anniversary).
Most of the traders on here, still believes that running multiple trend-following systems will provide some form of diversification or overall draw-down protection (IMO: only more temptation for emotional tinkering). Concurrently, the profitability foundation of all TF systems, is grounded in a single statistical anomaly that occurs in price action (the real reason why all TF systems are profitable) - thus, running multiple TF systems would provide a negligible long term advantage (particularly over similar time-frames). Over my years of discovery and application of advanced mathematics (Engineer), I am certain that I have identified this statistical anomaly (simple proofs possible in Excel) - this has provided tremendous confidence in my system and has reduced emotional tinkering temptations. There is little mention of the statistical reasons, why TF systems are profitable, on this thread - it would be great to see, so I can compare some notes (peer comparison/validation).


----------



## rnr (13 April 2020)

Hi @Skate,
Just wondering whether your "GTFO" indicator is based on a single function (e.g. say % drop in price of a stock) or is there another function which perhaps indicates an exit signal for all open trades?
Cheers,
Rob


----------



## Newt (13 April 2020)

Thanks for speaking up Trendnomics.  Your moniker about Sharpe chasing is always in mind during system development.  Very glad to hear you're active, and even more glad you're chiming in to challenge the discussions.

I'm glad you have fully embraced the Vulcan control of emotions lifestyle, but unfortunately I for one still suffer from some human mortal tendancies.

If I understand correctly, you think there would be benefit from a more public analysis of statistical factors underlying the momentum effect in stock prices?

(This sort of thinking?)
https://www.semanticscholar.org/pap...nden/1453464b12d66c43ba6d1b28b58baf4871f6b4bc


----------



## Trendnomics (13 April 2020)

Newt said:


> If I understand correctly, you think there would be benefit from a more public analysis of statistical factors underlying the momentum effect in stock prices?
> 
> (This sort of thinking?)
> https://www.semanticscholar.org/pap...nden/1453464b12d66c43ba6d1b28b58baf4871f6b4bc




Reading the relevant published literature can't hurt (although it can be convoluted at times). But ultimately, each TF system developer/trader has to be able to answer the most important question (i.e. What is the one statistical anomaly in the price action, which my system is exploiting to be profitable, over the long term?). Without an answer to this, you may be ill-equipped to endure the long road. Concurrently, all pilots have a fundamental understanding of aerodynamics, and will be able to answer their most important question (i.e. What keeps the airplane I am flying in the air?).

We can begin the journey of answering the most important question, with more questions:

For freely traded financial instruments, is the underlying price action random or predictable?
If random, how can my TF system possibly be profitable?
If predictable, why are most of my long time-frame TF system back-tests profitable, but most of my short time-frame system back-tests are non-profitable? If predictable, surely more of my system back-tests would be profitable (particularly over a variety of time-frames)?
Is question #1 really that black and white (for all time-frames)?


----------



## qldfrog (13 April 2020)

ducati916 said:


> Well I have just PM'd Mr Skate to see if he can code it up. Actually, all but 1 should be relatively straightforward. I guess we wait and see if he can.
> 
> As to the issue of 'objectivity' (coded) and subjectivity (observation), there may be issues, hence my initial challenge to Mr Skate (to see if it is possible) to code it, taking it from discretionary to systematic.
> 
> ...



there are very very few thinks which can not be coded Duc as long as it is based on measured values/acquired data be it pooled, equation results etc even number of references in twitter etc


----------



## ducati916 (13 April 2020)

qldfrog said:


> there are very very few thinks which can not be coded Duc as long as it is based on measured values/acquired data be it pooled, equation results etc even number of references in twitter etc





So Mr Frog,

The initial results are in from Mr Skate. I'll let him update the thread, he may have some late improvements to add.

jog on
duc


----------



## Skate (13 April 2020)

Trendnomics said:


> Boom! Best post on this whole thread! I've been a long time reader of this thread, and two notable things have become apparent:
> 1. Most of the traders on here, still haven't *FULLY* accepted that systematic trend-following, will always involve losses and large draw-downs
> 2. Most of the traders on here, still believes that running multiple trend-following systems will provide some form of diversification or overall draw-down protection




*Boom !!*
Your post is brillant & your views are welcomed.

*I've been a long time reader of this thread*
You making the remark that you are a "long time reader of this thread" is "music to my ears".

*Let me answer #1 & #2*
1. Guilty as charged - large drawdowns are acceptable, whereas massive drawdowns are harder to stomach making others re-evaluate their coding ability searching for strategy improvements - In my case I'm unable to fault my current exit strategy, thus the recent frustration.
2. Guilty as charged - I run multiple trend-following systems that provide "diversification" in entering & exiting the markets only. Moving sizable amounts in & out of the markets is a challenge. Putting large bets on is a killer, as slippage is the enemy. The recent volatility & panic in the markets has allowed me to increase my bets 10 fold to take advantage of the current trading environment. I've posted that I win big as well as losing big. I do concede however that having a variety of strategies doesn't give additional drawdown protection. 

*Trading versus investing*
My trading is not diversified whereas my overall investment strategy is.

@Trendnomics, thanks for making a valuable input in the "Dump it here" thread as there are only a few members who take the time or make the effort to post in the hope of helping others.

Skate.


----------



## jjbinks (13 April 2020)

Trendnomics said:


> We can begin the journey of answering the most important question, with more questions:
> 
> For freely traded financial instruments, is the underlying price action random or predictable?
> If random, how can my TF system possibly be profitable?
> ...




Although I don't have vigorous mathematical proof my reading has convinced that TF system profit due to two factors
1)"Momentum" phenomena which makes price actions non-random
2)Diversification/Position sizing - Buying say 20 stocks with position size decided by risk or pct/equity rather than market cap as would be the case when buying the index is more often than not likely to be more profitable than just buying the index. (This because in most time periods small/medium caps outperform large caps over longer time frame)


----------



## Skate (13 April 2020)

ducati916 said:


> So Mr Frog, The initial results are in from Mr Skate. I'll let him update the thread, he may have some late improvements to add.




@ducati916 contacted me today offering help with timing of the entry & exit using global benchmarks. The brief was to code his 5 fundamental indicators culminating into a useful code (I'll be forever grateful). The information Duc has shared is confidential.

*The "Duc Indicator"*
The information Duc shared was in the hope I could turn it into a useable indicator that I could use in one of my strategies. The "Duc Indicator" forms part of the buy condition as well as the sell condition. The indicator has blown me away as it works so well, maybe too well (further testing is required). At this stage I can't fault the "Duc Indicator" & I've been playing with it all day. The indicator is definitely not forward looking.  I've used the "MAP Weekly Strategy" & my "BlueWren Daily Strategy" as the guinea pigs.

*Lets see how the "Duc Indicator" handles a Daily Backtest*
Backtest period: 1st July 2019 to last Thursday - This is a screen capture using the Daily "Duc Indicator" on my "BlueWren Daily Strategy"







*The "Duc Indicator" backtest - Portfolio Equity Chart*
Backtest period: 1st July 2019 to last Thursday - This is a screen capture using the Daily "Duc Indicator" on my "BlueWren Daily Strategy"








*Lets see how the "Duc Indicator" handles a Weekly Backtest*
Backtest period: 1st July 2019 to last Thursday - This is a screen capture using the Weekly "Duc Indicator" on my "MAP Weekly Strategy"







*The backtest Weekly Portfolio Equity Chart*
Backtest period: 1st July 2019 to last Thursday - This is a screen capture using the Weekly "Duc Indicator" on my "MAP Weekly Strategy"




*The "Duc Indicator" *
The "Duc Indicator" has sharpened the entry but more importantly the "exit" kicked in much earlier on the 28th Feb 2020 - the strategy went straight to cash, so it works.

*Explanation of the Flat line*
The flat line across the top of the Portfolio Equity Chart indicates the "Duc Indicator" is off. (no trades are allowed to be taken till the "Duc Indicator" turns back on)

*Summary*
I hope the graphic displays how well the "Duc Indicator" enters & exits positions quickly "trading a lot" is the price you have to pay for added protection I guess.

Thanks for the ideas & help Duc..

Skate.


----------



## Rsthree (13 April 2020)

qldfrog said:


> Indeed apologies for using the acronym without first explanation
> Phone typing is not an easy sport




Hehe, I was thinking too much, I thought SL was some exotic exit filter.


----------



## Newt (13 April 2020)

Sounds impressive Skate and Duc. 
How about 2015 and late 2018 - did it help there too?

Dammit, where are all the Chinese hackers when you need them?


----------



## Skate (13 April 2020)

Newt said:


> Sounds impressive Skate and Duc.How about 2015 and late 2018 - did it help there too? Dammit, where are all the Chinese hackers when you need them?




@Newt, all I can say is "I believed Duc was a smart bunny" - NOW I know for sure.

The "Duc Indicator" handled 2015 & 2018 on it's ear, pity I don't have data for 2007 & 2008.

*2015*







*2018*


----------



## Trendnomics (13 April 2020)

jjbinks said:


> Although I don't have vigorous mathematical proof my reading has convinced that TF system profit due to two factors
> 1)"Momentum" phenomena which makes price actions non-random
> 2)Diversification/Position sizing - Buying say 20 stocks with position size decided by risk or pct/equity rather than market cap as would be the case when buying the index is more often than not likely to be more profitable than just buying the index. (This because in most time periods small/medium caps outperform large caps over longer time frame)




1) "Momentum" is a consequence of the statistical anomaly - we are currently saying, that the airplane flies due to it having wings (current answer depth).
2)Diversification/Position sizing does not attribute to a system being profitable or unprofitable - it does however contribute to the degree of profitability for a system with a positive expectancy + it determines the risk of ruin and ruin level of a system. But no amount of Diversification/Position sizing, will result in a long term profit, for a system with a negative expectancy. Diversification/Position sizing also has no impact on the underlying price action of a financial instrument. We can safely eliminate this as an answer.


----------



## Newt (13 April 2020)

Yikes, that does look very promising.

Congrats to you both if the outcomes if mutually beneficial.  You derserve some reward for all the paying forward effort in this thread Skate.  

Also double underlines Duc comments for all to listen to as well.  Suspect only small bits of info getting through before as Duc clearly playing in markets and strategies out the usual TF ASX norm for most of us.


----------



## Newt (13 April 2020)

Ok, I'm back for tidbits again. 

Would all the component data of the super Duc model be available to Norgate subscribers, hypothetically speaking, or does some macro data require hunting down from elsewhere??


----------



## Skate (13 April 2020)

Newt said:


> Ok, I'm back for tidbits again.Would all the component data of the super Duc model be available to Norgate subscribers, hypothetically speaking, or does some macro data require hunting down from elsewhere??




Newt, Norgate data has all the required global indexes to code the “Duc Indicator”. Also, Duc has given me help expecting nothing in return. You only have to read a few of his posts to understand how knowledgeable he is.

Skate.


----------



## Newt (13 April 2020)

Yes.....
Thanks Skate.  

Quite an Easter - ideas and inspiration on all fronts here.....


----------



## Bazzi (13 April 2020)

Thanks Skate!  
I look forward for your buy/sell update with duc indicator reaffirmation


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## ducati916 (14 April 2020)

Skate said:


> Newt, Norgate data has all the required global indexes to code the “Duc Indicator”. Also, Duc has given me help expecting nothing in return. You only have to read a few of his posts to understand how knowledgeable he is.
> 
> Skate.




Well actually Mr Skate, I'm hoping you keep the updates coming so that it can be truly assessed under real market conditions going forward.

Actually Mr Skate is being unduly modest: my methodology, being discretionary, can be quite subjective. Mr Skate undertook the heavy lifting in coding and thereby adding the objectivity to my interpretation.

jog on
duc


----------



## Skate (14 April 2020)

rnr said:


> Hi @Skate,
> Just wondering whether your "GTFO" indicator is based on a single function (e.g. say % drop in price of a stock) or is there another function which perhaps indicates an exit signal for all open trades?
> Cheers,
> Rob




Rob, the "GTFO Indicator" is a crude indicator just as an Index Filter is. For others, a basic "Index filters" turns-on & turns-off whether the close is above or below a moving average. A "Rate of Change" (ROC indicator) is a momentum indicator. For both indicators to work efficiently the lookback period is critical & totally independent of each other. In saying this the ROC Filter & Index Filter have been optimised to activate on the same bar.

*The "GTFO Indicator"*
The GTFO indicator sprung into life after looking at a lot of charts & remarking "if only I exited here" or "here". I had the grand idea to backtest the idea, exiting all my positions when the Index filter turned off, that idea was quickly shelved. My next grand idea was to exit when my ROC was below 0% (when the yellow ribbon turns on) another brain-fade of an idea. My next attempt was to optimise the ROC Filter to come on at the exact same bar the Index Filter turned off (Ribbon colours, ROC below 0% = YELLOW Ribbon whereas when the Index Filter is off = RED Ribbon. When the yellow ribbon turns on & the Index Filter is Red = I quickly "GTFO". That's the GTFO filter in a nutshell. Applying those parameters to individual stocks & "wam-bam-thank-you-mam" the GTFO indicator was born.

*The "Duc Indicator"*
The GTFO indicator is crude & has been optimised to my Index (XAO) Filter whereas the "Duc Indicator" is very detailed & exotic indicator linked to the performance of a Global Index. When Duc gave me the brief I had to do a lot of reading (supplied by Duc) not only to understand his idea but how to go about coding it. My first thought was "how the hell am I going to do this" but as usual Duc was kind enough to fully explain his methodology. Frankly I'm amazed that he can follow such a detailed plan in his head.

*My Exit strategy*
I'll be playing around with the "Duc Indicator" some more today but on face value my exit strategy has now gone from a Vespa to a Ducati 916

More information on the "GTFO" indicator can be found here: https://www.aussiestockforums.com/posts/1060850/

Skate.


----------



## Skate (14 April 2020)

ducati916 said:


> Well actually Mr Skate, I'm hoping you keep the updates coming so that it can be truly assessed under real market conditions going forward




Duc, I certainly will to keeping others updated - I'm planning to do a lot more testing today.

Skate.


----------



## Skate (14 April 2020)

*Well here's one for the books *




*Oh NO !*
"The Ducati blue bar strategy" has a buy signal today for "SGH" - Slater & Gordon (I nearly fell off my chair) with @Trendnomics words ringing in my ears _"you have to become comfortable with something that can be unbearable at times, to avoid emotional tinkering" _

*I've turned religious*
I'm praying that "SGH" doesn't make it to the end of the day as a buy signal. This signal would test my resolve as I'd be shaking in my boots investing even $1 on this dog let alone $15k. Personally I'll be following closely along as this might be the first time "The Ducati blue bar strategy" disappoints. (for the life of me, I can't see how it can't)

Skate.


----------



## Newt (14 April 2020)

Trendnomics said:


> 1) "Momentum" is a consequence of the statistical anomaly - we are currently saying, that the airplane flies due to it having wings (current answer depth).
> 2)Diversification/Position sizing does not attribute to a system being profitable or unprofitable - it does however contribute to the degree of profitability for a system with a positive expectancy + it determines the risk of ruin and ruin level of a system. But no amount of Diversification/Position sizing, will result in a long term profit, for a system with a negative expectancy. Diversification/Position sizing also has no impact on the underlying price action of a financial instrument. We can safely eliminate this as an answer.




So following on this TN, perhaps you're equating aerodynamic "lift" with nice green bar uptrends, and the tendancy for existing trends to continue after the initial market impulse for the initial price rise has passed?


----------



## Trendnomics (14 April 2020)

Newt said:


> So following on this TN, perhaps you're equating aerodynamic "lift" with nice green bar uptrends, and the *tendancy for existing trends to continue* after the initial market impulse for the initial price rise has passed?




There is some truth to this - but then price action can't be random all the time. Also, why do we observe a trend existence paradox, between different time-frames (trends are far more prevalent for longer time-frames)?

Performing some auto-correlation tests on the price action of a highly liquid equity, at various time-frames (from 1 day to 50 days), reveals some interesting random/predictable transitions:



@ 3:19 in the video "_16 days......_". Sixteen days as a maximum test boundary? Anyone curious to do some tests beyond? I know I have.....


----------



## Newt (14 April 2020)

Ok, that suggests a thesis, and presumably you could go further looking at other dimensions of market capitalisation, price, turnover in addition.  

Will have to get my thinking cap on how to wrest data out of the Norgate database.....


----------



## Trendnomics (15 April 2020)

Newt said:


> Ok, that suggests a thesis, and presumably you could go further looking at other dimensions of market capitalisation, price, turnover in addition.
> 
> Will have to get my thinking cap on how to wrest data out of the Norgate database.....




https://au.finance.yahoo.com/quote/BHP.AX/history/

^^^ Accurate enough and purely an Excel exercise - pick your favourite top 50 stock (BHP in link is an example).


----------



## aus_trader (15 April 2020)

Skate said:


> *Well here's one for the books *
> 
> View attachment 102250
> 
> ...



Yes this is a very interesting stock to play with. It has been de-fibrillated so many times back to life, I don't know whether it's on the path of the inevitable or it'll somehow find the strength and survive and prosper.
I have talked about this stock in various ASF threads including my spec portfolio thread with regards to how an ambitious UK law firm acquisition with massive debt funding unravelled this stock from a market darling status back in the day. Ever since it's done a clever 10 to 1 split or consolidation to rocket the share price to oblivion to prevent heart failure whenever the share price got close to zero.


----------



## peter2 (15 April 2020)

@Trendnomics  I've plotted the current closing price vs the close 16d, 30d and 50d earlier. 
Do these graphs show the statistically anomaly that you hope we might see? 
I'm not sure how to describe it other than over time prices disperse further. Prices get further away from the current price with time. With stock prices there's only two directions up and down. 

My mathematically edge is selling as prices fall while holding those that are going higher. 

I don't think this is the statistical anomaly that you're referring to.


----------



## peter2 (15 April 2020)

@aus_trader  this one's for you.


----------



## ducati916 (15 April 2020)

Skate said:


> *Well here's one for the books *
> 
> View attachment 102250
> 
> ...





_*Callahan*: I know what you're thinking: "Did he fire six shots or only five?" Well, to tell you the truth, in all this excitement, I've kinda lost track myself. But being this is a .44 Magnum, the most powerful handgun in the world, and would blow your head clean off, *you've got to ask yourself one question: 'Do I feel lucky?' Well, do you, punk?*_

_[The thief gives up trying to retrieve his shotgun; Callahan picks it up and starts to walk away, lowering the hammer.]

*Thief*: Hey! [Callahan turns around] I gots to know...

[Callahan recocks and aims his revolver and pulls the trigger, but the gun just clicks on an empty chamber, and he grins, laughs, and walks away.]

*Thief*: Son of a bitch...
_
jog on
duc


----------



## frugal.rock (15 April 2020)

About SGH...
A few thoughts.
Yes, it's a dog when looking at the chart.
I can see the cause of the blue bar, however the volume is pathetic.
It's a signal, but a setup?
Maybe, if the bottom is in.
Here we go, the old bottom thing again....it may reverse and do the same sort of stupidly low volume trading going upwards..meh!?
Pink Pig's CAN fly backwards.
With a good jet pack.

The bookie's have it at 100:1
I give it 80:1 only cause them be legal eagles.... 

F.Rock


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## Trendnomics (15 April 2020)

peter2 said:


> @Trendnomics  I've plotted the current closing price vs the close 16d, 30d and 50d earlier.
> Do these graphs show the statistically anomaly that you hope we might see?
> I'm not sure how to describe it other than over time prices disperse further. Prices get further away from the current price with time. With stock prices there's only two directions up and down.
> 
> ...




Hey Peter. It appears you have only plotted the first quadrant of price action.

Plots to look like:



Theoretically the shorter time-frames will look like (random distribution):



Theoretically the longer time-frames will look like (predictable distribution): 


But why?


----------



## Skate (15 April 2020)

qldfrog said:


> BBand:I worked a lot on Zero Lag (well nearly  ) code and the resulting code is both better overall than my BBand one, much more dynamic (but still weekly) and as BBand has only one entry I will replace it by my new  ZLextrav2 system.




*We are constantly being fooled by randomness*
"Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets" is a book by Nassim Nicholas Taleb that I have mentioned once or twice before in the "Dump it here" thread. "Fooled by Randomness" was very insightful book as-well-as a good read, a real eye opener to say the least. Taleb's book deals with the fallibility of human knowledge & it was mentioned in the video posted by @Trendnomics. What a perfect segway for me to post about the "randomness" of Mechanical Trading Systems & systems trading in general.

*The BBO Strategy*
@qldfrog, I've traded my version of John Bollinger's Bollinger Bands (BBO) for others the acronym BBO means the "Bollinger Break Out". My trading strategy is called the "BBO Weekly Strategy" & I've traded the strategy with great success. All my systems went to (100% cash) in the last quarter of 2018. The "BBO Weekly Strategy" was one of the strategies I didn't trade in 2019 with one thing or another getting in the way.

*GTFO & the DUC Indicator*
I'll post up a few graphis to show the difference what a GTFO makes to trading. Using the GTFO comes with a couple of trade offs (a) accepting lower profits for (b) less downside risk. The Duc Indicator is new & it's a current struggle to get the GTFO & the DUC indicator to play nice together. Getting local & global indexes to mix is like trying to get water & oil to mix - it's a work in progress. I'll concentrate on the GTFO Indicator (my Vespa Scooter) as I'm still trying to learn to ride my Ducati - which is a better bike by the way.

*The BBO Strategy*
I'll post up a backtest for 2019 the year that the "BBO Weekly Strategy" wasn't traded to show "what could have been". The "BBO Strategy" isn't a bad strategy when all the "ducks align".










*More to come*
I'll have more to say in my next post with a few comparisons between "NO" GTFO versus "WITH" the GTFO indicator applied to the same "BBO strategy".

Skate.


----------



## Skate (15 April 2020)

*2019 was a roaring market*
The GTFO Indicator has not been designed to be effective in a roaring bull market as the markets will take care of themself.

*Comparison Backtests*
The backtests & Portfolio Equity charts displays that the GTFO Indicator has little effect when trading in favourable conditions but in the next post trading is 2020 is a different kettle of fish.










*Nah..*
Not much different at all.

*More to follow*
Lets wait till the next post to see the GTFO in action.

Skate.


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## Skate (15 April 2020)

*The GTFO Indicator in action 2020*
Till I can get "The Duc Indicator" to behave the "GTFO Indicator" is all I have to "demonstrate" the effectiveness of the indicator. The GTFO indicator has saved my bacon on a few occasions by exiting positions earlier than most other exit strategies.

*Backtest results*
On face value the GTFO indicator works well doing its job "but" not well enough "in my opinion". @ducati916 has given me the tools to overcome this shortcoming so I'm tasked with finding an application method that can be universally applied to all my strategies. I'm like a dog with a bone, I won't let it go until I can get "The Duc Indicator" & the "GTFO Indicator" working together. I must admit at the moment though it's a bit of a struggle.








*The GTFO Indicator comes to life in March 2020*
The GTFO Indicator kicked in to life in March helping to "lower" the loss - even so there was still pain attached.







*The GTFO has been a band aid solution*
Even with the GTFO band aid solution the loss would still have hurt - but not using the GTFO indicator would have been very unpleasant indeed.

*Summary*
The GTFO Indicator is a worthy tool, one that I'm proud to have in my tool box.

Skate.


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## Newt (15 April 2020)

Trendnomics said:


> Hey Peter. It appears you have only plotted the first quadrant of price action.
> 
> Plots to look like:
> 
> ...




Thanks for having a go Peter, and thanks TN for explaining further.
One explanation might be that over longer time periods, as present price increases more individuals feel they need to climb on the "gravy train", and in the reverse as price fall then more will exit.  The "45% smear" on the 3rd graph suggests that this proportional effect applies in both directions, but as Peter has said our stops help contain the price drops, and hopefully let the price trends continue on.  

It is less likely, but certainly impossible for present prices to be increasing and future prices decrease as new info is anticipated or becomes known.  

Am I close at all??


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## Skate (15 April 2020)

Skate said:


> *Well here's one for the books *
> 
> View attachment 102250
> 
> ...




*Well here's another one for the books*
"The Ducati blue bar strategy" has a buy signal today for "TER" - Terracom Limited

*Summary*
"TER" shares appear to be in a long-term bearish trend confirmed by multiple indicators showing demand for this stock is low which signals that investors see little opportunity in owning this stock at this time.
*
Time will tell*
I'm now keenly watching "SGH" & "TER" 

*Why am I following these two with interest ? *
"Because they are positions I wouldn't trust buying with your money let alone mine"

Skate.


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## frugal.rock (15 April 2020)

Wow. PDI Predictive.
This has been in my watchlist for a while.
Expected a gap up on open...
didn't expect 200% on open, and definitely didn't expect a high over 800% up.
Wow.

Could a, should a... didn't.
From whoa, to Go!
Watched from the sidelines, all chicken like...

Anyone holding or held/ out today?
Awesome stuff!

F.Rock


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## qldfrog (16 April 2020)

Trendnomics said:


> Hey Peter. It appears you have only plotted the first quadrant of price action.
> 
> Plots to look like:
> 
> ...



The way i see it TN:
Due to inflation and population growth, we have an overall bias on growth and increasing price on the extra long term.it is a fact known by the player so overall positive mind.

Then why we end up in a long term olive style distribution heading north east is in my opinion just the fear and greed(FOMO)
Hum this is going up today, let's get in too, self reenforcing loop until the fear hits the first investor:
 hum i  made a killing, better get some of this safe, let's sell or sell half..price growth slow..more fear from initial buyers less incentive of FOMO..we top
Same in reverse when price falls
None of the above actually cared of PE or economic results, it is just multiple independent thinkings and psychology creating a market behaviour, and generating trends
Virus, terrorist attacks, financial releases can obviously shock these but my understanding is that we are just observing the fear/greed at play
Our systems then try to find indicators of start /end of these trends to get in out in time
All entries are roulette plays but as opposed to Casino, we can start to bet or exit while the wheel 
is turning, twisting our odds slightly
But always at risk of an earthquake collapsing the casino: GFC,war or covid-19


----------



## qldfrog (16 April 2020)

Just want to add most of Market activity is now machine created BUT these algorithms are built on past actions and mostly emulate human psychology too.


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## frugal.rock (16 April 2020)

qldfrog said:


> Just want to add most of Market activity is now machine created BUT these algorithms are built on past actions and mostly emulate human psychology too.



So, do you think it might pay to "get with the program" ?
Have been observing algo behaviour lately.
With yesterday's volume and price action on PDI, algorithms definitely were involved. Seems like it's going to carry on today... today will see some big winners and probably bigger losers... Possibly a good short trade developing...?
Either way, am watching only.

However, FAU has been showing modest signs of improvement.
Hoping it's a stunt double of PDI...
Seems relatively unknown for the time being.
FAU thread dormant, until now.
https://www.aussiestockforums.com/threads/fau-first-au-limited.34043/

F.Rock


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## qldfrog (16 April 2020)

Definitively not a matter of being right or wrong, look NXT lately yet would likely lock my silverware before inviting their mgt at home.
It is a matter of following/preempting the lemmings but jumping aside before the cliff drop.
Has been and is still the game


----------



## Newt (16 April 2020)

frugal.rock said:


> So, do you think it might pay to "get with the program" ?
> Have been observing algo behaviour lately.
> With yesterday's volume and price action on PDI, algorithms definitely were involved. Seems like it's going to carry on today... today will see some big winners and probably bigger losers... Possibly a good short trade developing...?
> Either way, am watching only.
> ...




Definitely Frugal, BUT, just be aware you'll have to become a competent moderately successful and disciplined trader before you can hope to create consistently profitable code that emlulates your trading "modus operandi".

For most of us, that learning period is roughly 2 - 20 years


----------



## frugal.rock (16 April 2020)

Newt said:


> Definitely Frugal, BUT, just be aware you'll have to become a competent moderately successful and disciplined trader before you can hope to create consistently profitable code that emlulates your trading "modus operandi".
> 
> For most of us, that learning period is roughly 2 - 20 years



At the moment, am settling for partially incompetent, slightly susuccessful undisciplined trader status. 
Still learning daily and know that I know that I don't know much, but after a year of trading and circa 1200 trades, it's make or break time.
I should review trades more often, the bad ones I mean. 

Oh, the "get with the program" thing was a pun ... to do with the automated algo/ bot discussion comments.
Recognition of algorithms trends is something I have been having some success with. Some are very touchy to trading interference, occasionally presenting opportunity.

F.Rock


----------



## Skate (16 April 2020)

frugal.rock said:


> Wow. PDI Predictive. This has been in my watchlist for a while. Expected a gap up on open...didn't expect 200% on open, and definitely didn't expect a high over 800% up.Wow.





Newt said:


> For most of us, that learning period is roughly 2 - 20 years




@ducati916 has been active on the thread recently & passed on a few "gems". "The Ducati blue bar strategy" has the uncanny ability to pick some great moves. Recently it picked the move of "PDI". 

*It gets off quick*
Looking at the chart you'll notice when "The Ducati blue bar strategy" generates a signal that doesn't follow through it get off the position quick smart - the most recent breakout of "PDI" has been captured by "The Ducati blue bar strategy" proving systematic trend trading still works in bearish markets.

*Recent posts*
I've recently posted about "The Ducati blue bar strategy" & the "Duc Indicator" both brilliant ideas. Since Duc has dropped those gems I've been hard at work trying to develop them further. We have all been given the same information about "The Ducati blue bar strategy" but I'll bet you pounds-to-peanuts not one reader is running with the idea.  

*Chart*
I'll post up the chart of "PDI" snagging the recent breakout. Looking at the chart it was on every move & quickly hoping off when the move didn't follow through.




Skate.


----------



## peter2 (16 April 2020)

Yep, it picked the move in PDI but who trades this sort of micro crap stock? 
The strategy has probably indicated hundreds during the current market rally. We can't buy them all. 

I'm not interested in looking at a strategy that acts like a mean reversion system. The average length of the trades shown in your back-tests was a little over two bars. Please don't call this a trend strategy.


----------



## Skate (16 April 2020)

peter2 said:


> Yep, it picked the move in PDI but who trades this sort of micro crap stock? The strategy has probably indicated hundreds during the current market rally. We can't buy them all. I'm not interested in looking at a strategy that acts like a mean reversion system. The average length of the trades shown in your back-tests was a little over two bars. Please don't call this a trend strategy.




@Peter, I displayed "The Ducati blue bar strategy" to demonstrate that it picks turning points within a trend, whether it be a trend continuation or a start of of a new uptrend. "The Ducati blue bar strategy" is definitely not a "Mean Reversion" system. Admittedly in its raw form it picks many positions daily but with additional parameter settings with a refined PositionScored the strategy is showing potential.


Newt said:


> Definitely Frugal, BUT, just be aware you'll have to become a competent moderately successful and disciplined trader before you can hope to create consistently profitable code that emlulates your trading "modus operandi". For most of us, that learning period is roughly 2 - 20 years




@Newt, after watching the video posted by @Trendnomics recently I got the distinct feeling as a Systematic Trend Trader I might be wasting my time believing the price moments are just random. If price movements are really random - I've sure capitalised on some of the moves.

*Better System Trader Podcast*
After listening to Greg Morris, a trader using "Technical Analyst" restored my faith in systemic trend trading. If you have watched the video it pays to balance both sides of the argument by listening to Greg Morris to understand the tools he uses with great success.

*Listen to Greg Morris*
http://bettersystemtrader.com/031-greg-morris/

*Systemic Trend Trading Works*
Most members on the forum are seasoned traders with many more years of experience than I have as my experience is limited to 5 years. Systemic Trend Trading has been kind to me over these years. The "PANDA Strategy" acknowledged by @peter2 as a handy performer so I'll use that strategy as an example. The backtest is over the last "4 complete calendar years".

*Backtest settings*
Portfolio Size - *$300k*
Number of Positions - *20*
Position Sizing - *$15k* (no re-balancing)
Backtest period - *1st January 2016 to 30th December 2019*

*FYI*
The "PANDA Strategy" isn't shabby at all with a low maximum drawdown percentage as a nice additional feature.

*I'm saying - it's doable*
Beginners who are reading this post take heart, with a lot of work it can be done.








*It takes time*
To get the strategy to this level of consistency it's taken countless hour in development & many more hours refining the system.

Skate.


----------



## frugal.rock (16 April 2020)

peter2 said:


> Yep, it picked the move in PDI but who trades this sort of micro crap stock?
> The strategy has probably indicated hundreds during the current market rally. We can't buy them all.



Who trades any sort of crap stock that has become an insto's flavour of the day? 
The insto then the market.
Around $20 million traded each day, from nothing to something.
An instant pop up gambling den IMO.
Unless you're already holding a 
stock that gets favoured by insto action, buying is a pure gamble...
Dangerous. 
However, for purely intraday TA traders, is it a crap stock?
Probably, because as you say, there's been plenty of opportunities lately.
I didn't trade it as the risk level was/ is unacceptable to me.

F.Rock


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## Skate (16 April 2020)

peter2 said:


> Yep, it picked the move in PDI but who trades this sort of micro crap stock? The strategy has probably indicated hundreds during the current market rally. We can't buy them all. *I'm not interested in looking at a strategy that acts like a mean reversion system*. The average length of the trades shown in your back-tests was a *little over two bars*. Please don't call this a trend strategy.




@peter2 re-reading your comments about "The Ducati blue bar strategy" I believe they were unkind.

*4 year Backtest*
I've just completed a backtest over the last 4 years as per my previous PANDA Strategy. I'm posting a backtest "to overcome a confusion" others may have gathered from your comments.

*Stats*
1. Average winning bars held over a 4 years period = *10.89 Bars/days*
2. Number of bars in the largest win = *22 Bars/days*
3. Number of bars in the largest loss =* 2 Bars/days*
4. Average annual return percentage (over a 4 years period) = *20.95%*

*Difference of opinions*
Peter our opinions differ at this stage but "IMHO" the strategy has potential to be developed. For those reading a "beginners thread" it might be a perfect entry into strategy development to understand how markets move - that's all.





All the comments I've made in the "Dump it here" thread are to encourage others - passing on information that I found helpful or interesting in my journey.

Skate.


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## frugal.rock (16 April 2020)

I had a crap day. Didn't really trade.
One buy. 
Portfolio down 5.8% today alone, was 1% off 0% drawdown prior.
So seeing things like PDI really piss me off.


----------



## Joe90 (16 April 2020)

Skate said:


> I'll post up the chart of "PDI" snagging the recent breakout. Looking at the chart it was on every move & quickly hoping off when the move didn't follow through.








I'm going to call complete BS on this one. You've got five buys signals on some 1/2c festering canker of a speccie and you're claiming you detected a breakout that occurred ~10days after the last buy signal? Utter bollocks. 

Please post some afl code to show everyone interested how the system supposedly works so we can evaluate it properly for ourselves.


----------



## peter2 (17 April 2020)

@Skate  My apologies if you were unsettled by my post.

When you first displayed the PDI chart as an example of the "The Ducati blue bar strategy" it was in reply to a members request to see it on PDI. That was reasonable.

When your posted the PDI chart again as a "gem" of an example, well, that I didn't like because I felt that PDI was a poor choice to use as an example. I like @Joe90 's description of the stock very much.

_Re: your recent back tests_. I've had another look at them and I'm sure that the average trade length is ~2 bars.  Now I'm wondering if those back tests were to show the effectiveness of the "Duc indicator" as an entry signal only and all trades were exited after two bars to test if the indicator was worth more research. It didn't read that way as you mentioned normal exit strategies were used.

Why are all the back tests showing the average trade length of 2 bars ?

The stats of your PANDA back test are more like a trend strategy (W% < 50% and average trade length of winners twice that of the losers). The good old PANDA may not need any assistance from the Duc Indicator.


----------



## Skate (17 April 2020)

Joe90 said:


> I'm going to call complete BS on this one. You've got five buys signals on some 1/2c festering canker of a speccie and you're claiming you detected a breakout that occurred ~10days after the last buy signal? Utter bollocks. Please post some afl code to show everyone interested how the system supposedly works so we can evaluate it properly for ourselves.




@Joe90 I believe you are missing the point or have jumped to a conclusion without knowing why the post was made. Let me try to background the strategy & why the chart was posted in the first place taking each comment in order.

1. *"I'm going to call complete BS on this one"*
You called BS because I posted a chart of "PDI" a security that @frugal.rock had made a few posts about in this & another thread. If you read his posts on "PDI" it's obvious he is emotional disappointed for missing the breakout. If you read my post I had remarked that there were many breakouts that didn't follow through. Also with the strategy parameter setting the position wouldn't have been taken & I never claimed or inferred this, the post was for @frugal.rock.

2. *"You've got five buys signals on some 1/2c festering canker of a speccie and you're claiming you detected a breakout that occurred ~10days after the last buy signal? Utter bollocks"*
Let me explain again - the chart was posted for @frugal.rock as it was a security he was following. As far as claiming that "The Ducati blue bar strategy" detected a breakout - the strategy did detect the breakout (obvious as shown in the chart above)

3. *"Please post some afl code to show everyone interested how the system supposedly works so we can evaluate it properly for ourselves"*
Hey Joe, I've discussed this all before, don't make me go over it again, how about you go back & read a few posts because you have made post displaying a poor attitude.

*The 'Dump it here' thread*
The sole purpose of this thread is to help others gain knowledge. The thread is for the "exchange of ideas, not a contest of ideas".

*Snide remarks*
I've found some members can't help themselves by posting to point-score at every turn, belittling or ridiculing others & in my opinion it's not the way forward. We are a community of like minded people who have common interests & goals. All members who are at different stages & levels of experience can still make a contribution to this thread if they have the desire to help others.

*Before posting T.H.I.N.K.
T* - is it *true*?
*H* - is it *helpful*?
*I* - is it *inspiring*?
*N* - is it *necessary*?
*K* - is it *kind*?

*Reads these posts before you respond*
https://www.aussiestockforums.com/posts/1065849/
https://www.aussiestockforums.com/posts/1066161/

*ducati916 posted* ↑
_"I am aware of the 'algos', are often visible during low volume periods that is not enough to break the 'trend' that is tied to a volatility measure. The programmers use multiple inputs that I believe is 'volatility' & Value Funds, will not buy long into high volatility. Their buying, creates a bottom in the market that pushes volatility higher so "volatility and cash/volume are two inputs". Given that your systems are cycling you in and out of stocks, from your perspective, I agree the entry is almost irrelevant as you buy high to sell higher. In this scenario, the exit is all encompassing. Your GTFO trigger seemed to work as well as anything and better than most. You will (obviously) have to programme into your systems some form of indicator. (Volatility & Volume) within a trend"_

*Duc's key words.*
1. "Volume"
2. The trend is tied to a "volatility measure" taken from the VIX or "other sources"
3. So "volatility & volume" are the two inputs

*"The Ducati Daily Blue Bar strategy"*
The strategy was quick to code using Duc's key words because he stripped trading back to the bare basics "volatility & volume" the drivers of a trend. Once again it proves "simple" works. Joe if you have something that helpful to add I'm all ears

*The "Dump it here" thread*
Making a stupid comment is unhelpful. Posting an alternative view is better than leading off in a confrontational manner as you did. I don't want to be rude but I find it very difficult to educate an idiot, was that the response you were after from me.

Skate.


----------



## Skate (17 April 2020)

peter2 said:


> @Skate  My apologies if you were unsettled by my post. When you first displayed the PDI chart as an example of the "The Ducati blue bar strategy" it was in reply to a members request to see it on PDI. That was reasonable. When your posted the PDI chart again as a "gem" of an example, well, that I didn't like because I felt that PDI was a poor choice to use as an example. I like .




@peter2 lets put this conversation into context. @ducati916 has been posting educational information in the "Dump it here" thread that I appreciate. It's hard to fill content that's educational while entertaining. Duc recently posted a few of his fundamental ideas in what he looks for when taking a position. I condensed his post & listed his key words. I coded a new strategy from those two words - "volatility & volume" the drivers of a trend. The two words formed the entry condition, Duc never mentioned an exit condition so for simplicity I exited when the entry condition was no longer being met. I used "Blue & Red" bars so others could follow along without any dramas. The exercise was to take a suggestion & turn it into a system & display some backtest results.

*I made a few comments*
"The Ducati Daily Blue Bar strategy" is a simple strategy buying the first "blue bar" & selling the first "red bar" it simple & surprisingly effective. I'm first to admit the strategy needs further development.

*New Trading Idea*
With all trading ideas we are trying to tilt the odds of success in our favour by buying into trends whilst minimizing our losses. Buying good companies at the "right time" & getting off quickly "at the right time" when it all goes wrong is the simplicity of the system.

*Educational exercise*
"The Ducati Daily Blue Bar strategy" & the "Duc Indicator" were two ideas generously shared by @ducati916. I profited from his advice where others just want to make unhelpful snide remarks.


peter2 said:


> The good old PANDA may not need any assistance from the Duc Indicator.



The PANDA Strategy sets a new level handling complex mathematical gymnastics thrown at it. The GTFO & the "Duc indicator" aren't required as PANDA handles the job nicely by itself.


peter2 said:


> I'm not interested in looking at a strategy that acts like a mean reversion system. The average length of the trades shown in your back-tests was a little over two bars. Please don't call this a trend strategy.





Joe90 said:


> I'm going to call complete BS on this one. You've got five buys signals on some 1/2c festering canker of a speccie and you're claiming you detected a breakout that occurred ~10days after the last buy signal? Utter bollocks.




*Poor form*
I considered both the posts above unhelpful & certainty not in keeping with the polite nature of the "Dump it here" thread. This thread is not a contest of idea but an exchange of ideas. Being right or wrong is not the point. This thread gives everyone a platform to express an alternative idea, view or opinion. Snarly remarked don't lead to a friendly exchange.

Skate.


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## ducati916 (17 April 2020)

peter2 said:


> 1. Yep, it picked the move in PDI but who trades this sort of micro crap stock?
> 
> 2. The strategy has probably indicated hundreds during the current market rally. We can't buy them all.
> 
> 3. I'm not interested in looking at a strategy that acts like a mean reversion system. The average length of the trades shown in your back-tests was a little over two bars. Please don't call this a trend strategy.




1. Can't really comment on this as it is an ASX stock and I don't follow ASX (where really pretty much all of your stocks, in comparison to US, are micro-caps). 

2. True. You need to add some form of filter. My understanding from this thread and looking at you system trader chaps, is that you all do this already. Therefore if a stock not meeting your criteria is thrown up, it would simply be discarded...correct?

3. Again, really referencing the US: (a) that is the correct observation. In the US a 'mean reversion' trade is exactly what happens across all time frames, especially in ETFs and Indices, Futures. VWAP is a very popular indicator and trading a reversion to that indicator is all many (daytraders) will undertake. Other longer term traders also use it. The 'key' is calculating just how stretched is stretched for a snap back. Mr Skate's code seems to have quantified that via entries. Possibly an 'optimised' exit would be (rather than first red bar) when the snap back hits the 20 day EMA (or some-such). Again, I'm sure Mr Skate could code that and test it.

jog on
duc


----------



## ducati916 (17 April 2020)

frugal.rock said:


> Who trades any sort of crap stock that has become an insto's flavour of the day?
> The insto then the market.
> Around $20 million traded each day, from nothing to something.
> An instant pop up gambling den IMO.
> ...




Mr Rock,

So the last couple of posts have indicated some frustration with the markets. Totally understandable. It has been a difficult patch.

Now this thread is dedicated (largely) to systems, coding, automated decision making. It tends to be (although by no means necessary) long only.

Coding would send me to sleep.

There are however lots of different ways to approach the market, although you would have to trade the US, the ASX simply does not have the depth, liquidity or variety to implement other strategies. Strategies such as:

(a) A variety of Options strategies: I have linked 2, but there are many more to consider;



(b) These chaps list loads more:
https://www.tastytrade.com/tt/


I use the following 3 strategies:

(c) I have not seen any examples of this on the internet: gamma scalping. Big advantage, market neutral. Had you had a position on leading into this crash, you would have made so much money your head would spin. Utilises Black/Scholes model.

(d) Equity based trading I use almost exclusively ETFs. While I can do the Fundie thing, it is far too time consuming. Trading a basket of stocks is less risky than trading individual stocks for a number of reasons, which I won't bother detailing here. Too slow, use the leveraged ETFs. Here you are looking at longer term holds and trading partial positions based on fluctuations. Leverage adds to the number of fluctuations and the number of opportunities. Just a form of rebalancing really.

(e) Pairs trading. Big advantage, market neutral.

jog on
duc


----------



## ducati916 (17 April 2020)

To succeed in the markets, one needs to overcome this mindset and reverse it (however you can)! Systems, discretionary methodology, quant, fundie, it matters not.




jog on
duc


----------



## aus_trader (17 April 2020)

Interesting read of the above posts Duc, especially regarding your ETF trading. I was just having a look at the inverse ETFs. The one I was looking at seems like a scam, see below:



The reason I say it is because I don't think you can make money buying it for longer term even if the market went down for a long time. It's already at the low's while the S&P500 has barely pushed up half way from the selloff.

What do you think ? Do you use these type of ETF's ?


----------



## qldfrog (17 April 2020)

Skate said:


> We have all been given the same information about "The Ducati blue bar strategy" but I'll bet you pounds-to-peanuts not one reader is running with the idea.



I send the peanut, you send the pounds?
Involved in serious work based on the Gems Duc sent. 

Just a few months ago, my bband based second system was already working on bband (Volatility) AND volume, it was good enough to start putting money in.
i found better entries and it has been replaced but was better than my first system a year and a half ago
Following @ducati916  and your posts, i have reactivated this research.
But only 24h in a day...
I spent most of my day yesterday tending to my bees...
People are reading and appreciating some of the teases if only to trigger more of our own research.
I know i am not alone as i discuss this with other ASF posters
So thanks @Skate and @ducati916


----------



## ducati916 (17 April 2020)

aus_trader said:


> Interesting read of the above posts Duc, especially regarding your ETF trading. I was just having a look at the inverse ETFs. The one I was looking at seems like a scam, see below:
> 
> View attachment 102348
> 
> ...




Short answer no. I don't use the inverse (short) ETFs. If I am going short, I use Options (Puts). Options allow a fixed risk position. I don't have to monitor particularly closely, carries lots of leverage (far more than x3) and allows far more flexibility re. hedging the position.

One thing you need to bear in mind when placing a trade, are volatility levels, Options are prone to IV crush.

jog on
duc


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## Bazzi (17 April 2020)

Skate said:


> *
> View attachment 102138
> 
> Start Date: *18th March 2020
> ...




Hi @Skate , Just curious if you got an update to the open positions of the Ducati Strategy?

Also do you see EOS & AD8 are at a good entry point?
Thanks!


----------



## Skate (17 April 2020)

Bazzi said:


> Hi @Skate , Just curious if you got an update to the open positions of the Ducati Strategy? Also do you see EOS & AD8 are at a good entry point?




@Bazzi "The Ducati Daily Blue Bar strategy" is a daily strategy but I've decided to update the portfolio results after the close on Fridays. (a) As you have asked I'll update the strategy Dashboard as of the close of trade yesterday.  (b) I'll also throw up the two charts for "EOS" & "AD8" so you can see the buy signals on the chart. When a signal is in a trade another is not generated till after it has been closed.

















Hope this helps..

Skate.


----------



## Bazzi (17 April 2020)

Skate said:


> @Bazzi "The Ducati Daily Blue Bar strategy" is a daily strategy but I've decided to update the portfolio results after the close on Fridays. (a) As you have asked I'll update the strategy Dashboard as of the close of trade yesterday.  (b) I'll also throw up the two charts for "EOS" & "AD8" so you can see the buy signals on the chart. When a signal is in a trade another is not generated till after it has been closed.
> 
> View attachment 102353
> 
> ...




Thank you Skate!


----------



## Skate (17 April 2020)

*



Start Date: *18th March 2020
*Portfolio Capital:* $120,000
*Positions in the Portfolio*: 8
*Fixed Position Sizing*: $15,000




1. TNE @ $7.00 for 2142 shares on the 18th March 2020
2. PPH @ $2.99 for 5016 shares on the 23rd March 2020
3. BTH @ $0.47 for 31914 shares on the 25th March 2020
*4.* *NXT @ $7.94 for 1889 shares on the 25th March 2020 - # SOLD 9th April 2020 @ $8.46*
5. PNV @ $1.53 for 9803 shares on the 25th March 2020
6. NAN @ $5.45 for 2752 shares on the 27th March 2020
7. SLC @ $0.54 for 27777 shares on the 27th March 2020
8. NCZ @ $0.076 for 197368 shares on the 27th March 2020


























Skate.


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## Skate (17 April 2020)

Skate said:


> *Oh NO ! *"The Ducati blue bar strategy" has a buy signal today for "SGH" - Slater & Gordon (I nearly fell off my chair). This signal would test my resolve as I'd be shaking in my boots investing even $1 on this dog let alone $15k. Personally I'll be following closely along as this might be the first time "The Ducati blue bar strategy" disappoints. (for the life of me, I can't see how it can't)





Skate said:


> *Well here's another one for the books *"The Ducati blue bar strategy" has a buy signal today for "TER" - Terracom Limited I wouldn't be buying this position with your money let alone mine"







*Follow your system*
I was told many years ago, "Don't think you are smarter than your system" For those who are following these two dogs "SGH" & "TER" - "The Ducati blue bar strategy" gave two buy signals that rattled me. To tell you the truth I wouldn't have taken either of these two positions, not even with counterfeit money. After a few days the portfolio would be up $3,806.












Skate.


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## ducati916 (18 April 2020)

Skate said:


> View attachment 102381
> 
> 
> *Follow your system*
> ...







Really aimed more at the discretionary crowd, but, still applicable to you systems chaps!

jog on
duc


----------



## qldfrog (18 April 2020)

ducati916 said:


> View attachment 102402
> 
> 
> Really aimed more at the discretionary crowd, but, still applicable to you systems chaps!
> ...



Do you mean that odds of success decrease as discipline and willingness increase?
This is so opposed to my learning and principles..
I noted the graph was drawn on the corner of a napkin: where did you find an open cafe?


----------



## ducati916 (18 April 2020)

qldfrog said:


> Do you mean that odds of success decrease as discipline and willingness increase?
> This is so opposed to my learning and principles..
> I noted the graph was drawn on the corner of a napkin: where did you find an open cafe?





Not my napkin!

The napkin is actually rather ambiguous. Does it mean:

(a) Discipline/Willpower are negatives; or
(b) Discipline/Willpower in the absence of a system/methodology are negatives; or
(c) Has the curve been incorrectly drawn; or
(d) Other?

I have all manner of screenshots from through the years collected on my computer (hence a lot of historical charts etc). I can't actually remember the context from when I grabbed it years ago.

But nicely noticed.

jog on
duc


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## barney (18 April 2020)

ducati916 said:


> Really aimed more at the discretionary crowd, but, still applicable to you systems chaps!




Lol … What a nasty picture



ducati916 said:


> Does it mean




It means neither a) b) nor c) 

The "operative" words in the picture are "RELYING ON"


----------



## Newt (18 April 2020)

Or perhaps Napkin Zen is warning unless we are "one with the system", we will find ourselves having to constantly and consciously call upon our willpower to fight ourselves.

_"Be one with the napkin and the system, grasshopper....."
_
I think I'm ready to branch out into selling super expensive vague guru trading courses now I'm full of bull#@%#


----------



## ducati916 (18 April 2020)

barney said:


> Lol … What a nasty picture
> 
> 
> 
> ...




Could well be: so (d) Other.

jog on
duc


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## ducati916 (18 April 2020)

Newt said:


> Or perhaps Napkin Zen is warning unless we are "one with the system", we will find ourselves having to constantly and consciously call upon our willpower to fight ourselves.
> 
> _"Be one with the napkin and the system, grasshopper....."
> _
> I think I'm ready to branch out into selling super expensive vague guru trading courses now I'm full of bull#@%#




_"Do or do not, there is no try."_

_Yoda_

jog on
duc


----------



## Skate (18 April 2020)

*I'm throwing this one out there*


Skate said:


> "The Ducati blue bar strategy" gave two buy signals that rattled me. To tell you the truth I wouldn't have taken either of these two positions, not even with counterfeit money. After a few days the portfolio would be up $3,806.



When you doubt your strategy you won't have the confidence to trade it religiously without hesitation - "The Ducati blue bar strategy" springs to mind. I & a few others have questioned the effectiveness of this strategy, a strategy relying on only two indicators. 

*I've been thinking*
After reading a few threads (a) "when-do-you-determine-when-to-buy-a-stock" thread (b) "how-far-will-the-market-fall" thread & (c) "when-to-buy-a-stock" thread. These are questions we all seek answers to no matter where we are in our trading journey.

*Let's take this post *(how-far-will-the-market-fall thread)


aus_trader said:


> Yes there have been quite recently actually. The unknown drop in late 2018 had a beautiful V-shaped recovery and went onto make new highs as nothing ever happened. When there is no clear reason, stock market commentators and news web sites make fancy guesses at what caused it, like *6 reasons* for the drop  I don't know what'll happen but I think a perfect V-shaped recovery like the late 2018 through to early 2019 is unlikely.



@aus_trader spoke about the drop in 2018 that had a V-shaped recovery & referenced this article https://www.pbs.org/newshour/econom...ors-that-fueled-the-stock-market-dive-in-2018 so we could better understand why. In hindsight we can all make up a story to fit the narrative.

*What about this post* (when-to-buy-a-stock)



SensibleInvesting said:


> What do you guys look for when you buy a stock, and when do you decide to pull the trigger?



@SensibleInvesting nailed his first post by asking: "when do you decide to pull the trigger?" a simple question not easy to answer.

*Whoa, let's backup a little*
Duc has given us "The Ducati blue bar strategy" & the "DUC Indicator" (which by-the-way is private & confidential) so I'll concentrate on making an Indicator out of "The Ducati blue bar strategy". The Indicator gets a new name & colour coding so there is no confusion. the indicator has been named:  "The Ducati Stop & Go Indicator"

*"The Ducati Stop & Go Indicator"*
This new indicator can be used quite simply to answer all the questions above. The Stop bars are "RED" & the Go bars are "GREEN", just like traffic lights (the yellow ribbon means to be cautious) So how do we use "The Ducati Stop & Go Indicator" & what is it correlated to? - The answers will be in the next post.

Skate.


----------



## Skate (18 April 2020)

*"The Ducati Stop & Go Indicator"*
First let's recap the "The Ducati blue bar strategy". The strategy is simple in its execution by buying a position on the bar after the first "Blue" bar & "Sell" that position on the bar after the first "Red" bar. The new "Ducati Stop & Go Indicator" is just as simple. "The Ducati Stop & Go Indicator" displays red & green bars indicating when it's safe to trade & when it's not. 

*How does the indicator work?*
Quite simply if you have a "Green" bar you are good to buy, if the bar is "Red" stop trading. My initial research uses the correlation of the "S&P/ASX 200 Accumulation Monthly Index (XJOA)" applied to individual stocks. The indicator uses a "Monthly Periodicity" of the (XJOA) for smoothing effect. The periodicity of your trading strategy is insequential.

*When is it safe to trade?*
When it comes to answering "when is it safe to trade?" & "when do you decide to pull the trigger?" is answered by "The Ducati Stop & Go Indicator" that uses traffic lights. Green means GO & Red means Stop, the yellow ribbon means to be cautious. 

*Charts to come*
In the next post I'll throw up some charts to see if the traffic lights picks up the scary trading periods correlated against "S&P/ASX 200 Accumulation Monthly Index (XJOA)".  

Skate.


----------



## Skate (18 April 2020)

*"The Ducati Stop & Go Indicator"*
There have been three recent scary trading periods bandied about on a few threads so I'll use them as an example. (1) The GFC (2) The unknown drop in late 2018 & (3) our most recent COVID-19 scare. I won't be commenting on the charts other than to say that we would have been wise not to trade the red bars between (31 Dec 2007 to 30th April 2009) the GFC period. We would have been well served not trading during "the unknown drop, late 2018" (31st December 2018 to 28th February 2019). With the advent of COVID-19 we should have ceased trading on the (28th February 2020) & be currently sitting on the sidelines waiting patiently for the next green bar to come along indicating it's safe to start trading again.

*1. GFC red bars *(31 Dec 2007 to 30th April 2009)








*2. The unknown drop, late 2018 red bars* (31st December 2018 to 28th February 2019)








*3. COVID-19 red bars* (starts on the 28th February 2020)





*Summary*
@ducati916 original idea of using two indicators to measure "volatility & volume" has developed into a stand alone trading strategy & now as a stand alone indicator. Both worthy in their own right.

*Disclaimer*
I'm not saying "The Ducati Stop & Go Indicator" is perfect or it should be used as a guide when it's appropriate to be "in-or-out" of the markets "but" posted to stimulate thinking along those lines & nothing else.

*Fresh perspective*
I'm sure with further research & refinement "The Ducati Stop & Go Indicator" may alleviate some of the fears associated with trading. 

Skate.


----------



## frugal.rock (19 April 2020)

Some food for thought.
Was perusing the March 2020 Quarter Results Presentation for NCZ. Now, am not currently holding.
While the results look ok, the forward outlook looks better...
Why am I posting this here instead of the apparently more pertaining thread?
Because something else in the report jumped out at me.
The current situation with Zinc itself.
Production is crashing, according to NCZ report, half of the top 10 global mines are shut down or offline to some degree. Smelters are reducing
prices to attract more feed.

It's been on my mind for a while, that's to say, what the catalyst may be for the 10 year? down trend cycle on the POZ to reverse.
From my understanding zinc storage levels are at lows as well?
Something has to give. Up goes zinc.
Have I got the right track on this?

From my understanding @peter2 would probably be all over this already as I believe you follow the zinc price? And @Smurf1976, no doubt you have more stats than one can poke a stick at!?
Am I wrong in thinking that this has legs? Cheers.

F.Rock


----------



## Skate (19 April 2020)

frugal.rock said:


> From my understanding @peter2 would probably be all over this already as *I believe you follow the zinc price?* And @Smurf1976, no doubt you have more stats than one can poke a stick at!?
> Am I wrong in thinking that this has legs? Cheers.




@frugal.rock I might be "misreading" your post. You say: _"I believe you follow the zinc price?" - _sorry that's not correct. I'm a 100% systematic trend trader - meaning I jump on confirmed trends & get off when they are finished. To be honest I don't even know the name of the company or their business model that I'm buying & frankly I don't care - they are just ASX codes to me.



Skate said:


> 8. NCZ @ $0.076 for 197368 shares on the 27th March 2020




*"The Ducati Daily Blue Bar strategy"*
It so happens NCZ is in the "The Ducati Daily Blue Bar strategy" portfolio, that's my total involvement. I'm sure other will chime in to answer your question.

Skate.


----------



## Smurf1976 (20 April 2020)

frugal.rock said:


> And @Smurf1976, no doubt you have more stats than one can poke a stick at!?



Only thing I can add to this one is that zinc isn't necessarily zinc, there are differences in the purity of it and that comes down to there being two distinctly different production processes each itself having some minor variants. As with most things, the quality of the product affects its financial value - zinc isn't all the same!

The pyrometallurgical and electrolytic processes both start with the same basic step of roasting which in simple laymans terms means the zinc concentrate, the ore from the mines, is literally burnt (and it burns rather well, much like coal). From there the rest is vastly different.

Pyrometallurgical process: Roasting > Sintering > Retorting > Casting of metal.

Electrolytic process: Roasting > Leaching > Purification > Electrolysis > Casting of metal. For simplicity this process is commonly referred to as the RLE process (Roast Leach Electrolysis).

The pyrometallurgical process results in a zinc purity of around 98% which is good enough for galvanizing but that's about all. In contrast the electrolytic process produces two output streams - High Grade at 99.95% purity and Special High Grade at 99.995% pure zinc.

A major byproduct is sulfur dioxide, usually used on site to manufacture sulfuric acid, indeed there's more of that by weight than there is actual zinc produced. So the acid is a by-product financially but it's actually the largest product in physical terms.

Australia is the third largest zinc mining country with mines in the NT, Qld, WA, NSW and Tas and with major smelting operations located at Hobart and Townsville.

Just on 2% of the world's zinc is refined at the Hobart plant, which uses the RLE process, with production about half each of 99.95% and 99.995% grades.

Apart from the zinc concentrate from mining, other key inputs to the process are a fair bit of water and rather a lot of electricity most of which goes into the electrolysis stage of the process.

From an investment perspective though I'll caution that zinc companies have tended to be a bit like airlines. A very large scale operation involving lots of fancy equipment but it sure wouldn't be the first time a zinc company went broke indeed they seem to spend a lot of time on the edge financially, interspersed with the occasional boom where the money is made but things tend to look pretty grim much of the time.


----------



## ducati916 (20 April 2020)

Skate said:


> *"The Ducati Stop & Go Indicator"*
> There have been three recent scary trading periods bandied about on a few threads so I'll use them as an example. (1) The GFC (2) The unknown drop in late 2018 & (3) our most recent COVID-19 scare. I won't be commenting on the charts other than to say that we would have been wise not to trade the red bars between (31 Dec 2007 to 30th April 2009) the GFC period. We would have been well served not trading during "the unknown drop, late 2018" (31st December 2018 to 28th February 2019). With the advent of COVID-19 we should have ceased trading on the (28th February 2020) & be currently sitting on the sidelines waiting patiently for the next green bar to come along indicating it's safe to start trading again.
> 
> *1. GFC red bars *(31 Dec 2007 to 30th April 2009)
> ...




So Mr Skate, the indicator will simply run alongside the various systems and issue a signal, which can be taken or ignored in a discretionary manner?

jog on
duc


----------



## Skate (20 April 2020)

ducati916 said:


> So Mr Skate, the indicator will simply (1) run alongside the various systems and (2) issue a signal, which (3) can be taken or ignored in a discretionary manner?




@ducati916 the indicator can be used in that way but I've coded it in such a way it integrates forming a part of my strategy.

*Clarification*
(1) Runs inside a strategy
(2) It's an indicator that allows a position to be taken if the strategy buy condition is met & on the flip side an OR statement is integrated into my looping exit strategy.
(3) As system traders we don't enjoy the benefits of being discretionary - when the indicator is GREEN it allows a position to be taken as per the strategy conditions - when the indicator is RED we get a forced sell.

*In layman's terms*
When the strategy generates a buy signal the "The Ducati Stop & Go Indicator" has the final say, meaning if the "S&P/ASX 200 Accumulation Monthly Index (XJOA)" bar is "Green" bar you are good to buy. Normal exits still apply but the "The Ducati Stop & Go Indicator" is constantly looping & if the "S&P/ASX 200 Accumulation Monthly Index (XJOA)" bar is "Red" an exit signal is generated.

*How effective is the indicator*
The indicator works extreme well, not perfect because of the inherent lag. Overall I'm very impressed.

*What's next with "The Ducati Stop & Go Indicator" *
John Ehlers has done a lot of work formulating many ideas how to reduce lag & recently written a paper on the advantages applying rapid adaptation to volatility in price movement. Ehlers often modifies the alpha term of indicators by the amplitude of an oscillator scaled in standard deviations from the mean resulting in responsiveness by using different input parameter that are well suited for trend-following. I'm hoping that one size fit all (with minor compromises) but that's to be determined.

*Let's Recap*
1. "The Ducati blue bar strategy" - this is a "stand-alone" strategy that is very simple & effective trading strategy. (using two indicator)
2. "DUC Indicator" (is private & confidential) sheer brilliance & extremely effective
3. "The Ducati Stop & Go Indicator" integration went smoothly & surprisinging as effective as the two above in simplicity & results. I feel with reduced lag the "stop & go" feature will be a great addition to my stable of tools.

Skate.


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## ducati916 (20 April 2020)

Skate said:


> @ducati916 the indicator can be used in that way but I've coded it in such a way so it integrates in & forms part of any strategy.
> 
> *Clarification*
> (1) Runs inside a strategy
> ...





So you managed to integrate the indicator to run inside your various strategies...nice.

I'll be interested to see how it performs in the 'bounce' that we have currently. A timely signal should the bounce (start to) collapse into a second low, would be very advantageous and I daresay profitable.

That is certainly where my current attention is: trading the bounce.

jog on
duc


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## Skate (20 April 2020)

ducati916 said:


> *So you managed to integrate the indicator to run inside your various strategies...nice*. I'll be interested to see how it performs in the 'bounce' that we have currently. A timely signal should the bounce (start to) collapse into a second low, would be very advantageous and I daresay profitable. That is certainly where my current attention is: trading the bounce.




Duc, I've added to my last post with "What's next" & a "recap" explaining the three.

*Trading the bounce*
Your posts is a perfect explanation how the daily "Ducati blue bar strategy" trades the "bounce" by picking when a trend turns using two indicators "volatility & volume". If the trend is up (blue Bars) we buy & if the trend is down (red bars) we sell - the strategy is simple, effective & clean. Your idea using "volatility & volume" to generate signals is clever but "ONLY" when the Parameters, Filters & PositionScore are added to the strategy being vital components to the profitability of the strategy. Using just the raw code without the "Parameters, Filters & PositionScore" the strategy would generate a tremendous amount of signals which tends to be useless.

*Back to "The Ducati Stop & Go Indicator"*
(a) Integration was important. (b) Using the "monthly" ASX 200 Accumulation Index (XJOA) smoothes the signal. (c) The indicator works like someone saying - "get ready", "get ready","pull the trigger now" indicator. All strategies have entry & exit conditions "The Ducati Stop & Go Indicator" adds another layer to fine tune the "NOW" (pull the trigger now indicator) if that makes sense.

Skate.


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## Country Lad (20 April 2020)

Well, look at that.  Skate's favourite company, SGH, is up 13.4% at the moment.


----------



## Skate (20 April 2020)

Country Lad said:


> Well, look at that.  Skate's favourite company, SGH, is up 13.4% at the moment.



*
"The Ducati blue bar strategy"*
It goes to prove that "The Ducati blue bar strategy" is no Chihuahua when it comes to strategies - it's more of a Rottweiler. For those who are following these two dogs "SGH" & "TER" - "The Ducati blue bar strategy" gave two buy signals that rattled me. To tell you the truth I wouldn't have taken either of these two positions, not even with counterfeit money. After a few days the portfolio is up $5,776.

@Country Lad thanks for reminding me about "SGH". It appears "The Ducati blue bar strategy" doesn't mind buying dogs if there is money to be made. 

*To rub salt into the wound *(Portfolio performance)
I'll post a few portfolio captures for those interested...











*Hanging my head in shame*
Repeating till it sinks in.

1. "Don't think you are smarter than your system"
2. "Don't think you are smarter than your system"
3. "Don't think you are smarter than your system"
4. "Don't think you are smarter than your system"
5. "Don't think you are smarter than your system"
6. "Don't think you are smarter than your system"
7. "Don't think you are smarter than your system"
8. "Don't think you are smarter than your system"
9. "Don't think you are smarter than your system"
10."Don't think you are smarter than your system"

Skate


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## Newt (20 April 2020)

Country Lad said:


> Well, look at that.  Skate's favourite company, SGH, is up 13.4% at the moment.




Certainly a lot of volume in last couple of weeks mainly "post crash".
Either that or Skate and Duc have so many followers/subscribers they're moving the market now....


----------



## frugal.rock (20 April 2020)

Newt said:


> Certainly a lot of volume in last couple of weeks mainly "post crash".
> Either that or Skate and Duc have so many followers/subscribers they're moving the market now....





frugal.rock said:


> Here we go, the old bottom thing again....it may reverse and do the same sort of stupidly low volume trading going upwards..meh!?
> Pink Pig's CAN fly backwards.
> With a good jet pack.



So it's not flying backwards.
But it is reversing on the same stupidly low volume.
Note the change/ pickup in volume/ divergence. I was considering picking some up last week and today it had fallen into the abyss off the end of the current checklist, so missed it's supernova performance... on low volume today
Now, if we all did staged buy ups tomorrow...

F.Rock


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## Newt (20 April 2020)

Disclaimer:  All speculation in jest and - commentary for (limited) educational purposes only......


----------



## Rsthree (20 April 2020)

I'm waiting for the bounce so I can dive in!

I posted before that I was planning to start my trading experience in Feb but was (fortunately) delayed by some equipment issues.

So since the crash I've been paper trading and all with good results but not not sure if I'm to learn anything given the extraordinary circumstances. 

As we know paper trading is relatively boring so I'm keen to dive in, but my better judgement and the the banter I read here suggests we are in a sucker rally at the the moment.

So please market get on with the bounce so I can do my thing


----------



## Skate (20 April 2020)

View attachment 102485


Rsthree said:


> So please market get on with the bounce so I can do my thing




*"The Ducati Stop & Go Indicator"*
@Rsthree if you are trading a daily periodicity you have missed the start of the "bounce" but if your are planning to trade weekly, wait patiently as the bounce hasn't been confirmed by "The Ducati Stop & Go Indicator" which has the uncanny ability not only to pick the bounce but when it safe to enter.

*Easy to read charts*
When the bars are green you are good to GO, whereas red bars mean do not enter a position.

*XAO - Daily bounce*








*XAO - Weekly bounce
*




*Listen to Kahuna1*
Below is a snippet from one of his recent posts worthy of a second read as trading is a "Get Rich Slow" method, hang tight as itchy fingers can bring even seasoned traders undone.


kahuna1 said:


> Trading or investing should be a GET RICH SLOW ... method. As is every business or accumulation of wealth. There is no magic shortcut. One has to do the work. Sure at times, we get some things very right, but along the way, we get others wrong. Money management is paramount and letting the bloody profits run and cutting the losses is key. Shares and trading often finds the less experienced doing the total opposite of this. Selling low and panic and buying high. When one has good cause to panic or reduce risk, we often find time and time again, the new hero's buying into things that are worthless. On the flip side, when something goes nuts, one reduces, slowly but reduces risk for that rainy day.




Skate.


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## Newt (20 April 2020)

Trendnomics said:


> Hey Peter. It appears you have only plotted the first quadrant of price action.
> 
> Plots to look like:
> 
> ...





Hi Trendnomics

It does my head in trying to figure out what the postive/negative x-axis is on those graphs.  I can understand Y will be the difference relative to buy price in set number of days.  But don't really understand what positive and neg X value (current values) represent?

Anyhow, just as an exercise, this is the All Ords (+ Historical constituents) universe 4/1/2015 to 20/4/2020:

BUY = Today's price is greater than x bars ago
SELL = x bars after BUY

This is 30 separate random runs across the All ords universe, for a max of 25 positions.  Y axis shows average annual returns across that period just randomly buying 25 stocks that met those Buy criteria, than selling X days later.

CAR scale is a bit hard to read, but effectively once over about 2 weeks you start to edge in to profitability.  This won't surprise anyone that's ever included some sort of trend check criterion into an ASX trend following strategy (and then optimised it).

Essentially once you increase the period "x" to around 100 days you can show approx 5-15% per annum.  This was run with $11 commission both ways, no slippage, min stock price 10cents, min average weekly turnover $100k.

Shown from a few different angles as otherwise bit hard to take in.

I think your thesis is that for short (<16 day) periods random walk theory holds ok, but longer periods (2 weeks to 2 years) show a high probability of continuing postive momentum and returns in a long only trend following ASX system?


----------



## Rsthree (21 April 2020)

Skate said:


> View attachment 102485
> 
> 
> *"The Ducati Stop & Go Indicator"*
> @Rsthree if you are trading a daily periodicity you have missed the start of the "bounce" but if your are planning to trade weekly, wait patiently as the bounce hasn't been confirmed by "The Ducati Stop & Go Indicator" which has the uncanny ability not only to pick the bounce but when it safe to enter.





Skate said:


> View attachment 102485
> 
> 
> *"The Ducati Stop & Go Indicator"*
> ...




Mine is a weekly outlook but I think I may have used the wrong term when I said 'bounce'. 

My low tech crystal ball from the $2 shop was insisting that the current exuberance was going to fail with another sharp down trend. So I was hoping to see a nice and orderly higher low developing for my entry signal. 
But even if that happens it will probably then torment me with a deep and protracted accumulation period until we see some confidence in the economy moving forward. It will certainly test my patience.


----------



## NoFOMO (24 April 2020)

A warning

Need to voice about Anton Kreil


By reading all the posts around the web I can see few who comment have ever done a Anton Kreil ITPM course


And his defenders here are obviously Anton trolls, or Anton himself. He’s a walking self-promoter who bags everyone else to make you feel your going to miss out, the best FOMO in the learner traders on the Web.  Don’t waste your money.


Most of what you need to be trade well you can get for FREE


Anton Kreils courses are FOMO Mercedes priced con when you only need a Toyota, like this fabulous forums *Trading Fundamentals - Skate's Beginners Version*


If you want a great Macro view of the world listen to religiously. Macrovoices


If you want to keep up with the worlds Macro info Tradingeconomics


If you want a great Bloomberg like platform Koyfin data


If you want a great all-round technical setup platform Tradingview


If you want to learn about how the market works read the front pages of Squeezemetrics

This site is closed for new premium subscriptions because they actually tell you where the markets are going with some accuracy.

If you want a site that you can still get some market direction using the same market analysis for a very small fee  Spotgamma  


If you want to learn to trade the Long Short Hedge fund way Macrovoices  offers a great free course.


I’m happy to discuss AntonK course material, just send me an PM.


Anton is overpriced and full of himself and uses your fear and previous trading losses to sell to you.


----------



## Skate (24 April 2020)

*


Start Date: *18th March 2020
*Portfolio Capital:* $120,000
*Positions in the Portfolio*: 8
*Fixed Position Sizing*: $15,000


*1. TNE @ $7.00 for 2142 shares on the 18th March 2020   - # SOLD 23rd April 2020 @ $8.66*
*2. PPH @ $2.99 for 5016 shares on the 23rd March 2020   - # SOLD 23rd April 2020 @ $3.90*
*3. BTH @ $0.47 for 31914 shares on the 25th March 2020 - # SOLD 23rd April 2020 @ $0.59*
*4.* *NXT @ $7.94 for 1889 shares on the 25th March 2020   - # SOLD 9th April 2020 @ $8.46*
5. PNV @ $1.53 for 9803 shares on the 25th March 2020
* 6. NAN @ $5.45 for 2752 shares on the 27th March 2020  - # SOLD 23rd April 2020 @ $6.35*
7. SLC @ $0.54 for 27777 shares on the 27th March 2020
8. NCZ @ $0.076 for 197368 shares on the 27th March 2020




















1. NXT @ $7.94 for 1889 shares on the 25th March 2020   - # SOLD 9th April 2020 @ $8.46
2. TNE @ $7.00 for 2142 shares on the 18th March 2020   - # SOLD 23rd April 2020 @ $8.66
3. PPH @ $2.99 for 5016 shares on the 23rd March 2020   - # SOLD 23rd April 2020 @ $3.90
4. BTH @ $0.47 for 31914 shares on the 25th March 2020 - # SOLD 23rd April 2020 @ $0.59
5. NAN @ $5.45 for 2752 shares on the 27th March 2020  - # SOLD 23rd April 2020 @ $6.35









1. PNV @ $1.53 for 9803 shares on the 25th March 2020
2. SLC @ $0.54 for 27777 shares on the 27th March 2020
3. NCZ @ $0.076 for 197368 shares on the 27th March 2020





Skate.


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## Skate (24 April 2020)

*"The Ducati Dalmador Two Dogs Strategy"*
It goes to prove that "The Ducati blue bar strategy" is no Chihuahua when it comes to strategies - it's more of a cute Labrador/Dalmatian mix. It's an offspring of a purebred Dalmatian and the purebred Labrador (hybrid). It's a mix of the easy-going Labrador & a feisty Dalmatian, which makes for a perfect dog & strategy. For those who are following these two dogs "SGH" & "TER" - "The Ducati Dalmador Two Dogs Strategy" gave two buy signals that rattled me. To tell you the truth I wouldn't have taken either of these two positions, not even with counterfeit money. Bugger me, the portfolio is still up $4,251.

*The Dalmador 









*

*I'm still repeating....*
1. "Don't think you are smarter than your system"
2. "Don't think you are smarter than your system"
3. "Don't think you are smarter than your system"
4. "Don't think you are smarter than your system"
5. "Don't think you are smarter than your system"
6. "Don't think you are smarter than your system"
7. "Don't think you are smarter than your system"
8. "Don't think you are smarter than your system"
9. "Don't think you are smarter than your system"
10."Don't think you are smarter than your system"

Skate.


----------



## Newt (24 April 2020)

Sometime soon there'll be a Simpson's episode that starts with Bart writing on the blackboard:
_"Don't think you are smarter than your system"
"Don't think you are smarter than your system"
"Don't think you are smarter than your system"
"Don't think you are smarter than your system"
"Don't think you are smarter than your system"
"Don't think you are smarter than your system"
"Don't think you are smarter than your system"
"Don't think you are smarter than your system"
"Don't think you are smarter than your system"
"Don't think you are smarter than your system"_


----------



## qldfrog (25 April 2020)

Skate said:


> View attachment 102616
> 
> 
> *"The Ducati Dalmador Two Dogs Strategy"*
> ...



In my time @Skate, 50 or 100 lines was the minimum and no easy cut and paste with a Biro....
Have a great weekend


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## NoFOMO (25 April 2020)

Looks like one of the aussie motley fool portfolio. Chasing 65000 subscribers is a good base


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## Skate (30 April 2020)

@frugal.rock as you have taken an interest in "PDI" I think an update is required. "The Ducati Blue Bar Strategy" has generated a sell signal on (ASXDI) tomorrow.





Skate.


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## Skate (30 April 2020)

myrtie100 said:


> I've chosen Selfweath for the May tipping competition.




@myrtie100 I've grabbed part of your post from the "swf-selfwealth-limited" thread. My weekly trading update for "The Ducati Blue Bar Strategy" is quickly coming to an end as the "8 Position Portfolio" has only one position currently open & "Two Dog Strategy" both positions are hanging on.

*Knowledge, "leads to action"*
@ducati916 posted some helpful hints (passing on some of his knowledge) in the "Dump it here" thread has resulted in 3 new afl's for me. (1) "The Ducati Blue Bar Daily Strategy" (2) "The Ducati Stop & Go Indicator" & (3) "The Ducati Acceleration Indicator" all respectable in their own right. I'm now a firm believer that we don't need a fancy strategy to make money in this game. Using "The Ducati Blue Bar Daily Strategy" with prudent "Money management" & a sharp "PositionScore" code brings this strategy to life. (parameter settings are also important - being part of the mix)

*"The Ducati Blue Bar Strategy"*
This strategy just keeps giving by picking the turning pivot with ease. The signals are generated by using two commonly found indicators. Reverse the entry condition & you have yourself a handy exit strategy. When the position doesn't follow through "The Ducati Blue Bar Strategy" exits very quickly without any other inputs, simple & clever.

*This may be interesting*
"The Ducati Blue Bar Strategy" picked the move of (ASX:SWF) & as you have an interest - the chart below may hold some interest for you.




Skate.


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## myrtie100 (30 April 2020)

Thanks for posting the chart Skate.
I wish I knew what those commonly found indicators are, because they seem to pick the turning point incredibly well!


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## Skate (1 May 2020)

*Start Date: *18th March 2020
*Portfolio Capital:* $120,000
*Positions in the Portfolio*: 8
*Fixed Position Sizing*: $15,000




*1. TNE @ $7.00 for 2142 shares on the 18th March 2020 - # SOLD 23rd April 2020 @ $8.66*
*2. PPH @ $2.99 for 5016 shares on the 23rd March 2020 - # SOLD 23rd April 2020 @ $3.90*
*3. BTH @ $0.47 for 31914 shares on the 25th March 2020 - # SOLD 23rd April 2020 @ $0.59*
*4.* *NXT @ $7.94 for 1889 shares on the 25th March 2020 - # SOLD 9th April 2020 @ $8.46*
* 5. PNV @ $1.53 for 9803 shares on the 25th March 2020 - # SOLD 24th April 2020 @ $1.99*
*6. NAN @ $5.45 for 2752 shares on the 27th March 2020 - # SOLD 23rd April 2020 @ $6.35*
* 7. SLC @ $0.54 for 27777 shares on the 27th March 2020 - # SOLD 28th April 2020 @ $0.785



*
8. NCZ @ $0.076 for 197368 shares on the 27th March 2020




















Skate.


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## Skate (1 May 2020)

*Portfolio Capital:* $30,000
*Positions in the Portfolio*: 2
*Fixed Position Sizing*: $15,000

*"The Ducati Dalmador Two Dogs Strategy"*
It goes to prove that "The Ducati blue bar strategy" is no Chihuahua when it comes to strategies - it's more of a cute Labrador/Dalmatian mix. It's an offspring of a purebred Dalmatian and the purebred Labrador (hybrid). It's a mix of the easy-going Labrador & a feisty Dalmatian, which makes for a perfect dog & strategy. For those who are following these two dogs "SGH" & "TER" - "The Ducati Dalmador Two Dogs Strategy" gave two buy signals that rattled me. To tell you the truth I wouldn't have taken either of these two positions, not even with counterfeit money. Bugger me, the portfolio is now up *$6,988* from $4,251 last week.

*The Dalmador









*
Skate.


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## peter2 (1 May 2020)

My tip for beginners is to avoid trading "dog" stocks. Yes, even dead dogs can bounce when dropped from a sufficient height.  SGH has dropped from such a height that even a dead elephant would have bounced.

My tip is that your trading universe is an important part of your trading plan. You should run your strategy scans/explorations across companies that you'd be comfortable trading. Currently the ASX has approx 2500 listed stocks. IMO there's 1500 that shouldn't be there. I initially filter out these undesirables by volume traded. I then delete companies from my universe using a variety of reasons. Over time my trading universe reduces to about 400. I refresh this list every six months so that I include newer IPOs and very occasionally an old dog does learn new tricks. Some traders stick to the 500 stocks in the All Ords, some the ASX top 300. Create your universe. 

The main reason for reducing the number of results in your scans is so that you focus on the better opportunities. Liking the setup but hating the company is not going to end well no matter what happens next. It's easier for me to delete the company from my trading universe rather than feel uneasy and noncommittal about the opportunity when it appears.


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## Skate (2 May 2020)

peter2 said:


> My tip for beginners is to avoid trading "dog" stocks. My tip is that your trading universe is an important part of your trading plan. You should run your strategy scans/explorations across companies that you'd be comfortable trading - filter out these undesirables by volume traded and very occasionally an old dog does learn new tricks. Some traders stick to the 500 stocks in the All Ords, some the ASX top 300. Create your universe, trading opportunity when it appears.




*Reading between the lines*
ASF is blessed to have so many members willing to pass on information that they have found beneficial in their trading endeavours. Those members have their own threads dropping crumbs along the way. When trading information is disseminated it's usually done in a scattergun manner where other posts have more precise details. Recently I had the privilege to gather a new understanding how others trade & their logic in doing so.

*So what am I planning next*
With an influx of new members "itching" to get their "foot in the door", or "dip their toes in" my next project might give them the opportunity. There are two option (a) watch along or (b) trade along. The new trading system will be explained in the next post. The positions will be disclosed before being traded with real money. Trading at first can be confusing, that's why we need a trading plan that includes a trading strategy, otherwise it's just plain gambling. Let me say, the strategy I'll be trading has exceeded my expectation so I'll be throwing caution to the wind jumping straight into the deep end.

*Turning knowledge into action*
There are no new idea out there but there are some discretionary ideas that can be coded & used in a mechanical trading system. As the saying goes, if what you learn leads to knowledge, you become a fool - but if what you learn leads to action, you can become wealthy. I want to practice what I preach by turning the knowledge gained from this forum & turn it into "action".  "The Ducati blue bar strategy" has now been put to rest, there will be no further updates. I've combined all Duc's ideas & mashed them into a new trading system known as the "Action Strategy"

*It's dangerous*
I also want to remind others about the dangers of gambling when finances become tight but those who have the funds eager to ride "the bounce" my new strategy might be the ticket. Funds you are prepared to lose is the price of your ticket.

More to come...

Skate.


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## Skate (2 May 2020)

*Let me explain the new "Action" strategy*
It's a combination of discretionary ideas coded & used in a mechanical trading system. It's the natural progression from "The Ducati Blue Bar Daily Strategy", "The Ducati Stop & Go Indicator" & "The Ducati Acceleration Indicator" all respectable in their own right but with money management, new parameters & filters the idea (strategy) grows an extra leg. The make up of the new "Action Strategy" has been freely discussed whereas other information (that forms part of the strategy) has been provided to me in private.

*Follow or trade along*
The strategy is designed for those itching to get involved. As we will be trading in the pre-auction, all positions, even the quantity of shares & the offer price will be disclosed before the opening of Monday's markets. The reporting will be accurate as "Share Trade Tracker" new release has included "Norgate" as the new data source.

*In a nutshell*
The new "Action" strategy is a "Weekly" $20k portfolio with $1k bets. The entry conditions of "volatility & volume" relies on other measures to tilt the odds of success in our favour. The strategy will be buying good companies at the "right time" & selling quickly when it goes against us. The exit will be at the heart of the strategy combining a looping "stale stop" & "a variable trailing stop" driven by a "volatility measure" taken from "other sources".

*I'm shouting out to a few members *
I've included a few members in the list below who have made a recent comment in the "Dump it here" or "trading the bounce" thread or were kind enough to "like" one of my recent posts. I'm hoping they will check-in each Friday or over the weekend to see the "Action Strategy" updated progress. (once it starts trading)

*List*
@ducati916 @frugal.rock @JimmyKesh @waterbottle @rogerlg @bigdog @aus_trader @peter2 @Newt @qldfrog @Metal Teeth @bluekelah @myrtie100 @gartley @Bazzi @sptrawler @wabullfrog @jbocker @Smurf1976 @imaginate19 @RickyY @laura @fiftyeight @Value Collector @JayGee @Boggo @Rsthree @Joe90 & a few others I couldn't think of.

More to come...

Skate.


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## Skate (2 May 2020)

*Sampler - Backtests*
So the backtests aren't cherried picked I've used the 2nd May as the start & finish dates 

*# Backtest period - 2/5/2017 to 2/5/2018*





*# Backtest period - 2/5/2018 to 2/5/2019*








*# Backtest period - 2/5/2019 to 2/5/2020*




Skate.


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## Skate (2 May 2020)

*The Action Weekly Strategy*
Start Date: ASAP, dependant on an index filter turning on
Portfolio Capital: $20,000
Positions in the Portfolio: 20
Fixed Position Sizing: $1,000 (No re-balancing)

*Weekly Update Format*
1. The "Share Trade Tracker" Dashboard
2. Portfolio performance line chart
3. Open Positions Summary
4. Pending buy & sell positions

*For those following*
I'll be posting extensively before & after the execution of any position.

*Included garden variety filters*
Index, Price, Turnover, Volume & Rate of Change Filters - additional parameters, & setting form part of the entry & exit conditions that a not up for discussion.

*Backtest comparison table*


*
I'm locked & loaded*
The next post will be when "The Action Strategy" turns on..

Skate.


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## Rsthree (2 May 2020)

Skate said:


> View attachment 103172
> 
> 
> *I'm locked & loaded*
> ...




Great initiative and much appreciated. 

I've been paper trading my 20k portfolio (20 × $1k) for the last few weeks, so this could be a great opportunity to transition to a live strategy benefiting from the brains trust in the group.


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## Skate (2 May 2020)

Rsthree said:


> Great initiative and much appreciated. I've been paper trading my 20k portfolio (20 × $1k) for the last few weeks, so this could be a great opportunity to transition to a live strategy benefiting from the brains trust in the group.




@Rsthree I've had two other confirmations so that makes 4 of us. When the system turns on I'll post every bit of information so it will be easy to follow along. We will all be taking the same positions at the same time in the pre-auction with exactly the same execution price. Others will be watching on the sidelines while we will be riding the emotional roller coaster.

*This post resonated with me*


aus_trader said:


> Markets can be scary in times of big falls (like at the end of 2018) and crashes like this one. I missed the bulk of the recovery that started in 2019 due to staying out of the market because of the fear, having liquidated late 2018. Should've stayed glued to this thread and those of Peter2's as you guys were investing right from the start of 2019 recovery.




*Important point*
I wouldn't be trading this strategy if it wasn't robust but just in case "we do lose" regard it as the price of your ticket.

Welcome aboard...

Skate.


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## Bazzi (2 May 2020)

Skate said:


> @Rsthree I've had two other confirmations so that makes 4 of us. When the system turns on I'll post every bit of information so it will be easy to follow along. We will all be taking the same positions at the same time in the pre-auction with exactly the same execution price. Others will be watching on the sidelines while we will be riding the emotional roller coaster.
> 
> *This post resonated with me*
> 
> ...




@Skate count one more confirmation in follow trading! 
I look forward to ride the upcoming roller coaster


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## Skate (2 May 2020)

Bazzi said:


> @Skate count one more confirmation in follow trading!
> I look forward to ride the upcoming roller coaster




@Bazzi welcome aboard, that’s 5 of us. 

Skate.


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## Saqeeb (2 May 2020)

Count me in too please @Skate 
Thanks


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## Skate (2 May 2020)

Saqeeb said:


> Count me in too please @Skate
> Thanks




@Saqeeb glad to have you aboard.

Skate.


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## ducati916 (3 May 2020)

Skate said:


> @Rsthree I've had two other confirmations so that makes 4 of us. When the system turns on I'll post every bit of information so it will be easy to follow along. We will all be taking the same positions at the same time in the pre-auction with exactly the same execution price. Others will be watching on the sidelines while we will be riding the emotional roller coaster.
> 
> *This post resonated with me*
> 
> ...




In no particular order:

1. This thread (experiment) will if *successful*, attract evermore (inexperienced) traders in search of 'easy money'. As the back tests demonstrate, this has every chance (high probability) of being successful; therefore

2. Increasing amounts of (real) cash will be seeking entry into smaller cap. stocks (probably not an issue with larger liquid stocks). Is there enough liquidity in them, both for entry and exits? You might have to limit the size of the group and inform via group email of the signals as they arise.

3. Re. following the 'rules'. Remember the 'Turtles' experiment. Simple rules, cash even provided: still only 1 or 2 out of a group of about 10 actually followed the rules. I will be really interested to watch this in real time, or weekly updates for the psychological impact. True, in the Turtle experiment none or very few had any market experience. This could be the difference.

4. Dependency. What if you (Mr Skate) get hit by a bus?

5. I think the participants need to understand that this is an opportunity to learn and develop their own twists to trading. It will provide invaluable real trading experience (even with a bit of hand-holding) but that needs to be capitalised on. They need to read the market and learn when the system is about to generate a signal: from there, they can develop their own strategies. Looking at the current list, I don't think this is an issue currently, but it could fast become one if you attract real newbies (no offence meant to the newbies).

6. This is *CRITICAL*

_*Important point*_
_*I wouldn't be trading this strategy if it wasn't robust but just in case "we do lose" regard it as the price of your ticket.*_

7. The current environment is (extremely) volatile. High volatility increases both opportunity and risk. Markets when they 'top' (after trending) usually give plenty of warning. Trading market bottoms and bounces do not. Even the most robust signals have a lag. That makes exits less than optimal. Less than optimal really means losses.

8. All-in-all, can't wait to see the experiment go live.

jog on
duc


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## qldfrog (3 May 2020)

ducati916 said:


> In no particular order:
> 
> 1. This thread (experiment) will if *successful*, attract evermore (inexperienced) traders in search of 'easy money'. As the back tests demonstrate, this has every chance (high probability) of being successful; therefore
> 
> ...



@ducati916 , unless mistaken, @Skate will only tell us of his purchase/ sell after the facts, as i do on my thread.
i follow the Dump it thread religiously, mostly as a new idea initiator and role model but i doubt anyone would be tracking and buy /sell the same codes, with a delay.
Would be nice as if we were popular enough, our wishes would become true as hordes of groupies would pile in in the obscure small caps we just purchased..
Did i just reveal the secret of "market newsletters?


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## ducati916 (3 May 2020)

qldfrog said:


> @ducati916 , unless mistaken, @Skate will only tell us of his purchase/ sell after the facts, as i do on my thread.
> i follow the Dump it thread religiously, mostly as a new idea initiator and role model but i doubt anyone would be tracking and buy /sell the same codes, with a delay.
> Would be nice as if we were popular enough, our wishes would become true as hordes of groupies would pile in in the obscure small caps we just purchased..
> Did i just reveal the secret of "market newsletters?





Actually from what Mr Skate said:

_@Rsthree I've had two other confirmations so that makes 4 of us. When the system turns on I'll post every bit of information so it will be easy to follow along. We will all be taking the same positions at the same time in the pre-auction with exactly the same execution price. Others will be watching on the sidelines while we will be riding the emotional roller coaster._

I read it as they will be trading as a group: ostensibly $1000/ea. Clearly however, there is no enforcement of a $1000 position. If I was following the signal, I could place $10K if I wished. In small caps. that is going to cause issues.

I think, at some point, Mr Skate will need to issue signals by email or some-such, just so that the opportunities in small caps. are not distorted. In the larger caps. probably not an (immediate) issue.

jog on
duc


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## qldfrog (3 May 2020)

ducati916 said:


> Actually from what Mr Skate said:
> 
> _@Rsthree I've had two other confirmations so that makes 4 of us. When the system turns on I'll post every bit of information so it will be easy to follow along. We will all be taking the same positions at the same time in the pre-auction with exactly the same execution price. Others will be watching on the sidelines while we will be riding the emotional roller coaster._
> 
> ...



My mistake indeed.hum..
I would not do it as our modus operandi is to buy at open , putting a buy a few pc above last close.if too many people do the same, you distord at least the open price if not the day demand


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## qldfrog (3 May 2020)

@Skate, count me in
If you want , i could pm you what my systems actions are in exchange, or just follow my thread for post action knowledge
To be clear i do not intend to trade your results unless they actually match my systems.


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## rogerlg (3 May 2020)

I would personally like to give a Big Thank You to Skate he has generously given his knowledge and time to this thread which has helped me a lot and given me much more confidence, and to ducati916 and qldfrog  for there support of the Skate and the thread.  Thank you All !!!


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## Rsthree (3 May 2020)

I see this as a great opportunity to learn. I would want to analyse and understand why each trade is being placed, as other than a potential reward, blindly following a system would not help me learn.

I'm not 100% how the auction process works but if a number of people are bidding on a small cap stock then conceivably some may miss out. Moreover I believe Skate uses a limit order so that would narrow the field even  more. It will be an interesting process, looking forward to it.


----------



## Rsthree (3 May 2020)

ducati916 said:


> 6. This is *CRITICAL*
> 
> _*Important point*_
> _*I wouldn't be trading this strategy if it wasn't robust but just in case "we do lose" regard it as the price of your ticket.*_
> ...




We may need to have our resident shrink on standby just in case some group counselling is required.


----------



## Skate (3 May 2020)

Rsthree said:


> *I see this as a great opportunity to learn. I would want to analyse and understand why each trade is being placed, as other than a potential reward, blindly following a system would not help me learn. *It will be an interesting process, looking forward to it.




*DISLAIMER*
I want to make it clear that I'll be posting my trades for the purpose of tracking my own system, it's an educational exercise & it should not to be confused with running a signal service for others to follow. The format will be similar to my previous posts displaying the trades I intend to open and close well in advance keeping a accurate record of my progress for those interested in following the journey. The "Dump it here" thread is an educational thread & by displaying the progress of the "Action Strategy" strategy will hopefully help to educate others. So there is no confusion my intentions is for others to follow along not trade along.

*Apologies*
If my previous posts about the new strategy gave the wrong impression I apologise, the "Action Strategy" will be displayed to keep a record of my progress.

*The format*
In the next thread I'll post a sample of the format that will be used for educational purposes & it's pleasing others are interested to follow along.

Skate.


----------



## Skate (3 May 2020)

*Disclaimer*
This is not a signal service but hypothetically if we turned off the "Index Filter" & the "Action Strategy" started trading on April Fools Day (1/4/2020) how would it be traveling at the moment? - I'd be interested in knowing.

*Lets see the signals *(with the Index filter turned off)
You would have been Bat$hit crazy to have traded in April - when the odds are not in your favour that's gambling. Just for the exercise I've turned the Index Filter off so you can get a feel how the system takes signals. The system is in profit that comforting to know.




More to come...

Skate.


----------



## Skate (3 May 2020)

*Disclaimer*
The next graphic displays the hypothetical signals for Monday as the "Index Filter" is still turned off. There is "no way in hell" I would trade a strategy without protection - that would be foolish.

*Sample of what to expect*
So the system generates a sample of signals I'll use the hypothetical "Action Strategy" remembering that the "Index Filter is still turned off". With the Index turned off the strategy will generate buy signals when the entry conditions are met. Sell signals are not dependant on the Index Filter, meaning a sell signal is generated when the exit conditions are met.




*There are 4 sell signals*
There are 4 exit signals listed but as the "Action Strategy" only holds 2 of them (GOR & AGG) those two would be sold at open on Monday. Both (GOR & AGG) at this stage will be exited as winners.

*For transparency*
All the signals for the "Action Strategy" will be posted well in advance for transparency.

More to follow..

Skate.


----------



## frugal.rock (3 May 2020)

I'm in. Unless something in the portfolio pops soon (unlikely), don't quite have the full amount to divest yet though. So, some discretion required my part.

@qldfrog
I believe Skate stated he would post extensively before and after trades?

Skate, I am wondering if you have refined the exit / reverse signal from earlier iterations of the current strategy? 

(My thoughts go back to the NCZ posted chart from around 6th March, where the price floated down for around 2 weeks with no sell signal.)

Also, as Duc has suggested re volumes, some stocks may not be suitable. Can you let us know what the criteria minimum daily volume is or is that secret? Or has been wisely considered to take a few extra trades without slippage? 

F.Rock


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## Skate (3 May 2020)

*The "Action Strategy" will start when the first signal is generated*
I'll post the signals on Friday night, update night. I'll be placing "my orders" in the pre-auction before Monday's open. 

*Signals*
The exploration displays the (1) ASX code, (2) the amount of shares to purchase, (3) the buy offer for the pre-auction & (4) finally what it will cost me (each investment needs to be under 1k because of the commission cost amount). To action the sell signals (a) I"ll sell all shares if held in the portfolio (b) at the sell offer price in the pre-auction as well. No thinking is required when you are a mechanical systems trader, just actioning the signals as they are generated. Thinking I've found usually complicates trading.

*I won't be deviating from our plan*
I'll take the signals as given without deviation from my plan. I'll be posting the 'Action Strategy Portfolio' so I can track it's progress where others can follow along.

*Losing is part of the game*
Don't forget I'm going to lose money, when that happens 'I'll suck-it-up' & not panic. Success is not guaranteed but rest assured I'll will be doing my best.

*Remember*
Trading is not a sprint but a marathon.

*Buying duds*
I know 50% of the buy signals will be duds & if all goes to plan I'll take an early hit as any trend following strategy needs time to do its thing.

*Complete Scan*
I will post the full scan each week that include my buy & sell for "me to action" before the next open. If there is sell listed currently not in my portfolio those signals are discarded, meaning action will not be required.

*Trend can last *
If the "Action Strategy" snags a good trend it can ride it for quite some time - the duds will be sold quickly. Trading is not a sprint, we make money over time, slow & steady at first than hopefully snowballing from then on.

*Message to myself*
I'll have good days & bad days, good weeks & bad weeks, it's all about hanging in there, losing is all part of the game so don't become emotional just stick to the plan.

Skate.


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## Newt (3 May 2020)

Sounds like an interesting initiatve Skate.  I'll be interested to see how the team goes


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## Beaches (3 May 2020)

Rsthree said:


> I'm not 100% how the auction process works but if a number of people are bidding on a small cap stock then conceivably some may miss out. Moreover I believe Skate uses a limit order so that would narrow the field even  more. It will be an interesting process, looking forward to it.





If you are going to buy during the opening auction, it may be helpful to understand how it works.

From 7:00am to 10:00am the market is in Pre Open mode. During this time, orders can be placed but will not trade.

As the orders being placed during Pre Open are not trading, there will be Buy orders that are above Sell orders and Sell orders that are below Buy orders. These orders form the overlapping bids which will be used by the opening auction algorithm.

The ASX uses an algorithm to match the volume and price of all overlapping Buy and Sell orders to calculate and set the opening price. As different Buy and Sell orders are entered into the market from 7:00am to 10:00am, the algorithm is constantly looking at the overlapping bids and a likely opening price will be displayed. This likely opening price gives everyone an idea of where they will need to set their bid in order to get filled at opening.

As a very simple example, if a stock has the following Buy and Sell bids during Pre Open:

Buy Orders
2000 @ 10.51
7000 @ 10.50
1000 @ 10.45
1000 @ 10 44

Sell Orders
1000 @ 10.48
2000 @ 10.49
6000 @ 10 50
1000 @ 10.56
1000 @ 10.57

In the above example there are 2 Buy orders and 3 Sell orders that are overlapping (coloured red). If we assume the ASX algorithm looks at these overlapping bids and calculates the opening price at $10.50, all of the overlapping (red) bids would be filled at $10.50 when the market for TLS opens.

At 10:00am the market commences a staggered opening alphabetically as follows:
10:00:00 - Stocks A - B
10:02:15 - Stocks C - F
10:04:30 - Stocks G - M
10:06:45 - Stocks N - R
10:09:00 - Stocks S – Z

Once each stock opens, it then trades normally throughout the day until 4:00pm when the market goes into the closing auction.

If there are no overlapping bids for a particular stock, then no opening auction occurs. The opening price will be the price of the first trade that goes through after opening.


----------



## Skate (3 May 2020)

frugal.rock said:


> Skate, I am wondering if you have refined the exit / reverse signal from earlier iterations of the current strategy?




@frugal.rock Duc's entry conditions have all been posted in this thread, the exit strategy has been refined from Duc idea privately explained. I'm not saying Duc's ar$e or credibility is on the line as it's my responsibility turning his ideas into tradable "actions". Duc's discretionary ideas have been coded in the "Action Strategy" (mechanical trading system).

*Here's the problem*
I'm lazy - "The Ducati Blue Bar Daily Strategy", "The Ducati Stop & Go Indicator" & "The Ducati Acceleration Indicator" are uncannily accurate when they are applied to a daily timeframe, the signals are fast & snappy but I prefer to trade weekly raising a whole new set of issues.


frugal.rock said:


> Also, as *Duc has suggested re volumes*, some stocks may not be suitable. Can you let us know what the criteria minimum daily volume is or is that secret? Or has been wisely considered to take a few extra trades without slippage?




*You ask about filters*
The "Action Strategy" is a Weekly system trading the All Ordinaries - Turnover, Volume, Acceleration, Momentum are some of the filters used to select the best of the best represented in the XAO index. The "Action Strategy" is simple in its execution. How? - by jumping on confirmed trends riding them as long as possible & jumping off when they lose momentum. The major issue with any "confirmation" is that you will never enter at the start of a trend or exit at the top of the trend. The "exit confirmation" guarantees you will give back a proportion of your open profits.

*Other answers to your questions *
(1) 3% slippage is included
(2) parameter setting & filters are vital to this or any other strategy & the values are adequate to make sure of liquidity, moving in & out of a position is critical
(3) the actual settings, amounts or percentages are not disclosed.

Skate.


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## aus_trader (3 May 2020)

Hi Skate,
It is kind of you to post the trades this new strategy generates. I will definitely be following along and will be happy to selectively place 1k positions on some of the trades generated.

Knowing that your system filter keeps out initiating new trades is assuring. Although I don't do anything complex I also try and stay out of down trending markets like we have just had. I have only just started buying a few selective companies in the "speculative stock portfolio" as you know.


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## Skate (3 May 2020)

aus_trader said:


> will be happy to selectively place 1k positions on some of the trades generated





qldfrog said:


> To be clear i do not intend to trade your results unless they actually match my systems.




I'm glad these comment have been made as "selective selection" won't cut it - system trading is a numbers game. With 50% of the signals being duds selective selection is a sure way to lose money. 

*Mechanical System Trading*
This style of trading is an "all or nothing" endeavour, you are fully in or fully out. 

Skate.


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## Skate (3 May 2020)

Beaches said:


> If you are going to buy during the opening auction, it may be helpful to understand how it works.
> 
> From 7:00am to 10:00am the market is in Pre Open mode. During this time, orders can be placed but will not trade.
> 
> ...




@Beaches welcome to our community & congratulations are in order - your first post was very impressive & full of educational value.

Skate.


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## Skate (3 May 2020)

*The "Dump it here" thread*
It's a timely reminder with the influx of new members to explain the concept behind the "Dump it here" thread. This thread is about expressing new idea & alternative ideas - comments with a different point of view are always welcomed. Whether your view is right or wrong isn't important, what's more important, this thread gives you the ability to express your views "without being ridiculed or challenged". 

*Experience*
Every member enjoys a different level of experience & expertise. When posting think of posting an "alternative view" that has educational value or if you "totally disagree" with one of the posts, explain so others understand your alternative view. (play the point not the person) Being friendly & polite is a unique feature of this thread & disrespectful comments are never welcomed.

*It takes time*
It takes a lot of time & effort to give a measured response so all I'm asking if you have a question or making a statement detail it precisely, let me understand why you don't understand as playing tennis with others is tiresome, boring & more importantly it wastes our time. 

Skate.


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## Skate (3 May 2020)

*I'm pushing an agenda*
I'm currently pushing the "Systematic Trend Trading" agenda trying to stimulate others to get involved. The point of this recent exercise was to build on knowledge given freely by others. Opportunities in life are a dime a dozen - realising & actioning those opportunities creates the magic.

*What am I not seeing*
"The Ducati Blue Bar Daily Strategy", "The Ducati Stop & Go Indicator" & "The Ducati Acceleration Indicator" sprung into life from reading & understanding a few posts. Posting about them in various threads was to encourage others to think "what did Skate see that I didn't". I'm just saying others (not all) rarely put knowledge into action. The "Action Strategy" is designed to create a bit of interest & a few bucks for myself along the way. 

*Before I get off my "soapbox"*
When you achieve a "perceived" level of success other quickly ask "how did you do it". When you explain most answer with a dismissive response: "that wouldn't work for me" where their response should have been along the lines of: "how will it work for me" most fail to realise life is like playing the game of pool.

*Life is like the game of pool?*
Playing pool is not about sinking the ball but "lining up the next shot" - most don't get it.

Skate.


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## aus_trader (3 May 2020)

Skate said:


> I'm glad these comment have been made as "selective selection" won't cut it - system trading is a numbers game. With 50% of the signals being duds selective selection is a sure way to lose money.
> 
> *Mechanical System Trading*
> This style of trading is an "all or nothing" endeavour, you are fully in or fully out.
> ...



Oh I see. Thanks for clarifying that Skate.


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## ducati916 (4 May 2020)

Skate said:


> I'm glad these comment have been made as "selective selection" won't cut it - system trading is a numbers game. With 50% of the signals being duds selective selection is a sure way to lose money.
> 
> *Mechanical System Trading*
> This style of trading is an "all or nothing" endeavour, you are fully in or fully out.
> ...




The film to watch, if you want to really understand Mr Skate's position, is 'Moneyball'.

jog on
duc


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## qldfrog (4 May 2020)

Beaches said:


> If you are going to buy during the opening auction, it may be helpful to understand how it works.
> 
> From 7:00am to 10:00am the market is in Pre Open mode. During this time, orders can be placed but will not trade.
> 
> ...



I believe this is gold information and maybe worth an entry in the dump it pdf?


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## Aristotle (4 May 2020)

Skate said:


> View attachment 103178
> 
> The next graphic displays the hypothetical signals for Monday as the "Index Filter"
> Skate.




Hello Skate, this is my first post.  I thoroughly enjoyed reading the first 40 odd pages of your "Dump it Here" Thread.  Along the way you mentioned that you use an Amibroker strategy in your trading and that you are happy to make it available on request.  I also use Amibroker and I am particularly interested in how you set up and apply your "Index Filter" for Buy and Sell which is illustrated in the table above.


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## Skate (4 May 2020)

Aristotle said:


> Hello Skate, this is my first post.  I thoroughly enjoyed reading the first 40 odd pages of your "Dump it Here" Thread.  Along the way you mentioned that you use an Amibroker strategy in your trading and that you are happy to make it available on request.  I also use Amibroker and I am particularly interested in how you set up and apply your "Index Filter" for Buy and Sell which is illustrated in the table above.




@Aristotle thank you for making your first post in the "Dump it here" thread & reading the first 40 pages is an achievement in itself. Now let's talk about "Index Filters" which can keep you on the right side of the markets (INDEX)

*Index Filter*
Reference:  http://www.amibroker.com/kb/index.php?s=index+filter
@Nina4 gives a good example: https://www.aussiestockforums.com/posts/1039294/ 

*SetForeign*
# HINT 1: Make sure SetForeign matches your data format. The examples below show there is a difference.
Premium data format: ( "XAO" )
Old Norgate Data format: ( "$XAO" )
Recent Norgate Data format: ( "$XAO.au" )

*Lookback period*
# HINT 2: The lookback period is matched to the periodicity of the system being traded. Weekly systems usually have a shorter lookback period than a Daily system. 

*How do they work*
Index filters are basically a line in the sand (Moving Average Line), meaning the line is a Simple Moving Average of the "SetForeign". If the closing price is above the Moving Average (MA) the index filter is deemed to be "on" that signal can decide which other "arrays" come into play, one being the Buy condition.

I hope this helps..

Skate.


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## Skate (4 May 2020)

@Aristotle one of the great features of Amibroker is the ability to turn parameters on or off. The hypothetical signals for Monday were generated by turning the Index Filter off.  The "ParamToggle" function allows you to turn parameters on or off. If I had missed that point more information can be found here: *http://www.amibroker.com/guide/afl/paramtoggle.html*

@Warr87 & @Lone Wolf have been discussing in the "multi-system-analysis-amibroker" thread a feature that I have been using since late 2015 that's worthy of a post.

*Combining Strategies*
One of my trading systems is the "HYBRID Strategy" that combines three different strategies into one. Each of the three strategy have their own parameters & setting competing for the first entry signal into a trend. The "HYBRID Strategy" is a top little money earner & a constant performer. Lone Wolf made a reference to Joe Marwood's website that explains the advantages of combining different strategies together & worthy of a read. https://decodingmarkets.com/combine-equity-curves-in-amibroker/

*Whinge session*
After a whinge session about trading multiple systems with correlation "the captain" floated the idea of combining them into one strategy. The task was a massive exercise but in the end it worked out well. This conversation was back in 2015 & if Joe Marwood wrote his article a little sooner than 2017 it would have saved me a lot of work making the job easier.

*EXTRACT from the article - 3rd February, 2017* (By Joe Marwood)
_"One of the keys to *successful system trading is to be able to combine different strategies together*. When you are able to combine less correlated strategies, it is possible to smooth drawdown, boost win rate and therefore improve your overall risk-adjusted returns. In Amibroker it is possible to combine equity curves together so you can see what the advantages are. Notice that in the first paragraph above I mention ‘less correlated’ instead of ‘uncorrelated’. That’s because *it is rare to find profitable strategies that are completely uncorrelated*. But so long as a system has a profitable edge and is slightly uncorrelated, great things can still be achieved"_

*Footnote*
Joe Marwood is a member of the Amibroker forum. Joe's website is worth checking out "for new ideas".

*Joe Marwood's website link*
https://decodingmarkets.com

Skate.


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## Warr87 (4 May 2020)

"Not putting all your eggs into one basket" is a financial cliche, or perhaps "diversification is king". And its a cliche for a reason. In my own analysis I am annoyed that my strategies have the least correlation coefficient of .97 which I thought was way to high. I compared drawdown which gave me much better metrics (low correlation). I hope this will translate too having DD's at different times. My overall CAGR is lower, but so is the MaxDD (my CAR/MDD ratio improves). The high correlation is going to happen if they are trading the same universe and long only. There is certainly value to be gained from running multiple systems.

I intend on giving Joe's website a closer look. His tutorial is quite good.


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## Aristotle (4 May 2020)

Many thanks Skate, you have been most generous with your time and expertise.  So far, I have come up with the following draft code:
//Index Filter for XAO with a 200Day MA on a Daily Chart
Index = Foreign("XAO", "C", True);

IndexMA = MA(Index, 200);

Buy = C >= MA(C, 200) AND Index >= IndexMA;
Sell = C <= MA(C, 200);

//* Note I assume I need to add more code *here *to get some columns for a print out of where the XAO is crossing the 200Day MA. // *Is that right?  Am I on the right track?
*
I appreciate the additional comments you have provided me.  It is good to know that Joe Marwood is a local.  I will endeavor to look closer at his resources.

Aristotle


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## Warr87 (4 May 2020)

Remember to run that code with settings set to Daily. I'm also not sure what your system will do since you have buy and sell criteria with greater/less than or *equal* to. Perhaps just include ">" or "<". 

My own way of doing it is similar to yours. Instead, with the index I add:

IndexUP = Index > IndexMA;

Then in the buy conditions write:

Buy = C >= MA(C, 200) AND IndexUP;

If you put in the variable, it will only excute if that variable is true (this is a shorthand of it). you could do,

Buy = C >= MA(C, 200) AND Index == TRUE;

The '==' is a true or false statement, which also means you could put it into your sell statement:

Sell = IndexUP == FALSE;

That would sell as soon as the index starts closing below its 200day MA. I personally use the IndexUP filter to determine my trailing stop, and whether I buy (that is, I don't use it to determine if I sell).

A better buying condition is actually more along the lines of:

Sell = C <= MA(C, 20);

As for columns, use the code: AddColumn, AddColumnText. There are plenty of examples and the AB guide is great for this too.


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## Aristotle (4 May 2020)

Many thanks Warr87. I will give it a go. 
Regards
Aristotle


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## Warr87 (4 May 2020)

Looking at other peoples code helps a lot. That and trial and error. feel free to ask questions.


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## Skate (4 May 2020)

Aristotle said:


> Many thanks Skate, you have been most generous with your time and expertise.  So far, I have come up with the following draft code:
> //Index Filter for XAO with a 200Day MA on a Daily Chart
> Index = Foreign("XAO", "C", True);
> IndexMA = MA(Index, 200);
> ...




Amibroker is a blank sheet of paper, where you get to write the story!

*176,000 words in the dictionary* (I don't think we need them all)
People have tendency to think in terms "more is better" but the truth is in programming less is more & to me less is better. I’m not a believer of adding complexity when it's not needed

*Trading is not exact science*
For all the advancements in technology the market itself hasn’t changed much. It is still driven by the same two opposing forces, fear & greed. Profiting from the stock market is exceedingly difficult to do consistently over a long period of time because the markets are so irrational & emotional, the market is not logical or reasonable & the last few weeks are evident to that. A market is nothing more than a crowd of people that has absolutely no regard for what any one person may think & most times rational people make irrational decisions thus the massive swings & the recent panic selling, go figure.

*AmiBoker's members area*
Having a mechanical trading system takes all the emotions out of trading. Learning Amibroker is going to be difficult at first to understand the programming but AmiBroker has a forum full of members willing to help. There is also a members area full of ready made code to play with & I've listed a few to download to get a feel. https://forum.amibroker.com/new

*Graham Kavanagh guide for learners*
http://www.amibroker.com/members/library/formula.php?id=547
This system is written by Graham Kavanagh - it's a guide for learners on the common components of writing AFL. There are many questions from beginners when they start using AmiBroker so Graham Kavanagh created a sample system that incorporates basic and useful items. The AFL can be used to better understand Chart, Scan, Backtest & Explore features. The system for Buy/Sell is an "example only" that backtests poorly.

*Brian Fenske enhancements to Graham Kavanagh learners guide*
http://www.amibroker.com/members/library/detail.php?id=547
This system written by Brian Fenske where he remarks that Graham Kavanagh did a nice job of capturing much of the essence of a basic script. But with Brian working with a group of programmers have come up with some enhancements to his formula that makes it useful in the Automatic Analysis (AA) component.

Enjoy playing & learning AmiBroker..

Skate.


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## Lone Wolf (4 May 2020)

Aristotle said:


> Buy = C >= MA(C, 200) AND Index >= IndexMA;
> Sell = C <= MA(C, 200);




As Warr87 suggested, with the above code, in the rare event that the Close is exactly the same as the 200 MA you'll get both a buy and sell signal at the same time. Better to remove the = from it, or only include = in one of the two.



Warr87 said:


> A better buying condition is actually more along the lines of:
> 
> Sell = C <= MA(C, 20);




This is a good example of something that might not be obvious to Aristotle. (In fact I have code purchased long ago from a well-respected professional with a similar issue.) Let's say you used this sell signal with no other modifications:
Buy = C >= MA(C, 200) AND Index >= IndexMA;
Sell = C <= MA(C, 20);

This is what you get below. Orange line is the 200 MA, Green is the 20 MA. Price first crosses the 200 MA, you buy the next day (little green arrow), great. But look at what happens when price closes below the 20 MA. Every bar below the 20 MA is generating Buy and Sell signals at the same time. It's important to review your backtest trades to ensure the system is working as intended. Plot any indicators you use on the chart like in the image below so you can easily see where it should have taken a trade and whether it did.


----------



## Bazzi (5 May 2020)

Skate said:


> View attachment 103178
> 
> 
> *Disclaimer*
> ...




Hi @Skate , JMS have dividend this week
Ex Date: Wednesday May 6, 2020
Record Date: Thursday May 7, 2020

As observation in overseas trading, the price surge higher during and uptill the record date then price drop after that. Just to educate myself does the dividend alters your decision to when to buy/sell/hold? Like for this case JMS, does the above dates changes your position?
Thanks


----------



## Warr87 (5 May 2020)

The majority of us system traders don't buy based on dividend. You buy/sell when the signal is given. Any dividends are considering a cherry on top of hopefully a winning trade.


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## Bazzi (5 May 2020)

Warr87 said:


> The majority of us system traders don't buy based on dividend. You buy/sell when the signal is given. Any dividends are considering a cherry on top of hopefully a winning trade.




@Warr87 If a share bought based on system buy signal given and dividend came in line, Does the sell off that happen (if it happens) after dividend based on experience trigger a sell signal? (Caused by Dividend)
The reason I ask, I have encountered this multiple time overseas and not sure about ASX


----------



## Skate (5 May 2020)

Bazzi said:


> Hi @Skate , JMS have dividend this week - the price surge higher during and uptill the record date then price drop after that. Just to educate myself does the dividend alters your decision to when to buy/sell/hold? Like for this case JMS, does the above dates changes your position?




@Bazzi that's a good question. Like most traders I have a dividend stripper strategy that operates on the principles you have described.

*Let's not over think it*
"The Action Strategy" buys into trends - the cause of the trend is of no concern. @Warr87 is correct, "dividends" are not part of the equation.

*What overrides a buy signal*
There is only one thing that will override a buy signal & that's an announcement of a takeover/scheme of arrangement (A scheme of arrangement is a court-approved agreement between a company & its shareholders)

*So there is no confusions*
Update: Instead of showing generated buy signals as planned I'll show orders placed in the pre-auction so others can follow along without confusion.


Bazzi said:


> Does the sell off trigger a sell signal (after dividend)?




*Dividend distribution*
The drop in share price after a distribution of a dividend has no bearing or relationship to the exit strategy being used.

Skate.


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## Warr87 (5 May 2020)

Bazzi said:


> @Warr87 If a share bought based on system buy signal given and dividend came in line, Does the sell off that happen (if it happens) after dividend based on experience trigger a sell signal? (Caused by Dividend)
> The reason I ask, I have encountered this multiple time overseas and not sure about ASX




It could, but I doubt a dividend selloff would cause your stock to lower by that much. My own systems have 30 or 40% trailing stop and I haven't noticed any dropping that far after dividend.

And to clarify, as @Skate has mentioned, there are some strategies that will target dividends.


----------



## Ante (5 May 2020)

@Skate thank for your eBook, it is very interesting read


----------



## Skate (5 May 2020)

Ante said:


> @Skate thank for your eBook, it is very interesting read




@Ante you are most welcome, I'm glad you are finding the eBook an interesting read. You need to read the eBook more than once to condition you "how to think", not "what to think". Having the correct head-space in this game is critical.

All the best..

Skate.


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## aus_trader (6 May 2020)

Bazzi said:


> @Warr87 If a share bought based on system buy signal given and dividend came in line, Does the sell off that happen (if it happens) after dividend based on experience trigger a sell signal? (Caused by Dividend)
> The reason I ask, I have encountered this multiple time overseas and not sure about ASX




I also like dividend paying stocks and in good times have specifically given higher priority to dividend stocks being included in my portfolio. In these leaner times when companies are more likely to cut the dividend than to increase it, it really is a "cherry on top" as Warr87 said.

I think Peter2 used to adjust his systems to allow his stops to be lowered during the share price drop that happens on the ex-dividend date.


----------



## peter2 (6 May 2020)

aus_trader said:


> I think Peter2 used to adjust his systems to allow his stops to be lowered during the share price drop that happens on the ex-dividend date.




Yes, indeed I do because most of my trades are short term and my trailing stop gets tighter as the profits rise. In my medium term trades the exit stops are usually well away from any div drop. 

Note: A shorter term trader must be careful to know when the XD dates. Brokers can purge orders on the XD date before the open. If you've placed a limit order in the market to sell or buy it may be wiped.


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## Aristotle (6 May 2020)

Thanks again Skate. 
My discussion with you and other members of ASF on my particular issue ie. Developing an "Index Filter" for my trading strategy in Amibroker has been very fruitful.  I can now see what I need to do in the short term.  Firstly, I need to up date my Trading Plan with the following statement:

*“Have a look at my trading charts each day (or at least weekly) and once the value of the index falls below the 200 Day MA it's no longer good to open positions and time to close ones that are open” 
*
This I can do manually or visually.  But in time I will further develop the Amibroker version after I have had a good look at the reference above cited by Skate.

Aristotle


Skate said:


> _Amibroker is a blank sheet of paper, where you get to write the story! etc"_


----------



## Aristotle (6 May 2020)

Lone Wolf said:


> As Warr87 suggested, with the above code, in the rare event that the Close is exactly the same as the 200 MA you'll get both a buy and sell signal at the same time. Better to remove the = from it, or only include = in one of the two.
> 
> 
> 
> ...



Many thanks Lone Wolf
When I first started this journey to set up an "Index Filter" I was unsure as to how it would look like visually.  You have given me a chart which clearly shows the "Buy and Sell" signals.  Some times I can't see the wood for the trees in this trading game.  But now I can see the end result vividly.  I will further tinker with my formula, but in the short term I am going to update my Trading Plan as I communicated to Skate above.
Aristotle


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## Trav. (6 May 2020)

Aristotle said:


> *“ time to close ones that are open” *



Aristotle you could also look at tightening your trail stop instead of closing your positions. ie if you normally have a 30% trail stop then goto a 10% trail stop etc.

also you will find that it is common to have a ribbon on the bottom of the chart visually showing you index filter

Ribbon1=IIf(  (indexWeeklyFilter) >= 1 , colorGreen,colorRed);
        Plot(1, "Ribbon", Ribbon1, styleOwnScale| styleArea| styleNoLabel,-0.5,100);


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## Skate (6 May 2020)

*



*
"The Action Strategy" index filter has turned "ON" & if it's still on at the end of trade Friday, the strategy will be trading live from then on. There will be nothing hidden with this trading strategy so following along will be easy as all signals will be posted before being placed in the pre-auction.

*Why am I trading "The Action Weekly Strategy"*
It's a small trading exercise so others can follow my progress & be involved "as much" or "as little" as they like. The strategy has been developed so there is little thinking required as it's just about taking the signals without hesitation as they come along, something most will find difficult to do. It shouldn’t matter how much money you have, how old you are or how much you know about trading, the very act of getting started is much more important than getting it right. No one likes to lose money, but it is an inescapable part of trading. Many people never start trading because they’re worried about losing some or all of their money so don’t let fear or self-doubt keep you from getting started. You can learn as you go by trading small positions & if you make a mistake small loses are bearable. Making small mistakes now will give you the skills & experience to be the best loser you can possible be. With that said, it's critical to make smart trading decisions.

*So why is market acting the way it is?*
Trying to guess what the market is doing or what’s causing the market to behave in such a way is sometimes futile & can drive you crazy just thinking about it. I could make up a story with the best of them but I've found fear is always the primary driving force but as with all human emotions, it can rise to extreme levels & then suddenly shift. Above all else, traders must accept the fact that we operate with incomplete & uncertain data & every trade has a probability of loss, a hurdle traders have to overcome. How you react to stress will decide whether you’ll be a success or a failure at trading. Even the best traders have plenty of lousy picks along the way.

*When trading success depends on two basic things:*
(1) Picking good stocks that have a chance of increasing in price, & (2) Effectively managing the stocks after you buy them & "I'm planning to do both".

Skate.


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## Aristotle (6 May 2020)

Trav. said:


> Aristotle you could also look at tightening your trail stop instead of closing your positions. ie if you normally have a 30% trail stop then goto a 10% trail stop etc.
> 
> also you will find that it is common to have a ribbon on the bottom of the chart visually showing you index filter
> 
> ...




Thanks a million Trav, that is a brilliant suggestion.  It is actually on my current Amibroker Price Chart.  Now, I understand how I can best use it with the XAO Index.  In the past I have used it for stocks only.
Aristotle


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## Newt (6 May 2020)

Aristotle said:


> Thanks a million Trav, that is a brilliant suggestion.  It is actually on my current Amibroker Price Chart.  Now, I understand how I can best use it with the XAO Index.  In the past I have used it for stocks only.
> Aristotle




You might also want to backtest the effect of tightening exit stops (and as Trav said, not necessarily exiting immediately) but also not necessarily blocking all new entries.  You can miss early moves in strong stocks coming out of bear markets if you rigidly refuse all buys.

Ultimately these choices will likely affect your future drawdown risk (and length of DD) but might also increase (or reduce) your upside growth.  You'll have to find the balance you're most comfortable with.

You've no doubt read past posts by Skate about combining ROC with an Index filter - just one way of potentially adding some granularity to your trading plan and strategy code.

Peter2 handles the transition between bear and bull market conditions by varying the number of positions open and allowed portfolio risk.  More than one way to skin the index filter cat.....


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## Aristotle (7 May 2020)

Newt said:


> You might also want to backtest the effect of tightening exit stops (and as Trav said, not necessarily exiting immediately) but also not necessarily blocking all new entries.  You can miss early moves in strong stocks coming out of bear markets if you rigidly refuse all buys.
> 
> Ultimately these choices will likely affect your future drawdown risk (and length of DD) but might also increase (or reduce) your upside growth.  You'll have to find the balance you're most comfortable with.
> 
> ...




Thanks *Newt*.
You have raised an issue that I have often wrestled with over the years.  For the past decade or so I have religiously set my stops at around 10% to 15% and have had various levels of success.  Often the stops get me out too early and many times the market has rushed through them and not triggered.
At a recent seminar that I attended the speaker gave his philosophy on setting stop losses as follows:

_"*A stop loss is appropriate when trading one stock.  But, when trading 10 or more stocks, you do not need a stop loss.*"
_
*Newt*, I would be interested to hear your opinion and that of other members on this approach to the setting of stop losses.  I experienced a downside to this methodology in early March this year at the beginning of COVID 19, my wife and I were on holidays travelling around country Victoria where I did not have access to a internet connection.  Consequently, several of the stocks in my portfolio are down 20% or more.  Fortunately, a few stocks such as FPH, AEF and MP1 are going OK.  So my dilemma now is how long should I hold on to stocks like: ALL, MQG, and PRU which are all in the red to the tune of 20% or more.  Should I Hold or should I Sell.

I was in a similar situation during the GFC when I sold the whole portfolio, while a good friend who had a similar portfolio held on and he said:  "*If you sell you realize a loss.*"  He was right, and today he is a very wealthy man, while I made a substantial loss. 

So today, I don't use "mechanical" Stops I use "visual" stops in conjunction with a _3x ATR Trailing Stop_ on my Amibroker Chart.  And, together with the several suggestions I have received in the last week on this thread, I will be monitoring my portfolio using my XAO Index Filter using the Buy/Sell Ribbon Indicator on the Daily & Weekly Charts.

*Newt *you said above:
_"You've no doubt read past posts by Skate about combining ROC with an Index filter" _
Well no I have not read  Skate's post on this issue.  That will be my next assignment.

Aristotle


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## InsvestoBoy (7 May 2020)

Aristotle said:


> I was in a similar situation during the GFC when I sold the whole portfolio, while a good friend who had a similar portfolio held on and he said:  "*If you sell you realize a loss.*"  He was right, and today he is a very wealthy man, while I made a substantial loss.




The disparity in your wealth is not because he didn't sell while you did, the disparity is because you didn't re-enter the market while he remained exposed.


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## Skate (7 May 2020)

Aristotle said:


> _"You've no doubt read past posts by Skate about combining ROC with an Index filter" _
> Well no I have not read Skate's post on this issue. That will be my next assignment.




@Aristotle you are an old hand at trading & now slowly learning about system trading. Mechanical system trading is full of benefits that some find difficult to understand let alone take the time to learn. 

*When do I sell?*
You first have to consider all your holdings as individual trades not as one portfolio because that’s what they are. Your portfolio is a collection of individual trades & every stock presents its own individual trading challenge, its own separate battle to fight. It's important to remember that selling positions should be done on their own merits. Knowing when to sell "makes the money" & to make the decision I rely on my GTFO/StaleStop indicator with a variable trailing stop & with this combination it certainly adds value to the profitability of my strategies. With trading there are no rules & having no rules is scary. Traders without a solid trading plan wonder when to sell after the horse has bolted where seasoned traders are constantly monitoring this on an ongoing regular basis. How you handle your positions while controlling your emotions (the mental gymnastics) will eventually decide how successful you will be as a trader allowing you to fight another day. Trading has a high attrition rate when the going gets tough. 

*To answer your question more directly*
If you are lacking in ideas when to sell a current position draw a line in the sand by using a Simple Moving Average. How? - Sell the position when the closing price is below the moving average of 50 weeks. The AmiBroker formula code if it helps is (Sell = C < MA(C,50); 

*Hyperlinks to read*
https://www.aussiestockforums.com/posts/1060850/
https://www.aussiestockforums.com/posts/1067493/
https://www.aussiestockforums.com/posts/1067739/
https://www.aussiestockforums.com/posts/1061759/

*Make the search feature your friend*
Most questions that you can think to ask have most likely been answered before so the first port of call should be the "search feature". 

Skate.


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## Aristotle (7 May 2020)

InsvestoBoy said:


> The disparity in your wealth is not because he didn't sell while you did, the disparity is because you didn't re-enter the market while he remained exposed.




@InvestoBoy
Yes!, point taken you are right, but when you lose a heap of money as I did in the GFC, it really does sting a lot.  So much so that I got out the market for a year or two.
Aristotle


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## Skate (7 May 2020)

The Action Strategy is still on track to commence trading next week so an addition post is in order.

*Scary*
Trading is scary when you trust a system developed by someone else but rest assured I wouldn’t be trading the Action Strategy if I didn’t think I could snag a few dollars from this exercise. In this game you need to have everything working in your favour & success depend on following the system without hesitation or bias. If the ACTION strategy snags a good trend it can ride it for quite some time - the duds will be sold quickly. Trading is not a sprint, we intend to make money over time, slow & steady at first than hopefully snowballing into profit from then on.

*The Action Strategy rules: *
1. There will be no thinking involved 
2. Signals will be taken in order they are listed
3. Buy orders placed in the pre-auction will be "good for day" only
4. Never alter the (a) Buy Offer or (b) the QTY of shares to buy
5. On a sell signal, sell the whole position at the "Offer Price" in the pre-auction
6. If the position has not sold by 10:30am – “sell at market”
7. If I fail to post weekly updates, liquidate all positions "at market" 

*Being picky*
There are some companies I don't particularly like & I believe they will end up being a loser if I buy them. Being tempted to miss one company & buy the next haphazardly will throw a spanner in the works. If you are tempted to pick & choose "Don't do it". The strategy has been well tested & deviating from the plan can be a disaster.

*Timing the markets*
Systematic Trend Traders rely heavily on "timing the markets" buying & selling positions at the wrong time is a recipe for disaster. Some traders are pessimistic by nature having a gut feeling that this current correction will turn into a sharper decline lasting longer than the normal fluctuations of the markets adding to the problem. 

*Current issue*
The problem with the Action strategy is that it has limited performance in "Bear market" but it's a rip snorter in a raging Bull market. I have multiple protections built in to limit losses when the markets are trending sideways or falling. Like boxing sometimes you need to take some hits to win in the long run. Confidence & perseverance is needed in spades to trade the Action Strategy. With my $20K on the line I've tried to leave nothing to chance.

Skate.


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## Aristotle (7 May 2020)

Skate said:


> @Aristotle you are an old hand at trading & now slowly learning about system trading. Mechanical system trading is full of benefits that some find difficult to understand let alone take the time to learn.
> 
> *When do I sell?*
> You first have to consider all your holdings as individual trades not as one portfolio because that’s what they are. Your portfolio is a collection of individual trades & every stock presents its own individual trading challenge, its own separate battle to fight. It's important to remember that selling positions should be done on their own merits. Knowing when to sell "makes the money" & to make the decision I rely on my GTFO/StaleStop indicator with a variable trailing stop & with this combination it certainly adds value to the profitability of my strategies. With trading there are no rules & having no rules is scary. Traders without a solid trading plan wonder when to sell after the horse has bolted where seasoned traders are constantly monitoring this on an ongoing regular basis. How you handle your positions while controlling your emotions (the mental gymnastics) will eventually decide how successful you will be as a trader allowing you to fight another day. Trading has a high attrition rate when the going gets tough.
> ...




@Skate
Thank you Skate.  When I wrote my first post only a week ago, I had only read the first 40 pages of your posts, and I was most impressed with the philosophy you presented about life in general.  
But since then I have moved on to page to Page 41 and beyond and I am now experiencing a real "Eureka Moment", a moment of discovery, inspiration, and insight about Technical Trading and Analysis that I have never seen before.  
I am a slow reader, so it will probably take me a week or two get through and absorb the rest of it.  But, I will be back.
Aristotle


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## Skate (7 May 2020)

Aristotle said:


> @Skate
> Thank you Skate.  When I wrote my first post only a week ago, I had only read the first 40 pages of your posts, and I was most impressed with the philosophy you presented about life in general.
> But since then I have moved on to page to Page 41 and beyond and I am now experiencing a real "Eureka Moment", a moment of discovery, inspiration, and insight about Technical Trading and Analysis that I have never seen before.
> I am a slow reader, so it will probably take me a week or two get through and absorb the rest of it.  But, I will be back.
> Aristotle




Good work, just don't speed read any of my posts - you need to take your time to understand how they can help you. When you’re dealing with your own money, trading gets very complicated, very quickly! - this is why self education is so important.

Skate.


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## Skate (7 May 2020)

*I missed a few points*
(a) Following along with the Action Strategy is not for the faint hearted because initially the strategy can lose money before it moves into profits.
(b) With all new strategies it take time to develop from a losing strategy into one that makes money but only if all goes well & luck is on our side.
(c) Don't be disheartened if the Action strategy is not performing - don't stop believing no matter what.
(d) Remember, I want to make money, that’s my end game.

*Uncertainty*
None of us know what's going to happen next in the markets so it's vital that we follow our trading rules consistently otherwise it can destroy the strategies edge. The benefit of trading a mechanical system is "consistence of signals" & when you can trust your strategy signals it gives you the added confidence to keep pulling the trigger. I'll be concentrating on timing the exit with consistency as there are an abundance of entry opportunities.

*Footnote*
There are so many who refuse to take responsibility when trading goes wrong, the problem is always caused by someone or something else. Ultimately the decision to trade is your responsibility.

Skate.


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## ducati916 (7 May 2020)

Skate said:


> View attachment 103265
> 
> The Action Strategy is still on track to commence trading next week so an addition post is in order.
> 
> ...





A question: what happens to the profits? Do you:

(a) sweep them out of the (starting) capital; or
(b) leave them in to compound.

I haven't really noticed that this topic has been addressed. My personal preference is (b).

jog on
duc


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## Skate (7 May 2020)

ducati916 said:


> A question: what happens to the profits?




*Commission drag*
@ducati916 that's a great question. To answer the question succinctly - Profits add additional positions to the portfolio. Commission drag won't allow rebalancing of position sizes & that's why they need to be fixed. (As stated - Fixed Position Sizing: $1,000 with "NO" re-balancing)

*All available funds need to be put to work. *
Commission drag has already been calculated so it's not possible to increase position sizing (bet sizes) which leaves the option to increase the number of positions in the portfolio. Extra positions are calculated form (a) existing available funds or (b) from "closed profits" in the portfolio. This means if the open profits or available funds are greater than $1k but less than $2k it allows another position to be added to the portfolio. If the open profits are greater than $2k but less than $3k it allows two extra position to be added to the portfolio & so on.

*Rebalancing & Pyramiding*
Questions relating to how I rebalance profits in my active trading strategies (not the Action Strategy of course) can be found here: https://www.aussiestockforums.com/posts/1055850/ & here: https://www.aussiestockforums.com/posts/1052241/

Skate.


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## Rsthree (7 May 2020)

Skate said:


> View attachment 103265
> 
> The Action Strategy is still on track to commence trading next week so an addition post is in order.
> 
> ...




So this is the fail safe (GTFO) for Skate being run over by a bus.... I'm surprised you haven't been able to code this one already.


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## willoneau (7 May 2020)

Hi Skate , I look forward to being involved as my weekly system still hasn't turned on.


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## Newt (7 May 2020)

Podcast to share - currently working my way through this "Trading Conversations" podcast between Phillip Teo and Jerry Parker (one of the original "Turtles").


I've listened to a few Jerry Parker interviews and incorrectly thought this might be familiar territory requiring some "Fast forwarding" - but wasn't at all tempted to skip anything.  A few things that I found valuable that might benefit others:

1.  Parker notes that traders tend to constantly collect knowledge, keep some processes and throw away others, but eventually put their own "stamp" on everything that remains
2.  Finding a good fit with a trading strategy is very important - don't necessarily expect the strategy to fit closely with your personality, but it should take advantage of your particular skills
3.  Trend following is generally not intuiative, nor easy to stick with - and Parker notes this could also be why it can be so profitable and so many give up on it
4.  Over the years, his need to move to longer timeframes and cope with greater drawdowns and equity curve "lumpiness" - again very hard for many to tolerate.  He says would love to make "1% a month", but it doesn't work that way.

Anyhow, couldn't help thinking of the parallels as Skate's incoming Action Strategy "Turtles" get ready to tackle the markets armed with their new strategy


----------



## Newt (7 May 2020)

Aristotle said:


> Thanks *Newt*.
> You have raised an issue that I have often wrestled with over the years.  For the past decade or so I have religiously set my stops at around 10% to 15% and have had various levels of success.  Often the stops get me out too early and many times the market has rushed through them and not triggered.
> At a recent seminar that I attended the speaker gave his philosophy on setting stop losses as follows:
> 
> ...




Hi Aristotle

Glad to hear you are getting benefit from the wealth of trading education treasure that is here to be found.  I don't profess to have all the answers, as choice of exits (initial stop, trailing stop, Index/GTFO stop, etc) can be very personal choices, even between traders that might all be trading weekly trend following strategies. For systematic traders, your final decision will hopefully be grounded in confidence gained from data, backtesting and reastlistic assessment of future rewards versus assumed risk.

*Some general suggestions that you expect to find across many traders:*
- You need an exit plan and quantifiable risk before entering any trade
- A "stop" does not have to be actually active in the market, but at all times you must be cognizant where you strategy specificies an exit must be made (regardless of whether it is a win or a loss)
- Stops and exits are managed across individual trades, but the value of your exits (and strategy) will only ever be expressed across many trades (depending on probability) - no amount of worrying, praying, market monitoring allows us to effect what the markets will do
- Having a trailing stop indicator plotted on your stocks will not help if you don't already have a good trading plan and the conviction to execute signals as they come up

Unfortunately most of us don't just wake up one day with a lifelong robust trading plan - you'll learn and hopefully improve as you go.  It does sound however like you currently hold stocks that you feel are "trades", but don't yet have a firm trading plan in place.  I can't advise you what to do (moral and legal limitations), but one option is you could sell and realise any gains or losses until you have a trading plan in place.  If however you do already have a strategy and trading plan in place, then you must hold or exit those positions that worry you as specified (otherwise you're not trading with a plan).

*What my strategies "do":*
- Don't enter without an established trend
- Have a wide but firm initial entry stop (generally around 30-40%)
- Have a trailing stop (e.g. ATR Chandalier or fixed %)
- Consider tightening trailing stop if market index filter turns "off"
- DON'T have "take profit" stops for weekly trend following
- if ever tempted to change my strategy or not take a signal, then backtest your reason for doing so and then either consider adding that new condition to your strategy or chastising yourself for trying to "awesomeize" it in the first place.


Hope this helps,
Newt

p.s. also lost plenty through GFC, but afterwards at least gained convinction to put decent effort into learning to trade over the long term


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## Skate (7 May 2020)

Newt said:


> Anyhow, couldn't help thinking of the parallels as Skate's incoming Action Strategy "Turtles" get ready to tackle the markets armed with their new strategy




@Newt thanks for posting the podcast I'll have a listen tomorrow.

*Reservations*
I have reservations starting the new Action strategy with the current volatility "as the strategy prefers a Bull market" but there is never an ideal time to start. The Action Strategy has no problems picking the moves but current market sediment can get in the way. I'll be consistently trading the strategy no matter what otherwise it will destroy the strategies edge, I've put too much work into this strategy not to.

*I'm in it for the money*
This is a nice exercise for others to follow, trading a small position portfolio will be emotionally easy to handle. I'm trading the strategy to make a few bob along the way, well that's the plan.

*Please read the "Footnote"*
There are so many who refuse to take responsibility when trading goes wrong, the problem is always caused by someone or something else. "Ultimately the decision to trade is your responsibility".

Skate.


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## Skate (8 May 2020)

With all things being equal the Action Strategy is ready to start trading from Monday. 

*A worthy read*
There is an article from News.com today that's worthy of a read to help make an informed decision about trading at this stage because ultimately the decision to trade is your responsibility.

*Warning  *
Anyone tempted to buy stocks because they think they represent value as a result of the recent decline should be aware that forward earnings have collapsed across the board. Fear of missing out (FOMO) is a terrible reason to invest in the markets if you aren't financially educated as you are exposed to significant financial risks.

https://www.news.com.au/finance/mar...s/news-story/8a8b02d8530ae221fae6abf6d1925333

_# “Even market professionals find it hard to time the market in a turbulent environment, and the risk of significant losses is a regular challenge,” ASIC said.

# “It’s fantastic that people are getting involved in the market, just go in with the expectation that it does take some time to learn how to invest and don’t expect to become a millionaire overnight. I look at it more as a process – if I was to learn any trade it would take two or three years. And it's the same with the market, it’s important to learn the lessons otherwise, at some point, you could end up getting burnt.” Burman chief investment officer Julia Lee said._

Skate.


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## peter2 (8 May 2020)

@Skate   yes, a timely reminder that trading without a plan is risky. ASIC released a report outlining the increased activity of retail traders during the CV selloff.

https://asic.gov.au/about-asic/news...retail-investors-at-risk-in-volatile-markets/

Additional details in the report (pdf) may surprise most. From the last page...


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## qldfrog (8 May 2020)

Skate said:


> View attachment 103284
> 
> With all things being equal the Action Strategy is ready to start trading from Monday.
> 
> ...



I also added an entry in the Afterpay thread as it seems the rise and fall of Afterpay and the "easy" win some got has been a specific trigger.No get rich quick,I am afraid unless you are the one selling the book/seminar/black box.....


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## Skate (8 May 2020)

peter2 said:


> @Skate   yes, *a timely reminder that trading without a plan is risky.* ASIC released a report outlining the increased activity of retail traders during the CV selloff. Additional details in the report (pdf) may surprise most.




@peter2 it's timely indeed to remind members that trading without a plan is a plan to fail. Trading is emotional at best but when "volatility meets large loses" your world can fall apart.

*An Update: *https://www.aussiestockforums.com/posts/1066919/
Before COVID-19 I was sitting on a large YTD profit. In two short weeks I managed to lose 70% of those profits. With "Billions wiped from the markets" we all felt the burn in one way or another. 

*Crawling my way back*
With 9 weeks of trading under my belt I've been lucky inching my way back & within a few more weeks I'm expecting to be whole again. The last few weeks hasn't been all peaches & cream. The daily fluctuations have been hard to stomach as I've never experienced volatility like this before. 

*A section of my "Weekly Line Chart" *
I'm posting the line chart so you can understand what I've had to endure these last few crazy weeks.




*Lifted off the ASIC website *
_"ASIC analysis of markets during the COVID-19 period has revealed a substantial increase in retail activity across the securities market, as well as greater exposure to risk. We found that some retail investors are engaging in short term trading strategies unsuccessfully attempting to time price trends".
_
Skate.


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## Skate (8 May 2020)

The Action Strategy is now live & all updates from this point will be an ongoing record of the strategies progress.  

*Signals*
I won't be posting the AmiBroker signals each week with the Friday's updates (to save confusion) but as there is nothing to post the first week, posting the signals is better than nothing. This week there is no shortage of signals. 

*Friday's weekly update *
Will be a summary of the weeks performance. 

*Suspended & delisted securities*
There are some things that can be coded into a strategy where others are a little more difficult. The analysis report will not include "Suspended or delisted securities" . Being hit by a bus is a little harder to code as is ASX announcements so they will be checked for the reason below.
*
What overrides a buy signal*
There is only one thing that will override a buy signal & that's an announcement of a takeover or a scheme of arrangement. 

*FYI*
A "scheme of arrangement" is a court-approved agreement between a company & its shareholders regarding the compulsory acquisition of all the outstanding shares.

*Positions placed in the pre-auction*
The positions placed in the pre-auction will be posted tomorrow (Saturday) after they have been entered into CommSec as filtering the announcements of each individual companies is required.

*Monday's report*
On Monday I'll post the reports from "Share Trade Tracker" with confirmations of the positions executed.

*This weeks signals *



*Luck*
In life & trading we all need a bit of luck to be successful.

*My next post*
After the positions have been placed in the pre-auction I will post a confirmation tomorrow (Saturday)

Skate.


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## willoneau (8 May 2020)

Do you place orders on Friday before open?
I thought you would place your orders before the open on Monday?


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## willoneau (8 May 2020)

With so many do you place the top 20 in pre auction after screening the announcements?


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## Rsthree (8 May 2020)

That's a big list, I didn't expect that many to pop up.
I have about a quarter of those on my paper trading account and faves list. From my basic approach to charting I can see why many of those would be on the list, but a few not so.

What criteria will you use to select the 20 trades?

I'd like to see some discussion on the final selection so I can understand more and learn.


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## Skate (8 May 2020)

willoneau said:


> Do you place orders on Friday before open? I thought you would place your orders before the open on Monday?




@willoneau I normally go over the signals on Saturday & place them into the markets after Norgate Data has been updated overnight. I have the option of placing my orders anytime before the market opens on Monday but I alway place them on Saturday being a creature of habit. 

Skate.


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## willoneau (8 May 2020)

Thanx Skate for the clarification, I also use Commsec but have never placed orders in pre auction. I usually use conditional orders.


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## willoneau (8 May 2020)

Skate said:


> *What overrides a buy signal*
> There is only one thing that will override a buy signal & that's an announcement of a takeover or a scheme of arrangement.



Good point as I usually just take the signals without looking at any announcements.


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## Skate (8 May 2020)

Rsthree said:


> That's a big list,
> *1. What criteria will you use to select the 20 trades?
> 2. I'd like to see some discussion on the final selection so I can understand more and learn.*




@Rsthree let me answer your two questions
1. All the buy signals have already been “ranked” by using (Amibroker- PositionScore). The PositionScore ranking code is confidential.
2. This is “no thinking strategy” - you take the signals as they are presented (I’ve explained the rules & how the strategy operates only a few posts back)

*Discussion*
Others are free to discuss why the signals have been selected but I’ve already explain all this in previous posts.

Skate.


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## Skate (9 May 2020)

*Informational Update*
The Action portfolio will include all the relevant portfolio information with every new update (for new readers) but for those who want to keep checking in & don't want to read something already read a separator & "NEW information starts below" warning will be displayed just before new information is added.

*CommSec is closed for maintenance *
_"From 7.30am to 11.30am on Saturday 9th May 2020 (Sydney time), our CommSec and CommSecIRESS trading and investing platforms will not be available. We apologise for any inconvenience this may cause. This means that you will not be able to Place orders online" _so in the meantime I'll make a few comments.

*Making a profit*
@willoneau the objective of trading is making a profit that requires careful risk assessment, disciplined money management, emotional & behavioural discipline but most of all you need the ability to execute a trading strategy flawlessly without hesitation. Losing streaks are a fact of life for traders so it’s vital to manage risk, because it’s your money on the line.

*Why complicate something that should be simple*
@Rsthree sometimes we are our own worst enemy because we have a tendency to look for confirmation about a decision that requires time to be confirmed & if we are wrong, then we doubt the system. Every system will have losing trades but we aim to be profitable in the long run. The Action Strategy is a "NO THINKING" way of trading, dipping your toes in as they say.

*Follow your plan*
For others - mechanical trading can be a simple endeavour if you are disciplined, follow the rules & stick to the trading plan. When the appropriate signal shows up, place your order and go on about your life. When you have a fully tested strategy there is no need to second-guess the signals.

*Trading the bounce*
This is the time to systematically “trade the bounce” as Duc would say provided you have the stomach to digest the volatility.

Skate.


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## Skate (9 May 2020)

*I'm just filling in time*
Traders understand the markets are based on human behaviour and our perceptions about what is happening at that moment will make traders rush into panic mode, causing huge selloffs. The markets are constantly doing things you don’t expect. Emotions are driving a lot of what's going on at the moment all due to the impact of the coronavirus on the economy.  While one person sees buying opportunity, another sees nothing but more drama ahead - what you see can either save you some money or it can keep you from succeeding as a trader. The most common problem that traders have is that they overcomplicate their trading.

Skate.


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## Skate (9 May 2020)

*Why is volume so important to the Action Strategy!*
What does volume mean to you? First, it gives you the context to understand why volume is important when you are considering a trend. If an uptrend is not confirmed by an expansion in volume, then what you have is the same number of buyers or, worse, fewer buyers. When price rises, it does so because there are even fewer sellers! Once you realise that the market is trending with higher prices without volume confirmation, then you truly are at greater risk of the trend reversing & doing so both quickly & violently.

*Probabilities *
Trading is all about predicting the value of a security sometime in the future & the idea of qualifying the strength of a trend. I can tell you with certainty not all trends are the same in terms of strength, durability & viability - by qualifying the trend it provides a trader with an exceptional edge.

As it's nearing 11:30am I'm off to place my trades in the pre-auction..

Skate.


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## Dona Ferentes (9 May 2020)

Skate said:


> *I'm just filling in time*
> Traders understand the markets are based on human behaviour and our perceptions about what is happening at that moment will make traders rush into panic mode, causing huge selloffs. The markets are constantly doing things you don’t expect. Emotions are driving a lot of what's going on at the moment all due to the impact of the coronavirus on the economy.  While one person sees buying opportunity, another sees nothing but more drama ahead - what you see can either save you some money or it can keep you from succeeding as a trader. The most common problem that traders have is that they overcomplicate their trading.
> 
> Skate.



about as sensible as anything.


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## Dona Ferentes (9 May 2020)

The following deals with a similar theme.
*Understanding Market Dynamics: Looking Beyond The Headlines*
By Greg Tolpigin
*
https://www.sharecafe.com.au/2020/05/08/understanding-market-dynamics-looking-beyond-the-headlines/

... "readers will note I have been particularly bullish the past month despite the barrage of negative news and have shown how economic data like unemployment are poor forecaster of market direction. As I noted to my office colleagues – play the ball, not the man!*

The reality is markets are extremely forward-looking and move at far faster rates than ever before as information is disseminated and trader positions are changed with every new data point. Gone are the days of watching a ticker and reading the paper and then ringing your broker. So it is no surprise at all that markets fall and rebound at new record rates and why comparisons to things like the 1930’s depression are just, well, idiotic. Central banks and Governments move at faster rates now to as well, reflected in how quickly central banks have moved to cut rates and implement quantitative easing. Plus for starters, we are not on the gold standard anymore and Governments are not raising taxes across the globe.

So if markets speed and newsflow has changed, what hasn’t? Human psychology and how the herd acts. I explained in my prior columns how I have made more money from applying pure market psychology than I have from any in-depth analysis across my career. Fear and greed are emotions that will always be ingrained in human DNA. So during the latest market panic and subsequent rebound, market psychology was most at play as the emotions rose to the surface. No amount of analysis could determine anything of any substance because of so many “unknowns” and still all this analysis has analysts and economists scratching their heads. How can the Nasdaq be up on the year already? We haven’t even received the worst data point yet – tonight’s US employment figures. And like all the data points that have come before this one, the market will look through it because that’s what it does.

Markets are a discounting mechanism. They first price in the worst and then discount news as it becomes reality. Nothing in the data that is being released tonight or in the past month is anything we didn’t know at the beginning of February. Moreover, is anyone honestly going to tell me that 33 million unemployed Americans is notably worse than 30 million as the market would view it?

As markets collapsed on Covid-19, what has the media been reporting (financial media included) – death, job losses, infections, shutdowns, market declines, toilet paper pandemic – anything and everything that is a sensationalized headline. And it is what we see and react to. Magicians always say – “what the eyes see and the ears hear, the mind believes”. Why do bookies make so much money? Because they bet against the public. Why? Because the betting public always gets it wrong. So seeing the public run and stock up on toilet paper as though it is the most important item in life is a prime example of Neanderthal mentality. You have to take the other side of that trade.

You saw that same mentality in the market with a huge dumping and shorting of stocks not in February, but in March and even more in April. I showed charts last week of the dash for cash. So investors liquidate equity positions, shorters positioned themselves short and then what? No sellers left. It takes lunch money to move markets back up. I gave the example in a recent column of how I tried to buy just $30,000 worth of Super Retail Group at the height of the panic. I moved the share price up 8% and got filled on zero, despite being the highest bidder repeatedly. With no sellers, there is a scramble of short covering. But the sentiment is still the same – the headlines are bad – millions are unemployed and shorters again try to re-short and those that dumped stocks are too scared to buy in.

That explains why we still have sentiment and trader positions like this from IG markets published this week that the most shorted position across all their clients is the S&P 500 at 74%!




Maybe IG clients are just an anomaly……….nope. The AAII weekly survey that has been running since 1987 reflects the same thing. This survey asks investors where they think the market will be in six months. What is surprising is that the bearish views are still increasing! Up 8.6% to 52.7% versus a long-term average of 30.5%.




Even the UBS Wealth Management survey of their HNW clients showed that 61% believed markets needed to fall between 5 – 20% before they would be prepared to buy.

So the psychology works that as the market creeps higher it becomes the most hated bull market of all time. The shorters are squeezed and force prices higher. They are more aggressive than traditional long only buyers so the price moves are rapid and aggressive. Take a look at any of the US teach earnings to see the 20-30% jumps in price! This gives little weakness or opportunity for investors to buy – even in the face of all these negative headlines and data points – and they remain frustrated and “fear” they missed the opportunity. Eventually, the sidelined money has to find a home and with time the economic data passes its inflection point and the news is better. That fear now of missing out creates, even more, buying and with the Federal Reserve in the background pumping trillions, the ultimate outcome is a bubble.

Money made without drawing a single trendline or balance sheet analysis. Just pure understanding of market psychology and watching what the herd do, how they react and why under fear and duress the worst decisions are made.

https://www.sharecafe.com.au/2020/05/08/understanding-market-dynamics-looking-beyond-the-headlines/


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## Skate (9 May 2020)

Dona Ferentes said:


> about as sensible as anything.




@Dona Ferentes I'm unsure what your comment means. If you would elaborate I may have a better understanding. I'll make an additional comment that might help.

*Intensity of psychological forces*
Personality has a lot to do with trader’s ability to grasp & properly execute a trading strategy or trading plan because of the complexity of the psychological forces at work that take on a new intensity when your hard-earned money is on the line. Trading is all about human behaviour & perceptions 

Skate.


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## Dona Ferentes (9 May 2020)

Skate said:


> @Dona Ferentes I'm unsure what your comment means. If you would elaborate I may have a better understanding. I'll make an additional comment that might help.
> 
> *Intensity of psychological forces*
> Personality has a lot to do with trader’s ability to grasp & properly execute a trading strategy or trading plan because of the complexity of the psychological forces at work that take on a new intensity when your hard-earned money is on the line. Trading is all about human behaviour & perceptions.



I'm not a trader, probably because I recognise I can't screen out (successfully, or enough) these factors/ forces. Tried it; doesn't work. For me.

But there are plenty of ways to skin the market cat.

(and; 'about as sensible as anything" means 'I agree with you" and like what you  post, by the way)


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## Skate (9 May 2020)

Dona Ferentes said:


> I'm not a trader, probably because I recognise I can't screen out (successfully, or enough) these factors/ forces. Tried it; doesn't work. For me. But there are plenty of ways to skin the market cat. (and; '*about as sensible as anything" means 'I agree with you" and like what you  post, by the way*)




@Dona Ferentes thanks for the clarification & your kind words.

*Psychological hurdle*
Your beliefs about the markets are obviously different to mine. Your risk tolerance may be different to mine but when we dabble in the markets in all of its various forms it’s a probabilistic endeavour. This means there is a probability that we will be a winner or a loser.
*
We are different but have the same goals*
The market provides plenty of opportunities if you're looking for them so I guess we are not that different after all. I look for increases in price, volume & volatility that may indicate further price increases. Sometimes it works & sometimes it doesn't. Managing the opportunities in a profitable manner is key to success & I guess you are no different.

CommSec is still down, it's the reason for my banter

Skate.


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## Skate (9 May 2020)

*I resist getting on my soapbox these days *
Talking about "Timing the market" is boring as most want to declare that it can’t be done but never explain why. I'll ramble on about "Selling" & how important it is when it comes to profitability usually misses the mark. When you raise the subject of being "Disciplined" most don't really understand because it conflicts with their belief system. Not being "Vigilant" when handling a portfolio can be a wealth hazard.

*Important topics with regards to trading profitably *
1. Timing the market
2. Selling
3. Being disciplined
4. Being vigilant
5. Following a Trading Plan
6. Being in charge of your emotions
7. Understanding the next step when you are wrong
8. Why having the correct mindset is important when it comes to trading

*Traders we are all different*
Traders are not just technical analysts, they have trading skills but some technical analysts never trade, they just fuss over coding formulas & strategies. As traders we are all different, I'm a trend trader & I trade my arse off.

Skate.


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## Skate (9 May 2020)

*Sample of [ASX - PNR] placed in the pre-auction *(CommSec)
1. The position is only "Good for a Day" & will automatically be cancel if the position is not executed on the day.
2. Commission needs to be no more than "$10" because commission drag will effect the systems performance.




Skate.


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## dbpbsuen (9 May 2020)

Hi everyone, newbie to investing and this forum - lots of great stuff!
Have recently relocated from UK to Aussie, and would greatly appreciate any suggestions on the following Qs:

1. Should I transfer money from my Cash ISA to invest or use money not from cash ISA in the UK?
2. Should I transfer money from UK pounds to Aus to invest or invest from UK pounds directly?


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## frugal.rock (9 May 2020)

It really depends on: what you want to do, current FX rates, convenience, fees and taxation implications, if any.

What you should do, is get the TARDIS whirring back a few weeks and change your cash to AUD...


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## Saqeeb (9 May 2020)

*Update on my MAP paper trading portfolio.*

The index filter on my MAP Strategy has turned on this week and I have 6 signals to enter this Monday 11/05. The paper portfolio is so far in a drawdown of 12%. 

The fact that this portfolio was only started in mid February this year has helped it in keeping the draw down to just 12% considering the steep sell off we have had. This is pure luck with the timing.

*This week's scan results:*
*BUYS:*
6 buys this week - *MLX, PDN, WAF, RMS, MSB and PPH*

*SELLS:*
No sells this week


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## ducati916 (10 May 2020)

Skate said:


> [B]Intensity of psychological forces
> [I][U]Personality [/U][/I][/B]has a lot to do with trader’s ability to grasp & properly execute a trading strategy or trading plan because of the complexity of the [B][I][U]psychological forces at work [/U][/I][/B]that take on a new intensity when your hard-earned [B][I][U]money is on the line[/U][/I][/B]. Trading is all about human behaviour & perceptions
> 
> Skate.





[FONT=Book Antiqua][COLOR=#000000]1. Personality can be divided into:
(a) individual quirks; and
(b) generic traits.

Which will dominate when trading? Can personality be modified? If so how?

2. Are the psychological forces:
(a) operant on individual personality quirks; or
(b) generically?

Which will dominate when trading, individual or generic? Can the psychological forces be modified? If so how?

3. (a) How does money affect these issues? (b) What if anything can be done to manage? Often (many times) traders will trade a demo account. They will often do really well. Then they trade money. They collapse.

This thread (lately) has focused more effort on the actual system, rather than the trader. The focus has been on finding a system (methodology) that trades the market successfully. This would seem to be the common sense approach. Not so much thought has been placed upon the trader and how they could trade. That is to say: making the system fit the traders personality/psychology and as a secondary consideration, fitting it to the market.

jog on[/COLOR][/FONT]
[COLOR=rgb(0, 0, 0)][FONT=Book Antiqua]duc[/FONT][/COLOR]


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## qldfrog (10 May 2020)

Orders entered, wishing good sailing ahead to this new boat:
20x1k positions.taken from my failed daily trial last week
Many familiar codes here...


Skate said:


> View attachment 103337
> 
> View attachment 103338
> 
> ...


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## Newt (10 May 2020)

ducati916 said:


> [FONT=Book Antiqua][COLOR=#000000]1. Personality can be divided into:
> (a) individual quirks; and
> (b) generic traits.
> 
> ...




Definitely a very important "leg of the trading table" Duc.  The table will fall over without a decent methodoloy and effectively trader psychology.

There were some very interesting observations by Jerry Parker (of Richard Dennis "Turtles" fame) in that podcast link I put up a page or so ago for anyone wanting to explore how to ensure a better "fit" between trader psychology and system design.


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## qldfrog (10 May 2020)

Newt said:


> Definitely a very important "leg of the trading table" Duc.  The table will fall over without a decent methodoloy and effectively trader psychology.
> 
> There were some very interesting observations by Jerry Parker (of Richard Dennis "Turtles" fame) in that podcast link I put up a page or so ago for anyone wanting to explore how to ensure a better "fit" between trader psychology and system design.



It is indeed critical:
I see the beauty in system trading as a better fit to my psychology:
-absence of trust? except for @Skate experimental foray starting tomorrow, I understand and master the code so trust it;no black box or financial report (black boxes IMHO)
- conservative or go for it all? you choose your own setting : with or without SL etc
-feeling good/feeling bad?I just apply whatever my system tells me, irrespective of my mood on the day

Am I able to endure the stress when sXXt happens? 
Well we got a good example in February and I hung on so not worried about that anymore, call this experience  .I would have been better off doing a sell all..but I see that as a failure of the code, now updated to care for that case,-> can we have other dramas, unplanned with code unprepared ?: sure but hey I am aware..
I am a very bad discretionary trader, I look ahead too far and I do not share the average trader view so always bad results, add a pessimistic outlook on life (Call that world life experience) and I am a dreadful punter..


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## Newt (10 May 2020)

qldfrog said:


> It is indeed critical:
> I see the beauty in system trading as a better fit to my psychology:
> -absence of trust? except for @Skate experimental foray starting tomorrow, I understand and master the code so trust it;no black box or financial report (black boxes IMHO)
> - conservative or go for it all? you choose your own setting : with or without SL etc
> ...




Wise words QF that in Feb you followed your system down rather then over-riding it.  Profit from over-riding may feel good in the short term, but not the stuff of the long term trading marathon we signed up for...


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## Skate (10 May 2020)

Newt said:


> Definitely a very important "leg of the trading table" Duc.  The table will fall over without a decent methodoloy and effectively trader psychology. There were some very interesting observations by *Jerry Parker (of Richard Dennis "Turtles" fame) in that podcast link* I put up a page or so ago for anyone wanting to explore how to ensure a better "fit" between trader psychology and system design.




@Newt after listening to the podcast I couldn't help but think others will listen to the same podcast & have a different take. Others might reject the information Jerry passed on because it's contrary to what they want to believe. 

*Some traders are a wealth of information*
I found the podcast interesting from the "get go". I would like to add to your takeaways that might benefit or encourage others to download or listen to other podcasts in the series: https://www.listennotes.com/podcasts/trading-conversations-traderwave-academy-q5ogLDiuPtV/

*Information Richard Dennis passed on to Jerry Parker*
1. Trading positions too large (that's not right for you) adds to your risk
2. Traders don't follow their system because it's hard to do

*Jerry Parker went on to add further*
1. Always have multiple entries & exits
2. It's hard to beat the Index because traders don't follow their rules
3. As a trader you need patience
4. You need Risk Control
5. Trend Following is how you make good returns

*Your beliefs shape your reality*
I have a simple philosophy that "your beliefs shape your reality". People are naturally pleased when processing information that supports their beliefs & have a tendency to embrace that information. It's a real shame that the learning process & system design is a slow & painful process.

Skate.


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## Skate (10 May 2020)

qldfrog said:


> It is indeed critical:
> I see the beauty in system trading as a better fit to my psychology:
> -absence of trust? except for @Skate experimental foray starting tomorrow, I understand and master the code so trust it;no black box or financial report (black boxes IMHO)
> - conservative or go for it all? you choose your own setting : with or without SL etc
> ...




@qldfrog it's refreshing when traders have confidence in their trading plan, methodology & approach when trading the markets confirming there is no right or wrong way. Without the confidence you will quickly fall into the habit of overriding your system & if you do it once - you'll do it again.

Skate.


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## Newt (10 May 2020)

Thanks for sharing your takeaway key points from the podcast Skate.  Totally agree that many might dismiss what is shared as simplistic, but there are some real gems for those that have been in the trenches already for a few years and willing to really listen.

Fascinating that he noted trading will often not be "easy", and there it might not be a goal worth chasing to have a system that perfectly fits you.  How often do we hear people want to become "consistently profitable traders", without defining what they actually means.  What timeframe, what DD, what psychological pain, etc.  I'm becoming more and more convinced it would be foolish for most of us to ever be totally dependent on trading for day to day income, but long term there is potential for it to be very financially rewarding.

There is also a strong theme that you should improve yourself as a person as well as a trader if you embrace continuous improvement, development, keeping your eyes open, never assuming you "know it all".  Think you've captured that well in your last paragraph - no pain, no gain.


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## Skate (10 May 2020)

Newt said:


> Thanks for sharing your takeaway key points from the podcast Skate.  Totally agree that many might dismiss what is shared as simplistic, but there are some real gems for those that have been in the trenches already for a few years and willing to really listen. Fascinating that he noted trading will often not be "easy", and there it might not be a goal worth chasing to have a system that perfectly fits you.  How often do we hear people want to become "consistently profitable traders", without defining what they actually means.  What timeframe, what DD, what psychological pain, etc.  I'm becoming more and more convinced it would be foolish for most of us to ever be totally dependent on trading for day to day income, but long term there is potential for it to be very financially rewarding. There is also a strong theme that you should improve yourself as a person as well as a trader if you embrace continuous improvement, development, keeping your eyes open, never assuming you "know it all".  Think you've captured that well in your last paragraph - no pain, no gain.




@Newt it’s frustrating & time consuming trying to figuring out what trading is all about, it was extremely difficult for me in the early days because I didn't know what I was expected to know. Reading & listening to everyone, absorbing heaps of useless information turned out to be irrelevant in the early stages.

*Posting relevant information*
I had this grand idea of posting information that I found relevant in my trading journey in the hope of helping others shorten their learning curve. This idea gave rise to the "Dump it here" thread.

*Others can learn by following along with the Action Strategy*
The hardest part of trading is learning from experience or time in the market, it's learning how to control your emotions, how to keep persisting even when your account suffers a few losses. It’s about being realistic having an understanding that we are probably only average traders at best but that’s okay. The Action Strategy will not be an overnight sensation as every strategy takes time to develop into profits because that's just the nature of the beast.

*Traders without an education*
These traders are notoriously optimistic & lack patience when they first start out. Everyone is looking for the perfect strategy, a foolproof method, but there isn't any. Trading the Action Strategy in a disciplined manner might be the best we can hope for. I’m first to admit financial markets are complex, but that doesn’t mean it requires a complex strategy. The level of complexity has little to almost no bearing on its performance. Those following along with the Action Strategy will soon realise that every system will have periods of good performance & periods of poor performance yet some tend to worry about the short term ups and downs then remaining focused on the longer term outcome.

Skate.


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## Rsthree (10 May 2020)

The Action Strategy

Well I had one minor glitch with my foray into the Action Strategy. I set up my trading account a few weeks ago, and on Friday I remembered that I only put $14k in the account. So I transferred some more funds on Friday but it looks like they wont come through till Monday. 

Frankly I was expecting the portfolio to build over a few weeks, but bang, it all happened on the first scan.

So now I have the first 13 positions on order and I'll just have to buy the remaining 7 at market on Monday. I hope this doesn't upset the experiment too much  

My homegrown strategy (paper traded) for the last month has had a bit of a ride. It was sitting at +12% after the first week and then grovelling  around at +2% for a couple of weeks and now up to 17%. Volatility!!


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## Skate (10 May 2020)

Rsthree said:


> The Action Strategy
> 
> Well I had one minor glitch with my foray into the Action Strategy. I set up my trading account a few weeks ago, and on Friday I remembered that I only put $14k in the account. So I transferred some more funds on Friday but it looks like they wont come through till Monday.
> 
> ...




@Rsthree settlement in normally delayed. CommSec works on T2 which means settlement is in two days. Monday’s purchases are settled on Wednesday. Whereas @qldfrog has posted that his broker requires the funds to be available before purchase.

Hope this helps, I’m hoping you are with CommSec with settlement delay so you don’t miss out.

Skate.


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## qldfrog (10 May 2020)

Skate said:


> @Rsthree settlement in normally delayed. CommSec works on T2 which means settlement is in two days. Monday’s purchases are settled on Wednesday. Whereas @qldfrog has posted that his broker requires the funds to be available before purchase.
> 
> Hope this helps, I’m hoping you are with CommSec with settlement delay so you don’t miss out.
> 
> Skate.



 Indeed BD:Bell Direct requires the funds straight away before allowing buy orders, but if you sell some shares, it does credit that amount into the pool of available credit before the D+2 settlement..
Usually... as I have encountered trades where BD wait for actual settlement before allowing you use of the credit: from memory options and I think some government bonds .
The advantage is that you can not order 2 Millions of CBA by mistake if you added 2 extra zero.
I once made a mistake with  comsec many year ago where I ended rushing to credit my CDIA and paying some interest .
Every broker will have rules along these lines with variations
Hope it helps


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## aus_trader (11 May 2020)

qldfrog said:


> Indeed BD:Bell Direct requires the funds straight away before allowing buy orders, but if you sell some shares, it does credit that amount into the pool of available credit before the D+2 settlement..
> Usually... as I have encountered trades where BD wait for actual settlement before allowing you use of the credit: from memory options and I think some government bonds .
> The advantage is that you can not order 2 Millions of CBA by mistake if you added 2 extra zero.
> I once made a mistake with  comsec many year ago where I ended rushing to credit my CDIA and paying some interest .
> ...



Yes qldfrog, I don't day trade but do place trades during market hours while doing other things. A bit of Multi-Tasking I suppose ! 

So it's good to know that I can only trade with funds in my account as well, just like you. So easy to buy a quantity of shares with an extra zero or two !


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## ducati916 (11 May 2020)

Newt said:


> 1. Fascinating that he noted trading will often not be "easy", and there it might not be a goal worth chasing to have a system that perfectly fits you.  How often do we hear people want to become "consistently profitable traders", without defining what they actually means.  What timeframe, what DD, what psychological pain, etc.
> 
> 2. I'm becoming more and more convinced it would be foolish for most of us to ever be totally dependent on trading for day to day income, but long term there is potential for it to be very financially rewarding.
> 
> 3. There is also a strong theme that you should improve yourself as a person as well as a trader if you embrace continuous improvement, development, keeping your eyes open, never assuming you "know it all".  Think you've captured that well in your last paragraph - no pain, no gain.




1. Many of the answers to [1] are contained in [2].

2. This is the key. When you do not 'depend' on it for income, you can relax and let the system work for you. That is when your gains start to mount. In trading, 'less is more'. Yes, you need to do the work in the early stages, to find a methodology: that methodology however should be easy and basic and not require day-to-day fiddling. Monthly & weekly charts should be your reference points.

Trading should be 1 string to your bow. You should have a number (diversification) of other ventures (profession/job/businesses) that earn you money and investments to spread those earnings into.

I have done the day trading thing at a number of levels (Prop. trading) and it is a mixture of extreme boredom mixed with periods of massive adrenaline and stress (5000 ES-mini contracts). It is not the 'lifestyle' choice that many think it is, or that it is often marketed as.

Every now and then, 2008/9 and currently, there are periods where greater involvement might be required: but they are (usually) infrequent and widely spaced. The rest of the time, there is little (excitement) to be done.

3. Constant personal growth is the key to life, the universe and everything.

jog on
duc


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## Skate (11 May 2020)

While I'm waiting for the markets to open I'll make a few comments about the Action Strategy. First off "I can see" 8 others are following along with the exact same interest that I have in the Action Strategy.

*Strategy Development*
The Action Strategy is a combination of information @ducati916 has kindly passed on in the "Dump it here" thread. There was enough information to formulate "The Ducati Blue Bar Daily Strategy", "The Ducati Stop & Go Indicator" & "The Ducati Acceleration Indicator" that are uncannily accurate. I've "actioned" that information to formulate the Action Strategy so it's fitting to explain them a little further.

1. "The Ducati Blue Bar Daily Strategy"  
2. "The Ducati Stop & Go Indicator"  
3. "The Ducati Acceleration Indicator" 

*Volatility & volume*
The "Action Strategy" is a combination of the above concentrating on "volatility & volume" that also is dependant on turnover, acceleration, momentum to select the best of the best represented in the XAO index. "The Ducati Stop & Go Indicator" tells the strategy when it safe to trade & when to stop taking new signals. "The Ducati Acceleration Indicator" measures "volatility & volume" in relation to the variance of the mean. I explained yesterday why volume is important to the Action Strategy so I'll explain it's partner today "Volatility"

*Why is Volatility important to the Action Strategy*
High volatility means prices move a lot. Even if you were the best trader in the world, you would never make any profits with zero volatility. In the long term, volatility is good for traders because it gives them opportunities & without volatility there would be no trading. Volatility has a direct correlation with risk & can improve the risk adjusted return of a portfolio. High volatility by itself is not bad, but it can become bad when combined with mismanagement or incorrect interpretation of volume. As with volume, volatility is what enables us to speculate in the market.

Skate.


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## Rsthree (11 May 2020)

Skate said:


> View attachment 103337
> 
> View attachment 103338
> 
> ...



Skate, I think I read in your previous post, which I cant find now, that if pre auction order isn't filled at auction then to buy at market. Do you do that straight away or see how it tracks throughout the day?


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## Skate (11 May 2020)

Rsthree said:


> Skate, I think I read in your previous post, which I cant find now, that *if pre auction order isn't filled at auction then to buy at market*. Do you do that straight away or see how it tracks throughout the day?




@Rsthree if positions aren't executed at the open "the position stays open during the day" & purged after the close.

*Important*
"Never buy at market" you need to be executed at the "Offer" or not at all.

*The Buy Rules*
1. The "Buy offer" is good for one day only
2. Never chase the price.
3. There are some positions that you will miss (like "MYR" today)
4. Positions not executed during the day need to be purged after the close (CommSec will do this automatically)
5. Do not "carry over" orders to the next day (positions need to be executed on the same day)
6. The buy rules are not flexible

*The Sell Rules*
1. Never sell before a signal is given
2. Sell in the pre-auction at the "Offer"
3. If the position is not sold in the pre-auction (at the open) wait till 10:30 am for the market to settle
4. If the position is still open after 10:31 am - sell immediately "at market" (@Rsthree this is what you are remembering)
5. The sell rules are not flexible

Skate.


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## Rsthree (11 May 2020)

Skate said:


> @Rsthree if positions aren't executed at the open "the position stays open during the day" & purged after the close.
> 
> *Important*
> "Never buy at market" you need to be executed at the "Offer" or not at all.
> ...



Thanks yes, that what I was remenbering.

Thank you very much for the hand holding process, its much appreciated.  Everything sinks in with a little experience.


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## Skate (11 May 2020)

Confirmations that the Action Strategy is in full swing & [MYR] has been purged. 




































*# Next portfolio update* 
Friday 15th May 2020

Skate.


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## Newt (11 May 2020)

ducati916 said:


> 1. Many of the answers to [1] are contained in [2].
> 
> 2. This is the key. When you do not 'depend' on it for income, you can relax and let the system work for you. That is when your gains start to mount. In trading, 'less is more'. Yes, you need to do the work in the early stages, to find a methodology: that methodology however should be easy and basic and not require day-to-day fiddling. Monthly & weekly charts should be your reference points.
> 
> ...



Fascinating to hear Prop Trading was in your past Duc.  More than just hard won "amateur" trading knowledge we're benefiting from in that case.


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## Skate (11 May 2020)

Newt said:


> Fascinating to hear Prop Trading was in your past Duc.  More than just hard won "amateur" trading knowledge we're benefiting from in that case.




@Newt, Duc is one smart bunny & has posted so many gems that I've found useful. Duc has also freely given me advice & help in private how to sharpen my exit strategy that now forms part of the Action Strategy strategy. Well, truth be told the Action Strategy is a combination of all his ideas, I've just added a few bells & whistle to pull all the ideas altogether. When @ducati916 talks I listen (intensely). I always read his posts more than once. 

Skate.


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## qldfrog (11 May 2020)

Skate said:


> @Newt, Duc is one smart bunny & has posted so many gems that I've found useful. Duc has also freely given me advice & help in private how to sharpen my exit strategy that now forms part of the Action Strategy strategy. Well, truth be told the Action Strategy is a combination of all his ideas, I've just added a few bells & whistle to pull all the ideas altogether. When @ducati916 talks I listen (intensely). I always read his posts more than once.
> 
> Skate.



while old, the Blob entries as per @ducati916  signature make for interesting reading too into Le Duc knowledge.
Thankful for all the little piece of gems Le Duc  shares 
http://leduc998.wordpress.com/


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## qldfrog (11 May 2020)

Newt said:


> Fascinating to hear Prop Trading was in your past Duc.  More than just hard won "amateur" trading knowledge we're benefiting from in that case.



But we Aussies should not get too carried away, do not forget Le Duc resides in the island of the long clouds...be wary


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## ducati916 (12 May 2020)

Newt said:


> Fascinating to hear Prop Trading was in your past Duc.  More than just hard won "amateur" trading knowledge we're benefiting from in that case.




Well it was a while ago now, so I'm sure some strategies are redundant, evolved, etc. However, some strategies are timeless.

jog on
duc


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## ducati916 (12 May 2020)

Skate said:


> @Newt, Duc is one smart bunny & has posted so many gems that I've found useful. Duc has also freely given me advice & help in private how to sharpen my exit strategy that now forms part of the Action Strategy strategy. Well, truth be told the Action Strategy is a combination of all his ideas, I've just added a few bells & whistle to pull all the ideas altogether. When @ducati916 talks I listen (intensely). I always read his posts more than once.
> 
> Skate.





Always nice to feel the love!

This thread is a very valuable resource for many and has re-ignited my interest in mechanical systems.

I remember back on Reefcap days when tech/a and (I think Daryl) were developing TechTrader, more or less live on their thread. At the time, I was a purely discretionary trader (which I still am to a degree) and had a fairly cynical view towards systems. I would pop up periodically on their thread and challenge some of their ideas.

The primary issue for me then was: the system is long only. What happens when the market turns? Their exit (at the time) seemed really lagging and I just couldn't get my head around why they would potentially risk so much 'paper profits'...sound familiar? The issue was something exactly like this year's collapse.

That issue seems now to have been solved by Mr Skate. The second issue (for me) has always been buying stocks that you know absolutely nothing about (hence my preference for ETFs) and the significant risk that that can engender. The 20, 30, 40 stock portfolio and quick exits, solves that issue.

The last issue, is the issue of actually executing and following the system. This was an issue that I also raised with tech/a back in the day: what if the market changes in some material way and the system is actually broken: how do you differentiate from a normal drawdown, to a fundamental change in conditions?

Now this may have already been addressed earlier in the thread. I only joined the thread after it was well underway and may have missed this discussion.

jog on
duc


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## qldfrog (12 May 2020)

ducati916 said:


> how do you differentiate from a normal drawdown, to a fundamental change in conditions?



And i doubt there is an easy answer here.
Backtesting is very useful in at least showing the variability between periods, same code glowing in some periods, not so in others.
i noticed some code consistently better in past years 2010-2015 than in recent times. 
The world is changing so it is a given that any system has an expiry date.
When is it time to retire a system? 
I retired Phoenix but because i had improved code for the same periods
This is different from a retirement due to obsolescence.and we all know that a DD is part of the life of even healthy systems.
Is this a good subject to discuss @Skate? Now or later
What are your views?


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## willoneau (12 May 2020)

Hi Skate , with it being a weekly system how does it know trades are taken on Monday only  and not during the week when back testing?


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## willoneau (12 May 2020)

Would it be possible to leave open and see if it pulled back during the week?
Very interested to know why you don't


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## Rsthree (12 May 2020)

Skate said:


> @Rsthree settlement in normally delayed. CommSec works on T2 which means settlement is in two days. Monday’s purchases are settled on Wednesday. Whereas @qldfrog has posted that his broker requires the funds to be available before purchase.
> 
> Hope this helps, I’m hoping you are with CommSec with settlement delay so you don’t miss out.
> 
> Skate.




Ok, I'm fully subscribed now. My funds finally came through and there was a pull back today so I managed to acquire the remaining stocks at or less than the original bid price.


----------



## Rsthree (12 May 2020)

Skate said:


> View attachment 103373
> 
> Confirmations that the Action Strategy is in full swing & [MYR] has been purged.
> 
> ...




So if MYR has pulled back to or below the original auction price is there any reason not to buy it during the week.

i guess the answer will be don't f... with the system. However I can't imagine that a buy a few days later should have any negative outcome or skew on system performance?


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## Skate (12 May 2020)

qldfrog said:


> This is different from a retirement due to obsolescence.and we all know that a DD is part of the life of even healthy systems. Is this a good subject to discuss @Skate? Now or later *What are your views*?




@qldfrog asking me open ended questions encourages me to get on my soapbox. I'll answer your questions & some others I can think of as well as we have a new group of readers of this thread.

*Why do we need a trading system?*
Trading is not an exact science & it's my belief that to succeed in the financial markets you need to have some kind of trading system in place & the level of complexity has almost no bearing on performance. If you have a great trading system, one that consistently makes you money, it is mostly that you are the one that’s making the system work. 

*Have the markets changed?*
The markets are merely an accumulation of human emotions & these emotions never seem to change. I often hear that markets have changed & new rules are needed, well the markets do change but the underlying fundamental rules for success don’t seem to, well not to me at least but I have to concede the markets are becoming more efficient & there is less profits available to go around.

*Why is some volatility good & too much isn't?*
I posted about volatility yesterday & the importance it is to the Action Strategy (that relies on it). As traders we need enough volatility to offer some profit but not so much that risk is excessive. I also want to point out that I believe systematic trading with a well developed system is much more accurate & consistent than the subjective decisions made by people, in saying that, some people have good results over some periods using "subjective judgement" but unfortunately it's not for me.

*Why do we need to be in touch with our feelings?*
No matter how successful a system is or how good your rules are, consistent profits will be difficult to obtain without training yourself to be aware when your emotions start to rise to the surface taking over your decision process. Many new members are joining the Aussie Stock Forum as a response to working-from-home, growing unemployment, or some who find that they have "additional time on their hands" who want to better understand trading - this is why I encourage them to grab a copy of my ebook that I believe will help these new traders with their learning curve. 

*The future will resemble the past, won't it?*
System traders rely on the fact that the future will resemble the past. New traders will quickly formulate a system & often trade it in haste only to find out that the strategy doesn't perform as expected resulting in licking their wounds & quickly "retiring" the strategy, then they rinse & repeat the same problem. I've never found a good system "yet" to experience obsolescence, nope, never once. I don't claim to be an expert, far from it & I've made my fair share of mistakes along the way, but the important thing is that I have learned from my mistakes & have become a better trader. 

*Who are we trading against?*
After reading a few posts I get the feeling other don't share my views that we are competing against traders who have much more experience, information & better systems than we do putting us at a disadvantage straight away. I'm genuinely interest in hearing more about how others go about evaluating the markets & this is Duc's contributions have been an eye opener as far as I'm concerned.

*What is risk & reward?*
Formulating the Action Strategy was not about seeking the best or ultimate returns but seeking to find the "Goldilocks parameters" to suit this strategy as always it's always a trade-off to some degree. Strategy development is always a constant balancing act between "risk & reward" or as Duc would say "volatility & volume". Every trader will make their own determination about the risk they are willing to tolerate helping them to decide what to trade, how to trade, how to develop techniques that will build their confidence to trade. As traders we are all different walking the same path.

*Why are some traders successful where others aren't?*
Unsuccessful traders tend to think about losing money more often than not, constantly passing up potential opportunities that a measured risk provides. Traders will continue to pass up on potential opportunities because they are too scared to lose or have a go.

Getting off my soapbox..

Skate.


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## Skate (12 May 2020)

Rsthree said:


> So if MYR has pulled back to or below the original auction price is there any reason not to buy it during the week. i guess the answer will be don't f... with the system. *However I can't imagine that a buy a few days later should have any negative outcome or skew on system performance*?




@Rsthree you have raised some important questions & you have managed to answer one yourself. You may have also missed Duc's comment earlier today that's worth repeating.



ducati916 said:


> The last issue, is the issue of actually executing and following the system.




*MYR*
_*1. "So if MYR has pulled back to or below the original auction price is there any reason not to buy it during the week"*_
It's not about a "negative outcome or skewing the system performance" it more to do about "unconditionally" following the trading rules. System trading is usually most effective when "implemented consistently". One problem frequently encountered by individual traders is the "difficulty" in following the rules or the system. Sticking to a system requires discipline & discipline is often difficult to maintain when their is confusion what to do next. Traders may be tempted to second-guess or modify the rules as they go along, lets not do that.
*
2. "I can't imagine that a buy a few days later should have any negative outcome or skew on system performance"*
Yes it can, if you purchase MYR you will not be in a position to take the next signal as your portfolio will be full. Break your rules once & you will do it again & again starting one of many bad habits. 

*When there is "no buy" there is "no sell signal"*
In saying this you can buy MYR the only issue that I can see is that the Action Strategy will never give you a signal to sell.

Skate.


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## willoneau (12 May 2020)

One thing I have noticed with my system is that when back testing it takes the open on Monday as the entry price even if is higher or lower than the close of previous week. Then works out the position size to suite, which is a little difficult when live trading.


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## Skate (12 May 2020)

willoneau said:


> Hi Skate , with it being a weekly system how does it know trades are taken on Monday only  and not during the week when back testing?




@willoneau Amibroker by default uses Monday as the start of the week. Monday is a very liquid trading period suitable for pre-auction trading. You can select any day if you think you can glean an advantage. https://www.amibroker.com/kb/2015/02/14/choosing-first-day-of-the-week-for-weekly-compression/


willoneau said:


> Would it be possible to leave open and see if it pulled back during the week? Very interested to know why you don't



What if the reverse happened & the position takes off to the moon without us, how would you handle that?

*Mechanical system trading*
To have confidence trading your system you have to be confident how it performed in the past & deviating from the plan most certainly would be a recipe for disaster.

*The CAM Strategy buys pull-backs*
The CAM strategy might be more suitable as it buys pullbacks in existing trends and buys countertrends when the rally continues as you have suggested. You can find a repository of my strategies & brief description of them here: https://www.aussiestockforums.com/posts/1052205/

Skate.


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## willoneau (12 May 2020)

Is your 3% limit price in your system so that if Monday's open is higher your trade is scratched?
It just seems you are using a daily entry on a weekly system?


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## Skate (12 May 2020)

willoneau said:


> One thing I have noticed with my system is that when back testing it takes the open on Monday as the entry price even if is higher or lower than the close of previous week. Then works out the position size to suite, which is a little difficult when live trading.




@willoneau AmiBroker backtesting results are calculated using the opening price. To replicate your backtest results it's vital to snag the opening price & a limit order is the tool, other than that you will find it difficult to secure the opening price & replicate the backtest performance. 

*Getting your head around it*
It may require you to read the next few paragraphs a few times to fully understand how I secure the opening price & how I trade the pre-auction.

*Trading in the pre-auction *(+/- 3% premium)
1. Buy positions - the maximum dollar cost is know if the +3% premium is fully exercised. (usually it isn't)
2. Sell positions - the minimum dollar value income is known if the -3% premium is fully exercised. (usually it isn't)

*QTY of shares is the only known*
The quantity of shares being purchased is FIXED but the share price (the opening price is UNKNOWN) theoretically the position will be filled but the amount invested is unknown till the trade happens.

*IMPORTANT*
If a 3% premium is unsuccessful to secure a buy (due to a gap-up) like MYR it’s a condition of the Action Strategy plan not to chase a price. The buy order is open for one day only.

*Pre-auction*
I place my orders in the pre-auction to secure the opening price. The value weighted average price (vwap) is used to determine the opening price & is displayed for each security in question “well before the opening” of trade. I have made many posts on the subject & I have listed a few hyperlinks below. Please don’t speed read them.

*Have a read here:*
https://www.aussiestockforums.com/posts/1041996/ & here https://www.aussiestockforums.com/posts/1029737/ & here https://www.aussiestockforums.com/posts/1041230/ & here https://www.aussiestockforums.com/posts/1041166/ & here https://www.aussiestockforums.com/posts/1030873/ will give you an idea how I enter & exit a position using the 3% premium/discount rule.

*Sometimes*
Others sometimes don't take the time to fully understanding what I've written (it consumes a lot of time & effort to give a measured response) 

Skate.


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## willoneau (12 May 2020)

I understand how you open and close your positions after doing it on the pre auction on Monday. I guess what I am trying to get my head around is the fact as a weekly system you wait until the end of the week to action your system. Either close position if stop triggered or enter new position if available or am I right in saying both entries and exits are taken on Monday's only?
I did read that you close a position at Market by 10:30am if unable at pre auction on Monday.


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## willoneau (12 May 2020)

Skate said:


> @willoneau AmiBroker backtesting results are calculated using the opening price. To replicate your backtest results it's vital to snag the opening price & a limit order is the tool, other than that you will find it difficult to secure the opening price & replicate the backtest performance.
> 
> *Getting your head around it*
> It may require you to read the next few paragraphs a few times to fully understand how I secure the opening price & how I trade the pre-auction.
> ...



Thanx Skate the links you provided helped clear a lot up, I usually read every Dump it here post but didn't recollect those.


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## Skate (12 May 2020)

willoneau said:


> I guess what I am trying to get my head around is the fact as a weekly system you wait until the end of the week to action your system. Either close position if stop triggered or enter new position if available or am I right in saying* both entries and exits are taken on Monday's only*?




*Correct *- both entries & exits are always placed for Monday's pre-auction using the (+/- 3% premium). The 3% premium will either secure the opening price or it won't. With a "buy order" not being executed has no consequence or bearing to the profitability of long term strategy holding 20 positions in the portfolio. (In summary, it just misses buying that position)


willoneau said:


> I did read that you close a position at Market by 10:30am if unable at pre auction on Monday.



*Correct* - If the position is still open after 10:31 am - I sell immediately "at market" as I want to be off the sucker at any price. I wait till 10:31 for the markets to settle down. (that's all)

Skate.


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## ducati916 (12 May 2020)

Skate said:


> @Rsthree you have raised some important questions & you have managed to answer one yourself. You may have also missed Duc's comment earlier today that's worth repeating.
> 
> 
> 
> ...





Mr Skate has already given you the answer. However, here is an alternative way of thinking about it.

Some questions:

(a) When designing the system, did you have a number of ideas that you felt could be profitable;
(b) Did you backtest those ideas;
(c) Did you try to break the system (ideas) through using difficult market periods;
(d) Did you make any compromises;
(e) If yes, why;
(f) If no, you were happy with the results;
(g) Why did you go the systems route in the first place;
(h) Were your discretionary trading results disappointing;
(i) If yes, were the system results better;
(j) If no, did you seek to make improvements to the system;
(k) Did the system improve;
(l) Did the improvements made, now exceed your discretionary trading;
(m) Were you finally happy with the system: is it the 'best' that you can achieve at this point.

If you have reached (m)...why would you adjust (tamper) with it now?
If you haven't reached (m), why are you trading it?

Traders (novice/failing) will always seek a way to self-destruct. Successful traders limit the number of decisions that they make, thereby minimising the ways that they can self-destruct.

Make all of your thinking, testing, fiddling, before you enter the market. Do not start when you have money in the market: your decision making under pressure will be uniform: it will all be bad.

jog on
duc


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## Lone Wolf (12 May 2020)

Skate said:


> @willoneau AmiBroker backtesting results are calculated using the opening price. To replicate your backtest results it's vital to snag the opening price & a limit order is the tool, other than that you will find it difficult to secure the opening price & replicate the backtest performance.




I don't disagree with ignoring any trade that gapped your buy limit on Monday. But one question - Will the Amibroker backtest of this week show MYR having been purchased on Monday? Or does the backtest code include something to say "Buy the open, only if the open is not more than 3% above the signal bar close"? If the backtest shows MYR as purchased, then it could be argued that picking up MYR later in the week for the original buy price more accurately follows the system as it was tested.

As a side thought, if we were trading the daily time frame I suspect most people would have their limit order in the market all day. So price has all day to drift back to your entry. But on the weekly system price doesn't get all week to come back to us since we cancel the order on Monday. Just a difference in execution depending on the timeframe which I hadn't considered before.


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## Newt (13 May 2020)

ducati916 said:


> Always nice to feel the love!
> 
> This thread is a very valuable resource for many and has re-ignited my interest in mechanical systems.
> 
> ...




Would have loved to have been "around" in the Reefcap days.  Sounds like Captain Black was among the active members of that forum too.  Would have been made that much more interesting by the 2003 - 2007 bull market. 

Wondering, do you feel ASF is ahead in any way (or perhaps missing something important) that Radge's reefcap forum offered back then?


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## rnr (13 May 2020)

Skate said:


> *Correct *- both entries & exits are always placed for Monday's pre-auction using the (+/- 3% premium). The 3% premium will either secure the opening price or it won't. With a "buy order" not being executed has no consequence or bearing to the profitability of long term strategy holding 20 positions in the portfolio. (In summary, it just misses buying that position)
> 
> *Correct* - If the position is still open after 10:31 am - I sell immediately "at market" as I want to be off the sucker at any price. I wait till 10:31 for the markets to settle down. (that's all)
> 
> Skate.




@Skate,

So it would be fair to conclude that the manual intervention, as highlighted above, would be the only deviation from the results of a back-test and reality.

Cheers,
Rob


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## Skate (13 May 2020)

rnr said:


> @Skate, So it would be fair to conclude that the *manual intervention*, as highlighted above, *would be the only deviation from the results of a back-test and reality*




Rob, in a nutshell yes. Sometimes the (+/- 3% premium) rule won't be enough latitude for the position to be executed at the opening price when the Gap-down is in excess of 3% to the last closing price. 99% of the time the (-3% premium) isn't fully exercised (usually it isn't). To find the right exits for any strategy can be a difficult job resulting in a compromise using "manual intervention" at times. Amibroker uses the opening price for all entries & exits. Backtesting uses "DUMB" maths whereas we are not as privileged, meaning our calculations are done in the heat of the battle whereas Amibroker uses hindsight.

Skate.


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## Skate (13 May 2020)

@rnr has raised the issue of exits & it's only fitting that I explain a little bit about an unexciting topic.

*Duc's key entry words*
In previous posts I've explained how the Action Strategy enters a trend using "volatility & volume". Unfortunately I can't be more specific as private information needs to remain private.

*Duc's exit strategy*
I haven't checked with Duc but I'm sure he will be okay if I talk about his "Volatility Dependant Stop" in general terms instead of specifics. Using the "Volatility Dependant Stop" is a clever concept as it uses the VIX in combination with extreme parameters that I found hard to swallow, but they worked like a dream to my amazement. Bandying the words like "Volatility & Vix" is meaningless without the explanation of application "that will remain a secret".

*Exits lock in profits or they avoid further loses*
Everybody knows that stops are necessary, but nobody really likes them. Often you get the feeling that the stop has just thrown you out of the market before it turned in your direction & you missed the big move. To find the right exits for any strategy can be a difficult job. By now readers know that exits are more important to me than entries. There is more written about entries than about exits because each entry needs a special scenario like indicators & patterns, something unique & interesting where exits seems to be more boring until we use a different approach.

*Generally*
Exits are normally a trailing stop or a variable trailing stop using fixed percentages but the Action Strategy takes it a few steps further being more flexible depending on the market’s volatility. The disadvantage of just using a trailing stop or a variable trailing stop is because they can’t be adjusted to the current market conditions. The Action Strategy incorporates a volatility exit thanks to information Duc has passed on to me in private. Volatility Dependant Stop & Stales Stops works wonders when trailing stops become less reliable due to their inherent lag.

*Please note *
Volatility stop can change dramatically from one day to another or even more so trading a weekly trading strategy. This flexibility makes the volatility based stop superior when dealing with the reward/risk ratio compared to only using a percentage based tailing stop. The volatility based stop is better all-round. Add a StaleStop & now we're cooking with gas.

Skate.


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## ducati916 (13 May 2020)

Newt said:


> Would have loved to have been "around" in the Reefcap days.  Sounds like Captain Black was among the active members of that forum too.  Would have been made that much more interesting by the 2003 - 2007 bull market.
> 
> Wondering, do you feel ASF is ahead in any way (or perhaps missing something important) that Radge's reefcap forum offered back then?




All things tend to evolve over time. In trading, that tends to be for the better, simply because if you survive and eventually thrive in trading/investing, you generally have some insights to pass on.

So on ASF currently, from the Reefcap days, there is tech/a, WayneL. and CountryBoy that I remember. With regard to systems, tech/a was the chap who really introduced me to them, but, for a number of reasons, I never really got into them.

The chap who really opened my eyes to a really useful area of trading (Options) was WayneL (although he went by some other name in those days which for the life of me, escapes me currently). That is one area of ASF that is weak: Options. They just have so many applications, but there seems to be limited interest in them.

Reefcap was a bit more US orientated than ASF. Apart from those 2 differences, it is similar.

jog on
duc


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## rnr (14 May 2020)

Skate said:


> @rnr has raised the issue of exits & it's only fitting that I explain a little bit about an unexciting topic.
> 
> *Duc's key entry words*
> In previous posts I've explained how the Action Strategy enters a trend using "volatility & volume". Unfortunately I can't be more specific as private information needs to remain private.
> ...




Hi Skate,

Based on your post regarding exits, as quoted above, I am trying to work out how you have coded (in general terms only) your exit strategies.
I'm assuming that you may have 3 separately coded (binary) stops that will send an exit signal if any of the stops have a value of 1. If that is the case and for the sake of this exercise lets call them StaleStop, VolatilityStop and TrailingStop.
With reference to the TrailingStop component, does it have multiple triggers involving say 2, 3 or 4 different outcomes for calculating a trailing stop based on the current market conditions or is there only one outcome.
Just to make this perfectly clear I am not asking you to disclose any info in relation to the VolatilityStop.

Cheers,
Rob


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## Skate (14 May 2020)

rnr said:


> Hi Skate, Based on your post regarding exits, as quoted above, I am trying to work out how you have coded (in general terms only) your exit strategies. I'm assuming that you may have 3 separately coded (binary) stops that will send an exit signal if any of the stops have a value of 1. If that is the case and for the sake of this exercise lets call them StaleStop, VolatilityStop and TrailingStop. With reference to the TrailingStop component, does it have multiple triggers involving say 2, 3 or 4 different outcomes for calculating a trailing stop based on the current market conditions or is there only one outcome. Just to make this perfectly clear I am not asking you to disclose any info in relation to the VolatilityStop.




*Important*
This post is beyond beginner level so don't worry if it sounds double dutch as I'm answering a question.

Rob, the exits of the Action Strategy are driven by 3 inputs working separately but in concert with each other. They are all combined in a "for loop" because you have to store the bar at entry. Let me explain them one by one.

*1. Trailing Stop*
I use a chandelier variable trading stop driven by an index filter, this is a common alternative to an "apply stop" array. I use variables so "looping is a better alternative" for me.

*2. Volatility Dependent Stop*
The "Volatility Dependent Stop" is a bit more involved as it uses the "average of the VIX" of a n-period. The Volatility Stop is driven by a separate "VIX Index Filter" & no trades are allowed to be taken when the "VIX Index Filter" is off, it's a simple "Stop or Go" type filter. When the "VIX Index Filter" is on it brings into play another array which is the "average of the VIX". The "VIX array" is calculated using the average of the highest high value of the last n-period, less the average of lowest low value of the last same n-periods. The result of this calculation generates a parameter variable where the n-periods parameter changes from bar to bar. I won't say any more as the idea is confidential & the coding is complex.

*3. StaleStop *
The StaleStop is a momentum stop. The momentum needs to be calculated over a period from bar to bar. There has been much talk & speculation about my StaleStop but I can assure it needs to be included in a loop or it won't be efficient. If others are contemplating using a StaleStop in their strategy it needs to be in loop because it's imperative to store the bar at entry. Measuring acceleration I use a Parabolic SAR Indicator, an indicator that is not widely spoken about (SAR stands for “stop and reverse”) Like most trend-based indicators, the parabolic SAR is much more effective during trending markets than those we are experiencing at the moment.

*4. Combination StaleStop, VolatilityStop & TrailingStop.*
Of all the challenges we face as traders there is none more important then timing the exit by using appropriate combinations of stops to find the "sweet spot" to exit a trend when it changes direction. The placement of effective extra stops can make the difference between a quick, relatively painless loss or something more excruciating. It's also important to workout when a trend has exhausted itself. I use a combination of indicators & oscillators to respond to the challenge of stop placement & measuring trend reversal is one of them, volatility is another. As the trend turns or begins to lose momentum the exit strategy generates a signal to hop off the ride. Getting them to play nice together is another matter.

Skate.


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## Newt (14 May 2020)

I love it when you share this sort of detail Skate, for 2 reasons:

One, it frequently challenges established thought processes and stimulates creativity - essential for continued learning and self-evoluation.

Two, its comforting to know there are others out there pursuing systematic trading to simple but still extraordinary elegance (and complexity). If that sounds contradictory it is - as complex as it should be to improve returns without curve-fitting, but as simplified and robust as it can be to ensure reliable performance in most markets.


There were times years ago I wondered just how far down the "Alice in Wonderland" burrow I might have fallen - perhaps losing my way in the process.  While I'm still not retired and living on a tropical island purchased through trading windfalls, hopefully I'm still properly grounded and continuing to improve from these ASF conversations.


p.s. Good question rnr - very much in line with Dump It Here "values".....


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## Skate (15 May 2020)

Skate.


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## Skate (15 May 2020)

qldfrog said:


> Mr Skate experiment: hit quite hard:-$428 in first week (I did chase Myer as I wanted to stick to the system for compliance, unless the code is mandating purchase price can not be above 3% of last week close, which I do not believe is the case




*Weekly comments*
With the Action Strategy weekly updates, it's better if I let "the figures" do the talking but as @qldfrog has quoted his weekly performance trading his version of the Action Strategy it's only fitting for me to make a few comments.

*How to read the Share Trader Tracker's Dashboard*
Our first week resulted in a loss of (-$183) inclusive of the commission cost (-$190). In reality, excluding the commission charge the Action Strategy traded flat this week being +$7.46 up. 

*MYER - Chasing the price*
One of the Action Strategy rules is that you aren't allowed to chase a price. It's not about a "negative outcome or skewing the system performance" it more to do about "unconditionally" following the trading rules. System trading is usually most effective when "implemented consistently". One problem frequently encountered by individual traders is the "difficulty" in following the rules or the system. Sticking to a system requires discipline which is often difficult to maintain when there is confusion about what to do next. Traders may be tempted to second-guess or modify the rules as they go along, let's not do that. The Action Strategy has not logged Myer as a buy so you will never get a signal to sell as a result.

*The markets have not been kind to us*
I've been reading the recent comments with interest. It's a perfect time to remember that trading is not always kind to us, losing weeks are inevitable & frankly there is nothing we can do to prevent it. To a great degree, our success or failure in the market is a function of our luck & timing. We would like to think that our results are a direct consequence of our insight & efforts, but in reality, luck plays a big part in how we do. 

*Signal quality*
As with most indicators, the signal quality depends on the settings & the characteristics of the underlying security. The right settings combined with decent trends can produce a great trading system. The wrong settings will result in losses & frustration as markets don’t always trend they bounce around from one day to another. Sometimes price fluctuations are hard to handle knowing that the tools most suitable for analysis in these types of markets differ from those that I'm currently using to take advantage of trending market. Comparing the current volatility to before the time of COVID19 you start to get a sense of how the markets are affecting "not only us" but the "markets in general".

Skate.


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## qldfrog (15 May 2020)

Skate said:


> View attachment 103494
> 
> View attachment 103495
> 
> ...



You mean Monday....
Have a great weekend.so you did not chase any of the buy.how will you compare to backtests?
Do you code your 3pc margin above the last close in the code?


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## qldfrog (15 May 2020)

qldfrog said:


> You mean Monday....
> Have a great weekend.so you did not chase any of the buy.how will you compare to backtests?
> Do you code your 3pc margin above the last close in the code?



Sorry you answered my question as i i was typing it....


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## willoneau (15 May 2020)

Skate said:


> *MYER - Chasing the price*
> One of the Action Strategy rules is that you aren't allowed to chase a price. It's not about a "negative outcome or skewing the system performance" it more to do about "unconditionally" following the trading rules. System trading is usually most effective when "implemented consistently". One problem frequently encountered by individual traders is the "difficulty" in following the rules or the system. Sticking to a system requires discipline which is often difficult to maintain when there is confusion about what to do next. Traders may be tempted to second-guess or modify the rules as they go along, let's not do that. The Action Strategy has not logged Myer as a buy so you will never get a signal to sell as a result.



Hi Skate just curious you have only listed 15 companies when 19 were taken?


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## Skate (15 May 2020)

willoneau said:


> Hi Skate just curious you have only listed 15 companies when 19 were taken?




@willoneau well spotted, I'm in the process of replacing it with the correct capture as the worksheet was not in the correct position when I did the screen capture.

If I'm unable to rectify or replace the graphic I'll repost it again.

Sorry about that...

Skate.


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## willoneau (15 May 2020)

Curious why AST, BGL, BFC are missing?
I know why MYR isn't there.


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## willoneau (15 May 2020)

Thanx Skate


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## Skate (15 May 2020)

willoneau said:


> Curious why AST, BGL, BFC are missing?
> I know why MYR isn't there.




@willoneau the post found here https://www.aussiestockforums.com/posts/1072660/ has been corrected to include the missing securities.

Skate.


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## qldfrog (15 May 2020)

OK, interesting take for a different broker, same orders:
At open, this is what I got: 
MYR in red is different and this has been discussed
you will notice that in yellow AST was purchased at 1.97 vs Mr Skate $1.95
But I got in green cheaper GRR at 0.2354 and RBL at $1
This is a kind of mystery for me



you will also notice the number of shares is slightly different based on the broker software establishing the amount of shares for a given requested amount and the max price I used. Still roughly similar but do not expect exact same figures
If discarding the Myer purchase which was a kind of misunderstanding in the execution, we would end  the week with a $186.44 loss (vs $183) and $1095 cash left from our initial 20k
I will resync on Monday and swallow a $250 loss, at this stage, for the mistake.


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## qldfrog (15 May 2020)

And BTW, I hope I am not the only one following Mr Skate trial and that others can share their experience of execution using different brokers
The above using Bell Direct with $10 a trade brokerage up to 10k


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## Bazzi (15 May 2020)

qldfrog said:


> And BTW, I hope I am not the only one following Mr Skate trial and that others can share their experience of execution using different brokers
> The above using Bell Direct with $10 a trade brokerage up to 10k




I too dont have the exact figures as skate as my broker (Saxo) charges $7.69/trade and some shares were picked up at marginal higher/lower price ... but overall very close figures with few dollars difference.

I am curious on the shares that jumped higher during the week and fell lower later like REX, Bub and CDV. I got the temptation to profit in but didnt do it because of Skate words to follow a system and stick to the rules. What do you think @Skate of those shares? Would it have another up run?


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## Skate (15 May 2020)

Bazzi said:


> *What do you think *@Skate of those shares? Would it have another up run?




@Bazzi, I have no idea & frankly I don’t care, it’s a numbers game. Remember we are trading a “NO THINKING” Strategy. What I think is irrelevant. All the hard work has been done & going forward I have one job to do & that is to take the signals as they come, nothing more & nothing less.

I’m guessing that my answer & response is not what you were expecting so let’s not complicate things. System trading is usually most effective when "implemented consistently". One problem frequently encountered by individual traders is the "difficulty" in following the rules or the system. Sticking to a system requires discipline which is often difficult to maintain.

Skate.


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## Bazzi (15 May 2020)

Skate said:


> @Bazzi, I have no idea & frankly I don’t care, it’s a numbers game. Remember we are trading a “NO THINKING” Strategy. What I think is irrelevant. All the hard work has been done & going forward I have one job to do & that is to take the signals as they come, nothing more & nothing less.
> 
> I’m guessing that my answer & response is not what you were expecting so let’s not complicate things. System trading is usually most effective when "implemented consistently". One problem frequently encountered by individual traders is the "difficulty" in following the rules or the system. Sticking to a system requires discipline which is often difficult to maintain.
> 
> Skate.




No, Very fair answer and I respect that. I never followed system trading previously and got burned with emotional trading. 

If anything this exercise is teaching me, is to correlate your system signals to a system I am trying to setup.  But most importantly I am learning from you how to be patient and stick to the rules.
Thanks for that @Skate


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## Saqeeb (16 May 2020)

*Week 13: Update on my MAP paper trading portfolio.*

This week I was able to enter only 5 out of the 6 positions. *MSB* was in a trading halt on Monday and my offer was only for valid for the day. Therefore it was purged out at the close of market Monday.

My portfolio gained a modest $9.00.

*This week's scan results:
BUYS:*
3 buy signals this week. I will post this week's buy signals with the EOW's update as I noticed that one other fellow forum member's entries last week were very similar to mine and he is trading it live.

*SELLS:*
No sells this week


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## aus_trader (16 May 2020)

ducati916 said:


> All things tend to evolve over time. In trading, that tends to be for the better, simply because if you survive and eventually thrive in trading/investing, you generally have some insights to pass on.
> 
> So on ASF currently, from the Reefcap days, there is tech/a, WayneL. and CountryBoy that I remember. With regard to systems, tech/a was the chap who really introduced me to them, but, for a number of reasons, I never really got into them.
> 
> ...



Thank you Duc, some interesting history going back to times when I wasn't even a member but was reading bits and pieces at times as a guest post GFC era without commenting on anything, although I was itching to do so.


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## Rsthree (16 May 2020)

qldfrog said:


> And BTW, I hope I am not the only one following Mr Skate trial and that others can share their experience of execution using different brokers
> The above using Bell Direct with $10 a trade brokerage up to 10k




I will post mine but just need to clean up my tracking spreadsheet as its work in progress.

I use selfwealth ($9.50 commission) however my results may be a little skewed as I had to buy the last 7 stocks on the Wednesday (due to delay in funds transfer) and quite a few were below the weekend bid price due to a dip in the market.


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## Rsthree (16 May 2020)

Report attached, hope this works.


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## qldfrog (16 May 2020)

Rsthree said:


> Report attached, hope this works.



Working for me


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## Skate (16 May 2020)

For those who are following along using CommSec, for transparency  I'll display the 5 step process in placing a buy order in the pre-auction with confirmations.

*1. Placing the buy order (proceed)
*





*2. Confirmation of the order you are about to submit (Submit Order)
*





*3. After submitting the buy order a confirmation screen with a link to place another order is displayed
*






*4. Outstanding order confirmation
*






*5. A confirmation email is received moments after submitting your order
*







Skate.


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## wabullfrog (16 May 2020)

When having a look at the GNC Investor Presentation they mention Core Debt & Net Debt. As an Investor which would you pay more attention to? Would the Core Debt figure vary quite a bit as the commodity price changes?


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## rnr (16 May 2020)

qldfrog said:


> And BTW, I hope I am not the only one following Mr Skate trial and that others can *share their experience of execution using different brokers*
> The above using Bell Direct with $10 a trade brokerage up to 10k




Hi qldfrog,

Referring to entries alone at this stage, if you were to get different results by using a broker other than the one used by Skate, what would cause this do you think?
Maximum position size should not exceed *$1,000* as specified by Skate.

Cheers,
Rob


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## Skate (16 May 2020)

rnr said:


> Hi qldfrog, Referring to entries alone at this stage, if you were to get different results by using a broker other than the one used by Skate, what would cause this do you think? The maximum position size should not exceed *$1,000* as specified by Skate.




Rob, thanks for raising the issue giving me an opportunity to make a few general comments about Systematic Trend Trading & following the rules.

*Systematic Trend Trading is simple but not easy to follow*
The Action Strategy is a weekly trend following strategy that doesn’t have many rules & simple to follow. Most don't realise what causes trends to form as they do, others like to put their spin on it, where I have a different view. Trends form because of "market sentiment" & that sentiment can change in a heartbeat. Given the simplicity & profitability of trend trading “why do some have problems following their system?”

*I’ll tell you why*
Most traders do not have enough resilience to do it consistently. Traders are not willing to remove themselves from their trading decisions to trust a trading system, particularly when you have more losing trades than winning trades "that’s why". Impatience is one of the biggest reasons traders like to override their system because many are not willing to wait patiently & “DO NOTHING” while a trend moves in the right direction. Because of this impatience, many just can’t follow the process or if they can, they have trouble following the rules. Trend trading the Action Strategy will get you into a lot of potential trends & quickly gets you out at a small loss if the trend doesn’t follow through. This means that trend traders will have lots of small losses, something everyone needs to come to terms with. 

*I’ll leave the last words to Bill Williams PhD*
You will never go broke trading if you “want what the market wants”

Skate.


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## qldfrog (16 May 2020)

rnr said:


> Hi qldfrog,
> 
> Referring to entries alone at this stage, if you were to get different results by using a broker other than the one used by Skate, what would cause this do you think?
> Maximum position size should not exceed *$1,000* as specified by Skate.
> ...



I believe brokers use a formula based on max price requested and brokerage 
basically requested 1000$ worth at lets say $2 is 500 shares + 10 brokerage=1010
so even if i enter 1000$ I often get an amount above  by a few dollars EVEN if as per example it could as an exact amount .anyway, never a big aount but I do not expect to match Mr Skate results on Comsec dollar to dollar
that is all I mean and I expect various brokers to have different rules


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## qldfrog (16 May 2020)

qldfrog said:


> I believe brokers use a formula based on max price requested and brokerage
> basically requested 1000$ worth at lets say $2 is 500 shares + 10 brokerage=1010
> so even if i enter 1000$ I often get an amount above  by a few dollars EVEN if as per example it could as an exact amount .anyway, never a big aount but I do not expect to match Mr Skate results on Comsec dollar to dollar
> that is all I mean and I expect various brokers to have different rules



I could be able to correct that by looking at @Skate action list and enter the number of shares instead of $1000 but being lazy, it is easier and more error safe to enter $1000 repeatively.I do not see the few dollar difference as an issue, chasing the price is/was a real issue but this is all clear now


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## qldfrog (16 May 2020)

wabullfrog said:


> When having a look at the GNC Investor Presentation they mention Core Debt & Net Debt. As an Investor which would you pay more attention to? Would the Core Debt figure vary quite a bit as the commodity price changes?
> 
> View attachment 103520



investor or system trader? a\
As a system trader, I could not care less if GNC has decided to sell unicorns make with martian rocks, investor is a VERY different story but @Skate will be able to confirm.


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## qldfrog (16 May 2020)

qldfrog said:


> I could be able to correct that by looking at @Skate action list and enter the number of shares instead of $1000 but being lazy, it is easier and more error safe to enter $1000 repeatively.I do not see the few dollar difference as an issue, chasing the price is/was a real issue but this is all clear now



Real life example a few sec ago: asking for $4.5k purchase in my weekly system :


But note that in most cases my $ limit will not be reached and actual cost will be lower [as the number of shares remains unmoved by the Open price which will be <= to my limit)
Interlude over , sorry for the disruption Mr Skate


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## rnr (16 May 2020)

qldfrog said:


> I could be able to correct that by looking at @Skate action list and enter the number of shares instead of $1000 but being lazy, it is easier and more error safe to enter $1000 repeatively.I do not see the few dollar difference as an issue, chasing the price is/was a real issue but this is all clear now




Hi qldfrog,
Thanks for your responses.

(post # 2954)
Alternatively you could deduct the brokerage (on purchase) from the maximum position size so that you can spend the balance of $990 to buy the actual shares.
(post # 2957)
Based on the example supplied with your weekly system, you could place an order to purchase shares (in the opening auction) at a limit of price of $0.32 and not to exceed $4490 (i.e. excluding brokerage).

It just looks odd to me when I see a system that, for example, specifies a maximum of 20 positions at $1000 each and then open trades that exceed $1000 in total.

Cheers
Rob


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## qldfrog (16 May 2020)

rnr said:


> Hi qldfrog,
> Thanks for your responses.
> 
> (post # 2954)
> ...





as we are not aware of the final open price we generally use a max amount spent  which is hardly used, 
Above, on average, even with my few above $1000 and a wild chase for Myer, my average per ticker is $996.... so not to worry about


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## Lone Wolf (17 May 2020)

qldfrog said:


> I could be able to correct that by looking at @Skate action list and enter the number of shares instead of $1000 but being lazy, it is easier and more error safe to enter $1000 repeatively.I do not see the few dollar difference as an issue, chasing the price is/was a real issue but this is all clear now




I'm playing along as I'm interested to compare the different levels that we sell at and the overall impact it has. I won't necessarily be at the computer at 10:30am on the day we sell, so if I don't get out on the open, it won't be the same as Skate. What difference does this make over time?

But my buy positions are identical to Skate as I used the same entry quantities and price limits. End values are different as CMC has $11 per trade ($9.90 if you do more than x trades in a month). So a bit worse than skate. However, I could have up to $10,000 positions and still only pay $11.


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## Lone Wolf (17 May 2020)

Out of interest Skate, would you mind showing us the backtest results for the system over the first week? You would expect it to match, it's good to check that it does.


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## willoneau (17 May 2020)

You 







Lone Wolf said:


> Out of interest Skate, would you mind showing us the backtest results for the system over the first week? You would expect it to match, it's good to check that it does.



You already have it , 19 open positions.


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## Skate (17 May 2020)

Lone Wolf said:


> Out of interest Skate, would you mind showing us the backtest results for the system over the first week? *You would expect it to match*, it's good to check that it does.




@Lone Wolf a backtest over one week as you said "you would expect it to match" the actual trading results but you would be wrong. I've explained a few posts back that Aimbroker uses dumb maths (in hindsight) it's a very clever scientific calculator calculating the optimal numbers but it's not smart enough to understand how the pre-auction works let alone the (+/- 3% premium) used for calculating the number of shares to buy.


Skate said:


> Rob, in a nutshell yes. Sometimes the (+/- 3% premium) rule won't be enough latitude for the position to be executed at the opening price when the Gap-down is in excess of 3% to the last closing price. 99% of the time the (-3% premium) isn't fully exercised (usually it isn't). Finding the right exits for any strategy can be a difficult job resulting in a compromise using "manual intervention" at times. Amibroker uses the opening price for all entries & exits. Backtesting uses "DUMB" maths whereas we are not as privileged, meaning our calculations are done in the heat of the battle whereas Amibroker uses hindsight.




*Let's recap*
1. Buy positions - the maximum dollar cost is known if the (+3% premium) is fully exercised (usually, it isn't) but the number of shares purchased in Amibroker can differ.
2. ASX uses dumb maths as well as it multiplies the number of shares (X) the opening price to work out the executed value.
3. Let's say the last closing price is $1.00 but in the pre-auction, we offer a (+3% premium) which is $1.03 
4. The bet size is $1,000/1.03 = 970 shares to be purchased - let's reverse the calculation 970 shares at 1.03 = $999.10 but here's the rub we don't know the opening price yet.
5. As we don't know the opening price we have no idea what the execution cost is going to be. 
6. Let's say for example the position opens at the closing price of $1.00 - we would be executed 970 shares at $1.00 = $970
7. But Amibroker (in hindsight) uses dumb maths to work out the backtest results because "it knows the opening price" so it simply calculates the shares purchased being 1,000 instead of the actual 970
8. One simple mathematical error multiplied many times the backtest results become inaccurate.

*Let me give you 3 examples*
Let's compare the Backtest results with actually executed positions as displayed in Share trade Tracker (boxed in red) It's also important to highlight that the portfolio manager displays to 2 decimal places in the report but is accurate up to 6 decimal places. (the P&L will reflect the true value when the position is sold)



*Backtest results*


	

		
			
		

		
	
  ----> The Amibroker Backtest thinks we have purchased *4,234 shares *instead we actually purchased *3,980 shares*


	

		
			
		

		
	
  ----> The Amibroker Backtest thinks we have purchased *1,099 shares *instead we actually purchased *1,081 shares*


	

		
			
		

		
	
   ----> The Amibroker Backtest thinks we have purchased *421 shares *instead we actually purchased *454 shares*

*Dumb maths*
Actual trading will differ from a backtest results for this & many more reasons. One recent example was an explanation by @Saqeeb about a position in a trading halt as posted below but Amibroker is not smart enough to know this "but take it from me" Amibroker has included that buy position in his backtest report. Amibroker doesn't even take into account that from time to time some companies are suspended from trading but Amibroker will consider the position taken skewing the backtest results.


Saqeeb said:


> This week I was able to enter only 5 out of the 6 positions. *MSB* was in a trading halt on Monday and my offer was only for valid for the day. Therefore it was purged out at the close of the market Monday.




*Summary*


Skate said:


> *Backtest comparisons*
> I've stated before, backtest results mean "Jack" - but backtesting gives an indication between test results using different parameters for evaluation. Comparisons between strategies, not so much.




Skate.


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## Skate (17 May 2020)

*It's important to follow the rules*
The Action Strategy is a weekly trend following strategy that doesn’t have many rules to follow but some traders don't have enough resilience to do it consistently. Impatience is one of the biggest reasons traders like to override their system because many are not willing to wait patiently & “do nothing” while a trend moves in the right direction. This means we will have lots of small losses, waiting for the movers & shakers to come along.

Skate.


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## willoneau (17 May 2020)

Hi Skate, did you say there was another buy order for Monday?


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## Skate (17 May 2020)

willoneau said:


> Hi Skate, did you say there was another buy order for Monday?




Yes, there is a buy order for this week & it has been placed. https://www.aussiestockforums.com/posts/1072758/

As you have missed it I might upgrade the graphic so it more prominent - give me a second...

Skate


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## Skate (17 May 2020)

Skate.


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## willoneau (17 May 2020)

Skate said:


> Yes, there is a buy order for this week & it has been placed. https://www.aussiestockforums.com/posts/1072758/
> 
> As you have missed it I might upgrade the graphic so it more prominent - give me a second...
> 
> Skate



Sorry I just assumed it was an example you were giving.


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## willoneau (17 May 2020)

I decided to place order at $990 with limit of 0.87 which gives me a value of $999.19 if filled at 0.87.
Just noticed that the number of shares is 1137 which equals $980. I think it is adjusted for the $20 commission, not $10 when less than $1000.
So changed it to 1143 as per Skate's.


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## qldfrog (17 May 2020)

I missed it too..


Skate said:


> View attachment 103539
> 
> View attachment 103540
> 
> ...


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## Skate (17 May 2020)

qldfrog said:


> I missed it too..




On each Saturday I'll post positions placed in the pre-auction as I've done here: https://www.aussiestockforums.com/posts/1072888/

*1. Friday's Update*
Friday will be for weekly portfolio performance updates

*2. Saturday's Update*
This is when I'll display the screen capture of orders placed in the pre-auction

*3. Monday's Update *
After the orders have been executed I'll post the "Open Summary" & "Dashboard" as confirmation they have been included in the portfolio.

*Let's alleviate confusion*
To alleviate confusion I've listed which days I'll be posting & why. Also, I'll update the Action Strategy reporting to reflect the summary of the portfolio to be inclusive of the "trading rules". So you don't have to read them over & over I'll have a separator to acknowledge the updated post follows on from here. The reason for this is when others join in down the track they don't have to search for the trading rules of the Action Strategy.

Skate.


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## Lone Wolf (17 May 2020)

willoneau said:


> You
> You already have it , 19 open positions.




Apologies if I'm overlooking it, but I've looked through all the recent posts and still don't see it.
What I can see is Skate's list of open positions. This is not the same as an amibroker backtest. It's important to know that your explore list matches the backtest. If you get different stocks in the backtest compared to the explore then you have a problem.

It's not clear to me whether the backtest will show Myer as an open position. Skate has said there will be no sell signal. But that doesn't confirm it's not in the backtest. That might just be because Skate will only look for sell signals in stocks he currently holds. Why is this important to me? Only because we might have different opinions on what it means to follow the system rules, and I'm interested to know if that's true.


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## qldfrog (17 May 2020)

Dear Mr Skate and followers,
I did not like too much the known difference between execution with a predefined gap on Monday open (be it 2% or 3%) and the fact backtests took as a fact that buy sell order were executed at open.
The myer business this week for example;
just added some amibroker code in my thread to close that gap: get an ASX compliant pricing to use and use it in backtests
I am in no way an amibroker guru: AB is a tool, not  a passion so feel free to tell me if you detect a bug error
@Skate, feel free to cut/paste add to the Bible if you see fit.Have all a great day
Note the code does not really reflect yet the day only execution plan of Mr Skate and match more an open for the whole week execution but better than nothing.


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## qldfrog (17 May 2020)

Lone Wolf said:


> Apologies if I'm overlooking it, but I've looked through all the recent posts and still don't see it.
> What I can see is Skate's list of open positions. This is not the same as an amibroker backtest. It's important to know that your explore list matches the backtest. If you get different stocks in the backtest compared to the explore then you have a problem.
> 
> It's not clear to me whether the backtest will show Myer as an open position. Skate has said there will be no sell signal. But that doesn't confirm it's not in the backtest. That might just be because Skate will only look for sell signals in stocks he currently holds. Why is this important to me? Only because we might have different opinions on what it means to follow the system rules, and I'm interested to know if that's true.



I have answered your dilemma before reading it, yes it was bothering me too


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## Rsthree (17 May 2020)

Skate said:


> On each Saturday I'll post positions placed in the pre-auction as I've done here: https://www.aussiestockforums.com/posts/1072888/
> 
> *1. Friday's Update*
> Friday will be for weekly portfolio performance updates
> ...




I've e done a copy and paste of the strategy into my notes. Sometimes, no matter how simple, you need to review it a few times before it really sinks in. Or maybe I'm just getting old and senile


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## Lone Wolf (17 May 2020)

Skate said:


> @Lone Wolf a backtest over one week as you said "you would expect it to match" the actual trading results but you would be wrong.




That was very poorly worded on my part. But probably for the best as you've put forward some good discussion, thanks for that. I was thinking only that the list of stocks to enter should match. I accept there will be position size differences. (I also hadn't considered trading halts) @qldfrog had a recent experience where he found an error in his code by running a test on past data to ensure it matches his original explore list. I feel the importance of checking this is something worth highlighting.

You are correct about all the differences that make real trading deviate from backtests. But isn't that even more reason to compare the live vs backtest results over the same period? Wouldn't it be good to get a feel for exactly how much of your original expected edge has been lost in live trading? Even if only to be able to factor that in when designing future systems and considering if they're worth trading? It looks like there might be some reluctance to show the backtest and it's not like I'm trying to insist on anything so I'll leave it there.


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## CNHTractor (17 May 2020)

Skate said:


> On each Saturday I'll post positions placed in the pre-auction as I've done here: https://www.aussiestockforums.com/posts/1072888/
> 
> *Let's alleviate confusion*
> To alleviate confusion I've listed which days I'll be posting & why. Also, I'll update the Action Strategy reporting to reflect the summary of the portfolio to be inclusive of the "trading rules". So you don't have to read them over & over I'll have a separator to acknowledge the updated post follows on from here. The reason for this is when others join in down the track they don't have to search for the trading rules of the Action Strategy.
> ...




Hi Guys, let's not get bogged down - Skate's new entry was clearly shown yesterday. 

I am following the Action Strategy with interest. Let's focus on the process of following a mechanical system and the psychological barriers to doing so.

As I write this, it seems to me the amount of questions around placing orders at what price and how many illustrate the "challenges" that one "overthinks" rather than, firstly accepting a strategy has a positive expectancy and therefore following it without exception.

If you do not have a positive expectancy, there is no point in pursuing the strategy.


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## Lone Wolf (17 May 2020)

Skate said:


> @Lone Wolf a backtest over one week as you said "you would expect it to match" the actual trading results but you would be wrong. I've explained a few posts back that Aimbroker uses dumb maths (in hindsight) it's a very clever scientific calculator calculating the optimal numbers but it's not smart enough to understand how the pre-auction works let alone the (+/- 3% premium) used for calculating the number of shares to buy.




I thought I might be missing something, I'm often missing something. But I still don't get the statement that Amibroker uses dumb maths. Amibroker will use what we tell it to use. Why can't we do that?

Position size will need some work depending on how many positions you intend to max out at and what happens then. But for now Position size = Equity / 1000.
Entry price for the purpose of determining the Qty of shares to buy = Close rounded up to 2 decimal places + 3%.
Qty shares to buy = The rounded down value of $995 / Entry price as calculated above.
This is what we use to determine the number of shares to buy, so why not tell Amibroker to do the same?
Amibroker will now buy the next open with the same position size as us. The only thing left is to ensure the backtester doesn't enter trades if the open is higher than "Close rounded up to 2 decimal places + 3%", as that the rule we are following.

Am I missing something?


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## Skate (17 May 2020)

Lone Wolf said:


> Apologies if I'm overlooking it, but I've looked through all the recent posts and still don't see it.
> What I can see is Skate's list of open positions. This is not the same as an amibroker backtest. It's important to know that your explore list matches the backtest. If you get different stocks in the backtest compared to the explore then you have a problem. *It's not clear to me whether the backtest will show Myer as an open position*. Skate has said there will be no sell signal. But that doesn't confirm it's not in the backtest. That might just be because Skate will only look for sell signals in stocks he currently holds. Why is this important to me? Only because we might have different opinions on what it means to follow the system rules, and I'm interested to know if that's true.




@Lone Wolf said: 
*(a)* _"Skate has said there will be no sell signal. But that doesn't confirm it's not in the backtest" & 
*(b)* "It's not clear to me whether the backtest will show Myer as an open position" _
In a nutshell yes, Myer is included in the Amiboker backtest as an open position & as Myer is included in the backtest it excludes the next position (IGL on Monday)

*Cut from the backtest*



*Backtesting means JACK*
I've stated before, backtest results mean "Jack" - but they do give an indication between test results using different parameters for evaluation. The next backtest report, won't include the buy in the pre-auction for Monday as the portfolio is already full.

*My Question*
Going forward, how will this backtest refect accuracy?

_*"Skate has said there will be no sell signal"*_
Ok, let me clear this up. I made it clear that the Action Strategy is not a signal service even though I posted the signals for the first week "as there was nothing to post about" in the hope of keeping the interest alive. With the weekly updates, only positions executed will be displayed so others can follow along without confusion. This means if I don't buy a position there will never be a sell displayed in the weekly updates & this is not to be confused with Amibroker Backtesting or Exploration Analysis signals.


Skate said:


> *Signals *I won't be posting the AmiBroker signals each week with the Friday's updates (to save confusion) but as there is nothing to post the first week, posting the signals is better than nothing. This week there is no shortage of signals.




*"It's important to know that your explore list matches the backtest"*
No, not really. Amibroker isn't smart enough to know when a stock is suspended or placed in a temporary trading halt. Also another issue, Amibroker takes the positions in order of "PositionScore" ranking without knowing the finer details of the stock or why there was a run-up in price. Just because a buy signal is generated doesn't automatically mean it's a buy without first passing our trading plan. The run-up in price due to "volume & volatility" needs to be understood in finer detail as there are somethings that can't be coded in. Amibroker is merely following a set of "coded rules" & it has no understanding of "market sentiment" that's where a trading strategy crosses swords with a trading plan. (there is a distinction)

*"Why is this important to me? Only because we might have different opinions on what it means to follow the system rules, and I'm interested to know if that's true"*
The market is completely chaotic & unpredictable due to the infinite amount of information pouring into the markets second-by-second & without the confidence in your trading plan, you won’t keep pulling the trigger. A trading plan is the heart & soul of trading & it shouldn't be confused with a trading strategy as they are totally different beast.

*Let me break trading into 3 parts *
Being a systematic trend trader there are 3 parts to the equation. 
Part (1) Your trading plan has the final say whether you trade the signals as given. 
Part (2) Your trading strategy is a signal service with no understanding of "market sentiment" 
Part (3) You need to have the necessary funds to action your trading plan/trading strategy.

Skate.


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## Lone Wolf (17 May 2020)

Skate said:


> *"It's important to know that your explore list matches the backtest"*
> No, not really. Amibroker isn't smart enough to know when a stock is suspended or placed in a temporary trading halt. Also another issue, Amibroker takes the positions in order of "PositionScore" ranking without knowing the finer details of the stock or why there was a run-up in price. Just because a buy signal is generated doesn't automatically mean it's a buy without first passing our trading plan. The run-up in price due to "volume & volatility" needs to be understood in finer detail as there are somethings that can't be coded in.




*"Just because a buy signal is generated doesn't automatically mean it's a buy"*
This is an important point that I was not aware of in this discussion. (I probably missed it) I was under the impression this was a purely code based trading system in which you trust the system and take the signals without hesitation. But if there's a discretionary element to stock selection that can't be coded then I understand why the backtest won't match.


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## Beaches (17 May 2020)

Lone Wolf said:


> Out of interest Skate, would you mind showing us the backtest results for the system over the first week? You would expect it to match, it's good to check that it does.





A backtest can never match live trading. The point of a backtest is only to establish a positive expectancy. Think of the back testing as Phase 1 testing. If the system gives a positive expectancy in Phase 1, then you move to phase 2 testing which is live trading. initially, your live trading is still testing.

A backtest can never match real trading for many reasons.

Here is 1 very simple situation that can make backtesting differ from live trading. If we assume a stock has the following Buy bids and Sell offers during the preopen session (7:00am to 10:00am):

Buy Orders
2000 @ 5.21
5000 @ 5.20
1000 @ 5.20
1000 @ 5.20
1000 @ 5.20
1000 @ 5.20
1000 @ 5.20
1000 @ 5.20
2000 @ 5.18
2000 @ 5.17

Sell Orders
1000 @ 5.19
2000 @ 5.20
1000 @ 5.20
6000 @ 5.20
1000 @ 5.21
5000 @ 5.22
2000 @ 5.23
5000 @ 5.23
1000 @ 5.24
3000 @ 5.25

In the above example we will assume that the ASX algorithm sets the opening price at $5.20 at the opening auction. There are 4 Sell bids making a total of 10,000 shares selling at the opening price of $5.20 or less and 8 Buy bids making a total of 14,000 at the opening price of $5.20 or more. In this situation only the first 5 Buy bids (highlighted red) fit into the 4 Sell bids (highlighted red) of 10,000 shares available at the match price. These 5 highlighted Buy bids will get filled at $5.20 during the opening auction. The remaining 3 Buy bids of 3,000 shares at the opening price of $5.20 are known as the Surplus and will not get filled during the opening auction.

If immediately after the opening auction the trading price moves higher than the opening price of $5.20 and stays higher for the rest of the day, the 3,000 buy bids at $5.20 will never get filled and will be purged from the list at the end of the day if they have been entered as ‘good for the day’ bids.

From the above example, we can see that while the opening price was $5.20, some bids got filled but others did not. So not only can the system backtest get a different result from live trading, but of 2 people trading the same system, one may get filed and one mot filled which would give them different results based on where they are in the queue at the opening auction.

This is just one example and there are probably another dozen scenarios that could result in a difference between a backtest and live trading.


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## qldfrog (17 May 2020)

Beaches said:


> A backtest can never match live trading. The point of a backtest is only to establish a positive expectancy. Think of the back testing as Phase 1 testing. If the system gives a positive expectancy in Phase 1, then you move to phase 2 testing which is live trading. initially, your live trading is still testing.
> 
> A backtest can never match real trading for many reasons.
> 
> ...



My understanding is that if there is more demand than offer during the auction, the price will increase and in the above example, the open price will NOT be 5.2 but 5.21 or whatever to ensure the situation you describe does NOT happen: open price is equal to price P where all sells down to P or below and buys up to P and above can be executed.I could be proven wrong but be disappointed
Nevertheless AB give you an indication if your orders might be unrealistic in real world execution:
see notice 802 below on a backtest execution:


This should not happen much with initial positions but if you day dream and play with 10M portfolio with 12 position, it will obviously happen and yes in that case the Backtest means shxt.
Right now, with 1k positions, I think we are safe


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## qldfrog (17 May 2020)

BTW, yes Backtest will differ from execution, but you should be able to understand and calculate it, otherwise something is wrong in your system code; 
As a beginner, I make sure I compare both and track differences, both a fail safe and instructive past time..it is not always easy


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## Skate (17 May 2020)

Lone Wolf said:


> I thought I might be missing something, I'm often missing something. But I still don't get the statement that Amibroker uses dumb maths. Amibroker will use what we tell it to use. Why can't we do that?




@Lone Wolf, I refer to "Dumb Maths" in relation to calculating static numbers. Amibroker lacks the intelligence to calculate fluid numbers, numbers that move from second to second, jocking for a position in the pre-auction is an experience in itself & Amibroker couldn't keep up with that. Amibroker is a programmable scientific calculator nothing more & nothing less. Self-driving cars have difficulty making decisions by code alone, sometimes a person using "smart maths" can quickly calculate "non-coded" variables that in the long run can save the day.

*Equity is a static number*
Also, you have raised the coding for Equity (Position size = Equity / 1000) using static numbers it's very easy "but" to code pyramiding of PositionSizing using a fluid "Bank Balance" is a little more challenging. If you are interested have a read how I handle "pyramiding of PositionSize": https://www.aussiestockforums.com/posts/1052081/

*Suspended & delisted securities*
There are some things that can be coded into a strategy where others are a little more difficult. The analysis report will not include "Suspended or delisted securities" as I've discussed. ASX announcements need to be checked as they hold information Amibroker is not privileged to. https://www.aussiestockforums.com/posts/1071517/ 


Lone Wolf said:


> *"Just because a buy signal is generated doesn't automatically mean it's a buy"*
> This is an important point that I was not aware of in this discussion. (I probably missed it) I was under the impression this was a purely code-based trading system in which you trust the system and take the signals without hesitation. But if there's a discretionary element to stock selection that can't be coded then I understand why the backtest won't match.




*Discretionary element*
The discretionary element is part of the trading plan that overrides the strategy selection & that's an announcement of a takeover or a scheme of arrangement that Amibroker is unaware of.

Skate.


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## Beaches (17 May 2020)

qldfrog said:


> My understanding is that if there is more demand than offer during the auction, the price will increase and in the above example, the open price will NOT be 5.2 but 5.21 or whatever to ensure the situation you describe does NOT happen: open price is equal to price P where all sells down to P or below and buys up to P and above can be executed.I could be proven wrong but be disappointed





The algorithm is more complex than that and you will find on the heavily traded stocks there is nearly always a surplus on either the Buy or Sell side at the opening. There may even be times where part of your order is filled and part not at the opening. If you have a buy order in for 1,000 shares, depending on the bids .. you may only get filled for 300 in the opening auction the the other 700 will sit at the top of the queue for that price until there is a match during the day.

The example was only indicative of what could happen. However, even if the opening price was moved to $5.21, that would only result in 11,000 matching and there would still be 2,000 Surplus

If your broker's trading  platform shows the indicated opening price and the surplus (some do not) you can watch a heavily traded stock from say 9:30am to 10:00am and you will see how the bids entered change the predicted opening price and the surplus.


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## Lone Wolf (17 May 2020)

Beaches said:


> A backtest can never match real trading for many reasons.




Agreed. I'm only advocating that you eliminate any differences in your backtest that can be eliminated. Then check your live results to make sure there are no differences to the backtest that you didn't expect. Different isn't a problem if you expect it and understand the impact on your expectancy. Just a suggestion.


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## Skate (18 May 2020)

Lone Wolf said:


> I'm playing along as I'm interested to compare the different levels that we sell at and the overall impact it has. I won't necessarily be at the computer at 10:30am on the day we sell, so if I don't get out on the open, it won't be the same as Skate. What difference does this make over time? But my buy positions are identical to Skate as I used the same entry quantities and price limits. End values are different as CMC has $11 per trade ($9.90 if you do more than x trades in a month). So a bit worse than skate. However, I could have up to $10,000 positions and still only pay $11.
> View attachment 103530




*The CommSec confirmation summary*
The 20 position Action Strategy portfolio is now full.







Skate.


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## Skate (18 May 2020)

*How to read the Share Trade Tracker Dashboard*
For those following along with the Action Strategy, I have made 6 references on the Dashboard capture that needs a closer look. The colour-coded reference boxes denote at a glance the information contained therein. I had planned to explain them in detail but as they say, a "picture paints a thousand words".

*Profit Factor*
Number (4) is the big one as it's the "Profit Factor" of the Action Strategy & we need to keep the cell coloured "GREEN". If the "Profit Factor" is less than 2 the cell will turn from "GREEN" to "YELLOW" which will be okay but I'm not trading the Action Strategy for "Okay" results.

*It's worth remembering*
"good is not good when better is expected".

*The markets are being kind to us today*
The results look pleasing so far today so I'll post a capture because as you know results can turn in a heartbeat.




Skate.


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## aus_trader (18 May 2020)

Skate said:


> *The markets are being kind to us today*
> The results look pleasing so far today so I'll post a capture because as you know results can turn in a heartbeat.



Yeah ! Go Goldies !

This is an awesome portfolio if the Gold price rallies like it is doing Skate.

From my analysis almost half of the candidates are Gold stocks. I can confirm at least 9.
i.e. 9/20 = 45% at least.


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## Skate (18 May 2020)

Skate.


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## Rsthree (18 May 2020)

My order for IGL was filled, 1143 @ $0.86

I've found that for me buying at auction over the weekend and being a weekly system helps me stay at an arms length from the process  and therefore more emotionally detached, which ofcourse is a good thing.

In the past I was way more involved by monitoring throughout the day and executing throughout the week, so way too absorbed and too easy to get drawn into the drama of the market.


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## Lone Wolf (18 May 2020)

20 buy orders filled so far. All filled at the open price and matching Skate's (brokerage aside).


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## rnr (18 May 2020)

Lone Wolf said:


> 20 buy orders filled so far. All filled at the open price and matching Skate's (brokerage aside).
> 
> View attachment 103582



Well done @Lone Wolf as you have kept either below or equal to the Position Size of $1,000.


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## Skate (19 May 2020)

*The Action Strategy up one day & down the next*
Trend Trading has been proven to be profitable over time & trading the Action Strategy (a trend following system) should be no different but there will always be drawdowns along the way. It doesn’t matter when you start you will always go through a bunch of losing trades while waiting for a winning trend to come along. Many traders are not prepared for drawdowns & will stop trading because they are too impatient to get to the point of profitability & give up because the strategy didn’t perform straight away. A reminder "Trading is a marathon, not a sprint".

*All the work has already been done*
With the Action Strategy, all the work has already been done eliminating you from spending months & months researching methods & testing new ideas. Trading the Action Strategy allows you to trade a system with confidence because you can’t make money if you're not in the game.   

*Taking control is a personal responsibility  *
If you are already trading the Action Strategy but feel stressed along the way having trouble following the rules consistently then there is a good chance this system doesn’t suit you.

*Emotions & trading don’t mix *
As soon as our emotions go up, our ability to make good decisions drop. Trading mistakes are extremely expensive. Trading without rules, traders will revert to judgment & with judgment comes emotions & with emotions comes mistakes. Trading the Action Strategy is a way of trading without thinking allowing clarity & perspective to be experienced along the way.  

Skate.


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## Skate (19 May 2020)

*I'm back*
After today's trading, I've been made whole again. I've got my profits back (said while punching the air) it's like the past 11 weeks hasn't happened.

*Trading was looking great this Financial year*
The "virus" has affected so many lives as well as the markets. I was having a great year accumulating a good deal of profits only to see some (70%) evaporate over a two week period. The crash came so swiftly, something I hadn't experienced in my 5 years of trading. But the good news is - "I'm back baby" as Phil Gould (NRL fame) would say.

*Giving back profits is not always fun*
The recent drop in my portfolio has been horrendous, to say the least, as the value in dollar terms was quite high. I'm lucky I was in large profits & gave back a percentage. Trading the last few weeks hasn't been all peaches & cream. I'm posting the line chart so others can understand what I've had to endure these last few crazy weeks. (but it was worth it)




Skate.


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## laura (20 May 2020)

qldfrog said:


> Share the feeling
> But how do you think compushare makes profit: by billing companies for mailing.
> There is no real want by these chess manager to reduce
> Why would i need to have a specific email, bank account, tfn per share traded, could not we have a default setup atyached to our hin?
> Yes we can but where is the money....



So we actually need to log in somewhere each time and update details? Should I give them my TFN or ABN? Does it make any difference?


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## qldfrog (20 May 2020)

laura said:


> So we actually need to log in somewhere each time and update details? Should I give them my TFN or ABN? Does it make any difference?



Yes for every share ticker, with compushare you have to update tfn, credit directions and communication details.their site is atrocious and very slow.was worse 6 month ago.
Links services is better in that they default tfn , coms etc from your profile.
But for each update, compushare sends you a letter and get paid by the company of the share involved, a rort ...no other name
And extremely time consuming until you basically have done it for the whole XAO...


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## laura (20 May 2020)

qldfrog said:


> Yes for every share ticker, with compushare you have to update tfn, credit directions and communication details.their site is atrocious and very slow.was worse 6 month ago.
> Links services is better in that they default tfn , coms etc from your profile.
> But for each update, compushare sends you a letter and get paid by the company of the share involved, a rort ...no other name
> And extremely time consuming until you basically have done it for the whole XAO...



Ok, thank you! I'll update them all then! It asks either for TFN or ABN, which one should I use?


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## qldfrog (20 May 2020)

laura said:


> Ok, thank you! I'll update them all then! It asks either for TFN or ABN, which one should I use?



Not sure if Mr Skate is keen on seeing this type of info here? TFN should do but whether you want to trade as a business or under your name, or even an account with your partner can have tax ramifications.
We (on the forum) can not really offer advices here as individual circumstances vary.Sorry I can not offer much more help.


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## Adamroweco (20 May 2020)

just been looking at the au bank's and it seem's that every time the dow has a big up or a big down the au bank's reflect that , yesterday combank $58.88 jump to 60.o81 then a clime to 60.327 that was with a dow jum of 300p from the ending of a corona virus trial , today dow drop 300 combank 59.782 to 59.068 - and across the line all of the bank's on my list have replicated this .
the only other share's that i have on my watch list replicating this are AGL and Origin .
has any one been using this for profit ?


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## rnr (20 May 2020)

laura said:


> Ok, thank you! I'll update them all then! It asks either for TFN or ABN, which one should I use?




Hi Laura,
Try doing this web search "Am I a share trader or investor for ATO purposes?" and you will get access to a reasonable amount of info to consider. If you have problems deciding which way to go, then seek the services of a tax accountant.
Cheers,
Rob


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## Skate (20 May 2020)

Adamroweco said:


> just been looking at the au bank's and it seem's that every time the dow has a big up or a big down the au bank's reflect that , yesterday combank $58.88 jump to 60.o81 then a clime to 60.327 that was with a dow jum of 300p from the ending of a corona virus trial , today dow drop 300 combank 59.782 to 59.068 - and across the line all of the bank's on my list have replicated this .the only other share's that i have on my watch list replicating this are AGL and Origin .has any one been using this for profit ?




@Adamroweco it will come to no surprise that our market mirrors the DOW & there have been many charts recently posted to reflect this. The banks make up a large portion of the markets & if they have a bad day the ASX tends to have a bad day

*In saying this*
Not many traders entertain banks in their portfolio as they normally lack volatility (but not of recently). Investors who hold the banks do so for other reasons entirely being for dividends & perceived safety. When the banks are held for dividends the daily fluctuations become less relevant. 

*Why do our bank's fluctuate*
Financials are connected & influenced by global markets

Skate.


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## Skate (20 May 2020)

*Disclaimer*
I have an involvement with Share trade Tracker

*Question*
Recently a member has asked about "Share Trade Tracker" a program I use extensively for my weekly updates & reports in this thread.  If Share Trade Tracker was made available to all ASF members for 180 days (6 months) free of charge with unrestricted use & support would members take up the offer ? 

*Share Trade Tracker *
STT has "free Yahoo Data for updates" & inclusive with the latest release version now integrates for those who have Norgate Data as well as others. Also if there are a large number of users taking this up this offer there would be some direct support for new users on the ASF forum 

*Let me know *
If this offer is worth organising.

Skate.


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## Skate (20 May 2020)

Garpal Gumnut said:


> It's a lonely interest, trading or investing




@Garpal Gumnut comments are so true & at times everyone starts to wonder if you are "trading correctly" or if there is really such a thing as "trading correctly". As traders, we tend to gravitate towards a trading method that feels comfortable. To succeed at trading I believe you need a system in place & trading along with the “Action Portfolio” (my latest example) is one way to share an experience in the hope of understanding some of the challenges from a traders perspective.

*Learning as we go*
We are all faced with making decisions every day & trading is no different, except it's vital we make smart decisions when trading. Trading along with the Action Strategy you'll learn as you go by trading small positions & if we make a mistake small loses are bearable. Making small mistakes now will give you the skills & experience needed to make the right decisions later on. The very act of trading along is much more important than getting it right.

*The risk is real when your money is on the line*
Nothing can be guaranteed when entering the market & the risk of losing your money is very real & that’s why I've used every means at my disposal to minimize the elements of risk by trading in the most efficient way. The idea is to get the maximum return for the amount of risk taken for each dollar spent.

*I've been recently reminded of "Black Swan" events*
There will always be share market booms & busts, but the share market has consistently out preformed most other investment classes. These recent fluctuations affect the various market participants in different ways, but one thing is true, the worst affected are those who are randomly speculating without a sound trading system or the right tools. By following some simple tried & tested methods, we can learn to protect our capital & improve our overall investment returns.

Skate.


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## Skate (20 May 2020)

*


As traders, we are all different*
In my previous post, I made an off-the-cuff remark about "trading small positions" without realising what that could mean to others. The Action Strategy is trading a $20k portfolio & to some, it's a fortune saved over a long period. Referencing @peter2 "Detour Strategy" his bet size starts at $10k. Whereas the minimum bet size of my trading starts at $15k ramping up "using pyramid position sizing" to a maximum of $25k bet size, so it's really horses for courses because as traders, we are all different.

*The Action Strategy last full year backtest (2019)*
It's handy to look back in hindsight to get a feel how the Action Strategy would have performed by changing a parameter setting (the size of the bet). I've been pondering what the average Super Fund at retirement would be. AMP super indicates it's a tad under $300k. I'll use $300k for the exercise of comparing the difference between $20k versus a $300k portfolio (that equates to $1k bet sizes versus $15k bet sizes)

*Using a trading portfolio of $300k*
The point of the exercise is to demonstrate that portfolio size does matter. The difference in performance percentage is roughly the same but you can't eat percentages only dollars. A $13,863 return is nothing to sneeze at but not a livable amount in retirement whereas $227,091 makes for a different lifestyle. Trading isn’t about getting rich, it's more about financial independence supporting yourself without an income, being able to choose to live your life on your terms.

*Let's look at a "side by side comparison" of what bet sizing can make to your trading returns*




Skate.


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## aus_trader (20 May 2020)

qldfrog said:


> Yes for every share ticker, with compushare you have to update tfn, credit directions and communication details.their site is atrocious and very slow.was worse 6 month ago.
> Links services is better in that they default tfn , coms etc from your profile.
> But for each update, compushare sends you a letter and get paid by the company of the share involved, a rort ...no other name
> And extremely time consuming until you basically have done it for the whole XAO...




I thought I was the only one muddling through this pain...
Thank you all for sharing the pain of Comp Share -> What a dinosaur !

This is what I see... for ages every time I try to update anything...



I spend so much of my weekend on this crap I actually feel like smashing the screen...




Er… sorry about that violent thought, I'll only damage my own equipment. But that's the frustration we are experiencing. I mean we are giving up our precious time that could be used for catching up on chores, doing the loan or gardening on the weekend instead for sitting in front of the computer for hours with a snail pace register update which is Comp Shares !

Agree qldfrog, Link and other juniors work so much faster, but the irony of the situation is bulk of the asx shares are still with the ancient dinosaur !

Situation is not resolved till either a new CEO or management will come in and re-structure their whole ComputerShare platform (that could happen quickly) or till newer tech savvy share registry management companies will take all the market share and extinct this dinosaur (which could take years of more pain for us !  ).

Skate, Thank you for allowing me to dump years of frustration built up in me at your "Dump it here" thread. I feel much better, although the culprit (CS) remains with the bulk of our holdings ! I am optimistic things will improve... one day  ​


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## qldfrog (20 May 2020)

Skate said:


> *
> View attachment 103625
> 
> As traders, we are all different*
> ...



And not to state the obvious but increasing bets also means increasing potential losses so please:
for any newcomers with shining $ backtest figures in the eyes (like my 33Millions if I had invested 100k in 2005)  well..you will pay taxes and how well will you handle loosing the equivalent of your house in a week during a market crash .So please do not start borrowing money you can not afford to lose and bet using margin lending.Stop loss get smashed thru, options expire, etc
Mr Skate has already reinforced this theme, but just to be sure no newcomer get burns
Dream realistically


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## aus_trader (20 May 2020)

qldfrog said:


> And not to state the obvious but increasing bets also means increasing potential losses so please:
> for any newcomers with shining $ backtest figures in the eyes (like my 33Millions if I had invested 100k in 2005)  well..you will pay taxes and how well will you handle loosing the equivalent of your house in a week during a market crash .So please do not start borrowing money you can not afford to lose and bet using margin lending.Stop loss get smashed thru, options expire, etc
> Mr Skate has already reinforced this theme, but just to be sure no newcomer get burns
> Dream realistically



Yes qldfrog, totally agree. I believe only free standing money (i.e. savings, money in your brokerage account etc) should be used for trading in general.

Any borrowing or leverage via the use of CFD's etc will make it difficult to stay the course as there is extra pressure to make up gains to compensate for interest costs and overnight funding charges.


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## investtrader (21 May 2020)

aus_trader said:


> I thought I was the only one muddling through this pain...
> Thank you all for sharing the pain of Comp Share -> What a dinosaur !
> 
> This is what I see... for ages every time I try to update anything...
> ...



Hey aus_trader,
I gave up on all of that admin crap years ago. I now use Netwealth ASX:NWL for my three accounts, including my super fund. While it appears to be a 'wrap' platform, and it is, I use it for all of my share trading and investments. Most of these platforms are restricted to financial advisers, but Netwealth allows private investors with no adviser fees. You can place orders from directly within the platform. Brokerage is reasonable. Order types are basic but sufficient what I do (weekly trend).Absolutely zero paperwork to do and end of year reports can go straight to your accountant. It is the fastest growing platform in Australia. 
There are fees, but they have a family share thing which caps the fees. If you are running a trading business I consider the fees inconsequential and just part of the costs of business.


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## qldfrog (21 May 2020)

I wou


investtrader said:


> Hey aus_trader,
> I gave up on all of that admin crap years ago. I now use Netwealth ASX:NWL for my three accounts, including my super fund. While it appears to be a 'wrap' platform, and it is, I use it for all of my share trading and investments. Most of these platforms are restricted to financial advisers, but Netwealth allows private investors with no adviser fees. You can place orders from directly within the platform. Brokerage is reasonable. Order types are basic but sufficient what I do (weekly trend).Absolutely zero paperwork to do and end of year reports can go straight to your accountant. It is the fastest growing platform in Australia.
> There are fees, but they have a family share thing which caps the fees. If you are running a trading business I consider the fees inconsequential and just part of the costs of business.



ld have to investigate, where is your money/chess held, in case of collapse, where do you stand, etc


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## Roller_1 (21 May 2020)

Hi Skate, I think ive read in this thread that you are using the $vix for a volatility measure? Is that a norgate symbol? I'm assuming it the Aus vix. It must be staring me in the face but i can't find it!


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## Skate (21 May 2020)

Each time you see the Action Strategy "update logo" at the beginning of one of my posts it signifies that the post relates to the strategy.


Roller_1 said:


> Hi Skate, I think ive read in this thread that you are using the $vix for a volatility measure? Is that a norgate symbol? I'm assuming it the Aus vix. It must be staring me in the face but i can't find it!




@Roller_1, yes $Vix is a Norgate symbol & "no it's not the Aussie VIX" but the (CBOE) Volatility Index of the S&P 500 index options. The CBOE Volatility Index reflects the investor's consensus view of (30-day) future market volatility, it provides a measure of market risk & investors sentiments. I'll explain the Norgate's $VIX index a little better so others might understand why it's used in the Action Strategy.

*The Volatility Index, or VIX, is a real-time market index *
The Cboe Volatility Index (VIX Index), measure the market’s expectation of future volatility. The VIX Index is based on options of the S&P 500 Index of the U.S. market & it's a perfect gauge of U.S. equity market volatility & that's why I believe Duc uses it as his primary measure of volatility. In simple terms, it's a barometer of equity market volatility. The VIX Index is really the U.S. market's "fear gauge".






Skate said:


> The trend is tied to a "volatility measure" taken from the VIX or "other sources"





Skate said:


> the "Volatility Dependant Stop" is a clever concept as it uses the VIX in combination with extreme parameters that I found hard to swallow, but they worked like a dream to my amazement. Bandying the words like "Volatility & Vix" is meaningless without the explanation of application "that will remain a secret".




*$VIX - Volatility Stop*
The "VIX Volatility Stop" is used in the Action Strategy with two other stops forming the exit strategy. The Action Strategy exit strategy is complex to explain without giving too much away as @ducati916 has passed on this information in private. I can say the Vix volatility stop involves the "average of the $VIX" of an n-period. The Vix volatility stop is driven by a separate "VIX Index Filter" & a simple "Stop or Go" filter derived from Duc's ideas. The Vix is calculated using the average of the highest high value of the last n-period, less the average of the lowest low value of the last same n-periods that changes from bar to bar.

Skate.


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## Skate (21 May 2020)

qldfrog said:


> And not to state the obvious but increasing bets also means increasing potential losses so please: for any newcomers with shining $ backtest figures in the eyes Mr Skate has already reinforced this theme, but just to be sure no newcomer get burns. Dream realistically




@qldfrog is absolutely right, the whole "Dump it here" thread is littered with warnings about the dangers of trading & the associated risks. My previous post visually demonstrated that portfolio size does matter & it's not to encourage overtrading or increase their trading portfolio. Trading the Action Strategy with small positions makes small loses bearable when they come along. The point of the Action Strategy exercise was to encourage others to get involved.

*The basic rules for trading*
1.    Always trade with money you can afford to lose. 
2.    Keep a conservative attitude towards the market. 
3.    Never forget that trading is a game of probabilities. 
4.    Place limit orders before entering a trade.
5.    Know at what level you will exit before placing the limit order
6.    Stick to your trading plan & don’t violate it at any cost.

Skate.


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## Skate (21 May 2020)

*The fear of losing is sometimes crippling*
Trading behaviours are mainly based on fear of losing money & sometimes it's the fear of missing out. Fear of losing is based on a lack of understanding of how to handle trades after experiencing a substantial loss that we all feel at times.  
*
The fear of not knowing*
Well, let's start off with the biggest fear of all & it's the fear of not knowing how much money we might lose when trading. We can compound the situation by having the fear of being wrong & nobody likes to be wrong.

*The fear of missing out (FOMO)*
Some traders will buy because of the fear they’ll miss out & trading like this can get ugly quick smart. 

*The fear of losing*
It's human nature to feel fear & we'll do whatever it takes to avoid it, sometimes making the wrong decision, sometimes taking no action at all, sometimes holding a trade too long or hesitant to sell thinking the price will recover.

*Being fearful to take the next trade*
After a few losses, you become fearful to pull the trigger to take the next position, possibly missing out on a profitable trade. 

*Being fearful of what the future holds *
Some are held back from trading because they fear "the worst is yet to come". 

*Having the fear of not being good enough*
At times we’ve all been fearful that perhaps we are not good enough even though we know what to do, our fear can keep us from executing our trading plan.

Skate.


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## Warr87 (21 May 2020)

Skate said:


> *The basic rules for trading
> 1.    Always trade with money you can afford to lose. *
> 2.    Keep a conservative attitude towards the market.
> *3.    Never forget that trading is a game of probabilities. *
> ...




All incredible important, though can be easily forgotten.

I personally find #1, 3, and 6 to be the most important for me.


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## aus_trader (21 May 2020)

qldfrog said:


> I wou
> 
> ld have to investigate, where is your money/chess held, in case of collapse, where do you stand, etc



I thought they were investment advisor / managed account type of firm.

Shares probably CHESS held but not sure if all your details such as TFN, Bank Deposit details for Dividends or DRP if you choose and Communications preferences are automatically updated when you purchase a stock or ETF ? If not we still have to deal with a share registry firm.

By the way I don't have a problem with updating my details on a share registry admin company, but it's got to be quick:
- Log in
- Should already take you to currently held shares. Click on any newly purchased.
- Update TFN (if not automatically done), Bank Deposit details for Div's or DRP, Communications preferences e.g. via email.
- Hit submit and it should be done.

Even if you have a few new stocks to update every few weeks, the whole process should take probably 5 mins or so. I am cool with that 

It should not take hours, which is why I deal with the Computer Snail Company only on the weekends. I can't think of a worst site these days, even in the good old days a 486 PC or a first Generation Pentium with a Dial Up internet used to get things done faster. We are not talking about doing some complicated Charting or 3D modelling, it's just updating some plain text info (simple admin) for F's sake !


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## Skate (21 May 2020)

Warr87 said:


> All incredible important, though can be easily forgotten.




@Warr87 the items you mentioned are important but fear stops us executing them correctly when trading.

*Trading is not an exact science*
I've found fear is always the primary driving force when it comes to trading & many never start because they’re worried about losing some or all of their money. Combine that with self-doubt & it's a sure-fire way to keep you from ever getting started.

*Losers are a dime a dozen*
As traders, we all lose for a variety of reasons, some because of having little trading education or experience, it can also stem from having bad habits or trading when undercapitalised which is a foolproof way to lose money that can lead to substantial losses.

Skate.


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## Warr87 (21 May 2020)

Skate said:


> @Warr87 the items you mentioned are important but fear stops us executing them correctly when trading.




Completely agree. Overcoming fear and not giving into greed = profitable trader.


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## Skate (22 May 2020)

frugal.rock said:


> How rude of me not to thank you for the charts Skate. Much obliged.




*It's becoming harder *
There have been times when it's hard to think of something new to write about that may help others understand trading a little better. When someone says "thank you" it's a reminder that being kind is part of who we are. Having an "attitude of gratitude" goes a long way in this world.

*I want to say thank you*
It costs nothing to be nice so it's only fitting that I should thank those who have supported the "Dump it here" thread, a thread I had high expectations of - only to experience a lack of traction in the early days. The thread has morphed into a "Systematic trading thread". Learning is sometimes boring where "doing" is more enjoyable.

*Recently we are getting some interest*
It's no secret the Action Strategy is the brainchild of @ducati916, it's an accumulation of his ideas posted in this thread with some additional information passed on to me in private. Duc has a style of articulating his views by backing them up with facts & figures in a way that helps others better understand. One of those posts was an inspiration, aha moments of sudden insight to understand a concept that was simple & made sense.

*The eureka moment *
I read Duc's words over & over, in quiet contemplation, I said to myself "I can do this". It started out as a few indicators & how the indicators related to an individual stock. Taking this one step further the "Duc's Stop & Go" buy indicator was born. Things were looking up. In one of my posts, I had a whinge of losing a quite sizeable chunk of money in the recent "virus crash" only to receive a private message from the Duc offering help to overcome my frustration. This private information gave rise to the  "Volatility Dependant Stop". These indicators lead to the formation of the Action Strategy.

*Duc, this is a long-winded way of saying "Thank you"*
Everyone trading along with the Action Strategy would share the same appreciation.

Skate.


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## Skate (22 May 2020)

Skate.


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## Skate (23 May 2020)

Skate.


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## frugal.rock (23 May 2020)

Thanks for the update Skate.
I should say, due to not having the 20k, I decided to stick with what I know, rather than trying to partially implement the Action Strategy, as recommended- either all in, or all out.

I had considered using the 5k cash available, for 5 posies, but didn't get past the thought process of how to filter out these 5. I will elaborate further later on. Cheers.

F.Rock


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## ducati916 (23 May 2020)

frugal.rock said:


> Thanks for the update Skate.
> I should say, due to not having the 20k, I decided to stick with what I know, rather than trying to partially implement the Action Strategy, as recommended- either all in, or all out.
> 
> I had considered using the 5k cash available, for 5 posies, but didn't get past the thought process of how to filter out these 5. I will elaborate further later on. Cheers.
> ...




Mr Rock, you might want to double check, but I think Mr Skate ranks his picks top to bottom. So the top 5 could be your filter (if this is actually correct).

jog on
duc


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## qldfrog (23 May 2020)

ducati916 said:


> Mr Rock, you might want to double check, but I think Mr Skate ranks his picks top to bottom. So the top 5 could be your filter (if this is actually correct).
> 
> jog on
> duc



I will just note that for my systems at least it would be hard to only take a few and expect similar proportional outcome, a better option would be to lower the per ticker amount but then you get hit by brokerage
An option i i wou suggest is get cheaper brokerage than mr skate and reduce your amount per ticket proportionally
If $7.5 per trade which i remember reading somewhere, you could play with 15k instead of 20k.
Anyone with me?
All systems i tried so far need a minimum of 12 positions not to become a gamble.
Mr Skate? What do you think?


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## Skate (23 May 2020)

qldfrog said:


> All systems i tried so far need a minimum of 12 positions not to become a gamble. Mr Skate? What do you think?






frugal.rock said:


> rather than trying to partially implement the Action Strategy, as recommended- either all in, or all out.





ducati916 said:


> Mr Skate ranks his picks top to bottom. So the top 5 could be your filter (if this is actually correct).




I have to agree with @frugal.rock of being either all in or all out. @ducati916 is 100% correct as portfolio position size can vary according to risk which I'll further elaborate on.

@qldfrog position size of a portfolio matters & to some extent can be a decider if the strategy is viable to trade.

*Having half a chance of profitability*
$20k is a lot of money but there is a high cost that comes with trading, one being brokers commission & many other expenses. Trading accounts under $50K makes trading so much harder. Most traders think you can start with a small amount of money to start trading but anything less than $50k or $60K is quickly swallowed up by commission costs, the cost of doing business. I have taken all this into consideration formulating the Action Strategy & it's imperative trading the Action Strategy commission drag needs to be $10 or under to have a half a chance of profitability.

*Frequency of trading*
The Action Strategy buys about 50 times a year so it's on the moderate side looking for long term trends. If your trading strategy trades with a high frequency the commission drag will play havoc with your strategy profitability but trading at the level I'm suggesting the drag becomes less.

*Commission cost & frequency of your trading style *
This consideration should include the commission cost & frequency of your trading style relating to your trading plan. When trading you can divide your capital into five, ten, fifteen or twenty equal amounts it's really up to you.  Trading the Action Strategy with less than the optimal number of positions (like 5 positions) the cards are stacked against you. With this exercise, I would be fully in or fully out. 

*What is annoying - no rebalancing*
Commission drag won't allow rebalancing of positions that's why we need to keep position size to $1k bets. Trading such a low-value portfolio with "NO" re-balancing restricts the performance potential of the strategy. Commission drag has already been calculated so it's not possible to increase position sizing (bet sizes) under any circumstances.

Skate.


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## qldfrog (23 May 2020)

Skate said:


> I have to agree with @frugal.rock of being either all in or all out. @ducati916 is 100% correct as portfolio position size can vary according to risk which I'll further elaborate on.
> 
> @qldfrog position size of a portfolio matters & to some extent can be a decider if the strategy is viable to trade.
> 
> ...



Thanks for the feedback, that question of minimum system size is critical for beginners like us


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## Rsthree (23 May 2020)

Skate said:


> Trading accounts under $50K makes trading so much harder. Most traders think you can start with a small amount of money to start trading but anything less than $50k or $60K is quickly swallowed up by commission costs, the cost of doing business.
> 
> Skate.



So we will just have to wait for the Action Strategy to turn  our $20k into $60k before we can up the game.


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## Skate (23 May 2020)

Rsthree said:


> So we will just have to wait for the Action Strategy to turn  our $20k into $60k before we can up the game.




@Rsthree, not quite. I have a procedure to take advantage of profits & it's normally done in two ways. 
Option (1) adding extra positions when funds become available. Of the initial $20k there should be $389.75 left in our trading account, once that balance exceeds $1,000 we will buy another position. We won't let idle funds sit around being lazy, every dollar needs to earn it keep. 
Option (2) is not applicable to the Action Strategy because of commission drag, the commission needs to be less than $10 per trade. This only leaves us with Option (1)

*The options to pyramid*
1. Increase portfolio position size
2. Increase the bet size

*Increasing the portfolio size*
This method of pyramiding really needs no explanation as you add extra positions when funds become available.

*"Pyramiding Explanation" *(positionSize)
Pyramiding "PositionSize" is a re-balancing technique to reinvestment profits. "Pyramiding (re-balancing) my PositionSizes" every soldier is put into the battle to fight the good fight.

*How?*
Position-sizing uses the trading Bank balance to calculate the size of the next bet. It's simply a way of putting every dollar to work.

*What is the Re-Balancing Formula?*
Trading Bank Balance/outstanding positions = new "PositionSize"
This will now be the new bet for each & every pending trade (the new PositionSize also calculates the number of shares to buy in the pre-auction)

Skate.


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## Rsthree (23 May 2020)

My comment about the 60k was in gest, but thank you for your answer, which leaves me with another question.
I assumed that a maximum of 20 positions was a strategy rule?


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## Skate (23 May 2020)

*

*


Rsthree said:


> My comment about the 60k was in gest, but thank you for your answer, which leaves me with another question. I assumed that a maximum of 20 positions was a strategy rule?




@Rsthree has me thinking, it's time to get up on the soapbox & make a few general comments. The strategy rules about the "number of positions" in the Action Strategy starts at "20 positions" ramping up to "40 positions" over time, I'm expecting profits & those profits will need to be put to work. Commission drag won't permit "positionsize pyramiding" as each bet needs to be $1k or under. If you think you are going to pocket the profits think again as we want to compound our profits. Let me make a few additional comments so others may understand my thinking.

*Years of study*
It takes many years of study to learn how to trade correctly let alone make money at this game. Trading live, having skin in the game, allows you to feel a range of emotions not experienced when paper trading. The financial markets are cruel, unkind, dangerous & it's not a level playing field, one place where amateurs are generally fleeced brutally.

*The truth *
You need money to make money. If you are thinking to turn $20,000 into millions, that's gambling, not trading. Instead, good traders look to make an average of 25% per year so the best we could hope for trading the Action Strategy would be a profit of $5,00 if all goes to plan.

*I'm not trading the Action Strategy for average returns*
The Action Strategy gives me hope that we can double our portfolio in the first year (if the markets rebound & luck is on our side), I think the strategy is that good. Whether the Action Strategy makes money or not it will be an exciting journey for some & an interest for others. It takes an extreme amount of trust blindly following along risking $20k on a system not fully disclosed or understood. It's hard to understand what motivates any of us to trade but sometimes everything just feels right.
*
What 25% returns will buy*
This is extremely important, but most traders don’t get it, your account size matters. Adding extra positions or increasing the bet size can have a positive impact on every strategy & on the flip side it can have the reverse effect.

*Example of portfolio sizes*
On a $20,000 account, with a 25% return, you're looking at an average of $5,000 per year.  
On a $100,000 account, with a 25% return, you're looking at an average of $25,000 per year.  
On a $300,000 account, with a 25% return, you're looking at an average of $75k per year.  
On a $1m account, with a 25% return, you're looking at an average of $250k per year.  

*PositionScore* (Ranking your signals)
A good strategy has many key features giving you a fighting chance of longevity & survival. 'PositionScore' is another important ingredient to the profitability of any strategy let alone the Action Strategy.

Skate.


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## Warr87 (23 May 2020)

All important points.

I have started my trading with $25000. I probably could have squeezed more into it, but I didn't for a number of reasons. What if I am wrong and there is a mistake with my system? This is the first system I have gone live with, and while I ensured it tested the same under live forward-testing compared to backtests, it still may not add up. Putting $100,000 at stake psychological is also very different to $25,000 for a beginner. Seasoned traders aren't phased by 20% DD on a $100,000 account, but a newbie probably would. It's correct to say that a small account is harmful, but I think $20,000-$30,000 is ok to start with. It is, afterall, money you have to be ok with to lose (well not ok, but it wont bankrupt you or stop you from paying bills).

Seasoned system developers (forgive me I am blanking on a specific name from a book and some podcasts) will test out new systems with a smaller amount and after it has proved profitable, then they scale up the account size for that system. This is pretty sound to me.

Your example on position sizes is important too. Sometimes its better to think about % terms, other times about $ returns. Context is key. I may have only made $350 last week but it was 1.4% in a week (nothing to scoff at, particularly in a half-invested system). Who wouldn't want a 1% return per week! But $350 itself is not much. I would also like to add (and I know you know this too!) that not all systems are scalable to $1mil. 25% on 1mil would be phenomenal to say the least. 

I know PositionScore is important for your hybrid strategy. I have tried to find a good positionscore formula too. Honestly, I struggle with this as I have not made any progress. It annoys me to no end. What I use now is something you suggested to me, which is simply the cheapest first. But that will not work for every strategy.

And final point. I have tried backtesting with more than 20 positions. I found my system overtrades and my profitability plummets. I hope the action strategy does not have this problem. Overtrading can be a problem even for mechanical systems.


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## Bazzi (24 May 2020)

Skate said:


> View attachment 103713
> 
> 
> Skate.



Hi @Skate , I am not sure if I missed in the Action Strategy rules the stop loss? 

Since the buy and sell placed during pre-market Monday, what is the strategy if the Market crash / retest March lows and happened early in the week? Or did I get the sell at Pre- Market Monday wrong and happens anytime the system gives the sell signal?


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## Skate (24 May 2020)

Bazzi said:


> Hi @Skate , I am not sure if I missed in the Action Strategy rules the stop loss? Since the buy and sell placed during pre-market Monday, what is the strategy if the Market crash / retest March lows and happened early in the week?




@Bazzi, I'm glad you have raised the issue of rules, exits rules in particular. Trading a "weekly trend following system" we are locked into trading the pre-auction on Monday morning or the first trading day after Sunday when the markets re-open. This is the only time we will exit a position no matter what happens during the week. Let me answer your questions then in the next few posts I'll recap what constitutes an exit & I'll explain how signals are generated.

_*Question #1 
"Since the buy and sell placed during pre-market Monday, what is the strategy if the Market crash / retest March lows and happened early in the week?"*_
To answer you succinctly NOTHING, we don't panic, we wait for a sell signal at the end of trade on Friday. With trading, some days are lemons & some days lemonade. How you handle your positions while controlling your emotions will eventually decide how successful you will be as a trader. Trading has a high attrition rate when the going gets tough.
*
Question #2 *
_*"Or did I get the sell at Pre- Market Monday wrong and happens anytime the system gives the sell signal?"*_
Let's talk about signals & how often are they generated. Every time you run an exploration "signals are generated" & the signals change with new information. But here's the rub, we only action Exploration signals after the close on Friday or the end of the last trading day of the week. Trading a mechanical system using Amibroker there are two ways to generate signals (a) by using Exploration mode or (b) using "Add artificial futures bar" in the settings, you can generate signals using the Backtest mode. However, this should not be confused with Backtesting a strategy as they are two different beasts. I prefer to generate signals using the "Exploration Analysis" for a few reasons & the explanation would be lengthy & boring to read.

Skate.


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## Rsthree (24 May 2020)

The real test of mettle will be if the market makes a sharp drop on a Monday and continues to freefall during the week. But I'm hoping that all the smart indicators would have set some alarms off a week or two before. Otherwise it will be a real test of internal fortitude and faith in the system.


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## Skate (24 May 2020)

*

*


Rsthree said:


> The real test of mettle will be if the market makes a sharp drop on a Monday and continues to freefall during the week. *But I'm hoping that all the smart indicators would have set some alarms off a week or two before*. Otherwise it will be a *real test of internal fortitude and faith in the system*.




@Rsthree now you understand why everyone is looking for the perfect strategy, a foolproof method, but there isn't any. Trading the Action Strategy in a disciplined manner might be the best we can hope for. Trading is stressful & emotional when your money is on the line. Bloody hell it takes an enormous amount of time & effort to be consistently profitable because you are required to develop skills & attributes for successful trading, (your words) "internal fortitude & faith in the system" are just two of them.

*When in doubt*
When in doubt, some would rather adopt others’ opinions blindly, rather than form their own as you are doing by asking questions. The more you understand the less fear you will have if it all goes pear-shaped. The smart indicator the "volatility dependent stop" unfortunately, on a weekly system has in-built lag which is a real shame. Simply jumping to a conclusion without bothering to assess the full range of possibilities is an inbuilt weakness we all suffer that's why we need to be 100% committed to the system.
*
The Action Strategy exit strategy *
The exit conditions of the Action Strategy is complex as there are 3 drivers all looking to exit a position to protect our winnings or to avoid further losses & they are:
(1) a variable trailing stop
(2) a volatility dependent stop &
(3) a stale stop

*Complexity*
The financial market is complex, but that doesn’t mean it requires a complex strategy. Information is important, but understanding what drives the market is the key that leads to making a better decision & the Action Strategy incorporates both "volume & volatility". Trading in it's simplest form is a game of mathematics & probabilities. Risks can be minimised & returns can be magnified with the right strategy. Anyone can buy and sell shares, it’s how we choose these shares & then how we manage our position dictates how successful we will be.

Skate.


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## Skate (24 May 2020)

*I want to talk about perception*
I was asked what does the green & red arrows signify in the logo above?. 
Simply the green "up arrow" signifies profits & "down red arrow" losses.
That I understand, but why the "S" in the middle?.

*Why the "S" in the middle of the logo?*
This is where perception raises its head, some see an "S" where I see a dollar sign ("$"), you will see one or the other. Perception in trading has the ability to drive your reactions & sometimes that isn't a good thing. Traders understand the markets are based on human behaviour & our perceptions about what's happening in the markets at any given time. While one person sees buying opportunities of a lifetime, others will see a complete meltdown of the markets. Thus, it’s our perception that creates the value at any given time.


Warr87 said:


> I have tried to find a good positionscore formula too. Honestly, *I struggle with this* as I have not made any progress. *It annoys me to no end*.




*Sometimes "good enough" is "good enough"*
Searching for better entries, exits or positionscore believing there must be something better is an approach that often leads us down the wrong path, a path of frustration because we just can't find the perfect one. One of the main reasons traders fail in the market is not because they don’t have a plan, it's because they don’t follow it. Trading is a probabilistic endeavour, there is a probability that a position will be a winner & there is also a probability that it will turn out to be a loser. Loss aversion is a significant psychological hurdle to overcome no matter where you are in your trading journey. It's important to remember every strategy will have losing trades, accepting this & your halfway there as a trader.

Skate.


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## Bazzi (24 May 2020)

Thank you @Skate . As always your detailed answers to our questions and wisdom teaches us newbies how to be better traders!


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## Skate (24 May 2020)

I've got no idea if this post will have any educational value or interest for those who don't use Amibroker. At least the post will be something different, a little beyond "beginner level" but as it's part of the Action Strategy for those following along it may hold some interest. I believe the more you know about the Action Strategy the better understanding you will have, even if it's a dry subject.

*Where are the Action Strategy signals coming from?*
Signals can be generated using either the Backtest mode or the Exploration Analysis mode. Both will generate signals but they are different beasts entirely. To explain - the "Exploration Analysis" displays each bar when a "Filter Condition" is met with no other constraints. Whereas the "Backtest" is subject to multiple portfolio constraints. The exploration falls well short of what the backtesting is capable of but as a signal generator, it does a mighty fine job.

*PositionScore*
The PositionScore decides which trades should be entered if there are more entry signals than the maximum allowable number of open positions or available funds by ranking them in numerical order. In such a case, AmiBroker will use the absolute value of PositionScore to decide which trades are preferred. PositionScore affects only backtest & optimization this is the reason we need to add a filter, without an additional filter it wouldn't display the ranking in the Exploration Analysis. The PositionScore is important when it comes to the profitability of the Action Strategy.

*Exploration Analysis*
PositionScore has no meaning & no effect on the "Exploration Analysis" as the exploration just outputs raw signals with no trade picks as the Backtester does, that's why we need to define the PositionScore as a "Filter Variable". It's worth noting that the exploration does not have the same portfolio feature as the backtester when it comes to trading output signals. That feature is in the backtest but not in the exploration analysis, it's the very reason why we need the "Filter". The idea behind an exploration filter is to control which symbols are accepted & displayed. If "true" is assigned to that variable it will be displayed in the "Exploration Analysis" report - it's that simple.

*The Backtester *
Backtesting lets you combine trading signals & trade sizing which exactly mimic the way you would trade in real-time. The Backtester has the ability to perform money management & risk control at the portfolio level just like in reality. I code my strategies to use either the "Backtest mode" or "Exploration mode" without the need for switching settings.

Skate.


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## Saqeeb (24 May 2020)

*Week 14: Update on my MAP paper trading portfolio.*

Going through my spreadsheet I found an error in that I was not including brokerage costs to my trades. I have fixed this now. The total brokerage costs so far have been deducted from the "Total Return". 

This portfolio gained $433.00 this week.
*
BUYS:*
I entered into 3 trades last week and they were *AEF, CAN and ELD.*
One buysignal this week.

*SELLS:*
No sells this week


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## martyjames (25 May 2020)

HI Skate (and all)

Im just getting back into trading after a 20 year break and spent hours reading this thread on the weekend - very interesting, thanks. Its probably been mentioned, but when backtesting, what 'group' of ASX stocks are you using? eg ASX300, mid caps etc. I dont see any top 100 stocks in your lists (BHP, CBA etc), so interested to know your grouping/s of stocks you consider to trade and back test

cheers
Marty


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## Skate (25 May 2020)

martyjames said:


> HI Skate (and all) Im just getting back into trading after a 20 year break and spent hours reading this thread on the weekend - very interesting, thanks. Its probably been mentioned, but when backtesting, what 'group' of ASX stocks are you using? eg ASX300, mid caps etc. I dont see any top 100 stocks in your lists (BHP, CBA etc), so interested to know your grouping/s of stocks you consider to trade and back test cheers Marty




Hi @martyjames welcome to the ASF community, a 20-year break is quite a sabbatical. Thank you for reading & making your first post in the "Dump it here" thread.

*Question #1*
_*"Its probably been mentioned, but when backtesting, what 'group' of ASX stocks are you using?"*_
In a nutshell, the "All Ordinaries" index (XAO). The All Ordinaries for me has the right risk/reward combination for good growth, the volatility is a bit of a roller coaster but the rewards are larger with the corresponding disadvantage of higher risk but the risk/reward combination is well suited for the Action Strategy.

_*Question #2
"I don't see any top 100 stocks in your lists (BHP, CBA etc), so interested to know your grouping/s of stocks you consider to trade and backtest"*_
In answering your second question I should make a comment about "Filters" & in particular the "Price Filter" parameter that trades in a low tight range between ($0.05 to $10.00) inclusive. Another deciding factor is the "PositionScore" that ultimately decides which trades should be entered by ranking them in numerical order. The PositionScore used in the Action Strategy is proprietary which limits what I can say. However, the Action Strategy ranking system uses an extreme look-back period of the average volatility, using this method means short term minor volatility blips become less relevant in the selection process. The two companies (BHP, CBA) you mentioned are displaying wild volatility swings at the moment but measured of volatility over longer "nPeriod" they don't even rate, volatility normally goes hand in glove with lower returns, something I'm not striving for with the Action Strategy so it's unlikely "larger stocks" will ever be included.

*XAO*
The All Ordinaries (XAO) comprises of the top 500 companies by market cap & it has a mix of safe, stable & aggressive companies that enjoys a mix of volatility. Indexes above the All Ordinaries have nail-biting volatility & it’s akin to hanging on to a cliff's edge just by your fingertips, meaning trading an Index above the All Ordinaries you’ll require nerves of steel or at the very least you need to be a very hardened punter. The "Action Strategy" is a Weekly system trading the "All Ordinaries" - Turnover, Volume, Acceleration, Momentum & Price are some of the filters used to select the best of the best represented in the XAO index. The "Action Strategy" jumps on confirmed trends riding them as long as possible & jumping off when they lose momentum.

*An idea  *
We all have opinions of what works & what doesn't when it comes to trading but always find it difficult to have the confidence in putting our money on the line trading an idea. After reading @ducati916 posts I set about coding a new strategy that on paper has the ability to make it. The idea coded up well & the strategy has backtested with pleasing results. The new strategy has only a few conditions when to buy & sell.

*Markets always bounce around*
Hopefully, the Action Strategy can withstand a bit of stress, a bit of turmoil. Periods of high volatility will always come and go, always has and always will. It doesn’t matter what system you are trading the best way to handle volatility is to just accept it by not jumping at shadows, just roll with it & "Dance-to-the-music-being-played".

Skate.


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## Nina4 (25 May 2020)

I would like to offer my many thanks to Skate for the effort he has put into this thread.

With the recent down-turn I had time to examine my processes with the aim of getting into a trade earlier.
I had sold my portfolio on the 4th March 2020 as my market filter (Thanks peter2) was looking grim and I was going to be away from my computer for an extended period of time.

Starting with a clean slate, I found inspiration within the excellent contributions of "ducati916" in the "Trading the Bounce" thread. Thank You.

Being a discretionary trader, I put together a weekly system that I was happy with.

As my market filter was still red, I had time to investigate turning my new system into a mechanical one.
I had been hearing Skate "banging on"  about mechanical systems long enough that I thought I should at least check it out.
My testing went well and showed positive expectancy. My major requirement.

For uniformity I decided to trial a 20 position, $1000 (including brokerage of $6.60) position size account.

A paper trade for the week starting May 11 is currently sitting at a profit of 5.51%.

I decided to jump in the deep end and go live for the week starting May 18 and had 15 of my 20 orders filled.
Unlike Skate, I use Stop Limit Buy orders. (Thanks to the little black duck that pops in now and again for that idea.)
These were 20 newly scanned symbols.
I have 5 orders in today to hopefully complete the 20 positions. (Edit 3 have filled.)
This account is currently showing a profit of 3.82%.

Several interesting facts have emerged.
The biggest one being stock selection.
I too trade the All Ords universe and of my now 38 scanned stocks NOT ONE matches Skates selection.

So, to recap.
We trade the same universe of 500ish stocks but have totally different selection criteria.
We have different order placement methods. Pre-Market Premium and Stop Limit Buy.
No doubt we will have different exit strategies.

My successful stock selection rate is not much better than 50/50.
I do not rely too much on indicators preferring to focus on price action. (Thanks to Captain Black).
I think that with a positive expectancy trading plan you could almost throw darts to make selections and be successful.

Thanks to all the contributors on these forums for some truly unique ideas.
You only need to find a couple of gems to get started.

My biggest problem now is what to do with my newly acquired free time if I continue this journey.


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## Skate (25 May 2020)

Nina4 said:


> I would like to offer my many thanks to Skate for the effort he has put into this thread. *I had been hearing Skate "banging on"  about mechanical systems long enough* that I thought I should at least check it out. *The biggest one being stock selection.* I too trade the All Ords universe and of my now 38 scanned stocks *NOT ONE matches Skates selection*. No doubt we will have *different exit strategies*. My biggest problem now is *what to do with my newly acquired free time* if I continue this journey.




@Nina4, what a great post, it was a pleasure to read on many fronts, squeezing in a few "thank you's" along the way, a very nice touch. I've cherry-picked your post & condensed your words into a few & attached them above. Why? because it gives me a reference to respond.

*"Banging on"*
First off, I agree, I do "bang on" about most things & I do have a habit of not knowing when to stop.

*The benefits of trading a mechanical system*
Let me reinforce the benefits of trading a mechanical system. The consistency of signals adds to your confidence which lets you keep pulling the trigger even at times of indecision. Some traders find it difficult to understand let alone take the time to learn as you have done. Trading a mechanical system can be a simple endeavour if you are disciplined at following the rules & sticking to your trading plan. When the appropriate signal shows up, place your order & carry on, it couldn't be any simpler.

*Stock selection*
Focusing on price action is another way of entering a trend & getting into a trend isn't hard at all. There are multiple entry points in a trend & within a trend to choose from each & every week, they come along with such regularity. Buying into strength is critical, price action allows you to do that, sorting the "wheat from the chaff" is a little more difficult to achieve with accuracy that's why PostionScoring the signals is so important, this alone can make or break a strategy.

*Timing the exit*
Getting into a trend is easier than most traders think especially at the moment. Timing the exit is another matter, that takes finesse & as you say _"No doubt we will have different exit strategies", _yes, I believe that's a given. I would also like to say, traders who are not taking advantage of the markets at the moment should be re-evaluating their trading plan to understand why they missed a great trading opportunity. Sure, I'll be first to admit trading has been bumpy at times but putting every dollar to work instead of having them lying idle is not a recipe for trading success.

*Relying on indicators*
As you say _"I do not rely too much on indicators preferring to focus on price action"_ which is a perfect a way to enter the markets. I use a combination of indicators to enter a trend as sometimes it allows for a better entry point. No matter what we use as our guide in entering the markets implementing it consistently is the key. One problem frequently encountered by traders is the "difficulty" in following a system which can result in their "emotions" ruling the day, a path to disaster.

*What to do in your free time?*
I've got a suggestion or two. What about making a few posts about the transition from being a discretionary trader to a mechanical system trader, by explaining the process. This would not only be educational but helpful to others by sharing the information. Another suggestion, many members contribute by reporting their ongoing trading. @Saqeeb directly posts the progress of his MAP strategy, I'm posting the weekly results of the Action Strategy both in my opinion adds value to the thread & with your involvement, I'm sure it will add further value automatically. We are all trading differently desiring the same outcome.

Skate.


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## martyjames (25 May 2020)

Hi Skate (and everyone)

Many thanks for the detailed reply. I have always been a mainly discretionary trader using (in the past) metastock to search for my setups (breakouts from bases and price dropping back to support etc) and use real time data for my entries and exits. I purchased Amibroker 2 weeks ago and know it has excellent backtesting capabilities, hence the newly formed interest in 'systems'.(bit of a learning curve though!)
I was not aware of 'Positionscore' and will now research it. Im assuming that if several stocks indicate a buy on the same day and funds are available. positionscore ranks the candidates by those with the greatest historical price movements / period of time, so whereas BHP may move 20% in one year, many smaller stocks historically may have moved 100 percent, in which case you pick that stock (the 100% mover) - is this the idea?
I did some playing with volatility and OBV and got similar signals to your earlier posts (on a daily t/f). I'll try throwing in a chandelier type exit and see how it goes over the next few days.

Thanks again for the info.

cheers
Marty


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## Warr87 (25 May 2020)

If you don't assign a value to PositionScore in AB, my understanding is that the positions will be chosen at random (but I'm not 100% with that).

You can make your PositionScore unique if you want. If its a long term uptrend you could make it the ROC (rate of change) over a certain period, or you could do linear regression value, if some people rely on RSI for signals, they can even do the RSI as the sole ranking factor. If you have an indicator, or anything that includes a number, it can become a factor in the PositionScore (i.e. RSI * 200day MA).

The skys the limit (but therein lies the problem, as well. With so many options to chose from, finding the most effective can be difficult at times).


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## martyjames (25 May 2020)

Hi Warr87

I was just reading up on positionscore and saw the RSI example. You are right there are a myriad of options but trying to keep it all logical and as simple and robust as possible.

cheers


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## Lone Wolf (25 May 2020)

Warr87 said:


> If you don't assign a value to PositionScore in AB, my understanding is that the positions will be chosen at random (but I'm not 100% with that).




According to the amibroker knowledge base, if you don't define a position score, symbols will be selected based on position size, then alphabetical order.
http://www.amibroker.com/kb/2015/09/28/symbol-selection-when-positionscore-is-not-defined/

If you want a random selection from a pool of eligible symbols you need to force it with the random function.


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## ducati916 (26 May 2020)

Nina4 said:


> 1. I would like to offer my many thanks to Skate for the effort he has put into this thread.
> 
> 2. Starting with a clean slate, I found inspiration within the excellent contributions of "ducati916" in the "Trading the Bounce" thread. Thank You.
> 
> ...




So after reading your post there were some interesting points raised, which I have responded to below.

1. I agree, this thread has become a valuable resource.

2. You're welcome.

3. As a fellow discretionary trader, what finally pushed you to mechanical?

4. A good start.

5. Potentially indicating good breadth in the market.

6. As indicators are derivatives of price, they actually contain very valuable information: specifically 'divergence' and 'comparative confirmation/denial'. I am always interested when an indicator indicates a divergence or a comparative indicator confirms/denies the information contained in price, as these tend to be the strongest signals. I have also found that there is a time lag in both (highly predictive) before that effect is realised in price, which allows one plenty of time to take advantage of it. How this could be coded is a further issue for Mr Skate to address.

7. Possibly a contentious statement. Care to elaborate?

jog on
duc


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## qldfrog (26 May 2020)

Warr87 said:


> If you don't assign a value to PositionScore in AB, my understanding is that the positions will be chosen at random (but I'm not 100% with that).
> 
> You can make your PositionScore unique if you want. If its a long term uptrend you could make it the ROC (rate of change) over a certain period, or you could do linear regression value, if some people rely on RSI for signals, they can even do the RSI as the sole ranking factor. If you have an indicator, or anything that includes a number, it can become a factor in the PositionScore (i.e. RSI * 200day MA).
> 
> The skys the limit (but therein lies the problem, as well. With so many options to chose from, finding the most effective can be difficult at times).



Technical note
Position scoring is definitively one of my weakness, as i understand it, if not defined, AB is not random but chooses the packet  with the more units(shares). 
I was looking at this a while back after trying to understand a backtest where the position score had been removed
It is not random by default


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## qldfrog (26 May 2020)

qldfrog said:


> Technical note
> Position scoring is definitively one of my weakness, as i understand it, if not defined, AB is not random but chooses the packet  with the more units(shares).
> I was looking at this a while back after trying to understand a backtest where the position score had been removed
> It is not random by default



Forget my post, @Lone Wolf  gave the answer already


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## Nina4 (26 May 2020)

Skate said:


> @Nina4, what a great post, it was a pleasure to read on many fronts, squeezing in a few "thank you's" along the way, a very nice touch. I've cherry-picked your post & condensed your words into a few & attached them above. Why? because it gives me a reference to respond.
> 
> *"Banging on"*
> First off, I agree, I do "bang on" about most things & I do have a habit of not knowing when to stop.
> Skate.




Thanks for the kind words Skate.

Only after I posted did I realise this comment may be taken out of context.
I hope the casual reader will understand it was nothing more than an Australian back-yard BBQ setting good natured type jab.
I do concede that the written word does not always convey intent, even with the obliqitory smiley.
Thanks for being a good sport.

To answer your question, transitioning from discretionary to mechanical for me required only one thing.
Stop micromanaging during the week. I'm a fiddler.

No programming changes were necessary. Rather than cherry picking from the ordered scan results list stocks I believed had the best chance of advancement, I took the trades in order.

I scan for stocks after the week's close and place orders for the next week's start if needed.
If orders are not filled on the first day they are abandoned, and a new scan is performed next weekend. Rinse and repeat.

If anyone wonders why I initiate new scans to fill my quota and don't just select from the previous list, the answer is simple.
In this week’s example, only 3 of my 5 orders were picked up. If two of my top ranked 5 did not go on with the job, why would I try the  6th and 7th selection next week?
No. A new scan with the current relevant information will be required.

I believe this type of thinking is needed for a successful mechanical strategy.
No if and or but with signals or I may as well continue with a discretionary plan.

As for reporting ongoing trading results, I'm reluctant to publish stock codes. I would never buy a stock just on the recommendation of someone else or a list I had seen. I hope others feel the same.
Generate your own list that meet your criteria before risking your money.

The percentage gains I mentioned yesterday show positive movement, which is pleasing but are for the most part meaningless until sell signals are generated and the money, if any, is in the bank.

Lets see how long I can sit on my hands.

I do hope I've been a good mechanical trading student. 
Cheers.


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## Nina4 (26 May 2020)

ducati916 said:


> So after reading your post there were some interesting points raised, which I have responded to below.
> 
> 1. I agree, this thread has become a valuable resource.
> 
> ...




3. As a fellow discretionary trader, what finally pushed you to mechanical?

Easy. Skate’s passionate comments and examples.
20 stocks with $1000 position sizes along with my trading plan makes mathematical sense to me. Skate has done all the testing for us and its not something I would have thought of.

4. A good start.

Positive expectancy yes but this may just have been a lucky week.
Only time will tell. The money is not in the bank yet.

6. As indicators are derivatives of price, they actually contain very valuable information…..

I should have worded my statement more carefully.
Theories such as  Elliot Waves, Fibonacci and the like I don’t use at all.
Excessively lagging indicators I avoid and tend to stick with volatility and volume.

7. Possibly a contentious statement. Care to elaborate?

If a trading plan, not necessarily mine, included the following.

Select only liquid stocks from the All Ordinaries.
Select within a price range.
Select what appear to be upwardly moving stocks with volume and volatility.
Avoid companies that have released recent damaging announcements.

Use strict buy orders. Use pips and not percentages when determining prices. This ensures no surprises as the top and bottom limits are absolute.
No getting in at the open that has surged 10% from the previous close only then to nosedive. No getting in at open 10% lower than the previous close then fall further.

Only buy stocks rising above the previous close within a selected pip span or not at all. Never chase.

Avoiding percentages also eliminates the need to use floor, ceil and round functions to determine prices as was recently discussed in the forum.
A few dollars variation from your ideal price either way adds up.

Do not risk more than a set percentage of the account per stock.
Say 1  percent.

Ruthlessly cut losses and allow winners to run.

With the above in mind and the average selection win rate of about 50% a dart used on qualifying stocks seems as good as any other method for selection.

The dart comment may have been foolish but I believe positive expectancy and a rock solid trading plan is more important than the selection process.

Nothing I have written is new. Everything has been mentioned by others before. I pick ideas that appeal to me and incorporate them in my trading.

Cheers.


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## Skate (26 May 2020)

Nina4 said:


> The percentage gains I mentioned yesterday show positive movement, which is pleasing but are for the most part meaningless until sell signals are generated and the money, if any, is in the bank.




*@Nina4 passage condensed*
Open profits = Belong to the Market
Closed Profits = Belong to you

*So it's a timely reminder* 
"Open profits belong to the market, closed profits belong to you" If you can accept that mindset (which a lot of traders can't) then that will serve you well when volatility impacts the Action Strategy.

*Before we exit we need a few confirmations*
For the Action Strategy to exit a position we need a few confirmations that the momentum has slowed, stopped or reversed. The major issue with any "confirmation" is that "you will never enter at the start of a trend" or exit "at the top of the trend". The "exit confirmation" guarantees you will give back a proportion of your open profits.

*A chart for visualization of giving back open profits *
There are two winning positions displayed on the chart below but both "winning positions" gave back some open profits before exiting.





Skate.


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## Skate (27 May 2020)

*I've got a confession*
I don't know if it's just me, the current content or lack thereof but I'm spending less time on the forum.

*Adding a bit of content*
I've had the grand idea of only posting when there was something important to say but I'm reconsidering this idea. After consideration, there is two ways of posting, (1) In a measured way or (2) just shoot from the hip & post what I'm thinking. I've decided to go with option (2). The next few posts will be haphazardly constructed with no rhyme or reason so no one will know what's coming next. My mind jumps all over the place & sometimes it's incoherent even for me.

*Why post *
To give others something different to read. It's important to point out that it's unhealthy to read the views of one person only but at times it's the best we can hope for when posters are in short supply.

Skate.


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## Skate (27 May 2020)

*I'm on my Soapbox*
When I start one of my posts with the "Soapbox" graphic it's a way to warn you that I'm about to express an opinion or get a few things off my chest. For a better word, I'll just be "banging on".

*How we think anchors how we act*
What's happening with the markets at the moment is anyone's guess. I'm amused that the media can express with conviction exactly what is causing each & every fluctuation not only in our markets but markets around the world. It's a pity they aren't clairvoyants, it would make my trading much easier.

*We are beginning to understand*
With the advancement in psychology & cognitive neurosciences, out of it has come an evolutionary explanation as to why our minds generate our beliefs & why we are prone to accept & spread those beliefs. Science also gives us an understanding of how we can alter our behaviour by changing a few of these beliefs or ideas. To survive as a trader our mind has to accept the impossible & at times create it by being a free thinker.

Skate.


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## Nina4 (27 May 2020)

Skate said:


> *I'm on my Soapbox*
> When I start one of my posts with the "Soapbox" graphic it's a way to warn you that I'm about to express an opinion or get a few things off my chest. For a better word, I'll just be "banging on".


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## Skate (27 May 2020)

*We have lost the art to memorise*
With the passing of time & the availability of the internet, we have lost the art of memorising important information. Once upon a time, there was no way of recording other than memorising information passed down through the generations sometimes from father to son, mother to daughter. If I want to know something I'll research it but in the process, I'll make notes, bullet points of important information, but that's just me. Recalling information is difficult at best, that's why I want to explain "CHUNKING" & the advantages of doing so. 

*Chunking*
Information chunking is something we do automatically without realising it sometimes. To give you an example, when you repeat your phone number to someone else you will chunk it from memory by breaking it up in memory size bites like (02 6887 4072). A song is chunked, this is why we remember the words to sing along. Those who have read the Koran in English do so without realising it has been written in the style of a hymn as the Koran is designed to be memorised & sung.

*My style of posting*
I use chunking in all my posts to give someone a chance to comprehend the passage. Paragraphs act as a minor break to hold attention hoping you want to read on. Some of my posts are ambiguous,  at times I won't explain the subject fully, which hopefully leads to a followup post so I can explain my way of thinking in more detail. Too much information at once is never fully understood.

*Heading & paragraphs*
With chunking, I also add a heading to the paragraph, it's a precursor to what is expected in the paragraph as a way of double reinforcement. Repeating with repetition is also another tool I use to reinforce a particular view.

Skate.


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## Skate (27 May 2020)

*I want to explain why the decisions we make are so important*
Life is full of decisions, making one after the other. We make important & not so important decisions to enhance our lives every day but for some life just sucks (that's a given) We all need to accept life is a struggle at times & everyone will have their fair share of ups and downs as no one is immune.

* What is the purpose of life & does it hold intrinsic value?*
What is life without objective meaning? The answer for some would be different to me, as it's been one hell of a ride, an exciting journey so far. It's hard for anyone to come to terms with the fact what has happened in the past can't be changed. We sometimes find it easier to recall bad memories dwelling on them too long which leads to negative reinforcement. The good news is that we can learn to control bad memories when they rise to the surface. We are all time travellers in our own minds jumping from the past to the present rarely living in the moment. Living in the moment allows you to have clarity of thought, something we very much need as a trader.

*Our future can be different *
We can't predict the future but we do get to write that story, by controlling the decisions we will make today, by knowing this, you can make those decisions count. Remember, every decision you make is important as it sets you on your life path.

Skate.


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## Skate (27 May 2020)

*Acceptance is key to coping with whatever life throws at us *
But here's the thing, some take it further by learning the secret to keeping frustration in check. Even small frustrations can feel like the end of the world at times. Whatever life brings you, good or bad, you have to embrace it, even the truly horrible "I don't ever want to think about it ever again moments". Challenges make your life so exciting & without them along the way, you would not have become the person you are today & your journey cannot be epic without challenges, big or small. 

*My definition of happiness *
"Desiring what you have", by accepting this fact you will be at peace with a life full of happiness.

*Acceptance is a mindset *
Acceptance is making the best out of anything that happens. Treating each & every moment, no matter how challenging as something to be embraced 

*Obstacles are a part of life *
So much of life is out of our control. You can't change the world or people you disagree with, often we can't even control what we're thinking at times. The only thing we can control is our deliberate thoughts & actions, so don't let your happiness hinge on what you can't control. 

*We can't control most things *
But we can control how we feel about new challenges by changing our expectations. 

*We take pleasures for granted*
We are frustrated & upset with some of the difficulties life throws our way, yet we readily admit difficulties are inevitable. While forgetting, pleasures must be worked for. We are all just passing through this life, experiencing a very unique & personal journey, a journey we only get to experience once. Accepting that there will be pain & sacrifices along the way is a fact of life. 

Skate.


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## Skate (27 May 2020)

*Trading Mistakes* (investors)
Well, it's not really a trading mistake, but rather how an investor handles a minor setback or disappointment when one of their long term positions drops temporarily out of favour. Investors buy certain shares either for long term value, dividends or perceived safety. With the recent volatility, holders can become more focused on the recent selloff, than on their long term plan. If a decision was made to sell due to emotions, a quick rebound can easily take away all the rewards built up over many years.

*Trading Mistakes* (traders)
Another mistake made by less experienced traders is that they "resist selling" or "never sell" unless the share price recovers above the original purchase price. Why? because they can't bring themself to sell at a loss. No one likes to lose money, but it's an inescapable part of trading. There is no method that doesn’t lose money some of the time & on occasions being prepared to accept a few losses is how we all learn to stay in the game.

Skate.


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## Saqeeb (27 May 2020)

Skate said:


> View attachment 103837
> 
> *Trading Mistakes* (investors)
> Well, it's not really a trading mistake, but rather how an investor handles a minor setback or disappointment when one of their long term positions drops temporarily out of favour. Investors buy certain shares either for long term value, dividends or perceived safety. With the recent volatility, holders can become more focused on the recent selloff, than on their long term plan. If a decision was made to sell due to emotions, a quick rebound can easily take away all the rewards built up over many years.
> ...



@Skate, I wish I could hit multiple likes for this post. Selling is one of the very most important aspect of trading, especially selling at the right time. This is something that I haven't been able to figure out yet.


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## Skate (27 May 2020)

*Assumptions, taken as gospel*
After reading a variety of (un-named) posts there is an insistence of some members separating what's imagined from what's real, resulting in a distinction between views. It's worth taking stock of how often our imagination, our expectations & assumptions, bleed into reality by actually changing the experience we have as readers. This isn't about denying that it's not true, it's about the cases when our perception of facts (the truth) becomes malleable.

*Indecision*
There’s a rational explanation why the markets behave the way that they do, it really is dependant on too many sellers or not enough buyers. Our trading decisions are based on the expectations of what others see as value. However, taking this one step further, showing how we adjust the value we see in something based on how others value it. So, it’s not just our decision that weighs into this equation, but everybody else’s as well.

*Summary*
We add more value based on the expectations of what others value. We also make decisions on malleable facts posted by others. We tend to place more value on their opinion rather than our own.

Skate.


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## qldfrog (27 May 2020)

I was going to post that in my thread but you might want to use the subject here.
as you said, too much information is not good so maybe keeping these subject for tomorrow's soapbox, 

How do traders manage trading during holidays, travels
Has anyone installed AB on an amazon cloud server (aws) and run his her system explore that way,allowing work from anywhere in the world with internet without worrying carrying an expensive laptop?
Do you find this subject worthwhile?


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## myrtie100 (27 May 2020)

Skate said:


> No one likes to lose money, but it's an inescapable part of trading.




And to stay in the game, you must start with sufficient capital - which allows you to ride out the ups and the inevitable downs without too much pain.

This was my number one mistake learning to system trade with HomeTrader years ago.  I didn't want to hear that the recommended capital for their systems were $100k - I thought I could do it with $20k!

After 15 losing trades in a row my capital base was rapidly disappearing.  Needless to say, I stopped trading the system.


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## Roller_1 (27 May 2020)

qldfrog said:


> I was going to post that in my thread but you might want to use the subject here.
> as you said, too much information is not good so maybe keeping these subject for tomorrow's soapbox,
> 
> How do traders manage trading during holidays, travels
> ...




I use a VPS on Hostwinds. Have Amibroker and a API installed on it, i just log into it on my phone or ipad to run explorations and place trades etc. Does the job for relatively cheap. There are better servers though i probably wouldn't recommend them tbh.


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## Skate (27 May 2020)

*Too much information*
Making too many posts today will have a turn-off effect as some will see it as overload & too time-consuming to read (that will be their perception)

*Moreover *
In my previous post, I should have also mentioned that our values shift according to our situation as it alters the way we perceive & react to opinions once held, our brain tricks us to believe something different with more information & we condition ourself to accept it as gospel.

*Being receptive*
Some members have open minds whilst I've found most have closed minds. The point of the exercise today was to express some of my current thoughts. Those who read my series of "Soapbox" posts will relate to them while others will hold a different view to the ones I've expressed. Members who have open minds will display to a varying degree of openness accepting some of my views while rejecting others but I know the ones that resonate can make a big difference.

*It's unhealthy*
At the start of the posts today I said _"it's unhealthy to read the views of one person only but at times it's the best we can hope for when posters are in short supply"_ so I'm encouraging others to post in the same spirit.

*It's not important*
Whether my views are right or wrong isn't important, others who hold an alternative view should express them without taking a firm stance that their opinion holds more value. The "Dump it here" thread is for others to express their ideas as it's not a contest of their ideas.

*Quality posts*
When members make quality posts it really does influence how others think to some extent, because it shapes our reality from what we see & read. New members are joining our community everyday & if their expectations are not met after reading a few posts they will not hang around.

Skate.


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## Skate (27 May 2020)

qldfrog said:


> I was going to post that in my thread but you might want to use the subject here. as you said, too much information is not good so maybe keeping these subject for tomorrow's soapbox, How do traders manage trading during holidays, travels Has anyone installed AB on an amazon cloud server (aws) and run his her system explore that way,allowing work from anywhere in the world with internet without worrying carrying an expensive laptop? Do you find this subject worthwhile?




@qldfrog, I'm off my soapbox for now. 

*Good topic*
I admit you have raised some good points in your post & as I have experienced all that you have suggest I might take the time to lightly touch on how I handle it. 

*QUESTION*
_"How do traders manage trading during holidays, travels? Has anyone installed AB on an Amazon cloud server (aws) and run his her system explore that way, allowing work from anywhere in the world with internet without worrying carrying an expensive laptop?"
_
*How I handle Amibroker *
The winters of the last 5 years I've been in the Northern hemisphere. It was a delight not to experience an Australian winter. Last year I was working away for 6 months & traded without an issue. To trade using Amibroker & Norgate data you don't need an expensive computer & today you can pick up a laptop that will do the job for a few hundred dollars.

1. I wouldn't go anywhere without my laptop, nope "not ever" even if I wasn't trading. 
2. I have a variety of computers with Amibroker loaded on each one & they are synced through Microsoft "One Drive"
3. I have 3 Norgate Data licences 

*Now here's the rub*
Forget all that, with a cheap laptop, internet access & "Team viewer" you are set to go as you can control your trading computer from anywhere in the world, hassle-free. If the laptop is lost or stolen it holds no personal or sensitive information.

Skate.


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## qldfrog (27 May 2020)

Skate said:


> *Now here's the rub*
> Forget all that, with a cheap laptop, internet access & "Team viewer" you are set to go as you can control your trading computer from anywhere in the world, hassle-free. If the laptop is lost or stolen it holds no personal or sensitive information.



I would try to avoid carrying the actual hardware around if I could, so the question: thanks for your explanations on how you manage your own setup.
Accessing my own computer would mean having it running 24/7 here in Oz while away , and hope no storm power outage, bushfire or burglar spoil the dream so my thought of AWS


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## Roller_1 (27 May 2020)

qldfrog said:


> I would try to avoid carrying the actual hardware around if I could, so the question: thanks for your explanations on how you manage your own setup.
> Accessing my own computer would mean having it running 24/7 here in Oz while away , and hope no storm power outage, bushfire or burglar spoil the dream so my thought of AWS




That's why i use a VPS just access from remote desktop app no problems. I have Amibroker that runs a batch > produces the CSV easy. But like i said Hostwinds isn't the best has crashed a few times but that just means opening Amibroker again basically but still annoying.


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## Warr87 (27 May 2020)

qldfrog said:


> I would try to avoid carrying the actual hardware around if I could, so the question: thanks for your explanations on how you manage your own setup.
> Accessing my own computer would mean having it running 24/7 here in Oz while away , and hope no storm power outage, bushfire or burglar spoil the dream so my thought of AWS






Roller_1 said:


> That's why i use a VPS just access from remote desktop app no problems. I have Amibroker that runs a batch > produces the CSV easy. But like i said Hostwinds isn't the best has crashed a few times but that just means opening Amibroker again basically but still annoying.




This is something I think about too. Occasionally with work I have little to no access to my usual setup. Good to know that a VPS can be used. I may not have access to my laptop or desktop for about a month or so soon, so having the VPS could be a option. The alternative was setting it up on my siblings computer as a backup and show them how to use it. Not ideal.


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## qldfrog (27 May 2020)

Unless someone has done it before, i might try to go the AWS way .
Keep own laptop when doing heavy research but otherwise just run the afl scripts in a batch and get csv results.
That means 2 licences for the data unless i can get some free data


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## Warr87 (27 May 2020)

Premium date allowed you to have your data on more than 1 computer (such as a desktop and laptop). I'm unsure if Norgate allow the same thing.


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## Roller_1 (28 May 2020)

Warr87 said:


> Premium date allowed you to have your data on more than 1 computer (such as a desktop and laptop). I'm unsure if Norgate allow the same thing.




That is correct. From Norgates Website FAQ:

"How many installations are allowed?

The Norgate Data Updater ("NDU") may be installed on 2 machines, as long as both are for the subscriber's personal use."

I'd be interested to hear your thoughts on aws if you use it.


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## martyjames (28 May 2020)

Hi Skate

Question, if your system produces several buy signals on one day and your maximum open positions allows that many new buys, will you take those signals on the same day, or do you 'spread them' (new buys) over a period of time? Is there any thought about preferring to take buy signals on a 'down day' when the market is down , rather than buying into strength on up market days, or do you simply take buys as they come up regardless of above factors?

Cheers
Marty


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## Skate (28 May 2020)

martyjames said:


> simply take buys as they come up regarless of above factors




Hi Marty, I simply take the signals as given. (in PostionScore order until the Strategy is full)

Skate.


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## martyjames (28 May 2020)

ok -thanks!


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## Skate (28 May 2020)

martyjames said:


> I purchased Amibroker 2 weeks ago and know it has excellent backtesting capabilities, hence the newly formed interest in 'systems'.(bit of a learning curve though!)




*Learning curve*
It may have taken you 20 years but purchasing Amibroker is a great first step in the right direction, learning how to drive Amibroker will be your second. Trading is still the hardest game in the world because you're playing with some of the sharpest, most intelligent, well informed & unethical minds in the world. The professional traders you are competing against, the fund managers, the quants with their "Machine Learning Supercomputers" are out there just waiting to eat new traders for lunch.

*Two goals in building a system*
In building a trading system there are two goals you should have in your sights, (1) the ability to detect a trend as early as possible & (2) your system must also be able to distinguish "false signals", the wheat from the chaff so you can avoid taking a wrong position. It's a slow process of learning Amibroker, even when you get there, every system requires time to be able to produce results, something lost on those just starting out.

*Get out quick*
Timing of the exit is critical to any strategy. Cutting trades early is the the secret of being a profitable trader. 

Skate.


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## ducati916 (29 May 2020)

Skate said:


> View attachment 103829
> 
> 
> 
> ...




The media submerge the signal in pure noise. History on the other hand provides signal. The issue with history (backtesting) is one of interpretation.






Choosing a timeframe in which to observe returns is an important decision, as opposed to simply the variability. With a 15% and 10% volatility the variability between a 1 minute chart through to a 1 day chart is marginally higher than a probability of 50%. A coin toss. This will play havoc with your mind. You are receiving almost pure noise. Hour to hour that translates into 30 parts noise to 1 part signal.

Over 1 month this improves to a ratio that is 2 parts noise to 1 part signal. This translates into a 67% probability of success. Over 1 year a 93% probability of success.

Mr Skates system:




Sitting far higher than my hypothetical 15%. The signal to noise ratio will be far higher. Yet by decreasing the time of your observations to shorter time periods, you run the risk of lowering that signal to noise ratio: you increase your chances of (discretionary) fiddling based on nothing more than noise.

There is a new thread (just popped up) re. 'Why is the market rising'? On my own thread I purposely post a mixture of noise/signal, mostly out of curiosity as to whether (either version) creates comment or opinion.

There are occasions (bounces) where the signal to noise ratio can and will compress into shorter timeframes. This is in part to the big Quant driven strategies (the non-day-trading strategies) in the US fiddling with their parametres and shortening some of their inputs, the result being (seemingly) greater sensitivity to the news. Even the big chaps fall prey to this phenomena. You see it in the data which demonstrates the higher churn rate, with increased choppiness and higher than average volatility. My hypothetical 10% annual volatility is currently far below average volatility over the past 1 month, which increases the noise, further hiding the signal.

Now I don't trade mechanically, so Mr Skate will need to confirm: when backtesting (history) the test is over significant periods of time. The 'interpretation' of that history is manipulated through the choice of indicators etc. Clearly value can be added through that 'interpretation'.

When I look at history (which I do a significant amount of) I am comparing stocks not to their indicators, which are after all derivatives, but, fundamental factors. Here (again Mr Skate can confirm/deny) I am not sure whether the 'systems' do that. Is it necessary? Arguable I guess.

Empirically, the secular (fundamental) trends tend towards 18yr. periods. Not exact by any stretch, but close enough. Macro market views (if you catch big chunks of the trend) can earn significant returns. Even higher if, you can avoid the cyclical downturns in the secular trend.

The signal: design methodologies that utilise the longest time periods possible. Try and avoid the noise when designing a system.

jog on
duc


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## Skate (29 May 2020)

ducati916 said:


> Now I don't trade mechanically, so Mr Skate will need to confirm: *(A) when backtesting (history) the test is over significant periods of time. The 'interpretation' of that history is manipulated through the choice of indicators *etc. Clearly value can be added through that 'interpretation'. *(B) When I look at history (which I do a significant amount of) I am comparing stocks not to their indicators, which are after all derivatives, but, fundamental factors. Here (again Mr Skate can confirm/deny) I am not sure whether the 'systems' do that. Is it necessary? *Arguable I guess. Empirically, the secular (fundamental) trends tend towards 18yr. periods. Not exact by any stretch, but close enough. *(C) Macro market views (if you catch big chunks of the trend) can earn significant returns. Even higher if, you can avoid the cyclical downturns in the secular trend*. The signal: design methodologies that utilise the longest time periods possible. Try and avoid the noise when designing a system.




Duc, I've condensed your post & bolded the questions that require answering. It's important I make a few comments first. My technical responses can be a bit dry sometimes & hard to understand, that's why I've "dumbed-down" them for beginners to comprehend. The Action Strategy is simple in concept & design but the coding to generate the signals is very complex. There are two parts to the conditional entry being "volatility & volume" in relation to the mean that's also dependant on turnover, acceleration & momentum. The exit strategy uses three independent indicators being: (1) Variable Trailing Stop, (2) Stale Stop & (3) Volatility Dependant Stop which is clever in design.

_*(A) "Mr Skate will need to confirm: when backtesting (history) the test is over significant periods of time. The 'interpretation' of that history is manipulated through the choice of indicators etc"*_
Backtesting of the Action Strategy is limited by my subscription level of Norgate data to a 10 year period. I've not found this to be an issue as the data of the last 10 years is relatively current & it's more reflective to the current performance of the strategy. In saying this, one of the main requirements of any good strategy depends on the accuracy of signals being consistent over many different time frames. Indicators are just indicators & they "indicate" when a condition has been met. Indicators don't manipulate the data what so ever. I should also say that "backtest results" are not that important but they need to be consistent over multiple time frames. I use a multitude of indicators because as they say: "two heads are better than one" & it no different when it comes to indicators, choosing & getting them to work together is another story. Indicators have an inherent lag so it's critical the parameters match the time frame being traded. Backtesting allows for optimisation of the parameters & these parameters need to align with the strategy being tested.

*(B) "When I look at history (which I do a significant amount of) I am comparing stocks not to their indicators, which are after all derivatives, but, fundamental factors. Here (again Mr Skate can confirm/deny) I am not sure whether the 'systems' do that. Is it necessary?"*
As you say: "_I am comparing stocks, not to their indicators but, fundamental factors". _The Action Strategy is a mechanical trend trading system & it's "Index-based", the All Ordinaries index to be precise. The All Ordinaries has a mix of volatility that's required for long term growth of the portfolio. The "momentum indicator" is pivotal in the process of selecting stock with the required "volatility & volume". I touched on it earlier about the "lag" of the indicators used to measure "volatility & volume". For me to reduce the "lag" of these indicators required some juggling so they would quickly adapt to the volatility of the price movement. The responsiveness was optimised to the values of the input period & it works a treat.

_*(C) "Macro market views (if you catch big chunks of the trend) can earn significant returns. Even higher if, you can avoid the cyclical downturns in the secular trend"*_
Duc, If I could sum up the Action Strategy it would be your words above. The Action Strategy has been developed to catch "the majority of the trend", not all the trend. The Action Strategy is very reliant on multiple confirmations, momentum & strength being two of them sometimes delaying the entry, but it's "better to be safe than sorry". The index Filter working "hand in glove" with the "Stop & Go" indicator goes somewhat in alleviating "cyclical downturns" & "market sentiment".

Skate.


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## Skate (29 May 2020)

Skate.


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## frugal.rock (29 May 2020)

Good job Skate!
There's an impressive start to the strategy! 
Wouldn't have thought indicator lag would be a worry on a weekly system though... 
are you using the strategy for some intraday perhaps Mr Skate?  

You know, I was going to cherry pick IGL... but went with PGL. Both were trading similarly.
Wondering if your system chucks out Ausnet tomorrow?

Good to see fruits from your labours, open profit.
Now, how much are these entry tickets? 
Where would one start now, if one determined to start following along, for learning purposes?
Cheers.

F.Rock


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## Skate (29 May 2020)

frugal.rock said:


> Good job Skate! There's an impressive start to the strategy! Wouldn't have thought indicator lag would be a worry on a weekly system though...are you using the strategy for some intraday perhaps Mr Skate?
> Wondering if your system chucks out Ausnet tomorrow?




@frugal.rock, the strategy is performing at the moment but that can spin on a dime if market sentiment drops. Speaking of "Lag" all indicators have a measure & others have it in spades, the longer the look-back period the worst it is. I've done a tremendous amount of work reducing "lag" to an acceptable level & it's woven into the Action Strategy.

*Wondering if your system chucks out Ausnet tomorrow?*
Why would you think that? - I think most will be wondering what Saturdays update will bring. If I told you it will spoil the surprise tomorrow.

*Where would one start now, if one determined to start following along, for learning purposes?*
It would be easy to join in at any time if the signals were displayed each week but that's not the point of the exercise. The exercise was to show how we can learn from the generous posts of others.

*Important point*
I've noticed the number of signals increase exponentially with the current (bullish) market sentiment. It could simply be that more companies are experiencing a tick up in volatility & volume. @ducati916 might like to express an additional fundamental view why.

Skate.


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## Saqeeb (29 May 2020)

*Week 15: Update on my MAP paper trading portfolio.*

It was a good week for the markets and this portfolio. The XAO rose 4.7% and this portfolio gained 2.4%. Considering the portfolio is only invested close to 40%, this is a good result for the week.
*
BUYS:*
I entered into 1 trade last week, *SLR*
4 buy signals for this week.

*SELLS:*
No sells this week


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## Rsthree (29 May 2020)

The website and this thread has been a great learning experience for me since joining in January this year. So a big thank you.

I decided to get back into trading this year after first dipping my toes in the water over 12 or so years ago, and what a surreal time period to get back into it. While I am learning, I'm not sure that this extraordinary period in the market is an ideal proving ground.

I've been paper trading since early April and all good. Using a purely discretionary approach with asomwhat basic and simple trend following strategy the portfolio is up 29%.

My live portfolio is the Action Strategy and so far looking good. Thanks Skate

My dilemma at the moment is that I have $60k coming out of a term deposit and the prospect of re investing in cash at 1-2 % doesnt excite. On the other hand my limited experience in a somewhat crazy market doesn't yet inspire confidence for a more speculative investment. So as an interim, until at least I lose one of my training wheels, I was thinking I should park the cash in something more conservative, like conservative LICs and ETFs.  Any pointers and  advice from the brains trust here is much appreciated. 

I have some more cash becoming available in the next few months so hopefully by then the market will settle a little and I'll have a few more tricks up my sleeve for a more aggressive play.


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## ducati916 (30 May 2020)

Skate said:


> *Important point*
> I've noticed the number of signals increase exponentially with the current (bullish) market sentiment. It could simply be that more companies are experiencing a tick up in volatility & volume. @ducati916 might like to express an additional fundamental view why.
> 
> Skate.




Mr Skate's methodology has at its core a selection process (entry) and an exit criteria for individual stocks. I consider individual stocks as noise. They are more 'news dependent' than the overall market. This is why (my best guess) Mr Skate will hold 40+ stocks (although this latest strategy is potentially lower) as the 'news factor' or noise, is reduced on the overall portfolio. I prefer ETFs for the reduced noise and increased signal.

So the issue raised was how can a fundamental viewpoint add value?

So I hold as one ETF: DFEN. The top 15 holdings are:




Looking back to the last bear market:




This represents government spending. That is secured spending. Signed into law for 2020. For the year 2021 here is the budget proposal:

https://www.defense.gov/Newsroom/Re...od-releases-fiscal-year-2021-budget-proposal/

Military tensions are building between China and the US. There is a new Cold War developing. What will Mr Trump do?

Well we can infer that Mr Trump is a fan of the 'Gipper':




As he (Mr Trump) adopted the slogan.

President Reagan increased US Military spending to the point of bankrupting the then Soviet Union in the first Cold War. History repeating? Even if it isn't and the Cold War II never eventuates, military spending is not going away anytime soon.

Here is XAR (the x1 leverage) ETF of DFEN (x3 leverage)




An example of a fundamental viewpoint to stock/sector selection.

jog on
duc


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## Skate (30 May 2020)

ducati916 said:


> An example of a fundamental viewpoint to stock/sector selection.




@ducati916 previous post from a fundamentalists perspective has slightly altered my opinion on the benefits of "Fundamental Analysis". After reading Duc's post & the Department of Defense (DoD) release paper (which was a real eye-opener) I'm with @Saqeeb, one "Like" per post is certainly not enough.

*Duc confirmed holding (ETF: DFEN) *
An impressive post from a fundamentalist, his in-depth analysis defends why he is holding (DFEN). The supporting information now gives me a better understanding of "Fundamental Analysis". After studying the graphics & reading the Department of Defense 2021 budget release, holding (DFEN) makes more sense. For those who have no interest in reading the hyperlink, I've condensed the (DoD) release to one paragraph.

*Condensed extra from the (DoD hyperlink)*
_"Department of Defense (DoD). The FY 2021 budget supports the irreversible implementation of the National Defense Strategy (NDS), which drives the Department's decision-making in reprioritizing resources and shifting investments to prepare for a potential future, high-end fight. The President and Congress have placed an emphasis on funding the military. Our budgets over the past three years have allowed us to reverse the decline in readiness"_

Skate.


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## Skate (30 May 2020)

Skate.


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## Skate (1 June 2020)

Trav. said:


> @Lone Wolf awesome stuff mate, works great and thanks for finding a fix. updated version of the AFL attached with fix for aligning foreign plots , Date on X axis, ATH in chart title and another column in the exploration called "Signal" to display buy / sell signal.




Well, I'm impressed with this post:  https://www.aussiestockforums.com/posts/1075050/ especially the back & forth banter between @Trav. & @Lone Wolf 

*An idea*
After reading the "amibroker-faq" thread it has given me an idea for a post in the "Dump it here" thread. One of the first Amibroker strategies that I traded live was a basic strategy but effective. It was one of a handful of strategies all being traded at the same time 

*The Donchian Strategy*
There are new members joining every day seeking answers to their questions, some don't know how to ask a good question, so at times it's for us to fill in the blanks. I made over eleven posts referencing Richard Donchian & one of them can be found here: https://www.aussiestockforums.com/posts/1012251/ If you use keywords like (Donchian) in the search feature & include "posted by" (Skate), you will find what you are looking for without too much frustration.

*Looking for perfection*
For those looking for the perfect strategy, there isn’t one, so in the meantime, why re-invent the wheel – pick an idea that’s been backtested, proven to work & modify the idea to suit the job you want it to achieve.

*New to Amibroker*
For those new to Amibroker & are searching for a strategy to play around with I'm prepared to give you the original Donchain Strategy that I traded live. It was one of my first attempts at coding & with additional knowledge the learning progressed. My original strategy contained 60 lines of code for a "Backtest" & a similar number for my "Explore" code & the other two codes. In the early days, I kept the coding separate for clarity & they were divided into 4 separate codes: Explore code, Backtest code, Optimisation code & a separate code for Charts, nowadays they are all-inclusive. I find it hard to keep under 1200 lines of code these days, more lines allow finessing of the strategy.

*"PM" me *
If you are a beginner, struggling with Amibroker & you would like a copy of the Donchain.afl all you have to say is: "Donchian Strategy please, Thanks".

Skate.


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## Skate (1 June 2020)

*Donchian channel breakout strategy*
I've traded a modified version of the Donchian channel breakout strategy ( the strategy being given away) with great success from the 7th May 2016 to 30th December 2016 making just over $100k. Unfortunately, I no longer trade the Donchian Breakout strategy, not that's it's not a good strategy, it’s because I’ve got better & I can’t trade them all. Richard Donchian was a true pioneer of technical analysis. The fact is that a lot of trading strategies he developed forms the basis of so many other systems used today is an excellent indication of the value of his method. 

*Backtest Results*
"7th May 2016 to 30th December 2016". The Donchian Strategy was a $500k portfolio trading 20 positions @ $25k fixed positions in the pre-auction.






*The Exploration Signals*
Crude by today's standards, but it did the job. 




*APX*
Each strategy is loaded through an Analysis window project file (.apx file) that holds the information of all the relevant settings.

Skate.


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## Warr87 (1 June 2020)

Those are some pretty good returns, nonetheless.


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## rogerlg (1 June 2020)

how do you  pm a member


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## debtfree (1 June 2020)

Hi @rogerlg 
Near the Top right hand corner of page you will see an envelope, click on it ... click on Start a new conversation ... enter the participant's name into the box, such as: Skate ..... enter Title ... enter Message .... Press Start Conversation


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## Linus van Pelt (2 June 2020)

Newt said:


> Anyone that's written and backtested trend following systems would have a very good idea what the parameters Skate lists are for.  For those lost or puzzled reading through the parameters post above, could be worth getting into some Nick Radge (Unholy Grails) or Howard Bandy (Blue Owl Press books).




Are there specific Nick Radge or Howard Bandy books you would recommend?


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## Linus van Pelt (2 June 2020)

Skate said:


> *What did I do after receiving the captains advice ?*
> I quickly coded up my best three strategies into one system & called it the HYBRID strategy. I went to work backtesting the guts out of the new combined (HYBRID) strategy. I started off fresh with a new system strategy development in place & the rest is history.




What process did you follow when you transitioned from your old system to your new one?  Did you wait for sells to be triggered in your old system, and ignored buys in your new system, until you had funds free to pursue the buys in the new system?  Etc. until all positions were closed in your old system and placed in your new system?


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## Skate (2 June 2020)

Linus van Pelt said:


> Are there specific Nick Radge or Howard Bandy books you would recommend?




Hi @Linus van Pelt, welcome to our community & thank you for asking a question in the "Dump it here" thread. The books by both authors are worthy of reading. Nick Radge is well respected & talks in plain English that are easy to understand whereas Howard Bandy is more on the technical side.

*Nick Radge books found here:* https://www.thechartist.com.au/product-category/stock-trading-ebooks/
All of Nick's books area great read & worthy to have in your library of trading books.

*Howard Bandy Books found here:* http://blueowlpress.com/books/

*1. Quantitative Trading Systems *
This book discusses trading system development from the perspective of a traditional trading system development platform. It uses the AmiBroker platform exclusively.

*2. Modelling Trading System Performance *
This book discusses several aspects of risk, including personal risk tolerance, quantification of risk, determination of maximum safe position size (safe-f), and estimation of profit potential (CAR25). It uses any set of trades obtained from any source, with analysis using Excel. It does not use any specific trading system development platform.

*Howard's books in order of publication:*

_Quantitative Trading Systems_ was originally published in 2007, revised Second Edition in 2011.
_Introduction to AmiBroker, Second Edition_, was published in 2012.
_Modeling Trading System Performance_ was published in 2011.
_Mean Reversion Trading Systems_ was published in 2013, revised in 2015.
_Quantitative Technical Analysis_ was published in 2015.
_Foundations of Trading_ was published in 2016.
Hope this helps.

Skate.


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## martyjames (2 June 2020)

I'd like to thanks Skate very much for generously supplying me a copy of his Donchian Strategy. As well as being interesting to investigate the actual strategy, as a 'newbie' with Amibroker it is extremely useful to be able to use the system and all its settings, options, filters, stops etc as a 'framework' for setting up my own systems, knowing i haven't made a silly error or overlooked something important.
i was able to generate virtually the same trades for the "7th May 2016 to 30th December 2016" back test screenshot shown above, which gives me confidence i have all the basic settings etc correct.

Cheers
Marty


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## Skate (2 June 2020)

Linus van Pelt said:


> What process did you follow when you transitioned from your old system to your new one?  Did you wait for sells to be triggered in your old system, and ignored buys in your new system, until you had funds free to pursue the buys in the new system?  Etc. until all positions were closed in your old system and placed in your new system?




*Let me explain*
The "old systems" as you have put it traded till they died a natural death, meaning the positions were only sold on a generated sell signal because I wanted the fruits of my labour. If I cashed them out early I was at the mercy of the markets. The "new system" kicked into gear from day one & has never looked back, still being traded, it's called the HYBRID Strategy.

*Trading side by side*
For a period of time all the strategies were trading alongside each other, the only difference was that the "old systems" never executed any new buy signals. Funds were never an issue.

Skate.


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## Skate (2 June 2020)

martyjames said:


> I'd like to thanks Skate very much for generously supplying me a copy of his Donchian Strategy. As well as being interesting to investigate the actual strategy, as a 'newbie' with Amibroker it is extremely useful to be able to use the system and all its settings, options, filters, stops etc as a 'framework' for setting up my own systems, knowing i haven't made a silly error or overlooked something important. i was able to generate virtually the same trades for the "7th May 2016 to 30th December 2016" back test screenshot shown above, which gives me confidence i have all the basic settings etc correct.
> 
> Cheers
> Marty




Marty, thanks for the thumbs up & your kind words.

Skate.


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## Linus van Pelt (2 June 2020)

Skate said:


> Hi @Linus van Pelt, welcome to our community & thank you for asking a question in the "Dump it here" thread. The books by both authors are worthy of reading. Nick Radge is well respected & talks in plain English that are easy to understand whereas Howard Bandy is more on the technical side.
> 
> *Nick Radge books found here:* https://www.thechartist.com.au/product-category/stock-trading-ebooks/
> All of Nick's books area great read & worthy to have in your library of trading books.
> ...




Sorry for being dense, a bit of information overload.  

Let me summarise your answer:

Nick Radge:  
Buy and read *all* the books found here:  https://www.thechartist.com.au/product-category/stock-trading-ebooks/

Howard Bandy:  
Buy and read *Quantitative Trading Systems *and* Modelling Trading System Performance *found here:  http://blueowlpress.com/books/

Are the other Howard Bandy books, and their order of publication, irrelevant to my question?  Is that correct?


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## Skate (2 June 2020)

Linus van Pelt said:


> Let me summarise your answer:
> Nick Radge:
> Buy and read *all* the books found here:  https://www.thechartist.com.au/product-category/stock-trading-ebooks/
> Howard Bandy:
> Buy and read *Quantitative Trading Systems *and* Modelling Trading System Performance *found here:  http://blueowlpress.com/books/




@Linus van Pelt your summary is 100% correct. I would resist buying Howards books until you have more experience because they are hard to comprehend. The books were listed to answer your initial question.

Skate.


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## Linus van Pelt (2 June 2020)

Skate said:


> *Momentum*
> To stop whipsaw I use a wide 40% variable trailing stop that is conditional on market conditions & momentum of the stock.
> 
> *Sell triggers*
> ...




Tell me more...

(Or if this is clearly explained in your e-book then just tell me to read that.  Hmmm, perhaps this noob should lurk longer and read your e-book before posting?)


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## Warr87 (2 June 2020)

If you are trend trading it is suggested you have a trailing stop that is wide enough to allow pullbacks (temporary decline in price) before it continues up. It is a double edged sword, though. It needs to be wide enough so you don't get whipasaw'd, but having a wide stop also means giving profits back. A trend trader can be profitable from just a few trades that took off while minimizing losses on the majority (a trend following system will have a win% of 30-35%).

The other sell trigger mentioned is the 'stale exit' which is to get rid of a position if it hasn't gone up after a certain amount of time. For example, you buy a stock and it goes up 5% and after 10 weeks it's still at 5%. This isn't going to trigger a trailing stop, obviously (its +5% not -40%), but you have a position that is going no where. You don't want to manually intervene, why?, because it will set a dangerous precedent. Therefore, a sell rule can be employed that if after 'x' weeks (or days, whatever time period yo are using) if the stock hasn't gone up by 'z' amount, sell. You would rather put the money into a stock that will have moment and make money, not sit there with the potential to go further down due to loss of momentum.

And last, the 'market conditions' are the index that you are tracking. If you are buying stocks in the All Ordinaries then you don't want to be trading stocks in that universe of stocks if the index itself is going down. Case in point, in the COVID market crash, why would you buy stocks in a falling market? The stocks in the universe you are trading tend to rise with that index (since the index tracks these stocks, not surprising). Therefore, a common technique that is used is a 'market filter' that is a rule to protect capital: when the market is down (however you define that, could be a 'close' below the 20week average for example) don't trade, when the market is in an upwards direction trade. That is the essence of a market filter.

These factors change depending on the system and style you are trading. If you are a swing trader, or a momentum trader, counter-trend trader, or a mean-reversion trader, the factors of a market filter (what consitutes a 'stale' stock) or what is an appropriate stop-loss level will all depend on that style/system.

Read Radge's books as these are mentioned in some way.


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## Skate (2 June 2020)

Linus van Pelt said:


> Tell me more...
> (Or if this is clearly explained in your e-book then just tell me to read that.  Hmmm, perhaps this noob should lurk longer and read your e-book before posting?)




@Linus van Pelt my suggestion is for you to read the "Dump it here" thread from start to finish (slowly, without rushing or speed reading any of my posts). I know it's a big ask & time-consuming but the learning process depends on how much you comprehend, your financial future may depend on it.

*We have lost the art to memorise *
We need memories for recall that's why we need to make a note of information that's important, it's the very reason why I repeat myself so others are conditioned "how to think" instead of "what to think". If you don't read my entire thread you will miss the story why a US Platoon Sergeant shouts & stresses new recruits. This passage might seem trivial but I've written it for a purpose. When you’re dealing with your own money, trading gets very complicated, very quickly! Jumping to conclusions is another bad trait, especially as a trader (these are all important points to understand & comprehend)

*Platoon Sergeant* 
In movies, a US army Platoon Sergeant's main role is to shout & stress the new recruits, why? It's so the new recruits are conditioned to handle stress from the get-go ensuring they make calm, measured decisions under enormous stressful combat conditions, their lives depend on it.

*Every question you can think of*
I believe I've already covered the questions you could think of so make the "search feature" your friend to hone in on a subject. Use a [keyword] posted by [Skate] & bingo, there will be plenty to read. As an example - searching the keyword [*StaleStop*] by [*Skate*] 38 separate posts will be displayed that explains the StaleStop in detail. The eBook is for you to take as a travelling companion & contains important information that I have found useful in my trading journey. Like most traders, I've read more books than I care to remember. The important information in those books is condensed in my free eBook, saving you a tremendous amount of reading.

*Respect other people’s way of thinking*
6+3=9 - But so does 5+4 & 3X3
The way you decide to trade isn’t the only way to trade. Respect other trader's way of thinking & have an open mind, that's how you will learn. There are different trading methods that work. You need to find something that suits your lifestyle, schedule & personality. As traders, we can all get to the correct answer no matter how the question is posed "in my example above".

*Inbuilt weakness*
Simply jumping to a conclusion without bothering to assess the full range of possibilities is an inbuilt weakness we all suffer as traders. 
Have a read of this post & the next: https://www.aussiestockforums.com/posts/1005992/

*Summary*
If you don't take the time to learn you will be in the company of most traders "LOSERS"

Skate.


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## Linus van Pelt (2 June 2020)

Warr87 said:


> Read Radge's books as these are mentioned in some way.




Thanks heaps.  I'm slowly working my way through the "Dump it Here" thread (page 75 so far, only 80 more to go!), and finally getting the courage to post questions.  

Earlier in this thread it was stated (roughly) "Ask a one-line question, expect a one-line answer".  In my attempt to be terse, I fell into this trap.  Although "Tell me more" is, I believe, a favourite phrase of Skate's .

What I meant to write is "Can I get more details on what these above terms mean?".  You've mainly addressed that, but the biggest takeaway I got is "Read Radge's books".


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## Skate (2 June 2020)

Linus van Pelt said:


> Thanks heaps.  *I'm slowly working my way through the "Dump it Here" thread (page 75 so far, only 80 more to go!),* and finally getting the courage to post questions. Earlier in this thread it was stated (roughly) "*Ask a one-line question, expect a one-line answer*".  In my attempt to be terse, I fell into this trap.  Although "Tell me more" is, I believe, a favourite phrase of Skate's . What I meant to write is "Can I get more details on what these above terms mean?".  You've mainly addressed that, but the biggest takeaway I got is "Read Radge's books".




@Linus van Pelt well done, I'm impressed that you are reading my entire thread & if you keep going you will even get to know what I look like & my background. By you repeating a few of my comments confirms that you are absorbing the information. Nick Radge's books are okay but please read my eBook at least "5 times", reading my book once won't cut it, you need to read it a few times for the words to sink in before spending money on buying other books. My posts are written in such a way to educate & condition people how to react when trading gets stressful.

Skate.


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## Linus van Pelt (2 June 2020)

Skate said:


> @Linus van Pelt my suggestion is for you to read the "Dump it here" thread from start to finish (slowly, without rushing or speed reading any of my posts). I know it's a big ask & time-consuming but the learning process depends on how much you comprehend, your financial future may depend on it.




Yep I'm doing just that.  And TBH I wonder how many noobs read the thread cover to cover?  But at the same time, it is MUCH MUCH more efficient to ask questions as I encounter them.  To be fair, I have restrained myself for 75 pages lol 



Skate said:


> If you don't read my entire thread you will miss the story why a US Platoon Sergeant shouts & stresses new recruits. This passage might seem trivial but I've written it for a purpose.




Nope I've already read that.  Or perhaps it's repeated in upcoming pages?  Although I'm not sure the relevance to my (poorly worded one-line) question about the definition of those technical terms?



Skate said:


> *Every question you can think of*
> I believe I've already covered the questions you could think of so make the "search feature" your friend to hone in on a subject. Use a [keyword] posted by [Skate] & bingo, there will be plenty to read. As an example - searching the keyword [*StaleStop*] by [*Skate*] 38 separate posts will be displayed that explains the StaleStop in detail. The eBook is for you to take as a travelling companion & contains important information that I have found useful in my trading journey. Like most traders, I've read more books than I care to remember. The important information in those books is *condensed* in my free eBook, *saving you a tremendous amount of reading*.




Thanks.  As a noob, I'll really try to restrain myself from posting until I've reached the end of the thread.  Perhaps questions raised (to me anyway) on page 75 are answered on page 124.  And I need to familiarize myself with the search features of this forum, so I appreciate the tip.  I'll be sure to read those other posts defining the StaleStop in detail.  

I realize I need to do my own work searching, learning, and reading, and not have you (and other gurus) spoon feed me by regurgitating the same information you've written many times before.

And I ****LOVE**** condensed, so I look forward to reading your e-book immediately after finishing this thread.  Or perhaps I should pause the thread and read it first :hmmm:



Skate said:


> *Respect other people’s way of thinking*
> 6+3=9 - But so does 5+4 & 3X3
> The way you decide to trade isn’t the only way to trade. Respect other trader's way of thinking & have an open mind, that's how you will learn. There are different trading methods that work. You need to find something that suits your lifestyle, schedule & personality. As traders, we can all get to the correct answer no matter how the question is posed "in my example above".




Noted, but again I don't see the relevance to my post? 



Skate said:


> *Summary*
> If you don't take the time to learn you will be in the company of most traders "LOSERS"




Yes, I certainly don't want to be a LOSER.  Which is why I'm beginning my journey by reading this entire thread.  The first of many, many, many steps along my learning process.

But should be fun, I love learning new things!  

And I really, genuinely appreciate all the effort you've undertaken creating this thread (and continue to support the ASF community).  Who knows, perhaps you'll be my Captain Black?


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## Warr87 (2 June 2020)

Linus van Pelt said:


> What I meant to write is "Can I get more details on what these above terms mean?".  You've mainly addressed that, but the biggest takeaway I got is "Read Radge's books".




I hope what I wrote was useful. It should give you some context and clear things up a little.

There are certain aspects of Radge that I'm not a fan of, but his books are relatively easy to digest. I think after reading this thread, and taking into consideration my post, reading Radge's book will help to solidify things further for you. Maybe read his books, then come back to this thread, and then re-read your favourite of Radge's books. One of the biggest issues when starting out is the overwhelming about of information. Not all of it will sink in at once, and there will be a point where something will just 'click'. I also have other books that will be of use to you, but probably best that you try to absorb what you have now.

To be clear, Radge isn't the be all or end all. He provides a decent base from which you can get a decent understanding on systems, trading rules, why trend following, etc. There are some good trend followers who have written some easy books to read (Rob Carver and Kevin Davey are others).


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## qldfrog (2 June 2020)

Warr87 said:


> I hope what I wrote was useful. It should give you some context and clear things up a little.
> 
> There are certain aspects of Radge that I'm not a fan of, but his books are relatively easy to digest. I think after reading this thread, and taking into consideration my post, reading Radge's book will help to solidify things further for you. Maybe read his books, then come back to this thread, and then re-read your favourite of Radge's books. One of the biggest issues when starting out is the overwhelming about of information. Not all of it will sink in at once, and there will be a point where something will just 'click'. I also have other books that will be of use to you, but probably best that you try to absorb what you have now.
> 
> To be clear, Radge isn't the be all or end all. He provides a decent base from which you can get a decent understanding on systems, trading rules, why trend following, etc. There are some good trend followers who have written some easy books to read (Rob Carver and Kevin Davey are others).



what I like in Radge's unholly grail is it define the key areas of a system (even if not trend):
universe, entry, exit,scoring (priority) and risk management/backtests
I hope I am not forgetting any key part..has been a long day..
once this was assimilated, the followings learnings were more refinement, but the principles are the same


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## Warr87 (2 June 2020)

qldfrog said:


> what I like in Radge's unholly grail is it define the key areas of a system (even if not trend):
> universe, entry, exit,scoring (priority) and risk management/backtests
> I hope I am not forgetting any key part..has been a long day..
> once this was assimilated, the followings learnings were more refinement, but the principles are the same




It's been a while since a read it, but that was the gist of it. And they are as you say the key areas of a system. The unholly grail is recommended because of those reasons too. And the refinement is definitely where a lot of the energy is put. Just as with coding a system in Amibroker: the buy and sell rules only take up a couple of lines, and yet the pages of coding that the whole system represents is more to do with the refinement of some aspect of those you listed (making sure it is more consistent with the buy/sell rules when its in play).


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## Skate (3 June 2020)

*



Position Sizing*
I've been reminded today about the importance of "Position Sizing" which is another way of saying, "How big of a position should you take for any one trade". Position sizing is part of the Action Strategy & it relates directly to “how much” we bet in one go. Without question "Position Sizing" is one of the most important areas of trading. The $10 commission of CommSec ("Commission Rate") has a direct consequence to the profitability of the Action Strategy. Some traders ignore this concept, but position sizing counts for most of a strategies performance. Trading is best described as a psychological game rather than a game of probabilities. Position sizing should be a part of your trading system that simply tells you how many shares to buy. Poor position sizing is the most common reason why new traders decide to "pull up stumps" & quit. Preservation of capital is the most important concept for those who want to stay in the trading game for the long haul.

*Position Sizing - How much is enough?*
When you start out on your trading journey it's wise to avoid the temptation of going all-in. Start by buying small positions & if they turn south it won't be too big of a burden to carry. Most new traders are so eager to have a go, logic sometimes flies out the window. The problem is that most traders have a much greater chance of losing than they do of winning when they first start out while they are in the process of learning how to trade successfully. Therefore, start small (very small) to minimize any losses, once you’ve proven that you can consistently & profitably trade over a meaningful period of time, then you can begin to ramp up your position sizing. To manage a losing streak simply reduce your position size when your account is dropping, easy peasy.

Skate.


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## Skate (3 June 2020)

*Amibroker*
@Trav. recently posted a few Amibroker trading systems & I posted my old "Donchian Strategy" showing there are hundreds, if not thousands, of trading systems that work. Having a perfectly sound strategy doesn't mean you will follow the system as it was intended. Why not? Mainly because the system was developed by someone else thus not being suitable. Also, when a system is designed by someone else, most traders will lack the confidence in trading that system. Developing your own system is the alternative as some members have already done.

*Optimising a strategy to their heart's content*
It's a trait most of us suffer from, fiddling & optimising till eventually, we end up with a meaningless system that makes a fortune on paper but performs miserably in real trading. Why do we fiddle? because we are curious to know if we can achieve the perfect settings, to predict the markets perfectly, without realising the markets are "perfectly unpredictable". There is a very small percentage of traders who consistently make big money trading, that's worthy of putting in the memory bank. What these winners do is not complex, in fact, simplicity is one of the keys to making money as it all boils down to trading consistently & confidently with a trading system that fits your style. Just knowing more about the trading process is a good first step, reading my posts is another.

Skate.


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## ducati916 (4 June 2020)

Skate said:


> *Amibroker*
> @Trav. recently posted a few Amibroker trading systems & I posted my old "Donchian Strategy" showing there are hundreds, if not thousands, of trading systems that work. Having a perfectly sound strategy doesn't mean you will follow the system as it was intended. Why not? Mainly because the system was developed by someone else thus not being suitable. Also, when a system is designed by someone else, most traders will lack the confidence in trading that system. Developing your own system is the alternative as some members have already done.
> 
> *Optimising a strategy to their heart's content*
> ...




Key words within the (above) post:

(i) Confidence;
(ii) Sound strategy;
(iii) Over complicating;
(iv) Simplicity;
(v) Consistency.

Confidence: is born of belief. If you do not believe, you will not (cannot) be confident. If you are not confident, you will falter when times are tough. Belief (can) be (a) synthetic a priori and/or (b) empirical. If (a) you will need to truly research your topic before entering the market. If (b) then the methodologies discussed on this thread will guide you.

Therefore if you were to adopt Mr Skate's Donchian system, you would need to research everything about the theory underpinning that strategy. You would look at its history and everything in-between. Where it is strong and where it is weak (market environments). In other words, you make it your own.

Simplicity/Over complicating: make things that are easy to understand. That are easy to verify or disprove (Popper). Because these factors will lead to a sound strategy. A sound strategy has the following important characteristic: they are easy to believe in: they inspire confidence.

Complexity cannot be understood looking at single variables and combining them. Complexity is a single variable with hidden properties. These (almost) invariably get us into trouble because when they are stress tested, they do not perform as advertised.

If the market is a complex system (some serious arguments on this point) then why advocate simple ideas? Simple ideas are fundamental truths that even a complex system must obey. That is the trick: there are probably not more than 5 or 6 big ideas (truths) in the market. There are thousands of variables, probably even more than that. 'Tinkering/fiddling' is trying to optimise variables. Some (in some market conditions) will work very well. They may never appear again.

Never underestimate pure luck.

Luck as a distribution in the market occurs at what probability? Is your methodology built on profiting from pure random luck? If not why not?

Consistency: is far easier when you combine it with confidence.

jog on
duc


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## ducati916 (4 June 2020)

ducati916 said:


> Mr Skate's methodology has at its core a selection process (entry) and an exit criteria for individual stocks. I consider individual stocks as noise. They are more 'news dependent' than the overall market. This is why (my best guess) Mr Skate will hold 40+ stocks (although this latest strategy is potentially lower) as the 'news factor' or noise, is reduced on the overall portfolio. I prefer ETFs for the reduced noise and increased signal.
> 
> So the issue raised was how can a fundamental viewpoint add value?
> 
> ...





So what is luck?

Here is one version of luck. The above position was predicated on Congressional military spending that was already approved for 2020 and would likely be approved for 2021. Fine.

However, down the line (in the future) this sector might balloon into a growth story.


_Space has been called the final frontier. It might also be the next frontier for investors. And one rocket stock might literally boost investors’ portfolios.

On Saturday, the National Aeronautics and Space Administration was set to launch two astronauts into orbit on a commercially produced SpaceX spaceship loaded atop one of the company’s reusable rockets. It will be the first astronaut launch from U.S. soil since 2011 and will be shown on the web as well as on major TV networks.

The launch, which was postponed on Wednesday due to bad weather, is a milestone for the country—and investors, too. Space, it turns out, is becoming big business. And new technology is creating a new, investible space race.

NASA is big. It would be a top 10 aerospace and defense company if it weren’t a government agency. Its 2020 budget—a proxy for sales—is north of $20 billion and growing. Its 2021 budget request is about $25 billion. NASA has big plans for the future.

There are about 35 publicly traded aerospace and defense companies with annual sales of more than $1 billion in North America and Western Europe. Raytheon Technologies (ticker: RTX), Boeing (BA), Airbus (AIR.France), Lockheed Martin (LMT), and General Dynamics (GD) round out the top five. NASA would rank just behind eighth-place jet-engine maker Safran (SAF.France) and ahead of tenth-place systems supplier Thales (HO.France).

SpaceX, the company at the center of Saturday’s mission, isn’t publicly traded. It’s controlled by Tesla (TSLA) CEO Elon Musk. But space is a collaborative business. And SpaceX’s pioneering development of reusable rockets and reusable spacecraft is benefiting all space players by driving down launch costs. Combined with more-powerful electronics, lower launch costs mean a greater number of smaller, lower-priced satellites. That enables more business models to be developed with space-based technologies.

It’s as if new space-based tech is the iPhone circa 2007, and the space app-store ecosystem is just getting started. Lower costs and more opportunity means space, as an investing theme, is here to stay.
_



_So NASA, if it were a stock, might be considered a growth stock. The companies that supply it might be as well—but they’re certainly not trading that way. The 35 aerospace and defense stocks used for NASA comparisons are down about 30% in 2020, worse than comparable drops of the S&P 500 and Dow Jones Industrial Average. That’s because the coronavirus pandemic has decimated demand for commercial air travel. But these companies aren’t just about commercial air travel—they’re helping people fly to space._

So maybe yes, maybe no. If yes, then you have just lucked into a sector that could become the darling of Wall St. for gains of? In the meantime, your downside risk is covered by Congress passing into law your earnings going forward.

That is one version of luck. There are others.

jog on
duc


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## Skate (4 June 2020)

I've been offloading some of my thoughts & decided to make a few general comments about trading.

*Developing your own trading system*
When you have enough confidence in yourself & your trading system long-term results, it shouldn’t matter what other people think or say. On the flip side, there is a trap, once you believe you have found a good strategy & become convinced that it works, you will do everything you can to avoid seeing evidence to suggest otherwise.

*Ignoring material in a post*
We typically trade what we perceive about the current market conditions & when our mind is made up we're not likely to change it. Despite the importance of the material in the “Dump it here” thread, some will totally ignore it while others will do exactly the opposite of what is recommended, some will distort the information to fit their way of thinking. Being dismissive or being selective with the information can be to your detriment.

Skate.


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## Skate (4 June 2020)

*When traders lose money *
When a loss is experienced some traders will assume that they picked the wrong stock & convince themselves of the fact, where it could have been poor execution of their exit strategy. Some traders get into the habit of hanging onto a position a little too long watching it fall further without knowing what to do next. It’s very hard for traders to take losses & move on.

*Do you really need to understand how markets work?  *
No, you don’t.  You only need to understand how your strategy works. Understanding that the markets will occasionally move in very large trends & if you can catch the big moves, you’ll make a lot of money, that’s all you need to understand about the market.

Skate.


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## Skate (4 June 2020)

*Overthinking can sometimes be unhelpful*
Overthinking can sometimes steer you away from what works & overriding your system can be a recipe for disaster. When we look at the markets, we assume we are seeing all the available information but most of the information is eliminated by our selective perception, meaning you believe what you want to believe. Sometimes it pays to take the blinkers off. 

*Reading the media*
When you read a significant amount of information about a stock you have purchased, it's a natural trait to seek confirmation that you have just done the right thing. The more you are exposed to certain information, the more likely you are to believe it. The media normally pulls from a single source but manipulates the story in such a way to make it sound like new information so don’t fall for that trap. Some journalists simply make up the story. Repeat something often enough & people will believe it no matter how silly it sounds.

Skate.


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## Skate (4 June 2020)

*Wanting lots of facts *
Needing lots of facts to “ad nauseam” before you buy a position is another bad trait, another is constantly chasing evidence to support the decision you have already made. Affirmations are sometimes not required but seek them anyway because it makes us feel better. Even when a decision has been made to buy we look for every excuse why we shouldn’t, sometimes by convincing ourselves that we’ve missed the move or the price is now too high. Thinking like this, you'll certainly miss the continuation if it keeps moving. Making a poor decision can manifest into frustration & anger, so don’t entertain those thoughts.

*The more you understand *
The more you trade you come to realise you are responsible for every trading decision you make, thus owning your own performance. You must believe that your system will make money long term or it will be all for naught. Trading requires a process & your one job is to simply concentrate on the process by following your system without making mistakes along the way.

Skate.


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## Skate (4 June 2020)

*Trading the bounce*
Despite the ongoing concerns about COVID-19 our markets appear to be rebounding at a quicker pace than most had expected. This rapid rebound raises a problem for all of us whether we are currently in the market or sitting on the sideline. At the moment psychology (fear & greed) is directly driving the markets in one direction than in the other without rhyme or reason. It would be handy to know if the enthusiasm can finally stabilise the markets. 

*I've been thinking*
I’m at a loss what comes next when traders become disillusioned post-COVID-19. I’ve been thinking there are limited levers left for governments to pull to keep the enthusiasm of the markets going. The markets are constantly rebounding one day only to retrace the next. Markets displaying high volatility is a market hard to trade, but at the moment that's all we have. There will be good trading days & bad trading days still yet to come, that's a given, being mentally prepared for this situation will certainly help.

Skate.


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## Country Lad (4 June 2020)

Skate said:


> There will be good trading days & bad trading days still yet to come, that's a given, being mentally prepared for this situation will certainly help.
> Skate.




One of our group has been a bit gun shy recently, concerned that the market's rise has not been all that logical. He feels that the forward looking market is not taking in to account the likely large downgrades over the coming months and is concerned that investing now could result in losses.

Lesson in this according to a Country Lad mantra is that if you are concerned about your trading resulting in losses, then either inactivity or losses will result. If the mindset is positive, looking for opportunities and trading them with normal risk assessments in place, then the likelihood is profits.  
I have no doubt many of us have experienced a loss of inertia at some time or other.


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## Skate (4 June 2020)

Country Lad said:


> One of our group has been a bit gun shy recently, concerned that the market's rise has not been all that logical. He feels that the forward looking market is not taking in to account the likely large downgrades over the coming months and is concerned that investing now could result in losses.
> 
> Lesson in this according to a Country Lad mantra is that if you are concerned about your trading resulting in losses, then either inactivity or losses will result. If the mindset is positive, looking for opportunities and trading them with normal risk assessments in place, then the likelihood is profits. I have no doubt many of us have experienced a loss of inertia at some time or other.




@Country Lad what a great post.

_*1. "A bit gun shy recently, concerned that the market's rise has not been all that logical"*_
To predict the markets perfectly, you have to realise that the markets are "perfectly unpredictable". The market is very emotional & illogical at times, if you are too analytical, you will be surprised often. Using logic to figure what the market might do on any given day is useless at best.

*2. "He feels that the forward-looking market is not taking in to account the likely large downgrades over the coming months and is concerned that investing now could result in losses"*
Fear & greed is directly driving the markets without rhyme or reason. We all wish the markets would stabilise because as traders we don't like uncertainty. (it messes with us)

*Opinions*
Most traders understand the markets are based on human behaviour & our perceptions about what's happening. While one person sees the buying opportunity of a lifetime, another sees the meltdown of the global financial system as we know it. Thus, it’s our perception that creates the value at any given time. The markets are a reflection of the overall beliefs of all the traders in the market at any given time.

*One step further*
The difference between winners & losers is their psychological outlook. Your psychology plays the biggest part when it comes to trading because it controls your perception (the drivers of your reactions). 

Skate.


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## Skate (5 June 2020)

Skate.


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## frugal.rock (5 June 2020)

Woops, I broke the trading rules...
Apologies Skate. 

Ausnet sold.... my bad, but I love a bit of  Discretionary Action in my Strategy?! 

My reasoning, if a stock gets a signal, that's all it is, a signal.
An entry or exit is then based from the signal. 
If a stock doesn't perform within 3 weeks of purchase/ signal, has it fulfilled it's original signal? (maybe/maybe not.)

We may not get a sell signal, but the SP can seemingly decrease substantially, degredate over time, without triggering a sell signal. 
The stop loss isn't set for the above scenario.

The soldiers were languishing begging for a new battle.... the new fight for my Action Jackson's / Dirty Dozens? (LKE, Lake Resources)
 

Ready to receive my reprimand 

F.Rock


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## Skate (5 June 2020)

frugal.rock said:


> *Ready to receive my reprimand*




Nah, all good.


Skate said:


> Most traders understand the markets are based on human behaviour & *our perceptions about what's happening*.





Skate said:


> *Fear & greed *is directly driving the markets





Skate said:


> The more you trade *you come to realise you are responsible for every trading decision you make, thus owning your own performance.* You must believe that your system will make money long term or it will be all for naught. Trading requires a process & *your one job is to simply concentrate on the process by following your system without making mistakes along the way*.





Skate said:


> *Overthinking* can sometimes steer you away from what works & *overriding your system can be a recipe for disaster*.





Skate said:


> *My posts are written in such a way to educate & condition people how to react when trading gets stressful.*




Skate.


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## Skate (6 June 2020)

Skate.


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## Skate (8 June 2020)

*The use of logo "at the start of a post"*
To highlight the content of the post I'll use a logo as a precursor. The "Research Logo" signifies some of my research - whereas my "Soapbox Logo" is reserved for my thoughts that are turned into words & posted in a scattergun style.

*Researching*
I was recently challenged to find a more effective way of ranking buy signals but that is not what I'm going to post. The challenge set off a chain of ideas, one being, to search for a more efficient market filter to gauge the "sentiment of the markets" rather than using a garden variety moving average of the Index. (“Index Filter”)

*Sentiment Filter*
The next post will be about a method found from my research that has merit over an "Index Filter" (IMHO)

Skate.


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## Skate (8 June 2020)

*Losing is always upsetting*
Losing 70% of my profits this year was upsetting, to say the least. Dropping 19.76% of my equity whilst knowing the markets had dropped roughly 30% didn't help. Even when you have your emotions under control it still has a corrosive effect to some degree. 

*My trading strategies*
I trade a variety of strategies & confess trading over the last five years has been kind & as they say, "so far so good". The "Virus Crash" made me re-evaluate all my systems & it was disheartening to find that my strategy code was not the issue & no improvements were required, "that's what I thought" fobbing it off as a "Black Swan" event. This got me thinking "is there a better timing method to use?"

*Broad market timing in system formulas*
Some trading systems may benefit from an attempt to time the broad market. A market-wide valuation, such as moving average, sentiment or some other mechanism may be used to tell if we should be in the market or not. The flexibility of AFL language allows creating rules or indicators, which are based on more than just one symbol. This enables us to introduce additional filters based on wide-market index performance. https://www.amibroker.com/kb/2014/09/20/broad-market-timing-in-system-formulas/

Skate.


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## Skate (8 June 2020)

*The offer of my old "Donchian Strategy"*
The response to my offer for one of my original trading strategies was overwhelming. One member offered to test the Donchian Strategy removing survivorship bias as my current Norgata Subscription level doesn't allow me to carry out this procedure. What an opportune moment. 

*I have been working on a new strategy *
For quite some time I've been developing a new strategy & recently applied the finishing touches ready for the paper trading process. Moreover, I asked if the member would be kind enough to backtest the strategy removing survivorship bias & report his findings. I should say from the onset the member has advanced coding skills & through a collaborative effort, I'm positive we can take a good strategy & make it even better.

Skate.


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## Skate (8 June 2020)

*Switching filter* (Using a "Sentiment Filter" instead of an "Index Filter")
I've been trying to code a more efficient "Index Filter" only to realise that what I needed was a "market sentiment filter" rather than an “Index Filter”. The profitability & probability of success increases when we trade with the prevailing market trend, that's a given (we should only be buying when the overall market is rising). In order to filter trading opportunities therefore, we need a more efficient way of determining the current market sentiment.  

*A crude switching filter* (“Index Filter”)
When defining market sentiment we really do need a better measure. A "sentiment filter" might be a better way to define the current state of the market than using a rather crude method like an “Index Filter”. It was important for me to find a better "switch" with the ability to gauge market sentiment quickly switching "on or off" as the (sentiment) turns.

Skate.


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## Skate (8 June 2020)

*The crude "Index Filter"*
The most commonly used filter by many traders & professional alike is the old trusty “Index Filter” that turns on & off in relation to a simple moving average, crude & effective to a level. It's purpose is to check whether the close price is above or below a simple moving average, nothing more, nothing less, but how does it really stack up in reality?

*Sentiment Filter*
Thinking about it a little deeper is there a better measure? What if we change our thinking from an “Index Filter” to a “Market Sentiment Filter” by looking for a filter that not only has the ability to define a bull market from a bear market but reactive enough to identify conditions quickly. The stability of such an indicator has to ensure "whipsawing" is eliminated. There are of course many indicators that would fit the bill, but we have to start somewhere, so here’s one idea of using the (MACD).

Skate.


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## martyjames (8 June 2020)

Your posts are extremely educational Skate, thanks so much for them. I have been working hard on my daily system and have incorporated many of your concepts into it and its looking pretty good so far (unless there is a coding error!). 

cheers
Marty


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## Skate (8 June 2020)

*Sentiment Filter*
What if we change our thinking from an “Index Filter” to a “Market Sentiment Filter”. There are of course many indicators that will do the job but I want to concentrate on the (MACD) as the switching indicator.

*Moving Average Convergence Divergence *
By using one set of parameters for the (MACD) to catch the upside sentiment (filter ON) we can now use a different set of parameters to catch the downside sentiment (filter OFF). Rather than using the closing price above or below a moving average as the switch (a line in the sand), we can define the (MACD) as a combined "switch & sensor". My research results "so far" have been pleasing & works in all time frames.

*Goldilocks parameters*
There is a fine line between "reaction time" & "signal quality". If we tune the (MACD) for speed there is a downside, meaning it’s faster to react (which on face value is a good thing) but it becomes choppy & creates whipsawing. The whipsawing constantly has you entering & exiting the markets exposing you to additional commission & slippage charges which is large impost to your trading results. Throttling back the (MACD) too far achieves undesirable results as well, there is a trade-off when striving for the goldilocks parameters.

*Summary*
Just based on my limited research, it appears something as a "simple moving average" can be useful as a market filter but it might not be the most optimal to use. There are of course many more indicators you could use before deciding which is the best filter for your own Strategy. For example, you could use other types of moving averages, (EMAs, WMAs) or you could even use oscillating indicators, such as "RSI or Stochastic". 

Thinking outside the box can be "beneficial at times" increasing the probability of success, something we all desire. (END)

Skate.


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## Skate (8 June 2020)

*Practical example*
This is a backtest from 1st July 2019 to 5th June 2020 as a direct comparison between an "Index Filter" & the "MACD Sentiment Filter" (The results speak volumes) Using the MACD the exposure reduces as a matter of course.



Skate.


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## willoneau (8 June 2020)

Hi Skate , how does it compare when taken from the start of the year?. As there was good gains at the beginning of the year.


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## Newt (8 June 2020)

Yes, was wondering same thing - or even further back.....


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## willoneau (8 June 2020)

Also the large reduction of trades taken, would that have a large reduction of return as well?


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## Saqeeb (8 June 2020)

*Week 16: Update on my MAP paper trading portfolio.*

This portfolio lost $952.00 last week.
*
BUYS:*
I was only able to enter into 3 out of the 4 buy signals, *PNR, DTL *and *EVN. *The other buysignal was for *BGL *which gapped up on Monday open and never traded at my maximum offer price for the whole day Monday. The order was then purged out at close of trading the same day.

3 buy signals this week

*SELLS:*
No sells this week


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## Skate (8 June 2020)

willoneau said:


> Hi Skate , how does it compare when . As there was good gains at the beginning of the year.




*MACD Sentiment Filter - From 1st January 2020 to 5th June 2020 *
MACD Filter: Net loss: $-852.03 
 Net Loss: -0.28 % 
Annual Percentage Return: -0.66%  








*Index Filter - From 1st January 2020 to 5th June 2020*
Net loss: $-55,663.66
Net Loss: -18.55 % 
Annual Percentage Return: -37.94 %  




Skate.


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## Skate (8 June 2020)

Newt said:


> Yes, was wondering same thing - or even further back.....




*Backtest period 1st January 2018 to 30th December 2019*
@Newt, this backtest period includes it all. Two combined calendar years for the averaging effect.



willoneau said:


> Also the large reduction of trades taken, would that have a large reduction of return as well?




*This is the very idea of the MACD Sentiment Filter*
The "MACD Sentiment Filter" only lets you trade when there is a positive market sentiment rather than using a "rusty" Index Filter that uses a simple moving average.

*MACD Sentiment Filter - From 1st January 2018 to 30th December 2019*
MACD Filter: Net Profit: $198,784
Net Profit: 66.26 %
Annual Percentage Return: 29.35%







*IndexFilter - From 1st January 2018 to 30th December 2019*
MACD Filter: Net Profit: $174,768
Net Profit: 58.26 %
Annual Percentage Return: 26.16 %




Skate.


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## Skate (8 June 2020)

Saqeeb said:


> *Week 16: Update on my MAP paper trading portfolio.*
> 
> This portfolio lost $952.00 last week.




*You can never pick it*
The "Action Strategy" struggled this week as well, whereas my trading built from the opening on Mondays & increased every day to achieve one of the biggest weekly results ever, go figure.

*Keep up the good work*
I enjoy watching your weekly progress, let's hope your MAP Strategy can build from here.

Skate.


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## Saqeeb (8 June 2020)

Thanks @Skate, it is your motivation and the conditioning from this thread that has helped me a long way into this journey of trading. I realise that every strategy is different and one has to have the trust in their system / strategy to keep following it in order to achieve positive expectancy. Paper trading gives you this confidence in a system, even though less emotions are attached with paper trading.


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## peter2 (8 June 2020)

I wouldn't call the MACD an indicator of sentiment but it does a respectable job as a momentum indicator. The MACD can turn down while prices are going up (generally they're going up slowly ie. momentum has slowed) and the MACD can turn up while prices are going lower. 

I like the MACD especially the divergence signals as a warning indicator. The appeal of the MACD for me is that there are two lines. The MACD and a signal line. This creates nice objective crossovers. The MACD also has a horizontal line at zero. Using this, one can segment the MACD into four stages. 
(i) MACD crosses up, but below zero  - cautiously bullish, start investing
(ii) MACD bullish and above zero - fully bullish - be fully invested
(iii) MACD bearish but above zero - cautiously bearish - reduce portfolio heat
(iv)MACD bearish and below zero - fully bearish - minimal portfolio heat or none. 

If you prefer the objectiveness of two line crossovers then two MAs will do what you want with less whipsawing than a MACD. One can tune the two MA lines to suit your risk tolerance. 

Try as we might, we will never produce something that works well all of the time. The corona virus selloff in 2020 was just too swift for any combination of indicators on weekly charts. All the genuine trend traders must accept that there will be times when they have to cop a 20% draw down.


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## Linus van Pelt (8 June 2020)

Hi @Skate,

I hope this question is ok for this thread...

Why do you use commsec as your broker, since there are a few others (for example CMC, IB, Selfwealth) with lower brokerage?

Commsec must have features worth the extra brokerage, I just don't know what they are.  I will start off trading similar to you, i.e. XAO, weekly, so don't need access to O/S markets or other securities.

(Trying to decide which broker to use...)

Thanks!


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## Skate (8 June 2020)

Linus van Pelt said:


> Hi @SkateWhy do you use commsec as your broker, (*Trying to decide which broker to use*...) Thanks!




*eSuperfund*
My SMSF reporting is handled by eSuperfund & they require direct bank feeds. When you join Superfund you have two options when it comes to selecting a trading account (1) CommBank (trading with CommSec) or ANZ (trading with EBROKING ) so for me it's a no brainer. 

*Which broker?*
Deciding which Broker to use is your "second decision" after deciding on a Portfolio Trading Account Balance. (trading funds)

Skate.


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## Skate (8 June 2020)

peter2 said:


> I wouldn't call the MACD an indicator of sentiment. Using this, *one can segment the MACD into four stages.*
> (i) MACD crosses up, but below zero  - cautiously bullish, start investing
> (ii) MACD bullish and above zero - fully bullish - be fully invested
> (iii) MACD bearish but above zero - cautiously bearish - reduce portfolio heat
> ...






@peter2 thanks for your input but I believe you have failed to realise how I'm using two independent MACD's to catch the "upside" & "downside" sentiment of the markets. I'm not using the MACD as intended but using the MACD as a dual purpose filter: (1) as an "on/off switch" & (2) to define the "Market sentiment". My research "so far" has been pleasing & the results posted tonight reflects the improvements over using a stock standard "Index Filter".

_*As you said: "I wouldn't call the MACD an indicator of sentiment"*_
The definition of the word sentiment means "a view or opinion that is held or expressed" & I don't believe your words fall short of that definition.

*Let's me annex "sentiment" to your bolded words below*
(i) MACD crosses up, but below zero  - represents a *cautiously bullish sentiment*, start investing
(ii) MACD bullish and above zero - this condition represents a *fully bullish* *sentiment *- be fully invested
(iii) MACD bearish but above zero - this is the first sign of a *cautiously bearish* *sentiment *- reduce portfolio heat
(iv)MACD bearish and below zero - trading is not advised with a *fully bearish sentiment *- minimal portfolio heat or none.

*I'm confused *
I'm unsure what are you're implying. Are you saying (a) I've used the incorrect terminology of the word "sentiment" or (b) the MACD is not suitable to gauge market sentiment? or am I missing the point of your post entirely?

*I do like the way you have described a "divergence signals" as a warning indicator. *
I'm first to admit the MACD can be used as a "warning indicator" as well as "sensor" of current market sentiment to the upside. As you have expressed the MACD has a "range" of sentiments that I've taken advantage of. Using an Index Filter, a simple moving average of the index can only be used as a binary signal. (either on or off)

*If you have an alternative indicator *
If you have an alternative market-based indicator to "define a bull market from a bear market" you might wish to share it with me (other than a MA or EMA). My mission was to find an indicator, an alternative to an "Index filter". The new filter had to have the ability to not only define a bull market from a bear market but it also had to be reactive enough to identify conditions quickly & accurately. I based my research on finding an indicator that could predict the best time to be in the markets. Why? In order to filter trading opportunities in a more efficient way.

Skate.


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## Skate (9 June 2020)

*There is a fine line between enough information & information overload*
Yesterday's series of posts were designed to encourage others to think of alternative ways to gauge market sentiment. By filtering those sentiments we can take advantage of trading opportunities in a more efficient way.

*Thinking a little deeper "is there a better measure than the MACD"?*
There are of course endless indicators that will do the job & yesterday I concentrated on the (MACD) as the switching indicator. Today I want to concentrate on the (VIX) to define a bull market from a bear market. The VIX is a forward-looking index that shows the expected volatility in the S&P 500 options market for the next 30 days, so why wouldn't I want to harness this power. Talk about a crystal ball.

*"But there's more"*
What if we take the VIX one step further & not only use it as a "Fear Switch" to enter the markets but as a buy condition as well. 

*Let's not waste the power of a "fear index." (VIX)*
The VIX being a forward-looking index solves the issue of lag that most indicators suffer from so it's perfect to use as part of an exit strategy.

Skate.


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## Skate (9 June 2020)

*The (VIX) Volatility Index "fear index."*
Another name for the (VIX) is the "fear index." Why? Because of its tendency to move significantly higher during periods of market fear & uncertainty. The $VIX shows the market's expectation of the next 30-days of volatility. 

*Volatility Index (CBOE) *
For those who use Norgate Data (NDU) the symbol is ($VIX).

*Now the questions *
1. How do we harness an American crystal ball & apply it to our Australian market?
2. Is there a correlation between the S&P 500 options market & our market? 
3. How do we use the VIX not only as a binary "switch filter" but as a "Sentiment Filter" as well?
4. How can we use a foreign market as our "Index Filter" to our advantage?
5. How do we harness the power of "fear" & incorporate it into our exit strategy?

*I've been thinking what if I had the power to look 30 days into the future *
The (VIX CBOE) combines the price of multiple options & derives an aggregate value of volatility, which the index tracks allowing for a more accurate view of investors expectations on future market volatility. 

*WOW, that's handy to know but really what does that mean? *
I often hear "buy low & sell high" but nobody explains how it can be achieved. Well here's the difference, I'll explain how we can squeeze an advantage from the (VIX) & how we can apply that advantage to a trading strategy in the next few posts.

Skate.


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## Skate (9 June 2020)

*First off a bit of background information about the (VIX)*
The (VIX index) represents the price of a commodity, interest rate or exchange rate. It's a "calculated index" based on the price of options of the (S&P 500). The estimation of volatility for these S&P options between the current date & the option's expiration date forms the (VIX). 

*So where is the power I speak of?*
The power is in the knowledge that when the (VIX value) moves higher than 30 it's usually associated with a significant amount of volatility as a result of investor fear or uncertainty. Correspondingly on the flip side knowing when the (VIX value) is below 15 ordinarily correspond to less stressful or even complacent times in the markets. Now there's some powerful information to use. 

*As the saying goes *
"If what you learn leads to knowledge, you become a fool - but if what you learn leads to action, you can become wealthy"

*I'm starting to believe in the power of the (VIX) *
I'm thinking it would be "advantageous" knowing the sentiment of investors 30 days in advance & by applying some fancy mathematics we harness the power in real-time (that today's time). Yep, that's the "power" of the (VIX)

*I'm trusting it's "easy peasy" so far *
The next few posts will get a little more intense but I intend to explain the process succinctly in plain English, well that's my intention. 

Skate.


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## qldfrog (9 June 2020)

Skate said:


> View attachment 104510
> 
> *There is a fine line between enough information & information overload*
> Yesterday's series of posts were designed to encourage others to think of alternative ways to gauge market sentiment. By filtering those sentiments we can take advantage of trading opportunities in a more efficient way.
> ...



Not to reveal any of my trade secrets but using the VIX, you can get a pretty good guess statistically of the asx asx move, before the open.
Disclaimer, it is used in most of my current strategies in one form or other


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## Skate (9 June 2020)

*Why talk about Investors when we are traders?*
Well, it's a fine line we walk "pigeon-holing" one trading group to another but at times we can be both. Sometimes traders & investors like to "pigeon-hole" themselves into one type of investment/trading style. There is a distinction between being an investor & a trader. From my experience, it generally boils down to the trading timeframe (to me at least). 

*My definition*
Investors invest in long time-frames whereas traders deal in shorter durations. A simple definition that works for me.

*The (VIX) is "Implied Volatility" Index*
So what does "Implied volatility" mean in English?. Simply "Implied volatility" is a metric that captures the market's view of the likelihood of changes in a given security's price. Investors & traders can use it to project future moves (supply & demand) often "employing" the (VIX) to price an options contract, but we'll apply (VIX) in a completely different way to suit our trading strategy. "Implied volatility" is not the same as "historical volatility", so let's not confuse the two. The "historical volatility" figure will measure past market changes & their actual results. "Implied volatility" is forward-looking.

*Summary*
1. Implied volatility is the market's forecast of a likely movement in a security's price.
2. Implied volatility is often used to price options contracts but not for us. 
3. High implied volatility results in options with higher premiums and vice versa.
4. Supply/demand & time value are major determining factors for calculating implied volatility.
5. Implied volatility increases in bearish markets and decreases when the market is bullish. (WOW, that's music to my ears, something that I can work with)
6. Implied volatility is the power I intend to harness.

Skate.


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## Skate (9 June 2020)

*Let's stay with "Implied volatility" the power I intend to harness*
"Implied volatility" is a metric used to estimate future fluctuations (volatility) of a price based on certain predictive factors as @qldfrog has eluded to. "Implied volatility" is commonly expressed using percentages & standard deviations over a specified time horizon. This "time framing" will become important in how I will use the (VIX) going forward. 

*Moreover *
The (VIX) when used as a "market sentiment indicator" is completely different when I use it as a "trade entry condition". Using the (VIX) as an "exit strategy" requires plenty of mathematical gymnastics so it works efficiently.

*The (VIX) is a "fear filter"*
When applied to the markets, "Implied volatility" generally increases in "bearish markets" where I believe the prices will decline over-time. On the flip side, when "Implied volatility" decreases, the market is deemed to be bullish. I believe when the markets turn bullish prices will rise in the near future. Bearish markets are considered to be undesirable, hence riskier.

*Implied volatility does not predict the direction in which the price change will proceed. *
For example, high volatility means a large price swing, but the price could swing upwards or downwards, sometimes fluctuating between the two. Volatility, in this case, starts to become our friend because it's all about "predicting changes", changes we can take advantage of.

Skate.


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## Skate (9 June 2020)

*How am I going to using Implied Volatility (VIX)*
Implied volatility (VIX) will help me quantify market sentiment. I'm going to code a formula that can manipulate the (VIX) in such a way to estimate the size of the movement & use those calculations in three different ways.

*Let's cut the crap*
How will I use the (VIX) to quantify "market sentiment" using the uncertainty & fear displayed in the (S&P 500) options index? By manipulating the (VIX) in a "unique way" I'm sure there will be an increased benefit to my trading, let's see.

*How will I increase the profitability of my trading* (By three different ways)
1. I'll use the (VIX) in its raw state as a direct "Sentiment Filter" (remembering the VIX is a 30-day forward-looking index)
2. I'll code the (VIX) using a "multi-day system" calculating the differences between highest high value & lowest low value averaged as an entry condition. To achieve this it will require complex coding.
3. I'll also be using the reverse calculations for an exit condition. When the market is hot, it's hot & when it's not, it's not, that's the simple logic of using the (VIX)

*Summary*
The (VIX) is supplementary to a strategy, "not a stand-alone strategy" by any means but with careful coding, I believe this trading idea would have merit & legs to perform.

Skate.


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## Roller_1 (9 June 2020)

Skate said:


> *MACD Sentiment Filter - From 1st January 2020 to 5th June 2020 *
> MACD Filter: Net loss: $-852.03
> Net Loss: -0.28 %
> Annual Percentage Return: -0.66%
> ...




Skate, in regards to your system development what is the reason for not getting the full Norgate package? That way at least you can test accurately over a statistically large enough data set. I saw you said you didn't have the full set with historical constituents? or did i miss something..

Because of the smaller test periods we already have a pre-conceived idea of what the results will be. 

I know you say backtest results mean 'Jack' but surely a larger number of trades/ time period has more weight in assessing performance than short time frames with <100 trades.


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## frugal.rock (9 June 2020)

Love your work Skate.
Have you considered coding actual orders?
I would think with your apparent ability there's potentially room for a consistent minimum of 2 to 3%? range (stock dependant) better entry and exit prices?
Obviously not the action strategy though but a future strategy?


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## Skate (9 June 2020)

*Well, I finally got here*
"The proof of the pudding is in the eating". The real value of using the (VIX) can only be judged from practical experience & backtest results - not from a theory about using the (VIX).

*Practical examples of using the (VIX)*
This is a backtest from 1st July 2019 to 9th June 2020 (today) as a direct comparison between using an "Index Filter" compared to using the "VIX" (2019/2020 financial year to date)







*Using an "Index Filter" only*
This is a backtest result from 1st July 2019 to 9th June 2020 (today) using an "Index Filter" only






*Examples of using the (VIX) in combination*
This is a backtest result from 1st July 2019 to 9th June 2020 (today) using the "VIX" combo.
The (VIX) backtest result include the application of (1) the "VIX Sentiment Filter", (2) the "VIX entry condition & (3) the "VIX exit strategy" a combination of the three all working in unison.

*Using the "VIX" combo*




*Before someone asks*
I'll post a backtest from 1st January 2020 to 9th June 2020 (today) as a direct comparison between using an "Index Filter" & the "VIX" - I won't be uploading any more comparison backtests, two backtest results will have to be sufficient.

Skate.


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## Skate (9 June 2020)

willoneau said:


> Hi Skate, *how does it compare when taken from the start of the year*?. As there were good gains at the beginning of the year.




*Credit where credit is due*
@ducati916, is a valuable contributor to the "Dump it here" thread & without his help with the (VIX) I wouldn't be able to use it to my advantage.

*Practical examples of using the (VIX)* (2019/2020 financial year to date)
This is a backtest results from 1st January 2020 to 9th June 2020 (today) as a direct comparison between using an "Index Filter" compared to using the "VIX" combo. 

*"Index Filter"     * *The (VIX) combo*




*Trading is still the hardest game in town*
Trading to a great degree hasn't changed over the years but the tools certainly have. When you're playing with some of the best traders around, you need to trade on a level playing field otherwise it could be "all over red rover" quick smart. By using a "market sentiment" filter, either the (MACD or the VIX) it accomplishes three goals, (1) the ability to detect a trend as early as possible, (2) be able to distinguish "false signals", (the wheat from the chaff) so you can avoid taking a wrong position & (3) the ability to get out quickly before the proverbial hits the fan. Every system requires these three to produce profitable results.

*Get out quick*
Timing of the exit is critical to any strategy. Cutting trades early is the secret of being a profitable trader & the (VIX) addresses this effectively.

*If others have an alternative *
If others have a more efficient way to gauge "market sentiment" feel free to share it. Using a simple moving average or any variety of a moving average to define a bull market from a bear market tends to be archaic nowadays (IMHO)

*This brings me to the end *
It's been exhausting, explaining how we can take advantage of the (MACD & the VIX Index) as a more efficient way to gauge the "sentiment of the markets" as trading is all about "predicting changes"

Skate.


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## Skate (9 June 2020)

Roller_1 said:


> Skate, in regards to your system development *what is the reason for not getting the full Norgate package*? That way at least you can test accurately over a statistically large enough data set. I saw you said you didn't have the full set with historical constituents? or did i miss something



@Roller_1 in my strategy development days I had Norgate Platinum subscription level using (NDU) 3 years before it was released to the public. My trading strategies have been fully tested & evaluated using the full set with historical constituents (25 years of data). They are now all mature trading systems.

*Having 3 Norgate subscriptions *
These days I don't require the features of a Platinium subscription package (including historical constituents) as I considered my development days are over. Retaining 3 Platinum subscriptions is overkill in my opinion.


Roller_1 said:


> *I know you say backtest results mean 'Jack' *but surely a larger number of trades/ time period has more weight in assessing performance



*I do have a trick up my sleeve*
I can accurately test a strategy with live results as "Share Trade Tracker" has now added an API to Norgate Data for subscription holders, a great new program update.

*So what does that mean? *
It means my backtest results will be 100% accurate. The more accurate my backtest replicates real-life trading the more confident I am in the system. I personally need to correlate & replicate my systems behaviour in real life. This is where Amibroker backtest results fall short of the mark on many fronts for me.

*Imagine this*
You miss a trade because it (a) gapped or (b) the position wasn't taken because the security was suspended (ISX) or (c) the signal was subject to a negative announcement (takeover or profit downgrade) or (d) the position contravenes my trading plan or (e) any other myriad of reasons.

*Amibroker doesn't care*
I know this, you know this, but Amibroker carries on regardless, taking the next position at the "opening price" no matter what. Not only does it take that position it won't allow another position to take its place in the portfolio. I hope this clarifies why Amibroker backtesting means JACK to me.

Skate.


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## Roller_1 (9 June 2020)

Skate said:


> @Roller_1 in my strategy development days I had Norgate Platinum subscription level using (NDU) 3 years before it was released to the public. My trading strategies have been fully tested & evaluated using the full set with historical constituents (25 years of data). They are now all mature trading systems.
> 
> *Having 3 Norgate subscriptions *
> These days I don't require the features of a Platinium subscription package (including historical constituents) as I considered my development days are over. Retaining 3 Platinum subscriptions is overkill in my opinion.
> ...




Cheers Skate,

I understand this with your existing Live systems, once you are happy that's ok. I am more talking about when you are 'tinkering' or adding new adaptions such as your vix exit, or developing the Action strat. Without a large set of trades the significance of results diminishes doesn't it? I'm not saying they are not significant results they look great but how are you measuring it? Or are you not intending to incorporate in your live trading.

Thanks


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## Skate (9 June 2020)

Roller_1 said:


> Cheers Skate, I understand this with your existing Live systems, once you are happy that's ok. I am more talking about when you are 'tinkering' or adding new adaptions such as your vix exit, or developing the Action strat. Without a large set of trades the significance of results diminishes doesn't it? I'm not saying they are not significant results they look great but how are you measuring it? Or are you not intending to incorporate in your live trading. Thanks




@Roller_1, I'm not saying I'm at a level of competency but when you put a few thousand trades under your belt, fiddling around the edges becomes second nature & less stressful. To me, trading is a straight forward endeavour, yet many make a mess of. The most common problem that traders have is that they always tend to over complicated their trading when trading doesn't need to be complicated at all. We obsessed looking for confirmation for every decision or code alteration we make. It's a trait most of us suffer from, fiddling & optimising till eventually, we end up with a meaningless system that makes a fortune on paper but performs miserably in real trading "if you don't know what you are doing".

*Let's not forget the basics*
As traders we buy a position in the hope sometime in the future we will be able to offload our position to someone at a higher price than we brought it. Traders make money in the markets by exploiting changes in the prices & that's exactly what I try to do.

Skate.


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## Trav. (9 June 2020)

Saqeeb said:


> *Week 16: Update on my MAP paper trading portfolio.*




@Saqeeb I was looking at your portfolio and wondered if you have thought about using (backtesting) Rotational Trading to weed out some of your lesser performing stocks that might tie-up critical funds that could be used in other positions that you would not normally be able to take.

*Example *- 

You have been holding PDN since the 11/5 for a loss of $220 and it appears to be trending sideways ( range 0.105 to .130 ). 

When you run your weekly scan and a better stock appeared then you would exit this PDN trade and open up another trade that would hopefully be successful.

​
Have a read up and then maybe give it a go and see if it will work for.

===========================================

Also I think you have a typo in the date column for the last few entries


​Good luck with the trading mate


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## IFocus (9 June 2020)

Skate, biggest leaning I have had for a long time during the run down was Duc's observations on the VIX.

This is in regards to the bottom.

There is some gold in there to be had


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## ducati916 (10 June 2020)

Since we are talking all things $VIX




You'll have to excuse a couple of my lines (could have been more precise). I have also omitted the horizontal lines (resistance/support) entirely because this particular chart is just a short history. You would want a longer time frame to plot the horizontals on.

 I use the VIX in combination with other indicators (probably about 4 in all). Mine are obviously not coded (big disadvantage, far more time consuming having to look at stuff) but you can still get there (even if you can't code) and have a pretty good idea what is going on.

Obviously (or maybe not so obvious) you can use the VIX in both directions (as Mr Skate is doing). There is a significant amount of information contained in this (seemingly) simple indicator. Clearly from the posted backtests, the advantage is clear.

So a practical application currently: look to far right of the chart. You will see that the steepness of the blue line is unlikely to be maintained. Any fluctuation now will create a 'break' in the trend line. This will in the current market trigger the 'pullback' that a number of posters have been talking about for the last week. Note also, had horizontal lines been added, the falling VIX would be at +/- the support point and would likely rally, which means falling prices in stocks.

Today, we have a bit of a pullback. Is it a pullback or failing (bounce) trend? It is simply a pull back because the other indicators do not confirm a trend (significant) failure.

But that identifies an important point (that Mr Skate has solved via code): how do you differentiate a 'signal' from noise? This takes some effort and is tricky in isolation. I use other confirmations, but you will have to find something that gells with your style of trading.

jog on
duc


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## Roller_1 (10 June 2020)

Skate said:


> @Roller_1, I'm not saying I'm at a level of competency but when you put a few thousand trades under your belt, fiddling around the edges becomes second nature & less stressful. To me, trading is a straight forward endeavour, yet many make a mess of. The most common problem that traders have is that they always tend to over complicated their trading when trading doesn't need to be complicated at all. We obsessed looking for confirmation for every decision or code alteration we make. It's a trait most of us suffer from, fiddling & optimising till eventually, we end up with a meaningless system that makes a fortune on paper but performs miserably in real trading "if you don't know what you are doing".
> 
> *Let's not forget the basics*
> As traders we buy a position in the hope sometime in the future we will be able to offload our position to someone at a higher price than we brought it. Traders make money in the markets by exploiting changes in the prices & that's exactly what I try to do.
> ...




No problem Skate, i agree that simple works best a lot of the time. 

Personally though i need that conformation, or what feel is conformation. 

Cheers


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## Saqeeb (10 June 2020)

Trav. said:


> @Saqeeb I was looking at your portfolio and wondered if you have thought about using (backtesting) Rotational Trading to weed out some of your lesser performing stocks that might tie-up critical funds that could be used in other positions that you would not normally be able to take.




@Trav. Thank you for suggesting and the example code. I will read up and look at implementing this and see if this will improve the backrest results. 

You are correct about the typo. I will fix the error when I can access my computer after work.


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## Warr87 (10 June 2020)

Saqeeb said:


> @Trav. Thank you for suggesting and the example code. I will read up and look at implementing this and see if this will improve the backrest results.
> 
> You are correct about the typo. I will fix the error when I can access my computer after work.




That also seems similar to the 'stale' exit that Skate uses, and the 1 I implement in my MAP strategy as well.


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## Skate (10 June 2020)

Skate said:


> *This brings me to the end *
> It's been exhausting, explaining how we can take advantage of the (MACD & the VIX Index) as a more efficient way to gauge the "sentiment of the markets" as trading is all about "predicting changes"




*ASX200 XVI index*
Well, I thought my research of using the (VIX) was done & dusted till I received a "PM" asking if I had also considered using Aussie (VIX) Norgate code ($XVI).


> I was just reading through your thread regarding the use of the S&P500 VIX index. Have you considered also using the ASX200 VIX index?




*Looking at both charts*
Looking at both charts below they appear similar (to a blind man) but the responsiveness between the two is quite different. I made mention in a previous post that the VIX needed to be manipulated requiring a hefty amount of mathematical gymnastics to have it work efficiently. "Well blow me down" there was not one piece of code that was compatible between the two indexes. First off, I had to heavily modify the smoothing of the adaptive moving average before cutting the look-back period. The "parameters & settings" were so foreign to each other, they were like "chalk & cheese". The issue with squaring the average of the HHV/LLV over the lookback period was a real eye-opener.

*Long story short*
I got there in the end. For those heavily invested in my latest series of posts searching for a better "sentiment filter" it's only fitting I should share my findings. 


*Chart of the S&P 500 (VIX)*






*Chart of the ASX 200 (XIV)*




*Next post - I'll be comparing the Aussie (XVI) to the S&P 500 (VIX)*
In the next post, I'll display a side-by-side comparison between using our own homegrown ASX 200 ($XVI) compared to using the S&P 500 ($VIX) as the "sentiment filter". (displayed in two different time frames) 

Skate.


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## Skate (10 June 2020)

*Two backtest periods (displayed)*
Below is a side-by-side comparison graph between using our own homegrown ASX 200 ($XVI) compared to using the S&P 500 ($VIX) as the "sentiment filter". There is no need for a story, the backtest results speak for themselves.

*Timing the markets*
Some trading systems may benefit from an attempt to time the market more efficiently indicating when we should be entering & exiting the markets. The probability of success increases when we trade with the prevailing market trend & we need to "GTFO" when the sentiment changes.

*Finally*
There are of course many more indicators other than the (MACD) or the (VIX) you could use before deciding which is the best "Sentiment Filter" or "Index Filter" for your own Strategy as trading is all about "predicting changes". My ultimate desire is for you to be stimulated enough to think about developing your own unique filter to gauge "market sentiment". Finding a trading method that allows you to trade consistently & confidently, well then, you might have just found your "Holy Grail".

*Comparison (1) Financial Year (YTD)*






*Comparison (2) Calendar Year (YTD)*




*All I ask*
Please don't lose sight of why I've made this series of posts of searching for a more efficient way to gauge the "sentiment of the markets". These posts were made for you. "I'm just repeating stuff I already know"
*
Scorecard*
Let's chalk this win up to @ducati916

(END)

Skate.


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## peter2 (10 June 2020)

Thanks @Skate for that research series on the VIX. BIG thumbs up from me.
I was also wondering about the ASX VIX. Thanks again for posting your work.

The reason the US VIX is more effective as a sentiment indicator is that the SP500 is a better representation of the overall US market than the XJO in the ASX. Our market is dominated by two sectors, financial and materials. Other industries aren't properly represented in the main indices.

I liked this paragraph of @Skate 's.


Skate said:


> *Finally*
> There are of course many more indicators other than the (MACD) or the (VIX) you could use before deciding which is the best "Sentiment Filter" or "Index Filter" for your own Strategy as trading is all about "predicting changes". My ultimate desire is for you to be stimulated enough to think about developing your own unique filter to gauge "market sentiment". Finding a trading method that allows you to trade consistently & confidently, well then, you might have just found your "Holy Grail".




We can borrow ideas and indicators from anywhere and anyone but we must first accept them as our own in order to have the confidence to use them properly.


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## qldfrog (10 June 2020)

thanks for mentioning the XVI, I was not aware and it is available in the Premium data package under XVI (no $)
Will check if it improves my systems vs VIX


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## qldfrog (10 June 2020)

Thanks Skate, 
if it helps
using a similar code as what I do with the VIX(and I assume different from yours), a trial with XVI was less than stellar, even after optimisation
since 1/01/2015 to today, daily:
longer period as I wanted significant entries to be statistically meaningful
using the same/similar code focusing on leveraging XAO trends either way:


the XVI is beaten flat so I will stick to VIX for my systems
@peter2 might be on something as to why and I would add XAO is quite different from ASX200.Hope it helps and reinforcse @Skate posts;
I did the tests and checks, better sharing than keeping for myself
Another great day trading, even with the VIX falling: have a great day


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## Trav. (10 June 2020)

Warr87 said:


> That also seems similar to the 'stale' exit that Skate uses, and the 1 I implement in my MAP strategy as well.




Fair enough, I don't have the MAP code but with a system with limited funds or fully invested how long do you hold onto a losing position (s) ?? 

Million dollar question I know, but can be tested with a stale exit if stock is held for x number of weeks (bars).

In the example @Saqeeb has only held PDN for 4 weeks but with a loss of ~ 18% I would be looking at options, but that is me and hence why I like daily systems, so comes down to the individuals "sleep at night factor"


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## Willzy (10 June 2020)

Using $VIX as a sentiment filter on my version of the Weekend Trend Trader was an excellent idea Skate!

Cheers! 

More investigation required but simply swapping it out from my usual index/sentiment filter even without optimization yielded an additional 2% of CAR and a more visually pleasing equity curve.

I'll also have a play with using $VIX as an additional feature in a logistic regression machine learning model for some US stocks to see what it can do there. I'll report back!


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## Warr87 (10 June 2020)

Trav. said:


> Fair enough, I don't have the MAP code but with a system with limited funds or fully invested how long do you hold onto a losing position (s) ??
> 
> Million dollar question I know, but can be tested with a stale exit if stock is held for x number of weeks (bars).
> 
> In the example @Saqeeb has only held PDN for 4 weeks but with a loss of ~ 18% I would be looking at options, but that is me and hence why I like daily systems, so comes down to the individuals "sleep at night factor"




I give mine a bit of time, as in the nature of trend following where some stocks will pullback before continuing up. But if it goes nowhere I'd rather move my money somewhere else. Your idea isn't the same, though, as the 5 worst stocks may not necessarily be losing money.


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## Skate (10 June 2020)

Willzy said:


> Using $VIX as a sentiment filter on my version of the Weekend Trend Trader was an excellent idea Skate!
> *More investigation required *but simply swapping it out from my usual index/sentiment filter even without optimization yielded an additional 2% of CAR and a more visually pleasing equity curve. *I'll also have a play with using $VIX as an additional feature* in a logistic regression machine learning model for some US stocks to see what it can do there. I'll report back!




@Willzy what a great post & thank you for your kind words. 

*More investigation required*
I'll be looking out for your report with a frank & honest appraisal if the (VIX) is beneficial to any of your systems. I'm so happy you were motivated enough to make your first post in the "Dump it here" thread. Your words were "music to my ears", it's exactly what I wanted to hear, well done. 


Skate said:


> *Why post ?*
> If my posts affect anyone's behaviour, I'm a winner - that's my end game..





Skate said:


> My ultimate desire is for you to be stimulated enough to think about developing your own unique filter to gauge "market sentiment". Finding a trading method that allows you to trade consistently & confidently, well then, you might have just found your "Holy Grail".




Skate.


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## Trav. (11 June 2020)

Warr87 said:


> Your idea isn't the same, though, as the 5 worst stocks may not necessarily be losing money.




I think that the idea of the rotational trading is that each stock in your watchlist (eg, S&P ASX 300 or user defined) is ranked via the *PositionScore* function as defined by you and if that stock falls out of the top 5 then it would be replaced. 

So with this example Saqeeb has a portfolio of 20 stocks (max positions) so you would set up the ranking for that portfolio size as per below

*PositionScore* = 50 - RSI(); // PositionScore as defined by you
SetOption("WorstRankHeld",30); // Remove stock if outside of top 30 ranked stocks​
Then once a month / quarter etc you would run the Rotational portion of the code and the non performing stocks (if any) positions would be exited, allowing you to take on a new position and address any portfolio re balancing sections of your plan. 

Non performing stocks in this case would be the ones that are ranked outside the top 30 stocks, so with a portfolio of 20 stocks you are bound to have a few going poorly and their ranking slipping down the list.

This may not be for everyone but if your system is running at 40% winners then you may want to turnover stocks periodically. 

Just food for thought.


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## qldfrog (11 June 2020)

Trav. said:


> I think that the idea of the rotational trading is that each stock in your watchlist (eg, S&P ASX 300 or user defined) is ranked via the *PositionScore* function as defined by you and if that stock falls out of the top 5 then it would be replaced.
> 
> So with this example Saqeeb has a portfolio of 20 stocks (max positions) so you would set up the ranking for that portfolio size as per below
> 
> ...



That would favour stock at end of trend and remove the one you get just as they start...
Really see the benefits in some systems but also the huge costs on other.
Stale checks would get them out on my systems, the longer i own a position the higher the profit or it get the chop
Just to say consider wisely if this is for you, look at average longest holding periods for winner loosers...or just backtest inbuilt rotational systems


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## Trav. (11 June 2020)

qldfrog said:


> That would favour stock at end of trend and remove the one you get just as they start...




@qldfrog I'm not sure that is correct. The entry would still be based on your normal system entry requirements which wouldn't be at the end of a trend, it is how you program it so really up to your imagaination



qldfrog said:


> Really see the benefits in some systems but also the huge costs on other.




Again not sure if this a factor as rotation would be done monthly or quarterly so impprovemnts in portfolio should outweigh a few extra transactions



qldfrog said:


> Stale checks would get them out on my systems, the longer i own a position the higher the profit or it get the chop




Yes that is a good way to do it, what is the criteria....n-bar stop ROC ??? many ways to skin a cat.



qldfrog said:


> Just to say consider wisely if this is for you, look at average longest holding periods for winner loosers...or just backtest inbuilt rotational systems




I think that this is what we are talking about. Backtest / optimise to see if it suits your system or trading mindset.


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## qldfrog (11 June 2020)

Trav. said:


> Yes that is a good way to do it, what is the criteria....n-bar stop ROC ??? many ways to skin a cat.



indeed I played with: after n bar ownership,  ROC in the most recent bars  has to carry on above specific % otherwise get out as you may statistically find better opportunities getting in other position.
I noted as well you were considering rotation on very long term: quarterly etc,  indeed if you keep positions that long, makes a long of sense;
i rarely have positions reaching that duration on my weeklys


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## frugal.rock (11 June 2020)

The discussion about rotation is great. 
Bias confirmation of my thoughts as mentioned re Ausnet in Mr Skates (brilliant overall) action strategy.

F.Rock


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## Trav. (11 June 2020)

Just to put up a quick back test result with the worst rank feature being optimised you can see the difference with the different re balancing options. 

Discussion only - not using this in any trading system

universe = ASX200

$100k Equity, Fixed position $10k, Max Positions 10

Rotated out end of each month

Ranking system = ROC(Close, 60);

Extra column "worst" is the WorstRankHeld option for determining if to rotate stock out of portfolio, so I have 200 stocks in my watchlist the system has selected; 
*
Optimal worst ranking system for best CAR/MDD*




*or sorted for maximum profit.*



​


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## Skate (11 June 2020)

*What have I been thinking about? "Thinking"*
I've made 168 posts referencing the word "thinking" that may have been missed by many.

*Thinking*
Thinking is so much a part of us that we usually don’t think much about thinking. If we pause for a moment & observe our thoughts, we become aware of the activity of our mind. Our thinking is tirelessly telling us what to believe & we tend to accept whatever it's telling us "as an accurate reflection of reality". We have become accustomed to accepting our thoughts "as fact" even if it's a "distorted fact". No matter what our thinking conveys, we rely on it heavily every day. 

*Specialised skill*
Thinking controls you without you even realising it. It's very rare that you can control your thoughts & we tend to accept the way we think as the norm, not realising that thinking can be controlled & developed into a specialised skill.

*Why post about thinking?*
Because trading is a "thinking game".

Skate.


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## Skate (11 June 2020)

*Different ways of thinking*
There are many different ways to think about a situation or a problem at hand. Thinking is usually divided into a multitude of categories but I'll concentrate on just two, as trading is a thinking game. Why just two? Because trading relies on making the best decision with the available information at hand. 

*"Analytical thinking" & "Lateral thinking" *
These ways of thinking at times work together & at times independently of each other. Nevertheless, both are required to trade profitably. Let me give you a condensed version of what they both do so you can determine their worth. 

*Analytical thinking *
Is "visual thinking" that gives us the ability to solve problems quickly & effectively by a step-by-step approach. A "step-by-step approach" allows breaking down of complex information into manageable components.

*Lateral thinking *
Is a manner of "solving problems" via "reasoning" that is not immediately obvious. It involves ideas that may not be obtainable using only traditional "step-by-step" logic of "Analytical thinking".

Skate.


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## Skate (11 June 2020)

*Dualistic thinking*
Analytical "visual" thinking is a different beast entirely to Lateral "problem-solving" thinking. Sharing the experience I’ve gained over the years, there are alternative ways of thinking about issues beneficial to making trading decisions. My way of thinking about issues is sometimes a little contrary to the accepted norm but normal for me.

*We have lost the art of thinking*
When people are in doubt, they tend to look to others first, that's human nature. Some people would rather adopt the opinions of others rather than form their own. It's greater today than in the past, today we have lost the art of thinking for ourselves. After thinking for ourselves without an answer that's the time we should seek the help of others & not before. 

*Where are these posts leading to?*
I'll wrap it all together in the next few posts as it will add validity to a way of thinking about the current state of the markets.

Skate.


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## Skate (11 June 2020)

*What's trading all about?*
Trading is like playing pool, it's not about sinking the ball, but lining up the next shot. Traders are often paralysed into inaction by the way they are thinking about the markets at any given moment. This way of thinking keeps you emotionally & financially tied to "that line of thinking" costing you substantially while you wait, hoping for a recovery.

*Have we missed the bounce?*
Most people really aren't smart enough to deal with the information overload which now exists & even intelligent people with good critical thinking skills, suffer the same fate. When processing information that supports our beliefs even after the evidence has been totally refuted, people fail to make appropriate revisions to their trading which tends to be one of our biggest design flaws of being human, "faulty thinking".


ducati916 said:


> Trying to apply too much logic to these types of events, usually results in nothing much more than a headache. Sometimes you just hold your nose and jump in and hang on as best you can. If you wait for the all clear, markets are long gone and trying for a good entry is just a waste of time. The time to jump in is often when all looks lost. Easier said than done.




*I'll leave the last word to* @Beaches


Beaches said:


> "*Just trade what you see"*




(END)

Skate.


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## frugal.rock (11 June 2020)

Cogito, ergo sum. 
_René Descartes_
Translation;
I think, therefore I am.

With the game of pool analogy, there's 2 games to consider;
Setting your balls up near pockets,
setting up the white ball from every shot, making it difficult for your opponent to succeed.

F.Rock


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## Skate (12 June 2020)

Skate.


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## ducati916 (13 June 2020)

Seemingly good advice. However we (should) know that what we see is very often influenced by what we think we see or what we want to see. Here you have the entire psychological field of cognitive bias to consider.

Second, even if you can filter out the bias and other traps, it has become very clear that to 'see', we have to know what to look at. There seems to be a significant issue with looking at the wrong thing. Media etc.

Even if we are in a darkened room, locked away and looking only at the price chart: what do we actually see? Price charts are a comparative tool. While you will make your final decision: buy, sell, stand-pat on a stock price chart, those price charts are reactive overall conditions. Those 'conditions' are myriad. So what are you looking at?

To 'see' you have to learn how to look.

jog on
duc


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## Skate (13 June 2020)

Skate.


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## Skate (13 June 2020)

peter2 said:


> realising *a 40% loss due to the recapitalisation*. This unexpected and undesirable outcome is just bad luck although the fundamentals of DCG were known to be poor. This is a good example that $hit happens when dealing in the market.




*Capital Raising *
I’m “Crystal balling”, forecasting that there may be a series of capital raising in the near future for many companies. Whether the capital raising is for “private placement” to take advantage of the current conditions for personal gains of company officials or it may be capital raising through a shareholder offer (both are done at a discount)

*Private placements *
This type of placement can be done on the quiet, offered to selected company officials including the Directors with an announcement simply saying more “shares have been issued” with most shareholders taking no notice.

*Shareholder Capital raising *
By offering discounted shares to current shareholders (at a bargain price) effectively reduces the value of existing shareholders. Raising capital this way circumvents the banks to increase or extend their line of credit.

*Win, Win*
It’s a win for the company at the expense of shareholders as @peter2 has experienced.

Skate.


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## Skate (13 June 2020)

*When an opportunity exists*
Profiting from the stock market is exceedingly difficult to do consistently over a long period of time - it’s our job as traders to identify opportunities, to anticipate a move & take advantage of that move (that’s the front end of trading, "stock selection"). From my experience, it pays to take action while a situation is favourable or where opportunities exist.

*The back end of the trading*
In its purest form trading is timing the market, buying & selling just at the right time. The best tactical tool a trader has is "selling". Timing the exit “determines” the outcome of a trade, critical to the success of any strategy.

*Successful trading is largely the art of selling*
Buying a stock & getting into a trend is easy, determining when to cut our losses or take our profits is the hard bit. It is so hard to determine when it’s the right time to sell, many just don’t do it or do it too late. This is a reason to look more closely at the (VIX) to "complement" existing exit conditions.

Skate.


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## Rsthree (13 June 2020)

Skate said:


> View attachment 104717
> 
> *When an opportunity exists*
> Profiting from the stock market is exceedingly difficult to do consistently over a long period of time - it’s our job as traders to identify opportunities, to anticipate a move & take advantage of that move (that’s the front end of trading, "stock selection"). *From my experience, it pays to take action while a situation is favourable or where opportunities exist.*
> ...




Well this rings very true. My post Covid crash paper portfolio is still running at 25%. All I did was pick stocks that were trending strongly pre covid crash and their basic fundamentals didn't indicate they were going broke before the crash.

At the time I decided to paper trade as I'm still green in the market, there was high volatiliy and I feared that the market was in a sucker rally and and would retest the crash lows. 

Well it hasn't (not yet anyway) so opportunity missed. In retrospect what would I have done differently..... Well thats irrelevant as my psychology at the time was in a very different state.

Learning slowly


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## ducati916 (13 June 2020)

Rsthree said:


> 1. At the time I decided to paper trade as I'm still green in the market, there was high volatiliy
> 
> 1(a) and I feared that the market was in a sucker rally and and would retest the crash lows.
> 
> ...




1. There was high volatility. What did you learn re. volatility? There are some very important facts that relate to volatility. When you understand them, you will have made significant progress re. trading volatility. Have you researched them? If no: why not?

1(a). Why did you believe it was a sucker rally? What informed you that it was? Why did you accept that as an authority?

2. You should absolutely list the things you would do differently and why.

2(a). What drove your psychology? If it was the 'market', then this is highly RELEVANT. You need to understand yourself and your reactions: most importantly, if you cannot control or manage your reactions you need a strategy that prevents those psychological reactions to begin with.

Now I don't mean to be rude, but you have learned nothing at this point. The good news is that you have plenty of time to do so.

jog on
duc


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## Skate (13 June 2020)

Rsthree said:


> so *opportunity missed*. My psychology at the time was in a very different state.




@Rsthree, your post allows me to get on "the soapbox" as there was no question but a statement from your recent experience.

*"My psychology at the time was in a very different state" *(your quote)
Fear & greed directly drives the markets & it’s our perception that creates the value at any given moment. The markets are a "reflection of the overall beliefs of all the traders" in the market at any given time. While one person sees a buying opportunity of a lifetime, another sees the meltdown of the global financial system as we know it. Reading a few threads, this becomes obvious in the extreme on both sides of the argument.

*Psychological outlook controls perception *
Your psychology plays the biggest part when it comes to trading because it controls your perception (the drivers of your reactions). When to be in the market & when to stay out of the markets is a personal decision & that decision is made while in an emotional state. Emotions can be good & bad, recognising the difference is the secret to trading.

*We need to understand market momentum*
@ducati916 recent series of posts are full of examples with supporting graphs adding validity to his posts. The momentum shifts the share price & our decisions determine if we are profitable traders in the long run. The "sentiment" of the players creates momentum in both directions. In a nutshell, trading is about "knowing when to hold them & knowing when to fold them" (Kenny Rodgers)

*Perfect time*
Staying out of the markets at the moment shouldn't be seen as a lost opportunity but the perfect time to evaluate your trading plan. I try very hard "not to give advice" because others will do as they please & "not what's in their best interest".

Skate.


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## Skate (13 June 2020)

ducati916 said:


> Now I don't mean to be rude, but you have learned nothing at this point.




*"You have learned nothing at this point"*
@ducati916, those words were a bit harsh even for me but I do realise the frustration you must feel because of the amount of effort you have put into explaining why the markets are reacting to the "volatility" controlling the day. It's worth remembering, we all learn at a different rate & our level of experience differs from one member to another. @Rsthree meets my expectations because he is one member who is thinking about some of my previous posts. Remarking that "his psychology" is now different today from the time of the COVD-19 crash.

*Thinking*
Thinking & curiosity has been pulled out from under us as traders but now's the perfect time for us to reclaim this area. Critical thinking (not touched on in my previous posts) is important but not as important as discovering new ways of thinking about issues or problems. Traders fail to realise that trading is just making one decision after another, making the right decision has a huge bearing on your profitability.

*The key element*
Fear drives capital preservation, which is the key to the longevity of a trader but sometimes (at a cost) stifling portfolio growth in the process. What we see in our "mind" sometimes doesn't align with reality, leading us into making a poor or wrong decision.

*Summary*
There is never a dull moment in the markets.

Skate.


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## ducati916 (13 June 2020)

Skate said:


> View attachment 104722
> 
> 
> 
> ...




Not as harsh as losing all his money. That is the reality. If you do not understand at least your own trading, you are highly likely to blow-up your account.

The years 2000-2003, 2007-2009 were huge learning opportunities (I would have loved to be trading in 1987, what an opportunity). If you were not trading then, you missed them. Looking at history can only take you so far. You need to live the market to fully appreciate the market. 2020 is a godsend for those serious about markets. It provides all you need to learn about trading bear markets.

Learning is an active process. It just doesn't happen via osmosis. It is good that he is willing. It is not good that he is missing object lessons being provided by the market.

How his 'paper' portfolio performs is worse than irrelevant, it is positively dangerous. Almost anyone can generate paper profits. Paper from real is 100% different. That however is not the central issue: the issue is that two critical factors are discounted as unimportant.

His paper portfolio is UNIMPORTANT. The other factors are CRITICAL.

jog on
duc


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## Rsthree (13 June 2020)

Yes I did say learning.

What I did learn

• I'm more risk averse then I thought I was
• Amibroker has a steep learning curve and I'm a long way from developing any sound code and successfully back testing the results with any confidence
• I realise that I will need to buy, beg or borrow system code that I can tinker with, tweak and learn. I don't think I'll have the tenacity to develop the level of Amibroker competence I'd be happy with
• It's bloody hard to keep things simple
• After reading enough content to make my eyes pop out of my sockets I could find an expert with an impressive set of charting tools to justify just about any result that I could dream up.
• It's bloody hard to keep things simple..... yes this one keeps popping up
• Common logic and basic economics don't seem to apply to the markets when fear, greed and fomo are in play.... Well at least not in the short term.
• I now know more about what I don't know
• Paper trading has limited learning value for me as it doesn't exercise / test the emotions enough, which seems to be atlest half the game. I'm better of trading a small account and just paying for the learning process with trading fees.
• Lots of small learnings like developing portfolio tracking tools and excel skills, trading accounts etc.
• My exits are still work in progress, ie. Finding the right balance between being too cautious with tight stops.. fear factor.. or allowing more space to avoid over trading.

Yes still learning and the more I learn, I learn more about what I need to learn.... if that makes sense.


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## Warr87 (13 June 2020)

https://www.marketcalls.in/library
https://alvarezquanttrading.com
and the AB forum all have plenty of code to play with

I still have a while to go with my coding, but you can always macgyver some code snippets together and follow basic rules to avoid overfitting/unrealistic results. I don't blame you for wanting to buy code though, as even though I have working systems I may buy one of Radge's turnkey systems.

I also still strongly believe that the complexity in systems comes not from the buy/sell rules, but rather the periphery code (making sure stops are coded correctly, or risk is implemented, or even just the exploration code, etc.)


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## Rsthree (13 June 2020)

ducati916 said:


> How his 'paper' portfolio performs is worse than irrelevant, it is positively dangerous. Almost anyone can generate paper profits. Paper from real is 100% different. That however is not the central issue: the issue is that two critical factors are discounted as unimportant.
> 
> His paper portfolio is UNIMPORTANT. The other factors are CRITICAL.
> 
> ...




Justleaised there's been a few more posts since your initial comment, the joys of typing on a mobile device. 
Always happy to recive criticism, it's part of the learning process. Hehe.

Total agree with your comment on paper trading, it was a l long way of the real life drama of a live portfolio. But it allow me learn a few technical aspects of managing the process.


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## Rsthree (13 June 2020)

Warr87 said:


> https://www.marketcalls.in/library
> https://alvarezquanttrading.com
> and the AB forum all have plenty of code to play with
> 
> ...




I did write down a set of rules that I wanted in my trading plan and then laid them out in a logical order of how I thought they would be coded.
I then tried to to find bits of code for each of my rules and tried testing each element. The individual pieces sort of worked, but then trying to string together some of the rules it all fell apart. So yes it became very frustrating process.

I'll take the opportunity, again, to remind all the seasoned traders that we are in a beginners thread. I've found that sometimes even seemingly simple and common trading concepts are not so simple when you start to dig in to them. At times I'd be been diverted for hours into the bowels of the WWW trying to find answers, and it's amazing the amount of **** you can dig up.


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## ducati916 (14 June 2020)

Rsthree said:


> 1. I did write down a set of rules that I wanted in my trading plan and then laid them out in a logical order of how I thought they would be coded.
> 
> 2. I then tried to to find bits of code for each of my rules and tried testing each element. The individual pieces sort of worked, but then trying to string together some of the rules it all fell apart. So yes it became very frustrating process.
> 
> 3. I'll take the opportunity, again, to remind all the seasoned traders that we are in a beginners thread. I've found that sometimes even seemingly simple and common trading concepts are not so simple when you start to dig in to them. At times I'd be been diverted for hours into the bowels of the WWW trying to find answers, and it's amazing the amount of **** you can dig up.




1. With the recorded rules, did you also list 'why' you want that rule. Market divergences are a critical element of analysis in the market. You want to ensure that your rules are performing as expected. To do so, you must note your expectation.

2. For Mr Skate.

3. That is very true. Re-reading my posts, they are intemperate. Apologies.


jog on
duc


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## Skate (14 June 2020)

ducati916 said:


> 1. With the recorded rules, did you also list 'why' you want that rule. Market divergences are a critical element of analysis in the market. You want to ensure that your rules are performing as expected. To do so, you must note your expectation. *2. For Mr Skate.* 3. That is very true. *Re-reading my posts, they are intemperate. Apologies*. duc




@ducati916 *thank you on two fronts. *
(1) Getting me to think about how I can help others in the same boat as I've helped @Rsthree yesterday.
(2) Making an apology, where one was due (impressive)

Skate.


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## Skate (14 June 2020)

*Why crystal balling never works*
Our mind tricks us into thinking we are using the "crystal ball" on the "left" but in reality, we are using the one on the "right". Knowing this, I want to make a few posts about my previous topics (thinking & memory) & bring them into relevance. 

*I know it's difficult*
New members sometimes find the information posted difficult to follow or understand & frustration quickly follows. The process sometimes seems simple but the concepts are not easy to follow. It's up to us all to make the difference & for myself, I'm going to take up the challenge in the next few posts.

*Keeping all my posts in the one thread*
Recently I posted about how we have lost the art to memorise which is a bad trait we have fallen into. We need memories to recall information that's important when it comes to trading. Jumping to conclusions is another bad trait, especially as a trader.

Skate.


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## Skate (14 June 2020)

*So much information to read *
We fail to absorb what we have just read let alone memorising & storing the important stuff (sometimes by speed-reading). I want to make it easier for you to recall information (as far as my posts are concerned) in the "Dump it here" thread. There are a few ways I propose to do it. (a) Visual Recall referencing a subject by using a graphic (b) Search the thread using "Keywords" 

*Keywords*
I always reference a preceding passage with a title so you better understand what's coming. Recalling information is difficult at best, I use "CHUNKING" of information into short passages for this reason. Another reason for "CHUNKING" my posts, is so you don't get exhausted before you start reading.

*How to use keywords? *
By referencing the passage title with my "avatar" you will subconsciously store the information which will help in the search for information at a later date. In the next few posts, I'll give practical examples of what I'm eluding to.

*How to use the search feature*
[keyword] + [Skate] + [Search this thread only]     

*BINGO! *
Finding information will be quick & simple. If you have a question, search for the answer first as I've covered most things already. Only after you haven't got a satisfactory explanation, then ask the question. By searching first you will remember better.

Skate.


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## Skate (14 June 2020)

*When the Amibroker logo is used*
There will be information about Amibroker. If the subject is "irrelevant to you" feel free to pass reading the post. For those using Amibroker, the post will either reference general information or a download. 

*My posts will be supplementary to: *
Amibroker-FAQ: https://www.aussiestockforums.com/posts/15657/
Amibroker-tips-and-tricks: https://www.aussiestockforums.com/posts/1073951/
Amibroker-CBT-help: https://www.aussiestockforums.com/posts/1077075/
Amibroker-system-backtesting: https://www.aussiestockforums.com/posts/1076918/

*About Amibroker*
AmiBroker is equipped with a powerful formula language allowing you to write trading system rules, define your own indicators & custom commentaries. The hyperlinks better explain the language, giving you a detailed reference of built-in analysis functions. It also shows how to use AFL-tools such as automatic analyser (AA).
http://www.amibroker.com/guide/AFL.html

*Alphabetical list of all AFL functions *(431 in total)
http://www.amibroker.com/guide/a_funref.html

*Understand how Amibroker works*
http://www.amibroker.com/guide/h_understandafl.html

Skate.


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## Skate (14 June 2020)

*When the Norgate logo is used*
There will be information about Norgat Data or Premium Data. If the subject is "irrelevant to you" feel free to pass reading the post. For those using Norgate Data, the post will reference general information about Norgate.

*Previously posted*
I made reference in @qldfrg "qldfrog-weekly-skate-inspired-system" & in @Trav. "amibroker-tips-and-tricks" about the nuance of Norgate Data. I realise not all members read all threads so it's worth repeating the differences here. (for readers of this thread)

*Addendum for Norgate Data users*
Heads Up - about 18 months ago Norgate made the (.AU suffix) mandatory for all new subscribers of Australian data to avoid support issues. Older subscribers don't have a suffix & changing subscriptions can also raise an issue without you noticing the change in data format.

1. Old Subscribers to NDU = $XAO (old data feed format)
2. New Subscribers to NDU = $XAO.au (new data feed format)

*Pad & Align*
Make sure the correct data format matches.

*Also, I made a follow-up post here*
https://www.aussiestockforums.com/posts/1069294/

*Premium Data*
"Norgate's old legacy format" (MetaStock format) you are using the correct format for the All Ordinaries "XAO".

*The problem with a bit of history*
If you subscribed to (NDU) both Australian + US stocks originally you would have had a (.AU) suffix. If you were an Australian-only subscriber then there would be no (.AU suffix). This optional suffix arrangement resulted in causing an issue, especially when a (AU+US) subscriber dropped a US subscription then all of their Australian stocks lost their suffix. It broke various watchlists that had been created, it also broke the formulas that were relying on a suffix being present. So to overcome this problem about 18 months ago Norgate made the (.AU) suffix mandatory for all new subscribers of Australian data to avoid the confusion.

*Using Norgate Data (NDU) instead of Premium Data*
With AmiBroker significantly-enhanced capabilities Norgate Data (NDU) capitalises on this by adding additional features well beyond those in Premium Data, so it pays to migrate over.

*There is a catch *(with regards to historical data)
There is one very important difference, with my original Premium Data I purchased historical data separately. NDU works as a subscription-only model and historical data cannot be purchased separately. The historical data is in the old legacy format (MetaStock format) meaning, they are not compatible.

Skate.


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## Skate (14 June 2020)

*Amibroker SetOption template by Bruce Robinson*
This is a modified version of Bruce Robinson's template as some settings are only accessible via "setoption" & not listed in the (AA) settings. It's recommended to control settings using an (AFL) rather than the Settings dialogue whenever possible. (the reason for uploading the template)

Skate.


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## Skate (14 June 2020)

*How to change from a Candle Chart to a Bar Chart on the fly*
Amibroker's standard "Price Chart" is a "Candle Chart" where I prefer to have a "Bar Chart" (personal preference) I have uploaded a "Price Chart" (AFL) that allows changing from a Candle Chart to a Bar Chart on the fly.





*The "Price Chart" as a "Bar or Candle Chart"*
Save the (AFL) to the "Basic Chart" Folder as shown below. The Price chart is a "Bar Chart" by default.








*How to change from one type of chart to another style*
I've made the Price chart as a "Bar Chart" by default. The instructions to change from one type of chart to another is on the graphic below. As the "Bar" is selected the "Price Charts" is displayed.








*How to change from a Bar Chart to a Candle Chart  *
I've made the Price chart as a "Bar Chart" by default. The instructions to change from one type of chart to another is on the graphic below. As the "Candle" is now selected the Candle "Price Charts" is displayed.





Skate.


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## Saqeeb (14 June 2020)

*Week 17: Update on my MAP paper trading portfolio.*

Another losing week for this portfolio
*
BUYS:*
I was only able to enter into 2 out of the 3 buy signals, *PPG *and* AYS. *The other buysignal was *Z1P *that zipped off on open and never traded at my maximum offer for the day.

No buy signals this week

*SELLS:*
2 sells this week.* CAN *and *AEF*
*



*


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## Willzy (14 June 2020)

Hi all,

I know this is probably not the thread to use but couldn't find a better alternative. I'm wondering if anyone out there is using the specific techniques / systems taught in H_Bandy's book Quantitative Technical Analysis?

I know its not everyone's cup of tea but it's been something I've been dabbling with for the last year or two. I've taken a very simple strategy often used in mean reversion (the basic rsi model) and used a combination of H_Bandy's example python code and my own to try and find stocks (predominantly US) that can be traded with such a system.

The python code cycles through a watchlist picking each stock individually optimizing on inSample data to find a good rsiPeriod, entryLimit and exitLimit then tests those settings out of sample.

Obviously some stocks are just no good at all but others look like this the one below attached below.

I was trading several of these systems at the same time on a MT5 demo account and all was great the first six months looked amazing.... well until COVID cleaned house!

Just want to know if anyone else is doing something similar with python (basic models or machine learning) 

Happy to have this moved to a new thread if necessary.

Cheers!


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## ducati916 (16 June 2020)

Since Mr Skate identified that the ASX followed the US VIX, here is the $VIX:EWA chart:




The circle indicates the break in trend and that the $VIX was about to move higher. That was the signal for short term traders (daily systems) to exit or at least lighten. No-one really expected (although we probably should have) the size of the 1 day move.

Keep at least half an eye on it, it will keep you out of big trouble.

jog on
duc


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## Skate (16 June 2020)

*Market sentiment, market direction indicator*
I recently received a "PM" about another concept to determine market sentiment or market direction. It's the "canary in the coalmine" indicator. To get a grasp of the concept, even though the strategy is rotational, the canary market indicator can be adapted to any system type.

*Introducing Protective Asset Allocation*
Protective Asset Allocation (PAA) is a new provident long only tactical investment strategy that combines a dual momentum approach with a vigorous capital preservation routine. The key elements of PAA are:

(a) Dual momentum-based timing and selection mechanic
(b) Innovative crash protection routine through protective momentum
(c) Support for separate “risk-on” and “risk-off" universes

*To read more*
https://indexswingtrader.blogspot.com/2016/04/introducing-protective-asset-allocation.html#:~:text=Introducing Protective Asset Allocation,based timing and selection mechanism

*Abstract*
Since the financial crisis of 2008 and the recent (end of 2015) pullback, investors are searching for less risky investments. Therefore, there is a growing demand for low risk/absolute return portfolios. The paper describes a simple dual-momentum model (called Protective Asset Allocation or PAA) with a vigorous “crash protection” which might fit this bill. It is a tactical variation on the traditional 60/40 stock/bond portfolio where the optimal stock/bond mix is determined by multi-market breadth using dual momentum.

*Read more here*
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2759734

*Download the paper*
https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID2764043_code1935527.pdf?abstractid=2759734&mirid=1

*Reposted the hyperlink without permission*
Thanks must go to the ASF member for forwarding the link.

Skate.


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## Skate (17 June 2020)

*It's hard to decide what to post*
With new members joining ASF it’s been my experience that they have a desire to learn. Most don't understand that trading is a "critical skill" in building enough wealth to eventually retire or additional funds in retirement. 

*Why are they thinking about trading? *
Most start to realise current investments are sub-par & the returns are getting less & less with each year that passes. There are more thinking about trading with fewer getting around to doing it. Those that do usually start to trade have a lack of understanding of how to enter/exit the market & consequently, often go broke. Most don't realise there are a few different ways to enter the markets. Traders will pigeon hole themselves using (a) Technical Analysis or (b) Fundamental Analysis. When discussing Technical Analysis verses Fundamental Analysis it shouldn't be a debate about right or wrong but methods to achieve the same end game.

*What’s your style?*
Trading styles are similar to religions, only slightly less combative (although I’ve seen some discussions get quite heated) however. Whether you use Fundamental Analysis or Technical Analysis doesn't matter - one is not right & the other is not wrong, that's not the point of discussing them. Technical analysis & Fundamental analysis are often seen as opposing approaches to analysing securities, but many traders have experienced success by combining the two techniques.

Skate.


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## Skate (17 June 2020)

*Trading System*
To succeed in the financial markets you need to have some kind of "trading system" in place, whether it’s Discretionary trading, Fundamental Analysis or Technical Analysis, it’s up to you. The amount of time you want to dedicate to trading will determine how much research you might do & how closely you monitor your holdings, will determine which method you will use.

*What criteria should you use to pick a stock?*
Well that the 64 million dollar question, you can either use fundamental analysis (the study of balance sheets, PE ratio, P&L statements, also researching any known facts about the company or you can use technical analysis (the study of charts). I prefer technical analysis as I believe all that is known about a company, the fundamentals of the company have already been factored into the share price. 

*In the next post*
I plan to upload an (AFL) file of a simple "Weekly Breakout Trend Following Strategy" for new members who have purchased Amibroker to help them understand coding a little better. The strategy is full of "comments" for a better understanding. 

*"Skate's 260 Period Weekly Breakout Strategy" *
This strategy buys into growth & in the direction of the markets. The strategy has a few adjustable parameters & fixed settings. Charting is using a "Bar Chart" as the (default). You can select a Candle Chart if prefered.

Skate.


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## Skate (17 June 2020)

*Skate's 260 Period Weekly Breakout Strategy*
The strategy uploaded is a weekly "Trend Following Strategy" buying when a stock is making a new "High" in the direction of the market "buying into growth". 

*Skate's 260 Period Weekly Breakout Strategy *(standard Settings)
Portfolio Capital: $20,000 ($20k Inital Equity: User-definable parameter, accessible via "Exploration Parameter Settings" - changes are reflected immediately)
Positions in the Portfolio: 20
Variable Position Sizing: $1,000 (User-definable parameter, accessible via "Exploration Parameter Settings" - changes are reflected immediately)
Note: Variable Position Sizing allows for rebalancing.

*Backtest Results (2019 Calendar year)*







*Backtest Results (2019 - 2020 Financial Year to Date)*




*Exploration Analysis *
The Exploration Analysis is used to generate the Buy & Sell Signals

*The Exploration Analysis displays the pre-auction trading values*
Quantity of shares to buy
Buy offer with a 3% premium
Total costing ($) value

*Exploration Analysis *(example display)




*(APX) File*
Please load the (AFL) strategy using the (APX) file.

*Disclaimer*
The strategy is supplied "as is" & coded quickly as an example only & it shouldn't be traded.

Skate.


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## fiftyeight (17 June 2020)

Skate said:


> *Market sentiment, market direction indicator*
> I recently received a "PM" about another concept to determine market sentiment or market direction. It's the "canary in the coalmine" indicator. To get a grasp of the concept, even though the strategy is rotational, the canary market indicator can be adapted to any system type.
> 
> *Introducing Protective Asset Allocation*
> ...




This is something I have spent quite a bit of time on lately. Well mostly annoying a few people on here and then following their links/advise.

HUGE topic with many many different variables to consider.

I am definitely at the learning what I don't know on the Dunning Kruger curve


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## Movendi (17 June 2020)

Can someone explain after 4pm what's the reasoning behind these large orders way beyond the market price?
You can see a $1.7mil sell order at $5.92 when market closed at $6.24.


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## Skate (17 June 2020)

*


I'm torn*
I wanted to upload a "Bollinger Band Daily Strategy" described & coded in "Urban Jaekle & Emilio Tomasini" new book (Trading Systems 2nd Edition). I've finished coding "Urban's Daily Bollinger Band Breakout Strategy" & frankly I'm unimpressed. I'm torn whether to upload "Urban's Daily Bollinger Band Breakout Strategy" or whether I should upload a Bollinger Bands version I've just coded as an alternative or should I upload both.

*Why upload a Bollinger Band Strategy?*
Bollinger Bands by John Bollinger has the ability to protect a trader against black swan events. The recent "COVID-19" Virus crash & similar events like these are always just around the corner. "Systemic Trading Systems" using Bollinger Bands will help guide you through the murky waters showing you what it takes to be among those that survive. "Skate's Bollinger Bands Weekly Strategy" is one example using a weekly periodicity where Urban Jaekle new strategy "Urban's Daily Bollinger Band Breakout Strategy" trades on a daily time frame that should be quick to respond to the changing market sentiment, "but falls short in that area for me".

*This is an extract from Urban Jaekle's new book *(that sounds great)
Urban Jaekle's Bollinger Band code is disclosed in his new book & his system logic is familiar to many. Urban Jaekle book explains how you can build a winning trading system. It is an insight into what a trader should know & do in order to achieve success in the markets. It shows you why you don't need to be a rocket scientist to become successful.

*Urban's Daily Bollinger Band Breakout Strategy*
Urban Jaekle's Bollinger Band code is certainly different & "not one I would trade" but it's a new approach to system development & portfolio optimisation. Urban Jaekle & Emilio Tomasini new book (Trading Systems 2nd Edition) is still a good read.

*Should I upload*
1. Urban's Daily Bollinger Band Breakout Strategy or
2. Skate's Bollinger Bands Weekly Strategy or
3. Should I upload both?

Skate.


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## over9k (17 June 2020)

Movendi said:


> View attachment 104883
> 
> 
> Can someone explain after 4pm what's the reasoning behind these large orders way beyond the market price?
> You can see a $1.7mil sell order at $5.92 when market closed at $6.24.




https://thebull.com.au/17821-how-do-i-get-an-order-filled-before-the-open-of-the-market/

To have your order executed on the open your bid/offer has to be such that the order executes during the Opening Auction phase. The opening phase is essentially where all orders that have been placed outside of market hours overlap in price and volume. Orders placed before 7am and after 4.10pm on ASX trading days are considered orders outside of market hours. Think of it as an open auction where everyone that has a bid or offer is listed on a board. The highest bidder and the lowest seller will trade as their prices overlap. The computerised system also takes into account the volume of bids and offers and determines at what price the first trades will occur at. Essentially it is an algorithm which determines how much stock will trade at the open and at what price through simple supply/demand balancing using both the price of sell & buy orders as well as volume for each. This is where "indicative price" comes from. A similar calculation occurs at the end of trade at 4.10pm. Orders after 4pm also queue up for 10 minutes until 4.10pm for the closing phase where the algorithm determines the close price for the day and the last trades for the day are executed.

So this guy is basically saying "computer, at the open, negotiate the best prices you can get above 5.92, and sell for them".


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## martyjames (17 June 2020)

Hi Skate

Learning a lot from you and your system uploads - thanks. Upload both if possible please

cheers


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## Skate (17 June 2020)

martyjames said:


> Hi Skate, Learning a lot from you and your system uploads - thanks. Upload both if possible please




*Okay, I've had a positive response for both strategies to be uploaded*
I'll post both (AFL) codes tomorrow. There has been renewed interest in the Bollinger Band Strategy because of Urban Jaekle's book (Trading Systems 2nd Edition). I thought with the recent "COVID-19" Virus crash it would be the ideal time to test his Bollinger Bands Strategy using his methodology. If others are interested the Bollinger Band code is free on his site: https://urban-stocks.com/en/codes but requires modification to suit our markets. The strategy also requires different parameters, filters & setting that might be the reason why the backtest results are unimpressive.

*Norgate Data*
Others who have a "Norgate subscription" with the "function for survivorship" might like to code the strategy for comparison to mine as "my subscription level" lacks those functions for survivorship bias. 

*Urban Jaekle's new book - Bollinger Band System (chapter 9 of his book)*
"Urban's Daily Bollinger Band Breakout Strategy" code is listed below

// https://norgatedata.com/AmiBroker-usage.php */

/*include all Norgate functions for survivorship free backtests */

*#include_once "Formulas\Norgate Data\Norgate Data Functions.afl";*

/* General settings */

*index = "$SPX";*      /* choose index which you test;

don't forget this to set also in backtester settings "pad and align"!

e.g. Norgate symbols $SPX=S&P500, $SP1500=S&P1500,

 $NDX=Nadaq100, $DJI=DowJones 30, $RUT=Russell 2000,

 $RUA= Russell 3000, $XAO.au = Sidney All Ordinaries 500     

more see https://norgatedata.com/data-content-tables.php; */

/* Strategy parameters */

*NumberPositions      = 20;*

/* Number of positions which you can hold at the same time*/

*BollTopPrds              = 180;*

/*compare with Appendix 1. Futures: default = 60 */

*BollingerTopWidth  = 3.5; *

/* For entry, compare with Appendix 1. Futures: default = 2 */

*BollBottWdth            = 0.5;*

/*For exit, compare with Appendix 1. Futures: default = 2 (for shorts) */

*IndexFilterLength    = 300;*  /*set Filter Length*/

*ScoreLength              = 300;*  /*Score lenght */

*BollBottPrds  = BollTopPrds; */*same length for both bands*/

*SetOption("MaxOpenPositions", NumberPositions); *

*SetPositionSize(100 / NumberPositions, spsPercentOfEquity);* 

*InitialEquity = 100000;*

*CommissionAmount = 0.25;*

/*this means 0.25% at entry AND 0.25% at exit of a position */

*SetOption( "InitialEquity", InitialEquity );*

*SetOption( "CommissionMode", 1 );* /*1 = percent, 2 = fixed */

*SetOption( "CommissionAmount", CommissionAmount );*

*RoundLotSize = 0;*

/* 0: fractional number of shares are allowed */

/* Preparation for Entry and Exit */

*indexFilter     = NorgateIndexConstituentTimeSeries(index);*

*upperBand    = BBandTop(C, BollTopPrds, BollingerTopWidth);*

*LongEntry = C >upperBand          */* Price is above the upper Bollinger band */

*AND Ref(C<upperBand, -1)          *

/* Price the day before is below the upper Bollinger band */

*AND indexFilter;*

/* make sure you have the correct stock universe */

*LongExit = C < BBandBot(C, BollBottPrds, BollBottWdth);*

/* price is below the bottom Bollinger band */

/* Market index filter. Allow positions only when index is in uptrend,

defined by a simple moving average of 300 days*/

*SetForeign(index);*

/*Norgate $SPX, $SP1500, $NDX, $DJI, $RUT=Russell 2000,

$RUA= Russell 3000, Sidney All Ordinaries

(Australian stock market)       $XAO.au

see here https://norgatedata.com/data-content-tables.php;

                                                                       */

*IndexDownTrend = C < MA(C,IndexFilterLength);*

/*IndexDownTrend = LinRegSlope(C, IndexFilterLength) ;

//  another possible option to define trend */

*RestorePriceArrays();*

/* In the case you get many different signals, buy the

stocks with the highest momentum over the last 300 days first*/

*Rank = 100 + Ref(ROC(C, ScoreLength),-1);     *

*PositionScore = Rank;*

/* The entry and exit trigger */

*Buy = Ref(LongEntry,-1)              *

/* Price is today above the Bollinger band */

*AND !Ref(IndexDownTrend,-1);  *

/* Index Filter: Don't enter new positions in a bear market */ 

*Sell =  Ref(LongExit,-1)*

*OR DateTime()==GetFnData("DelistingDate")*

 /* sell if stock is de-listed */

*OR !indexFilter ;     *

/* sell if stock has to leave the index  */

*BuyPrice=SellPrice=Open;*  /* Buy and Sell on the next days open;

Close instead of open could improve performance */

*Short = Cover = 0;*

/* for visualisation, optional */

/* Plot(C,"Close", colorBlack, styleCandle);

Plot(BBandTop(C, BollTopPrds, BollingerTopWidth),

"BollEntry", colorGreen, styleThick);

Plot(BBandBot(C, BollBottPrds, BollBottWdth),"BollExit"

, colorRed, styleThick);

Plot(ma(CLOSE, BollTopPrds),"MovAvg", colorBlack, styleThick); */

*Till tomorrow*

Skate.


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## Joe90 (17 June 2020)

Willzy said:


> Hi all,
> 
> I know this is probably not the thread to use but couldn't find a better alternative. I'm wondering if anyone out there is using the specific techniques / systems taught in H_Bandy's book Quantitative Technical Analysis?
> 
> ...



Hello Willzy, Dr. Howard's methods have always interested me. I suggest you start your own thread, your posts will just get buried under a load of irrelevant blather in here.


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## frugal.rock (17 June 2020)

Movendi said:


> View attachment 104883
> 
> 
> Can someone explain after 4pm what's the reasoning behind these large orders way beyond the market price?
> You can see a $1.7mil sell order at $5.92 when market closed at $6.24.



The mind boggles...
Your screen shot is at 4:01 PM.
This is the CSPA jostle.
Have a good read of this.
https://www.asx.com.au/about/trading-hours.htm


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## Willzy (17 June 2020)

Joe90 said:


> Hello Willzy, Dr. Howard's methods have always interested me. I suggest you start your own thread, your posts will just get buried under a load of irrelevant blather in here.



Thanks Joe, I'll do that!


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## CNHTractor (17 June 2020)

Skate said:


> Skate's 260 Period Weekly Breakout Strategy




Hi Skate, thanks for posting the 260 Period Weekly Breakout Strategy.



martyjames said:


> Learning a lot from you and your system uploads - thanks. Upload both if possible please




I very much agree with @martyjames - there is a tremendous amount of learning that I am getting from your posted codes.

I have been using Amibroker for a bit of time but had become lazy running strategies that were derivatives of themselves, working "ok" until the "Black Swan" arrived. Your examples are opening my eyes to code structures. I particularly love how you have been able to put buy and sell prices on your chart - very neat!


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## Skate (18 June 2020)

*


Bollinger Band Background*
Bollinger Bands are a technical indicator developed by John Bollinger. The indicator forms a channel around the price movement. The channels are based on standard deviations & a moving average. Bollinger bands can help you establish a trend's direction, spot potential reversals & importantly monitor volatility. All of this can help you make better trading decisions if you follow a few simple guidelines.

*Bollinger Band Basics*
Bollinger bands have three lines, an upper, middle & lower. The middle line is a moving average of prices. The parameters of the moving average are chosen by the Amibroker coder. There is "no magic moving average number", so it's important that the moving average (the middle line) aligns with the techniques & strategy being traded. The upper and lower bands are drawn on either side of the moving average. The distance between the upper and lower band is determined by standard deviations.

*The differences between the strategies*
1. Urban's Daily Bollinger Band Breakout Strategy = Bollinger Band "180 days Moving Average" of the (closing price) with (3.5) upper deviations & (0.5) lower deviations from the moving average
2. Skate's Bollinger Bands Weekly Strategy = Bollinger Band "100 weeks of Moving Average" of the ("HIGH price") with (2) upper deviations & (1) lower deviations from the moving average [PLUS] I use an additional condition. 

*An additional indicator *
By using the (HIGH price) of the Highest High Value of the last 100 weeks add another indicator & "IMHO" validity to the signals. John Bollinger recommends using two or three other un-correlated indicators, instead of using the Bollinger Bands as a stand-alone trading system.

Skate.


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## Skate (18 June 2020)

*An extract from Urban Jaekle's book (Trading Systems 2nd Edition)*
_"Every day, there are traders who make a fortune. It may seem that it seldom happens, but it does – as William Eckhardt, Ed Seykota, Jim Simons, and many others remind us. You can join them by using systems to manage your trading. This book explains how you can build a winning trading system. It is an insight into what a trader should know and do in order to achieve success in the markets, and it will show you why you don't need to be a rocket scientist to become successful. It shows how to adapt existing codes to the current market conditions, how to build a portfolio, and how to know when the moment has come to stop one system and use another one"
_
*Urban's Daily Bollinger Band Daily Breakout Strategy *
When I read comments from Urban Jaekle's book (Trading Systems 2nd Edition) I was doing cartwheels with excitement & couldn't wait to test Urban's Bollinger Bands Strategy using his methodology. Urban's Daily Bollinger Band Breakout Strategy is rather disappointing (but still has educational value) & is uploaded "as is". I've used the same format as my previous uploads for consistency with comments. It should be noted that the Bollinger band code supplied on his website is basic without being a trading strategy.

*Bollinger Bands Weekly Breakout Strategy*
Skate's version of a Bollinger Bands Weekly strategy will be uploaded after Urban's Daily Bollinger Band Daily Breakout Strategy has been digested.

*Disclaimer *
In my opinion Urban's Daily Bollinger Band Breakout Strategy shouldn't be traded - not even with "counterfeit money"

Skate.


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## Roller_1 (18 June 2020)

Skate,

Is cond1 correct? The comments don't seem to match the code or am i missing something


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## Skate (18 June 2020)

*Bollinger Band Breakout Strategy *
Both strategies use the same money management settings but trade a different periodicity. 
Portfolio Capital: $20,000 ($20k Initial Equity: User-definable parameter, accessible via "Exploration Parameter Settings" - changes are reflected immediately)
Positions in the Portfolio: 20
Variable Position Sizing: $1,000 (User-definable parameter, accessible via "Exploration Parameter Settings" - changes are reflected immediately)

*Note* 
Variable Position Sizing allows for rebalancing & is included as an Exploration Parameter Settings for those wishing to use larger position sizing.

*Exploration Analysis*
The Exploration Analysis is used to generate the Buy & Sell Signals

*The Exploration Analysis displays the pre-auction trading values*
Quantity of shares to buy
Buy offer with a 3% premium
Total costing ($) value

*Backtest results for "Urban's Bollinger Bands Daily Breakout Strategy"  *
Period: from 1st July 2019 to 18th June 2020 YTD (Today) 







*Backtest results for "Skate's Bollinger Bands Weekly Breakout Strategy" *
Period: from 1st July 2019 to 18th June 2020 YTD (Today) 
*


*
Skate.


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## Skate (18 June 2020)

Roller_1 said:


> View attachment 104926
> 
> 
> 
> ...




@Roller_1 well spotted.

*My bad*
In keeping with consistency of the (AFL) uploads I've used the same template as "Skate's 260 Period Weekly Breakout Strategy" & missed amending/correcting the comments.




*There were other mistakes *(comments only)
There were other mistakes using the same format & template but there shouldn't be any programming mistakes.

*Thanks for the Eagle Eye*
The corrected (AFL) & (APX) files have been corrected & upload for the "Urban's Bollinger Bands Daily Breakout Strategy v1"

*Summary*
The original files have also been replaced with the updated files & comments.

Skate.


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## Skate (19 June 2020)

Skate.


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## Linus van Pelt (19 June 2020)

Hi All,

Pardon the interruption.  This post will break up the great technical analysis and trading strategy posts that have been happening lately.

Well, I did it!  I've read the "Dump It Here" thread cover to cover!  All 3,185 posts (and counting)! It only took me two weeks to do so (May 28, 2020 - June 10, 2020).  Now there's two weekends plus a lot of nights I'll never get back .  I've only now had time to post this follow up after reading the thread.

Reading the entire thread generated a lot of thoughts, including a few analogies, and I hope you'll indulge me as I share them with the group.  The analogies are mine; you may, or may not, relate to them.  I apologize in advance that this post may be a bit long.

I thought "Dump It Here" was an excellent thread, and I really appreciate Skate putting the thread together, and to all the contributors to the thread.  It's nice that it still has legs after all this time (Dec 17, 2018 - present), and I hope it continues well into the future.  The reality is if it weren't for Skate, this thread would not exist, nor will it likely continue to grow should he tire of updating it.

I've bookmarked over 100 posts in the thread, and at some point I'd like to go through all my bookmarks and collate the information in those posts into a single document for faster reference.

Some of the concepts in the thread are a bit repetitive, especially the earlier posts.  This isn't a criticism at all, and in fact is likely consciously intentional.  As repetition is often conducive to learning, the repetition may help drive home some important points.  But it does make the thread longer to get through.  It does take a commitment of time and patience to read (not skim) every post.

After I finished the thread, the first feeling I felt was "incomplete".  Not that I expected a single thread to be a "complete" trading education, but that is nevertheless how I felt.  I felt like it gets me 80% "there", but the "magic" 20% is missing.  Don't get hung up on those percentages, they are just to illustrate a point.  But after reading the thread, I felt like I learned so much, yet have so much more to go.

Which leads me to my first analogy.  And these analogies really did pop into my head one night.  I'm not making them up just for this post.

Analogy #1:
Let's say you have an 8 year old child (i.e. a "newbie") who would like to bake her (or his) first cake.  So, as the parent (i.e. the "guru") you lay 5 ingredients out on the counter, a couple of utensils, and say "have at it, bake a cake".  Now, your child has eaten many delicious cakes before (witnessed the end results of a good trading system).  Perhaps she has even watched you bake a cake many times.  But seeing you prepare, or eating the finished product, doesn't mean she can create it without a detailed recipe.  You haven't included the two secret ingredients for the cake that make it delicious, you haven't said what temperature to use or how long to bake it, etc, etc.  What are the chances that your child will bake a successful cake?  Nil.

So, my first feeling after reading the thread was a lot like that child would feel.  A feeling of "incomplete", as though I haven't been given all the information.

However, then I thought "what if my analogy is incorrect"?  Don't get me wrong, it's correct for how I feel (felt), but is it correct about my expectation of this thread, or indeed of ASF in general?

A definition of "analogy" is "a form of reasoning in which one thing is inferred to be similar to another thing in a certain respect, on the basis of the known similarity between the things in other respects." (dictionary.com).  If your analogy is not in fact similar to another thing, then it is just a story, but does not serve to support your inference to that other thing.

So, as I thought about this further, I thought of another (perhaps more accurate?) analogy.

Analogy #2:
Instead, say I'd just graduated high school, and had a burning desire to be a professional chef, specifically a pastry chef or pâtissier.  So I'm still a "newbie", but with a higher intellect than an 8 year old child.  And let's say I went to a very fancy restaurant, and tasted the BEST CAKE EVER (brilliant trading system).  Man, this was the BEST cake I've ever had; I could eat it every day.  I have this BURNING DESIRE to learn how to make that ONE PERFECT CAKE.  So, I explain to my waiter, then the maitre d, that I'm an aspiring pastry chef, and with persistence convince them to let me meet their pastry chef after the restaurant closes.  I beg Jacques the pastry chef to give me the cake recipe.  Does he?  Of course, he says no.  Why?  Well, it's his intellectual property, and the restaurant's.  Also, he knows I might stop coming to the restaurant if I had the recipe.  Finally, he knows I could one day be a competitor, having "stolen" his recipe.

But Jacques isn't completely heartless, and recommends me to Pierre's Culinary College, where I study for three years to become a culinary chef, specialising as a pastry chef.  During that time, I bake hundreds of cakes.  I make a ton of mistakes, burn many a cake, others taste horrible, but eventually I learn to be an pretty good pastry chef.

Now, with that experience behind me, I one day return to that restaurant, and again order that cake.  It is just as delicious as always - the best cake I've ever had.  But now, with my newfound experience, I have newfound discernment.  I can taste the vanilla, a hint of coconut, definitely poppyseed, etc, etc.  Now, I still don't have the recipe, but I am now MUCH more capable of going home, trying different things, and coming up with a recipe that is pretty darn close, if not even better, than the best cake I've ever tasted.  I took those very good ideas embodied in the end result of that fantastic cake, and created my own recipe and made them my own.  I can now bake a cake every bit as good as that cake from the restaurant.

This is the analogy I choose to believe, rather than the first one, as it puts me in a better mindset of what I believe I can learn from the "Dump It Here" thread, and indeed from ASF in general.

Another feeling I had after reading the "Dump It Here" thread was "jealousy".  Why does Skate get mentorship from Captain Black, and I can't?  Why does Skate get technical analysis help from Tech/a, but not me?  Why does Skate get the "ducati-secret-VIX-formula-that-if-only-I-had-it-would-make-ALL-my-financial-dreams-come-true" secret formula?  Of course, I have no idea of the history or relationship between Skate and those individuals, so who am I to say why Skate, and not me?  But I was still jealous 

Which led me to my final analogy.

Analogy #3:
When you attend university, you start as an undergraduate.  As an undergraduate, you attend classes in a group, sometimes in a classroom, sometimes in a large auditorium with hundreds of fellow students.  You have a lot of homework (self-study), and frequent assessments (backtesting, paper trading, small positions to start).  In fact, the majority of work as an undergraduate is (guided) self-study; you spend more time reading, doing homework, and perhaps labs with fellow students, than you do in class. You never, as a general rule, get individual mentorship, unless you pay for a tutor (purchase a system?).  Although if you're that rare, persistent student who has a genuine passion to learn, stay after class, and "pester" the professor, you may get a bit of one-on-one tutorship (depending on the professor).

Fast forward to getting your PhD.  A PhD candidate has a personal advisor, who helps him or her decide on his subject, and provides one-on-one mentorship throughout the research and preparation of his thesis (trading system), when it is finally defended to a panel of critical professors (the market) who decide its merit or not.  (Apologies if this is not 100% correct, it is just to illustrate the analogy, I don't have a PhD.)

The point is, undergraduates haven't earned one-on-one mentorship.  It's only when they've proven themselves through two degrees that they get that one-on-one mentorship to earn that most difficult and highest of degrees (and of course medical degrees).

This is just an analogy; it may or may not apply to what I can expect from ASF.  Time will tell.  To be honest, I don't know exactly what one needs to do to earn a mentor from ASF.  Perhaps over time, and with persistence, a "virtual friendship", or at least "virtual respect", forms?  Peter2 said in a post (not sure if here or in another thread) something along the lines that he was sick of wannabe investors, who beg for help, are given help, never to be heard from again (nor with a word of thanks) (a paraphrase from my recollection of Peter2's words).  See "_Help Vampire_" below.

I did a title search on ASF for "mentor", and came across this thread: https://www.aussiestockforums.com/threads/mentor-for-newbie.35447/, and particularly this post:  https://www.aussiestockforums.com/posts/1071322/.

This quote by Garpal Gumnut resonated with me:  "It's a lonely interest, trading or investing."

These last two analogies work for me, and I believe put me in the right mindset for what I can expect from ASF, and what I need to do in my trading journey and education.  I am still an "undergraduate", having merely read my first assignment ("Dump It Here").  I have a long, long road ahead of me in my self-education.  I suspect it's a self-education that never ends, for as long as one keeps investing or trading.

It would be nice if I can at least get "What next?" advice from ASF but, again, time will tell.  But I do believe that "if it's meant to be, it's up to me".  There are no shortcuts on ASF that will instantly teach me what I need to be a successful investor or trader.  Not even "Dump It Here" .  But I do hope ASF will be an online community of like minded individuals, with many variations in skill set and experience.  It's probably the typical "pyramid":  the handful of gurus at the top that have a wealth of knowledge, experience, and success as investors and traders; the middle that are solid investors and traders, committed to investing and/or trading but still learning, still perfecting, still making mistakes; and the larger bottom of newbies or wannabes, that may or may not advance up the pyramid into the other two sections.

I do hope that ASF will be of benefit to me on my journey of self-education, and perhaps in the (distant?) future I can contribute back to the ASF community.

Finally, I'll do my best not to be a "Help Vampire" (this term is geared toward programmers but applies to ASF):
https://en.wiktionary.org/wiki/help_vampire (very short)
https://communitymgt.fandom.com/wiki/Help_Vampire (short) and
http://slash7.com/2006/12/22/vampires/ (longer but a bit funnier).

@Skate, thanks again for creating this thread and keeping it alive.  I do have more questions, but I'll save those for further posts.


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## Linus van Pelt (19 June 2020)

Hi @Skate,

I mentioned I have more questions in my above post.  My first question is, would you be willing to tell us about your own trading education and journey, preferably in as much detail as you are comfortable in sharing?  

I'm going on memory here, but I believe you said you studied for 3 years before making your first trade, having finished your first trading system while on a 6 month world cruise.  You were retired before beginning your trading, so you could devote more time to learning than those working full time.  You joined ASF on Dec 28, 2013, so rounding up to 2014, that means you were studying trading for roughly two years before joining ASF?

Why do I ask?  Well, one approach to self-education is to try to emulate someone who you respect, and who has the success you would like to achieve.  If I were to duplicate exactly what you have done, could I emulate your results?

(I heard a successful businessman once say "Never take advice in life from someone who is not where you want to be".  He specifically said don't take financial advice from broke college/uni professors.  I always liked that saying.)

I would love to know your motivation to start trading, the books you've read, the websites you've read/continue to read, the podcasts you listen to, the mistakes you've made, the tips and tricks you've learned with Amibroker, and other questions I'm too new to know to ask.

In summary, I'd love to know the DETAILS of your own trading education and journey.  And if not the details, then perhaps at least the books, podcasts, websites, and other sources you've used for your own education.

Kind Regards...


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## Linus van Pelt (19 June 2020)

And I thought of one more thing:  a list of the posts in ASF that I should read and follow.  

Assume I'm interested in technical analysis and trading.

(Yeah, this borders on "Help Vampire" - I could just spend hours searching ASF on various topics - but I'd still appreciate the leg up.)


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## Warr87 (19 June 2020)

I would recommend reading peter2's threads. But you may also want to think about if you are discretionary or purely mechanical? duc also has some great insights but both p2 and duc are discretionary. Skate is mechanical.


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## Linus van Pelt (19 June 2020)

Warr87 said:


> I would recommend reading peter2's threads. But you may also want to think about if you are discretionary or purely mechanical? duc also has some great insights but both p2 and duc are discretionary. Skate is mechanical.




Thanks @Warr87.  I'm already following @peter2, but I'm not sure what that gives me re: the forum software?  I don't think it gives me an alert on all his posts.  But I have seen his posts in this thread, and he seems like a super nice, really patient, super switched on guy.  I'll have a search on his and @ducati916's posts and start reading/catching up.

Except right now I'm reading the Amibroker manual:  https://www.amibroker.com/bin/UsersGuide.pdf.  I'm up to page 300 so far lol.  I do wish Dr. Tomasz Janeczko (https://www.amibroker.com/about.html) would invest in a tech writer where English is not his/her second language .

I'm a computer programmer, and my degree was in physics.  I think my nature will be more suited to mechanical trading.  I *love* coding; I've always thought I'd continue programming even in retirement, just for fun.  Maybe contribute to some open source project.  I just never thought it would be AFL 

I think I will get more excited about perfecting a new strategy than P&E, P&L, etc.  Once I learn what a strategy is!

But perhaps it's best to know a bit of both?  Hopefully if I read enough books (or peter2 and ducati's posts) that will happen organically.


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## debtfree (19 June 2020)

Linus van Pelt said:


> Thanks @Warr87.  I'm already following @peter2, but I'm not sure what that gives me re: the forum software?  I don't think it gives me an alert on all his posts.  But I have seen his posts in this thread, and he seems like a super nice, really patient, super switched on guy.  I'll have a search on his and @ducati916's posts and start reading/catching up.




https://www.aussiestockforums.com/t...orums-hints-and-tips.1489/page-2#post-1000122


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## Warr87 (19 June 2020)

Well you may like to know that a number of quant shops specifically looked for those with training in computer programming and physics. Given that background you would likely have a better chance at understanding people like Ernie Chan. Amibroker is some great software but I'm not sure what your programming background is (C, C#, Java, R, Fortran, and Python are all used within the industry and Python is currently considered the go-to for Fintech). AB is versatile and will do what you want if you know how to use it.

I will shameless plug my own thread, but more so for the occasional list of authors I am reading. If you are like me then you will try to ingest as much (academic) information as you can.


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## qldfrog (19 June 2020)

@Linus van Pelt 
I fully understand all analogies and went thru all these steps.
It is a lonely task and there is only so much you can learn and design on your own.
i have a similar background to yours sciences and math with programming so systemic trading is definitively well suited.
After the big thanks to Skate who initiated my travel, the notion of mentor is indeed critical and missing:
Location, background, so no mentor for me but i try to establish with some other valuable ASF members a loose network face to face meeting to initiate conversation and share common points then email etc so that you can share.code, concept and basically bounce ideas 
It is really useful.not as good as a mentor but better than being alone in front of a white board at home.
Look at the advantages no mentor means you need to do everything on your own, you fully own the code and sadly its  mistakes ..it will be a longer path, will cost you hard earned dollars but i do not have better options
Hope it helps..a bit


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## Skate (19 June 2020)

Linus van Pelt said:


> @Skate, *thanks again for creating this thread and keeping it alive*.




@Linus van Pelt, thank you for your assessment of the "Dump it here" thread, it was a great post.

*I really appreciate your kind words*
I'm the first to help others where I can, every post I make is done with that sole purpose of helping others. There is no smoke & mirrors with me, I'm frank & honest & at times a bit too open, but that's just me. With every post, I'm just repeating information I already know. I keep reading this forum to learn what I don't. There are a lot of smart people in our community & when they start to speak I'm smart enough to "prick me ears" & listen.

*Years of study*
I had 3 years of constant study before placing my first trade so I understand the frustration knowing the amount of time it takes to learn how to trade correctly let alone to make money at this game. It pays not to rush the learning process. The financial markets are cruel, unkind, dangerous & it's not a level playing field, one place where amateurs are generally fleeced brutally.


Linus van Pelt said:


> *I don't have a PhD.*



*What does PhD stand for?*
It's an acronym - *P*ersistence*, h*ard-work* & D*etermination* (PhD) *I have never met a successful trader who didn't have these qualities & qualifications in spades.

*Let's not complicate trading*
Trading is easy, making money trading is the difficult part. Trading consistently & successfully is even harder, which is why the majority of people who try to make money from trading fail. When you realise nothing works perfectly, accepting "that sometimes it works & at other times it doesn't" you'll become more accepting of handling a few setbacks. I say just "go with the flow". If you have the ability to delay gratification, stifle impulsiveness & shake off the market’s inevitable setbacks, will make you a half-decent trader. For those looking for the perfect strategy, there isn’t one, so in the meantime, pick an idea, backtest it to death leaving nothing to chance.

*I'm like a Dog with a bone*
I'm a compulsive learner & have a passion to share knowledge. I'm compulsive about most things & I study & write every day. I've condensed 5 years of trading knowledge into this thread, I thought it would be helpful for others to read the "nitty-gritty" of trading in a lighthearted way explaining what it takes to be successful.

*Let me give you an analogy to finish with*
I don’t care how often you read a "Boeing 747 instruction manual" or even a "Helicopter instruction manual" I can guarantee you that in the end you will not be a good pilot. If you ever get off the ground there would be no guarantee the plane or helicopter would be safe under your control. Reading my thread is just the same, this thread is a stepping stone to advance learning.

*Summary*
After reading some of my posts, hopefully it's the catalyst to learn more than the basics.

Skate.


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## Linus van Pelt (19 June 2020)

qldfrog said:


> @Linus van Pelt
> I fully understand all analogies and went thru all these steps.
> It is a lonely task and there is only so much you can learn and design on your own.
> i have a similar background to yours sciences and math with programming so systemic trading is definitively well suited.
> ...




Hi @qldfrog,

Thanks for all your contributions to this thread.

You triggered another question I had for Skate, but I guess I can ask it to the group in general.

Why the reluctance to share a trading system with the wider ASF?  I'm used to open source software projects, where individuals and groups contribute their expertise for the greater good of the world (so to speak).

Now, I think I may know the reason, but correct me if I'm wrong.  Besides "do your own bloody work", let's say Skate, or anyone, shared his active trading strategy(ies) with, I dunno, say 10 people privately.  Or with the entire forum.  If 10's, 100's, or 1000's of people were trading his *exact* system, they would be competing with him in the market.  Depending on when their trades ended up in the market, they could drive up his buy price, or drive down his sell price.

Besides protecting the *exact* intellectual property, there would be some real, actual detriment to someone sharing his/her strategy with a large group.


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## willoneau (19 June 2020)

Skate has shared a few systems in his thread.


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## Linus van Pelt (19 June 2020)

Skate said:


> @Linus van Pelt, thank you for your assessment of the "Dump it here" thread, it was a great post.
> 
> *I really appreciate your kind words*
> I'm the first to help others where I can, every post I make is done with that sole purpose of helping others. There is no smoke & mirrors with me, I'm frank & honest & at times a bit too open, but that's just me. With every post, I'm just repeating information I already know. I keep reading this forum to learn what I don't. There are a lot of smart people in our community & when they start to speak I'm smart enough to "prick me ears" & listen.
> ...




Thanks @Skate.  I'd still love to know the details of your educational journey, but I understand if you don't want to share the details.  I won't ask again.

I do recall you saying you read so many books only to learn that most of them were irrelevant (or words to that effect).  Perhaps that's a journey I'll also need to follow?

If other "gurus" reading this want to share their favourite books, podcasts, websites, ASF posts, etc, I'll be sure to take notes and start reading.


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## Warr87 (19 June 2020)

You don't see who is on the other side of the trade or who you are competing against when you put in an order. Crowding is a thing and whether we like it or not we would be competing against each other (without knowing it). I don't mind sharing snipets of code, but I'm personally reluctant to completely use someone elses or give completely my own. And why? Well as you mention we would be competing.There is also the reason that you need to know your own system so if you use someone else's how will you know when it has gone outsider the parameters its supposed to be working within? Kind of hard to detect a broken system on a good day, particularly one your not familiar with.

That being said, with some people I am happy to give them the complete code of systems I have designed (but not yet trading). Perhaps not to the entire internet, but to a few close people.


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## Warr87 (19 June 2020)

willoneau said:


> Skate has shared a few systems in his thread.



Infact I am trading one of them and so is @Saqeeb . I modified it and made sure it was different to anything @Skate personally trades (to make sure I didn't lower his effectivenss of his system). I definitely wouldn't have progressed like I have without Skate's disclosures of full systems within the thread.

It is also surprising how many systems you can download from the web! A number of them out there, though the majority are made for either the US market or the indian market.


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## Linus van Pelt (19 June 2020)

willoneau said:


> Skate has shared a few systems in his thread.



Yes but IIRC they were not systems he actively trades.  Or there was the one $20K portfolio he did trade with about 8 others.  But I got the impression that that was just "play money" for Skate and not a system he would trade with any large portfolio.  I believe that system was shared privately with those who specifically requested it.

But I will certainly go back and grab those systems that Skate posted (I will have bookmarked those posts), if nothing else to have a starting point to learn Amibroker.  There may also be other systems on the Amibroker site that I can use as a starting point to learn Amibroker.

Regardless, whether Skate or anyone addresses my post as to why, in my brief time here on ASF I've deduced that one is unlikely to get a complete system handed to him/her.  And perhaps that's as it should be


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## willoneau (19 June 2020)

The 20k portfolio was to show what is involved in trading a system. When real money is used it isn't play money, not to me anyway.


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## Skate (19 June 2020)

Linus van Pelt said:


> Thanks @Skate. *I'd still love to know the details of your educational journey*, but I understand if you don't want to share the details. I won't ask again.




@Linus van Pelt it has all been disclosed in this thread. I've explained my trading journey so far as well as explaining my work experiences, going from debt collector to a Judge in the NSW Financial Courts. I've been a state educator (Mechanical Engineering) & a trainer at (train the trainer level). I have stacks of qualifications spending around 18 years collecting them "just to hang them on my office wall"


Skate said:


> *Degrees & diplomas *Yep they are pretty common & they look good on your office wall. What impresses me are the successful business owner they have all the same qualification that assured success. PhD - an acronym that builds a successful business.Skate.






Linus van Pelt said:


> But *I got the impression that that was just "play money" for Skate and not a system he would trade with any large portfolio.* I believe that system was shared privately with those who specifically requested it.




*I value money*
I trade a variety of strategies & they are usually on the larger side, (one of my strategies trade in excess of 7 figures). I've made a bold statement that I intend to double my money trading the "Action Strategy" in the next 12 months (FYI: I trade the "Action Strategy" inside & outside my SMSF) Those trading along (if they follow what I do) I'm sure they will have a stressfree way of trading, a no thinking way of trading. $20k is a lot of money & each of my bet sizes exceed this amount but that doesn't diminish the "strategy's worth" or those members investing along with it.

*Strategies that have made me money*
I've posted actual trading strategies, strategies I've traded in the past & they have all made money. I've shared my trading equity curve once or twice before & I'm prepared to share it again. I've explained in minute detail how & what I trade, how I move in & out of the markets - all fully disclosed.

*Equity curve from July 2018*
I've got nothing to hide & nothing to gain. My equity curve may not hold any interest but it demonstrates what I had to endure trading the last few years (have a look at the hefty fluctuations within the curve). I thought this year was going to be my first losing year (of the five years I've been trading) but the trading gods have smiled on me.




*Another analogy - this time about Peter Brock* (otherwise known as "Peter Perfect")
Peter Brock won the "Bathurst 1,000" nine times, imagine if he gave you his winning car, do you honestly believe you would be able to win Bathurst even once? His 'ability', 'skill' & his 'mental toughness' decided the win, it's not when he got into the car, not even when he exited the car but how he handled the car during the race. Trading one of my strategies would be along the same analogy, meaning giving you one of my strategies to trade wouldn't guarantee success.

*Intensity of psychological forces*
Personality has a lot to do with the trader’s ability to grasp & properly execute a trading strategy or trading plan. The complexity of the markets & the psychological forces at work takes on a new intensity when your hard-earned money is on the line. Trading is all about human behaviour & perceptions.

*Traders are all different*
That is one of the nice things about traders "we are all so different", trading different styles & markets so "it shouldn't be a surprise to know that we all approach trading so differently". As traders, we all have a different level of risk tolerance, patience, activity but we all experience the same emotional ups and downs associated with trading. What is comfortable for one trader will drive another to distraction & if you can appreciate that fact, arriving at a style that works for you will be easier to handle in the long run.

*Stay tuned*
Tomorrow I will post my "Bollinger Bands Strategy" a strategy that I traded with success back in 2016. I'm hoping someone will backtest it & give an honest assessment.

Skate.


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## qldfrog (20 June 2020)

Linus van Pelt said:


> Hi @qldfrog,
> 
> Thanks for all your contributions to this thread.
> 
> ...



It is really the size of the group amount invested which matters
If you,play with small shares, it does not take long to change the market, my own order may influence it:
@Skate to his credit is sharing a 20k trend portfolio
Not the code but the actions ..but it is restricted to 20k total size, 1k parcels
If hundreds were playing it,that would be a disaster
Imagine, maybe open to manipulations
You release a system and maybe act a bar earlier so benefit from it
What if the system fails..are you getting sued?

Lastly, when the going get tough ,if you just cut and paste code, will your mindset be: i trust this, i have lost 25pc but i stay in..?
@Skate shared some code and that was a great starting point to build from, but as soon as i got that code, i quickly dismantled and changed it..made it mine before investing my first dollars..
Does that make sense?


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## ducati916 (20 June 2020)

Morning Mr Skate,

That equity curve is amazing, particularly the recovery out of the crash. It underlines this chart which appeared in the 'Market Bottoms'.






Trading Bear markets is an absolute skill that must be mastered.

Probably more important than any system (although that is a pretty close 2'nd) is the mental attitude to wade into uncertainty with a plan. You have to believe that if your plan is indicating too early, whatever, that you will have the psychological fortitude to pull the plug and reset for the next entry point indicated.

As far as methodology (#2 on list) it has to take account of Bear market realities first and foremost and second keep you in the bounce and third (and finally) keep you in the trend if and when it develops.

The absolute *SAFEST* place is at (or near) the bottom in a Bear market (or crash). The worst has already happened. Nothing but gravy ahead.

This is the exact opposite of what people perceive. They convince themselves (through media contributions) that the bottom is dangerous.

Your system, methodology, tea-leaves, witch-doctor,  must be able to distinguish NOISE from SIGNAL.

jog on
duc


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## ducati916 (20 June 2020)

Linus van Pelt said:


> Regardless, whether Skate or anyone addresses my post as to why, in my brief time here on ASF I've deduced that one is unlikely to get a complete system handed to him/her.  And perhaps that's as it should be




Mr Pelt, (clearly another Peanuts fan).

The reason (and this will stretch your credulity) is that if Mr Skate did provide his system, people would still f*** it up and lose money.

Impossible you say.

It is unfortunately true. A system that you have not developed yourself through the necessary contribution of blood, will not be traded as it should be traded when s*** happens. And it always happens. Or, even more oddly, when the system is making money, they short-circuit it thinking that a top has been reached, whatever and pull the plug.

As Mr Skate has alluded to many times: psychology is paramount. Without it, I can guarantee you that no system will save you.

jog on
duc


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## ducati916 (20 June 2020)

Linus van Pelt said:


> I'm a computer programmer, and my degree was in physics.  I think my nature will be more suited to mechanical trading.  I *love* coding; I've always thought I'd continue programming even in retirement, just for fun.  Maybe contribute to some open source project.  I just never thought it would be AFL
> 
> I think I will get more excited about perfecting a new strategy than P&E, P&L, etc.  Once I learn what a strategy is!
> 
> But perhaps it's best to know a bit of both?  Hopefully if I read enough books (or peter2 and ducati's posts) that will happen organically.




A mechanical system is simply an ironclad method for entering and exiting the market. The strategy will dictate the type of system that you build. That strategy (at least in the early days) needs to be aligned with your psychology, otherwise you will never reap the benefits.

Therefore first stopping point: (a) strategy. Then (b) can I realistically trade this way (psychological assessment)? Followed by (c) building/coding the system, backtesting it and (d) finally trading it.

jog on
duc


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## frugal.rock (20 June 2020)

ducati916 said:


> Therefore first stopping point: (a) strategy. Then (b) can I realistically trade this way (psychological assessment)?



One might also consider a psychological assessment (PA) first, then strategy logic? Then a PA again. There's no doubt that I started in the wrong order... and need to remove the damaging emotions from the equation.
Personally, am disappointed that I wasn't in a position to be able to join the action strategy, however, Mr/Sir Skate is now drip feeding the stragglers like me with another opportunity to build from.
Thank you Skate.

I believe he will post his previously traded Bollinger bands system soon, and I gather that he may move onto the next step we should consider implementation of. 

Can only hope that these "baby" step guides continue, as they are giving me some confidence in myself; of developing a system that can be adapted to my own psychology and removing the pitfalls our emotions can trap us in, if allowed.

F.Rock


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## martyjames (20 June 2020)

Just wanted to chip in, for any new traders reading this great post, one of the must read trading books in my opinion is 'trade your way to financial freedom' by Van Tharp. In my previous trading life (20+ yrs ago), this was the book that set me on the path to trading success and i still follow the guidelines since i have re-entered the markets recently.

cheers


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## frugal.rock (20 June 2020)

Trading in the Zone by Nick Radge is also a book commonly mentioned.
I believe that Skates free ebook would probably provide the same or similar outcome of the aforementioned book though. 
F.Rock


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## Skate (20 June 2020)

ducati916 said:


> That equity curve is amazing, particularly the recovery out of the crash. It underlines this chart which appeared in the 'Market Bottoms'.




@ducati916 When to be in the market & when to stay out of the markets is a personal trading decision, one trader sees a buying opportunity of a lifetime, another sees the meltdown of the global financial system as we know it. Making a profit from trading is all about chasing stock that has momentum & volatility, a topic you have discussed at "ad nauseam". I'm smart enough to realise without either there is no money to be made & when my money is on the line I try not to leave anything to chance.

*Elvis has left the building*
When all the scared money has left the building “some buyers step in” & that's what I've done. Buyers will gradually return to the markets only after they perceive it to be safe to do so missing the bounce, another topic you have discussed, trading the bounce another. 

*It’s not "Rocket Science", it’s "Behavioural Science", predictable human behaviour of emotions. *
The objective of trading is making a profit that requires careful risk assessment, disciplined money management, emotional & behavioural discipline but most of all you need the ability to execute a trading strategy flawlessly without hesitation. Sometimes we are our own worst enemy because we have a tendency to look for confirmation after confirmation before we make a decision. 

*Don't forget every trader loses money *
When that happens 'suck-it-up' & don't panic, don't lose your nerve & stop trading, a decision you may learn to regret. Successful trading is not guaranteed but 'there-is-no-alternative' that gets 'better-than-average' long term returns than parking your money in the Bank. Taking hits every now & again is all part of the game (just like boxing)

Skate.


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## Skate (20 June 2020)

ducati916 said:


> The reason (and this will stretch your credulity) is that *if Mr Skate did provide his system, people would still f*** it up* and lose money.




@ducati916 my analogy about being given Peter Brock's winning car doesn't assure a win at Bathurst, but your analogy is easier to understand (& direct). 

*Let me give you a few simple reasons why I think traders "fu¢k it up"*
The reasons aren't in any particular order, they are as they have popped into my mind.

*Timing the market*
Most traders declare that timing the markets can’t be done, how ridiculous, that’s my job description being a trader.

*Selling *
Most traders don’t know how to time the sell successfully. Successful trading is largely the art of selling. Buying stock is easy. It is determining when to cut losses or when to take profits is hard. Because it is so hard to determine, many just don’t do it or "do it in time". Traders need an edge to beat the markets & selling the losers whilst holding the winners can, in fact, be a simple edge

*Being disciplined *
Most traders don’t have any discipline. They’ll watch stocks get destroyed without doing anything about it (the more they lose the more likely they are likely to persist with it, go figure.

*Being vigilant*
Most traders will not back themselves so they use a ‘set & forget’ style of trading. Meaning, they forget about their money! What universe are they are living in?

*Having a Trading Plan *
Most traders don’t have one. They let their losses run & cut their profits early being the complete opposite of how I trade.

*Being emotional*
Most traders believe the things that make them "feel good" and "disregard the things that make them feel bad" (confirmation bias). They listen to everyone & invest on the thinnest of evidence. It’s not rational, that’s boarding on crazy. After reading a few posts some members do "crazy well".

Skate.


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## Skate (20 June 2020)

*Another analogy - Trading & Boxing*
Its been many years (many decades actually) since I jumped into the boxing ring but there are comparisons between boxing & trading I wish to make. When it comes to boxing you need to have confidence you have "done the work" to give yourself a fighting chance of success. Boxing is seen as a "brutal sport" but it's game of "strategy, timing & persistence", much like trading. Boxing is all about executing a plan whereas "trading is the brutal sport between the two".

*Boxing & trading*
No matter how good you are at "boxing or trading" you'll still take your hits, we all feel pain at some stage. Paper trading is similar to condition yourself in the gym, honing your power & skills, but once you step into the ring it feels totally different, especially when the bag hits back. (the opponent I mean) It's the same when you start live trading, the risk of losing your money is very real indeed & when you do, you'll experience emotions you never thought you had.

*Words from my old Boxing coach*
You couldn't make this stuff up. My old boxing coach is the "grandfather" of my "daughter-in-law". Change the word from "boxing" to "trading" & the analogy will become clear.
1. My coach expected me to time-my-punches (trading is all about timing), boxing is a game of skill (so is trading)
2. Don't get in the ring if you don't want to be hit (it's exactly the same when it comes to trading, taking hits along the way is part of the game)
3. Don't let him put you on the canvas & "ALWAYS" keep throwing punches (With trading don't allow yourself to be knocked out of the game, keep stepping up to the plate & keep on placing the trades)

*In trading, you have one job*
It's to "PROTECT YOU TRADING CAPITAL" if you don't protect your capital you'll be knocked out of the game.

*Analogy to trading*
When you take a few hits, making the next trade becomes much harder as you won't be thinking clearly. To stay in this game you need to keep taking the trades as they come along because no one is interested in "how you feel" or "what you might think" will happen next.

*Summary*
There is a major difference between boxing & trading, with boxing "even when you win" your body always feels like "it hasn't".

Skate.


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## Skate (20 June 2020)

Skate.


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## Saqeeb (20 June 2020)

@Skate, Thank you for the Saturday update of Action Strategy
I have a question and wonder if you have any rules to action when a security you hold is subject to a takeover offer. Obviously this question is pertaining to CDV as this was subject to a takeover offer on Friday.
Thanks


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## Skate (20 June 2020)

frugal.rock said:


> I believe he will post his previously traded Bollinger bands system soon, and I gather that he may move onto the next step we should consider implementation of.




*In keeping with consistency *
The (AFL) that I'm uploading all have the same $20k Portfolio template holding 20 positions the same portfolio values of the "Action Strategy"

*Some like to "Backtest" a larger amount*
All the signals for the "Bollinger Bands Strategy" are generated using the "Exploration Analysis". So others can select a higher value to backtest I have included a parameter function so the bet size (trading Funds) can be adjusted on the fly. Meaning, the "user-definable parameter" is accessible via Exploration parameters - changes are reflected immediately. (Default $1k bets).

*How to change my bet size?*
Follow my instruction below & change the "Trading Funds" amount, the strategy will make the adjustments to the Number of shares to buy, the price to offer in the pre-auction & a running tally of the dollars you are planning to invest.




Skate.


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## Skate (20 June 2020)

Saqeeb said:


> @Skate, Thank you for the Saturday update of Action Strategy I have a question and wonder *if you have any rules to action when a security you hold is subject to a takeover offer*. Obviously this question is pertaining to CDV as this was subject to a takeover offer on Friday.
> Thanks





@Saqeeb, that's a great question. I do have a rule when a security is subject to a takeover offer. First off, we don't panic, we let the position digest the information & give other traders wriggle room to make their judgement call. If the announcement is detrimental to the share price we still give it the wriggle room. The position deserves to be digested by the markets before we make our decision, it's important to respond to announcements rather than reacting as "responding gives us time to think". (I have one takeover rule that applies before we buy a position & another rule that applies when the position is currently held in our portfolio)


Skate said:


> *General advice*
> You also need to understand how to deal with the stress of trading - stressful situations & *how you "respond" rather than "reacting" will eventually decide your trading fate,* concentrate on this & you're partway there to being a half-decent trader.









Skate.


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## rnr (20 June 2020)

frugal.rock said:


> Trading in the Zone by Nick Radge is also a book commonly mentioned.
> F.Rock




"Trading in the Zone" was written by Mark Douglas.
"Unholy Grails" and "Adaptive Analysis" are books written by Nick Radge.

All three books are worth reading.


Cheers,
Rob


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## CNHTractor (20 June 2020)

Skate said:


> "Bollinger Bands Strategy"




Hi Skate, thanks for your post of the BBS - from a quick look it gives verrrry impressive backtests  .

I look forward to looking at your code and structure - possibly next week. 

This thread is a wealth of information. So thanks for everyone who is posting.


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## frugal.rock (20 June 2020)

Thanks for the correction and the Nick Radge books @rnr. 

Hi Mr Skate, firstly, thanks for the Bollinger bands code.

Question; following on from Saqeeb,

What do you recommend on how to take into account dividends paid/ pending?

EG;
AST went ex  ~5 cent dividend later in May, payment pending  (if the memory is correct. )
Thanks in anticipation.

F.Rock


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## Skate (20 June 2020)

CNHTractor said:


> Hi Skate, thanks for your post of the BBS - from a quick look it gives verrrry impressive backrests  . I look forward to looking at your code and structure - possibly next week. This thread is a wealth of information. So thanks for everyone who is posting.




@CNHTractor thanks for taking an interest in the "Bollinger Band Weekly Strategy". I've traded this strategy with good success back in early 2016. 

I would appreciate an honest assessment for others to read, the code & structure is at beginner level but at times "SIMPLE" just works. 

Also, thank you for supporting the "Dump it here" thread, without members taking an active interest the thread will die.

Skate.


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## Skate (20 June 2020)

frugal.rock said:


> *What do you recommend on how to take into account dividends paid/ pending? *F.Rock




@frugal.rock that's a good question. We are not trading for dividends, that's just icing on the cake. We have a trading account balance of $389.75 left in our trading account from our initial stake of our $20k. Taking this balance into account "less a loss with selling [AST]" plus a "small win selling [IGL]" the rebalance will buy another positiion when our trading account exceeds $1,000. 


Skate said:


> *What is annoying - no rebalancing*
> Commission drag won't allow rebalancing of positions that's why we need to keep position size to $1k bets. Trading such a low-value portfolio with "NO" re-balancing restricts the performance potential of the strategy. Commission drag has already been calculated so it's not possible to increase position sizing (bet sizes) under any circumstances.




*I have a procedure to take advantage of profits & it's normally done in two ways.*
Option (1) adding extra positions when funds become available. As I've said from the initial $20k there should be $389.75 left in our trading account, once that balance exceeds $1,000 we will buy another position. We won't let idle funds sit around being lazy, every dollar needs to earn it keep. Because of the commission drag, the commission needs to be less than $10 per trade.  

*The options to pyramid*
1. Increase portfolio position size (this is our only option)
2. Increase the bet size (not applicable, due to commission drag)

*Increasing the portfolio size*
This method of pyramiding really needs no explanation as you add extra positions when funds become available.

*"Pyramiding Explanation" *(positionSize)
Pyramiding "PositionSize" is a re-balancing technique to reinvestment profits. "Pyramiding (re-balancing) my PositionSizes" every soldier is put into the battle to fight the good fight.

Skate.


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## CNHTractor (20 June 2020)

Skate said:


> I would appreciate an honest assessment for others to read, the code & structure is at beginner level but at times "SIMPLE" just works.




I am having an initial look at the "BBS" code. I am struggling with understanding the trailing stop and thought I would try to plot it - thinking a visualization would assist.

The trailing stop is 
	
	



```
ApplyStop( stopTypeTrailing , stopModePercent , ts , exitatstop = 2 ); 
// Apply Stop = [ts] Trailing Stop [exitatstop = 2] means check High-Low prices but exit NEXT BAR on regular trade price.
```

I am not sure how to interpret "check High-Low Prices". I have checked to Amibroker manual but my "brain" is not understanding the text.

You code applies either a 20% or 10% stop loss, depending on index filter. What is this applied against, ie what value, and for what period.

I am presuming this is obvious but I am not understanding.


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## CNHTractor (20 June 2020)

CNHTractor said:


> I am having an initial look at the "BBS" code. I am struggling with understanding the trailing stop and thought I would try to plot it - thinking a visualization would assist.




I have written the following code:

```
highsinceBuy = HighestSince( Buy, High);
stoplevel = highsinceBuy  * (100-ts)/100;
Plot( stoplevel, "stop", colorRed, styleDashed );
Plot( highsinceBuy, "highsinceBuy", colorBlue, styleDashed );
```

I think my issue is that the visualisation of Sell on the chart doesn't actually show a sale from TrailingStop. I will post some images to illustrate


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## Skate (20 June 2020)

CNHTractor said:


> *I am struggling with understanding the trailing stop and thought I would try to plot it *




@CNHTractor, you will not be able to plot an ApplyStop, so don't even try.



CNHTractor said:


> I am not sure how to interpret _"check High-Low Prices"_.



That's a fancy way of checking the complete bar. The moving average of the IndexBuyFilter uses the "closing" price. I could have used the "high" as I have in the Buy condition. The ApplyStop check the "high, low, open or close" or a shorter way of saying it is _"check High-Low Prices"_

*In English*
When the close is higher than a (100 Week) simple moving average the Index Filter is on. (ts1 = 20%) means the trailing Stop is set to 20%. The "IndexSellFilter" is the exact opposite of the "IndexBuyFilter". When the IndexBuyFilter is "False" (ts2 = 10%) is the option selected as per the ApplyStop code. The Index filter is binary (either on or off). If you read my comments & look at the codes (being placed together) it might make more sense to you.




*Stop type*
0 = stopTypeLoss - maximum loss stop,
1 = stopTypeProfit - profit target stop,
*2 = stopTypeTrailing - trailing stop,*
3 = stopTypeNBar - N-bar stop

*Stop mode*
0 - disable stop (stopModeDisable),
*1 - amount in percent (stopModePercent)*, or number of bars for N-bar stop (stopModeBars),
2 - amount in points (stopModePoint);
3 - amount in percent of profit (risk)

*ts*
References the Indexbuyfilter *TRUE*, (ts1 = 20%) = *Index Filter (ON)*
References the Indexbuyfilter *FALSE*, (ts2 = 10%) = *Index Filter (OFF)*

*ExitAtStop*
ExitAtStop = 0 - means check stops using only trade price and exit at regular trade price(1) (if you are *"trading on close"* it means that only "close price will be checked for exits" and exit will be done at close price)
ExitAtStop = 1 - check High-Low prices and exit intraday on a price equal to stop level on the same bar when a stop was triggered
*ExitAtStop = 2 - check High-Low prices but exit NEXT BAR on regular trade price.*

Skate.


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## CNHTractor (20 June 2020)

CNHTractor said:


> I will post some images to illustrate





Trailing Stop highlighted


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## CNHTractor (20 June 2020)

Sorry is all of the above is a bit messy, however I have now sorted the question in my "brain" Thanks for your patience.


----------



## martyjames (20 June 2020)

Thanks Skate for uploading this system plus the clear explanation above of the trailing stop, which even though i have read the manual i still found confusing.
I ran a back test back to 2009 (XAO) with the returns per attached, can someone verify if possible so i know im doing the backtest correctly please. Seems like excellent returns and max. system drawdown of only 9.08% for the period which is excellent.


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## frugal.rock (20 June 2020)

Skate said:


> *The options to pyramid*
> 1. Increase portfolio position size (this is our only option)
> 2. Increase the bet size (not applicable, due to commission drag)




Thanks for the detailed response Skate.
Q.1
Drawing from your knowledge bank,
If a cheaper broker was used would you still go with option 1 ?
(consider all trade position sizes having a $10 fee)

Q.2
Where would you cap the number of positions using option 1 before considering moving to option 2 ?

The above situation would be a nice problem to have one day!

Q.3
What method would you use to determine starting bet size for
option 2 ?

Cheers,
F.Rock

PS; money can't buy the information format you present. Your patience and benevolence is to be applauded, and to my detriment, has largely been previously obscured by the ego.
Sometimes in life the truth hurts, but you have highlighted to me that my psychological variables need to be "fixed", otherwise, they will forever remain variables.  
Sometimes the seed of thought doesn't sprout until washed into a fertile furrow...


----------



## Skate (20 June 2020)

frugal.rock said:


> Q.1 Drawing from your knowledge bank, If a cheaper broker was used would you still go with option 1 ?  (*consider all trade position sizes having a $10 fee*)




*Answer*
(a) There is no "cheaper broker" I can use.  eSuperfund only allows two broker options. (previously discussed only a few posts back)
(b) If the commission rate was fixed at $10.00 (no matter the bet size) I would prefer & use "pyramid my position sizing", which means I would increase the bet size over adding additional positions.


frugal.rock said:


> Q.2 *Where would you cap the number of positions *using option 1 before considering moving to option 2 ?




*Answer*
40 positions


frugal.rock said:


> Q.3 What method would you use to determine starting bet size for option 2 ?




*Answer*
When 40 positions are full.
*
Moreover*
I'll have this problem to sort out "about a year from now" when I double our money from $20k to $40k. (going from 20 positions to 40 positions trading with $1k bets)

*FYI*
One of my strategies trades a (40) position portfolio & has been as high as (63) positions. Members scoffed at the idea of trading such a large number of positions in a strategy. I've been shown "graphical proof" that trading such a larger number of position wouldn't achieve any better than an Index Fund. What? - my trading results don't align with that summarisation, nor doesn't the results @peter2 achieved trading a (40) position portfolio.

-----------------------------------------------------------------------------------
*READ THIS IN FULL:* https://www.aussiestockforums.com/posts/1039741/
------------------------------------------------------------------------------------
*
START*

*#1 This is a quote of* @peter2 *about trading a larger position portfolio*
@Skate Very interesting that your testing shows 53 is optimal number of positions whereas most trend following systems indicate 15 - 17 with most people happy to use 20. Why is there such a difference if all systems are trend following systems? So overall I accept that the Hybrid strategy will do a slightly better job than most mainstream trend following systems *but I fail to understand why there's a huge difference in the optimal number of portfolio positions between apparently similar systems*. I'm not interested in the actual optimum number. I'm trying to understand the difference between 17 and 53. *My knowledge and experience would say that a portfolio with 50 positions would not beat the market index*. *Clearly this has been challenged by skate's work.*

*#2 This is a quote of* @peter2 *about trading a larger position portfolio*
re: Skate's hybrid system results for 17-18. Wow. Congrats and damn, *you've forced me to re-evaluate my preference to hold 8-12 positions in my portfolios.* Did you also research this aspect for your system? Clearly with lots of small positions one big hit isn't going to be noticed and with so many positions you're almost certain to get into most of the best trends of any period. Now I have to research this myself. More work to do.

*#3 This is a quote of* @peter2 *about trading a larger position portfolio*
Thank you @Skate. I like to highlight the unpalatable moments such as the recent losers in the ASX40P portfolio. *It's all to easy to post when things are going well and stroke our own egos.* Had I started the research portfolio (ASX40P) a few weeks earlier it would have contained FMG and a few gold stocks. It may have been fully invested and most likely wouldn't have had BLD and BIN. The timing was unlucky. *Timing plays a huge part in the performance of a portfolio.*

*#4 This is a quote of* @peter2 *about trading a larger position portfolio*
Well, @Skate that's a substantial request. I will write an opinion piece on the optimum number of positions in an ASX share portfolio.* It has exceeded my expectations. I was/am pleasantly surprised by the results.* One benefit and advantage of the 40 position size is that it forced me to include positions outside my normal stock universe.

*#5 This is a quote of* @peter2 *about trading a larger position portfolio*
_Comments from a stunned mullet_: *There's no doubt that a 30+ portfolio, that is actively managed will thump any index*, provided the positions are diversified throughout the whole market. You are unlikely to get this out-performance sticking to the top 300. A couple of benefits from a 30+ position portfolio. I may have mentioned them before but by repeating myself I may get it into my thick head. It's easier being patient with a lot of trades when the portfolio is going well. The second benefit of a large number of positions is that I'm more willing to start a trade in a perceived "riskier" stock. This seems too easy, doesn't it. I'll admit I'm finding it tough to start so many positions in my own accounts. The evidence is here in this thread, but I tend to hit resistance at 16 positions even though there's plenty of cash available.
@peter2 when I first posted about my Hybrid 40 position portfolio in the 'Dump it here' thread most was sceptical that running such a high number of positions "goes against normal conventions" reinforcing that the strategy wouldn't beat a index but to your credit you stated *"Clearly this has been challenged by skate's work" *deciding to give the idea a go with your "ASX40 POS Portfolio"

*@peter2 - shift his opinion after trading a 40 position portfolio*
_(a) "My knowledge and experience would say that a portfolio with 50 positions would not beat the market index"_
*to*
_(b) "*It has exceeded my expectations. I was/am pleasantly surprised by the results. There's no doubt that a 30+ portfolio, that is actively managed will thump any index"*
_
*END*
_
----------------------------------------
_
*# Let me explain further*
Pyramiding of positions (increasing bet sizes with closed profit is beneficial to the profitability of any strategy. If you are in any doubt, look back at my equity curve over the last couple of years (The equity curve has been posted only a few posts back)
*
"Pyramiding Explanation" *(positionSize)
Pyramiding my positionSize is a re-balancing technique to vary my position sizes (my next series of bets) with the reinvestment of profits. I'm a TRUE believer in "pyramiding" my Position-sizing (I've discussed many times in the "Dump it here" thread) "Position-sizing Pyramiding" is to re-balancing my weekly position-sizes (bet sizes). By "Pyramiding (re-balancing) my PositionSizes" every dollar (I call them soldier) is put into the battle to fight the good fight.

*How?*
Position-sizing uses my trading Bank balance - the Bank feed is sent to a parameter setting within the AFL strategy code. It's simply a way of putting every dollar to work.

*What is the Re-Balancing Formula?*
Trading Bank Balance/outstanding positions = new "PositionSize"
This will now be the new bet for each & every pending trade (the new PositionSize also calculates the number of shares to buy in the pre-auction)

Skate.


----------



## Rsthree (21 June 2020)

There has been an absolute semi trailer load of information (gold) dumped in the last dozen or so threads. Thanks skate for your generosity and willingness to share, and thanks to the other posters asking the right questions to unearth more gems.
As soon as I get a reprieve from work I'll buckle down into more indepth study and Amibroker testing.


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## Wyatt (21 June 2020)

@Skate the results are simply incredible.

After try to break it by changing the moving average period significantly on HI and LW ref and BB periods, as well as switching from weekly to daily on all variations, I haven't found a single negative year or unspectacular result on any backtest. It indicates extreme robustness.

In fact it seems too good to be true.

The results confirm your strong view that exits are so important to minimise open profit loss and drawdown. You've really nailed that area. Wow, super impressed.


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## willoneau (21 June 2020)

Hi Skate, I have just been back testing your Bollinger Breakout System and have noticed that the buy price is the open of the signal bar?
The indication on the chart is correct just not in Analysis window.


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## willoneau (21 June 2020)

Just noticed when I do an explore with dates the buy offer is correct with the close of the signal bar . Just that on the back test in the results the open of signal bar is used.
I changed the buy price in the back test to the close of the entry signal as the buy offer is 3% of that.


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## willoneau (21 June 2020)

Back tested results drop a lot with the change.


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## Sir Burr (21 June 2020)

willoneau said:


> back test in the results the open of signal bar is used.




Think you might need to set trade delays in the settings.


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## Wyatt (21 June 2020)

Hmmmm, including trade delays. That makes a big difference. Well spotted @willoneau
Should have spotted that with trades such as
TLM Open Long 19/06/2020 0.115 19/06/20200.135 17.39% 
CDV Open Long 19/06/2020 0.44 19/06/20200.595 35.23% 
SPT Open Long 19/06/2020 0.7 19/06/2020 1.47 110.00%


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## willoneau (21 June 2020)

Sir Burr said:


> Think you might need to set trade delays in the settings.



The thing is that the buy offer is the close plus 3% and if Monday's open is higher than the 3% the trade isn't taken. This is were back testing falls over or is less accurate.


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## Sir Burr (21 June 2020)

willoneau said:


> The thing is that the buy offer is the close plus 3% and if Monday's open is higher than the 3% the trade isn't taken. This is were back testing falls over or is less accurate.




I dropped the code in and ran a backtest for a long date range as my standard. Result were massive and that instantly rings alarm bells.

Started comparing trades in the backtest against the chart and noticed same as you willoneau. Looking at the code, tradedelays set at zero but there is a ref,-1 on COND1 but not the rest.

About the 3%, it's not within the Buy but is just a number used to place at the broker before the open Monday.


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## CNHTractor (21 June 2020)

willoneau said:


> Back tested results drop a lot with the change.




Yes, you are correct in the downgrade in results, however Skate's BB Strategy still posts *strong results with CAR/MDD of the order of 1.20*. Without the trade delay CAR/MDD was showing in excess of 6.00 - probably a clue here, "too true to believe".

@Skate, again thanks for the posting of the strategy - it has provided me with a wealth of learning


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## willoneau (21 June 2020)

CNHTractor said:


> Yes, you are correct in the downgrade in results, however Skate's BB Strategy still posts *strong results with CAR/MDD of the order of 1.20*. Without the trade delay CAR/MDD was showing in excess of 6.00 - probably a clue here, "too true to believe".
> 
> @Skate, again thanks for the posting of the strategy - it has provided me with a wealth of learning



I agree great learning curve


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## Sir Burr (21 June 2020)

CNHTractor said:


> Skate's BB Strategy still posts *strong results with CAR/MDD of the order of 1.20*




I don't think buying/selling at the close was the intention for this system?

Maybe wrapping the BUY and SELL in Ref,-1 as SetTradeDelays( 0, 0, 0, 0 ); overrides the settings.


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## willoneau (21 June 2020)

I agree but the entry price is calculated from close.


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## rnr (21 June 2020)

Sir Burr said:


> I don't think buying/selling at the close was the intention for this system?
> 
> Maybe wrapping the BUY and SELL in Ref,-1 as SetTradeDelays( 0, 0, 0, 0 ); overrides the settings.




Whilst I don't have AmiBroker as yet and therefore am unable to read the system code, using code like Ref(BUY,-1) and Ref(SELL,-1) along with SetTradeDelays( 0, 0, 0, 0 ) as suggested by Sir Burr is akin to a BUY or SELL signal on the current bar and setting trade delays to one 1 bar should result in the same outcome.

Cheers,
Rob


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## rnr (21 June 2020)

willoneau said:


> I agree but the entry price is calculated from close.




@willoneau If you have been reading the posts by @Skate you should have noticed that he uses the closing price of the previous bar to calculate the BUY price for the entry bar.
Cheers,
Rob


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## Skate (21 June 2020)

Sir Burr said:


> I don't think buying/selling at the close was the intention for this system? Maybe wrapping the BUY and SELL in Ref,-1 as SetTradeDelays( 0, 0, 0, 0 ); overrides the settings.





rnr said:


> Whilst I don't have AmiBroker, using code like Ref(BUY,-1) and Ref(SELL,-1) along with SetTradeDelays( 0, 0, 0, 0 ) as suggested by Sir Burr is akin to a BUY or SELL signal on the current bar and setting trade delays to one 1 bar should result in the same outcome.





rnr said:


> Whilst I don't have AmiBroker, using code like Ref(BUY,-1) and Ref(SELL,-1) along with SetTradeDelays( 0, 0, 0, 0 ) as suggested by Sir Burr is akin to a BUY or SELL signal on the current bar and setting trade delays to one 1 bar should result in the same outcome.




Both posts by @rnr & @Sir Burr are 100%  but when using Amibroker backtest mode it needs additional code.

*Let me clear this up*
@Sir Burr I've been watching the interaction between members & I'm impressed that they are thinking deeply about the BB code uploaded. @CNHTractor highlighted the issue yesterday with backtesting irregularities he was finding. I use the Exploration mode (delays included in the array) for the buy & sell signals (using the other information to enter the pre-auction) so the backtest is irrelevant. Backtesting means Jack to me & my coding reflects this. The code is from 2016. Look at the trade delay explanation & it will make sense

*Exploration Mode = The trade delay settings are correct*
SetTradeDelays( 0, 0, 0, 0 ); // *Trade delays FALSE, the delay is in the array (CORRECT CODE)

Buy Condition = The trade delay settings are correct*
Cond1 = Ref(BuySetUp,*-1*); The (-1) is the trade delay
Buy = cond1; This line is the "buy" that references the array (Cond1) that has a built-in delay that's referenced by [ Ref(BuySetUp,*-1*) ]
*
Backtest Mode = The trade delay settings need to be changed *(backtesting needs these delays)
SetTradeDelays( 1, 1, 1, 1 ); // *Trade delays TRUE, the delay is for backtesting (CORRECT CODE)*

*Chart Mode = correct = using either will be irrelevant as the Plot has the delay (-1)*
PlotShapes( Ref( Buy, -1 ) * shapeHollowSquare, colorWhite, 0, O, 0, 0 ); // Displays a white square on the buy bar *(-1 is the trade delay also called the entry bar)*
PlotShapes( Ref( Sell, -1 ) * shapeHollowCircle, colorYellow, 0, O, 0, 0 ); // Displays a yellow circle on the sell bar *(-1 is the trade delay also called the entry bar)*

*Please Note*
If you want to use the strategy for backtesting add the delay (for Backtest) as explained in the documentation, the SetTradeDelays() function "Sets trade delays applied by the backtester." It doesn't affect plotting.

*SetTradeDelays using ( 1, 1, 1, 1 ) for backtesting*
Allows controlling trade delays applied by the backtester

*FUNCTION*
Sets trade delays applied by the backtester. This function allows you to override trade delays from the "Settings" page. It is important to understand what trade delays really do. They in fact internally apply the following:

Buy = Ref( Buy, -buydelay );
Sell = Ref( Sell, -selldelay );

*A must read*
Inside backtester after your formula is executed but before backtester starts trade simulation. It is functionally equivalent to having above 2 lines at the end of your formula. Note that NO OTHER variables are affected by trade delays, therefore for example, if your position sizing depends on values found in buy/sell/short/cover variables *and* if you are using non-zero trade delays you need to account for that in your code. EXAMPLE settradedelays( 1, 1, 1, 1 )

*Important*


Skate said:


> I would appreciate an honest assessment for others to read



I wanted members to scrutinise the BB code & think about the coding. Run backrests & compare notes. The last thing I want others to do was to add it to their list of other codes never to see the light of day.

*Exploration & Charts*
Theses are both 100% correct & if you used only these your trading would be as the code has been designed.

I'm pleased with the banter, it's the only way we learn

Skate.


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## qldfrog (21 June 2020)

willoneau said:


> The thing is that the buy offer is the close plus 3% and if Monday's open is higher than the 3% the trade isn't taken. This is were back testing falls over or is less accurate.



I actually did check that in some BT where you voluntarily put a condition that ref o,1 is lower than c*1.02


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## willoneau (21 June 2020)

rnr said:


> @willoneau If you have been reading the posts by @Skate you should have noticed that he uses the closing price of the previous bar to calculate the BUY price for the entry bar.
> Cheers,
> Rob



Yes that is why I said it.


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## Warr87 (21 June 2020)

martyjames said:


> View attachment 105048
> View attachment 105049
> View attachment 105049
> View attachment 105049
> ...






Wyatt said:


> View attachment 105068
> @Skate the results are simply incredible.
> 
> After try to break it by changing the moving average period significantly on HI and LW ref and BB periods, as well as switching from weekly to daily on all variations, I haven't found a single negative year or unspectacular result on any backtest. It indicates extreme robustness.
> ...




I don't know what I'm doing wrong then because I get relatively poor results from the backtest on the strategy.


----------



## rnr (21 June 2020)

willoneau said:


> Yes that is why I said it.




My bad @willoneau as I believe I may have misread a comment you made in an earlier post.
Please accept my apologies.
Cheers,
Rob


----------



## Sir Burr (21 June 2020)

Skate said:


> Backtesting means Jack to me & my coding reflects this.




OK fully sense makes. Look at documentation 

A tip for that Index bar on the bottom of charts that won't sit still.

Index = Foreign("$XAO.au","C"); 
IndexBuyfilter = Index  > MA( Index , 100 );
IndexSellfilter = Index < MA( Index , 100 );
indexfilter = IIf( IndexBuyfilter, True, False );
RibbonColor = IIf( indexfilter, colorGreen, colorRed );
Plot( 1, "", RibbonColor, styleArea | styleOwnScale | styleNoLabel, -0.0001, 190 );


----------



## willoneau (21 June 2020)

rnr said:


> My bad @willoneau as I believe I may have misread a comment you made in an earlier post.
> Please accept my apologies.
> Cheers,
> Rob



No it's fine sometimes I don't make myself clear.


----------



## rnr (22 June 2020)

Hi Skate,

Given the copious amount of system testing that you have carried out to date, have you tested any strategy that allows for more than one position to be held, at the same time, in any of the securities included in the back-test?

Cheers,
Rob


----------



## Skate (22 June 2020)

rnr said:


> Hi Skate,
> 
> Given the copious amount of system testing that you have carried out to date, have you tested any strategy that allows for more than one position in any of the securities included in the back-test?
> 
> ...




Sorry, no.

Skate.


----------



## DaveDaGr8 (22 June 2020)

AFAIK tradedelays only works in backtester mode. It's a way of adding a delay only to the backtester without adding a delay to the Explorer or Chart results.

So ( please don't shoot me ), setting *tradedelays* should have no effect on the exploration results.

https://forum.amibroker.com/t/under...tween-backtest-tradedelays-and-explore/7354/7

I think the following document is a bit confusing too.

https://www.amibroker.com/guide/afl/settradedelays.html

The code should say something more like this.

if( Status( "Action" ) == actionBacktest ) // ** Might be actionPortfolio (BT 2nd pass) ??
{
Buy = Ref( Buy, -buydelay );
Sell = Ref( Sell, -selldelay );
Short = Ref( Short, -shortdelay );
Cover = Ref( Cover, -coverdelay );
}

Oh And thanks for sharing your BB system. I love catching up on this thread and finding gems like that make it worthwhile.


----------



## ah13 (22 June 2020)

Hi Skate

As the IGL sale proceeds exceeded $1000, I would have thought Commsec's brokerage would have been $19.95 on the sale not $10?
From the Commsec site
*Brokerage fee amount by transaction value1
Trade
Trade online and settle your trade to a CDIA or CommSec Margin Loan2*

$10.00 (Up to and including $1,000)
$19.95 (Over $1,000 up to $10,000 (inclusive))
$29.95 (Over $10,000 up to $25,000 (inclusive))
0.12% (Over $25,000)





View attachment 105088


View attachment 105089


Skate.[/QUOTE]


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## Skate (22 June 2020)

DaveDaGr8 said:


> Oh And thanks for sharing your BB system. I love catching up on this thread and finding gems like that make it worthwhile.




@DaveDaGr8 I appreciate your kind words knowing they apply to every member who gives their time freely posting in the "Dump it here" thread. 

Sharing is caring.

Skate.


----------



## Skate (22 June 2020)

ah13 said:


> Hi Skate. As the IGL sale proceeds exceeded $1000, I would have thought Commsec's brokerage would have been $19.95 on the sale not $10?




@ah13, you are 100% correct. The Action Strategy "Share Trade Tracker" configuration commission rate setting is hardcoded @ $10 & I've neglected to override the commission rate to $19.95. Thank you for having an Eagle Eye & alerting me to update the portfolio & Monday's results..

Skate.


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## Skate (22 June 2020)

Skate.


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## Warr87 (22 June 2020)

I'm in awe of your returns so far. The Action strategy seems to react very quickly!


----------



## Skate (22 June 2020)

Warr87 said:


> I'm in awe of your returns so far. The Action strategy seems to react very quickly!




@Warr87, I'm in awe that some members had the "blind faith" to join in.

So far so good...

Skate.


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## Warr87 (22 June 2020)

@Skate you have a history of profitable systems. It takes some guts, but perhaps not too surprising that people are following haha.


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## over9k (22 June 2020)

So what was your original thought process? What made you pick the portfolio that you did?


----------



## Saqeeb (22 June 2020)

*Week 18: Update on my MAP paper trading portfolio.*

This portfolio gained a little last week - $237.00
*
Last week's buys:*
There were no buys for last week.

*Last week's sells:*
Sold *CAN *and *AEF*.





*
This week's buys:*
The system generated 6 buy signals this week. 
*CDV*, *SPT*, *RBL*, *OPC*, *NXT *and *AEF *(re entry after last week's exit, hence missing all of last week's gains   ) 
I have a rule that I do not enter a position after a takeover offer and therefore *CDV *was not entered.

*This week's sells:
PDN *and *DTL`
*


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## Warr87 (22 June 2020)

Im surprised you exited CAN and AEF when my MAP system kept them.


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## Rsthree (22 June 2020)

ah13 said:


> Hi Skate
> 
> As the IGL sale proceeds exceeded $1000, I would have thought Commsec's brokerage would have been $19.95 on the sale not $10?
> From the Commsec site
> ...



[/QUOTE]
From memory, I think that skate gets a high roller discount with commsec.


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## debtfree (22 June 2020)

From what I can see Skate was charged $19.95




Edit: Ahhh Sorry just noticed the Matched Buy Trade Brokerage of $10. Does everyone get this rate Skate or is it a rate you have negotiated?


----------



## Skate (22 June 2020)

over9k said:


> So what was your original thought process? What made you pick the portfolio that you did?




@over9k, thanks for the question.

*The "Action Strategy"*
It's only proper I give a background to how the "Action Strategy" sprung into life & the concept behind it.

*I've quoted this to "ad nauseam"*
"If what you learn leads to knowledge, you become a fool - but if what you learn leads to *action*, you can become wealthy"

*The strategy is from information that has freely been posted in this thread*
I turned that knowledge into "action" coding up a tradable strategy. What to call the new strategy was my next dilemma. It didn't take too much thinking, I called it the "Action Strategy". I put into practice what I've been preaching "knowledge into Action".

*Knowledge *(leads to action)
@ducati916 posted some helpful hints (passing on some of his knowledge) in the "Dump it here" thread that resulted in coding up two new indicators & one new strategy. The explanation of these with samples are scattered in this thread.

(1) "The Ducati Blue Bar Daily Strategy"
(2) "The Ducati Stop & Go Indicator" &
(3) "The Ducati Acceleration Indicator"

The two indicators & the strategy were all respectable in their own right. I'm now a firm believer that we don't need a fancy strategy to make money in this game. Using "The Ducati Blue Bar Daily Strategy" with prudent "Money management" & a sharp "PositionScore" code brings this strategy to life.

*Reading between the lines*
ASF is blessed to have so many members willing to pass on information that they have found beneficial in their trading endeavours. Those members have their own threads dropping crumbs along the way. When trading information is disseminated it's usually done in a scattergun manner where other posts have more precise details. Recently I had the privilege to gather a new understanding how others trade & their logic in doing so.

*Ther "Action Strategy" was my next exercise*
With an influx of new members "itching" to get their "foot in the door", or "dip their toes in" my next project might give them the opportunity. There are two option (a) watch along or (b) trade along. I decided all the positions would be disclosed before being traded with real money. Trading at first can be confusing, that's why we need a trading plan that includes a trading strategy, otherwise it's just plain gambling. Let me say, the strategy I'll be trading has exceeded my expectation so I'll be throwing caution to the wind jumping straight into the deep end.

*Turning knowledge into action*
There is no new idea out there but there are some discretionary ideas that can be coded & used in a mechanical trading system. I simply coded a new strategy with the knowledge gained from this forum & turn it into "action". I've combined all Duc's ideas & mashed them into a new trading system known as the "Action Strategy"

*Let me explain the new "Action" strategy*
It's a combination of discretionary ideas coded & used in a mechanical trading system. It's the natural progression from "The Ducati Blue Bar Daily Strategy", "The Ducati Stop & Go Indicator" & "The Ducati Acceleration Indicator" all respectable in their own right but with money management, new parameters & filters the idea (strategy) grows an extra leg. The makeup of the new "Action Strategy" has been freely discussed whereas other information (that forms part of the strategy) has been provided to me in private.

*Follow or trade along*
The strategy is designed for those itching to get involved. As I trade in the pre-auction, all positions, quantity of shares & the offer price will be fully disclosed before the opening of Monday's markets. The reporting will be accurate as "Share Trade Tracker" new release has included "Norgate" as the new data source.

*In a nutshell*
The new "Action" strategy is a "Weekly" $20k portfolio with $1k bets. The entry conditions of "volatility & volume" relies on other measures to tilt the odds of success in our favour. The strategy will be buying good companies at the "right time" & selling quickly when it goes against us. The exit will be at the heart of the strategy combining a looping "stale stop" & "a variable trailing stop" driven by a "volatility measure" taken from "other sources".

*Summary*
The above is a snapshot of the "Action Strategy". I've made 101 posts referencing the Action Strategy & if anyone needs a more detailed explanation I suggest using the [search feature][Action Strategy] posted by [Skate].

Skate.


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## Saqeeb (22 June 2020)

Warr87 said:


> Im surprised you exited CAN and AEF when my MAP system kept them.



@Warr87, Both of those positions exited on trail stops. I think you maybe using a wider trail stop whereas mine is 20% currently.


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## Warr87 (22 June 2020)

Ah, that makes sense. Mine is set for 40% on this system.


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## Skate (22 June 2020)

debtfree said:


> From what I can see Skate was charged $19.95. Edit: Ahhh Sorry just noticed the *Matched Buy Trade Brokerage of $10.* Does everyone get this rate Skate or is it a rate you have negotiated?




@debtfree that matching is a feature of "Share Trade Tracker" @ah13 quoted CommSec's commission rate & notice I had exited (IGL) & the sell value exceeded $1k thus an increase in brokerage that I have highlighted below. (The Action Strategy "Share Trade Tracker" configuration commission rate setting is hardcoded @ $10 & *I've neglected to override the commission rate to $19.95)*


Skate said:


> @ah13, you are 100% correct. The Action Strategy "Share Trade Tracker" configuration commission rate setting is hardcoded @ $10 & *I've neglected to override the commission rate to $19.95*. Thank you for having an Eagle Eye & alerting me to update the portfolio & Monday's results..




Skate.


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## over9k (23 June 2020)

Interesting that you're working on a weekly basis with a market this volatile. We saw a 4% swing just between morning & afternoon last friday iirc. 

Thanks for the explanation though.


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## qldfrog (23 June 2020)

over9k said:


> Interesting that you're working on a weekly basis with a market this volatile. We saw a 4% swing just between morning & afternoon last friday iirc.
> 
> Thanks for the explanation though.



While we often disagree, i will second that one . .my daily system had stellar results vs weekly.
I much prefer weekly as a fit to my trading behaviour, psychology and lifestyle but when volatility is that high, our weekly systems have an handicap.a trend could break mid week very abruptly and using ema or ma whatever would expose us to the full SL extend
But as discussed a few months ago, this is where we need our GTFO trigger


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## over9k (23 June 2020)

I'm simply rebuying on every slump - no selloffs, just an increase in position.


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## Skate (23 June 2020)

over9k said:


> *Interesting that you're working on a weekly basis with a market this volatile*. We saw a 4% swing just between morning & afternoon last friday iirc. Thanks for the explanation though.





qldfrog said:


> While we often disagree, *i will second that one *. .my daily system had stellar results vs weekly.




*Boxing in slow motion*
@over9k, let me try to explain why I prefer trading a weekly system. My days in the boxing ring are now a distant memory but "if my opponent would fight in slow motion" I would still take on anyone. Your question about trading weekly versus daily allows me the opportunity to express my views as @qldfrog expressed his. Trading weekly is like boxing in slow motion, meaning you have time to "respond" when trading is not going your way. Trading on a daily time frame you are always "reacting" to price movements. Responding gives you time to think. So I make it one of my trading rules never react always respond. (it's one of my life rules as well)

*Weekly versus a Daily system*
There are merits trading in both time frames but for "me" I prefer trading a weekly system, it also reduces the workload & stress. There is always a robust discussion when Daily versus Weekly trading is raised. I'm a believer if it works for you, it's right for you. Posting my thoughts & actions keeps me productive & consistent in my messaging, hoping over time it will help others.

*Exits are important*
Admittedly after watching the extreme volatility this past few weeks the exit carries more weight than timing the entry. There is always robust banter when I raise the benefits of the "exit versus the entry". I consider the "exit" is more important than the "entry" when it comes to profitability as "exits" is where the money is made.

*When others disagree *
The "Dump it here" thread gives a perfect platform for others to express an alternative view rather than debating that one is better than the other.

The "Dump it here" thread is for the "exchange of ideas, not a contest of ideas".

Skate.


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## over9k (23 June 2020)

Oh I wasn't arguing - I used the word "interesting" for a reason. I genuinely wanted to know why.

Workload can be a b!itch.


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## WilsonFisk (23 June 2020)

I think this may be my first post on ASF, but have spent much time learning from ASF.  Just wanted to say thankyou @Skate for sharing your experience and knowledge.  It is something other successful (or self proclaimed successful) traders sell rather than give.  

I myself have only developed a small number of systems, only 1 of which has progressed from paper to live trading in January (it took a 5% hit, and then hibernated until a couple of weeks ago).  It is a simple daily Bollinger Band Breakout strategy that had a similar approach to your Weekly one (albeit maybe not as successful - time will tell).  

The reason for raising this is that one of the gems I have learnt from @tech/a is the importance of knowing 'why' and 'how' a system generates its return.  

After launching my strategy in January, just before the Great Toilet Paper Shortage of 2020, I was able to just punch in the necessary orders dictated by my system, without being concerned or second guessing it.  

For those that prefer the science over the faith (or combination thereof), knowing the why and how, I believe can assist with mitigating the emotional bias.

For this reason I am enjoying following your Action Strategy (without actually trading it) as it is inspiring me to continue to further develop my own knowledge, and skills in developing systems.


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## Skate (23 June 2020)

over9k said:


> Oh *I wasn't arguing* - I used the word "interesting" for a reason. *I genuinely wanted to know why*. Workload can be a b!itch.




Fair enough, I appreciate the clarification.

@over9k, your overtones had no connotations what so ever, expressed or implied. When posters have a perceived history of strongly debating a point I try to use some gentle phrasing or keywords hoping they feel a different atmosphere when reading or posting in the "Dump it here" thread. I'm proud to say the "Dump it here" thread is different to most.

*Friendly atmosphere*
Over time you value some posters more than others, some have the knack of nailing posts accurately, succinctly & politely. Those posts are the ones everyone enjoys reading. Whether your view is right or wrong isn't important, what's important is that this thread gives you the opportunity to express your views without being "ridiculed or challenged". However, some members tend to follow patterns of behaviour when posting. This pattern can incite an emotional response that tends to undermine the friendliness of this educational thread.

*Offending a member is hard to detect *
I'm trusting my explanation is not perceived as a reflection on you but rather it serves a greater value "as a friendly reminder to others".

Skate.


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## over9k (23 June 2020)

So have you considered moving to a more frequent system on account of the significantly larger gains that others, for example, qldfrog, have been able to accrue by doing so?

I.e do you think the extra effort/work might be worth moving to a more frequent/higher volume system?


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## tech/a (23 June 2020)

WilsonFisk said:


> For those that prefer the science over the faith (or combination thereof), knowing the why and how, I believe can assist with mitigating the emotional bias.




Systems are simply a set of Trading conditions tested against a universe in a repetitive manner with conditions like "If" "When" "Then" "Or"
They have very limited ability to adapt to both long and short term market conditions.

**If you trade enough systems you'll notice (as I did) that most work really well in Bull Markets
With Mixed results in flat markets and atrociously in Bear markets.

Unless you have a way of adapting to market conditions or the ability to predict a longer term move you'll forever be trapped.
*For 95% of systems the Why and How is right here**!*


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## Skate (23 June 2020)

over9k said:


> So *have you considered moving to a more frequent system on account of the significantly larger gains* that others, for example, qldfrog, have been able to accrue by doing so? I.e do you think the extra effort/work might be worth moving to a more frequent/higher volume system?




_*"Do you think the extra effort/work might be worth moving to a more frequent/higher volume system?"*_
@over9k, it's not about the extra work involved, it's more about the results from my research. In a nutshell, my research reflects that trading with greater frequency doesn't enjoy the gains @qldfrog has expressed. Having an interest in this field I would appreciate a follow-up post of "how you would go about achieving this" for others to better understand.

*They never tell you*
When you are new to trading you will often hear this: "Buy low & Sell high" but they "never tell you how" to do it. I go into great detail explaining the virtues of how to "Buy high to Sell higher" that's the difference between a useless comment & reading the "Dump it here" thread.

Skate.


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## Skate (23 June 2020)

tech/a said:


> Unless you have a way of *adapting to market conditions or the ability to predict a longer term move *you'll forever be trapped.




@tech/a, welcome back to posting in the "Dump it here" thread, it's been quiet a hiatus. Recently we have been discussing the virtues of a "Sentiment Filter" overusing an "Index Filter"
to time the period, we should be in the markets. Most traders declare that timing the markets can’t be done but as a trader that's a function of our job description.

Skate.


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## over9k (23 June 2020)

Well if you're trading frequently then you're simply trading volatility. Fundamentally, that's what you're working with.

So you find a sector or industry that's on at least a slow (or moderate) increase as of now, and you trade the chop. I'm having a good discussion with ducati in the other thread about what is relevant/causing the chop, but a simple example at the moment which I think is very relevant (and he does not) is virus data. Every time there's a spike in virus data, some sectors nosedive and some spike.

So travel in australia for example is going to improve significantly and soon. In the united states it is not, and the reason is actually very simple: Australia contained the virus, usa didn't. It's genuinely no more complex than that.

The market knew (and knows) this, hence travel related stocks were on a fairly solid trend upwards. Then we got virus spikes after the protests, particularly in victoria. So things nosedived yesterday. Same as last week and in fact in several instances over the past fortnight, and there was then a commensurate spike the following day, or last friday, it was literally just by the afternoon. All this is doing is simply delaying what WILL occur - not stopping it from happening.

I can't predict exactly when the bad virus data will come out, just that we'll get some, so I don't sell the peaks but rather, buy the drops. My position increases over time as I was fully expecting a lot of chop after the george floyd riots so deliberately kept a significant amount of cash out of the travel related stuff but primed ready to buy in whenever we got some nasty virus data. In other words, you can't perfectly predict when the virus data will come out, but you can predict that it WILL occur (I'm finding it to be about 2-3 weeks after the actual date of infection just FYI) and that there's a huge drop IMMEDIATELY after it does.

When there's a 4% swing just between morning & afternoon, there's an absolute killing to be made here.

The other thing I do is buy into a sector/industry, not by companies - I'll buy all the biggest players and then trim my position down by nuking the lowest performers as some companies are hit far harder than others in response to bad data because the difference is that they aren't then seeing a commensurate spike afterwards. In other words, there's generally a trend split between the two (or three or four or five or whatever). Alternatively, the gains just aren't as high as their competitor - either way, the lowest performer(s) go.

I sold five positions off last week and pumped the money into their competitors after doing absolutely *no* research into why they weren't performing as well as the others and only one out of those five has even matched their competitors (which I pumped the money from the sale into) since. A simple example of this is microchips - intel & AMD are both flat for the past couple of months, but skyworks is through the roof. Same with slack vs zoom.



Using this method, I've found that if you get the sector/industry right, you don't need to worry too much about getting the company right - you'll potentially lose a few gains/cough up more in fees initially, but the risk and work required to get it right is just SO much lower that it's well worth it.


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## WilsonFisk (23 June 2020)

tech/a said:


> For 95% of systems the Why and How is right here**!




*Absolutely!*

don't just have 1 string in your Bow
don't just have 1 Bow
Know when to use which Bow
Know when not to use which Bow (or in some circumstances any Bow)
I don't necessarily have a trading system that will adapt well to both short and long term conditions, but I am utilising a Trading System (hopefully systems - soon) to leverage long term conditions, and when short term conditions don't suit the system, I deploy the capital to other effective pursuits.  

In regards to Timing the Market, I believe that it is difficult to do.

In regards to timing a trade, I believe it is the function of a trader to discern this whether they are fundamental or systems/technical based.  

Individual Stocks and Even Sectors can perform very differently to the Market as a Whole.  I think this is something that @ducati916 mentioned/alluded to/discussed something earlier in the thread as a sector being a more effective tool.


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## over9k (23 June 2020)

Wilson - reference timing, outside of the USA there has been a big dip every single time bad virus data has been released. Every time. 

With that in mind, if you know that there's going to be a big spike in virus cases in say, 2-3 weeks (which is what I've found to be the rough gap between actual infection and it showing up in the data), which there was always going to be after all the infection spread in the riots/protests, then you can put a lowball good-til-cancelled order in *now* and it'll just autofill as soon as the market tanks in response to the data release - there's no need to sit there watching the news like a hawk trying to time it as it'll just autofill for you as soon as the drop happens.


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## Skate (23 June 2020)

WilsonFisk said:


> *In regards to timing a trade, I believe it is the function of a trader to discern this whether they are fundamental or systems/technical based*.




*I'm amazed*
@WilsonFisk it may have taken you a while to make your first post but it's evident you have some quality posts in you, sharing information with others is priceless. You might have to change your avatar to: "No Longer Lurking From The Deep"

Skate.


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## over9k (23 June 2020)

I absolutely agree, specifically with your statement about knowing when to NOT do something.

Kind of like how some of the best decisions I've ever made in poker were folds, some of the best things I've ever gotten right trading were NOT buying particular positions.


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## qldfrog (23 June 2020)

@Skate, i doubt i am a role model, even less a model but will try to compare both daily and system results for you when i am back on my computer will have to wait next week
I have 2 systems relatively similar one weekly one daily
Will show the hard results till i liquidated them before that trip.
A key factor is that they work with volatility so daily is able to edge it more than weekly..so in my opinion the difference in success
And btw, my definition of stellar results is probably soso for you..i am just the apprentice


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## Newt (23 June 2020)

Thanks for sharing this info QF.  It makes sense that daily system might be able to navigate the volatility of the markets more reliably in recent weeks.  Still happy to stay weekly myself, and agree the learning never ends.  Even just staying in the game and retaining "apprentice" status beats being knocked out.


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## Skate (24 June 2020)

qldfrog said:


> *will try to compare both daily and system results for you when i am back on my computer* will have to wait next week. I have 2 systems relatively similar one weekly one daily. Will show the hard results till i liquidated them before that trip. *A key factor is that they work with volatility so daily is able to edge it more than weekly*..so in my opinion the difference in success





Newt said:


> Thanks for sharing this info QF. * It makes sense that daily system might be able to navigate the volatility of the markets more reliably in recent weeks*.  Still happy to stay weekly myself, and agree the learning never ends.  Even just staying in the game and retaining "apprentice" status beats being knocked out.




*Daily versus weekly trading Strategy*
In the meantime, while we wait for @qldfrog to show his results next week I thought it might be helpful to display my research on the subject of "trading a Weekly Strategy versus trading a Daily Strategy". Comparing backtests would normally be a "contentious issue" where members are likely to argue about the issue (but not in this thread).

*The "Dump it here" thread *
Allows members to freely express a view or an alternative opinion (as well as backtest results of course) without being challenged or ridiculed, otherwise, it would undermine the friendliness of the “Dump it here” thread.

*Weekly beats Daily in every time frame *(except one)
To keep the research as basic as possible I have coded the "Bollinger Bands Strategy" (recently uploaded) as a "Daily Strategy" & a "Weekly Strategy". Both have been backtested against each other over the same period. The parameter settings have been changed to reflect the periodicity being backtested, giving each a fair go.

*#1. Bollinger Weekly Strategy versus Bollinger Daily Strategy Backtest Results - 2019 Full Calander year (Winner = Weekly)*







*#2. Bollinger Weekly Strategy versus Bollinger Daily Strategy Backtest Results - "1st January 2019 to 24th June 2020"  (Winner = Weekly)







#3. Bollinger Weekly Strategy versus Bollinger Daily Strategy Backtest Results - "1st July 2019 to 24th June 2020" YTD (Winner = Weekly)







#4. Bollinger Weekly Strategy versus Bollinger Daily Strategy Backtest Results - "1st January 2020 to 24th June 2020" COVID-19 CRASH (Winner = Daily slightly)




Weekly versus a Daily system*
There are merits trading in both time frames but for "me" I prefer trading a weekly system, it also reduces the workload & stress. 
*
Summary*
When the Daily needed to step up & act quickly to exit on volatility during the recent COVID-19 Crash it fell short of my expectations. More work & extra commission is all you get when trading a daily strategy versus a weekly.

Skate.


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## frugal.rock (24 June 2020)

Hi Skate,
I have been thinking.... the thread is colossal !
In fact, it's getting bigger than Ben Hur.
Was wondering and hoping if any consideration to splitting it up somewhat and somehow has occurred.
I seem to have troubles with the site search engine. I searched "oil" the other day, had the thread box ticked, and got the following result,


Unfortunately, Oil Drip user wasn't what I wanted !  I don't think my WiFi signal was the problem, on this occasion...
F.Rock


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## Skate (24 June 2020)

frugal.rock said:


> Hi Skate, I have been thinking.... the thread is colossal ! In fact, it's getting bigger than Ben Hur.
> *Was wondering and hoping if any consideration to splitting it up somewhat* and somehow has occurred. I seem to have troubles with the site search engine. I searched "oil" the other day, had the thread box ticked, and got the following result, Unfortunately, Oil Drip user wasn't what I wanted !  I don't think my WiFi signal was the problem, on this occasion...F.Rock




@frugal.rock this has been suggested before a few times. I prefer to keep all my posts together as it's an educational help thread (in the beginner's section). Also along the way for those who have had trouble re-finding information, there have been helpful hints how to bookmark & how to do keyword searching. If you are experiencing difficulties with the search feature not displaying the correct results I suggest you let @Joe Blow know as others may be experiencing the same issue.

Skate.


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## Newt (24 June 2020)

Skate said:


> *Summary*
> When the Daily needed to step up & act quickly to exit on volatility during the recent COVID-19 Crash it fell short of my expectations. More work & extra commission is all you get when trading a daily strategy versus a weekly.
> 
> Skate.





Hallelujah say all we Weekly traders to that info then Skate!  Thanks for showing the backtests.  You'd be aware Peter2 has also previously compared and contrasted daily and weekly discretionary trading, noting that daily doesn't always "earn its keep".  Let's hope the algos and market forces continue to leave a (weekly) niche for the amateurs for many years to come...


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## over9k (24 June 2020)

Day traders haven't been able to consistently make money over short time frames for ages. Basically all of it is algorithms now. 

These are NOT normal market conditions at the moment however - don't go getting yourselves black swanned like the black-scholes guys did in the 90's.


----------



## over9k (24 June 2020)

Oh and the open tonight has been a big drop in response to the IMF news but the tech heavy nasdaq is a very different number (4-5x the difference between the indexes) to the sp500 & DJ as tech's actually up whilst everything else is down:




Let me emphasise that tech and stay-at-home tech are not the same things however. It's the stay-at-home tech that's where to be.

I'm kind of tempted to make a gut-instinct "stay at home tech index" and just see how it does. Would you mind if I added that to this thread skate?

(and would anyone be interested in it?)


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## Skate (25 June 2020)

over9k said:


> Oh and the open tonight has been a big drop in response to the IMF news but the tech heavy nasdaq is a very different number (4-5x the difference between the indexes) to the sp500 & DJ as tech's actually up whilst everything else is down:
> 
> 
> 
> ...




@over9k this is an educational thread & if you think posting that information will help, I’m all ears.

Skate.


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## over9k (25 June 2020)

True, it's just not a trading method and this thread is all about methods, so I didn't want to get it off-topic.


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## qldfrog (25 June 2020)

OK daily vs weekly: with real money and not Backtests
https://www.aussiestockforums.com/posts/1078897/
and following post
please notice the remark about returns vs XNT index which I use as a benchmark
I just included the weekly vs daily  backtests matching Skate's above period;
Mr @Skate->did not want to impose on your thread but feel free to copy/cut and paste here if you see educational value


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## Skate (26 June 2020)

Skate.


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## qldfrog (26 June 2020)

Skate said:


> View attachment 105264
> 
> 
> View attachment 105265
> ...



RBLwas a winner, I am lucky as I had it on my weekly as well and it compensated some other heavy loss
System going well @Skate


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## Skate (27 June 2020)

Skate.


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## Rsthree (27 June 2020)

Skate said:


> View attachment 105319
> 
> 
> Skate.




I have to say that I am really starting to appreciate more the systematic approach to trading and particularly with the weekly time frame.
In the past I would have been monitoring daily with finger on the button and more prone to reacting rather than executing, which results in over trading and high costs.

Moreover, lately I've been flat out at work so placing buy/sell orders at auction on the weekend really works well to avoid more stress during the day. To be honest I had never considered this approach, so it's a valuable learning.

Lastly I want to thank Skate again for the Action strategy and the hand holding and education he's generously providing.

It struck me the other day that he is actually paying a price in providing this guidance, ie. Paying for higher trading costs than he normally would due to the small parcel sizes.

So I definitely need to buy him a beer or a soda or a herbal tea, whatever is his poison.


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## Joe90 (27 June 2020)

Linus van Pelt said:


> Thanks @Warr87.
> 
> Except right now I'm reading the Amibroker manual:  https://www.amibroker.com/bin/UsersGuide.pdf.  I'm up to page 300 so far lol.  I do wish Dr. Tomasz Janeczko (https://www.amibroker.com/about.html) would invest in a tech writer where English is not his/her second language .




Another good place to start with Amibroker...Howard Bandy's work is excellent. This is his introductory text, first of a series of five-six books on systems trading all using AmiBroker, also some Python & machine learning content in the more advanced books.
http://blueowlpress.com/books/introduction-to-amibroker/
There a link to the free download at the bottom of the page.


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## martyjames (28 June 2020)

Thanks for the system updates Skate. I remember your saying your 'old' system gave up a big chunk of profits during the corona crash, does the action strategy have a filter that protects open profits (as well as not taking new positions) and does it react quickly enough, if it exists?

Cheers
Marty


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## ducati916 (28 June 2020)

Joe90 said:


> Another good place to start with Amibroker...Howard Bandy's work is excellent. This is his introductory text, first of a series of five-six books on systems trading all using AmiBroker, also some Python & machine learning content in the more advanced books.
> http://blueowlpress.com/books/introduction-to-amibroker/
> There a link to the free download at the bottom of the page.





I downloaded the book. Now I just need to find the time to read it. Possibly I could code up some of my discretionary stuff and save significant amounts of time.

jog on
duc


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## Skate (28 June 2020)

martyjames said:


> Thanks for the system updates Skate. I remember your saying your 'old' system gave up a big chunk of profits during the corona crash, does the action strategy have a filter that protects open profits (as well as not taking new positions) and does it react quickly enough, if it exists?




@martyjames, the COVID-19 crash happened so quickly (a 2 week period) 70% of my profits were lost & in hindsight, nothing would have protected me, it was a simple "Black Swan" event. (thems the breaks)

*Protection*
All my (weekly) systems have been designed to exit quickly with the (GTFO filter), the systems also exit when momentum stalls or slows (StaleStop filter). 

*What you really want to know is *
_"does the action strategy have a filter that protects open profits (as well as not taking new positions) and does it react quickly enough" _The answer is two-fold, (1) if another "Black Swan" event was to happen again (at the same magnitude & pace), I'm sorry nothing will protect us. (2) Under normal trading conditions (if there is such a thing as normal these days) I consider we have the best protection around built into the "Action Weekly Strategy" 

@ducati916 *doesn't mince his words *(take note)


ducati916 said:


> There will be a fair bit of chop in the continuing trend, which will keep many out of the market or singing songs of doom. So for the moment: sit tight, trade the trend and do not be scared out of positions as getting back in can be tough when you have to buy back in higher than when you sold out.




*Summary*
1. There will be a fair bit of chop in the continuing trend
2. Those singing songs of doom will keep many out of the market
3. Trade the trend & do not be scared out of positions

Skate.


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## martyjames (28 June 2020)

Thanks for the reply Skate. Im playing around with exits that use index volatility (SP500) as an additional exit for my stock system. It seems to make for a smoother equity curve and avoids some of the corona crash , still resulted in an 18% DD for 2020 but not too bad.

cheers


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## Linus van Pelt (1 July 2020)

ducati916 said:


> I downloaded the book. Now I just need to find the time to read it. Possibly I could code up some of my discretionary stuff and save significant amounts of time.
> 
> jog on
> duc



Hi @ducati916,

I'm a noob, but have been reading up on Amibroker and Norgate, so perhaps some of the below will help?  This assumes you're using Norgate Data; if not, then perhaps this may help others.

The below link shows the "extras"/"fundamentals" data available in Norgate Data (Gold and Platinum subscription level) (scroll the page as required):

https://norgatedata.com/data-content-tables.php#current-fundamentals

I opened the data viewer in Norgate Updater:




but unfortunately it is static, not dynamic, and doesn't list all the additional information.  I was hoping to be able to scroll to the right (a lot) to see all the extras.

I opened the Symbol Information window in AB:




which does appear to list (all???) the additional information, but with data labels rather than data names.  For the data names I would use the Norgate URL above.

In the AB Chart window:




is the Norgate Data folder, I assume created when you install the Norgate Data Updater, or perhaps the ND AB plugin.

I dropped all these on a blank chart, then selected Edit Formula..., but IMO it's easier to just view the AFL in an external editor.  I like Visual Code, but Notepad works (is notepad the best Microsoft can do after 20-30 years???)

On my installation, the Norgate Data AFL is located at C:\Program Files\AmiBroker\Formulas\Norgate Data.

Viewing those files in Visual Code, the main file seems to be C:\Program Files\AmiBroker\Formulas\Norgate Data\Norgate Data Functions.afl, as this is #included in all the remaining files.

Those functions look to just be helper functions wrapped around the AFL GetExtraData function, for example GetExtraData("NorgateBusinessSummaryLastUpdate"), with the rest of the AFL being outer functions calling the helper functions (for example to Plot() something).

IMO the documentation for the extra data could be better on the Norgate website, but this AFL, plus a bit of hacking, may get you what you need.

To me, it doesn't look like Norgate Data Functions.afl is complete, compared to the extra/fundamental data available in the URL above.  Plus all the variable names in the code are prefixed with "Norgate", none of which are noted in the Norgate URL as the variable names. 

For example, in the URL, search Metadata, Security Information - Text, FieldName = "Business Summary", but the AFL code says "NorgateBusinessSummary".  See the function NorgateBusinessSummary() in Norgate Data Functions.afl.

All of this is untested  - I'm making the assumption that the AFL provided by Norgate, um, works 

If I were to augment their code, I wouldn't edit their files directly, as they might get overwritten if I re-installed Norgate Data Updater.  Instead, I think I would create another folder under C:\Program Files\AmiBroker\Formulas, such as CustomNorgateData or MyNorgateData or somesuch, then put my code there.  And have a good backup somewhere in case I reinstall AB and my custom location disappears!  I'd then follow a similar pattern as Norgate; have one uber-AFL file with all my helper functions, then other functions that call them (such as to plot or filter).  I may be wrong on this best practice approach due to my AB inexperience, but I'm sure someone will correct me if I am (and I'll learn something in the process).

I believe you are a discretionary trader, but perhaps this will help you write up some filtering rules that would save you a lot of time when hunting for your next winners?

Hope this helps,
Linus


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## frugal.rock (1 July 2020)

Linus van Pelt said:


> I like Visual Code, but Notepad works (is notepad the best Microsoft can do after 20-30 years???)



You may like this program instead.
Have used for attempting beginners level HTML stuff.
https://notepad-plus-plus.org/
Cheers.


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## martyjames (1 July 2020)

Hi Linus

Thanks for the info on extras"/"fundamentals. Im with Norgate, didnt even know this was available so will check it out. I wonder if anyone combines this data with trading systems and gets enhanced results?

cheers


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## Skate (1 July 2020)

*2019-2020 Trading year was looking good *
I’ve spoken to a few traders recently & their trading ranges from the "worst year ever" to "the best year ever". I’m lucky to be in the latter. Trading was travelling along quite nicely, well that all changed mid-February 2020. Trading just went to mush, experiencing the fastest drop ever that I can recall. It took 2 weeks to unravel, two weeks I’ll never forget. Markets aren’t supposed to drop that quickly, don’t they know that?

*Historically*
New bear markets (in the days gone by) normally would begin slowly with larger declines coming much later on within the cycle but not this time. Trading systematically, “Bear markets” aren’t that scary, well they weren’t. What happened in two weeks would normally have taken months to develop & play out. It wasn’t that way this time, leaving little time to react. I say “thank god for the GTFO Filter”.

*Why so fast? *
The reality of the COVID-19 hit like a sledgehammer, forecasting economic chaos impacting worldwide with closures & imposed lockdowns aimed to slow the spread of coronavirus. Quick & steep selling scared most traders, shaking out the weak first. Disbelief turned to panic creating a flow-on effect, selling on a mass scale. As traders, we have the tendency to see what we want to see & act accordingly.

Skate.


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## Skate (1 July 2020)

*Trading the bounce*
Recoveries are always created haphazardly, whipsawing from one day to the next but with the COVID-19 crash, it was hourly. Even the best traders found it difficult to pick the change of market sentiment. In the next post, I'll chart up some real examples of how it was done in real-time.

*When does a bear market start to become a bull market? *(Do they sneak up?) 
What I do know is that the markets shift unpredictably & the bounce can come in sneaky ways. Traders who obsessed over negative news didn’t enjoy the recent bounce. If you missed the bounce so far, don’t compound your mistakes by sitting on the sidelines too long, as it’s never too late to re-enter the markets. Admittedly there are to be more disappointments along the way, so be prepared.

*Pain tends to focus me*
Since 20th March this year, I had to endure the good with the bad. Trading the bounce was not without its challenges. I could have described my best & worst days, weeks & months in percentages but dollars adds more clarity. You can't eat or spend percentages so dollars it is. Knowing how others handle the markets may be a useful insight.

*The worst of trading the bounce *(from the 20th March 2020)
Worst Day (-$62,823)
Worst Week (-$33,808)
Worst Month (-$116,831)

*The best of "trading the bounce" *(from the 20th March 2020)
Best Day $62,414
Best Week $83,770
Best Month $146,314

Skate.


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## Skate (1 July 2020)

*"The Ducati Dalmador Two Dogs Strategy" *(has been useful trading the bounce)
The next few charts hopefully prove that "The Ducati Blue Bar Strategy" is no Chihuahua when it comes to trading strategies as it's the best of both breeds (volatility & volume). As traders, we don't need a fancy strategy to make money. Personally I want to trade the price differentials along the way. The Strategy is uncannily accurate when applied to all timeframes, the signals are fast & snappy. Adding prudent "Money management" with a sharp "PositionScore" brings this strategy to life.

*Picking the change *(trading the bounce)
Trading the bounce has been very profitable so far but it has been a roller coaster of a ride. "The Ducati Blue Bar Strategy" when applied to the Dow & the All Ordinaries picked the turns in real-time, normally only seen in hindsight. 

*I'll post a chart of the two indexes showing the turn.* (Both Daily Chart)










*I prefer to trade weekly*
In the next post, I'll show how I capitalised on two trades (APT & Z1P) traded weekly. Trading the same strategy, whether "Daily or Weekly" the results are similar regardless of the periodicity.

Skate.


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## frugal.rock (1 July 2020)

Skate said:


> In the next post, I'll show how I capitalised on two trades (APT & Z1P) traded weekly. Trading the same strategy, whether "Daily or Weekly" the results are similar regardless of the periodicity.



Ooh goody!
Happy to say that I have moved to a weekly style discretionary system... the headaches have gone!
Cheers.


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## Skate (1 July 2020)

*How I capitalised - trading the bounce *("The Ducati Blue Bar Strategy")
I'll chart both weekly trades for (APT & Z1P). The "The Ducati Blue Bar Strategy" concentrates on "volatility, volume, turnover, acceleration & momentum" all the ingredients that go hand in glove with increased market sentiment.

*The two weekly trades ($25k position)*
1. (APT) is being traded in a Weekly timeframe & the open profits are $30,826
2. (Z1P) is being traded in a Weekly timeframe & the open profits are $30,881














*The same two positions "if traded" in a Daily Strategy  ($25k positions)*
"If I traded" these using the Daily Strategy the results would have been slightly higher with additional work & commission expenses.
(APT) closed profits of  $25,551  
(Z1P) closed profits of  $39,553











*Summary*
By "Trading weekly" both positions are currently open, whereas if I traded the positions on a daily timeframe I would have been in & out a few more times. The positions would also be closed.

Skate.


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## ducati916 (1 July 2020)

Skate said:


> *How I capitalised - trading the bounce *("The Ducati Blue Bar Strategy")
> I'll chart both weekly trades for (APT & Z1P). The "The Ducati Blue Bar Strategy" concentrates on "volatility, volume, turnover, acceleration & momentum" all the ingredients that go hand in glove with increased market sentiment.
> 
> *The two weekly trades ($25k position)*
> ...





From the number of posts and backtest results posted, I'm pretty sure most accept that the weekly is the way to go. Of course weekly doesn't mean that you exit at the end of the week, the trade could run for months. The problem is that it is somewhat counter intuitive. Traders tend to think that they can catch the daily fluctuations and that by doing so they will never suffer temporary drawdown, converting that all to profit. The truth is that that is incredibly difficult to do and even if you could, often you need the top and bottom prices of the day to enter/exit. Watch a few day-trading videos and see the incredible consistency of traders missing the trend for dollars and trading counter-trend for pennies. This is the exact trap that awaits for those that trade daily systems.

It is also incredibly difficult to exert the mental discipline to re-enter or re-exit a stock that you have just entered/exited, almost immediately, which in practical terms means that you lose your position. This can be incredibly costly if that stock then goes on a run.

Further, when trading daily fluctuations, you will find yourself increasingly paying attention to the headlines. This almost invariably leads to the poor-house. Trading the headlines is a monumental waste of time/effort and most importantly money.

If you can't sleep at night, have to watch the market, etc: your risk is too high or you have no idea what you're doing. 

jog on
duc


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## ducati916 (1 July 2020)

Linus van Pelt said:


> Hi @ducati916,
> 
> I'm a noob, but have been reading up on Amibroker and Norgate, so perhaps some of the below will help?  This assumes you're using Norgate Data; if not, then perhaps this may help others.
> 
> ...




While I certainly appreciate the effort, I haven't even had time to print the book, never mind read it. I'll get round to it eventually...

jog on
duc


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## Skate (1 July 2020)

ducati916 said:


> From the number of posts and backtest results posted, I'm pretty sure most accept that the weekly is the way to go. If you can't sleep at night, have to watch the market, etc: your risk is too high or you have no idea what you're doing.




@ducati916, *what a timely post. *
Those following along with the "Action Strategy" would now start to realise how stressfree trading a weekly strategy is. Most times it's boring & slow, nothing much to do other than to execute the trades as they come along.

*Trading the trend *(Systematic Trend Trading)
Trends can last longer than most traders realise & till the trend bends or stagnates it's still our friend. It pays not to be trigger happy & following your trading plan & strategy "is a given".

*Price differential*
I'm not a fancy trader, I jump on confirmed trends & hop off in a timely manner looking for the next ride. Trends are happening in all timeframes & "the regularity they form" is nothing short of astounding, picking the strong movers is the secret. Knowing when to hop-on & hop-off is the tricky part of trading. Buying quality won't cut it these days, the purchase "needs to be timed". Timing is everything in this game.

Skate.


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## Richard Dale (1 July 2020)

Linus van Pelt said:


> To me, it doesn't look like Norgate Data Functions.afl is complete, compared to the extra/fundamental data available in the URL above. Plus all the variable names in the code are prefixed with "Norgate", none of which are noted in the Norgate URL as the variable names.




The general overview of the data available is here:
https://norgatedata.com/data-content-tables.php

Each charting/analysis app has different ways of accessing the data.  For AmiBroker, accessing fundamental data is available two ways:
1.  Via the in-built fields within AmiBroker (viewable in the Symbol Information window, also accessible via the AFL function GetFnData.
2.  Via a call to the function NorgateFundamentals() using AFL code.

The in-built fields are populated as described here:
https://norgatedata.com/amibroker-database-layout-content.php

For access to more of the fundamental fields see here:
https://norgatedata.com/amibroker-usage.php#fundamentals

For certain subscriptions, the "Extras" data is provided as additional symbols.

I'm not aware of any data points that can't be accessed.

Cheers,
Richard.


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## frugal.rock (1 July 2020)

Richard Dale said:


> The general overview of the data available is here:
> https://norgatedata.com/data-content-tables.php
> 
> Each charting/analysis app has different ways of accessing the data.  For AmiBroker, accessing fundamental data is available two ways:
> ...



Any chance of  "Special Package" pricing for ASF members Richard ?
Thanks


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## martyjames (1 July 2020)

Hi Skate

Did you post back tested results for The Ducati Blue Bar Strategy or the Action strategy (which is the tweaked version of the former)? I know you have said you dont give too much credence to such, but im interested to hear how you gain confidence to trade  your strategies with long term back testing and strategies walk forward etc

Cheers
Marty


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## Skate (1 July 2020)

martyjames said:


> Hi Skate. Did you post back tested results for The Ducati Blue Bar Strategy or the Action strategy (which is the tweaked version of the former)? I know you have said you dont give too much credence to such, but im interested to hear how you gain confidence to trade  your strategies with long term back testing and strategies walk forward etc
> 
> Cheers
> Marty




@martyjames these days I backtest to get the desirable parameters & filters setting. I’m not looking for the best backtest results but “consistency of results” over a multitude of indexes.

*Confidence*
The backtest period always starts with the previous 365 days. Once that’s bedded I backtest over a multitude of date ranges. My Norgate Data subscription level doesn’t allow for survivorship bias. Without sounding cocky, after spending many (years) of Monte Carlo & backtesting you get a feel of what works & what doesn’t.

*Share Trade Tracker *
The advantage of using this software it allows “shortcutting” of the paper trading period with 100% accuracy. Share Trade Tracker also allows “pyramiding of position sizing” a backtest feature lacking with Amibroker. Another issue with Amibroker, it can’t backtest a “trading plan” only a trading strategy. A trading plan versus a trading strategy, there is a difference.

Skate.


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## Richard Dale (1 July 2020)

frugal.rock said:


> Any chance of  "Special Package" pricing for ASF members Richard ?




This isn't something we're likely to offer.  There's plenty of reasons why this is the case - it does work for some products/services where there's not really any differentiation between product/service specifications and there's lots of competition (e.g. gas/electricity utilities, refrigerators, hard drives etc.) but our product is particularly unique.

We have only provided limited discounts in the past to users that have assisted us in alpha/beta testing, or to users that are converting from our legacy environment (Premium Data).

Cheers,
Richard.


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## frugal.rock (1 July 2020)

Cheers Richard.
Doesn't hurt to ask. Have to live up to my name!


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## martyjames (1 July 2020)

Thanks for the reply Skate. I'll have a look at Share Trade Tracker. Im always interested to see how my systems perform in bear markets and collapses like the corona crash and if i can handle the DD. Ive just about finished my own weekly system which looks pretty strong in all market conditions (famous last words..!). Like you and others have commented, i do like the minimal time required to action the weekly system as opposed to my daily system.

cheers


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## over9k (1 July 2020)

Surely it would make sense to have some kind of "significance" or "change" threshold when it comes to trading frequency?

I don't have a set schedule, I just trade when I deem it appropriate. There's been a whole stack of dips over the past few weeks that have been excellent opportunities to buy into for example. Some of them have been close to one another, some more spread out. All have seen some kind of correction after their initial chaos however - every dip's bounced back a bit, every spike's corrected, and well within a week too...

If you've analysed your market/sector properly and say, know things are going to be choppy for a bit but pick back up, you don't even need to actually watch the news & wait, you can just put good-till-cancelled orders in at whatever% below current asking price and they'll just fill automatically whenever some chop occurs. Just look at webjet over the past 5 days for example https://www.google.com/search?q=asx:+web&rlz=1C1CHBF_en-GBAU732AU732&oq=asx:+web&aqs=chrome.0.69i59l2j69i58.2191j0j7&sourceid=chrome&ie=UTF-8

That's a ~10% swing down and then back up just in the past 5 days. If you traded weekly you'd have gone nowhere, but if you were expecting some significant chop and had some orders in at 5 or 7 or 9% below market or something you'd have made, well, 5 or 7 or 9%, in just a few days.

Surely this is bread & butter stuff?


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## Skate (1 July 2020)

over9k said:


> *I don't have a set schedule, I just trade when I deem it appropriate.* There's been a whole stack of dips over the past few weeks that have been excellent opportunities to buy into for example. *Surely this is bread & butter stuff?*




@over9k, that’s an excellent post.

*Buy low & sell high*
I hear this touted all the time but no one ever tells you how to do it. It’s the same with “it’s bread & butter stuff” sound great but it’s not easy for those who don’t know.

*I just trade when I deem it appropriate*
I wish to make a “Mrs Browns Boys” reference - “that nice”.

*Statements need to be qualified*
When you make a statement like “I just trade when I deem it appropriate” in a “Beginner’s Educational Thread” the statement needs to be qualified.

*Why?*
So others have an understanding how “you do it” but importantly “if they can do it” & apply it as part of their trading plan. I’m a systematic trend trader using technical analysis so your trading style is fresh & new for the “Dump it here” thread.

*Let me channel Pauline Hanson*
Please Explain (in detail) so no one needs to ask a follow up question.

Skate.


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## qldfrog (1 July 2020)

May the pupil challenge a bit the Master @Skate?
IF and that is a big IF you do not have a full time job/activity AND are free to enter daily orders AND if you have a system running at a click of a button AND the market is especially volatile AND you pay reasonable brokerage,
then you can take advantage of this intra week changes with a daily system vs a weekly one;
I would not bother in a smoother market but we can gain more opportunities AND reduce DD;
In BT at least, my DD is much lower on my daily system than on my weekly (similar algorithm on different time frames)
There is a little bit of extra stress as you have to update your data , pass order  before each open, and yes you can get in out in in a week but it also brings serenity against potential crash
So I prefer my weekly system but am happy to play with daily right now as well (money wise, I am 40% daily vs weekly)
A last advantage, it can take a long while to detect issues with a weekly system: a month is just 4 rounds whereas on dailies, you get 5 times more data and opportunities to detect  issues/validate changes.


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## Skate (1 July 2020)

qldfrog said:


> May the pupil challenge a bit the Master @Skate?
> IF and that is a big IF you do not have a full time job/activity AND are free to enter daily orders AND if you have a system running at a click of a button AND the market is especially volatile AND you pay reasonable brokerage,
> then you can take advantage of this intra week changes with a daily system vs a weekly one;
> I would not bother in a smoother market but we can gain more opportunities AND reduce DD;
> ...




*Weekly versus trading a Daily system*
@qldfrog, I’ve often said, "if it works for you, it's right for you". There are merits trading in both time frames but for "me" I prefer & feel more comfortable trading a weekly system, it also reduces the workload & the day to day stress of constantly trading. Imagine handling close to a hundred positions (93 to be precise) each day. Or the confusion of handling a mixture of weekly & daily positions, heaven forbid.

*The Action Strategy as an example*
Those following most likely would like to see more action (pardon the pun) but trading "my way" is slow & stress-free. A 20 positions portfolio is easy to fill. Placing your order over the weekend in the pre-auction, easy peasy. The rest of the week is your own.

*Did I tell you I'm a lazy bugger?*
I've traded Daily systems in the past with success but I had to check for signals "every day", let alone actioning them. "I ain't got time for that". It's not about having the time it's about being tired to a job.

_*"The last advantage, it can take a long while to detect issues with a weekly system"*_
That's not an issue as sometimes it's beneficial to have a "weekly smoothing effect" rather than "jagged daily volatility". 

*Weekly performs better, less work, less commission, less stress *
Let's take the example I posted earlier today (APT) & you decide if you had the option, would you trade it as a Daily System or Weekly? I rest my case. 

*Trading (APT) on a Daily timeframe* 
In & out, in & out, rinse & repeat. (that's a lot of work for one position)








*Trading (APT) on a Weekly timeframe* 
It's a "no brainer" for me




Skate.


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## over9k (2 July 2020)

Well I basically trade when I'm confident enough that I've figured *something* out. E.g my asx portfolio is overwhelmingly travel/aviation and gold mining stocks and my U.S one is what I call "stay-at-home tech" (tech which enjoys an increase any time people stay at home, e.g due to a pandemic). I'll tell you my play over the past month: 

I know/observed/realised/discovered/figured out a few things: 

First, that it takes roughly 3ish weeks from infection for the infection to be reflected in the data. 

Second, that travel and almost the entire aviation industry have been all but shut down, i.e seen the largest collapses. 

Third, Australia and New Zealand did manage to contain the virus whereas the United States did not, which means that with a simple understanding of exponentials we can know that the U.S WOULD see a 2nd wave and Australia/New Zealand would not and would in fact be able to reopen properly months before the United States could.   

Fourth, that markets across the board are almost invariably reacting negatively to any spike or increase in virus data, but some sectors are obviously reacting far more or less dependent on the sector obviously. I.e that some are far more volatile.  

Fifth, that markets across the board almost invariably react positively to reopening news in the same varied fashion that they drop to virus increase news. 

Sixth, that events which incur significant amounts of human contact like memorial day weekend or protests, no matter what the country, would undoubtedly spread an infection massively. 

Seventh, that goverment(s) the world over were desperate to reopen their economies even if they hadn't contained the virus. 

Eighth, that state and municipal governments have the power to both seal state borders and close down isolated areas of infection and thus play "whack-a-mole" with infection outbreaks, which would enable travel "bubbles" intra-national. 

Ninth, that it takes 14 days of negative test results to be absolutely confident of a lack of infection, so zero cases for 14 days would, assuming no more cases were reported, mark the beginning of the end of the lockdown. 

Pooling this together told me firstly that we would see reopening announcements in a titanic tug-of-war with any spikes in virus data, thus could expect enormous volatility whenever this occurred, and secondly that we could expect this volatility roughly 3ish weeks after any event which spread the virus occurred, e.g george floyd riots/protests or memorial day weekend. 

I confirmed my thoughts by simply waiting to see the results of the first virus spike announced and a lot of stocks just fell off a cliff. ONE guy who was at the protests in melbourne was all it took for asx armageddon, same as just that one spike in cases in the U.S (which was the beginning of the end of the curve flattening) and something similiar occurred. 

From there, I just put a bunch of lowball good-till-cancelled orders in and layered them (some at -4%, some at -6%, some at -8% and so on) and they've just autofilled whenever the market's dropped and then I've done the inverse with sell orders at +4, +6, +8 and so on. 

So I've basically just traded the chop - every time there's chop, my orders are filled. Some of it has been so wild that iirc it was friday before last that we had a 4% swing just between morning & afternoon. 

I've also sat on *some* of it to keep as a long position that I've been gradually growing lately too. Net, that position's basically flat at the moment, but I've made a killing trading the volatility as I've described above.


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## qldfrog (2 July 2020)

over9k said:


> Well I basically trade when I'm confident enough that I've figured *something* out. E.g my asx portfolio is overwhelmingly travel/aviation and gold mining stocks and my U.S one is what I call "stay-at-home tech" (tech which enjoys an increase any time people stay at home, e.g due to a pandemic). I'll tell you my play over the past month:
> 
> I know/observed/realised/discovered/figured out a few things:
> 
> ...



All this edges on the fear of the virus, but as Europe demonstrates now, it will evaporate and your edge will lessen.
.you talk about Armageddon? Is that Victoria, how many people died, are in hospital?
Population are ready to play the game and say _we are so scared_
 as long as they are being thrown money for nothing.if this stops, 
The " who cares, what about me " will take over and only real cost/virus effect will matter and they are negligible.
We are in a lockdown decision economic crisis, not a medical one..even in the US.
Parts of Italy, France and Spain, ,NY are the only real medical crisis and even so not dramatic.
Once reality and voters power reestablish, the edge will lessen.
You played the public psyche and hysteria well, kudos there.
Make sure you see the wind change coming.
After do not correlate facts with a narrow selection of virus only causes
If Biden chances increase, market will head lower, we may see a rotation of favourite sectors..
I do not deny the system shock just gone thru, whatever the reason, we live in a different world today


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## qldfrog (2 July 2020)

Apologies you said ASX Armageddon...my mistake..


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## frugal.rock (2 July 2020)

Mr Skate,
A few questions if I may?;

Q1. Iress and Amibroker.
A first port of call enquiry, do you know if Amibroker can get data from Iress system?

Q2. System Development.
In consideration of developing a system, can you give any tips for a scalable system that can be used monthly, weekly, daily, intradaily?

Q3. Bar Timeframes
Do you know what the minimum bar timeframe is for Amibroker and is this dictated by Amibroker and or Norgate data limitations?

I refer to ASX:ATH which went absolutely nuts yesterday.
I thought to have a chance of quick success using a Amibroker system, bar sizes of maybe around 20 seconds (give or take) were in order, as the SP ranges/volumes (volatility) within a minute were incredible!

If you felt inclined, and as a learning experience, can you consider analysing ATH on yesterday's trading?
It was a very unusual experience and makes me think there may be some extra parameters and strategy to consider in building a one stop shop/turn key style system strategy, that is likely to work under incredibly extreme conditions as well as all "normal" conditions.
Much obliged.

Your (and Duc's) ex Gratia gift of time will be forever remembered.
If there is any way I can "repay" said time, please don't hesitate to ask.


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## Skate (2 July 2020)

frugal.rock said:


> Mr Skate, A few questions if I may?; If you felt inclined, and as a learning experience, can you consider analysing ATH on yesterday's trading? Your (and Duc's) ex Gratia gift of time will be forever remembered. If there is any way I can "repay" said time, please don't hesitate to ask.




@frugal.rock let me answer your questions in order.

*Q1. Iress and Amibroker. A first port of call enquiry, do you know if Amibroker can get data from Iress system?*
Amibroker can use a local database so I guess it would be possible for those who know-how. Most data feeds are listed below that require a plug-in to use the propriety format of the data supplier. They often say "All things are possible with Amibroker" that I wouldn't refute.




*Q2. System Development. In consideration of developing a system, can you give any tips for a scalable system that can be used monthly, weekly, daily, intradaily?*


Skate said:


> *Coding a strategy*
> Let me give you an analogy - I don’t care how often you read a Boeing 747 instruction manual or even a Helicopter instruction manual – I can guarantee you that in the end, you will not be a good pilot – even if you get it off the ground there would be no guarantee that the plane or helicopter would be safe under your control. This is exactly where my coding ability is, weak at best & amateurish at worst - reading something doesn’t mean I understand it.



My position hasn't changed & I'm certainly not qualified to offer any meaningful help.

*Q3. Bar Timeframes - Do you know what the minimum bar timeframe is for Amibroker and is this dictated by Amibroker and or Norgate data limitations?*
With a live data feed combined with Amibroker, all things are possible. Neither products lack limitation.  

*If you felt inclined, and as a learning experience, can you consider analysing ATH on yesterday's trading?*
@peter2 would be the perfect guy to analyse (ATH) as well as many others, otherwise, I'd just be making up a story.

*Your (and Duc's) ex Gratia gift of time will be forever remembered. If there is any way I can "repay" said time, please don't hesitate to ask.*
Hitting the [Like] button is all that any poster hopes for. When I post I'm just repeating information I already know in the hope of motivating others wanting to learn more. @peter2 words below nailed it.


peter2 said:


> Use the "like" button. If there is a post that you really like or it contains some interesting or helpful information, please thank the poster by hitting the like button. The "like" button creates an alert that lets the poster know that someone likes a post that you did. It's a compliment and we all like to receive them. When I receive a few likes and I've been fortunate to receive many, I'm more likely to provide further information on the "liked" topic. To those new members, who don't want to post. Please thank the contributors that you like to read.




Skate.


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## qldfrog (2 July 2020)

frugal.rock said:


> Mr Skate,
> A few questions if I may?;
> 
> Q1. Iress and Amibroker.
> ...



@frugal.rock , please think about any real chance of intraday play, if 20s counts, you will always be behind the big players who work in the ms, they actually know about your trade before it is executed and can even outbid/underbid you if it is seen worthwhile; I would not think about trading anything  below a day trade from an amateur setup..so much against you unless you are in a very narrow niche
my view only


----------



## qldfrog (2 July 2020)

Skate said:


> *Weekly versus trading a Daily system*
> @qldfrog, I’ve often said, "if it works for you, it's right for you". There are merits trading in both time frames but for "me" I prefer & feel more comfortable trading a weekly system, it also reduces the workload & the day to day stress of constantly trading. Imagine handling close to a hundred positions (93 to be precise) each day. Or the confusion of handling a mixture of weekly & daily positions, heaven forbid.
> 
> *The Action Strategy as an example*
> ...



I fully understand your view and am MUCH more comfortable trading a weekly system.One point which is system based and can swing me one way is the ramp -up speed:
if a weekly system increases exposure by 2 or 3 net positions a week.[.was the case for one of my earlier attempt], it takes 2 months to be fully exposed, during that time, the money/soldiers are not working ;-) and the peak trend benefit bypassed..first half 2019....
On the other end , if the exposure is quickly achieved, this does not matter anymore and weekly is much easier on mind/wallet.
It is clear you have a very good position scoring which allow you to sort the good from the bad of prolific selection..I have no such luck/expertise..maybe my efforts should go in a more open buy selection, with emphasis on the position scoring..that should allow me back in weekly.
We are always slave of our past experiences in today's decisions


----------



## peter2 (2 July 2020)

@frugal.rock   Systems for multiple time frames. 

You would have heard the term that the markets are "fractal". Basically this means that the price patterns that form on the 1 minute chart, form in all other time frame charts. A system that uses price patterns can be used on all time frames. 

Systems that use indicators have to contend with the lag and on smaller time frames have to be able to identify the signals from the noise. It's a careful balancing act and that's why so many people find the weekly time frame ideal for their purposes. 

re: ATH:  It's so very rare that the ASX halts trading as a circuit breaker. It's very common in the US markets on the smaller priced stocks.  I do not trade stocks are have been locked by a circuit breaker halt. They can go either way when they resume trading.


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## Newt (2 July 2020)

qldfrog said:


> I fully understand your view and am MUCH more comfortable trading a weekly system.One point which is system based and can swing me one way is the ramp -up speed:
> if a weekly system increases exposure by 2 or 3 net positions a week.[.was the case for one of my earlier attempt], it takes 2 months to be fully exposed, during that time, the money/soldiers are not working ;-) and the peak trend benefit bypassed..first half 2019....
> On the other end , if the exposure is quickly achieved, this does not matter anymore and weekly is much easier on mind/wallet.
> It is clear you have a very good position scoring which allow you to sort the good from the bad of prolific selection..I have no such luck/expertise..maybe my efforts should go in a more open buy selection, with emphasis on the position scoring..that should allow me back in weekly.
> We are always slave of our past experiences in today's decisions




Interesting point QF.  Have to admit I almost had a choking fit early May when saw the Action Strategy enter pretty well 20 positions straight away.  

I'll be B'ed if any of the strategies I've written manage to take up positions so aggressively.  If you can demonstrate an edge than hats off for being able to exercise that edge so frequently and aggressively.  

Not sure if the Action Strategy is a school of angry piranha or just a speeding Ducati??


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## frugal.rock (2 July 2020)

Newt said:


> Not sure if the Action Strategy is a school of angry piranha or just a speeding Ducati??



It looks like a speeding Ducati... 
with a Piranha fly screen...


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## Skate (3 July 2020)

Skate.


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## Skate (4 July 2020)

Skate.


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## martyjames (4 July 2020)

Nice work Skate. Are these sells 'inactivity' mainly ?


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## over9k (4 July 2020)

Sounds like skate's broadly doing what I do - buy a whole bunch and then torch the non-performers.


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## Skate (4 July 2020)

martyjames said:


> Nice work Skate. Are these sells 'inactivity' mainly ?




@martyjames, let me put something together in the next few post so you have a better understanding without telling you exactly why the position no longer meets our trading plan or trading strategy.



over9k said:


> Sounds like skate's broadly doing what I do - buy a whole bunch and then torch the non-performers.




@over9k, that's a simple analogy but it doesn't hold water for the positions in bold. 

*The bolded securities are performers*
Why sell [BFG] ?
Why sell [CDV] ?
Why sell [PRU] ?
Why sell [REX] ?




*Why are we selling some of our best performers?*
The Action strategy by-the-way does not have a "Take Profit Stop" - any guesses?

Skate.


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## martyjames (4 July 2020)

Hmmm.. BFG in particular looks very strong. Maybe its related to if stock hasnt reached x percent gain after so many bars dump it? I could understand that if there were a lot of new buy signals but there is only one IRI. Following with interest.


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## Skate (4 July 2020)

*The "Action" strategy*
The Action Strategy is simple in concept & design but the coding to generate the signals is very complex. The Action Strategy is a combination of discretionary ideas coded & used in a mechanical trading system. Strict money management, refined parameters, extremely sharp exit with additional filters the (strategy) grows an extra leg.

*Before we exit we need a few confirmations*
For the Action Strategy to exit a position we need a few confirmations that the momentum has slowed, stopped or reversed. The "exit confirmation" guarantees you will give back a proportion of your open profits. The exit strategy in our trading strategy uses a GTFO filter as well as three independent exit indicators being: (1) Variable Trailing Stop, (2) StaleStop & (3) Volatility Dependant Stop which is clever in design. The exit is the heart of the strategy trading such small positions driven by "volatility measures" taken from "other sources". All positions need to meet the conditions of our trading plan or they face the humiliation of being dropped from the team no matter how they are currently performing or how we think those positions will perform in the future.

*Selling* (it's not always pretty)
Some traders have a hard time knowing when to sell or sell successfully. Successful trading is largely the art of selling & determining when to cut losses or when to take profits is hard. Because it is so hard to determine, many just don’t do it or "do it in time". Traders need an edge to beat the markets & selling the losers whilst holding the winners can, in fact, be a simple edge, at other times selling the winners at the correct time can also add to the edge. It's important to remember that the "sentiment" of players creates momentum in both directions. 

*In a nutshell*
Trading is about "knowing when to hold them & knowing when to fold them"

*Trading is a simple endeavour*
Trading a mechanical system can be a simple endeavour if you are disciplined at following the rules & sticking to your trading plan. When the appropriate signal shows up, place your order & carry on, it couldn't be any simpler. Trading small-dollar positions attract a high-cost of brokers commission & in our case is the killer trading this type of strategy. Never forget, trading is a game of probabilities. Stick to your trading plan & don’t violate it at any cost.

Skate.


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## Skate (4 July 2020)

*Half the fun of trading is figuring out what others are doing & why *
When information is supplied it helps you become a detective that adds value to your learning experience. I could go into depth & explain why each position is being sold in the Action Strategy this week but that's not the point. 

*Clear as mud*
Looking at the charts some positions will be obvious why they are being sold, where other positions will be a little more obscure. All chartists make up stories (in their head) about what they see in the charts & then go on to believe the story because of their ingrained bias. Biases are mental blind spots, it takes special effort to avoid falling into their traps. Often, we realize our errors after the fact & usually it's too late.

*Let's not leave out the members who like to look at charts*
The "Charts" always tell a story even if at first it appears that they don't. As traders, we are always playing catch-up with new information. As systematic trend traders, we are searching for the probability of what will happen next, sometime in the future. Punting on those probabilities can be hazardous to your wealth & emotions. The times when you get it right, can compensate you for the cost of constantly having a go. 

*Do the charts tell a story for you?*
The red & green lines are the support & resistance lines for the 10 & 50 weekly periods.

*Looking at the chart of [BUB]* 
It should be oblivious why it's being cut from the team.





*Now let's look at these charts*
What do you see? 
What is the story?
Why are the positions being sold?

*PRU - Perseus Mining *






*REX - Regional Express*






*Looking at the chart of [BFG] it looks so good !!*
Why is it being cut from the team?

*BFG - Bell Financial Group Limited Ordinary *



*Hopefully *
Some members may like to "express their opinion" on the charts above or why the positions below in the list are being axed from the team. 

*It pays to remember* 
There is no "right or wrong" answers in the "Dump it here" thread but a variety of opinions, one very good opinion has already expressed by @martyjames 



martyjames said:


> Hmmm.. BFG in particular looks very strong.







Skate.


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## ducati916 (4 July 2020)

Skate said:


> *
> Before we exit we need a few confirmations*
> For the Action Strategy to exit a position we need a few confirmations that the momentum has slowed, stopped or reversed. The "exit confirmation" guarantees you will give back a proportion of your open profits. The exit strategy in our trading strategy uses a GTFO filter as well as three independent exit indicators being: (1) Variable Trailing Stop, (2) StaleStop & (3) Volatility Dependant Stop which is clever in design. The exit is the heart of the strategy trading such small positions driven by "volatility measures" taken from "other sources". All positions need to meet the conditions of our trading plan or they face the humiliation of being dropped from the team no matter how they are currently performing or how we think those positions will perform in the future.




It is not:




A volatility based exit.

It is not the GTFO filter as this would mandate an exit from all positions.

Therefore it is a mixture (based on the charts) of the 2 remaining exit criteria.

jog on
duc


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## CNHTractor (4 July 2020)

Skate said:


> *Do the charts tell a story for you?*
> The red & green lines are the support & resistance lines for the 10 & 50 weekly periods.




Hi, I am trying to identify patterns. My first step has been to emulate the chart you have posted - I have plotted the ROC over 15 periods as maybe a clue to a stale stop, alas it hasn't assisted me.







ducati916 said:


> It is not the GTFO filter as this would mandate an exit from all positions.



 Noted!


----------



## Saqeeb (4 July 2020)

First of all I would like to apologize the followers of this thread and most importantly the members following the progress of my MAP paper trading portfolio for not posting updates last week. Life gets in the way and sometimes you do not find time to do the tasks that you need to do.

I am going to make two posts updating the progress of WEEK 19 and WEEK 20.
*
Week 19 update on my MAP paper trading portfolio.*
This portfolio gained $807.00 for week 19 and the drawdown has now come down to -11.5% from -14% the previous week.
*
Week 19 buys:
SPT, RBL, OPC, NXT *and *AEF *
As noted in my previous post *CDV *was not entered as this is one of my rules that I do not enter a position after a takeover offer.

*Week 19 sells:*
As noted in my previous post, *PDN *and *DTL *were sold. 
*****There was another position sold this week**** *This position was *MLX *(reason for sell is below).

*Lesson learnt:*
I learnt that I must always also run my scans against a watchlist that lists my current holdings. This is because as if I am only scanning the universe that I trade, which is *All Ordinaries *in this case, and if there is a position I am holding that has beed dropped from this universe then a sell signal is not generated. This is a trading mistake that could cost me hugely if that position gets hammered before I realise.

Thankfully a) I made this mistake while I was still paper trading, b) I noticed it the same week.

This brings me to wonder if backtests results are also prone to this anomaly.




*

*


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## Saqeeb (4 July 2020)

*Week 20 update on my MAP paper trading portfolio.*
This portfolio gained $867.00 this week reducing the drawdown to -8.5% from -11.5% the previous week.
*
Next week's buys:*
One buy signal for next week

*Next week's sells:*
No sells for next week


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## martyjames (4 July 2020)

Hmmm, i'm missing something here Skate. How do you define 'support & resistance lines for the 10 & 50 weekly periods'?
I always look at the next higher time frame to what im trading to determine S/R levels. In the example of BFG i would see around $1.50 as the next 'resistance' level.

Enjoying the discussion as always.

cheers


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## Skate (4 July 2020)

Lewie said:


> *My idea was to invest in a wide range of businesses that I have some degree of knowledge about*, so *I'm trying to invest on the basis of fundamentals *as opposed to speculation. *As such my first "filter" was going to be an intrinsic value calculation*, the more mainstream of them (using average growth rate to extrapolate the free cash flow, discounting that and dividing by shares outstanding to get the intrinsic value per share) I thought that the free cash flow extrapolation method of *calculating intrinsic value would be quite a strong tell of a companies health? Since it essentially represents profitability*, so I guess one question is: Is it common to get extremely differing results in these calculations




@Lewie made a few points in his recent post giving me an opportunity "not to respond" but to make a few general comments as a system trader. I represent a trader travelling down the opposite path to Lewie but having the same end game in mind. Technical analysis is based on the psychology of buyers & sellers where Fundamental analysis is basically a background check of how a company has performed & operated in the past, using the past data to estimate future value.

*Let's take Enron as an example*
People bought Enron as it was a fundamentally good company & the fundamentals looked good. What I am trying to say is, fundamental analysis can fool you just as much as technical analysis can fool you. The story of Enron Corporation depicts a company that reached dramatic heights only to face the biggest fall from grace "ever" in the United States, disintegrated almost overnight fooling regulators for so long with fake holdings & off-the-books accounting.

_*"My idea was to invest in a wide range of businesses that I have some degree of knowledge about"*_
Revenue flow, for instance, you may think you know how Woolworths operates, because you buy your groceries there, but can you clearly articulate how one dollar of revenue flows through the business? The more you understand how a business operates, the more you'll find that you don't know, but in the process, you will become aware of other information, which further improves your understanding of the investment’s risk.

_*"I'm trying to invest on the basis of fundamentals"*_
What criteria should you use to pick a stock? Well, you can either use fundamental analysis (the study of balance sheets, PE ratio, P&L statements, also researching any known facts about the company & its managers, even the company’s historical performances) or you can use technical analysis (the study of charts) I prefer technical analysis as I believe all that is known about a company, has already been factored into the share price already. Human fragility such as greed & fear is what fuels the markets, it’s the very same reason why support and resistance areas are so important. Support and resistance is another way of saying - the top and bottom of a price range a direct correlation to traders sentiment about a companies share price. My post is an alternative view & not to be considered in any other way than that.

More to follow.

Skate.


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## Skate (4 July 2020)

_*Lewie said: "Calculating intrinsic value would be quite a strong tale of a companies health? Since it essentially represents profitability"*_
There are many ways to calculate intrinsic value but simply put "it reflects the actual worth of the business", the amount of money that can be crystalised if the whole business & all of its assets are sold off today & is not reflective of a share price evaluation. Most believe a stock's value is indicated by its share price but that only tells you a company's current value or its market value. The share price represents an agreed value of a buyer & a seller, nothing more & nothing less. If there are more buyers than sellers, the share price will climb & when there are more sellers than buyers the share price will fall. When this is in play the intrinsic value of a company becomes less relevant. Some revert to using other ways to value a company & one common way is to use a crude measure of a "Price/Earnings ratio" (P/E). I say "each to their own"

*Focusing on valuations is the time-tested path to lousy returns*
Valuations using the price/earnings ratios or other valuation metrics as in using "intrinsic value" in my opinion is terrible at timing the direction of the markets, in particular, early in the formation of a trend. Concentrating on valuations routinely misses the major moves in a bull market, but has merit investing over the long haul. Personally I want to trade the price differentials of a share price along the way.

*Price/earnings ratio (P/E)*
For those who are unfamiliar with a Price/Earnings ratio (P/E), it's simply a valuation metrics which divides a stock’s price by its per-share earnings. (P/E) is a measure to gauge if a company is under or overvalued. When stocks are perceived as under or overvalued, it's comparing the stock price to the companies’ underlying business values.

*Some P/Es use past earnings *
Others utilise projected future earnings or other valuation metrics, for example, some will use, “price to book” which in theory is what's left when a firm liquidates & repays all liabilities. While other valuations compare prices to sales of unlocked opportunities while others value in the short-term.

*Market direction*
I'm suggesting that you ignore all of these metrics for market direction as they simply don’t help. The recent COVID-19 price plunge didn’t happen because valuations were too high, or because the economy was shaky, it was all to do with market sentiment, the sentiment of the herd & nothing else.

Skate.


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## qldfrog (4 July 2020)

interested by PRU:
looking at the chart, this is what I see:

It is going to bounce and break that level (it tried to cross 3 times )next week
BUY BUY BUY ;-)


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## qldfrog (4 July 2020)

try again issues to upload


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## Saqeeb (4 July 2020)

qldfrog said:


> interested by PRU:
> looking at the chart, this is what I see:
> 
> It is going to bounce and break that level (it tried to cross 3 times )next week
> BUY BUY BUY ;-)



As a chartist, yes, PRU is looking like it is ready to breakout and is screaming a buy.

In the context of Action Strategy, in my opinion, the volatility seems to have died down and I see this as the reason for the sell signal. This is only my opinion and I am still on my training wheels.


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## Skate (4 July 2020)

Saqeeb said:


> As a chartist, yes, PRU is looking like it is ready to breakout and is screaming a buy. In the context of Action Strategy, in my opinion, the volatility seems to have died down and I see this as the reason for the sell signal. This is only my opinion and I am still on my training wheels.




*PRU - from a different perspective*




Skate.


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## Skate (4 July 2020)

*PRU - from a different perspective*
*


*
Skate.


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## CNHTractor (4 July 2020)

Skate said:


> Half the fun of trading is figuring out what others are doing & why




Hi Skate, probably a bit late in the night for me, and maybe a glass of red too late as well.

However, given @ducati916, comment re Volatilty not being in play then I have tried to look at chart using Index Filter, Stale Stop and Trail stop as follows:

I have looked at it form a stale stock perspective using

```
StaleStop = ROC(C,13)<0;
```
 as a reference point.

Likewise, I have looked at a trail stop of 20% or 10% if index filter is negative. The index filter I have used is

```
C < MA(C,50);
```

Obviously, the parameters [i.e. period] used for Stale Stop, Index Filter and Trail Stop are key.

Using the above I have the following weekly chart:




I will revert to looking at the charts tomorrow to see whether I can pick a pattern.


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## ducati916 (5 July 2020)

Skate said:


> @Lewie made a few points in his recent post giving me an opportunity "not to respond" but to make a few general comments as a system trader.
> 
> 
> _*"I'm trying to invest on the basis of fundamentals"*_
> ...




1. Expanding on Technicals v Fundamentals. To start, assume that it will take an equal amount of work/study to become competent in either discipline. Further that should you study both, they will be complementary in some aspects and contradictory in others.

Once you have overcome that initial hurdle, TA becomes far more time efficient. You could analyse 1000+ stocks on a technical basis in the time it takes to analyse a single stock via FA. As Mr Skate has already alluded, even completing a thorough analysis via FA, your analysis can still be woefully inaccurate due to information that is hidden. I had an extended discussion with Mr VC here: https://www.aussiestockforums.com/threads/the-education-of-an-investor.34402/page-9 on CZZ, which in my analysis was a fraud, but, like Enron, rose magnificently higher in price until it was taken private. Which was pretty lucky, as the fraud was starting to slip out.

Far better, if you are set on adding FA to your repertoire, to study macro economics and file down to sectors. Aggregates of stocks in an industry are more accurate than individual stocks, rather like psychohistory in Asimov's Foundation trilogy. Even better, focus on the market as a whole.

2. Ultimately, FA is only really a required skill if you plan on LBO transactions, as actual cash-flow is vitally important in this area. Just buying and selling stocks can be accomplished with just TA. You want long term? Just run your buy/sell program indefinitely. You are holding a basket of stocks: simply the stocks in the basket change periodically.

jog on
duc


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## qldfrog (5 July 2020)

ducati916 said:


> extended discussion with Mr VC here: https://www.aussiestockforums.com/threads/the-education-of-an-investor.34402/page-9 on CZZ, which in my analysis was a fraud, but, like Enron, rose magnificently higher in price until it was taken private. Which was pretty lucky, as the fraud was starting to slip out.



Interesting, i had the same opinion of CZZ and a not so healthy debate with monsieur  VC years  ago : I view them as fraud in the penal way: these guys should have landed in jail
Fake products, breaking commercial and quarantine laws,and morally destroying real beekeepers for their short gain.ugly.not surprised if this leaked to their annual reports.
A shame i missed your side, will read...


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## frugal.rock (5 July 2020)

ducati916 said:


> plan on LBO transactions,



LBO ?  LBW I understand... howzat!

Could it be Leveraged Buyout?

* "What Is a Leveraged Buyout? *
A leveraged buyout (LBO) is the acquisition of another company using a significant amount of borrowed money to meet the cost of acquisition. The assets of the company being acquired are often used as collateral for the loans, along with the assets of the acquiring company."
https://www.investopedia.com/terms/l/leveragedbuyout.asp


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## Newt (5 July 2020)

Skate said:


> *Half the fun of trading is figuring out what others are doing & why *
> When information is supplied it helps you become a detective that adds value to your learning experience. I could go into depth & explain why each position is being sold in the Action Strategy this week but that's not the point.
> 
> *Clear as mud*
> ...




Some more thoughts on the "exit puzzle" for these stocks....

Theory 1.  All 4 reaching previous price action (e.g. nodes on Volume Profile - or price where large volume has previous transacted, before have to break out to new high)

Theory 2:  ROC of ROC is slowing (deceleration of price)?  Seem to recall you saying before Skate you look at ROC of price as well as acceleration for entry/exit filters.


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## peter2 (5 July 2020)

Like many, I was surprised to see this weeks sell orders on a few positions in the Action Strategy. So what?  It's @Skate system not mine. Skate will follow his system because he knows every detail and has done all the back testing. 

None of us know all the system details. None of us have done all the back testing research that examined the past performance of the system. 

This is a good example why it's almost impossible to trade someone else's system.  As soon as we can't explain a few actions, in this case a few exits, doubt about the system sets in. Once we doubt a few exits we'll doubt a few entries and then we won't follow the system at all. 

I'm not going to spend time trying to explain something when I don't have all the details. I will use this conversation to reaffirm my commitment to follow my systems.


----------



## peter2 (5 July 2020)

Oh, and if you're interested BFG is a 1st green bar CAM buy with above average volume  .




One system's SELL can be another's BUY.


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## Rsthree (5 July 2020)

peter2 said:


> Oh, and if you're interested BFG is a 1st green bar CAM buy with above average volume  .
> 
> View attachment 105618
> 
> ...




This is a great example of why trading can be so challenging. You make your assumptions, you feel you have a solid grounding and then you're presented with a contrarian view, and then doubt and uncertainty start to creep in.

Btw, I love the presentation of your charts, particularly the added drama of the skull and cross bones.


----------



## CNHTractor (5 July 2020)

Newt said:


> Some more thoughts on the "exit puzzle" for these stocks....
> 
> Theory 1. All 4 reaching previous price action (e.g. nodes on Volume Profile - or price where large volume has previous transacted, before have to break out to new high)
> 
> Theory 2: ROC of ROC is slowing (deceleration of price)? Seem to recall you saying before Skate you look at ROC of price as well as acceleration for entry/exit filters.




I have been looking at the “exit puzzle” and at this point I am not seeing a pattern

@Newt  has made a few suggestions. I am not sure that I understand Theory 1 [Volume], nor do I see ROC slowing. Attached is my attempt to see patterns on the chart. I post CDV.au as an example. The bottom pane is based upon this code:


```
_SECTION_BEGIN("SROC");
P = ParamField( "Price field" );
periods = Param("Periods", 15, 1, 200, 1 );
Plot( EMA(ROC( P, periods),20), _DEFAULT_NAME(), ParamColor( "Color", colorCycle ), ParamStyle("Style")  );
_SECTION_END();
```



There has been so much posted on the Action Strategy I am thinking I need to go back in time and re-read Skate’s posts

Before doing so @Skate are you able to tell us the Stop loss levels that you are using and also what stale stop parameters are used?


----------



## Skate (5 July 2020)

CNHTractor said:


> There has been so much posted on the Action Strategy I am thinking I need to go back in time and re-read Skate’s posts. Before doing so @Skate are you able to tell us the Stop loss levels that you are using and also what stale stop parameters are used?




@CNHTractor, I've been out & just noticed your post. I have been watching the interaction & discussions about the list of sell positions of the Action Strategy this week. They are all fair comments & some are very good. All the recent posts about the Action Strategy, by the way, show a level of interest. When I get some free time this afternoon I'll make a post that some may find interesting as it's something new & a bit out there. The problem will be to explain it "succinctly without being boring".

*Backgrounding*
I need to set the background. Some might have missed the turn in sentiment this week. Volume, Volatility & other metrics compared to the previous 16 weeks "things have changed". The last week & a half has been the turning point. What worked back weeks ago won't work going forward (the markets have changed).

*Read a few of Duc's post & read the moderation of his words *
@ducati916 knows the shift has been on for a few weeks now & his projections are solid (his posts align with a few of my technical indicators). The shift is not like a light switch (on or off) but more like a dimmer switch & it's turning clockwise, the room is getting brighter.

*Different markets require a different strategy *
Here is a thought, what if we can switch the strategy to take advantage of a changing market. That's a unique feature of the Action Strategy, it can gauge sentiment & "dance to the music being played".

More to come.

Skate.


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## qldfrog (5 July 2020)

Skate said:


> @CNHTractor, I've been out & just noticed your post. I have been watching the interaction & discussions about the list of sell positions of the Action Strategy this week. They are all fair comments & some are very good. All the recent posts about the Action Strategy, by the way, show a level of interest. When I get some free time this afternoon I'll make a post that some may find interesting as it's something new & a bit out there. The problem will be to explain it "succinctly without being boring".
> 
> *Backgrounding*
> I need to set the background. Some might have missed the turn in sentiment this week. Volume, Volatility & other metrics compared to the previous 16 weeks "things have changed". The last week & a half has been the turning point. What worked back weeks ago won't work going forward (the markets have changed).
> ...



very good and a bit scary as last week is the first week the sum of my systems posted a loss..not gone that way for a long while.even my pure volatility one while going as planned overall did not do much
hum food for thoughts


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## Newt (5 July 2020)

Mmmm- so a regime filter, presumably based off Duc's volaility teachings.  If so, to alternative settings, or a change in underlying strategy?  

Totally accept Peters comments earlier about sticking to your existing strategy, but never too proud to get my head around some new element of trading that might one day translate into an improvement.  

Just modeling different strategies, timeframes, universes can often cast a new light on existing strategies, which parameters are robust and those that might be getting into curve fitted territory.


----------



## Skate (5 July 2020)

*Let's talk about switching parameters, settings & functions*
Trading strategies vary in performance from one strategy to another. Some strategies are better suited to certain market conditions than others, that's a given. Why can't we have the best of both worlds & combine a few different strategies into one. I've done it with my "Hybrid Strategy" which is a combination of similar trend following strategies, all racing to be the first to enter a trend. Taking this idea one step further, to the next level, what if the "Action Strategy" could be two strategies in one. Here's the rub, what if we can have one set of parameters for one type of market & a different set of parameters when the sentiment of the market switches.

*A cryptic post *
The "Action Strategy" was setting up to switch modes during the week & I made a cryptic post on Wednesday that some may have missed or paid little "lip service" to it. The post can be found here:  https://www.aussiestockforums.com/posts/1080051/  if you re-read the post "it will make more sense now"

*I also made these comments last Wednesday as well*
(a) "Even the best traders found it difficult to pick the change of market sentiment" &
(b) "When does a bear market start to become a bull market? (Do they sneak up?)

*What I do know is that the markets shift unpredictably & the bounce can come in sneaky ways*
As one trading day rolls into another, the days start to blend & most will miss the (market sentiment) change being so close to the action. This is where my "Sentiment Filter" shines as it picks the slight nuances & subtle differences between a few variables that drive the "Sentiment Filter".

*Parameters are dependant on a sentiment filter*
What if there was a way to make a strategy to be dual purpose much like an "American Gridiron" football team. Markets have 3 phases, they go up, they go down & they go sideways. Wouldn't it be an advantage to know which phase is which & when is the line in the sand crossed? Also, why do we have to have a static line, what if the movement of the line was conditional on an Amibroker [if, else Statement].

*How does an (if, else Statement) work?*


Newt said:


> never too proud to get my head around some new element of trading that might one day translate into an improvement.



The [if] keyword executes [statement 1] if the expression is true (nonzero) - [if else] is present & the expression is false (zero), it executes [statement 2]. After executing [statement 1] or [statement 2], control passes to the next statement. Also have a read here: https://www.amibroker.com/guide/a_keywords.html for a clearer picture of [keywords]

*In a nutshell*
If the market sentiment is "true", use [Statement 1] if false use [statement 2]. The code executes either [statement 1 or statement 2] than it passes to the next statement controlling which parameters & settings come into play.

*One final check*
The positions purchased with [statement 1] "do they meet" the buy condition of [statement 2] - if "true" hold, if "false" sell.

*The positions below didn't make the cut  *(The remaining position in the "Action Strategy" passed the new statement)



*NFL consists of an offensive team & a defensive team *(two teams in one)
Backgrounding: In American football, each team has 11 players on the field at one time. Under the rules, teams are allowed unlimited free substitutions, that is, teams may change any number of players after any play, at any point in the game. This has resulted in the development of task-specific "group" of players within any single team. The "offence group of players" (the team with possession of the ball, which is trying to score), has a different method of play to the "defence group of players" (the team trying to prevent the other team from scoring & at the same time is tasked to take the ball from them).

*Let's switch strategies dependant on market sentiment*
There is nothing stopping the "Action Strategy" switching to meet the sentiment of the markets, one set of parameters to handle one type of market where the other handles the complete opposite. For those looking for the perfect strategy, there isn’t one, so in the meantime, why re-invent the wheel, let's try to make a better one. Let's trade the markets as they present, I say just "go with the flow" or "dance to the music being played"

*Summary*
I trust this puts to bed the reason why the positions listed above failed to make the new team.

Skate.


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## qldfrog (5 July 2020)

One point which puzzles me a bit Mr @Skate, you mentioned *Wednesday*..and i remember reading your posts last week and thinking _What_? _We are not at week's end_.
Do you also track daily moves?
We were just discussing the pro and con of daily vs weekly.


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## Skate (5 July 2020)

qldfrog said:


> One point which puzzles me a bit Mr @Skate, you mentioned *Wednesday*..and i remember reading your posts last week and thinking _What_? _We are not at week's end_. Do you also track daily moves?
> We were just discussing the pro and con of daily vs weekly.




@qldfrog, I trade weekly & track all the daily moves. I update the progress of every strategy at the end of every day, meaning I’m across every Strategy. I’m a facts & figures man & I’m crunching numbers all day.

*I’ve got to come clean*
I don’t think like a trader, I don’t act like a trader but I’m constantly thinking of what returns are available versus the risk involved. Being a trend trader I’m after “meat of the move” over & over, that’s it in a nutshell.

*From my “Bookmaking” days *
I’m playing the odds of large numbers. Trading as with bookmaking it’s all about the mathematics, it’s never about the gamble.

*Simplicity of trading *
As traders we just want to know what to buy, when to buy & when to hop off the ride “which is so important for profitability”. Trading this way works for me.

Skate.


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## over9k (5 July 2020)

Skate - you're clearly a pure maths/numbers guy. I like talking to quants as I'm the complete opposite and both of us always know or can figure out something that the other can't. 

Thought about adding some intuitive/instinctive/gut analysis to your method?


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## qldfrog (6 July 2020)

Skate said:


> I update the progress of every strategy at the end of every day, meaning I’m across every Strategy. I’m a facts & figures man & I’m crunching numbers all day



That's 2 of us..I do the same but did not expect you to: i imagined you as detached by wisdom and experience of the day to day fluctuation, floating above peons like me 
You are human after all:
More seriously, thanks for your answer


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## Skate (6 July 2020)

Skate.


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## Skate (8 July 2020)

Skate said:


> *Read a few of Duc's post & read the moderation of his words *
> @ducati916 knows the shift has been on for a few weeks now & his projections are solid (his posts align with a few of my technical indicators). The shift is not like a light switch (on or off) but more like a dimmer switch & it's turning clockwise, the room is getting brighter.




@ducati916 *nailed it *
I'm keeping this quote from the Duc as it explains the current market sentiment of the ASX. The extremes have receded but the road we're travelling on still has a few potholes with the occasional hill to climb. Till playing with the dimmer switch ceases the room won't get back to full brightness (if that's even possible in the short term)


ducati916 said:


> *The market has been on a sprint. Markets are marathons. When they sprint, they also pause for breath. The pauses do not indicate a reversal is imminent. Simply a pause is a pause*.




*Negativity always reigns supreme when market sentiment starts to fluctuates*
Waiting for clarity can be very costly as change can sneak up in small increments. Typically, a change in market sentiment starts slowly, similar to "boiling a frog in cold water" some traders will not perceive what's happening in the markets till it's too late to capitalise. Bull markets always follow bear markets but vary in magnitude. When markets start to change they can change more sneakily at times when battered traders least expect it.

*News*
With expectations already so low, any new news can boost the markets, even bad news that's lower than expected can also lift the markets. What we are experiencing at the moment is profit-taking when resistance is nearing. With each market pullback a "dead cat bounce" or it's a "sucker’s rally" gets thrown around like confetti. Over emphasise of bad news spins a potential positive into a negative because it better suits the current narrative. Those blinded by negativity have a habit of craving "clarity" that a change has begun. Those waiting for "clarity" have already missed some early big gains.

*Duc's words*
_"The market has been on a sprint. Markets are marathons. When they sprint, they also pause for breath. The pauses do not indicate a reversal is imminent. Simply a pause is a pause". _

*If I may add to Duc's quote by saying*
Markets are always forward-looking as well.

Skate.


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## Skate (9 July 2020)

*Has anyone conducted research on correlation* (it would save me a lot of work)
I've been thinking of the correlation between the stock I tend to hold as a trend trader & the high correlation of positions @over9k is currently holding. As a trend trader, is there a way to use negative correlation as an indicator?

*Various charts*
Looking at the myriad of charts @ducati916 has been posting I'm seeing correlation everywhere. What I'm after is a reverse correlation or more bluntly, a negative correlation between securities & if it can be coded as an indicator. I'm thinking along the lines of using negative correlation in picking the turn of sentiment rather than using a combination of the garden variety indicators.

*I’m a trend trader*
I trade a multitude of portfolios & each portfolio holds a large number of positions. A portfolio is not diversified simply by holding many securities, I know this, particularly when those positions tend to move in the same direction at the same time. It's the very reason "I win big & I lose big" because of the high correlation of positions.

*Evaluation time*
With the start of the "New Financial Year" it’s due time for me to evaluate the performance of all my strategies & evaluate whether there is a way to insulate against future shocks, similar to the one just experienced.

*They tend to move in unison*
Positions in a trend all tend to "move in the same direction" thus having a high "correlation". There are benefits of diversification, I accept this. It would be an advantage in having a suite of positions that don't rise & fall simultaneously.

*FYI: Correlation*
Correlation is when the prices of shares move in similar directions. Negatively correlation is when the prices of shares move in the opposite direction. A highly correlated portfolio means when one security tanks, those highly correlated will do the same. COVID-19 was a wakeup call because I know now that it was "not the time" to be holding a stack of positions that had high levels of correlation resulting in losing 70% of my yearly profits, it was hard emotionally.

*Correlation & negative correlation*
To give you an example: Holding all the Australian Banks they are likely to move in the same direction & you may think you’re diversified by holding several of them, but this becomes redundant if they all behave identically. What we need to find is negative correlation stock that behaves exactly the opposite. Why? My thinking is that we could use negative correlation as an indicator in much the same way as we use an Index Filter to our advantage.

I’m open to suggestions

Skate.


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## over9k (9 July 2020)

Hey skate - here's a couple of posts I made in some other threads. Ignore the pricklyness/don't take them as directed at you or anything as they were a bit of a ragepost at another forum member.

They explain my entire play since I joined this forum so boil the kettle, it's a bit of a read.






Let's go back to before coronavirus for a moment.

Before coronavirus hit, there was already a long and consistent trend of business and work moving away from face to face/bricks and mortar and to distance/online based on purely economic reasons. The ability to order items direct from the manufacturer online, the ability for even a middle-man to sell items from a massive warehouse with rent a tenth of the price per square foot and massive economies of scale to boot, the ability for a business to reduce its necessary office space and therefore rent and fitout costs by 20% if its employees were to stay home/work from home just one day a week (let alone all of them), the ability to talk to someone halfway across the world in seconds virtually for free on a zoom call vs having to fly what could be teams of people for a day straight, pay for all their flights, food, accommodation, lost work, time away from home and so on and so forth were all major competitive advantages and resulted in half the bloody economy undergoing a structural readjustment based on nothing other than economic/cost reduction grounds.

This is the very trend I have been talking about ad nausea since my first comments in this thread.

What coronavirus has done is put that trend on steroids. We haven't seen 5% more people working/ordering stuff from home in the last 6 months, we've seen 10x it. Or whatever. I could post up a whole stack of data here (and believe me, there's no shortage of it out there, heaven knows I've spent long enough poring through it all) but the exact numbers don't actually matter all that much - what matters is knowing that it's a massive increase that isn't going to reverse and that's all we really need to worry about.

So from there, we ask ourselves, why? The answer is twofold, but both answers share the same source. Firstly, there's the lockdowns. Government imposed lockdowns literally required that many people work and buy from home. Secondly, human behaviour. Many both workers and businesses have voluntarily decided to keep everyone working from home because A: people themselves don't want to get the virus and B: getting the virus stops you from working. Even if you didn't actually care about your employees, keeping them uninfected makes sense from a purely business point of view. What is key with these two realities is understanding that even if all government imposed lockdowns were lifted, employees and businesses are VOLUNTARILY avoiding human contact. This means that government imposed lockdowns or not, the end result is still very similiar: Avoidance of human contact, i.e working & ordering from home if at all possible.

And you can prove this to yourself quite easily - if it was only about the lockdowns, why hasn't stay-at-home tech fallen off a cliff once the lockdowns have been lifted? Why hasn't everything else taken off like a gunshot? Why haven't we seen an inversion of what we saw previously?

There is a reason why what I have dubbed "stay at home tech" has outperformed all the major indices massively. There is a reason why basically all markets except stay-at-home-tech have tanked every single time bad virus headlines/data has hit the news and stay-at-home-tech has often actually increased on those days and that reason is that it is the VIRUS which is dictating human & business behaviour and therefore markets.

But the deeper point that people like duc are failing to recognise is that the coronavirus has not diverted a previous trend or created a new one - it has simply accelerated something which was ALREADY OCCURRING ORGANICALLY.

There is a reason why all the airline execs are saying that business travel will never return to previous levels. There is a reason why the airbnb ceo is saying his business will never return to previous levels. There is a reason why so many companies are mothballing entire floors of offices or buildings. There is a reason why office rents are down 25% and outright purchase prices are down 40%. There is a reason why jets are being retired and scrapped en masse. There is a reason why chief exec's of office furniture companies are saying their business will never return and they're attempting to pivot to home office fitouts. There is a reason why sales on ebay & amazon are absolutely stratospheric even when their bricks & mortar competitors have been allowed to reopen, and the reason is exactly the same for all of these things:

THIS WAS ALL GOING TO HAPPEN ANYWAY.

This is NOT a divergence from a previous trend, this IS the previous trend. It's just been put into overdrive and 5 years of change has occurred in about 5 months.

This is not to say that this is going to continue in perpetuity. I have never claimed that things will. Once the virus, and therefore the reason for the ACCELERATION of this phenomenon is gone, plenty of people will return to the office and plenty of money will go back to consumables like food rather than tv streaming services or what have you. But as long as the virus remains, so will this acceleration of this ALREADY OCCURRING trend.

But once a vaccine is found, things are NOT going to return to their pre-virus levels because those levels WERE GOING TO CHANGE ANYWAY.

I'll bet you any sum of money you like, absolutely anything, that zoom, amazon, ebay et al will NOT return to their pre-virus levels. Any sum you like.

Anyone who thinks that this is some kind of aberration and/or will simply be reversed once a vaccine is found, or that a single day of bounce in the rest of the market in response to, say, better-than-expected employment data disproves my assertion, is utterly, utterly clueless.

Consumer discretionary, flat for a month:



Consumer staples, flat for almost three months, down 6% in the last month:



Energy, flat for 2.5 months and down 15% over the past month:



Healthcare, flat for almost 3 months:



Industrials, done SFA since the end of april and down 10% over the last month:



Materials, flat for just over a month:



Utilities, flat for three months and down 10% over the last month:



Real estate, flat for three months and down 7% in the last month:



Even communications is flat for the last month after its run up until start of june:



Meanwhile, tech has done almost nothing but climb since the march slump and is up over 50% in that time, 20% in the last three months, with 8% of it being just in the last month:



And my "stay at home tech" like zoom:



Ebay:



Amazon:



Are up 100-150% since their march lows and 20% over just the last month.


I said a month ago when I joined that the U.S would see a 2nd wave/2nd slump. Since then, consumer discretionary is flat, consumer staples is down 5%, energy is down 15%, healthcare is flat, industrials is down 10%, materials is flat, utilities is down 12%, real estate is down 7%, and communications is flat.

Meanwhile, tech is up 3% and my stay-at-home tech is up 20%.

And wouldn't you know it, it was basically bang on a month ago that the run we saw (in some sectors) up until the 8th of june reversed at the exact same time that the virus cases started spiking:




So are you still going to sit here & claim I'm wrong and that this is all just one giant coincidence? That the virus data has nothing to do with anything when *nothing* except tech has gained since the reopenings, and most of the indices have actually fallen? All of which flipped trajectory at the exact same moment (like, to the day) that the virus case trajectory also flipped?

You still want to sit here & claim it's all a giant coincidence and that there's no trend here?



I then followed this post up with my personal holdings:


It's not gambling frog, I've been a bit more sophisticated than just eyeballing them. You might have noticed that here's a few names conspicuously missing. I do not hold apple, facebook, google, or slack for example.

Here's everything:




Iirc I've had one red day in the last month. One. Even today was green whilst the djia dropped 1.5%.

I've been more than open about what I hold/buy & why - if people want to ignore me then that's fine, but as far as I know, my returns have been miles above everyone else's.


It is not a coincidence that this all flipped trajectory at the exact same moment the virus case numbers did. I've been calling a 2nd slump/2nd wave since I joined this forum and have received little more than dismissal and ridicule for it. Yet, every other sector is between flat and down 15% over the last month vs my portfolio being up 20% and I have no intention to sell as I firmly believe that it is the virus which is dictating ALL of this (and I've explained why) and the virus is not going away.


I'm a geopolitics/governance and macro economics/developmental economics guy by training (I have degrees pouring out of my ears by this point), so I see some things miles before the numbers guys' models tell them what's going on, same as their models tell them things that I don't know. Both sides always know something the other doesn't.

It's taken me WEEKS (and actually months if you count all the stuff I was working on/figuring out prior to the virus) of poring through data, reports, presentations, applying my own understanding, and even a bit of number crunching for me to get to this point. I have not just bought this stuff on a whim. I could go into why I have chosen these particular stocks one by one if you like and would reciprocate in kind with your reasons why you hold them, same as I/we could go into why I haven't chosen other stocks like apple or facebook which one would assume would be included in a portfolio like this if you didn't know any better.

I also have holdings here in AU but aside from kogan (the reason for ownership should be obvious for) they're travel/aviation, iron ore miners, and gold miners, so a very different kettle of fish. Same type of thinking applies though.

Let me know if you're interested


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## martyjames (9 July 2020)

Hi Skate

I was thinking kind of along similar lines over the past few days. Couple of thoughts - 1.In April and May most long only trend following systems started spitting out a ton of buy signals - as your Action Strategy shows, you opened a lot of positions on 11 May. Can the number of new buy signal generated per week actually be turned into an indicator of some sort. When this indicator drops the market is turning possibly..
2. Use the relative strength of different sectors (ASX indexes) as an indicator - eg defensives v tech stocks etc

anyhow just a couple of random thoughts!
cheers
Marty


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## willoneau (9 July 2020)

Hi Skate , aren't you already using neg correlation with your GTFO indicator?


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## willoneau (9 July 2020)

I am thinking that you need to have different instrument than stocks that you can trade with your system that gets you in when you have to get out of stocks.
One example that comes to mind is a neg correlated EFT that you buy when you get the GTFO indication, or maybe gold?


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## willoneau (9 July 2020)

By the way it has also got me thinking about it, now to go do some research.


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## over9k (9 July 2020)

Depends on the sector as to what your GTFO indicator would be willon - you'll probably have to be more specific and even then, likely need a specialist sector X trader to get a proper answer anyway. Nothing ever happens in a vacuum either so the GTFO indicator for sector X might actually be found in sector Y - this could be as simple as when thing X always trails/is closely linked with thing Y so if something happens in Y, you nuke your positions in both X and Y.


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## Skate (9 July 2020)

willoneau said:


> I am thinking that you need to have different instrument than stocks that you can trade with your system that gets you in when you have to get out of stocks. One example that comes to mind is a neg correlated EFT that you buy when you get the GTFO indication, or maybe gold?




@willoneau I was thinking along similar lines. I haven't started my research as I was hoping this has already been canvassed. Using BBOZ (Betashares Australian Equities Strong Bear) might be my starting point. I should also point out the "GTFO indicator" has inbuilt lag (by design) & it works superbly under "normal" trading conditions. I'm seeking to add an additional layer of protection as an early warning indicator (similar to a tsunami early warning device)

*Correlation is the issue*


over9k said:


> I also have holdings here in AU but aside from kogan (the reason for ownership should be obvious for) they're travel/aviation, iron ore miners, and gold miners, so a very different kettle of fish. Same type of thinking applies though.





ducati916 said:


> Easier to simply buy the ETF. Given the signalled under-performance, you'll get a fair bang for your buck this way as the sector generally is underpriced as compared to some individual stocks.



Let me say straight off the bat: Holding "stay-at-home-tech" is currently a smart move & profitable. COVID-19 has given everyone "fair-bang-for-your-buck" as Duc has mentioned. We have all enjoyed the "bounce" in our own individual ways. I'm not questioning the quality of anyone's portfolio but rather having a technical indicator to pick the change in market sentiment with reduced lag.

*As a scenario *
Trading a variety of trend following systems have been profitable over the last 5 years but could you imagine if my strategies weren't mature or not being in considerable profit when COVID-19 hit (I was lucky in both respects). Imagine if I started my trading journey at the beginning of this year the COVID-19 flash crash, it would have been devastating. 

*On reflection what would have been a quick indicator? *
Information drives the market, I just want the information about sentiment change a little sooner than most, is that too much to ask?

*It's an idea, but it a measure of something entirely different*


martyjames said:


> Can the number of new buy signal generated per week actually be turned into an indicator of some sort



"Momentum" using moving averages is common. "Strength" can be a measure of the average of new weekly highs & lows. The volume of shares being traded that are on the rise is another measure. "Market Volatility" is another great measure & my research confirms that the Aussie VIX (XVI) moves in unison with the (VIX), but using the average of the Aussie VIX to measure volatility lacks the accuracy of the alternative.

*I'm at a Crossroad*
It's well known that traders are driven by two emotions: fear and greed. Too much fear can sink stocks well below where they should be & when traders get greedy, they bid up stock prices way too far - there must be a precursor to gauge the change in sentiment in real-time. I’m trying to harness the negative correlation to trending stock. I'm sure @peter2 would have a wealth to share in this regard.

Skate.


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## willoneau (9 July 2020)

Skate said:


> Using BBOZ (Betashares Australian Equities Strong Bear) might be my starting point.



I was looking at BEAR myself.


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## willoneau (9 July 2020)

Although when looking at trading BEAR all I see is buying pullbacks in a long term down trend.


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## Newt (9 July 2020)

Must confess did (hypothetically) look at my current index filter "off" periods as potential BBOZ buys last night.  Was only a quick eyeball, but fairly confident the safety lag built into that filter meant no profit or losses in BBOZ - just to sluggish to enter and exit.

Suspect any hedging of this fashion would require more aggressive trigger conditions off XOA, ROC or whatever you're currently using.

2nd thought - starting to get into shorting territory, and the vast majority of the time ASX stocks trend positively.

Pretty sure Clenows "Stock on the Move" had some strong opinions on the dangers of stock correlation and strategies for handling - recommending momentum ranking for bull markets and hedging strategies for bear periods.  (Disclaimer:  Have never read the book)

3rd thought - Peter2 or Trendnomics are going to remind us to stop fiddling with our strategies to make them perfect any moment now....!  

https://chrischow.github.io/dataandstuff/2018-11-10-how-not-to-invest-clenow-momentum/


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## Warr87 (9 July 2020)

I recommend you read his books. they are good. I can't remember if he includes hedging but he does point out that when the markets go down correlation tends to change and everything goes down. that is, the US market goes down and chances are the ASX goes down too. And in the event of a global event everything does as well. So correlaton is good for diversifying, but be aware that in an event like 2008 or COVID, in such market downturns stocks will be correlated. Clenow doesn't seem to like equities that much either tbh.

Diversifying with some FX that isn't correlated could be useful. CFDs can be used with FX too. And as for hedging with an inverse ETF, I think you would likely lose money if the market is sideways or up, and only make money if the market moves sharpely down. I could be wrong but Iwould love to be able to test a strat that hedges with an ETF and goes long with equities. The other option is to use options. You would lose your premium but if it went down you would recoup some loses. I have no clues with options though but I wish I knew more just for this fact.


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## over9k (10 July 2020)

Skate - if you're looking for an indicator, after the lockdowns end, look at behavioural data on the street level. I'm talking numbers of people in restaurants, foot traffic in shopping centres etc etc. These are the things which will tell you the public's sentiment reference how scared they are of the virus etc. Only once human behavioural/spending patterns start returning to normal will there be any, you know, return to economic normal. 

We aren't even at the point of rolling whack-a-mole lockdowns being a thing of the past though, so this has a LOT of legs yet.


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## willoneau (10 July 2020)

I'm in WA , what lock downs?


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## Skate (10 July 2020)

over9k said:


> Skate - if you're looking for an indicator, after the lockdowns end, look at behavioural data on the street level.




@over9k behavioural science is a fancy way of saying “why people act the way they do”. Behavioural science helps you understand how people think, how they react, how they make decisions & how you understand them more effectively.  

*Strategies react to patterns caused by the emotions of traders*
Coding a strategy on the behaviour of individual shoppers has merit but it would be more suited to a discretionary trader. The process you described would be impossible to code.  

Skate.


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## over9k (10 July 2020)

I don't know the specifics of your platforms or apps or whatever but surely you could use data like shopping centre foot traffic to just have a break point?

You know, once foot traffic increases by X amount, you sell.

But the lockdowns are going to be with us for a long time yet so might be putting the cart before the horse here a bit? 

I'm deploying my remaining 30% cash into my stay-at-home tech even now. I'm buying some nvidia tomorrow.


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## ducati916 (10 July 2020)

Skate said:


> @willoneau I was thinking along similar lines. I haven't started my research as I was hoping this has already been canvassed. Using BBOZ (Betashares Australian Equities Strong Bear) might be my starting point. I should also point out the "GTFO indicator" has inbuilt lag (by design) & it works superbly under "normal" trading conditions. I'm seeking to add an additional layer of protection as an early warning indicator (similar to a tsunami early warning device)
> 
> *Correlation is the issue*
> 
> ...





Mr Skate,




Real time. This is set for weekly, which for you is your chosen time-frame. You can choose daily or monthly. Or you can like the x3 Elder methodology track all 3 as a comparison to your chosen time-frame.

jog on
duc


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## qldfrog (10 July 2020)

over9k said:


> Skate - if you're looking for an indicator, after the lockdowns end, look at behavioural data on the street level. I'm talking numbers of people in restaurants, foot traffic in shopping centres etc etc. These are the things which will tell you the public's sentiment reference how scared they are of the virus etc. Only once human behavioural/spending patterns start returning to normal will there be any, you know, return to economic normal.
> 
> We aren't even at the point of rolling whack-a-mole lockdowns being a thing of the past though, so this has a LOT of legs yet.



I would even say look at the refusal of facts in dedicated covid threads here. 
number of deaths etc would be a bad indicator as psyche is the one which matters
Maybe a headline count in a commercial network.exclude ABC SBS etc as they do not care about click numbers
But commercial: News ltd etc just track closely whatever the masses are interested in.pure business sense


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## Skate (10 July 2020)

Skate.


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## ducati916 (11 July 2020)

With regard to your question earlier in the week re. 'indicator':




I'm guessing that the (a) the lack of new buys last week and (b) slow down in profits is suggesting to you that the market is topping out and (a) is rather confirming that observation of (b).

The thing is that Aus. doesn't exactly correlate to the US (but it is in the ball-park) so there are differences.




Are the differences worth worrying about? Probably. Given that the US broader indices are have slowed and consolidated as they reach all-time high territory, consideration of Aus. based stocks probably warrants a look at something Aus. based that can account for the variations away from US centric issues.

*Given the reliance of the Aus. economy on natural resources, I think I may have the answer for you! I'll look at it a little and then post it up.

jog on
duc


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## Skate (11 July 2020)

ducati916 said:


> I'm guessing that the (a) the *lack of new buys last week* and (b) *slow down in profits* is suggesting to you that the market is topping out and (a) is rather *confirming that observation *of (b).




*ducati916 said*
_"The market has been on a sprint. Markets are marathons. When they sprint, they also pause for breath. The pauses do not indicate a reversal is imminent. Simply a pause is a pause" _


ducati916 said:


> Given that the US broader indices are have slowed and consolidated as they reach all-time high territory



The pause is simply a lack of momentum as you mentioned above. I don't believe the Aussie market is "topping out" but plateauing because of indecisiveness adding to the lack of volume & volatility, the drivers of the "Action Strategy". 

*Dancing to the music being played*
My research confirms the profitability trading certain market conditions require one set of parameters where another condition requires a different set. The market sentiment swayed enough in the last two weeks to switch settings resulting in a group sell-off, selling a few good positions. 
*
Change in market sentiment*
Plateauing market + changing strategy modes + having fewer positions = "slow down of profits". With the recent sentiment change, it will take a few weeks to have the "Action Strategy" back to full strength, "fighting the good fight". 

*Don't miss reading *@bigdog's *post today*
Market sentiment is on the rise: https://www.aussiestockforums.com/posts/1081656/

*Creating an Indicator from negative correlation*


ducati916 said:


> The thing is that Aus. doesn't exactly correlate to the US (but it is in the ball-park) so there are differences.



Your VIXfear filter is where my efforts are being directed at the moment as it's still to be the best choice by a country mile. Going forward I'll be researching how to apply the filter more effectively.  

Skate.


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## Beaches (11 July 2020)

While our market will generally follow the US, there will be a divergence at times. In the last week in particular, our market has ended the day down despite the US market being up.

There a few things fundamentally different between the US and Australian market at the current time which are likely to be contributing to the recent weakness. These are not all the reasons, just some contributors and are in addition to the ever present fear of another correction.

End of Financial Year.
Access to Superannuation
*End of Financial Year*
First the issue of the end of the financial year. In Australia, the date for the end of the financial year and tax reporting is June 30. The US is different and generally uses 31 December for the end of financial year. So the US does not experience the June 30 movements that can occur here. In the US, June 30 is just another day.

This year we had a huge market drop and a massive loss suffered by many. Although we have had a big recovery, many are still sitting on big losses and there has likely been some selling in the final 2 weeks of June to realise those losses in the 2020 financial year. I wont speculate on how much, suffice to say its highly likely to have occurred.

The drop was then followed by the big rise in the market from March 23 to around mid June. It has been extensively reported of the massive spike in people opening trading accounts and pouring money into the market. Many of these would be sitting on profits and any that wanted to take profits due to the ongoing fear of another drop in the market. This selling would have commenced from July 1 to bring the capital gains into the new tax year. Once again I won’t speculate on the extent of it.

So this year we had both big losses and big gains. Usually it would be more of one than the other. So you would see the majority of tax selling occur either pre June 30 or post July 1. However, this year the selling is likely to have extended from June and through into July.

*Access to Superannuation*
Second the early access to Superannuation. The second round of the early access to superannuation opened on July 1. As of 29 June, there had been $19.4 billion withdrawn form the first round of super release. There was $7.6 billion of withdrawals in the first 7 days of the second round opening and it is estimated that around $25 billion will be withdrawn under the second round.

That is $25 billion that has come straight out of the market. Even if all the money didn’t come from direct selling by the super funds and they paid from cash reserves, it’s still money that would normally have gone into the market and resulted in less money on the buy side.

Despite all the pressure on the sell side from pre and post June 30 selling and super withdrawals, the market has had a pull back but has not dropped significantly. We could also anticipate the selling from the financial year end and early super withdrawal would dissipate towards the end of July and into August, which would reduce the pressure on the sell side.

Also during the end of July and into August we have the annual reporting season. While we have stocks that are clearly overvalued based on likely immediate forward earnings, there are many that have had increased revenue and profits over the last 6 months and are unlikely to be affected for the short to medium term unless circumstances change dramatically. Numerous companies have recently released a revised guidance showing their profits have been unaffected or have increased over the last 6 months.

A lot of the money sitting on the sidelines is waiting to see what the reporting season brings. Once that money starts to see increased revenue and earnings, the sideline money is likely to start returning to the market through August. Combined with the drop off of current selling, we have a probability of the market rising towards the end of July and through August.

The following is from a recent interview with Marcus Padley who runs a $60 million fund that is concentrated on just Australian equities:

_You obviously made some cracking calls during the COVID crash; going to 70% cash on February 20, and then "all in" on March 24, and more recently, all out again on June 12. Can you walk us through the thinking behind those big calls?
We are in 100% cash at the moment and we did it because the US market dropped 6.9% in a night. That's not normal, that is the sort of move that marks a "Big Top" and starts a correction. Corrections start fast. At the same time 25% of the ASX 200 generated technical sell signals on their charts.
We had also made a 36% profit in less than three months. On that first day of the sell-off we were bleeding performance in the recovery stocks that had served us so well. It was time to lock in, which we did.
As far as getting 100% invested again, we'll take it day by day, stock by stock. We'll just keep waking up and making decisions. A sharp rise on the back of a vaccine (a real one this time) is about the only thing I can think of that would make us move very quickly at the moment. Otherwise, it is likely to be a gradual thing because it takes three times as long to build confidence as it does to destroy it. So you always have plenty of time to do your buying. It is the selling you've got to be quick with._​

If the Padley fund identified a likely weakness in the local market in the middle of June from technical indicators, it’s a fair bet that other fund managers also recognised it. While many funds are not able to go to full cash, they may well have gone heavily underweight in equities.

As the reporting season starts to lift some of the fog and uncertainty, funds could well start to flow back into the market. While there will still be some element of a rising tide lifting all boats, the next rise may be a little more selective than the one from March to June.

None of the above is certain, it is simply possible (or probable, take your pick). Trading as with business, is not about certainty, by the time it becomes certain, the boat has sailed. To be profitable in trading or business you have to consider the risk/reward profile and play the higher percentage probabilities.


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## Skate (11 July 2020)

Skate.


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## Newt (11 July 2020)

ducati916 said:


> With regard to your question earlier in the week re. 'indicator':
> 
> View attachment 105822
> 
> ...




Hi duc

Could you briefly explain what we're looking at in the graph please?  Is EWA some sort of weighted price for SPY?


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## Skate (11 July 2020)

over9k said:


> Hey skate - here's a couple of posts I made in some other threads. There is a reason why what I have dubbed "stay at home tech" has outperformed all the major indices massively. There is a reason why basically all markets except stay-at-home-tech have tanked every single time bad virus headlines/data has hit the news and stay-at-home-tech has often actually increased on those days and that reason is that it is the VIRUS which is dictating human & business behaviour and therefore markets. Let me know if you're interested




I read an article a few days ago that explains @over9k recent lengthy re-post in this thread. The explanation for his series of posts have been condensed for those following along.

*Why is the Nasdaq outperforming the S&P 500 and Dow Jones index?*
In June, the Nasdaq Composite Index [IXIC] made waves when it peaked over 10,000 for the first time. Just two weeks later, the Nasdaq hit another major milestone reaching an intraday high of 10,221.85 and closing at 10,131.37 (up 11.42% in the year-to-date) on 23 June. The rally represented the most considerable advantage in the Nasdaq’s performance over the S&P 500 [SNP] and the Dow Jones index [DJI] since 1983, which were respectively down 3.1% and 8.3% YTD. What factors have contributed to the Nasdaq’s show of strength and continue to push it far ahead of the S&P 500 and Dow Jones index?

*Stay at home vs blue-chip*
A significant factor in the Nasdaq index’s surge is that investors are now rallying behind the big tech and stay-at-home stocks benefitting from the pandemic, particularly in e-commerce, cloud computing and communications sectors. A few of these stocks are having a positive impact on the S&P 500 as well as the Nasdaq, which explains its slightly better performance compared to the Dow Jones. Up to 29 June, Apple [AAPL], Amazon [AMZN], Alphabet [GOOG], Facebook [FB] and Microsoft [MS] had seen their share prices increase by an average of 21.18% in the year-to-date. These stocks account for 40% of the Nasdaq index’s value, and 20% of the S&P 500. The Dow Jones, however, only features Apple and Microsoft among these stocks. While we have all become even more dependent on the products and services provided by the FAANGM’s during the Great Virus Crisis. While we have all become even more dependent on the products and services provided by the FAANGM’s during the Great Virus Crisis, they might have become more immune to government regulation.

*COVID-19 has introduced uncertainty and volatility to all markets and industries — keeping indices like the Dow Jones grounded.*
For starters, economic instability and fears over a second wave of cases have caused many blue-chip companies, including Walmart [WMT], McDonald’s [MCD] and Caterpillar [CAT] (all listed in the Dow Jones) to pull their 2020 guidance making stocks challenging to value. Although economic data have improved in recent weeks, many investors expect the recovery to remain uneven and they are bracing for more turbulence as the presidential election season ramps up. Although economic data have improved in recent weeks, many investors expect the recovery to remain uneven and they are bracing for more turbulence as the presidential election season ramps up

*Meanwhile, current sentiment suggests the Nasdaq will continue to prosper as long as COVID-19 remains a threat.*
The second half of 2020 is expected to keep facing the brunt of the coronavirus pandemic as the second wave of the outbreak is gathering steam. With the new trends making way, these major technology stocks are expected to continue to gain on rising demand for their products and services. In the current scenario, the rising work-from-home and online shopping trend, increasing digital payments, growing video streaming and soaring video game sales are slowly becoming the ‘new normal’. With the new trends making way, these major technology stocks are expected to continue to gain on rising demand for their products and services.

*The analysts’ outlook*
Uncertainty and confusion are clouding analysts’ predictions & this year is proving to be one of the most difficult ever to forecast. “You can’t depend on any one index, consider all three of them and know what’s in them.”

Skate.


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## ducati916 (11 July 2020)

Newt said:


> Hi duc
> 
> Could you briefly explain what we're looking at in the graph please?  Is EWA some sort of weighted price for SPY?





EWA is simply the US ETF for the ASX.

jog on
duc


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## Newt (11 July 2020)

Ahhhh.....


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## over9k (11 July 2020)

Skate said:


> main uneven and they are bracing for more turbulence as the presidential election season ramps up
> 
> *Meanwhile, current sentiment suggests the Nasdaq will continue to prosper as long as COVID-19 remains a threat.*
> The second half of 2020 is expected to keep facing the brunt of the coronavirus pandemic as the second wave of the outbreak is gathering steam. With the new trends making way, these major technology stocks are expected to continue to gain on rising demand for their products and services. In the current scenario, the rising work-from-home and online shopping trend, increasing digital payments, growing video streaming and soaring video game sales are slowly becoming the ‘new normal’. With the new trends making way, these major technology stocks are expected to continue to gain on rising demand for their products and services.




Yep the tech heavy nasdaq has gained the most because tech has made, well, all the gains. Take tech out of any of the indices and they're ALL in negative territory over the last month iirc.

We're also now heading into winter in the northern hemisphere - already a time when more time is spent indoors, and then combined with the simple reality of cold making people more susceptible to infection (making people even more afraid to go out) and the xmas silly season and I can't see how e-tailers aren't going to make an absolute killing.

In fact, on days where positive economic data has come out (e.g jobs or consumer spending or sentiment), I've actually had mild drops/minimal gains in stocks like zoom but bounces in amazon & ebay in particular because whatever increase in demand that has come from more consumer cash splash has ALL been spent ordering stuff online. I've had several days that actually would have been red if not for the bounce I had in ebay.

People simply aren't returning to bricks & mortar/face to face anything unless they have no other choice. Shopping centres are still wastelands. I should hope that the reason would be obvious.

It's genuinely no more complex than that.


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## IFocus (11 July 2020)

Good post 9K


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## qldfrog (12 July 2020)

over9k said:


> Yep the tech heavy nasdaq has gained the most because tech has made, well, all the gains. Take tech out of any of the indices and they're ALL in negative territory over the last month iirc.
> 
> We're also now heading into winter in the northern hemisphere - already a time when more time is spent indoors, and then combined with the simple reality of cold making people more susceptible to infection (making people even more afraid to go out) and the xmas silly season and I can't see how e-tailers aren't going to make an absolute killing.
> 
> ...



Where are you located @above9k?
Believe me, my last visit in a shopping centre.brisbane suburbs was not wasteland , too busy to my taste, 3 weeks ago in Townsville, the Strand was busy as hell weeknight with pub overflowing
Qld is suffering as expected but not because of people attitudes.


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## over9k (12 July 2020)

Sorry frog I should have mentioned I was talking about the U.S specifically. 

QLD was absolute bedlam yesterday & friday.


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## Saqeeb (12 July 2020)

*Week 21 update on my MAP paper trading portfolio.*
The system bought *IRI* last week and the portfolio saw a gain of $88.00.
Noticed I had made a mistake where there was a sell signal for *PPG* a couple of weeks ago and I missed it. This position will be sold next Monday's open. This is a trading mistake that has cost the portfolio a further loss as this security sold off last week.
*
Next week's buys:*
Five buy signals. *FLN, EMR, BGL, DTC* and *WSP.*

*Next week's sells:*
No sells


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## Trav. (12 July 2020)

@Saqeeb some interesting stock selections there mate



Saqeeb said:


> Five buy signals. *FLN, EMR, BGL, DTC* and *WSP.*




Price movements for last week

FLN  +44%
EMR +9.8% 
BGL +11.4%
DTC +6.45
WSP +38.8%


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## qldfrog (12 July 2020)

Saqeeb said:


> *Week 21 update on my MAP paper trading portfolio.*
> The system bought *IRI* last week and the portfolio saw a gain of $88.00.
> Noticed I had made a mistake where there was a sell signal for *PPG* a couple of weeks ago and I missed it. This position will be sold next Monday's open. This is a trading mistake that has cost the portfolio a further loss as this security sold off last week.
> *
> ...



@Saqeeb just something to be careful:
copy the result of your explore weekly in a spreadsheet or file
If your system repaints usually due to future looking, you will discover in the following weeks that buy or sell go missing or are added
My systems were nót exempt
That could be the cause behind PPG


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## Linus van Pelt (13 July 2020)

Trav. said:


> @Saqeeb some interesting stock selections there mate
> 
> 
> 
> ...



What makes them "interesting"? I sense there's a hidden message there but I'm too noob to get it.

(I'm holding a couple of these)


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## Trav. (13 July 2020)

@Linus van Pelt for me to enter today after FLN gapped up on Friday is ' interesting '

When you look at the Weekly chart you just see the 1 bar up 44%

Then look at the daily chart and on Friday alone it gapped up 17% on the open to close 31% for the day, I will be interested to see *if *it retraces today as the daily RSI level is at significant levels. 

Similar story with WSP


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## Trav. (13 July 2020)

qldfrog said:


> @Saqeeb just something to be careful:
> copy the result of your explore weekly in a spreadsheet or file
> If your system repaints usually due to future looking, you will discover in the following weeks that buy or sell go missing or are added
> My systems were nót exempt
> That could be the cause behind PPG




or you could just run the bar replay 
	

		
			
		

		
	



	

		
			
		

		
	
 over the last couple of weeks and you can see if signals are repainted on the chart.


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## Bazzi (13 July 2020)

Did we miss the FLN bus?


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## Linus van Pelt (13 July 2020)

qldfrog said:


> @Saqeeb just something to be careful:
> copy the result of your explore weekly in a spreadsheet or file
> If your system repaints usually due to future looking, you will discover in the following weeks that buy or sell go missing or are added
> My systems were nót exempt
> That could be the cause behind PPG




@Joe90 in https://www.aussiestockforums.com/threads/dump-it-here.34425/page-168#post-1079495
put me onto http://blueowlpress.com/books/introduction-to-amibroker/ which I've found to be excellent.

P. 8-4 states:



> Code Check & Profile ‑ Saves the file, makes it the selected file for Analysis, and runs the Code Check and Profile process. Code Check tests for “future leaks” where the code peaks into the future. Profile lists the operations required to run the code and estimates the execution time.




I've not tested this, but it's a good assumption that Mr. Bandy is correct.

Hope this helps...


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## qldfrog (13 July 2020)

Linus van Pelt said:


> @Joe90 in https://www.aussiestockforums.com/threads/dump-it-here.34425/page-168#post-1079495
> put me onto http://blueowlpress.com/books/introduction-to-amibroker/ which I've found to be excellent.
> 
> P. 8-4 states:
> ...



yes,definitively 
just be aware I have had repainting happening while profile was not detecting any future code.
Another way creating differences is synchronization of data, you run explore thinking your data is up to scratch byt DJ for example is not finalised etc...anyway, so the reason I take a snapshot weekly of the explore results and confirm the following week that whatever was recommended in the past is still present  exactly as it was then.


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## qldfrog (13 July 2020)

Bazzi said:


> Did we miss the FLN bus?



I missed it too both Dump it and another system.


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## martyjames (13 July 2020)

Can you code into amibroker buying at last close plus 'x'percent, rather than buying on open and see what the difference is to backtested results?


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## Warr87 (13 July 2020)

martyjames said:


> Can you code into amibroker buying at last close plus 'x'percent, rather than buying on open and see what the difference is to backtested results?




off the top of my head, that should be something like this:

BuyPrice = Ref(Close, -1) * 1.05;

Though if you have trade delay set, it would likely  be even simpler

BuyPrice = Close * 1.05;


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## qldfrog (13 July 2020)

martyjames said:


> Can you code into amibroker buying at last close plus 'x'percent, rather than buying on open and see what the difference is to backtested results?



Yes you can but what you do is check in your buy code that price multiplied by percentage is higher  than ref(L,+1) for your buy on open
So that your backtest reflect cases that actually miss buys
I did that then do not bother anyone
I prefer lighter simpler code even if backtest will vary a bit from real


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## qldfrog (13 July 2020)

Ideally you compare with open and adjust open or lower at your limit for purchase price
As you see a lot of complexity to be truly accurate but what for?
Will not actually change the strategy


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## martyjames (13 July 2020)

thanks for the replies guys, i'll have a play with it. Im interested to know how much a difference it would make with my trendfollowing system, i suspect not much

cheers


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## qldfrog (13 July 2020)

martyjames said:


> thanks for the replies guys, i'll have a play with it. Im interested to know how much a difference it would make with my trendfollowing system, i suspect not much
> 
> cheers



Please share your results, as i noted above, not really critical and is the aim of the gamevis not to have real equal backtest..once you can track and understand explain difference, my view is who cares.i use backtests as comparison tool, i do not expect to be Elon Musk after 20 y even if my backtest tells me so


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## Skate (13 July 2020)

Skate.


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## qldfrog (13 July 2020)

Bazzi said:


> Did we miss the FLN bus?



jumped on FLN at asking price 0.67 later in the day, I may differ from Mr @Skate who from memory might close order if not passed in the morning, in my case, they remain open for the day


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## frugal.rock (13 July 2020)

FLN clearly in the open list. 
The Action Strategetist bought at 0.67 QF.
Hopefully holders do ok. I don't hold. 
My portfolio is behaving crabby- going sideways. 
Guess what happens if I put my fingers near it? Crabby bite's.
Will chalk FBR up as a win though.


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## Saqeeb (13 July 2020)

@Trav. Thank you for your prompt. It has been a concern for me as well when there is a weekly buy signal after a significant gap up during the previous week. I have been burned previously. I am considering adding a rule where I do not enter a position if it has gapped up significantly during the past week.
However, At this stage of paper trading I am going to follow the system without any questions but will keep an eye on these two positions, *FLN* and *WSP*, to see how they perform.

@qldfrog and @Trav. , I will check to see if there is any repainting with the system. Thanks for the ideas guys. However, in case of *PPG *I do not think it is repainting as it was a trailing stop hit. Nevertheless, I will check to see if there is any repainting concern with my system.


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## Trav. (13 July 2020)

Saqeeb said:


> I am considering adding a rule where I do not enter a position if it has gapped up significantly during the past week.




That's the beauty of AmiBroker mate you can add a rule and backtest pretty easily. Your sleep at night factor (SNF) will be different to mine so if you are not sure then I would think that there is less chance of following the system correctly.

It appears that you are not having any issues finding signals so one option could be penalising a stock in your position score ranking if stock gapped up

some code that could be used to determine the size of a gap that you are not comfortable with.

BigGapUp = ( L > 1.02*Ref(H, -1) ); // today's Low 2% above yesterday's high
BigGapDn = ( H < 0.98*Ref(L, -1) ); // today's High 2% below yesterday's Low

Good on you for doing the paper trade mate, as I wish I had your patience but unfortunately I am a sucker to learn the hard way.


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## Saqeeb (13 July 2020)

Trav. said:


> Good on you for doing the paper trade mate, as I wish I had your patience but unfortunately I am a sucker to learn the hard way.




@Trav. LOL, I am the same as well. But in this instance I decided that I will paper trade first before I dive in deep. 

Thank you for the code snippet. I will test this out and hopefully will help my SNF, thanks.


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## Warr87 (13 July 2020)

amibroker has a built-in function for gap up/gap down.

http://www.amibroker.com/guide/afl/gapup.html

Something like:

Buy = buycondition1 AND (Gapup == False);


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## Trav. (13 July 2020)

Warr87 said:


> amibroker has a built-in function for gap up/gap down.




Correct mate but that just returns a true or false as you have shown.

The code above allows you to define a % which is more useful in backtesting (optimize) as a small gapup might be ok, and a +10% might be no good.


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## Linus van Pelt (14 July 2020)

Trav. said:


> Good on you for doing the paper trade mate, as I wish I had your patience but unfortunately I am a sucker to learn the hard way.




Excerpts from http://blueowlpress.com/books/introduction-to-amibroker/:

P. 3-44: Example 9 - Perform Walk Forward Validation

The walk forward process consists of several iterations of:
1. Developing a system over a set of in-sample data.
2. *Testing the profitability over a set of out-of-sample data.*
3. Stepping forward in time to a new set of in-sample data and *a new set of out-of-sample data.
The combined results of all the out-of-sample data* are used to decide whether the system recognizes profit potential or not.


*The out-of-sample results from the walk forward run are the best estimate of future performance of the system.* They provide the information used in analyzing the reward and risk profiles, and in determining the position size that will produce greatest account growth while holding drawdown to a level of tolerance determined by the trader.
P 7- 4: Perform Walk Forward Runs

While there is nothing special about optimizing, *there is something very special about a walk forward run.*

P 9-17+: Walk-Forward tab

(Details of Walk-Forward testing)

P 9-32: Walk Forward

While there is nothing special about the optimization process - it is just an organized way to look at a lot of alternatives - there is something very special about the walk forward process. *The walk forward process is the best tool available to you for trading system validation.* While you are developing your trading system, you have access to all the data. Using your best efforts, you try to develop your system using in-sample data and test it using out-of-sample data. But what will happen when you start actually trading the system? *The walk forward process can give you an idea of what might happen.
*
In the development phase, you used the in-sample data and ran optimizations to search for patterns, then tested on out-of-sample data. The walk forward process automates this for you and provides several important things:
• It automates the process of optimizing over a set of in-sample data.
• It automates selection of the best set of values.
• *It automates testing over the out-of-sample data.*

Etc, etc, just search on "Walk Forward".

Sooooo, the $64,000 question:  *Is Amibroker Walk-Forward testing a suitable proxy for Paper Trading?*


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## qldfrog (14 July 2020)

Interesting today is that a sea of red, fln is one of my few green
Who would have thought..one of the reason i actually keep gap up...not found rewarding to eliminate, statiscally in my backtests


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## Warr87 (14 July 2020)

qldfrog said:


> Interesting today is that a sea of red, fln is one of my few green
> Who would have thought..one of the reason i actually keep gap up...not found rewarding to eliminate, statiscally in my backtests




just checked and was definitely a sea of red. i lost half of my open profits today. no matter though, which is early lol.


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## over9k (14 July 2020)

Really frog? You weren't expecting red today after red on wall st last night + all the virus numbers here?


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## Trav. (14 July 2020)

qldfrog said:


> Interesting today is that a sea of red, fln is one of my few green
> Who would have thought..one of the reason i actually keep gap up...not found rewarding to eliminate, statiscally in my backtests




Hopefully you are right mate, but you are looking at FLN daily now. If you are on a weekly system then you will need to comment at the end of the week ( same as all of your stocks in that weekly portfolio )


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## qldfrog (14 July 2020)

Indeed, just found it weord one of the only green around, weekly has been slaughtered today around 5pc down while 90 pc pcvested
One daily unchanged and other daily around 4pc down which is high as it is only 50+ pc invested.
Will look on friday
Based on your comments, it means that you believe / tested that gapping up stocks have to be avoided.interesting


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## Trav. (14 July 2020)

qldfrog said:


> Based on your comments, it means that you believe / tested that gapping up stocks have to be avoided.interesting




My original comment about the weekly system is that it covers up gaps shown on the daily charts.



Trav. said:


> When you look at the Weekly chart you just see the 1 bar up 44%
> 
> Then look at the daily chart and on Friday alone it gapped up 17% on the open to close 31% for the day, I will be interested to see *if *it retraces today as the daily RSI level is at significant levels.
> 
> Similar story with WSP




So just an observation that it may retrace as there was no price sensitive announcement released, to act as a catalyst.

You would be a brave person to call any price movements at the moment as the market is all over the place that is why it is interesting to watch to see how it behaves. As mentioned several times I am happy for holders but for me I would have baulked at entering this trade with FLN.

WSP looks a bit weaker than FLN at the moment but we will have to wait and see what happens over the next week or two.


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## Trav. (14 July 2020)

Linus van Pelt said:


> Sooooo, the $64,000 question: *Is Amibroker Walk-Forward testing a suitable proxy for Paper Trading?*




For me the testing process whether it is backtesting / walk forward / Monte Carlo etc is the easy part, just a click of the button! How easy is that.

The hard part for me is trusting the system 100%, to just sit back and place orders daily / weekly has me looking at announcements / forum posts that ultimately acts as a new positionscore feature ( which obviously is not tested ) 

So @Linus van Pelt I agree that walk forward testing is as good as you are going to get but are you able to follow the system and by paper trading it then your may get a feel for it, but real life trading of having a loser or 2 in a row is the hard part.

This leads to risk management, if you have done this right then you should be fine and a loser or 2 won't hurt too much, but if you have this wrong you will come unstuck pretty quick, by this I mean that it you have optimised on only Net Profit then the System Drawdown might be unrealistic which will find you checking stock price moves every 30 minutes which is not a healthy way to trade a EOD system.

Something that is coming clear for me is what works for one will not work for another. Only you know what you can handle in regards to risk and you have to be honest with yourself, *really honest*. I obviously haven't got this right for me yet so I cannot tell you my secret, others might be closer and the diaries are a great insight to some of the struggles people go through.


----------



## Chronos-Plutus (14 July 2020)

Skate said:


> View attachment 105748
> 
> *Has anyone conducted research on correlation* (it would save me a lot of work)
> I've been thinking of the correlation between the stock I tend to hold as a trend trader & the high correlation of positions @over9k is currently holding. As a trend trader, is there a way to use negative correlation as an indicator?
> ...




Correlation:

I would start with a plot graph of daily portfolio stock price movements as a percentage. On one axis, your stocks/portfolio; on the other axis, over9k stocks/portfolio.

It will just basically highlight who is the more profitable investor over a set time frame and show if you are both correlated in picking winners.

Haven't done this stuff in a decade.


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## Chronos-Plutus (15 July 2020)

Once you have the data and done your plot. Then look or run a regression line for correlation:



https://i1.wp.com/ucanalytics.com/b.../Correlation-Coefficient-and-Scatter-Plot.jpg


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## Skate (17 July 2020)

Skate.


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## Skate (18 July 2020)

Skate.


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## frugal.rock (19 July 2020)

Gday Mr Skate,
Was wondering if you might shed some light on your strategy regarding on how you pick stocks in relation to the SP and bracket ranges? 
Have noted a range of stocks in the 10c to 200? cent range, and now noted some buys in a higher bracket range circa $13. 
I take it that this is a lower risk style embedded in the strategy for the expected choppy times ahead? 
Oh to be a fly on the wall... (instead of trying to be bloody Sherlock!)


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## Skate (19 July 2020)

frugal.rock said:


> Gday Mr Skate,
> Was wondering if you might shed some light on your strategy regarding on how you pick stocks in relation to the SP? Have noted a a range of stocks in the 10c to 200? cent range, and noted now some buys in




@frugal.rock the price filter is ($0.05 to $15.00) if that is what you are asking.

Skate.


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## Saqeeb (19 July 2020)

*Week 22 update on my MAP paper trading portfolio.*
After last week's buys this portfolio is fully invested now. The portfolio lost $500.00 last week and the total drawdown is now at $2,945.00.

*Next week's buys:*
System has generated two buy signals, however, nothing can be purchased as I am fully invested now.

*Next week's sells:*
No sells this week.


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## frugal.rock (19 July 2020)

Skate said:


> @frugal.rock the price filter is ($0.05 to $15.00) if that is what you are asking.
> 
> Skate.



Ok, thanks. Was editing post. 
Me, slow off the draw! 
Any other logic, re the price filter or is it purely a case of what stocks pop up via signal and position score?
Cheers.


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## Fury (19 July 2020)

Saqeeb said:


> *Next week's buys:*
> System has generated two buy signals, however, nothing can be purchased as I am fully invested now.




What were the buy signals for out of curiosity?


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## Saqeeb (19 July 2020)

Fury said:


> What were the buy signals for out of curiosity?



@Fury, the two buy signals were GGG and IFN.


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## qldfrog (20 July 2020)

Saqeeb said:


> @Fury, the two buy signals were GGG and IFN.



Ifn a bit late....look at announcements.


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## Skate (20 July 2020)

Skate.


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## qldfrog (20 July 2020)

As fellow action strategy must be aware by now, BGL (bellevue) has a SPP offer @$1 a share;
I do not know what Mr Skate think about that but what I often do, and did today:
I sell existing portfolio component and have a de facto option to buy BGL at $1 until 4th of august:
I believe I so remove risk and potentially buy  more than I had before 
Is any of you , inc Mr Skate applying that "strategy" or have I just been too traumatised by the GFC where this resulting in significant gains and risk avoidance


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## Skate (20 July 2020)

qldfrog said:


> As fellow action strategy must be aware by now, BGL (bellevue) has a SPP offer @$1 a share;
> I do not know what Mr Skate think about that but what I often do, and did today:
> I sell existing portfolio component and have a de facto option to buy BGL at $1 until 4th of august:
> I believe I so remove risk and potentially buy  more than I had before
> Is any of you , inc Mr Skate applying that "strategy" or have I just been too traumatised by the GFC where this resulting in significant gains and risk avoidance




@qldfrog the Action Strategy is a "no thinking strategy" & such I'll be following the signals religiously. 

Skate.


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## over9k (20 July 2020)

So in other words skate, it's:


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## rnr (21 July 2020)

Saqeeb said:


> *Week 22 update on my MAP paper trading portfolio.*
> After last week's buys this portfolio is fully invested now. The portfolio lost $500.00 last week and the total drawdown is now at $2,945.00.
> 
> *Next week's buys:*
> System has generated two buy signals, however, nothing can be purchased as I am fully invested now.




Hi Saqeeb,

Just having a look at where you are at with paper trading your MAP system and I came across the above comment.

At the time of your post you had 18 open positions (out of 20) and no funds available to enter trades for the 2 buy signals.

Hopefully, you immediately started reviewing your system code to see where the error lies!

When you are ready to put real $$$'s at risk you must be in a position where you "*own the system (including the code)*" so there can be no surprises that will impact on your live trading.  

Cheers,
Rob


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## qldfrog (21 July 2020)

rnr said:


> Hi Saqeeb,
> 
> Just having a look at where you are at with paper trading your MAP system and I came across the above comment.
> 
> ...



It is an interesting case
You have 20k for 20 positions, 1k each great
 after a few months, you have 15 positions
31k overall value, 2k in cash, with your 15 positions at last close.

Your explore find 4 buys...what do you do?
Do you
1) divide cash by remaining positions to fill to get the next parcel value?
2) keep to 1k per position until no cash
3)divide overall value  by remaining positions to fill to get the next parcel value?and buy until cash runs out
I usually try 3...


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## Saqeeb (21 July 2020)

rnr said:


> Hi Saqeeb,
> 
> Just having a look at where you are at with paper trading your MAP system and I came across the above comment.
> 
> ...



@rnr, Thank you for following my paper trading and your concern. My account was in a drawdown of close to $3,700 when my system restarted producing signals after the March sell off. As I am not rebalancing my portfolio for this paper trading experiment and my position size is $1500 each position, the portfolio at this stage is fully invested at 18 positions. In fact I should have only taken 17 positions as I would have been short of funds for the 18th position.


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## rnr (21 July 2020)

qldfrog said:


> It is an interesting case
> You have 20k for 20 positions, 1k each great
> after a few months, you have 15 positions
> 31k overall value, 2k in cash, with your 15 positions at last close.
> ...





The answer is really simple as it lies within your system which would / should be coded accordingly.
They are your rules so you should know the answer.
As an example if you have a rule that the maximum trade size (including brokerage on acquisition) is $2500" then any trades exceeding that amount are quite simply breaching that rule.
For example, in any of Skate's systems posted on the forum there is usually a comment as when re-balancing occurs. 

Cheers,
Rob


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## qldfrog (22 July 2020)

rnr said:


> The answer is really simple as it lies within your system which would / should be coded accordingly.
> They are your rules so you should know the answer.
> As an example if you have a rule that the maximum trade size (including brokerage on acquisition) is $2500" then any trades exceeding that amount are quite simply breaching that rule.
> For example, in any of Skate's systems posted on the forum there is usually a comment as when re-balancing occurs.
> ...



it was theoretical, I use option 3, but this highlights the fact that this implementation requires a potential buffer of $ as you might (not to say often will and must) have winners still in your portfolio with unrealized gains


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## qldfrog (22 July 2020)

An area which interest me and maybe others:
Mr Skate, have you consider using some of your systems in the US
There is considerable work and i believe..with no proof, that you would need to not only change parameters but also work in niche realms.
Yet, at what i believe is a Reset time, could be diversification and protection.
Have you or anyone here tried trending, or other systems in the US market.
With less emphasis on dividends, it should even be a better market for trending systems


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## Skate (22 July 2020)

qldfrog said:


> *Mr Skate, have you consider using some of your systems in the US*




@qldfrog, I haven't considered trading the US markets but was curious at one stage if my Hybrid System would be tradable in other markets. It was suggested, a good system is a good system when it performs over a multitude of indexes & markets. As I was planning to invest a sizable amount with the Hybrid Strategy knowing the answer would add another layer of confidence.

*I have also answered a similar question here*
Short answer the Hybrid Strategy performs well in the US markets. https://www.aussiestockforums.com/posts/1057390/

*What’s happening to the markets.*
If you read @bigdog "NYSE-dow-jones-finished-today" thread each day it has an underlying theme of "Yo-Yo" trading. Traders at the moment have a "sell first and ask questions later" mentality. Worries about the US economy continues to spook the markets. COVID-19 was an initial handbrake on economies around the world with the tech giants lapping it up or as @over9k would say "stay-at-home-tech" is where to be. 

*In conclusion*
Even though the Hybrid Strategy tests well against the US markets "Yo-Yo trading still plays havoc with systematic trading" requiring nerves of steel.

Skate.


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## ducati916 (22 July 2020)

Structurally the US market is different. The US has MM who will manipulate the stocks. What you will see is much higher volatility in individual names, which can shake you out of a trade based on a mechanical system. Going weekly avoids some of this but if the stock is selling off for real reasons, weekly can really multiply the loss. Earnings will/can also play havoc (that's probably true for Aus though).

jog on
duc


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## Skate (22 July 2020)

ducati916 said:


> Structurally the US market is different. The US has MM who will manipulate the stocks. What you will see is much higher volatility in individual names, which can shake you out of a trade based on a mechanical system. Going weekly avoids some of this but if the stock is selling off for real reasons, weekly can really multiply the loss. Earnings will/can also play havoc (that's probably true for Aus though). duc




@ducati916 I'm under the opinion that trend trading strategies would work in all markets & your comments are a real eye-opener.

*I had a few lengthy emails to explain how the strategy worked *
The strategy tester found my coding & logic hard to follow at first. The report commented on how well the strategy performed in all markets tested, going on to say how well the strategy performed on inexpensive stocks in the US. The price filter is set from ($0.05 to $110) but my unique "positionscore" tends to select the lower price points when other filters & parameters come into play. The notation (performed well on inexpensive stocks in the US) at the time it wasn't important, as I had no intention in trading the US only the ASX market.

Skate.


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## over9k (22 July 2020)

Exactly - the volatility is just nuts at the moment. I did make a post a while back asking skate why he hasn't gone daily because of it. 

There's quite a bit of money to be made just finding something choppy and throwing good-till-cancelled orders in


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## Warr87 (22 July 2020)

over9k said:


> Exactly - the volatility is just nuts at the moment. I did make a post a while back asking skate why he hasn't gone daily because of it.
> 
> There's quite a bit of money to be made just finding something choppy and throwing good-till-cancelled orders in




because he trades weekly and no system is every constantly in sync with the market at all times? cherry picking when to trade and not to trade, and cherry picking the timeframe you trade is not a systematic mechanical algo trader ...


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## rnr (22 July 2020)

Saqeeb said:


> @rnr, Thank you for following my paper trading and your concern. My account was in a drawdown of close to $3,700 when my system restarted producing signals after the March sell off. As I am not rebalancing my portfolio for this paper trading experiment and my position size is $1500 each position, the portfolio at this stage is fully invested at 18 positions. In fact I should have only taken 17 positions as I would have been short of funds for the 18th position.




@Saqeeb, thanks for your response and please be assured my comments regarding the development of your system are based on being constructive. 

As your system was generating buy signals (without available funds) it became clear that you were not paper trading your system as it was designed, which is obviously up to you.

Some questions if I may:-

How long time-wise are you going to paper trade your revised system?

At the conclusion of this paper trading exercise are you going to:-

a) re-code your system, to reflect the method paper traded OR

b) effectively adjust the the results of the paper trading to reflect the system as initially coded?

The stats on the recovery from the resultant draw-down created by these two systems may be of considerable interest going forward.

Cheers,
Rob


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## over9k (22 July 2020)

Warr87 said:


> because he trades weekly and no system is every constantly in sync with the market at all times? cherry picking when to trade and not to trade, and cherry picking the timeframe you trade is not a systematic mechanical algo trader ...



I never said it was all the time. I was implying that it might be worth it with volatility this high.


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## Skate (22 July 2020)

over9k said:


> Exactly - the volatility is just nuts at the moment. *I did make a post a while back asking skate why he hasn't gone daily because of it.* There's quite a bit of money to be made just finding something choppy and throwing good-till-cancelled orders in




@over9k your logic to trade a daily strategy over a weekly system because of the recent volatility is well-grounded in theory but my research doesn't back it up. Trading a "Weekly Strategy" performs better with less work, less commission & less stress. (AFAIC)

*My recent research found here*
https://www.aussiestockforums.com/posts/1078832/

*Weekly versus a Daily system*
There are merits trading in both time frames but for "me" I prefer trading a weekly system, it also reduces the workload & stress. There is always a robust discussion when Daily versus Weekly trading is raised. I'm a believer if it works for you, it's right for you.

*Posting in the "Dump it here" thread*
I've always posted what I've found to be "the-best-for-me" when it comes to trading & if it's "best-for-me" it might also be the best for others but not always. Being consistent in my messaging I'm sure will help others.

*It's worth repeating*
If it works for you, it's right for you.

Skate.


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## rnr (22 July 2020)

qldfrog said:


> it was theoretical, I use option 3, but this highlights the fact that this implementation requires a potential buffer of $ as you might (not to say often will and must) have winners still in your portfolio with unrealized gains




Hi qldfrog,

My apologies as I almost missed your response.
Yes, it is exceedingly difficult to re-invest unrealised profits. Perhaps that is why @Skate has an account called BANK in his system, thus making the task simple.
Hang on....just thought how you could get around the problem, yep it's a system account with the name AFTERPAY. 

Cheers,
Rob


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## Saqeeb (22 July 2020)

rnr said:


> @Saqeeb, thanks for your response and please be assured my comments regarding the development of your system are based on being constructive.
> 
> As your system was generating buy signals (without available funds) it became clear that you were not paper trading your system as it was designed, which is obviously up to you.
> 
> ...



@rnr, I have no concerns and I am sure your intention is for a constructive dialogue.

My system will keep generating signals every week, dependent ofcourse on the index filter. If I take the signal or not will be dependent on 1)if I am fully invested, in which case I cannot take any more postions, 2)if I have a sell signal, in which case I will have to replace the position with a new one.

So far I am happy with the system and I intend to paper trade for another 4-6 weeks to see if I will come across any issues. This will make it a 3-4 month time frame since the system's index filter has turned on. So far I have not had any issues with the system such as repainting or any other unforseen issues. To me, it is performing as intended and therefore I am comfortable to trade the system.


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## Warr87 (22 July 2020)

Saqeeb said:


> @rnr, I have no concerns and I am sure your intention is for a constructive dialogue.
> 
> My system will keep generating signals every week, dependent ofcourse on the index filter. If I take the signal or not will be dependent on 1)if I am fully invested, in which case I cannot take any more postions, 2)if I have a sell signal, in which case I will have to replace the position with a new one.
> 
> So far I am happy with the system and I intend to paper trade for another 4-6 weeks to see if I will come across any issues. This will make it a 3-4 month time frame since the system's index filter has turned on. So far I have not had any issues with the system such as repainting or any other unforseen issues. To me, it is performing as intended and therefore I am comfortable to trade the system.




and try backtesting over the period you have been papertrading. the numbers should match up as well. I do this to give myself more credibility that the backtest results are at least close to what you expect on live data. Ideally you do 6months of forward testing like this but that is easier done if you are already trading a system.

my papertrading of the MAP system matched perfectly to the backtest results over the same period. even now I get the same affecting. peace of mind is important


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## ducati916 (23 July 2020)

Skate said:


> @ducati916 I'm under the opinion that trend trading strategies would work in all markets & your comments are a real eye-opener.
> 
> *I had a few lengthy emails to explain how the strategy worked *
> The strategy tester found my coding & logic hard to follow at first. The report commented on how well the strategy performed in all markets tested, going on to say how well the strategy performed on inexpensive stocks in the US. The price filter is set from ($0.05 to $110) but my unique "positionscore" tends to select the lower price points when other filters & parameters come into play. The notation (performed well on inexpensive stocks in the US) at the time it wasn't important, as I had no intention in trading the US only the ASX market.
> ...




Mr Skate, I think your system would work, overall, well. Some sectors, Biotech comes to mind, are however so news driven and the volatility so extreme (all year every year) that I doubt any mechanical system would fare particularly well. Whereas other sectors would really lend themselves well to a mechanical approach.

jog on
duc


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## qldfrog (23 July 2020)

I also believe you would need to refine your realm, either thru sector..as LeDuc noted, avoid Bio or even a filter removing stocks based on previous volatily/ size or even use ETFs only
But the sheer size and diversitg is tempting in the US


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## qldfrog (23 July 2020)

To clarify, when i use *your* realm, i imean the system builder, not specifically Mr Skate


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## ducati916 (23 July 2020)

qldfrog said:


> I also believe you would need to refine your realm, either thru sector..as LeDuc noted, avoid Bio or even a filter removing stocks based on previous volatily/ size or even use ETFs only
> But the sheer size and diversitg is tempting in the US




The trend in much of the Tech. stuff currently would have loaned itself nicely to Mr Skate's system. From the bottom, its gone what, 100%+? I don't really know what the ASX has done, probably not that sort of return. Also where Mr Skate wants to place larger bets relative to ASX liquidity and has market moving issues, in the US that's like throwing a pebble in the ocean. You can have fills with zero slippage. 

Re. ETFs, correct EMQQ as an example (which we hold) has the returns, without the single stock risk. XLK another index (Tech) that provides the returns (currently) without single stock risk. You also avoid issues during earnings. There are probably as many ETFs as there are listed ASX stocks. You'll never run short of candidates. Also, lots of inverse ETFs which allow a short strategy without the risks of actually shorting the market.

Also far easier to hedge: either via inverse ETFs or Options.

jog on
duc


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## qldfrog (23 July 2020)

ducati916 said:


> The trend in much of the Tech. stuff currently would have loaned itself nicely to Mr Skate's system. From the bottom, its gone what, 100%+? I don't really know what the ASX has done, probably not that sort of return. Also where Mr Skate wants to place larger bets relative to ASX liquidity and has market moving issues, in the US that's like throwing a pebble in the ocean. You can have fills with zero slippage.
> 
> Re. ETFs, correct EMQQ as an example (which we hold) has the returns, without the single stock risk. XLK another index (Tech) that provides the returns (currently) without single stock risk. You also avoid issues during earnings. There are probably as many ETFs as there are listed ASX stocks. You'll never run short of candidates. Also, lots of inverse ETFs which allow a short strategy without the risks of actually shorting the market.
> 
> ...



I know, so tempting, i tried the etf way on the asx but offer is too few
And even one system strategy i play here would be much better on the us market.i am under no illusion there is a fair amount of work and testing required and more tools: i do not subscribe to northgate data US updates yet
I see that as my next step
Still system centric in niche markets(realms) within the NYSE
Let's not talk again inn a couple of months years...


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## qldfrog (23 July 2020)

qldfrog said:


> I know, so tempting, i tried the etf way on the asx but offer is too few
> And even one system strategy i play here would be much better on the us market.i am under no illusion there is a fair amount of work and testing required and more tools: i do not subscribe to northgate data US updates yet
> I see that as my next step
> Still system centric in niche markets(realms) within the NYSE
> Let's not talk again inn a couple of months years...



Apologies for the mangled last sentence... let's talk again in a few months years


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## Skate (24 July 2020)

Skate.


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## qldfrog (24 July 2020)

to note that while the market was basically flat, the Action system performed very well
Well done


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## Skate (25 July 2020)

Skate.


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## Saqeeb (25 July 2020)

*Week 23 update on my MAP paper trading portfolio.*
My paper portfolio saw some good gains this week along with the Skate's Action Strategy that I am following. This portfolio gained $1,604.00, which now brings my drawdown to -4.5%.

*Next week's buys:*
Plenty of buy signals, however, I will only need one to replace a sell that has hit my trail stop.

*Next week's sells:
PPH*, this is a trailing stop exit.


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## Skate (26 July 2020)

*I have a new strategy *
The HappyCat Strategy has now completed the "development stage" & is due to be paper traded till 30th December. I made a quick comparison to the "Action Strategy" & posted the trading results of the "HappyCat Strategy" below as a measure between the two. There is no correlation of signals which is a bonus & on face value the "HappyCat Strategy" looks the goods.

*Gold Happy Cat *
On my last visit to Japan, I picked up a Gold Happy Cat (Gold = wealth and prosperity)

*The "HappyCat Strategy" is a pure Momentum Strategy*
Momentum shifts the share price, "that's a given". Our decisions when to enter & when to exit a move really determines if we are to be profitable in the long run. I've calculated the momentum over a period from bar to bar as the entry signal. The exit signal is the reverse of the entry condition.

*Momentum is either on or off*
Momentum trading is simply trading the trend using the "momentum effect". The strategy works on the principle that momentum is either on or it's off there is no middle ground. Additional setting & parameters assist in the fine-tuning. The secret of momentum trading is the ability to filter out the false signals.

*The "HappyCat Strategy" below is for the comparison in relation to the "Action Strategy"*







*The "Action Strategy" below is for comparison in relation to the "HappyCat Strategy"*






*I'm unsure*
I'm at a crossroads whether to:
(a) conduct the paper-trading in the "Dump it here" thread & report weekly as per the "Action Strategy"
(b) if so, do I keep trading the same period as the "Action Strategy" or
(c) do I start fresh from tomorrow as the generated signals are below (so there is no fudging)
(d) No interest at all

*Tomorrows signals*



*Running a second strategy might be confusing (20 x $1,000 positions portfolio)*
1. If there is any interest I would appreciate some feedback for (a), (b), (c) or (d)
2. If there is little interest, I will conduct the "paper-trading" process without reporting & clogging up this thread.

*FYI*
If the strategy performs it will be traded in the new year.

Skate.


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## Beaches (26 July 2020)

I would certainly like to see how this one plays out as momentum is a significant component of my trading decisions.

I think the different logos will differentiate each of the systems sufficiently so that there should be no confusion.


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## Skate (26 July 2020)

Beaches said:


> I would certainly like to see how this one plays out as momentum is a significant component of my trading decisions. I think the different logos will differentiate each of the systems sufficiently so that there should be no confusion.




*The other dilemma *
Should I restrict the position sizing to $1,000 (as per the “Action Strategy”) or something more realistic. Restricting bet sizes to under $1k doesn’t allow for rebalancing. Rebalancing & pyramiding position sizes is a powerful tool that I utilise.

Skate.


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## tinhat (26 July 2020)

Skate said:


> *The other dilemma *
> Should I restrict the position sizing to $1,000 (as per the “Action Strategy”) or something more realistic. Restricting bet sizes to under $1k doesn’t allow for rebalancing. Rebalancing & pyramiding position sizes is a powerful tool that I utilise.
> 
> Skate.



Save your own soul.


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## tinhat (26 July 2020)

if that's what matters


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## Skate (26 July 2020)

tinhat said:


> Save your own soul.




@tinhat , your tag needs to be corrected as:

“All lives matter”

Skate.


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## Beaches (26 July 2020)

Make it simple and more realistic for yourself and trade as you usually would. The additional brokerage  percentage is irrelevant for a test run and you can easily calculate a reduced percentage of brokerage at the conclusion of the trial to reflect the results of using a larger bank.

For anyone that wanted to trade along, they could open a Selfwealth account  as it has a flat $9.50 fee for all trade amounts which would keep the brokerage percentage manageable.


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## peter2 (26 July 2020)

I'm impressed by your productivity @Skate . 

If the HappyCat System is one you're considering using in the new year then I'd suggest using a portfolio size that is closer to the one you intend to use (if the system proves itself going forward). 

The Action Strategy is being demonstrated in real time for those who are new to system trading. IMO it's been a valuable real time demo of how to trade a system professionally with a small starting capital. 

Your headings make it very clear as to what topic you're addressing in each of your posts. 

IMO @Saqeeb should transfer and continue his weekly MAP reporting in his own thread in the Trading Diaries/Journals thread. In this way any discussion with Saqeeb won't clutter this thread. This thread should remain as essential information for new traders showcasing Skate's systems and the benefits of a fully professional approach to trading.


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## frugal.rock (26 July 2020)

Brilliant Skate.
Would love to see;
a)
c)
Position sizing, rebalancing, pyramids of giza etc all up to you.
It's all magic ninja arts... love the happy cat pic.
Saw a (Buddha?) in a butcher's the other day, the budha had a chopping knife waving... 
Am considering starting a Amibroker for Beginners thread to see if people can help me bumble through some (what should be) basic stuff....


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## Skate (26 July 2020)

peter2 said:


> If the HappyCat System is one you're considering using in the new year then I'd suggest using a portfolio size that is closer to the one you intend to use (if the system proves itself going forward).




*Ok, that's sorted* 
1. The HappyCat Strategy will be a 20 position portfolio, position size (bet size) will be $15k as it allows pyramiding.
2. I'll keep the start date "as is" & change the bet sizing so both strategies (Action & HappyCat) run side-by-side (if that's ok)
3. The format below (displaying all the weekly signals) might help others understand why the positions have been selected (half the fun is trying to work out why)
4. The "Exit Strategy" should also be different to most as it's the reverse of the entry 
*
Tomorrows signals*
The strategy needs 2 positions so the first two positions in the Exploration Analysis being: WGO & PLS will be included 





*This is the full list of signals from the get-go*
I'll update the "HappyCat Strategy" with the correct position sizing tomorrow. 




Skate.


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## Skate (26 July 2020)

frugal.rock said:


> Brilliant Skate.
> Would love to see;
> a)
> c)
> ...




@frugal.rock, I just read your post & thank you for your input. I've decided on (a) & (b) 

*Why? *
So there will be a direct comparison with the "Action Strategy" the bet sizing is different but the percentage of the returns should be comparable. 

*The "HappyCat Strategy" *
There will be a difference between reporting between the "HappyCat Strategy" & the "Action Strategy". The Action Strategy displays only the positions purchased over the weekend. Whereas the "HappyCat Strategy" will display all the buy & sell signals at the end of the week & before the opening of the markets on Monday. It should be educational to try & figure out why the "buy & sell" signals were entered. Also, others will see how I pyramid my position sizing as it's included in the coding parameters. 

Skate.


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## Skate (27 July 2020)

*
Rebalanced position sizing applied *
Each position size has been rebalanced weekly & the HappyCat Dashboard reflects the position size changes




*How is the position size calculated *
1. The portfolio holds 18 out of 20 positions as per the Share Trade Tracker Dashboard = (open positions 18)
2. Available "Cash Balance" as per the Share Trade Tracker Dashboard = $32,986
3. $32,986/2 positions = new position size ($16,493)
4. The new bet size = $16,493 (reflected in the Exploration Analysis)
5. The number of shares to purchase in the pre-auction (inclusive of the 3% premium) is displayed

*There are 2 Positioned required*
1. As there are two positions required to complete the portfolio the first two positions are placed in the pre-auction.
2. The buy position is good for a day (only)
3. Prices are not chased - both positions WGO & PLS will be settled at their maximum price or under
4. The #shares being purchased are fixed & are not flexible
5. If the price Gaps above our offer & never retraces during the day we will pass on that position.



*2 Buys*
WGO - 91,627 shares @ $0.18 (as per the Exploration Analysis)
PLS - 44575 shares @ $0.37 (as per the Exploration Analysis)





*This brings the portfolio up-to-date*
It should be noted that the floating position size started out at $15,000 position size (the original bet size) & has increased weekly. The last two buys have now increased to $16,493 the new "bet size"




Skate.


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## martyjames (27 July 2020)

following with interest -thanks Skate for the ongoing education


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## Skate (27 July 2020)

Skate.


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## Skate (27 July 2020)

*For full disclosure*
The records below brings the "HappyCat Strategy" in line with the "Action Strategy" listing all the relevant details for full disclosure. Percentage folio returns will be interesting to track. The "HappyCat Strategy" will be paper traded in the same way as I would trade any new strategy. Position sizing starts at $15k & will max out at $25k.
































Skate.


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## WilsonFisk (28 July 2020)

A question that may have been answered in the 3,500 posts prior to this one, but I am curious how others feel on a number of factors in developing a system.  I'll place this in 2 parts, 1 part the questions, and then 1 part my thoughts (as narrow minded as they may be )

Part 1 - Questions

1) position sizing - what impact does this have on your decision making process on how to employ a system within your portfolio of systems.  

2) universe of assets being traded - what controls do you like to employ to ensure you are actually able to exit a trade, and that you maintain a 'comfort level' with the trade

Part 2 - Thoughts

1) Position Sizing - I believe that a good system has your Alpha/Edge/Absolute Awesomeness whether it is fixed, fractional or percentage based position sizing, it is broken it if only works with one.  

But I also believe there is benefit in trading fixed amounts for certain strategies, and that there is benefit for increasing position sizing for others.  

Fixed Positions can provide greater risk management as you can possibly increasing your number of positions and take more positions rather than increasing a position size.  Downside is impact of commissions and more work inputting trades.

Fractional/Increasing Position sizes allow you to compound your return without increasing cost or workload.  You do however decrease your 'comfort level' and take on significantly more risk.  

2) Universe - I personally like to see liquidity in both volume and turnover in a stock over a look back period, so that I know that when I want to get out, I should have a good confidence level of doing so.  

This has meant that when I apply these overlays I can trade quite a few stocks outside the ASX200 and even ASX300 that I may have otherwise missed if I restricted my self to those indexes.  

Counterpoint I may have lost and may continue to lose some opportunity in less liquid but potentially better performing stocks.  

*TLDR - *I Like to use both Fractional and Fixed Position Sizing as they provide diversification and return smoothing.  Whilst I don't need to use Volume, Turnover or Price to enter a trade - they give me my 'comfort level' so I can feel confident that when the world goes upside down I can cash my chips in.

Attached is an example of the difference in position sizing for my BBO Strategy (Daily) from 01/07/2015 to 30/06/2020.


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## WilsonFisk (28 July 2020)

Also - wanted to thank all contributors to this thread - it has made some good shifts in my thinking around developing future systems.

I have found the index filter vs sentiment filter a really good read and my BBO Daily Strategy v4 will move from index to volatility filtering, with some pretty satisfying results (I hope).  

This mammoth bible of info, has inspired me to code more systems over the last 12 months, than I had done to date (out of many years investing and trading).  Many of those systems suck, but it is a learning journey.

Thanks people.


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## willoneau (28 July 2020)

Skate said:


> View attachment 106533
> 
> *For full disclosure*
> The records below brings the "HappyCat Strategy" in line with the "Action Strategy" listing all the relevant details for full disclosure. Percentage folio returns will be interesting to track. The "HappyCat Strategy" will be paper traded in the same way as I would trade any new strategy. Position sizing starts at $15k & will max out at $25k.
> ...



Hi Skate, how long do you usually paper trade before you decide to trade live or discard or change the system?


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## Skate (28 July 2020)

willoneau said:


> Hi Skate, how long do you usually paper trade before you decide to trade live or discard or change the system?




@willoneau paper trading is for a minimum of 6 months. During the paper trading evaluation period there needs to be an extreme of trading conditions otherwise the period is extended. 

*Paper trading *
This is the final stage of system development. Paper trading is used to evaluate the system using out-of-sample data. This final evaluation period is definitely not a period for fine tuning the parameters or settings as “ all the changes” needs to be put to bed well before the paper trading stage.

*When do you disregard the system? *
When it deviates from the expected results.

Skate.


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## Skate (28 July 2020)

WilsonFisk said:


> A question that may have been answered in the 3,500 posts prior to this one, but I am curious how others feel on a number of factors in developing a system.  I'll place this in 2 parts, 1 part the questions, and then 1 part my thoughts (as narrow minded as they may be )
> 
> Part 1 - Questions
> 
> ...




@WilsonFisk what a great post. I’ll be very interested in what others have to say as I’ve expressed my views on the two questions you have raised many times.

Skate.


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## willoneau (29 July 2020)

My understanding - position sizing has to take into account ,
not being too small to be affected by commissions and not being too large as to move share price.
Skate uses trailing stops, stale stops and GTFO stops that I am aware of.


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## Skate (29 July 2020)

willoneau said:


> My understanding - position sizing has to take into account




@willoneau you are correct "position size" is important. Trading small amounts over a short period using a "percentage-based" position sizing beats a fixed dollar position size hands down. When you start to trade larger amounts over a longer period, it becomes very hard to move those amounts into the markets without a large amount of increased slippage.


WilsonFisk said:


> whether it is fixed, fractional or percentage based position sizing, it is broken it if only works with one.



@WilsonFisk is 100% correct in his statement.



WilsonFisk said:


> Fixed Positions can provide greater risk management as you can possibly increasing your number of positions and take more positions rather than increasing a position size. Downside is impact of commissions and more work inputting trades.




I say each to their own, if it works for you it's right for you. Testing theories is one thing, trading the theory is another. Any serious trader quickly learns that theory & practical is like chalk & cheese.


WilsonFisk said:


> Fractional/Increasing Position sizes allow you to compound your return without increasing cost or workload. You do however decrease your 'comfort level' and take on significantly more risk.



Houston we have a problem - if you have a successful trading system the compounding effect of using a "fractional position sizing" as I said previously - it becomes very hard to move large amounts into the markets incurring a large amount of slippage.

*Simple works for me*
Pyramiding position sizing works for me as all available funds are constantly in the markets. Most fail to realise pyramiding works both ways. When trading is not going well, position sizing decreased because of the compounded losses, even a string of losses is reflected. But hey, when times are good why shouldn't I take advantages of these conditions & increase my bet sizes. It's the "make hay while the sun shines" theory.

Skate.


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## willoneau (29 July 2020)

When you say pyramiding , do you mean increasing position size for next trade or buying more of same trade at higher price?


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## Skate (29 July 2020)

@WilsonFisk *raised a few good points about strategy development. *
I've been working on the "KingFisher Strategy" for over three years, the theory & the idea behind the strategy is quite sound.

*Background*
The KingFisher is a unique strategy that quickly adapts to the volatility within a price movement. The responsiveness to that movement is increased with data smoothing. Substantial data smoothing quickly adapts to these changes, fine-tuning the entry process but exiting the KingFisher strategy quickly is still elusive.

*The last 12 months of trading*
Without a doubt, the last 12 months has had it all, the highs mixed with the extreme lows because of the COVID-19 crash. @WilsonFisk methodology of fixed dollar position sizing versus using a 1% Fixed Fractional method (the capture below) makes a difference over a short period but lacks "tradeability" over a longer journey where compounding is not your friend.

*Here's the rub*
As I said the methodology behind the KingFisher Strategy is sound but the COVID drawdown would have been unstomachable. Nailing the exit is critical because "it's where the money is made". Long story short the strategy is a "work in progress". Persistence, hard work & determination is required for this strategy to see the light of day & get to the paper trading stage. Sadly it's a long way off.

*Let's examine the backtest results from the last 12 months*
There are three parts to the posted capture.
(1) Fixed Dollar versus Fixed Fractional position sizing (net profit)
(2) The corresponding maximum percentage drawdown that in live trading would be unstomachable
(3) The most important - don't confuse percentages with dollars (don't fall for the trap of accepting percentages)

*Looking at percentages*
If you view backtests in percentages you become quickly conditioned & accepting. A drawdown of 28.91%, yeah, that's acceptable & let's face it, we have all made the same remark at one stage or another. But convert percentages to dollars & it takes on a new meaning. Percentages are relevant to the size of your portfolio.
(a) On a $20k portfolio, 28.91% is bearable but if you are trading a large portfolio it takes on another meaning.
(b) Trading a $1m or $2m portfolio 28.91% becomes very relevant indeed. That's nearly 1/3 of your funds "GONE"




Skate.


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## WilsonFisk (29 July 2020)

Skate said:


> Houston we have a problem - if you have a successful trading system the compounding effect of using a "fractional position sizing" as I said previously - it becomes very hard to move large amounts into the markets incurring a large amount of slippage.




Indeed, and this is where my Universe controls starting kicking in, I want to make sure that any volume and turnover I add from my trading doesn't create said issues.  

Only starting with small portfolio's, and having diversified into a home (lifestyle investment), I haven't had the problem of excess slippage - future problem I suspect.  

However I believe that diversifying my capital across numerous trading systems (and other assets) can mitigate the risk.

*TLDR - *If portfolio size is starting to create slippage problems, the strategy has hit capacity and excess capital should be deployed elsewhere


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## Skate (29 July 2020)

willoneau said:


> When you say pyramiding , *(a)* do you mean increasing position size for next trade or *(b)* buying more of same trade at higher price?




@willoneau I've altered your question into two parts (a) & (b) = (a) is correct. (b) is incorrect.
I increase the size of the next series of bets averaged to have all my trading funds deployed in the markets.

*There are 2 options to pyramid*
1. Increase portfolio position size
2. Increase the bet size

*Increasing the portfolio size*
This method of pyramiding really needs no explanation as you add extra positions when funds become available.

*"Pyramiding Explanation" *(positionSize)
Pyramiding "PositionSize" is a re-balancing technique to reinvestment profits. "Pyramiding (re-balancing) my PositionSizes" ensures every "soldier is put into battle" to fight the good fight.

*How?*
Position-sizing uses the trading Bank balance to calculate the size of the next bet or series of bets. It's simply a way of putting every dollar to work.

*What is the Re-Balancing Formula?*
Trading Bank Balance/outstanding positions = new "PositionSize"
This will now be the new bet for each & every pending trade (the new PositionSize also calculates the number of shares to buy in the pre-auction)

*As I touched on strategy development - let's recap the "Megan Ratio"*
The Megan ratio lets you evaluate different strategies, it gives you the ability to compare apples with apples when backtesting apples & oranges. "MEGAN" is an acronym which stands for the “*M*aximum *E*xponential *G*rowth *A*nnualized *N*otation” of the equity curve of a trading system, it’s a metric specifically designed to highlight the system that generates more returns per year when the profits are "reinvested" PositionSize Pyramiding regardless of the number of trades, holding period, drawdown, & so on. Pyramiding works for me. Others can research using the "Megan Ratio" if there are advantages of pyramiding using their style of trading. 

*I post my research hoping to alter the thinking of others *
When I read the post below I was doing Cartwheels, whether I'm right or wrong doesn't matter, the way I elect to trade isn't important but to get others to think about the way they trade is priceless. 

@WilsonFisk *made the remarks:* 
(1) _"it has made some good shifts in my thinking"  & _
(2) _"This mammoth bible of info, has inspired me to code more systems". _


WilsonFisk said:


> Also - wanted to thank all contributors to this thread - *it has made some good shifts in my thinking *around developing future systems. I have found the index filter vs sentiment filter a really good read and my BBO Daily Strategy v4 will move from index to volatility filtering, with some pretty satisfying results (I hope). *This mammoth bible of info, has inspired me to code more systems* over the last 12 months, than I had done to date (out of many years investing and trading). Many of those systems suck, but it is a learning journey.




Skate.


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## willoneau (29 July 2020)

Skate said:


> *What is the Re-Balancing Formula?*
> Trading Bank Balance/outstanding positions = new "PositionSize"
> This will now be the new bet for each & every pending trade (the new PositionSize also calculates the number of shares to buy in the pre-auction)



If you have 20 positions on and close one with profits and Capital greater than 5 % of capital isn't there an issue with one position being a lot greater than the others?
I was thinking of adding profits to Capital and dividing by 20, being total position size and would be the size of the bet for the  remaining position?


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## qldfrog (29 July 2020)

willoneau said:


> If you have 20 positions on and close one with profits and Capital greater than 5 % of capital isn't there an issue with one position being a lot greater than the others?
> I was thinking of adding profits to Capital and dividing by 20, being total position size and would be the size of the bet for the  remaining position?



it can also get the other way, you are fully invested then sell a loser: you lost 25% let's say from initial buy as initial amount per position...
your next buy has no other cash than that sale, which is under your expected amount per position, unless you top up with a cash buffer.
This is an issue which happens to me regularly and I sort it by just applying [inverse ]pyramiding;
position size =available cash/nb of available free slots.
Not backtested as optimum,just real world meeting theory
hope it helps


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## willoneau (29 July 2020)

qldfrog said:


> it can also get the other way, you are fully invested then sell a loser: you lost 25% let's say from initial buy as initial amount per position...
> your next buy has no other cash than that sale, which is under your expected amount per position, unless you top up with a cash buffer.
> This is an issue which happens to me regularly and I sort it by just applying [inverse ]pyramiding;
> position size =available cash/nb of available free slots.
> ...



Hi qldfrog, If you lose 25% on one trade and only have one position to fill why would you use all of the Capital on one trade. Especially as a trend trader when the next trade can just as likely be a loss than a win.
I would think lower total Capital / 20 would be the Capital allocated to next trade?
I would use realized Capital not paper profits too.
Just noticed you mentioned 25% of initial trade Capital not total Capital.


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## willoneau (29 July 2020)

I  can see your point , which gives me something to think about .


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## willoneau (29 July 2020)

If you have a windfall profit on one trade and have one position to fill do you use all that Capital on the next trade?


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## qldfrog (29 July 2020)

hum nice to think that way, currently yes but true 19 break even, one triple then that tripple winner is set as sell with one buy allowed, makes no sense to put 3x initial cash on that single bet
Probably a matter of using common sense and a rule of thumb

not very systemised...


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## Skate (30 July 2020)

Posting for the sake of posting.

*I wanted to get something off my chest *
Why did a massive day turn into a good day?

*It's confirmed the market is irrational*
Swings & roundabouts, it's hard to keep up. I've come to the conclusion that's it's usually too late to figure out what causes the prices to move & profit from it trading a weekly system. The markets can be very unpredictable even when using technical analysis as the guide. Trading is a constant competition with some of the smartest traders around & I'm starting to wonder what they are thinking at the moment.

*Uncertainty*
Most say: Trading the market is a rollercoaster of emotions & it's never been truer. The psychological forces at the moment is creating the uncertainty & the price fluctuations are testament to that. The only thing that I know about the market is that as technology becomes more advanced, traders will still keep trying to exploit the movement in price no matter what. I've been pondering that prices shouldn't shift as they do, well they didn't in the past that I can recollect, but then again we didn't have COVID.

*Who really knows what the markets are going to do as most times nothing seems to make sense*
The logical explanation would be that traders are very bullish or bearish at the moment & at the same time. I was starting to think the price follows market sentiment & now realise that sometimes, prices move in the opposite direction of the sentiment, go figure. I'm currently thinking that the market is moving on technical setups due to the massive number of algorithms that now control trading as "I have no other explanation".

*Maybe the changes in price could still be due to “emotion”*
I know emotion is a powerful driver of the markets & panic buying & selling can create massive inefficiencies but reasoning that goes into stock analysis is becoming less relevant (IMHO). But there is light at the end of the tunnel as overtime, prices generally recover back to where they originally started to fall & even continue to move up, thank god.

Skate.


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## frugal.rock (30 July 2020)

I came to a conclusion today that any old speccie stonk stock is a vehicle for the high frequency guys to do their thing with. 
Seems like they just need a "catalyst" announcement for the next big thing "hysteria" creation.
It's definitely more pleasant to be stoically holding rather than frequently trading.


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## Newt (30 July 2020)

It almost seems "normal" to have a couple of share positions up or down by 15 or even 25% in a day lately.  Maybe I should stop doing daily portfolio updates but its an old habit now.  

Noticed an advert for anti-shorting petition come up recently.  
Howard B would say price series are definitely not "stationary" in current climate!


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## qldfrog (30 July 2020)

Newt said:


> It almost seems "normal" to have a couple of share positions up or down by 15 or even 25% in a day lately.  Maybe I should stop doing daily portfolio updates but its an old habit now.
> 
> Noticed an advert for anti-shorting petition come up recently.
> Howard B would say price series are definitely not "stationary" in current climate!



Indeed
Portfolio from 11am  +5k to -600 at close yesterday
So 3% variation during the day
But today was so so for me
Basically flat, just a few hundreds
Indeed, can confirm very high variability..obviously not owning much asx20 but still


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## Skate (31 July 2020)

Skate.


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## Skate (31 July 2020)

Skate.


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## Skate (1 August 2020)

*


I want to talk about timing & luck when it comes to trading*


Beaches said:


> Make it simple and more realistic for yourself and trade as you usually would





peter2 said:


> If the HappyCat System is one you're considering using in the new year then I'd suggest using a portfolio size that is closer to the one you intend to use (if the system proves itself going forward).





frugal.rock said:


> Would love to see; (a) conduct the paper-trading in the "Dump it here" thread & report weekly as per the "Action Strategy" & (c) start fresh from tomorrow as the generated signals are below (so there is no fudging)




*The exercise to paper trade the "HappyCat" strategy*
Straight off the bat, after reviewing the backtest & Share Trade Tracker results I'm expecting the "HappyCat Strategy" to be my very best work so far. I was at a crossroad last week trying to decide whether to conduct my paper-trading exercise in the "Dump it here" thread or conduct it in private. I asked if the start date should align with the "Action Strategy" or start afresh. Even the value of the portfolio had to be decided on. With input from members, I decided to keep the start date inline with the "Action strategy" but was convinced by @Beaches & @peter2 to trade a portfolio size that would mimic how I would trade this strategy live. I had decided on the conditions how I was going to paper trade the strategy but @frugal.rock at the last moment threw a spanner in the works as he preferred the strategy to be started fresh from last Monday. As this was a poor trading week for a momentum strategy it's only fitting I should display the records if I started the "HappyCat Strategy" fresh from this week & make a post about timing & luck.
*
Start dates are important*
Depending on the starting date of paper trading, this can have a big bearing on the performance outcome of the strategy. I've published results for the "HappyCat Strategy" (5th June start) & now will post the "HappyCat Strategy" (v2 with a 27th July starting date in the next post). Having different start dates makes a difference in the short term but in the long term, they should reflect each other as all systems need time to do their thing. Luck & timing plays a significant role when comparing portfolios over the short term.
*
Looking for long term trends*
Paper trading has the ability to find & qualify long term trends. The issue with long term trending systems is that they are hard to qualify as the returns could be down to sheer luck or maybe just the start date - all this just adds complexities to its evaluation.

*Luck*
All systematic traders need to be aware of the significance of luck when they start trading. As an example, system traders who started their systems early this year got hammered with the COVID-19 flash crash & they were just unlucky to start when they did. After any major drop, traders are normally fearful to get back in. Restarting to trade again also relies on a degree of luck to kick them off on the right foot. Another failure will make it even harder next time - "if there is a next time".

*Abandoning a strategy too quickly*
When strategies are not performing as expected or don’t follow the backtest results we tend to start fiddling & modifying a perfectly good strategy disguised as a trading strategy improvement. The development stage of a system is when these measures are crafted & certainly not during the paper trading phase.

*Next*
I'll post up some captures as an example of why timing & luck plays such an important role when it comes to trading. The results are disappointing bearing in mind that the only difference between the strategy is (a) the start date & (b) a slightly different logo to differentiate between the two.

@qldfrog remarked recently about trading "Not every week is sugar and lollipops"

Skate.


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## Skate (1 August 2020)

*Once only report*
This is a once-only report to explain & display why timing & luck is important.

Skate.


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## martyjames (1 August 2020)

Hi Skate

Your last post is very timely for me as i started trading my weekly system at the beginning of July so i know how important the start date is.
Can you post the backtest results of the Happy Cat strategy for the last year ( i know you have limited data and dont give too much credence on back test results) if possible?

I have to say im liking trading a weekly system (as opposed to daily) - i find it far more relaxed (so far).

Cheers
Marty


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## Skate (1 August 2020)

martyjames said:


> Hi Skate, Your last post is very timely for me as i started trading my weekly system at the beginning of July so i know how important the start date is. Can you post the *backtest results of the Happy Cat strategy for the last year* ( i know you have limited data and dont give too much credence on back test results) if possible? I have to say im liking trading a weekly system (as opposed to daily) - i find it far more relaxed (so far).




@martyjames I was unsure what you are referring to when you said "the backtest results of the Happy Cat strategy for the last year" so I'll post a few dates.

*# This is the last Financial year
*





*# This is the last 365 days - one year backdated from today
*





*# This is the 2019 Calendar year*






*# This backtest is from 1st January 2020 to end-of-trade Friday*




Skate.


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## frugal.rock (1 August 2020)

Thanks for the V2 once only report Skate. 
Conversely, my "Stoic Slightly Stonky Strategy" is up 26.6 % from commencement around 23rd June after a non stoic reset and a pay off of the credit card.

This last week has seen most of the rise with BUD and THR being the main contributors. EN1 was going well but has retraced a little, still holding as it's a long term business.
Bought BUB this week before I saw it was a sell by system here. Not worried, as also a long termer.
Lucky timing or fundamentals inclusions? Both. Cheers.


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## Skate (1 August 2020)

frugal.rock said:


> Thanks for the V2 once only report Skate.
> Conversely, my "Stoic Slightly Stonky Strategy" is up 26.6 % from commencement around 23rd June after a non stoic reset and a pay off of the credit card.




@frugal.rock - the 23rd June 2020 HappyCat Results. (36.87%) - yes timing & luck is everything when trading (trading skills being less so)




Skate.


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## frugal.rock (1 August 2020)

Thanks for the correction Skate. The conversely bit was aimed at this last week, definitely a lucky week and the market may still "taketh" my open profit yet.... but that's the rise and fall of the tide's.


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## martyjames (1 August 2020)

Many thanks Skate. Amazingly low DD in  calendar 2019 6.9% - a great trend following year. Since starting beginning of July im up 3% as of now, but was initially down about 3.5%. Once day last week was up *intra day* 9%, 2 days later back to 3%!

cheers


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## Skate (1 August 2020)

martyjames said:


> Many thanks Skate. Amazingly low DD in  calendar 2019 6.9% - a great trend following year. Since starting beginning of July im up 3% as of now, but was initially down about 3.5%. Once day last week was up *intra day* 9%, 2 days later back to 3%! cheers




@martyjames that's exactly what instigated the post here: https://www.aussiestockforums.com/posts/1085800/ for those who didn't read my post.

*Why did a massive day turn into a good day? *
Swings & roundabouts, it's hard to keep up. I've come to the conclusion that's it's usually too late to figure out what causes the prices to move & profit from it trading a weekly system. The markets can be very unpredictable even when using technical analysis as the guide. Who really knows what the markets are going to do as most times nothing seems to make sense. The logical explanation would be that traders are very bullish or bearish at the moment & at the same time. I was starting to think the price follows market sentiment & now realise that sometimes, prices move in the opposite direction of the sentiment, go figure. I'm currently thinking that the market is moving on technical setups due to the massive number of algorithms that now control trading as "I have no other explanation". Maybe the changes in price could still be due to “emotion” I know emotion is a powerful driver of the markets & panic buying & selling can create massive inefficiencies but reasoning that goes into stock analysis is becoming less relevant (IMHO). But there is light at the end of the tunnel as overtime, prices generally recover back to where they originally started to fall & even continue to move up, thank god.

Skate.


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## willoneau (1 August 2020)

Hi Skate, how is the Action Strategy looking for Monday's open?


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## Skate (1 August 2020)




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## qldfrog (1 August 2020)

Skate said:


> View attachment 106776



thanks was wondering as well as I had done my homework for my 3 systems. The action strategy was quite resilient last week once again


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## ducati916 (2 August 2020)

Skate said:


> *1. Why did a massive day turn into a good day? *
> Swings & roundabouts, it's hard to keep up. I've come to the conclusion that's it's usually too late to figure out what causes the prices to move & profit from it trading a weekly system.
> 
> 2. The markets can be very unpredictable even when using technical analysis as the guide.
> ...




1. Remember we are still in an elevated Vol. environment. Daily moves are still amplified compared to 'normal' metrics. The same things still make prices move. (a) The macro-environment, (b) the sector specific fundamentals and (c) the individual fundamentals of the stock. If the fundamentals of a sector are considered to be optimal, then price will move a long way past those fundamentals. Tech. being an obvious example, gold currently. Momentum is measured by any number of indicators. It is a different game. Momo Vol. is always higher (in normal circumstances) in an elevated Vol. environment, it is higher again. My guess is that your systems are written in such a manner as to look (in normal circumstances) for momentum based trades. The system(s) are still finding them: just at an elevated Vol., hence the positions as a portfolio, are far jumpier than they would normally be.

2. I think T/A is the starting point. Internals are the next step. Macro-analysis being either the starting point or finishing point.

3. This is where macro is so important. If you 'knew' that the market was going up, then intra-day volatility is less of an issue. Markets operate pursuant to macro drivers. Sure day-to-day stuff happens, a news story spooks the little guy or whatever. Individual stocks will jump to their own narratives, earnings, etc. What are the big drivers of stocks, commodities, currencies, bonds, etc. Then what are actually looking at and for, totally changes. You are looking for stretch points and contractions within a trend. Stretch points are sells or hedges, contraction points (what we just had) is an opportunity to really load up for a big move. Think 2009 - 2020. There were 3 or 4 contraction points along the way of that huge move to take profits and reload. My system (if you could call it that) is measured (usually) in years. The big macro drivers do not flippe-floppe: they are huge and powerful. The 'virus' is not the origination of a new world order, it is a transient blip. On the other hand, the China/US issue could, like the US/Soviet issue, impact the macro trend if it continues to escalate.

4. Buy the rumour sell the news has been the tactic ever since there have been markets. One of the best recently: 




5. In the US that is true. Many (most) are intra-day. They go flat overnight, or enter at the close to exit at the next day open. Hence the crazy moves that then collapse in a day or two, up 500% in a day etc. You are increasingly going to see this sort of thing though: https://www.institutionalinvestor.c...e-Best-Market-Neutral-Funds-Is-Run-by-a-Robot

6. Analysis of the aggregate is still consistent. Individual stocks (smaller caps. particularly) can be easily manipulated. Hence why I prefer ETFs. Money flow worldwide is also changing the nature of individual bourses. US style is coming (gradually) to your local. You additionally have this issue anyway: your system (I think buys momo) therefore when a sector goes hot, gold atm, you'll be triggered to buy loads of gold based stocks. Why not increase the position size and just buy the ETF? If you want the added juice, just use a x2/x3/x4 leveraged one.

7. Back to the fundamentals, once the froth becomes yesterdays news.

jog on
duc


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## qldfrog (2 August 2020)

ducati916 said:


> 6. Analysis of the aggregate is still consistent. Individual stocks (smaller caps. particularly) can be easily manipulated. Hence why I prefer ETFs. Money flow worldwide is also changing the nature of individual bourses. US style is coming (gradually) to your local. You additionally have this issue anyway: your system (I think buys momo) therefore when a sector goes hot, gold atm, you'll be triggered to buy loads of gold based stocks. Why not increase the position size and just buy the ETF? If you want the added juice, just use a x2/x3/x4 leveraged one.



For the follower of this thread and the mostly momentum based systems:
I did look at Mr LeDuc suggestion:
Trading ETF instead of specific stocks and my own searches/backtests *on the ASX* where not that successful: 
a disclaimer, as i am no expert and my systems are nowhere near as good as Mr Skate, others might find different outcome but for me:

yes, using a realm of ETFs (basically all ETF I could find in the last 5 y or so), on the ASX, I could catch trends...but the results were decent  if compared to a term deposit, pitiful by our own standards and i quickly dismissed the idea;
using leveraged ETF is very exciting but on the ASX, they are VERY few
SO in the US, I would give it a go, but sadly not really usable here was the end result of my quest.
I did this 2 months ago or so but doubt this has changed
It is possible to toy a little bit with that and my Pure volatility does but overall , sadly the is and will remain a side play
if you look at the results of our weekly/daily systems, a lot of the money is made by a few high performers that are let run. since 01/07 on my daily system looking at realised profits:
69.6% MNS
34.8% YOJ
24% NZM
45% IFN
101% BRN
64.4% HAS
22%  AMA
the rest  below 20% with one loss at 35% other mostly around 10% ish


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## qldfrog (2 August 2020)

in a visual way realised profit loss in % per trade since 01/07
and that gives you a so far 16% return in one month.Hard to do that with ETFs if not leveraged and wo a crystal ball.
Hope it helps


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## Skate (2 August 2020)

*Strategy Bloating*
I'm the biggest offender. Back in the old days (2015) I was lucky to string a few lines of code together & looking back the coding was robust & sound. The original coding is still the foundations of my current trading strategies but with additional bloatware to make me feel safer when my money is on the line. I guess as an analogy it's the equivalent of wearing 5 condoms when having sex, sure the protection is in place but the sensitivity is lacking, thus the real enjoyment of trading is diminished somewhat.

*My Momentum Strategy*
In 2015 I was trading like a mad man, trading multiple strategies at once & I was confident in doing so. As you get more experience at trading you tend to be more cautious & start battening down the hatches by adding another layer of protection. In your mind, you are creating additional layers dressed up as strategy improvements. All those years ago I was using "Momentum Indicators" to get the job done. The results trading my old "Momentum Strategy" were pleasing at the time (2015). Trading back then if "I didn't lose money" it was considered a "good day".

*Lately I've been reminiscing*
I've been dusting off a few of my old strategies. My new "HappyCat Strategy" being a momentum strategy got me thinking. Back in 2015, I was trading my old momentum strategy that used a momentum indicator that got me thinking, what if I was to substitute my momentum code instead of using a momentum indicator. FYI - my base code is the foundation of all my current trading strategies.

*The backtest results*
Well, blow me down - the lean strategy is impressive. It uses an "ApplyStop" instead of a "LoopingStop", the looping code also contains a 'StaleExit' & a "GTFO" filter all being driven by a "Rate of Change Filter".

*More coding is better - RIGHT*
My HappyCat Strategy contains 1,337 lines of codes, meaning it's no lightweight. My old "Momentum Strategy" with my new momentum code inserted weighs in at a merger 168 lines of code. I'm starting to wonder if need to wear 5 condoms. I know or "I used to know" simplicity works. When you strip back trading it's all about trading the price differential, knowing when to get in & when to get out. Money management takes care of the rest.

Skate.


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## Newt (2 August 2020)

ducati916 said:


> 1. Remember we are still in an elevated Vol. environment. Daily moves are still amplified compared to 'normal' metrics. The same things still make prices move. (a) The macro-environment, (b) the sector specific fundamentals and (c) the individual fundamentals of the stock. If the fundamentals of a sector are considered to be optimal, then price will move a long way past those fundamentals. Tech. being an obvious example, gold currently. Momentum is measured by any number of indicators. It is a different game. Momo Vol. is always higher (in normal circumstances) in an elevated Vol. environment, it is higher again. My guess is that your systems are written in such a manner as to look (in normal circumstances) for momentum based trades. The system(s) are still finding them: just at an elevated Vol., hence the positions as a portfolio, are far jumpier than they would normally be.
> 
> 2. I think T/A is the starting point. Internals are the next step. Macro-analysis being either the starting point or finishing point.
> 
> ...





Forever indebted to many of you for the constant inspiration, stimulation, and backside kicks from time to time.  There's some gold just on this last page.  Duc, those first 3 points (above) alone deserve gold-plating and being pinned for any new system trader (probably any new market investor in general).  Don't think I would have even understook point 2 in the beginning, but  now that I'm "less than clueless" from many years learning 1 and 2 are wonderful.  3 is scarey, but trying to keep up and learning in your "Trading the Trend" thread.

QFFrog, your post inspired me to run a few old strategies for just this year (all weekly), and the outcome was something like what Skate described - surprisingly good results for early versions of current strategy or older strategy systems.  That doesn't mean I'd still like to be trading the older code - see below.

Skate your prolific thread continues to greatly inspire and during Covid downtime around Easter led to a few weeks of intensive testing of different ideas for GTFO, ROC filters with variable parameters, various buy filters.  Ironically I had earlier this morning been playing the game of "what if I jump back 12 months and tell my self to sell everthing and wait a year".  I'd have more capital right now, but I'm certain the pressure cooker environment this year has forced some valuable evolution in my trading/coding maturity:

1. Backtesting (god knows how I ever came up with anything decent years ago with the amount of crazy over-fitting, poor coding, almost no graphics, clueless about Monte-Carlo).  Even the "number of positions" debate many pages ago helped highlight possible improvements in optimizing code
2.  DD and crash defences - previously of the "less is better"camp, found that wasn't much fun in Feb/March this year - more "condoms" in place now.....
3.  Returns - believe changes in systems this year very positive for returns, and slight improvement in av loss and maxDD

So, on the time travel scenario, actually feel like last 6 months may possibly have been most valuable for future earning since started many years ago.  Difficult times can lead to positive change if you continue regualar dispassionate review and try to learn from what's happened.  Even seeing Skate putting out new work (HappyCat etc) shows the value of hard work, versus "set and forget". 

Don't want to affect new traders here too much until I have a better track record under my belt, but greatly appreciate the time and effort so many put in to sharing performance and learning here. 
*Never underestimate the benefit of frank benchmarking against your peers.*


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## Newt (2 August 2020)

The ETF versus individual stocks debate is also interesting.  I suspect Duc is right that ASX is each year becoming more "US-ified".  If so, we'll get more mean-reversion, shorter or choppier long trends and systematic trend trading returns may tail off a bit.  Diversification into mean reversion may make more sense. 

Find it fascinating how Duc has matured into trading as her does (advanced discretionary systematic approach?) in US ETFs, but don't think I'm anywhere near competence or skillset to make that work currently.


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## Skate (2 August 2020)

Newt said:


> Skate your prolific thread continues to greatly inspire




@Newt thanks for the kind words. At one stage I didn't think this thread would develop but as you have eluded to it's because on the ongoing quality contributions.


Newt said:


> Even seeing Skate putting out new work (HappyCat etc) shows the value of hard work, versus "set and forget".




*Back to protection & the "HappyCat Strategy"*
The new "HappyCat Strategy" seems "new" but to me, it's quite old. The "HappyCat Strategy" has been a "long" work in progress & could develop into my best strategy to date. I've got into the habit of wearing 5 condoms when trading these days as I'm using the added protection a comfort blanket. I'm wondering if I could manage to peel back 4 condoms & get away with just wearing one. 

*Confidence*
When trading you need the confidence to keep pulling the trigger & keep going even when all feels lost. The old momentum strategy had been tested to death before making it to "live trading" so with some update code it can only help rather than being a hindrance. Trading the lean mean old "Momentum Strategy" would still be a stretch. Having a lack of guts it's only fitting the old strategy needs to be resurrected & be given a second chance. It would be nice to paper trade the "Momentum Strategy" alongside the "HappyCat Strategy" for a comparison.

*What I'm thinking*
After looking at the backtest results I'm inclined to give it a go & paper trade it.





























Skate.


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## frugal.rock (2 August 2020)

Nice work Skate.
Have restarted my Uni course, and having another go at Fundamental Programming using JavaScript.

Will have to stay off the forum a bit to get it done. 

It may be the last subject I do.... depending on Mr Market and the soldiers commander making sound, wise plans and decisions to avert disaster.

Thanks for your time and consideration.


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## Skate (2 August 2020)

Skate said:


> *What I'm thinking*
> After looking at the backtest results I'm inclined to give it a go & paper trade the "Momentum Strategy".




*I'm going to paper trade both strategy for a comparison of apples to oranges*
I've decided to paper trade both strategies (1) The "HappyCat Strategy" & (2) My old updated "Momentum Strategy". Both strategies enjoy the same momentum base code but that's where the similarities end. In the short term, I'd expect them to crack off returning similar results but over time they should start to drift apart. Paper trading adds confidence & confidence to trade either one & that's paper trading will decide.

*I'm wondering*
Really, can an old lean momentum strategy be given a new lease of life by swapping out a momentum indicator with fresh modern momentum coding - only time will tell.

*The old Momentum strategy has been renamed*
The "HappyCat Strategy" remains unchanged but the old "Momentum Strategy" will be renamed as the "HappyCat v2 Strategy". They both enjoy a similar logo with slight differences to define them.

*Comparisons have started*
The next few captures are a snapshot of how they currently compare.




*1. "The HappyCat Strategy"














2. The HappyCat v2 Strategy (the old "Momentum Strategy, revamped & renamed)


*

*


*
Skate.


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## Newt (3 August 2020)

I'm just not sure about Mr Happycat 2 - his gold skin is a bit too flashy, and there's something about his pose that makes him look like he's hiding something?

V1 however looks much more trustworthy


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## Skate (3 August 2020)

Newt said:


> I'm just not sure about Mr Happycat 2 - his gold skin is a bit too flashy, and there's something about his pose that makes him look like he's hiding something? V1 however looks much more trustworthy




@Newt *you might be on to something there*
What HappyCat v2 hides the exit strategy that relies on "momentum" to switch off. Admittedly it will be excruciating waiting for momentum to switch especially when you are looking at the share price is in freefall. Nerves of steel will be required to trade this strategy as designed.

*It's happened to me*
In saying this, we have all experienced selling a position only to see the position reverse & take back off as soon as we sell. HappyCat v2 alleviates this issue by hanging onto positions "when" the buy condition is still "true".

*FYI *
The exit condition is the reverse of the entry condition, meaning the momentum is either on or off - there is no in-between.

Skate.


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## Skate (3 August 2020)

*Chart Example - it can be excruciating to watch*
@Newt let me show you the "dark side" of the shiny "Happycat".

*The momentum ribbon is for individual stock* (not applied to an index)
A position is sold when the momentum ribbon turns red. The strategy buy when the ribbon is green & sell when the ribbon turns red, simple & normally effective. (look at the hold period & imagine the feeling of missing the "huge" move) Momentum is a mathematical formula applied to individual stock & it's not a filter applied to an index.

*It pays to remember this is the exception "NOT" the rule*
The chart is posted to display a negative side trading momentum (entering & exiting on momentum only).




Skate.


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## Newt (3 August 2020)

Holy cow, that would be very hard to stomach Skate.

Hard to believe it pulls that much profit when a trade like that can be holding up the portfolio.  Very strange business at times this trading....


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## Trav. (3 August 2020)

Skate said:


> The exit condition is the reverse of the entry condition, meaning the momentum is either on or off - *there is no in-between*.




@Skate I took some inspiration from your post above as I did some further education on momentum and decided to try a few different things in my code which showed some interesting results. 

The *there is no in-between *had me think about RSI and Stochastic's again and the ability to set levels for overbought / oversold signals and obviously anywhere in between.....

So I ended up running some tests to see if a better entry 'up trend' detection could be defined instead of using a ROC filter on the relevant sector, and yes you can define a better entry condition.

Thanks for the inspiration.

Cheers
Trav


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## Skate (4 August 2020)

Trav. said:


> The *there is no in-between *had me think about RSI and Stochastic's again and the ability to set levels for overbought / oversold signals and obviously anywhere in between.....




@Trav. I'm glad you mentioned RSI & Stochastic a momentum oscillator giving me the opportunity to expand further about momentum & momentum oscillators. These oscillators are leading indicators that can "signal a possible trend change" that is yet to start helping to gauge the strength of a trend. The adjustable time period means these indicators are user friendly & can be finely tuned.
*
How does a momentum indicator work?*
A Momentum Oscillator moves between an upper & lower bands. When a "Momentum Oscillator" reaches the upper & lower boundaries "indicate" that the stock may be overbought or oversold.

*The “HappyCat Strategy” uses a different way to calculate momentum *
The HappyCat Strategy calculates momentum over a period from bar to bar. The mathematical calculations use two values, such as two points that measure the rate & speed of the average change in price. The entry signal uses a smoothing effect "using the average" of the price bar. Using the average of the price makes it easier to pick a confirmed trend. Using this method of entry allows multiple entries positions rather than just one. The exit signal is the reverse of the entry condition. It's not so much when you buy within the trend but where you buy eliminates most of the false signals.

*The adjustable time period of the “HappyCat Strategy” *
Optimising the lookback period helps gauge the strength & momentum of a trend but also typically signal if a market is overbought or oversold, which can point to a stalling or reversal of the trend. The hardest part trading the “HappyCat Strategy” is getting past the notion that there is a right & wrong time to enter a trade. There isn't a "right & wrong" time as the price is random. System trading relies heavily on trade management ensuring that you are "never right or wrong". With the “HappyCat Strategy” parameters & settings there is only "get in & get out" alleviating any grey areas of interpretation.

Skate.


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## Skate (4 August 2020)

Newt said:


> Holy cow, that would be very hard to stomach. Hard to believe it pulls that much profit when a trade like that can be holding up the portfolio.  Very strange business at times this trading....




*There is a premium to be paid for added security*
The "HappyCat Strategy", (version 1) the "original" has the protection level I'm comfortable trading. With trading, it's always a compromise between results & stomachable results. Each layer of protection ultimately has a cost to be paid, meaning it's a tradeoff that varies in degrees between traders as risk tolerances vary. (Version 2) of the "HappyCat Strategy" peels back the layers of protection & the results are pleasing but sometimes it can be a horror show to watch. The "HappyCat Strategy" (version 3) is really (version 2) with one layer of protection added. 

*The simplicity of the extra layer of protection in (version 3)*
The added layer of protection is quite simple. If the position fails to keep going "up" after a slight pullback - "exit" it's that simple.

*Examples of the three versions of the "HappyCat Strategy" is below (NEA)*
This is the original version, the version I would be happy to trade if "paper trading" mimics my backtest results.







*The "HappyCat Strategy" (version 2) has no protection levels* (the strategy buys & exits on momentum)






*The "HappyCat Strategy" (version 3) has "one level of  protection" added* (If the position fails to keep going "up" after a slight pullback - "exit" )





*In the next post*
I'll post a comparison of the last financial year backtest results for the three versions (1st July 2019 to 30th June 2020) to visually gauge the "price" when you add layers of protection.

Skate.


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## Skate (4 August 2020)

*The "HappyCat Strategy" comparisons between the versions*




Skate.


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## Skate (4 August 2020)

TraderJimmy said:


> Hi everyone, been lurking here for a few weeks - reading the phenomenal amount of material. I have not traded shares directly before, but have always been drawn to it. My plan is to research and learn, specifically systematic trading approaches. I have a background in software development and like the methodolical approach, so I think it will work well for me, but we'll see. I'd like to then papertrade one or two methods that appeal to my personality and stage in life / risk appetite. Following that, I will trade the system that has ticked as many boxes as possible. Cheers




*Members are joining the "Aussie Stock Forums" to learn how to trade & trade profitably *
@TraderJimmy is typical of new members seeking the help of others without fully releasing the effort required to learn. It’s frustrating & time-consuming trying to figuring out what trading is all about. Posting information that I found relevant hopefully shortens their learning curve. Learning & bouncing ideas off each other is the very essence of the "Dump it here" thread.

*The "Dump it here thread" keeps growing *
3593 posts makes it near impossible to set the time aside to read the complete thread & absorb its content.

*Reading the entire "Dump it here" thread*
As Sweet Brown famously said "ain't nobody got time for that" & admittedly it's a big ask.

*I would like to talk about Kimberly Wilkins*
Who? Kimberly Wilkins is better known to the world as Sweet Brown. Kimberly was in the right place at the right time to become an internet sensation. Her declaration of, "Ain't nobody got time for that!" went viral, garnering millions and millions of views on YouTube that lifted her lifestyle. 

*The original*


*Better version remix*


Skate.


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## Skate (6 August 2020)

Trav. said:


> As mentioned over in the Dump It Here thread I thought about the use of momentum So after reading this I decided to run a few tests and found some improvement in my back test results - (at) what level you want to enter the market with (typical Oversold = 20 and Overbought = 80) a level that confirms an uptrend.




*Stimulating ideas*
@Trav. is posting some stimulating ideas at the moment. His last thought-provoking idea is "at what level do you enter a trend" using the typical Oversold & Overbought levels. @peter2 has referenced "Swing Trading" in over 180 posts talking about "trend trading", "swing trading" & "momentum trading" all in the same breath so it's only fitting that I try to combine them into a tradable strategy - that's the initial brief I gave myself.


peter2 said:


> My trading methodology is very similar to that documented by @Skate . We need prices to move higher on all time frames. You may call it trend, swing or momentum trading.




*I get the feeling Peter enjoys swing trading taking quick profits *
Taking quick profits the gains might be smaller, but when he is doing it consistently I'm sure trading this way compounds into excellent system returns. Swing Trading & taking quick profits is totally foreign to how I trade.


peter2 said:


> The trades based on the daily charts will be much shorter in duration as they're designed to capture smaller price swings.




*I've got an idea*
What if we incorporate a strategy that can take advantage of both worlds using Trav's Oversold & Overbought idea & Peter's Swing Trading methodology. By combining these two ideas using a defined level between "Oversold & Overbought" to enter the trend. Sharpen the parameters so the "Swing Trades" can be held longer.

*Long posts can get boring to read*
I'll post my latest research over a few post to try & hold your interest with a more detailed explanation of my current thinking.

Skate.


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## Skate (6 August 2020)

*How do you identify the beginning & end of a price swing*
When markets exhibit extreme volatility as with the recent COVID-19 flash crash, traders move away from longer-term trading methods because of their devastating drawdowns & start to gravitate towards more nimble strategies trying to catch shorter-term price moves. Among the many short-term trading methods, swing trading offers a good middle ground that makes trading more manageable.

*Traders may use a variety of methods to identify the beginnings & endings of a price swing*
These methods usually include patterns formed by support/resistance, (oversold & overbought) or a multitude of momentum indicators. The approach I want to talk about the humble "relative strength index" (RSI), a momentum indicator.

*The (RSI) identifies potentially overbought & oversold levels*
However, an (RSI) with values that Trav quoted (80 & 20) will have to be discarded if we are to take advantage of entering a confirmed trend sooner rather than later. The (RSI) provides signals about bullish & bearish price, something I can work with.

*The (RSI) is displayed as an oscillator *
An oscillator is just a "line graph" that moves between two extremes from "0 to 100". My research confirms using the halfway point of the oscillator (50) to identify short-term price swing has the ability to catch fairly large trends before reaching the overbought level.

*Using a short lookback period to increase the sensitivity of the indicator*
Combining a short lookback period with an (RSI) & entering a position when the close is greater than the (50) level allow you to remain in an uptrend for a longer period. Using a level higher than (50) is counterproductive with a short lookback period. 

*Examples to follow*
I'll post up some backtest results as examples of how the humble (RSI) can be utilised to our advantage.

Skate.


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## Skate (6 August 2020)

*These are the Backtest results over three different time periods*
1. 2019 Calendar Year
2. 2019- 2020 Financial Year
3. 2020 Year to date




Skate.


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## Skate (6 August 2020)

*Swing trading can still deliver larger gains *
A stock with enough initial strength can be held for a bigger gain giving the position room to run. Taking profits when they come can string together a number of gains back-to-back & your portfolio can turn a great result. The usual swing trading holding period is short but stronger gains mean longer hold periods. You'll often see stocks go up just after you sell & kick yourself for selling too early. Technical analysis is well suited to swing trading as it allows you to focus on buying positions with good momentum. 

*Chart & Swing Indicator displayed*



Skate.


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## Skate (7 August 2020)

*I always appreciate when others share*
I'm like most members & get my share of private messages sharing & bouncing ideas around. Being a solidarity keyboard trader you tend to wonder what others are trading. I was also wondering if there is a trading benchmark out there that you can use to compare your trading results against? - Sometimes the simplest word or sentence can be the catalysis to make you re-evaluate your trading style or methodology always looking for improvements. Learning is always evolving.

*I have a few strategies under evaluation at the moment *(That I would like to share)
I'd like to share some backtest captures of 3 strategies (with 3 different time periods) that are under evaluation at the moment.
*
The three strategies*
1. The KingFisher Strategy
2. The PocketPivot Strategy
3. The Swing Trading Strategy

*# Backtest period*
1st January 2019 to 30th December 2019 (2019 Calendar Year)







*# Backtest period*
1st July 2019 to 30th June 2020 (2019/2020 Financial Year)







*# Backtest period (YTD)*
1st July 2020 to 6th August 2019 (2020/2021 Calendar Year-to-Date)





Skate.


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## Skate (7 August 2020)

*I have a fair few strategies that are completed, tradable & parked at the moment *(There are three that I would like to share)
I'd like to share a few backtest captures of 3 strategies (with 3 different time periods) that have gone full circle of evaluation & are parked for future use.

*The three strategies*
1. The Bollinger Band Strategy
2. The Darvas Strategy
3. The Donchian Strategy

*# Backtest period*
1st January 2019 to 30th December 2019 (2019 Calendar Year)







*# Backtest period*
1st July 2019 to 30th June 2020 (2019/2020 Financial Year)







*# Backtest period (YTD)*
1st July 2020 to 6th August 2019 (2020/2021 Calendar Year-to-Date)





Skate.


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## Skate (7 August 2020)

*A comparison to a live trading strategy*
The previous backtest results posted above are for 3 strategies "under evaluation" & 3 completed "parked strategies"

*The HYBRID Strategy*
The backtest results below is from one of my "Live" trading strategies (The HYBRID Strategy) Why? for a direct comparison to the backtest in the previous posts above.





Skate.


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## qldfrog (7 August 2020)

@Skate, thanks for all this data.Sadly unable to give it the time it deserves yet, hopefully will be able to process these info in a couple weeks;
Absence of comments does not always equals showing disinterest 
Great job!!!


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## Skate (7 August 2020)

Skate.


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## Skate (7 August 2020)

*   AMI  *26,315  @  $0.54



*   IFN *17,916 @  $0.96





Skate.


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## Skate (7 August 2020)

* AMI *  28,070  @  $0.54
* WZR*  66,666  @  $0.21




* CLQ*  88,405  @  $0.18
* IMA * 79,565  @  $0.20





Skate.


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## Fury (7 August 2020)

Hi Skate,
Truly appreciate the information overload you're providing.
As someone relatively new to trading i'm trying to research as much as possible as I can and make my own consensus on what entry/exit triggers i care to utilize. I think this is an incredibly valuable point you are trying to drill home as opposed to the "what stock should i buy" question that constantly gets thrown around on other mediums.
Seeing back test results gives an idea on how things perform however without understanding (or visibility), the underlying principles behind these (eg: what momentum indicators are being used) i'm finding it hard to determine what you're doing behind the scenes.
All I can do is run my own evaluation on your buy and sell items to try and determine if they suit (to my limited knowledge).

Looking at IFN for instance, I see the following:
- Volume has increased this week but price has not followed.
- RSI is above 50, below 70 (also showing bearish divergence)
- Stoch is a touch above 80 (maybe overbought)
- Stoch RSI is around 50
- MACD signal line is above (maybe close to cross)
- 4MA's appear to be aligned correctly (probably not as relevant)

I guess there's a lot more too it that i'm clearly not seeing and am unaware of as yet...
I'll continue playing along at home


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## qldfrog (8 August 2020)

Fury said:


> Hi Skate,
> Truly appreciate the information overload you're providing.
> As someone relatively new to trading i'm trying to research as much as possible as I can and make my own consensus on what entry/exit triggers i care to utilize. I think this is an incredibly valuable point you are trying to drill home as opposed to the "what stock should i buy" question that constantly gets thrown around on other mediums.
> Seeing back test results gives an idea on how things perform however without understanding (or visibility), the underlying principles behind these (eg: what momentum indicators are being used) i'm finding it hard to determine what you're doing behind the scenes.
> ...



One of the beauty to system trading is you are removed from announcements balancw sheets etc
But ifn is under a takeover attempt.you may or not...decide to exclude it from your systems as these stocks usually display unusual behaviour
My 2c on this specific stock


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## Fury (8 August 2020)

And to look at the other side of the equation...
AMI
- Volume is slightly increased over previous weeks although it is higher post covid than pre covid.
- RSI is just above 50, below 70 (also showing bearish divergence)
- Stoch is below 50 but trending up
- Stoch RSI is below 50 but trending up
- MACD signal line is above and trending down
- 4MA's - 100ma is below the 200ma, but all are trending up.

I'm completely unsure about your sell signal on this one, especially with the price of gold increasing and hitting ATH's.


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## Country Lad (8 August 2020)

Fury said:


> And to look at the other side of the equation...
> AMI
> - Volume is slightly increased over previous weeks although it is higher post covid than pre covid.
> - RSI is just above 50, below 70 (also showing bearish divergence)
> ...



@Fury it may be best to have a look at another share to follow Mr Skates systems.  IFN will no longer show any signs of up or down, just sideways as it has a takeover offer from Iberdrola Renewables Australia Pty Limited which the IFN directors are recommending.  The only movement would be if someone else comes in with another offer and the charts won't give any indication of that.


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## Fury (8 August 2020)

Country Lad said:


> @Fury it may be best to have a look at another share to follow Mr Skates systems.  IFN will no longer show any signs of up or down, just sideways as it has a takeover offer from Iberdrola Renewables Australia Pty Limited which the IFN directors are recommending.  The only movement would be if someone else comes in with another offer and the charts won't give any indication of that.



Noted, I will play a long at home in following weeks


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## Skate (8 August 2020)

Fury said:


> Hi Skate, Truly appreciate the information overload you're providing. As someone relatively new to trading *i'm trying to research as much as possible as I can and make my own consensus on what entry/exit triggers i care to utilize.* I think this is an incredibly valuable point you are trying to drill home. Seeing back test results gives an idea on how things perform however without understanding (or visibility), the underlying principles behind these (eg: *what momentum indicators are being used*) i'm finding it hard to determine what you're doing behind the scenes. "Looking at IFN for instance"
> *I guess there's a lot more too it that i'm clearly not seeing and am unaware of as yet... *I'll continue playing along at home




@Fury you have raised two posts that need to be answered. I've been waiting to see if others would answer your posts as it can be unhealthy hearing one person's point of view all the time. It was encouraging to read in your first post "my bolding": *"I'm trying to research as much as possible as I can and make my own consensus on what entry/exit triggers I care to utilize" *kudos for doing this!

*You said: "What momentum indicators are being used"*
Well frankly, it doesn't matter. There are so many momentum indicators out there you are spoilt for choice. I've recently made a post about the old humble (RSI) indicator so I will use the (RSI) & apply it to the chart of (INF) in two different time frames.

*The (RSI) Indicator *(recapping)
The (RSI) identifies potentially overbought & oversold levels that may reverse direction. However, its default lookback period of (14) doesn't work well as the price tends to remain in limbo between its 30 & 70 levels for long periods, catching fairly large drawdowns before reaching overbought or oversold levels. Decreasing the lookback period increases the indicators’ sensitivity. I simply optimised the 14-period (RSI) to a smaller-period.

*I'll answer your 2 posts over a series as I want to explain it in a few different ways *
Learning from others shouldn't be underestimated. As an example, if traders wanted to make easy money (in the next series of charts) buy Duc's blue bars & sell the red ones. Even in its RAW state, buying & selling the coloured bars you would be rolling in dough. I'll be using The "Duc Strategy" to add a bit more flavour for others to follow along. Give me a few minutes to capture some charts for the explanation.

Skate.


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## Skate (8 August 2020)

Country Lad said:


> @Fury it may be best to have a look at another share to follow Mr Skates systems.  *IFN will no longer show any signs of up or down, just sideways as it has a takeover offer from Iberdrola Renewables Australia Pty Limited which the IFN directors are recommending*.  The only movement would be if someone else comes in with another offer and the charts won't give any indication of that.




@Fury, @Country Lad raises a very important point of having a "Trading Plan". 

*"A Trading Plan" *
A trading plan "decides" if you will enter a new position, not the strategy.

*When systematic trading *
A "Trading Plan" trumps a "Trading Strategy". Buy & sell signals are generated using a mathematical formula & nothing more. One of my trading rules is that I don't buy a position until I have checked the announcements & I will not take a new "buy position" that is under a "takeover offer" or a "scheme of arrangement". Another rule is: I will sell a position that is currently held "after a week" of a "take over" being advised & not before.

*Paper Trading*
When paper trading a strategy you are trading the raw signals that are "not conditional" of a "Trading Plan". The "HappyCat Strategy" is being paper traded & it trades the raw signals that the "Exploration Analysis" coughs up. FYI, the signals have been ranked, positionsized with the "pre-auction buy & sell offer". Paper trading is a "confirmation" stage. The strategy undergoing this stage will confirm if there is an alignment with the backtest as "most times" they fail to live up to expectations (IMHO). 

*Live trading off backtest results "guarantees" you will be a millionaire in a decade.* 
But in reality, live trading on the backtest results, I can "guarantee" you that you'll be a "pauper" quick smart.

*IFN*
Let's forget about the off-market takeover offer & make some "raw" assumptions. There will be more-to-follow after I make a few posts that will hopefully tie everything together.

Skate.


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## Skate (8 August 2020)

Skate.


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## Skate (8 August 2020)

Newt said:


> Forever indebted to many of you for the constant inspiration, stimulation, and backside kicks from time to time. Don't want to affect new traders here too much until I have a better track record under my belt, *but greatly appreciate the time and effort so many put in to sharing performance and learning here. "Never underestimate the benefit of frank benchmarking against your peers"*




*A catalysis*
After @Newt made those comments I decided to post up some backtest results yesterday of a few of my strategies "under evaluation" as well as some parked "completed" strategies. Trading is a lonely exercise & mostly boring. Seeing what other traders are up to goes somewhat to benchmark your own ongoing progress. The COVID-19 flash crash not only displayed the importance of emotions & trader sentiment but also allowed you to have a glimpse of how other traders handled the situation that was presented. Unfortunately, not everyone saw it as an opportunity at the time. 

*Decisions*
As in life, trading is all about making one decision after another. While I was posting my wife asked me a question breaking my concentration at the time that's worthy of a post in itself.

Skate.


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## Skate (8 August 2020)

peter2 said:


> I play tennis with a guy called Bob. He's very consistent and I know the rallies will be long when Bob's on the other side of the net. I try to hit a winner against Bob and he just waits for me to make a mistake. Bob wins more points than I do.




*I have a neighbour called "Bob"*
Bob, my next-door neighbour & I "use to" play cards every day. Yesterday it was raining so I decided to make a few posts being a slow day. My wife broke my concentration by asking me a question.

*Mrs Skate, "*Why don't you play cards with Bob anymore?"
*Skate,* "Would you play with a cheat & a liar"
*Mrs Skate*, "No I wouldn't"
*Skate,* "Neither will Bob"

Skate.


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## Skate (8 August 2020)

Fury said:


> Looking at IFN for instance, I guess there's a lot more too it that i'm clearly not seeing and am unaware of as yet...




*Trying to figure out trading can be frustrating*
Brains are an overrated attribute when it comes to trading. Smart people tend to think logically & have a hard time dealing with a market that ignores what should be painfully obvious. The market is very emotional & illogical at times & if you are too analytical, you will be surprised often. 

*Using logic to argue with a lunatic is useless *
Using logic to figure what the market might do on any given day is equally useless.

*I'm going from memory *
I read years ago about two "Nobel Prize winners" for economics. My recollection can be a little fuzzy but the story will deliver the point I'm trying to make. Robert Merton & Myron Scholes both University teachers got together & developed a formula for evaluating stock options. Splitting the one million dollar prize money they now had the chance to put their theory into practice. Their trading didn't go as expected & in the process, they lost their money, who would have thought.

*Why do traders lose at trading?*
The answer is that we are humans not machines. When it comes to trading you need to be clinical, resist being emotional & irrational. We are not wired to trade successfully & to overcome that weakness you have to have a system, a trading system or trading strategy. Having a system or strategy to trigger an action without debate adds value & allows you to sleep at night.

*Trading is a basic process *
Let's not try to make it complicated. I'll explain more about trading before we move on to answer your concerns about (IFN) & (AMI)

Skate.


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## Skate (8 August 2020)

*Trading is a basic process*
When you strip back trading it's all about trading the price differential, catching trends, knowing when to get in & when to get out. Money management takes care of the rest.

*Price differential*
I'm not a fancy trader, I jump on confirmed trends & hop off in a timely manner looking for the next ride. Trends are happening in all timeframes & picking the strong movers is the secret. Knowing when to hop-on & hop-off is the tricky part & the purchase "needs to be timed". Timing is everything in this game. 

*Trading systematically *
To be honest, my strike rate of winners is around 50%, so half of the time my strategy is okay but sufficient enough to be profitable on balance. My research suggests that successful traders use technicals which is another way of saying - they use a "mechanical trading system". The vast majority of these successful traders have developed their own specific methodology combining rigorous risk management & testing. 

*Beginners *
They all have trouble finding their own level at times without realising how time-consuming it is & most never want to put in that level of effort. Reading is one thing, memorising is another. Sadly we have lost the art to memorise important information. 

*The evidence *(it happens to us all)
Someone telling a story will at times get lost & ask _"what was I just saying as I've lost my train of thought" - _normally most will struggle to answer that because they were not listening. 

*I don't tell jokes *
People have lost the art of listening & because of this I don't tell jokes. I realise most don't listen to your joke because they are thinking of a joke to tell you in return.

Skate.


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## Skate (8 August 2020)

*Trading has no rules *
Trading is "Bat-**** scary" for beginners because there are "NO" rules. When it comes to trading most will not take the time to self educate & formulate a trading plan encapsulating a series of rules to follow.

*It happens with great regularity*
I've educated more people than I care to remember & most will make the same statement with pride "I'm now fully qualified". They fail to realise that they are now fully qualified to "learn on their own". Learning is a never-ending process. 

*Education is the key.*
“Education is something that is done to you. Learning is something you do for yourself."

*The Action Strategy*
The "Action Strategy" is from the wisdom of another member. @ducati916 drops gems all over the place with great regularity, collecting them & joining the dots has given rise to a trading strategy (The Action Strategy) FYI, others have had the courage to invest along with this strategy. 

*This is how the "Action Strategy" got its name*
“If what you learn leads to knowledge, you become a fool but if what you learn leads to *"Action"*, you can become wealthy” 

Skate.


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## ducati916 (8 August 2020)

*Why do traders lose at trading?*
The answer is that we are humans not machines. When it comes to trading you need to be clinical, resist being emotional & irrational. We are not wired to trade successfully & to overcome that weakness you have to have a system, a trading system or trading strategy. Having a system or strategy to trigger an action without debate adds value & allows you to sleep at night.

Trading is competitive. It is a competition where there are winners and losers. It is not necessarily a zero sum game, but it is close in most respects. If you do not learn the rules of the game (competition) you will lose and probably lose big. This should inform you that it is not simply what you do: ie. your strategy/tactic/system, but how other market participants are actually going to attack that system. Is your system and more importantly, are you, ready to be punched in the face? It was Tyson who said, 'everybody has a plan until they get punched in the face'. You will be punched. You will be suckered, misled, lied to and everything in-between, by everybody: the companies financials, market makers, the media, other market participants dressing the tape.

To survive and thrive in this gladiatorial arena you must first intimately understand your edge and where it comes from. Where it works, where it doesn't. Where it doesn't, you do not trade that market, sector, stock, whatever. 

So this thread is where the systems chaps hang out.

You have a system. It trades 'X'. It is backtested, drawdown does not exceed 23% across a market history of 10 years. Looks good. You forward test it, drawdown does not exceed 17.5%. Looks good. You trade it live. You immediately go into drawdown over a period of 3 weeks by let's say 39%. Is your system broken? What do you actually do at this point? If you cannot answer this question, you have no business in the markets yet.

I'm interested in the answers.

jog on
duc


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## Skate (8 August 2020)

ducati916 said:


> So this thread is where the systems chaps hang out.




*Duc I was just about to make a post about a simple strategy that uses volatility & volume *
"The Ducati Blue Bar Strategy" when it comes to a trading strategy is simple in design & structure as it incorporates (volatility & volume). As traders, we don't need a fancy strategy to make money. If you traded nothing but the blue & red bars of the "The Ducati Blue Bar Strategy" you would be tripping over yourself going to the bank, it's that good. 

*I trade the price differentials*
"The Ducati Blue Bar Strategy" is uncannily accurate when applied to all timeframes, the signals are fast & snappy. Adding prudent "Money management" with a sharp "PositionScore" brings this strategy to life. Trading the bounce (the blue bars) has been very profitable so far. 

*Trading the bounce*
The "Ducati Blue Bar Strategy" trades the "bounce" by picking when a trend turns using two indicators "volatility & volume". If the trend is up (Blue Bars) we buy & if the trend is down (Red Bars) we sell - the strategy is simple, effective & clean. Duc, your idea using "volatility & volume" to generate signals is clever but with the right "Parameters, Filters & PositionScore" the profitability of the strategy jumps off the charts. 

*I'll use the "Ducati Blue Bar Strategy" charts for demonstration purposes*
@Fury questions related to momentum so I want to post some "visual" example of how the "HappyCat Strategy" uses momentum to enter & exit a position using an (RSI) indicator explaining what I've done to get it to work in my favour. I will use the two securities in question (IFN) & (AMI) & the "Ducati Blue Bar Strategy" chart.

*The (RSI) Indicator *(recapping)
The (RSI) identifies potentially overbought & oversold levels that may reverse direction as it's a momentum indicator. However, its default lookback period of (14/15) doesn't work well. My aim was to improve the sensitivity of the indicator while at the same time "colour code" the (RSI) line to indicate when the momentum is on & when it's off.

Skate.


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## Skate (8 August 2020)

*New Trading Idea*
With all trading ideas, we are trying to tilt the odds of success in our favour by buying into trends whilst minimizing our losses. Buying good companies at the "right time" & getting off quickly "at the right time" when it all goes wrong is the simplicity of the system.

*"The Ducati Daily Blue Bar strategy" *
This strategy simply buys the first "blue bar" & sells the first "red bar" it simple & surprisingly effective. I've used @peter2 idea of colour coding the trend with "Blue Bars" so it's simple to follow along by looking at the charts. The "Blue" bars meets Duc's two conditions & the "Red" bars are when Duc's conditions "are not met". I've profited from Duc's advice where others might not have realised the opportunity that was posted. "The Ducati Daily Blue Bar Strategy" is clear to understand. The first "blue bar" is the signal bar (the white arrow) & we buy on the "next blue bar" at the open (the white square). The position is held till the first "red bar" & sell that position on the open on the next "red bar".

*Making easy money*
Trading the "Blue" bars & selling on the "Red" bar is a recipe for success. 

*Using a modified (RSI)*
Let's turn or focus onto "Skate's modified RSI" indicator & explain how it works in relation to the "HappyCat Strategy"

*The "HappyCat Strategy" is a pure Momentum Strategy*
Momentum shifts the share price, "that's a given". Our decisions when to enter & when to exit a move really determines if we are to be profitable in the long run. I've calculated the momentum over a period from bar to bar as the entry signal. The exit signal is the reverse of the entry condition.

*Momentum is either on or off* ("Skate's modified RSI" indicator is green or red)
Momentum trading is simply trading the trend using the "momentum effect". The strategy works on the principle that momentum is either on or it's off there is no middle ground. Additional setting & parameters assist in the fine-tuning. The secret of momentum trading is the ability to filter out the false signals. The standard (RSI) indicator identifies potentially overbought & oversold levels that may reverse direction. However, the default lookback period of (14/15) doesn't work well. "Skate's modified RSI" is the stock standard (RSI) with a modified lookback period, nothing elaborate at all. The colour coding of the modified indicator identifies when the momentum is on & off. We buy when it's on & use the "off" period as a layer of our exit strategy.




*Looking at the standard (RSI) line *
The standard RSI is (the bottom line) that I found unhelpful as far as I'm concerned. The sensitivity of signals are found wanting using the (14/15) lookback period.

Skate.


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## Skate (8 August 2020)

Fury said:


> I'm completely unsure about your sell signal on this one, especially with the price of gold increasing and hitting ATH's.




@Fury the "HappyCat Strategy" indicates that momentum has stalled after entering the position two weeks ago. If the strategy gets it wrong & sells too early "who cares" not me - we can always buy back in.










Fury said:


> I'm completely unsure about your sell signal on this one, especially with the price of gold increasing and hitting ATH's.




*The Buy & Sell pressure chart*
They say a picture "paints a thousand words" & the picture doesn't hold the same view as you. What "you or I think" when it comes to trading is irrelevant. If you aspire to be a systematic trader "trade the signals" as they come along - you have one job to do & it's our responsibility not to stuff it up.




*When you have one job*
 "just do it" correctly




Skate.


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## Skate (8 August 2020)

*I was unimpressed with the recent COVID-19 flash crash *(I had to give some of my profits back)
The "HappyCat Strategy" buys momentum. Using momentum to enter a trend is a handy tool but as you can see from the backtest below (version two) exits when momentum turns off where (version one) relies on a combination of confirmations that the momentum has really stopped before it exits. 

*The exit really determines if we are to be profitable in the long run*
There are no free lunches when it comes to trading, it all about swings & roundabouts. Trading is a tradeoff. 

*Sharing is caring*
I'm very curious how other strategies performed during this period. 

*I would be very interested if others would post a backtest of their strategy during the recent COVID-19 period*
The backtest period is from: "1st January 2020 to 30th June 2020" (All ordinaries Index)

*These are the "HappyCat" backtest results from the COVID-19 period - 1st January 2020 to 30th June 2020*




Skate.


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## Skate (8 August 2020)

*Moreover *(for full disclosure) 
The "HappyCat v2 Strategy" was the winner in the previous backtest "shoot off" so it's only fair that I balance the argument to which is the "better strategy" (v1 or v2). I've included a backtest for the last 365 day or exactly one year for comparison purposes. 

*Backtest report*
It was not fair that I only post a backtest of the last half of "2019/2020" financial year or the "first half" of the calendar year. Cherry-picking a time period is rarely helpful.

*# Backtest period - the last 365 days (1 year backdated from today)*
The backtest report is for the previous 365 days 







*# Portfolio Equity curve
*




*Sometimes too much information is too much*


Fury said:


> Truly appreciate the information overload you're providing.




Skate.


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## Sir Burr (8 August 2020)

ducati916 said:


> Why do traders lose at trading?
> You have a system. It trades 'X'. It is backtested, drawdown does not exceed 23% across a market history of 10 years. Looks good. You forward test it, drawdown does not exceed 17.5%. Looks good. You trade it live. You immediately go into drawdown over a period of 3 weeks by let's say 39%. Is your system broken? What do you actually do at this point? If you cannot answer this question, you have no business in the markets yet.
> 
> I'm interested in the answers.



A top shelf question Duc. I'd be sweating like a snowman in heat!

Every time my system exits with the index filter then re-enters, it immediately goes into drawdown as I sell off and crawls back. Happening the past few months yet again and never nice but don't deviate.

39% would be nasty. In that particular case, I'd be going back another 10 years (20 total) and check results. I'd also be looking at the recent market period and if there was something similar in the past 20 years to compare before considering it broken.

BTW if you had said it was already backtested 20 years, then what? Again looking at the past for a similar market. If most recent was actually worse, then consider continuing. If not, then maybe adjust with fresh new backtests


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## Newt (8 August 2020)

Hi Skate,

I started to write this post Fri night then held off, but in keeping with the sharing shown so often here, have written up some backtests from my newest system, cooked up pre-Easter in the heat of Covid.  For over a year I'd meant to do a serious dis-assembly and rebuild of CAM in line with my own experiences and preferences.  During this time finally took the trouble to track entry and exits on the price pane, calculate and display % profit for closed trades.  Seeing backtests from yourself and others led to me targetting certain goals, including:

- (hopefully) improved average win
- reduced average loss (previoiusly always over 15%)
- (hopefully) reduced DD even in very difficult periods
- take more weekly trades, hopefully with smoother equity curve, faster entries into new strong market periods

Many ideas for entry, exit, trailing stop, index filtering were tried to create new systems in addition to CAM.  A couple of ideas showed more promise than I expected and warranted more attention.  The backtests below are from a strategy incorporating principles of your variable trailing stops (tigthening off ROC and index filter), trend filter ideas of my own, entry signals inspired by Panda posts many months ago.  After many months of stress-testing parameters decided to trade this from May.

Have heard Mike Bellafiore say in "Chat with Trader" podcasts that people underestimate just how hard it is to get "edge", and that even the best traders may have now greater than 50% winning trades.  He went on to say a lot of "psychology" challenges stem from having to cope with poor performance and edge.

Anyhow, last few months the stronger expected edge versus previous systems has held for this beast.  I'm sharing these tests with and without ticker ZNO included, to show how just one stock can lead your backtesting and optimising astray if not careful.  Actually that was another goal here - to reduce reliance on long trends in a small number of tickers (something I'd designed my previous strategy to do from the ground up), but ironically a strong trend in ZNO still affected outcomes. 

*8/8/19 - 8/8/20 (without, then with ZNO - All ords and historical constituents):*









*1/1/19 - 31/12/19 (without, then with ZNO - All ords and historical constituents):*


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## qldfrog (8 August 2020)

Newt said:


> Hi Skate,
> 
> I started to write this post Fri night then held off, but in keeping with the sharing shown so often here, have written up some backtests from my newest system, cooked up pre-Easter in the heat of Covid.  For over a year I'd meant to do a serious dis-assembly and rebuild of CAM in line with my own experiences and preferences.  During this time finally took the trouble to track entry and exits on the price pane, calculate and display % profit for closed trades.  Seeing backtests from yourself and others led to me targetting certain goals, including:
> 
> ...



Seems great.well done


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## Skate (8 August 2020)

Newt said:


> A couple of ideas showed more promise than I expected and warranted more attention. The backtests below are from a strategy incorporating principles of your variable trailing stops (tigthening off ROC and index filter), trend filter ideas of my own, entry signals inspired by Panda posts many months ago. After many months of stress-testing parameters decided to trade this from May.




@Newt *what a great post* 
Thank you for the backtest captures they are impressive, well done. No wonder you decided to trade the strategy from May. Your post is well constructed, inspirational & littered with gems. I'm glad the "Dump it here" thread inspired you to keep looking for improvements. 

*There is an old saying that I live by*
"Good is not good when better is expected". 

You should be proud of your efforts, I am. 

Skate.


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## qldfrog (9 August 2020)

Is Mr Skate in Victoria?
The current stream of data will take me weeks to analyse.
For those of us in Qld with good pleasant weather, and some freedom left, it is hard to find the time to analyse this flow, and work on it.
I believe we have just found one advantage of martial laws and dictatorship: system building LOL
Please keep the data flow, as long as Joe Blow  keep the site post safe and searchable, this is Gold


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## ducati916 (9 August 2020)

Sir Burr said:


> A top shelf question Duc. I'd be sweating like a snowman in heat!
> 
> Every time my system exits with the index filter then re-enters, it immediately goes into drawdown as I sell off and crawls back. Happening the past few months yet again and never nice but don't deviate.
> 
> ...




Your 'edge', whatever that may be, needs to be constantly monitored. It may be momo, value an indicator or combination of indicators, whatever: it needs to be monitored. Styles (tactics) gain and lose traction in markets over time. First order of business: is your edge still an edge.

The most successful systems, mechanical or otherwise, find an edge in a market truism: something that is consistent through the decades and cannot go out of fashion or be subjected to manipulation over any great period of time. Almost anything can be manipulated in the short term. The shorter the time frame, the greater the manipulation can be (that is almost a market truism).

Assuming that the above is true, generally speaking a tactic is to take a sub-set of that edge and refine it to instruments and time frames that you build your engagement with the market around. It is often the time frame element that changes in some way. Take 1 variable (since it has been discussed quite extensively on this thread) Vol.




There are 5 quite distinct time frames: (a) 2009/2013, (b) 2013/2017, (c) 2017/2020 and the current period. Now I don't backtest systems, but if I did (ignoring the current period for the moment) I would break down each period individually as a test and then the aggregate for the entire period. The point being that they will (or should be) different. Different gains/losses. This is a market truism: vol. fluctuates. Long back tests could hide that fact. That is just one example. In any given system there will be multiple factors and variables that lurk unseen or unnoticed in time frames. As a further example of what I look at, as this will be an issue if Biden takes the WH.




The point being: s**t can change and if you are not cognisant of these variables, your system may well be through the instruments you are trading.

Outliers: this catches traders out time and again. So we have an established trend. Boom. COVID happens. Market sells off. Clearly your system isn't broken, it was just never designed for something like that. The question then becomes: is the trend broken (shut down the system as many did) or is the trend intact and you double down? Well the answer is outside the scope of this post, but look at Market Bottoms and Trading the Bounce, which are really about trying to decide whether the outlier is fleeting or trend destroying.

The takeaway: know your edge, check your edge constantly against market conditions and make sure it is still relevant.

jog on
duc


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## Skate (9 August 2020)

qldfrog said:


> Is Mr Skate in Victoria?




Nope, I live in NSW.

Skate.


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## qldfrog (9 August 2020)

Skate said:


> Nope, I live in NSW.
> 
> Skate.



Missing travel maybe..i do but actually too busy right now to spend the time i need on my systems
Thanks for your time.this is the only priceless item in life


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## Newt (9 August 2020)

Fantastic post, many thanks Duc.  Skate has hinted more us would benefit from listening and then rolling our sleeves up.  We probably all pick up on different parts of your message(s) depending on trading experience, outlier "lessons" learned, and personal mindset.  We're fortunate to have such helpful information density, but sometimes it pretty hard trying to drink from the fire hose!

During the few weeks of intensive (more than F/T) effort in trying to be creative, tweaking existing systems, and backtesting noted that others here have quiet different approaches to bactktesting process, timeframes and outcomes sought.  I can now see more clearly that many years ago what I thought were filters to improve "edge" and reliability were actually filters that after many iterations were overfitting the strategy to a few strongly performing stocks over the period in question.

I still don't have the skill to reliably incorporate Vix in my strategies, BUT definitely reading ever bit of info on how Duc, Skate and others use it, watching the graph through different market periods, and yes there have been good examples over last 2 years.  Information from Norgate market internals (Cum new highs and lows) was one of a number of indirect "indicies" I've watched for many years and have now (hopefully) successfully incorporated within my market index filter.  Probably no surprise the rapid market gyrations and VIX spikes co-incide with my longer weekly system going "defensive", even though the fundamental driver is currently non-Vix.  For same reason try to follow with great interest macro Duc posts on interest rates, gold, silver.  

What you say Duc about longer timeframes makes total sense - Mike B traders would of course be working in minutes/hrs/day timeframes.  Fortunately amateur ASF traders till seem to be able to find edge reasonably reliably in the weekly charts, less so in daily - let's hope the algos don't erode that too soon in years to come.

Re backtest periods and changing edge, definitely agree there.  Looking at this with more grey hair than previously, believe its wrong to keep tweaking a strategy on the expectation of smooth returns across the years.  Skate has previously aluded to challenging test period (e.g. 2008, 2011) and Feb/March 2020 is a new one to add to that list.  Something gleaned from watching others in the strategy kitchen here is the importance of "getting the hell in there" quickly and systematically in the good times, but quickly going defensive in the tough times. 

I'd be interested to compare notes with others on a few other elements now Duc has stimulated the thought processes.  As try as I might, for systematic weekly ASX trend following, it seems difficult to stray from the points below.  I'm not worried, about this, but strongly suspect it reflects the way I create code, optimise etc.  In science, the most exciting breakthroughs tend to come from very unexpected new experimental data that doesn't fit the existing model - so in that mindset curious where others diverge/disagree.  So, the points in question:

* Early entry into breakouts is best, BUT performance often stronger as "Trend check" filters accelerate (trade off between being first in versus taking more reliable trend signal)
* Market index filter - when turned "down" or "off" - best value seems to be tightening stops - much less so blocking new trades (very strong stocks can still occur, particularly at the end of tough market periods and you don't want to miss climbing on board) - that is, use market index and individual stock momentum/strength together.    In extreme downturns, do you sell everything or wait for individual stocks to turn down?  (thought I'd never agree to doing this but the Coronacrash seriously challenges that mindset!).
* Position sizing - should this be fixed (e.g. fixed fractional) or vary according to market conditions - personally I'm very conservative on this because of the over-fitting risk in backtests (and Howard Bandy books) but interested if others increase total capital or number of positions in very strongly trending markets.  (I don't - just allow same number of positions to have larger sizing as the account capital grows (or shrinks)).
* Edge is very hard to come by and refine, but there seem to be an amazing number of market opportunities (stocks) each week in the ASX during most periods.  When you play with numerous strategies over different market regime periods, you start to realise that your strategies are often only taking a fraction of the available entries depending on starting date.  Part of this will be luck of entering at a strong/weak market period (as per Duc above) but Monte-Carlo work usually shows how many other trade paths could have occured and definitely worth monitoring
* Following from the last point, the risk of losing edge from publically sharing trade entry/exit, strategy etc here for longer timeframes is probably negligible - there are just so many ways to skin the cat and the markets are always there.

Agggh - this is bound to be getting too specific now to the point of less value for others.  Enough waffle for now.


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## Skate (9 August 2020)

Newt said:


> * Following from the last point, *the risk of losing edge from publically sharing trade entry/exit*, strategy etc here for longer timeframes *is probably negligible* - there are just so many ways to skin the cat and the markets are always there.




@Newt another amazing post & your last point is on message. I'm an oversharer but that's just me & in the scheme of things it makes no difference. There is a ton of money in the markets & I only want a very small slice.

Skate.


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## CNHTractor (9 August 2020)

Newt said:


> Fantastic post, many thanks Duc. Skate has hinted more us would benefit from listening and then rolling our sleeves up. We probably all pick up on different parts of your message(s) depending on trading experience, outlier "lessons" learned, and personal mindset. We're fortunate to have such helpful information density, but sometimes it pretty hard trying to drink from the fire hose!




@Newt , fully agree with your fantastic post.

I have read along with @Skate (& traded along  the Action Strategy) particularly since the Covid19 crash. This period has opened my eyes to Index filters. I have implemented the Index filter as a "caution" to only turn off on another indicator,  hopefully to be able to catch this stocks which take off notwithstanding the general market conditions.


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## Skate (9 August 2020)

@Newt *I'm still interested*
Would you please post a backtest capture of your new strategy with the "Portfolio Equity & Profit Table" during the recent COVID-19 period (without removing any securities) - the backtest period is from: "1st January 2020 to 30th June 2020" (All ordinaries Index)

*These are the "HappyCat" backtest results from the COVID-19 period - 1st January 2020 to 30th June 2020*
The Backtest results include the "Portfolio Equity & Profit Table"

*I've worked long & hard on the "HappyCat Strategy"*
I've found using momentum as a sentiment filter works a treat & is robust enough to withstand another black swan event (FYI, a pure momentum exit strategy works the best)




Skate.


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## Newt (9 August 2020)

Happy to help Skate.  I have a little (0.5%) slippage dialed in both ways normally - probably doesn't matter much zoomed in this close - should that be removed?


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## Skate (9 August 2020)

Newt said:


> Happy to help Skate.  I have a little (0.5%) slippage dialed in both ways normally - probably doesn't matter much zoomed in this close - should that be removed?




@Newt just post as the strategy is designed. It hard for me to accept the difference (ZNO) made to the backtest results. Outliers are a requirement for a trend trading strategy to be profitable as the small wins & losses tend to cancel themselves out.

Skate.


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## Skate (9 August 2020)

CNHTractor said:


> @Newt , fully agree with your fantastic post. *I have read along with @Skate (& traded along  the Action Strategy) *particularly since the Covid19 crash. This period has opened my eyes to Index filters. I have implemented the Index filter as a "caution" to only turn off on another indicator,  hopefully to be able to catch this stocks which take off notwithstanding the general market conditions.




@CNHTractor I'm amazed to learn that you are also trading along with the "Action Strategy". I have a few experienced traders doing the same & personally I was chuffed to learn that they were - it wasn't expected.

*Why join in?*
I would have expected a few new members wanting to get their feet wet but not seasoned traders. Honestly, I would have found it difficult "if not impossible" to trade along with an unknown strategy, created by "someone" I didn't know, nor would I have ever recommended others to do so either.

Skate.


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## Warr87 (9 August 2020)

Skate said:


> @Newt another amazing post & your last point is on message. I'm an oversharer but that's just me & in the scheme of things it makes no difference. There is a ton of money in the markets & I only want a very small slice.
> 
> Skate.



@Newt 
Losing the edge from shared entry/exits would be more of a worry if people actually followed through the system to a Tee. the psychological component of trading is much more likely to erode an edge IMO then technicals.

most people will fiddle or over-ride the system. they wont trust it and think they know best and alter it when it suits. i think people forget that the statistical results of the backtest are only valid for the system you trade. as soon as you start changing the system you have invalidated your backtest results and its now an untested system. (fixing a coding error or similar is different to fiddling with entry/exits/filters. and hopefully those are sorted in paper trading before live trading.)

that's not to discount overcrowding where more participants utilizing a common (or highly correlated) system will detract from the potential gains. but as @Skate says there is a ton of money in the markets. at our hobby scale it is unlikely to impact us too much.

also an important thing I like to remember with edge is the metaphor of an edge ... that is, the sharper an edge the quicker it will blunt. full quant strategies that exploit a razor edge will find it is short lived (think arb and HFT strats). My own systems are very basic and not exploiting nuances, but rather just riding price movement. its not a sharp edge, but it stays sharp enough throughout numerous markets to be profitable on a longer timeframe.


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## Newt (9 August 2020)

So for $300k, no slippage, All Ords universe, 20 positions on this strategy - on the left below.

On the right for comparison is my older stragey, Full ASX universe, 15 positions trading from mid 2019 (this strategy is so slow to accumulate positions it didn't make sense starting from 1/1/2020 as very positions bought and held up into the Coronacrash.










The older system is a signficantly "wilder" ride but had the surprising fortune to buy into DEG mid April.  Frankly I don't think I would have bought into DEG then in hindsight - the lower average longer term CAR, and extra element of "luck" having less positions made that strategy a handful for me to stick with honestly.

Disclaimer - I'm currently half my normal invested capital versus 2019 pre crash size - still being a "woos"  

Extra homework this year, comparisons with others, slightly better risk control (DD, average loss etc) leads me to believe I will be more likely to stay true to this latest work.  Time will tell.
Peter2 has pointed out how his trading improved when regularly posting - forces one to stay true to what they preach.


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## Newt (9 August 2020)

Warr87 said:


> @Newt
> Losing the edge from shared entry/exits would be more of a worry if people actually followed through the system to a Tee. the psychological component of trading is much more likely to erode an edge IMO then technicals.
> 
> most people will fiddle or over-ride the system. they wont trust it and think they know best and alter it when it suits. i think people forget that the statistical results of the backtest are only valid for the system you trade. as soon as you start changing the system you have invalidated your backtest results and its now an untested system. (fixing a coding error or similar is different to fiddling with entry/exits/filters. and hopefully those are sorted in paper trading before live trading.)




Very wise words Warr87 - the trader can be a huge risk unless they flawlessly execute the edge and the trades generated.  Most people totally under-estimate the work, understanding, confidence, willpower and self-awareness required.  Those that have read this far in "Dump it Here" should be getting close. 
Have tried to be honest above, but think might still have gone to the dark side with that older strategy.  Maybe I'm still not there with reduced capital allocation - arguably just another "fiddle".


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## Skate (9 August 2020)

Newt said:


> So for $300k, no slippage, All Ords universe, 20 positions on this strategy - on the left below.
> Disclaimer - I'm currently half my normal invested capital versus 2019 post crash - still being a "woos"
> Extra homework this year, comparisons with others, slightly better risk control (DD, average loss etc) leads me to believe I will be more likely to stay true to this latest work.  Time will tell.
> Peter2 has pointed out how his trading improved when regularly posting - forces one to stay true to what they preach.




*WOW*
@Newt your efforts have been rewarded, those stats are impressive, well done.

*Words of encouragement*
All I have to do is to get you to revisit "positionsize pyramiding" (ensuring every available dollar is put to work) as increasing the positions in your portfolio past 20 would be a near-impossible task.

Skate.


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## CNHTractor (9 August 2020)

Skate said:


> @CNHTractor I'm amazed to learn that you are also trading along with the "Action Strategy". I have a few experienced traders doing the same & personally I was chuffed to learn that they were - it wasn't expected.
> 
> *Why join in?*
> I would have expected a few new members wanting to get their feet wet but not seasoned traders. Honestly, I would have found it difficult "if not impossible" to trade along with an unknown strategy, created by "someone" I didn't know, nor would I have ever recommended others to do so either.
> ...




Yes, I thought I'd join in and see whether I could work out the entries and exits. Apart from looking at exits some weeks ago I haven't really had the time to investigate, in the meanwhile the strategy is performing so I continue, I will at some point double down to look at entries and exits.


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## Skate (9 August 2020)

CNHTractor said:


> Yes, I thought I'd join in and see whether I could work out the entries and exits. Apart from looking at exits some weeks ago I haven't really had the time to investigate, in the meanwhile the strategy is performing so I continue, *I will at some point double down to look at entries and exits.*




@CNHTractor I wouldn't even try to understand the entry & exits as there are so many variables with (1,311) lines of code.

*The "Action Strategy"*
Trading the "Action Strategy" was an exercise in how to trade systematically without thinking, just following the signals as they come along.


Newt said:


> the trader can be a huge risk unless they flawlessly execute the edge and the trades generated. Most people totally under-estimate the work, understanding, confidence, willpower and self-awareness required.




*System Trading has huge benefits*
@Warr87 nailed it when he said: _"Most people will fiddle or over-ride the system they won't trust and think they know best and alter it when it suits"._


Warr87 said:


> most people will fiddle or over-ride the system. they wont trust it and think they know best and alter it when it suits. i think people forget that the statistical results of the backtest are only valid for the system you trade. as soon as you start changing the system you have invalidated your backtest results and its now an untested system. (fixing a coding error or similar is different to fiddling with entry/exits/filters. and hopefully those are sorted in paper trading before live trading.)




*Fiddling & overriding your strategy*
Thinking you know better & overriding signals is a surefire way to disaster. After knowing this, some traders still can't help themselves.

Skate.


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## CNHTractor (9 August 2020)

Skate said:


> @CNHTractor I wouldn't even try to understand the entry & exits as there are so many variables with (1,311) lines of code.
> 
> *The "Action Strategy"*
> Trading the "Action Strategy" was an exercise in how to trade systematically without thinking, just following the signals as they come along.




Ah ha! Noted


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## Fury (9 August 2020)

I've been trying to formulate a response this morning, but every time a question comes up, I do a search, and end up down the rabbit hole. As an example, going off and searching "blue bars" on here brings up This which I assume is what you're referring to as the Blue Bar strategy?
As a newcomer, I want to understand the "why"... and that seems to open up more questions than it answers at this point in time. The above gives me more to research (ADX, CCI, etc...).
Had to go out and take a walk to clear my head as well.
It's clear I need to do a lot more learning on momentum indicators and work out a way in which i can backtest them.
I am currently using Trading View but it appears it can only do it on a stock by stock basis.
Ami Broker does appear to be very powerful and may be good a path to pursue.

Once again thank you and i'll re-read through all this (and probably have a lot more questions) during the week.


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## Skate (9 August 2020)

Fury said:


> I've been trying to formulate a response this morning, but every time a question comes up, I do a search, and end up down the rabbit hole. As an example, going off and searching "blue bars" on here brings up This which *I assume is what you're referring to as the Blue Bar strategy?*.




@Fury *I was referring to  the "Ducati Blue Bar Strategy"*
@ducati916 has given me a few ideas which developed into a new strategy the "Ducati Blue Bar Strategy". As usual "for me" it's all about jumping on trends & now with a few new ideas from the "Duc" I'm using those indicators to guide when its optimal to buy & sell. I have a simple trading method of riding trends. Everyone would have read the same post but I've taken the gems dropped by @ducati916 & applied the knowledge he generously passed on to everyone.

*Explanation*
I've used @peter2 idea of colour coding the trend with "Blue Bars" so it's simple to follow along by looking at the charts. The first "blue bar" is the signal bar (the white arrow) & we buy on the "next daily blue bar" at the open (the white square). The position is held till the first "red bar" & sell that position on the open on the next "red bar". It's a simple strategy I have to admit.

*Making money is the name of the game*
If you only traded one strategy the "Ducati Blue Bar Strategy" buying blue bars & selling the red bars you would be rolling in dough. This strategy is a money-making machine.

*In saying this *
"A trading system is usually most effective when "implemented consistently". One problem frequently encountered by individual traders is the "difficulty" in following a system. Sticking to a system requires discipline & discipline is often difficult to maintain in the heat of live market action, where "emotions" can rule the day & a trader may be tempted to second-guess his or her system as @Warr87 eluded to earlier".

*This is the series of post - the timeline that gave rise to the "Ducati Blue Bar Strategy" *
https://www.aussiestockforums.com/posts/1065849/
https://www.aussiestockforums.com/posts/1065921/
https://www.aussiestockforums.com/posts/1066161/
https://www.aussiestockforums.com/posts/1066911/
https://www.aussiestockforums.com/posts/1066996/
https://www.aussiestockforums.com/posts/1067016/
https://www.aussiestockforums.com/posts/1067059/
https://www.aussiestockforums.com/posts/1067241/
https://www.aussiestockforums.com/posts/1067303/

*All the information has been disclosed to make a profitable strategy*
I've made over 70 posts about the "Ducati Blue Bar Strategy" & if you use the search feature you will find them all. I studied constantly for 3 years (14 hour days) before I placed my first trade. I've condensed what I've found important & condensed the information into one thread. Most won't read the entire thread "as it will take too long" - go figure. At least read my free ebook.

Skate.


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## Skate (9 August 2020)

*All my educational posts are in the "Dump it here" thread.*
Make the search feature your friend. Before you ask a question do a "search first" [Posted by Skate] the subject in question has most likely been discussed before (it saves going over old ground) If you are unable to find a suitable answer there are members who read this thread are more than qualified to reply to you.

*Search the topic [Posted by Skate]*




*Trading Fundamentals - Skate's Beginners Version eBook*
https://www.aussiestockforums.com/posts/1014728/ If you forget the hyperlink to the free eBook it's displayed below my name.

Skate.


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## Warr87 (9 August 2020)

I think being consistent and having discipline also comes from some other trading mantras. You are going to lose, and losing is part of the game. Expect loses, particularly at the beginning of trading a strategy. And also realize that 1 in 1000 events such as 2008, or the more recent COVID crash, are far more frequent than the 1 in 1000 events they are described. Trading through the recent COVID crash wasn't easy.

Don't try to be right. The market will do what it will do. It doesn't care if you are right or wrong, and neither should you. Use the data to make an opinion/inference, don't have an opinion and force it upon the market. It's easy for confirmation bias to affect you where the market not behaving as you would like. I think @ducati916 does a great job with his analysis. He doesn't have an opinion either way and lays out the data, making a decision from there.


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## MovingAverage (10 August 2020)

@Skate I've just done a quick backtest of my EOD swing system. The backtest was done using the parameters below you requested.



Skate said:


> @MovingAverage I would be interested to see a backtest capture of your strategy with the "Portfolio Equity & Profit Table" during the recent COVID-19 period. The backtest period is from: "*1st January 2020 to 30th June 2020*" (All ordinaries Index) I've found this 6 month period to be a "stress test" of a trading system.
> 
> *It would be even better if you would change your parameters to match the ones below*
> Backtest period = 1st January 2020 to 30th June 2020
> ...




Given you have requested a max of 20 open position I've assumed you're ok with each position being 5% of total portfolio value (cash and open positions). Given the size of the position I've applied a turnover filter to only take stocks with more than $2mill in turnover. Why $2 mill in turnover? Well it is because I personally wouldn't take a position if the turnover was less than $2 mill. This backtest uses the current trade fee schedule publicly offered by Bell Direct.

I haven't looked at these sim results closely as it's been a long day so not sure all is correct with the sims. I need to call it a day and get to my family now, but I'll take a closer look at my sims tomorrow and re-post new results if necessary. Until tomorrow--take care.


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## Skate (10 August 2020)

CNHTractor said:


> @Skate I have a version of the Weekend Trend Trader that I coded some time ago. I think it mirrors the Radge intent. The results were not that exciting for me however it would be interesting to see how some refinements would change performance.
> 
> *1 Jan2020 to 30 June 2020*
> View attachment 107169




@CNHTractor thank you for uploading the screen capture for your version of WTT. The $20k Portfolio size can skew the results.

*Is it possible*
To have another Backtest capture for the same period - 1st January 2020 to 30th June 2020 but with a larger Portfolio Size as @MovingAverage has done above.

Backtest period = 1st January 2020 to 30th June 2020
Portfolio size = $300k
Positions = 20
CBA Commission rate = $29.95

*In the meantime*
I'll have a read & code my version of the Radge WTT strategy & post the results tomorrow.

*Next*
I'll modify the original code of the Radge WTT version with refinements as-you-say. By fine tuning the original parameters & settings will prove if there are improvements to be had. You said you would be interested & if you are interested I’m sure others would be as well.

*Open invitation*
If anyone is trading "nick-radges-weekend-trend-trader" I would appreciate a backtest result being uploaded here using the above parameters.

Skate.


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## Skate (10 August 2020)

MovingAverage said:


> I haven't looked at these sim results closely as it's been a long day so not sure all is correct with the sims. I need to call it a day and get to my family now, but *I'll take a closer look at my sims tomorrow and re-post new results if necessary. Until tomorrow--take care*




@MovingAverage thank you for uploading the Backtest results & with a quick glance the results look better then okay, boarding on being great. The largest loss (maximum trade drawdown) before the Index Filter turning off of $22,883.10 hit hard & would have been disconcerting at the time. 

*Summary* 
For a Daily system operating during the COVID-19 flash crash the overall results are very impressive. 

*Personally* 
I can’t wait for your update tomorrow.

Skate.


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## Warr87 (10 August 2020)

Skate said:


> @MovingAverage thank you for uploading the Backtest results & with a quick glance the results look better then okay, boarding on being great. The largest loss (maximum trade drawdown) before the Index Filter turning off of $22,883.10 hit hard & would have been disconcerting at the time.
> 
> *Summary*
> For a Daily system operating during the COVID-19 flash crash the overall results are very impressive.
> ...




agreed. those results look pretty good and would fair better than most during that period.


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## Skate (10 August 2020)

peter2 said:


> Nick's WTT is a simple and robust trend following system. Like all trend following systems it needs bullish market conditions to show it's best results. It will struggle to produce profits when markets go sideways and will produce large draw downs in bearish markets. It's important to understand this before starting any trend following system. Overall you'll get slightly above average returns with the occasional large draw down. You must be comfortable with this and hold through these draw downs. There are a number of tweeks that can be applied to reduce these draw downs but they require more active management and in fact reduce the total profits.




*There is chatter on the forum about the "Weekend Trend Trader"*
There seems to renewed interest in the "WTT Strategy" at the moment. @TraderJimmy (a new member) is certainly interested.

*Information off the Chartist website
*



*A bit of free information off the internet*
https://books.google.com.au/books/a...p_read_button&redir_esc=y#v=onepage&q&f=false







*
The weekend Trend Trader is a simple 20-week breakout system*
I've just about finished coding up my version of the WTT strategy & I'll upload some backtest results. Others who own the strategy can check if my backtests results are in the ballpark.

More to follow

Skate.


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## Skate (10 August 2020)

*There is renewed interest in the "Weekend Trend Trader" *
@peter2 stated: _"Like all trend following systems it needs bullish market conditions to show it's best results. It will struggle to produce profits when markets go sideways and will produce large drawdowns in bearish markets". _sparked my curiosity. How would have the "WTT" strategy handled the COVID-19 flash crash?

*The "WTT Strategy" Backtest results*
Backtest period = 1st January 2020 to 30th June 2020
Portfolio size = $300k
Positions = 20
CBA Commission rate = $29.95




*Summary*
The original WTT backtest results are not that bad considering. Peter nailed it with his summarization of a trend trading system highlighted above. The results are not as bad as @CNHTractor original backtest using a small portfolio size of $20k



*
I'll make a few modifications to my original WTT strategy & I'll post the results in the next post.*
@CNHTractor wanted to see if there were improvements that could be squeezed out of the WTT Strategy. With most strategies, there is always improvements to be squeezed out - even if they are not visible at the time of development.

Skate.


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## Skate (10 August 2020)

*The WWT Strategy*
I've made a few strategy modification. My version of the WTT Strategy (the code) has not been touched or altered. The improvements are limited to the Index Filter lookback period & Parameters Setting. I have also added an additional moment filter. The results after the improvements are below. The backtest results are acceptable but not pleasing.




@CNHTractor *there are improvements to be had*
I'll wait for others to post their backtest capture of a real "WTT Strategy" to confirm if I'm in the ballpark. Time will tell.

Skate.

Skate.


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## CNHTractor (10 August 2020)

Skate said:


> *Is it possible*
> To have another Backtest capture for the same period - 1st January 2020 to 30th June 2020 but with a larger Portfolio Size as @MovingAverage has done above.
> 
> Backtest period = 1st January 2020 to 30th June 2020
> ...




@Skate will look at posting Backtest as above tomorrow. I will, first,  revise my code against Nick Radge's book. I have noted that in the Index I had forgotten to add .au to $XAO in SetForeign code. This did improve result but still negative to your version.


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## qldfrog (11 August 2020)

Hoping not to disturb too much as I am a step behind, only just got time to do the compare with my active system:
Weekly QFDuc backtest
08/08/19 to 08/08/20


with equity curve


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## qldfrog (11 August 2020)

and for 1/01/20 to 30/06/20:


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## qldfrog (11 August 2020)

overall behaving quite well against the other systems, the real world so so performance 9% since 01/05 (3 months and a bit is not that bad: I started with v10 and have reached v14 which has been stable and clean for quite a few weeks and does not show sign of repainting.
I will keep this one going


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## Skate (11 August 2020)

qldfrog said:


> Hoping not to disturb too much as I am a step behind, only just got time to do the compare with my active system:
> Weekly QFDuc backtest




@qldfrog both backtests are impressive, well done.

With all the backtests submitted so far they confirm that trend trading is a profitable way to trade.

Skate.


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## Saqeeb (11 August 2020)

Keeping with the current theme, below are backtest results of my version of WTT.

Backtest period = 1st January 2020 to 30th June 2020
Portfolio size = $300k
Positions = 20
CBA Commission rate = $6.6


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## MovingAverage (11 August 2020)

Skate said:


> @MovingAverage thank you for uploading the Backtest results & with a quick glance the results look better then okay, boarding on being great. The largest loss (maximum trade drawdown) before the Index Filter turning off of $22,883.10 hit hard & would have been disconcerting at the time.
> 
> Skate.




Thanks Skate, yes my live trades of this system have been good to me. 

You mention the "index filter turning off". My system doesn't use any index filter whatsoever and as I found out in March that causes me a significant mental challenge. I was live trading this system through the first two weeks of March and the trades I took during that time were nothing unusual (winners and losers with no out of the ordinary profits or losses). However, during this time it was hard to avoid all the bad news about global financial Armageddon being upon us so I just stop trading the system despite it telling me to do otherwise--placing long buy orders when the market was falling like lead balloons just did my head in and I couldn't deal with it. I went back to live trading it in the second week of April. Even for system traders it is very easy to say "just trade the system and ignore everything else" but it is a very different thing when you have significant capital tied up in live trades when the market is on an express train south. 

That March crash was also a difficult time for me to sit on the side and watch my weekly system--stocks heading south very quickly and knowing the system won't exit for 3-4 days--that takes some serious discipline. That March time frame caused we to modify my weekly stops to help my head deal with those rapid March type crashes.


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## qldfrog (11 August 2020)

MovingAverage said:


> That March time frame caused we to modify my weekly stops to help my head deal with those rapid March type crashes.



Do you mean intra week stops, wo waiting for the monday open?


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## MovingAverage (11 August 2020)

qldfrog said:


> Do you mean intra week stops, wo waiting for the monday open?



yup...they they are only triggered in extreme conditions like we saw in March


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## qldfrog (11 August 2020)

MovingAverage said:


> yup...they they are only triggered in extreme conditions like we saw in March



I understand, had the same idea before the crash,removed it toato be a purist and lost 20k...
They are now in place for my weekly but very wide SL


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## Warr87 (11 August 2020)

qldfrog said:


> and for 1/01/20 to 30/06/20:
> View attachment 107267
> 
> View attachment 107268



Great result. Even the sharp ratio from both tests us very high IMO.

Interesting and informative results from everyone.


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## MovingAverage (11 August 2020)

qldfrog said:


> I understand, had the same idea before the crash,removed it toato be a purist and lost 20k...
> They are now in place for my weekly but very wide SL



My intra week stop is based on a rate of decline over a period of time--meaning it will trigger if there is a rapid decline in a short period of time (like we witnessed in March).


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## qldfrog (11 August 2020)

Just have to be cautious based on your universe, you can not adopt the same SL for a penny stock or CBA
Not directed to above post, just a generic truth for any learmer


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## MovingAverage (11 August 2020)

qldfrog said:


> Just have to be cautious based on your universe, you can not adopt the same SL for a penny stock or CBA




Most definitely - very important. I apply a turnover and volume filter to exclude highly volatile stocks


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## CNHTractor (11 August 2020)

Backtest results of my version of WTT.

Backtest period = 1st January 2020 to 30th June 2020
Portfolio size = $300k
Positions = 20
Commission rate = $29.50

These results are not too dissimilar to @Saqeeb https://www.aussiestockforums.com/threads/dump-it-here.34425/page-184#post-1087587


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## Skate (11 August 2020)

@soso *has given me an idea*
The "Weekend Trend Trader" or the (WTT Strategy) is a topic worth discussing. For those interested, I'll explain my methodology of constructing a strategy for a beginner to follow along. I'll construct the strategy in such a way so it can be used as a "template" for other trading ideas. In the series of posts, I'll construct the WTT strategy as there is renewed interest.

*In the "Dump it here" thread *
1. I'll make a series of post about strategy construction in Amibroker
2. I'll explain what Amiboker is in plain English & some keywords 
3. I'll do a step-through, a "storyboard" a step-by-step construction of a basic WTT strategy 
4. When finished the WTT Strategy will be tradable if you have "Amibroker + a Data supply"
5. I'll make sure the series of posts are understandable even for a beginner to follow
6. I'll make "the series" before posting them & in doing so the series might stay together without interruption

Skate.


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## MovingAverage (11 August 2020)

@Skate (and others) you might find this interesting--performance of my live weekly system trades. This is dumped straight out of Stator and is for open and closed live trades. Sorry, I've removed the Y axis scale for obvious reasons but even so should give you some insight into the performance. The charts are linear. So to explain what this is representing and note I've been live trading this system since Jan 2015:

1. The top green chart is total profit (closed position profit + open position profit). 

2. The next graph (red and blue bar chart) shows P&L for each individual trade (obviously green is a winning trade and red is a loosing trade).

3. The next solid grey graph is the number of open positions. The highest level shown is 20 open positions, which is fully invested. I'm using a very simple position sizing technique for this system--max of 20 positions each position being 5% of total portfolio value.

4. Finally, the graph at the bottom is open and close position profit. The blue line represents total profit of all closed positions and the orange line represents the profit of all open positions.

Looking at the green chart you can see my profit is now pretty much back up to pre-March crash levels.   

It's great to discuss simulation results--but it's even better to discuss actual live system performance


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## qldfrog (11 August 2020)

MovingAverage said:


> Most definitely - very important. I apply a turnover and volume filter to exclude highly volatile stocks



and a demo today, I bought MSB @4.5 initial stop loss set and unchanged for a week at 4.39
SL blown thru today and manually sold just a few sec ago  at $3.81 eeekkk
will most likely finish the day higher than my initial SL ;-)  16% loss, in one overnight ownership...
Ok.I stop disrupting Mr Skate feed


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## Skate (11 August 2020)

CNHTractor said:


> Backtest results of my version of WTT.




@CNHTractor your version & @Saqeeb version of the "WTT Strategy" would be hard to trade with confidence. The premise behind the strategy is "sound & simple" so it's worthy of constructing. 

*The constructed strategy *
I prefer trading weekly & in the pre-auction, a system of trading that has served me well so that will be my template. Hopefully the strategy will put others on the "Road to Success"

Skate.


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## Warr87 (11 August 2020)

MovingAverage said:


> My intra week stop is based on a rate of decline over a period of time--meaning it will trigger if there is a rapid decline in a short period of time (like we witnessed in March).



how is that implemented? are you running code daily to look for this?


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## Skate (11 August 2020)

MovingAverage said:


> It's great to discuss simulation results--but *it's even better to discuss actual live system performance*




@MovingAverage thanks for the share, trading is a lonely hobby & without members like yourself posting actual returns others have no way of benchmarking their returns. @qldfrog & @Warr87 are doing the same on a weekly basis. As I've said before "Sharing is caring" & it motivates all of us to strive for better.

*The COVID-19 Flash Crash*
This "black swan event" has affected us all & it's worthy to explore how we go somewhat to find a way to cushion the blow of the next one.




Skate.


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## MovingAverage (11 August 2020)

Warr87 said:


> how is that implemented? are you running code daily to look for this?



Yes, I'm using Amibroker. I'm trading three different systems over different timeframes so am already doing EOD explores in Ami each night so no big deal to also check in on the weekly each night--it's just "a press of a button".


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## over9k (11 August 2020)

Skate said:


> thanks for the share, trading is a lonely hobby & without members like yourself posting actual returns others have no way of benchmarking their returns.




Surely you just compare yourself to the market/indices? As long as you beat the market, you're winning.

I'm about to rotate out of a lot of U.S holdings due to my belief that the exchange rate has a lot of legs to run yet. It's hard to fight both a market and an exchange rate. The way we're going, 90c by christmas is not looking unrealistic.


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## MovingAverage (11 August 2020)

Skate said:


> @MovingAverage thanks for the share, trading is a lonely hobby & without members like yourself posting actual returns others have no way of benchmarking their returns. @qldfrog & @Warr87 are doing the same on a weekly basis. As I've said before "Sharing is caring" & it motivates all of us to strive for better.
> 
> *The COVID-19 Flash Crash*
> This "black swan event" has affected us all & it's worthy to explore how we go somewhat to find a way to cushion the blow of the next one.
> ...




I definitely think that the rapid and relentless drop we saw in March is a challenge for the standard WTT...waiting so long to exit positions...yikes. As mentioned I've addressed that now with an "emergency exit".


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## MovingAverage (11 August 2020)

over9k said:


> It's hard to fight both a market and an exchange rate. The way we're going, 90c by christmas is not looking unrealistic.




I'd like to have a go at trading the US, but every time I come to thinking about managing the FX and factoring it into system modelling it turns out to be another layer of complexity that I find too difficult to deal with.


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## over9k (11 August 2020)

MovingAverage said:


> I'd like to have a go at trading the US, but every time I come to thinking about managing the FX and factoring it into system modelling it turns out to be another layer of complexity that I find too difficult to deal with.



Ok so are you a quant? Are you a maths & finance guy or are you more of an economics guy?

I did VERY well up to earnings season and did a big post a while ago in this thread. I'll repost it here for you just to give you an idea of the different kind(s) of thinking you'll need to apply. I used vanishingly little quantitative analysis. Give me a few mins to find it and I'll repost here.


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## Skate (11 August 2020)

over9k said:


> Ok so are you a quant? Are you a maths & finance guy or are you more of an economics guy?
> 
> I did VERY well up to earnings season and did a big post a while ago in this thread. I'll repost it here for you just to give you an idea of the different kind(s) of thinking you'll need to apply. I used vanishingly little quantitative analysis. *Give me a few mins to find it and I'll repost here.*




Please don't

*Just post the link*

Skate.


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## over9k (11 August 2020)

Here we go: 



over9k said:


> Hey skate - here's a couple of posts I made in some other threads. Ignore the pricklyness/don't take them as directed at you or anything as they were a bit of a ragepost at another forum member.
> 
> They explain my entire play since I joined this forum so boil the kettle, it's a bit of a read.
> 
> ...




The problem is that the AUD has run 13% against the USD in the past three months, so that takes a huge chunk out of things immediately. That's not to say you can't beat the exchange rate, but when you consider the gains to be made on the ASX vs NYSE (classic econ 101 opportunity cost), you've got to make 13% more on the NYSE than you would have on the ASX - I attempted this, but haven't managed it. In AUD, my ASX holdings are miles above my NYSE ones. Even gold is about 5% higher in AUD if you held GOLD on the asx vs GLD on the NYSE. 

If my predictions are correct and we have another 20% run just in the exchange rate over the next 3-4 months, there's no way I'm going to make 20% more on the NYSE than I do on the ASX. Not a chance.


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## rnr (11 August 2020)

CNHTractor said:


> Backtest results of my version of WTT.
> 
> Backtest period = 1st January 2020 to 30th June 2020
> Portfolio size = $300k
> ...




Hi @CNHTractor ,

Do you mind disclosing the universe of stocks used in this back-test and the ASX index used as a filter.

Cheers,
Rob


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## MovingAverage (11 August 2020)

over9k said:


> Ok so are you a quant? Are you a maths & finance guy or are you more of an economics guy?
> 
> I did VERY well up to earnings season and did a big post a while ago in this thread. I'll repost it here for you just to give you an idea of the different kind(s) of thinking you'll need to apply. I used vanishingly little quantitative analysis. Give me a few mins to find it and I'll repost here.




Definitely a maths, stats and finance guy. Looking forward to the link to your thread


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## over9k (11 August 2020)

MovingAverage said:


> Definitely a maths, stats and finance guy. Looking forward to the link to your thread



It was just a post but I quoted it above - you just need to hit the expand button and it'll, well, expand. Quoted in post 3685.

I'm the complete opposite to you - I'm not a hardcore quant guy at all (I come from austrian school of economics and then geopolitics/governance) so I always like chatting to the quants as both types of thinking always know something the other doesn't.


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## qldfrog (11 August 2020)

MovingAverage said:


> Yes, I'm using Amibroker. I'm trading three different systems over different timeframes so am already doing EOD explores in Ami each night so no big deal to also check in on the weekly each night--it's just "a press of a button".



That's probably the way to go..I was/am setting conditional orders... trouble is that they can go thru, or be exploited in penny stocks to shake you out
The idea is not bothering with system during the week, but as you I have 2 daily systems so i could adopt your way and avoid preset order


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## CNHTractor (11 August 2020)

rnr said:


> Hi @CNHTractor ,
> 
> Do you mind disclosing the universe of stocks used in this back-test and the ASX index used as a filter.




@rnr, I have used All Ordinaries as the Universe and $XAO.au as the Index filter. I am using Norgate data.


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## rnr (11 August 2020)

CNHTractor said:


> @rnr, I have used All Ordinaries as the Universe and $XAO.au as the Index filter. I am using Norgate data.




On the basis that you have used the All Ordinaries for your Universe of Stocks, do you have any price, volume or perhaps liquidity filters to reduce the stocks from which you may use?

Cheers,
Rob


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## CNHTractor (11 August 2020)

rnr said:


> On the basis that you have used the All Ordinaries for your Universe of Stocks, do you have any price, volume or perhaps liquidity filters to reduce the stocks from which you may use?




@rnr , the various parameters are per the Weekend Trend Trader system set out by Nick Radge. So:

Index Filter = $XAO
Index Filter Length = 10 weeks
Minimum price = $1.00
Maximum Price = $10.00
Minimum Turnover = $500,000 average for 7 days
Minimum Volume = 500,000 average for 7 days​
Rob, this is not a system I currently trade, although it is one that I looked at as I started out. The post was in response to the discussion on WTT and how it would perform in the current environment.


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## rnr (11 August 2020)

@CNHTractor 

Okay I get that and thanks for taking the time to reply.

Cheers,
Rob


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## Skate (11 August 2020)

CNHTractor said:


> @rnr , the various parameters are per the Weekend Trend Trader system set out by Nick Radge. So:
> 
> Index Filter = $XAO
> Index Filter Length = 10 weeks
> ...




@CNHTractor thanks for the confirmation of the Weekend Trend Trader parameters.

*What I am planning for the next exercise *
1. I going to upload a capture to display the backtest results for my version of WTT in relationship to your "WTT Strategy" results & @Saqeeb "WTT strategy". I believe the backtest results are indicative of actual returns for this strategy - This is so I have a solid foundation to work with.
2. Explain Amibroker (the program) in a few words that beginners will be able to understand
3. Show a step-by-step construction of the WTT strategy (in a basic way)
4. Modify that strategy to gain improvements - improvements that you were looking for.

Skate.


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## Benn jackson (11 August 2020)

Hi all bit new to this, I recently purchased some shares and at 0.023 and it didn’t go through straight away . It’s now at 0.36 ive press amend . How long does it take to be executed . Thanks guys


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## Roller_1 (11 August 2020)

Skate said:


> @CNHTractor thanks for the confirmation of the Weekend Trend Trader parameters.
> 
> *What I am planning for the next exercise *
> 1. I going to upload a capture to display the backtest results for my version of WTT in relationship to your "WTT Strategy" results & @Saqeeb "WTT strategy". I believe the backtest results are indicative of actual returns for this strategy - This is so I have a solid foundation to work with.
> ...




Hi Skate 

When posting the reports for this/other systems can you add a chart/ stats for a longer term period instead of breaking it up into CY/FY? ie. 2018-now or longer if possible. That would be great for a longer term view. cheers


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## Skate (11 August 2020)

Roller_1 said:


> Hi Skate - When posting the reports for this/other systems can you add a chart/ stats for a longer term period instead of breaking it up into CY/FY? ie. 2018-now or longer if possible. That would be great for a longer term view. cheers




@Roller_1 that's not an issue but you'll have to bear in mind that I have the basic Norgate data package. 

Norgate Silver subscription doesn't include the features listed below & that's why I normally post recent backtests for this very reason.

Delisted Equities
Historical index constituents
Skate


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## Skate (11 August 2020)

Roller_1 said:


> 2018-now or longer if possible




@Roller_1, I have just completed coding a basic WTT strategy so after I'm done I'll upload each strategy (the original & the modified version) so others can have a play. The WTT Strategy will be constructed step by step. The improved WTT strategy will be the finale.

Skate.


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## Skate (11 August 2020)

*Basic information about Amibroker*
Amibroker is a cheap but powerful charting & coding program. You could think of Amibroker as a scientific calculator that is designed to calculate & solve mathematical equations. Instead of using the function buttons as a calculator does, Amibroker uses arrays. An array is just a name that equals a defined function or a mathematical formula. There is a stack of arrays built-in & as the coder you have the ability to defined any word as an array as long as it doesn't conflict with the ones already assigned by the program.

Skate.


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## Skate (11 August 2020)

*Norgate Data*
Norgate Data is clean & reliable who provides updates for "end-of-day" financial market data & specializes in data for U.S. and Australian stock markets. 

*Data Format & Access*
The data is held on the user's machine in a proprietary database format. Direct access to the database is provided by way of plugins into supported 3rd-party charting/analysis applications. In addition, it's possible to export historical price data (but not other data features) in ASCII format. Access to the database is no longer possible if a subscription lapses.

Skate.


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## Skate (11 August 2020)

*Amibroker & Norgate Data*
This is a match made in heaven. I'll be using Amibroker to code the "Weekend Trend Trader Strategy" & using Norgate as the data supplier. Amibroke & Norgate data are both programs that are needed to develop a trading strategy as one program without the other is less than useless. I have both WTT strategies coded & I will do the necessary background work to upload the strategy construction hopefully in one procedure.

Skate.


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## Skate (11 August 2020)

*This sets the baseline for the WTT comparisons *
I apologize for the sizing as it was difficult to get them to co-operate (sizing wise).

*Backtest Results*
Backtest period = 1st January 2020 to 30th June 2020
Portfolio size = $300k
Positions = 20





*To view the original backtests* (original size)
CNHTractor - https://www.aussiestockforums.com/posts/1087655/ (to view the original size of the backtest results)
Saqeeb - https://www.aussiestockforums.com/posts/1087587/  (to view the original size of the backtest results)
Skate - my backtest is below as it might be easier to read




*The baseline has now been set*
I'll will explain how I code a strategy from start to finish. I started to learn strategy construction by creating a storyboard & joining all the pieces together. It was easy for me to follow & I'm hoping it will be easy for you if you are just starting out. Seasoned coders are well past the beginners stage but never-the-less it might hold some interest.

*Just to be clear*
I don't trade a "WTT Strategy" & I don't trade basic (AFL) codes. In saying this - the end result should develop into a tradable code or a code you can play around with as I intend to upload both strategies when completed.

Skate.


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## Skate (11 August 2020)

*


This is the procedure I will follow to explain the "WTT Strategy" construction *
The procedure is the same for any strategy construction & when finished you can use the strategy as a template to formulate other strategies you can dream up.

*Strategy construction*
* Amibroker formula language is simply lines of code & each line of code is closed when the instruction has been completed with a semicolon.
* A semicolon or semi-colon (";")  completes "finishes off" the line of code
* Once one line of code has been complete you start another
* Amibroker read from the top to the bottom & left to right just as we read a book (The order of instructions are important)
* It's similar to when you give verbal instruction, they follow one another after the other - with a breath in between
* To make the code human-readable we can make comments along the way.
* The code or line of instructions need to be clear & concise but when we make a comment for ourselves we uncommented that line out
* Uncommenting a line so it's not a readable line of code (instructions) we use two forward slashes (//) so the program is not confused
* Blank line are not actionable, we just use them to separate groups of instructions - Amibroker takes no notice of blank lines
* Amibroker is array driven program.
* What this means is that one word can represent one line of code or simply a command

*Example of an array *
[Drink] is an array so when I say [Drink] it really means ="would you be kind enough to go to the fridge & bring me a cold beer please & can you do it quickly"

*So when I want a cold drink (beer) *
Instead of saying "would you be kind enough to go to the fridge & bring me a cold beer please & can you do it quickly" I would just say "DRINK"

*Remember "Father Ted" the TV show*
Father Jack a foul-mouthed, rage-filled alcoholic - DRINK ! (Father Jack didn't have to say another word, they knew what he wanted them to do)



Skate.


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## MovingAverage (11 August 2020)

Hi All,
Great to see folks posting simulation results of the systems they're trading or investigating. Sorry if this has been recently covered but thought this might be a good time to remind folks (particularly those new to system trading) of the importance of treating a single run simulation with some caution. Here is my point:- the first pic below shows a standard simulation output from Amibroker. Look at the Net Profit % figure, not too bad hey.  Well this Net Profit % is not really reflective of the overall system behavior and it is a complete outlier. To get a better feel for the Net Profit % performance of this system I ran a simple Monte Carlo analysis (100 different runs) and you can see from the second pic that the majority of the Monte sims delivered much less than half of the Net Profit % that the single run did. So, if you really want to understand how your systems perform then make sure you do some rigorous Monte Carlo simulations. Personally, I use TradeSim but it is easy to do in Amibroker by adding the mtRandom() to your buy conditions and then doing an optimization on a dummy parameter to give you say 100, 500, 1000 or more runs. Your Amibroker optimization window can then be dumped into a CSV and cut and diced in excel using the Data Analysis plugin.
Cheers All, MA.


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## Skate (11 August 2020)

*The procedure to code the WTT Strategy will be in 12 easy steps to follow*
To keep the strategy construction simple I will outline the steps in order. In the next few posts, I'll upload screen captures so others are not tempted to do a "cut & paste". Don't worry I will upload the completed strategy after the construction has been completed.

*The order of construction*
1. First, we will set out our strategy "options" the "options" are management options & they are a part of Amibroker (features)
2. We will then add an "Index Filter" - this ultimately decides when we will trade & also our trailing stop levels
3. Next, we will add all our other filters
4. Then we will add our Buy condition
5. Add a sell conditions
6. Add a two-stage trailing stop
7. Add "Position Sizing"
8. Add "Filters for the Exploration Analysis"
9. Add Buy & Sell coding for use in trading the pre-auction
10. Add an Exploration code
11. Add columns to report & sort the Exploration Analysis results
12. Code chart signals & plots them with an Index Ribbon

*After the construction phase is completed *
I will upload a few backtests & then explain how we can squeeze a little more out of the strategy by adding or changing a few settings (parameters) & then compare the results.

*I will start fresh tomorrow *
Too much information in one go tends to be information overload but at least you have the mud map of what I'm planning to post tomorrow.

Skate.


----------



## frugal.rock (11 August 2020)

I like the way you are heading Skate.   You must have read my mind. 
I am trying to get taxes sorted, and some other office work, and then I seem to be free for a while.
Hoping to be able to follow on in a few days, or on the weekend.
Cheers


----------



## martyjames (11 August 2020)

Hi MA

Interested in your valuable post re monte carlo testing. In Amibroker monte carlo settings do you use 'Constant Value' (eg $5k on a $100k portfolio) OR 'Percent of Equity'?? They recommend NOT to use the latter. It makes a huge difference obviously
I dont have Tradesim ( or the time to learn it!) - Do you have any code or link to info re your comment :
"by adding the mtRandom() to your buy conditions and then doing an optimization on a dummy parameter to give you say 100, 500, 1000 or more runs."

Your comment - "standard simulation output from Amibroker Net Profit % is not really reflective of the overall system behavior and it is a complete outlier." is spot on - my system shows excellent returns in the standard simulation run but im not 100% sure of it and  my knowledge of Amibroker monte carlo analysis is limited to reading the manual

any ideas appreciated

cheers


----------



## Warr87 (11 August 2020)

Benn jackson said:


> Hi all bit new to this, I recently purchased some shares and at 0.023 and it didn’t go through straight away . It’s now at 0.36 ive press amend . How long does it take to be executed . Thanks guys




if you had to 'amend' then you didn't purchase it. you may have got a few at that price but at best you got a 'partial fill'. you need to check out the order types with your broker. we can't help you with that.


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## Newt (11 August 2020)

Here's my 1/1/20 to 30/6/20 backtest Skate.  Might be worth giving people PositionScore and Exit code to get better agreement.  The exit condition is a bit tricky to write - I've got a suspicion my code let's the trailing stop out wide again if index filter goes "green" which isn't supposed to happen.


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## Warr87 (11 August 2020)

I'll add mine, though my live results are available to anyone who wants to follow my journal 

I swear in the long-run it will be profitable  hahah

1/1/20 to 30/6/20 backtest


----------



## Skate (11 August 2020)

Newt said:


> Here's my 1/1/20 to 30/6/20 backtest Skate.  Might be worth giving people PositionScore and Exit code to get better agreement.  The exit condition is a bit tricky to write - I've got a suspicion my code let's the trailing stop out wide again if index filter goes "green" which isn't supposed to happen.
> 
> View attachment 107350
> 
> ...




@Newt, those returns are absolutely unbelievable. To get the Radge “WTT Strategy” to perform that well you must have had to massaged the parameters beyond recognition.

*So I get this correct*
The Backtest results that you posted are from a turnkey WTT Strategy OR is it a “WTT Strategy” that you coded?

Skate.


----------



## Newt (11 August 2020)

MovingAverage said:


> Hi All,
> Great to see folks posting simulation results of the systems they're trading or investigating. Sorry if this has been recently covered but thought this might be a good time to remind folks (particularly those new to system trading) of the importance of treating a single run simulation with some caution. Here is my point:- the first pic below shows a standard simulation output from Amibroker. Look at the Net Profit % figure, not too bad hey.  Well this Net Profit % is not really reflective of the overall system behavior and it is a complete outlier. To get a better feel for the Net Profit % performance of this system I ran a simple Monte Carlo analysis (100 different runs) and you can see from the second pic that the majority of the Monte sims delivered much less than half of the Net Profit % that the single run did. So, if you really want to understand how your systems perform then make sure you do some rigorous Monte Carlo simulations. Personally, I use TradeSim but it is easy to do in Amibroker by adding the mtRandom() to your buy conditions and then doing an optimization on a dummy parameter to give you say 100, 500, 1000 or more runs. Your Amibroker optimization window can then be dumped into a CSV and cut and diced in excel using the Data Analysis plugin.




Very much in agreement - the "Strawbroom" plots for Monte Carlo runs in AB are a particularly valuable too for considering the real range of simulated outcomes.  More info, but of course can never be definitive going forward.


----------



## Newt (11 August 2020)

Skate said:


> @Newt, those returns are absolutely unbelievable. To get the Radge “WTT Strategy” to perform that well you must have had to massaged the parameters beyond recognition.
> 
> *So I get this correct*
> The Backtest results that you posted are from a turnkey WTT Strategy OR is it a “WTT Strategy” that you coded?
> ...




That's my interpretation of WTT from the eBook, BUT with a price filter, turnover filter, PositionScore added (hadn't noticed I've never put one in there until people started talking about it today) - and as commented pretty sure the exit trailing stop isn't spot on.  

Not sure about posting it publically as Radge property - don't mind messaging - its not that many lines of code.  Suspect the turnkey would have trailing stop loops, parameters, graphics, Exploration etc.


----------



## Warr87 (11 August 2020)

Newt said:


> Very much in agreement - the "Strawbroom" plots for Monte Carlo runs in AB are a particularly valuable too for consider the real range of simulated outcomes.  More info, but of cause can never be definitive going forward.




i'll be honest, I have struggled to read the MC output properly. it's not entirely intuitive. i found some articles/blogs that went through how to read them to help out. AB's only info is alright but still not entirely clear. in some of my BT i force a certain amount of runs:


```
SetOption("MCEnable", 1 );
SetOption("MCRuns", 5000);
```

You can see here that there are very few chances of this system over this period of time staying above the 300000 mark. those above are the outliners. ideally you want it to skew the other way.






with the following graph, there is a 90% chance that the MC CAR will be -45% or higher (follow from the 10 percentile mark and their is a 90% chance that actual results will be anywhere to the right of that mark).


----------



## Warr87 (11 August 2020)

As opposed to the test over 2019 (1/1/19 to 30/12/19)





As you can see from the strawplot, even with the outliners they remain above 300000. this is promising over a min of 1000 iterations.



Here, there is a 90% chance that I will have a  CAGR over 50% or greater for that year. That is obviously high (and I don't remember the backtest being so good for 2019).


----------



## Warr87 (11 August 2020)

Don't be fooled by the results, btw. Add in other years and the results are much more modest. 2019 just happens to be a good year for it. My strategy does good even in slightly sideways to upwards markets. (Acts more like a momentum strategy in those environment and not a trend system from what I've noticed.)


----------



## Rsthree (11 August 2020)

Skate said:


> View attachment 107347
> 
> 
> *The procedure to code the WTT Strategy will be in 12 easy steps to follow*
> ...



The 12 steps provide a great framework for coding any system, wish I had this a few months ago, it would have set me on a much better path.


----------



## peter2 (12 August 2020)

You're trying to convince me to buy Amibroker and code my discretionary trading plans into systems so that I can make so much more. 

Arrgh, it might actually be a good idea, but can this old dog who used to write Fortran and Pascal programmes learn to code Amibroker at the advanced level in a short time? 

It may be easier for me to modify entries and exits in already coded systems. I'll mull it over.


----------



## ducati916 (12 August 2020)

peter2 said:


> You're trying to convince me to buy Amibroker and code my discretionary trading plans into systems so that I can make so much more.
> 
> Arrgh, it might actually be a good idea, but can this old dog who used to write Fortran and Pascal programmes learn to code Amibroker at the advanced level in a short time?
> 
> It may be easier for me to modify entries and exits in already coded systems. I'll mull it over.





Which after reading through all of the above, is pretty much how I am feeling. The initial investment of time now, to save so much time later. What is the discount rate on that?

jog on
duc


----------



## MovingAverage (12 August 2020)

martyjames said:


> Hi MA
> 
> Interested in your valuable post re monte carlo testing. In Amibroker monte carlo settings do you use 'Constant Value' (eg $5k on a $100k portfolio) OR 'Percent of Equity'?? They recommend NOT to use the latter. It makes a huge difference obviously
> I dont have Tradesim ( or the time to learn it!) - Do you have any code or link to info re your comment :
> ...




Hi @martyjames,

You raise a very good point regarding position sizing. Whenever I look at testing the performance and behavior of a system I always look at it with fixed dollar position sizes, typically I would use 20 position each being $5k. This IMHO is very important if you are testing a system over a very long time frame--5, 10, 20 or more years. Doing this gives me a better understanding of the system behavior per se without the "external" influence of a variable position size. As you probably know position sizing can have a major influence on a system's top line performance ($$$ made). I like to know how a system performs without external influences such as position sizing. Position sizing methodologies are most definitely important but in my mind position sizing is not a integral part of the system (how you buy and how you sell) and is external to the system so I think doing system evaluation should include fixed dollar position analysis. In reality I live trade using percent of total equity so I will also run sims using that position sizing approach as well, but my core testing is focused on fixed dollar positions.

In relation to Amibroker and monte carlo test. Amibroker does have a very rudimentary inbuilt capability to do monte carlo analysis, but I am not a fan of its inbuilt monte carlo capability for several reason (this alone could make a separate thread so I'll keep it simple for now). As you can see in some of the Amibroker backtest report pics in this thread, clicking on the "Monte Carlo" tab in the backtest report will show some Monte Carlo charts. While these Monte Carlo charts are better than nothing, for me they are very limited as there are many key characteristics of a system that I'd like to examine for which Amibroker doesn't do a Monte Carlo analysis. On a more technical issue I also have a problem with the way Amibroker internally "shuffles" trades to do the Monte Analysis which is one of the main reasons I use TradeSim. Anyway, it is easy enough to get Amibroker to do more comprehensive Monte Carlo analysis by adding the following few simple lines of code to your system:

MonteCarloParam = optimize("Monte", 1, 1, 1000, 1);

Buy = YourSystemBuyConditionsHere AND mtRandom() < 0.7;

With the above AFL code added click on the optimize button in your analysis window and it will do 1000 runs. The key here is that there is now a random element to determining whether your system takes each trade. There is about a 70% of the trade being taken.  You can change the "0.7" value to suit but be aware that if you make it too low you won't take enough trades. For a system taking about 1000 trades I found 0.7 to be about right--all runs take about 1000 trades. Below is an example of the analysis window from Ami as an example Monte done as explained above--I've only run 10 sims for simplicity. The variation in the system characteristics for each run is purely down to the random determination of taking each trade. The MonteCarloParam variable is not a system parameter it is just a dummy parameter. You can export the analysis results to a CSV and then import into excel where you can do a much more comprehensive Monte analysis of all of the simulation results and all parameters output by Ami.


----------



## martyjames (12 August 2020)

Hi @MovingAverage

Many thanks for the detailed reply. I will try adding in you Amibroker code to delve further into Monte Carlo testing in Amibroker with my system and see what i come up with. Totally agree re including 'fixed dollar position sizes' when testing. So far my system is tracking what the back test results suggest, but ive only traded it for a short time. 
Clearly, the results from Amibroker system testing itself needs to viewed with a degree of caution and needs further examination

cheers
Marty


----------



## martyjames (12 August 2020)

Quick update re above post - i added in your code, @MovingAverage  and run the analysis over different time periods. Very interesting to review the results. Overall the DD of my system appears to be stable and the CAR is 'good' when i scroll through 80% of the results also. At worse its still profitable. 
This is very useful to give you an idea as to what can happen at the 'extremes' of probability (that could well happen). 
I'll export to excel later for more analysis later. I think anyone doing back testing would find this very useful - thanks again for the input, much appreciated

cheers
Marty


----------



## MovingAverage (12 August 2020)

martyjames said:


> Quick update re above post - i added in your code, @MovingAverage  and run the analysis over different time periods. Very interesting to review the results. Overall the DD of my system appears to be stable and the CAR is 'good' when i scroll through 80% of the results also. At worse its still profitable.
> This is very useful to give you an idea as to what can happen at the 'extremes' of probability (that could well happen).
> I'll export to excel later for more analysis later. I think anyone doing back testing would find this very useful - thanks again for the input, much appreciated
> 
> ...




Great to hear @martyjames . The spread on the DD is very important to look at.


----------



## Skate (12 August 2020)

*Background - before I start constructing the "WTT Strategy"*
There have been posts made previously about "setoption" & changing a "chart style" on-the-run, so I'll reference those posts with the hyperlinks.

*Amibroker SetOption template by Bruce Robinson*
https://www.aussiestockforums.com/posts/1077208/
This is a modified version of Bruce Robinson's template as some settings are only accessible via "setoption" & not listed in the (AA) settings. It's recommended to control settings using an (AFL) rather than the "Settings dialogue" whenever possible. (the reason for uploading the template) "Setoption" forms the start of the construction process.

*How to change from a Candle Chart to a Bar Chart on the fly*
https://www.aussiestockforums.com/posts/1077220/
Amibroker's standard "Price Chart" is a "Candle Chart" where I prefer to have a "Bar Chart" (personal preference) I have uploaded a "Price Chart" (AFL) that allows changing from a Candle Chart to a Bar Chart on the fly.

*How to change the user-definable parameter *(this is important)
I use the parameter feature extensively in all my trading strategies. Meaning, every parameter & "important setting" can be changed without changing the strategy code. To test an idea, change the parameter you wish & run a backtest to see if it makes a difference. Once finished you can "reset" the parameter back to the original parameter setting of the strategy code by hitting the [Reset All] at the bottom of the dialogue box or alternatively it will reset once the strategy is closed.




*User-definable parameter, which will be accessible via Parameters dialogue box*
1. When you are on a chart: "right-click" over chart pane & select "Parameters". The chart below is the format for displaying the "WTT Strategy" which paints an easy to read graphic (a) the buys & sells signals, (b) the white arrow is the signal bar (c) the white square is the buy bar (d) is the entry price of the pre-auction & (e) the Index Filter ribbon at the bottom (Green = On, Red = Off)




*2. Exploration Analysis *
The Parameter icon is a small [slider Box] icon on the menu bar. How to change the parameters?, "left-click" on the parameter icon, a list will appear so you can alter (a) the bet size (b) The Strategy Breakout Period or (c) change the chart style. I've decided to have a portfolio size of $100k with 20 positions = $5k initial bet size (as shown in the parameter dialogue box below). The parameter setting allows you to adjust your bet size on the fly. Changing your bet size is done by changing the "Trading Funds" dollar size. The strategy will automatically re-calculate the new number of shares to buy.




*3. The "Exploration Analysis" window *(Set the "Range" to 1 recent bar for buy & sell positions)
The "WTT Strategy" has been designed to trade the signals of the "Exploration Analysis" as they appear. The results are self-explanatory & easy to follow. You just need to buy the positions in the order displayed. As an example, if you need to buy 3 positions you buy the top three. If you are holding a position that is displayed "as a sell" in the "Exploration Analysis" results, sell all the shares that you hold at the "Sell Offer price" in the pre-auction. If you don't hold that sell position, no action is required.





*4. Backtesting*
I have coded the strategy so it can be backtested. The results below are from a backtest of the strategy I will construct. The Portfolio size is $100k with $5k bets (but as explained the bet size can be adjusted through the parameter dialogue box) The Backtest period is from "1st January 2019 to end of trade yesterday". Why did I use that period? Because it's an average of how the strategy would have performed that included the recent "good & bad" periods of trading.







*The "WTT Strategy" being constructed is the Henry Ford model "T" when it comes to cars*
The model "T" &  the "WTT Strategy" has many similarities as both are practical & affordable for the common man of the time (Model "T" = then, the "WTT Strategy = now). Both the model "T" & the "WTT Strategy" are low cost, durable, versatile & easy to use. I can guarantee you "it's no Tesla" but it will get the job done till you get more experience driving either one. The "WTT Strategy" that I'm going to construct is "bare-bones" & basic in nature that bears no relationship to the original strategy coding. I went to great lengths to construct & code my version of the "WTT Strategy" to align with actual results posted by forum members "who own the genuine original WTT Strategy" using those results as a baseline.




Skate.


----------



## JBWTrader (12 August 2020)

hey folks
please watch out and stay alert for the newbies to go no where near

https://ivytrusts.com/

they are a total scam
A person i know in Aussie sent a sizeable amount of money and they have requested it back and they wont sent it back to them. Total fraudsters.

*Tony DeRossi*

Senior Vice President

+*61280743414*

+*441205540216*

Tony.DeRossi@ivytrustsservices.com


----------



## Skate (12 August 2020)

*I'll post the 12 steps in constructing a strategy (WTT Strategy)*
I'll try to post the steps quickly so I keep the entire post together. The 12 steps are in story-board format (broken & displayed separately) to reduce confusion when there is so much to look at & then try to decipher it. Each line of code has an explanation of what the code means.

*The "WTT Strategy"*
The strategy comprises of 109 lines of code that is inclusive of white space. The strategy will be uploaded & for those who don't have Amibroker the (afl) code can be opened & viewed in "Microsoft Notebook" or similar reader.

*So the series can be kept together *
I'm asking if you could refrain from posting comments or asking questions till they are all uploaded. 

Skate.


----------



## Skate (12 August 2020)

*The order of construction*
1. First, we will set out our strategy "options" the "options" are management options & they are a part of Amibroker (features)




Skate.


----------



## Skate (12 August 2020)

*The order of construction*
2. The "Index Filter" - this ultimately decides when we will trade & also our trailing stop levels




Skate.


----------



## Skate (12 August 2020)

*The order of construction*
3. Add all our other filters




Skate.


----------



## Skate (12 August 2020)

*The order of construction*
4. Add a Buy condition




Skate.


----------



## Skate (12 August 2020)

*The order of construction*
5. Add a sell condition




Skate.


----------



## Skate (12 August 2020)

*The order of construction*
6. Add a two-stage trailing stop




Skate.


----------



## Skate (12 August 2020)

*The order of construction*
7. Add "Position Sizing"




Skate.


----------



## Skate (12 August 2020)

*The order of construction*
8. Add "Filters for the Exploration Analysis"




Skate.


----------



## Skate (12 August 2020)

*The order of construction*
9. Add Buy & Sell coding for use in trading the pre-auction




Skate.


----------



## Skate (12 August 2020)

*The order of construction*
10. Add the Exploration code




Skate.


----------



## Skate (12 August 2020)

*The order of construction*
11. Add columns to report & sort the Exploration Analysis results




Skate.


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## Skate (12 August 2020)

*The order of construction*
12. Add code to the chart & plots the signals. Also adding an Index Ribbon at the bottom of the chart




*Next, I'll post up some backtest results *
The Backtest results will be from this constructed "WTT Strategy". Then I will post a backtest with a few modifications to the strategy just constructed for improvements to have confidence trading a modified version of a "WTT Strategy"

Skate.


----------



## TraderJimmy (12 August 2020)

Fantastic information @Skate . I'm interested to see where the differences lie with those others who have coded Amibroker WTT strategies and had different backtest results.


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## Skate (12 August 2020)

*


What a bummer *
I've just been messaged by a concerned member & it looks like I have the incorrect parameters for the WTT code.

1. The index filter parameter from Nicks ebook is actually a 10 week SMA, not a "20 week SMA as reflected in your code"
2. The trailing stop for the WTT is actually 40% not "20% as reflected in your code" from the entry price and then 40% from each successive high point whilst the index filter is ON, and then it ratchets up to 10% from each successive high point when the index filter turns to OFF. 

*I'll make the adjustments *
I'll make the adjustments (alterations to the code) & post a backtest with the amendments made for the accuracy of reporting.

*FYI*
The strategy construction is correct & completed in the correct order but the Index Filter & Trailing Stop is settings are not correct (they will be corrected) I thank the member for the updated information

Skate.


----------



## MovingAverage (12 August 2020)

Skate said:


> View attachment 107419
> 
> 
> *The order of construction*
> ...




Great posts @Skate . Quick question:- am I correct to assume there are two sell conditions in this system? A) when the stop is triggered; and B) the other being when the close crosses below the 25 period ma of the close?


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## Skate (12 August 2020)

MovingAverage said:


> Great posts @Skate . Quick question:- am I correct to assume there are two sell conditions in this system? A) when the stop is triggered; and B) the other being when the close crosses below the 25 period ma of the close?




@MovingAverage in my copy of the "WTT" I have 3 stops

*Stops*
1. A moving average stop
2. A trailing stop level when the index is ON
3. Another Trailing stop level when the Index is OFF

*Radges WTT Strategy - has two stops only*
1. A trailing stop when the index is ON
2. Another Trailing stop when the Index is OFF

*I'll have a short break & upload the backtests from the original version that I constructed (the "WT Strategy") versus Nick Radge strategy rules & paraments.*
1. I'll set the Index Filter lookback period from 20 to 10 weeks
2. I'll change the Index Filter to 40% from 20% (Index Filter ON)
3. Remove my moving average exit
4. Nick's exit strategy uses only the Index Filter

Skate.


----------



## MovingAverage (12 August 2020)

Skate said:


> @MovingAverage in my copy of the "WTT" I have 3 stops
> 
> *Stops*
> 1. A moving average stop
> ...




Interesting. I assume the idea behind the MA stop is that in some situation it would have a level higher than the stop and would be trigger before the stop is. I guess this would help improve system DD?


----------



## MovingAverage (12 August 2020)

@Skate is this type of scenario the motivation for your additional MA exit?


----------



## MovingAverage (12 August 2020)

Newt said:


> Very much in agreement - the "Strawbroom" plots for Monte Carlo runs in AB are a particularly valuable too for considering the real range of simulated outcomes.  More info, but of course can never be definitive going forward.
> 
> View attachment 107354




The objective of the sims should be to move that red line in the straw broom pic as close as possible to the green line. Sometimes I which Amibroker would let you optimize to standard deviation


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## Skate (12 August 2020)

MovingAverage said:


> @Skate is this type of scenario the *motivation for your additional MA exit*?
> 
> View attachment 107441




*The motivation was to fudge the exit *(to align with Radges WTT results)
The Index filter is a Simple Moving Average of an Index whereas the additional exit is from the same train of thought but at an individual position level. The Index could be going gangbusters whereas the individual position might not enjoying the same level. It's a line in the sand & when it's crossed I don't want to be in the position anymore. 

*FYI*
I've supplied a versions of this style of exit to other members but I don't use that exit strategy in any of my systems - it was added to get my version of "WTT" near what was uploaded for a benchmark. It's called fudging the exit.

Skate.


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## MovingAverage (12 August 2020)

I just added that MA exit to my weekly for a bit of fun. Nothing spectacular, but was fun to try. Optimized the MA period over 15 to 35


----------



## Skate (12 August 2020)

*Apologies for the corrections *
In my enthusiasm to make a post about constructing a strategy, in particular, a "WTT Strategy" it appears the parameters are different to the original. After coding my version of the "WTT Strategy" a few of the parameters & setting fall short of the original. In my defence, I have coded a 20-week breakout strategy - the heart of Nick's WTT.  The other setting I was going from memory as it's been a while since reading snippets on the internet.

*Here is the differences as brought to my attention*
1. My version of the WTT Strategy "Index Filter" uses a lookback period from *20 weeks*   ==  The Radge "WTT strategy" uses a *10 week* lookback period for the Index Filter
2. My version of the WTT Strategy the "Trailing Stop" is set at *20%* when the Index Filter is ON  ==   The Radge "WTT strategy" uses *40%* when the Index Filter is ON
3. My version of the WTT Strategy uses a moving average as *an additional exit*   ==   The Radge "WTT strategy" *only uses a "Trailing Stop Exit"* driven by the Index Filter.
4. My version of the WTT Strategy uses a "Price Filter of (*min $0.05 *& Max of $10.00)  ==   The Radge "WTT strategy" uses a (*min $1.00* & Max of $10.00)




*Is there still a discrepancy *
Would you please let me know if there are other discrepancies as I won't upload my version of the "WTT Strategy" until the settings have been confirmed again.

Skate.


----------



## MovingAverage (12 August 2020)

One of @Skate 's posts today got me thinking about the stop loss that is commonly used in the WTT. These stops often result in loosing positions that if exited a few bars earlier would have been a profitable position. The thing that has always bugged me about the WTT is the relatively low win rate--typically 45% to 48%. This afternoon I augmented the stops in my WTT and the first pass simulation looks promising--I was really pushing to get an average win rate of better than 47% with the existing system, but the first pass of the augmented exit has pushed the win rate up to 56% and it has increased the number of consecutive winners to 18. It also appears to have reduced the overall average hold time, which I like. It does appear to have dramatically increased the number of trades. I'm going to run some more sims tomorrow to verify the new exit but if it checks out I'll share details in case anyone would like to incorporate it into their WTT.


----------



## Skate (12 August 2020)

*I have altered the parameters of my "WTT Strategy" to align with the original "WTT Strategy" *
The difference in the backtest results are startling, to say the least. 

*I'll post a backtest of my version of the "WTT Strategy" that I just constructed *
I have changed the parameters to align with the original Radge "WTT Strategy"

*# 1. Backtest comparison Skate's WTT Strategy & the Radge WTT Strategy *(using the Radge parameters)
Backtest Period = 1st January 2019 to end of trade today
Portfolio Size = $100K
Bet Size = $5k
Positions = 20







*# 2. Backtest comparison Skate's WTT Strategy & the Radge WTT Strategy *(using the Radge parameters)
Backtest Period = 1st January 2020 to 30th June 2020 
Portfolio Size = $100K
Bet Size = $5k
Positions = 20




*I'm sure others will backtest to confirm my results*
If my backtests differ from someone with the original it would be appreciated to have a genuine backtest uploaded with the parameters below for comparison.

*1. #Backtest Period* = 1st January 2019 to end of trade today
Portfolio Size = $100K
Bet Size = $5k
Positions = 20

*2. #Backtest Period* = 1st January 2020 to 30th June 2020 
Portfolio Size = $100K
Bet Size = $5k
Positions = 20

*Summary*
The parameters being different between strategies does not diminish this exercise of how to construct a tradable strategy.

Skate.


----------



## Cam019 (12 August 2020)

Skate said:


> View attachment 107448
> 
> *Apologies for the corrections *
> In my enthusiasm to make a post about constructing a strategy, in particular, a "WTT Strategy" it appears the parameters are different to the original. After coding my version of the "WTT Strategy" a few of the parameters & setting fall short of the original. In my defence, I have coded a 20-week breakout strategy - the heart of Nick's WTT.  The other setting I was going from memory as it's been a while since reading snippets on the internet.
> ...



Hey Skate,

No discrepancy. The only thing I will say is just make sure in the code, that if the systems index filter is off, and the stop has been moved up to 10% off the most recent high, and the index filter turns back to on again, the stop must stay 10% off that high until the 40% trailing stop catches up again. In other words, stops are never to be moved down when the index filter goes from off to on.


----------



## Skate (12 August 2020)

Cam019 said:


> Hey Skate,
> 
> No discrepancy. The only thing I will say is just make sure in the code, that if the systems index filter is off, and the stop has been moved up to 10% off the most recent high, and the index filter turns back to on again, the stop must stay 10% off that high until the 40% trailing stop catches up again. In other words, stops are never to be moved down when the index filter goes from off to on.




@Cam019 thanks for the help, the results are disappointing - Tomorrow if there is no other input I'll do a comparison with improvements I've made to the strategy. (Skate's Modified Version)

Skate.


----------



## CNHTractor (12 August 2020)

@Skate , Nick Radge has posted his current positions as at 10 August 2020 on his Twitter feed. As a cross check on coding you could see what positions your WTT coded portfolio held against those in Nick's. I will have a look tomorrow, at first glance I'm thinking my coding is only a 60% MATCH 

Here is a link to his post https://t.co/tKhbff8VEX


----------



## Newt (12 August 2020)

peter2 said:


> You're trying to convince me to buy Amibroker and code my discretionary trading plans into systems so that I can make so much more.
> 
> Arrgh, it might actually be a good idea, but can this old dog who used to write Fortran and Pascal programmes learn to code Amibroker at the advanced level in a short time?
> 
> It may be easier for me to modify entries and exits in already coded systems. I'll mull it over.




Definitely a "yes" 

Basics of Amibroker AFL can be learned relatively quickly, then the nuances can come with time.  So many helpful resources and people here and on AB forums.  Price isn't really a problem - very reasonable.  If in doubt, go for it.......


----------



## Warr87 (12 August 2020)

plenty of people here to msg if some coding doesn't make sense. it's a good product (and i'm certain I still haven't unlocked all of its features).


----------



## WilsonFisk (13 August 2020)

CNHTractor said:


> @Skate , Nick Radge has posted his current positions as at 10 August 2020 on his Twitter feed. As a cross check on coding you could see what positions your WTT coded portfolio held against those in Nick's. I will have a look tomorrow, at first glance I'm thinking my coding is only a 60% MATCH
> 
> Here is a link to his post https://t.co/tKhbff8VEX




My testing came within Cooee of the backtest done by @Skate however I probably think mine is about a 40% match compare to what Nick posted.  In saying that Nick did comment that it was his Personal Weekend Trend Trader strategy so he will have some tweaks in there from the original strategy I would suspect.


----------



## rnr (13 August 2020)

Cranked up the old Kindle last night and noted that there is a Minimum Turnover condition of $500,000 average for 7 days and a Minimum Volume condition of $500,000 average for 7 days.

Also interesting to note that the Universe was the Russell 3000.

Cheers,
Rob


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## Skate (13 August 2020)

*The WTT Strategy is a 20-week breakout strategy*
I had planned to keep posting more about the "WTT Strategy" but trying to duplicate another persons strategy is next to impossible. I coded my version of the "WTT Strategy" as a simple exercise in constructing a strategy. The simple 12 step procedure might be helpful to some.

*Uploads*
The idea was to upload the constructed version of the "WTT Strategy" then show how a few simple modifications (parameters & settings) can improve the strategy performance. Posting 2 or 3 different codes would be confusing so I'll upload my modified version of the "WTT Strategy" & let others backtest the strategy for evaluation.

*Human readable WTT code *
The code below is the (AFL) Amibroker "WTT Strategy" code for those who don't own the Amibroker program. I have made comments on each line for a better understanding of what the line of code is hoping to achieve.
*
/********************************************
Skate's WTT Weekly Modified Strategy for ASF Members
Created by: Skate - Last revision 12th August 2020
*********************************************/*

_SECTION_BEGIN( "# Skate's WTT Modified Exploration" );
//=================================================================================
//*1. The "SetOptions" are management options & they are a feature of Amibroker*
//=================================================================================
TradingFunds = Param( "Trading Funds - $", 5000, 1000, 10000000, 1000 ); // User-definable parameter, accessible via Exploration parameters - changes are reflected immediately. (Default $5k bets) - INSERT any amount
SetOption( "InitialEquity", 100000 ); // $100k Inital Equity (allows for 20 X $5k bets)
SetOption( "PriceBoundChecking", 1 ); // True: Adjust prices so that they fall within the High-Low range
SetOption( "CommissionMode", 2 ); // Use $ amount
SetOption( "CommissionAmount", 19.95 ); // CommSec commission rate
SetOption( "UsePrevBarEquityForPosSizing", 1 ); // True: Use previous bar closing equity to perform position sizing
SetOption( "AllowSameBarExit", False ); // False: Trade is exited & we move to next bar ignoring other signals
SetForeign( "$XAO.au", True , True ); // I've used the new Norgate Updater (NDU) format - change if the format is different to your data supplier
RestorePriceArrays( True ); // Restores original price and volume arrays after the call to SetForeign.
SetTradeDelays( 1, 1, 1, 1 ); // Trade delays, the delay is required for backtesting

//=================================================================================
//*2. The "Index Filter" - decides when we will trade & also our trailing stop levels*
//=================================================================================
MAfilter = MA( C, 10 ); // 10 week lookback period
IndexBuyFilter = C > MAfilter; // Index Filter = ON: When the close is greater than the 10 week simple moving average the Index Filter is ON [trailing stop set to 20%] + [buy + sell signals generated]
IndexSellFilter = C < MAfilter; // Index Filter = OFF: When the close is less than the 10 week simple moving average the Index Filter is OFF [shortens trailing stop to 10%] + [only sell signals generated]

//=================================================================================
//*3. Add all our other filters*
//=================================================================================
Liq = C * V; // Liquidity Filter
CV = 500000; // Volume Filter
Liqfactor = Liq > CV; // Liquidity Filter
ROCFilter = ROC( C, 20 ) > 30; // Rate Of Change (ROC) Momentum filter
ROCParameter = Param( "ROC Parameter", 8, 0, 52, 1 ); // 8 week Rate of Change period
MOMFilter = ( ROC( C, 10 ) >= ROCParameter ); // Momentum filter - the closing price of the last 10 weeks is greater than the last 8 weeks
NoStrength = Close < MA( Close, 12 ); // If the closing price is less then the Simple Moving Average of the last 12 weeks it's considered there is no strength in the move

//=================================================================================
//*4. Add a Buy condition*
//=================================================================================
WTTBP = Param( "Breakout Period", 10, 1, 1000, 1 ); // 10 week Lookback period

Cond1 = C > Ref( HHV( C, WTTBP ), -1 ); // Buy when the closing price is greater than the highest High Value of the last 10 weeks
Cond2 = IndexBuyFilter; // Buy ONLY when the Index Filter is ON
cond3 = C >= 0.05; // Buy only if the closing price is greater $0.05 (5 cents)
cond4 = C <= 10; // Buy only if the closing price is less than $10.00
cond5 = liqfactor; // Buy only when the Liquidity filter is TRUE
cond6 = ROCFilter AND MOMFilter; // Buy only when the Rate of Change filter & Momentum filter is TRUE

Buy = cond1
      AND cond2
      AND cond3
      AND cond4
      AND cond5
      AND cond6;

//=================================================================================
//*5. Add a sell condition*
//=================================================================================
Sell = C < MA( C, 50 ) AND NoStrength; // Sell when the close is less than the moving average of the last 50 weeks with the closing price is less than the Simple Moving Average of the last 12 weeks

//=================================================================================
//*6. Add a two-stage trailing stop*
//=================================================================================
ts1 = 20;
ts2 = 10;
ts = IIf( Indexbuyfilter , ts1 , ts2 );

ApplyStop( stopTypeTrailing , stopModePercent , ts , exitatstop = 2 ); // Apply Stop = [ts] Trailing Stop [exitatstop = 2] means check High-Low prices but exit NEXT BAR on regular trade price.

//=================================================================================
//*7. Add "Position Sizing"*
//=================================================================================
BuyPrice = Open; // Buy the next day at open
SellPrice = Open; // Sell the next day at open

Buy = ExRem( Buy, Sell ); // Removes additional buy signals
Sell = ExRem( Sell, Buy ); // Removes additional sell signals

PosQty = 20; // Position Quantity = Maximum 20 positions
PositionSize = -100 / posqty; // 100% of the equity divided by the Position Size
SetOption( "MaxOpenPositions", PosQty ); // Maximum number of open position

//=================================================================================
//*8. Add "Filters for the Exploration Analysis"*
//=================================================================================
Filter = Buy OR Sell; // Buy & Sell Filters

//=================================================================================
//*9. Add Buy & Sell coding for use in trading the pre-auction*
//=================================================================================
BuyOffered = Close * 1.03; // +3% Buy premium over the last closing price
BuyOffer = ceil( BuyOffered * 100 ) / 100; // The amount is rounded up no matter the price (ceil function used)

SellOffered = Close * 0.97; // -3% Sell premium below the last closing price
SellOffer = floor( SellOffered * 100 ) / 100; // The amount is rounded down no matter the price (floor function used)

//=================================================================================
//*10. Add the Exploration code*
//=================================================================================
ToBuyPosSize = floor( TradingFunds / BuyOffer ); // Trading Funds divided by buy offer of (+3%) buy premium over the last closing price
ToBuyPosCost = BuyOffer * ToBuyPosSize; // The cost of buying the amount of share

PositionScorer = 100 - Close;  // Lowest priced security at BuySetup trigger is taken first
PositionScore = Ref( PositionScorer, -1 ); // Previous bar (-1 bar)

//=================================================================================
//*11. Add columns to report & sort the Exploration Analysis results*
//=================================================================================
AddColumn( IIf( Buy, ToBuyPosSize, Null ), "# shares", 1, colorWhite, colorDarkGreen, 90 ); // Exploration Analysis - this column displays quantity of shares to buy
AddColumn( IIf( Buy, BuyOffer, Null ), "$ Buy Offer", 1.2, colorWhite, colorDarkGreen, 110 ); // Exploration Analysis - this column displays pre-auction buy offer price (+3% premium added to the last closing price)
AddColumn( IIf( Buy, ToBuyPosCost, Null ), "$ Cost", 1.2, colorWhite, colorDarkGreen, 80 ); // Exploration Analysis - this column displays the total ($) you will pay for the qty of shares at the +3% primum
AddColumn( IIf( Sell, SellOffer, Null ), "$ Sell Offer", 1.2, colorWhite, colorRed, 110 ); // Exploration Analysis - this column displays pre-auction sell offer price (-3% discount to the last closing price)
SetSortColumns( 2, -3, -4, -5, -6, 1 ); // Sort the columns in correct order
_SECTION_END();

//=================================================================================
//*12. Add code to the chart & plots the signals. Also adding an Index Ribbon*
//=================================================================================
_SECTION_BEGIN( "Price" );

SetChartOptions( 0, chartShowArrows | chartShowDates );
_N( Title = StrFormat( "{{NAME}} - {{INTERVAL}} {{DATE}} Open %g, Hi %g, Lo %g, Close %g (%.1f%%) Vol " + WriteVal( V, 1.0 ) + " {{VALUES}}", O, H, L, C, SelectedValue( ROC( C, 1 ) ) ) ); // Chart settings

Plot( C, "Close", ParamColor( "Color", colorBlack ),
      ParamStyle( "Style", styleNoTitle | styleBar, maskAll ) ); // User-definable parameter, accessible via Chart parameters - changes are reflected immediatelly. (Bar Chart Default)

PlotShapes( Buy*shapehollowUpArrow, colorWhite, 0, Low, -20 ); // Displays Buy up arrow on the signal bar
PlotShapes( ( Sell > 0 ) * shapeDownArrow, Coloryellow, 0, High, -40 ); // Displays Sell down arrow on the signal bar
PlotShapes( Ref( Buy, -1 ) * shapeHollowSquare, colorWhite, 0, O, 0, 0 ); // Displays a white square on the buy bar
PlotShapes( Ref( Sell, -1 ) * shapeHollowCircle, colorYellow, 0, O, 0, 0 ); // Displays a yellow circle on the sell bar

Indexfilter = IIf( IndexBuyfilter, True, False ); // If Index Filter is TRUE (ON), or If Index Filter is FALSE (OFF),
RibbonColor = IIf( Indexfilter, colorGreen, colorRed ); // If Index Filter is TRUE (ON) the ribbon is GREEN, or If Index Filter is FALSE (OFF) the ribbon is Red
Plot( 1, "", RibbonColor, styleArea | styleOwnScale | styleNoLabel, -0.0001, 190 ); // Plots Index Filter Ribbon [green = ON] [Red = OFF]

for( i = 1; i < BarCount; i++ )
{
    if( Buy[i - 1] ) PlotText( "Buy\n@ " + O_, i, L * 0.9, colorWhite ); // _Displays white buy price (opening price) under the white box (buy bar)

    if( sell[i - 1] ) PlotText( "Sell\n@ " + o[ i ], i, H[ i ] * 1.1, colorYellow ); // Displays yellow sell price (opening price) above the yellow circle (sell bar)

}
_SECTION_END();
_

Skate._


----------



## CNHTractor (13 August 2020)

@Skate, thanks for all your work in this exercise. I am sure all members are appreciative of your time and expertise. I know that there are many aspects of these posts that I can take away and hopefully implement in improving systems that I am looking at.

As to your WTT I have run a series of backtests to see particular statistics over different time frames. Hopefully they will be of interest


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## Skate (13 August 2020)

CNHTractor said:


> @Skate, thanks for all your work in this exercise. I am sure all members are appreciative of your time and expertise. I know that there are many aspects of these posts that I can take away and hopefully implement in improving systems that I am looking at. As to your WTT I have run a series of backtests to see particular statistics over different time frames. Hopefully they will be of interest
> View attachment 107477




*Hopefully they will be of interest*
@CNHTractor they are of interest to me - thank you for uploading the backtest results, it's a real eye-opener. 

*For a very simple strategy *
The idea behind a 20-period Breakout Strategy is not new & utilising a bare-bone code the stats look robust over a variety of periods. 

*What's most pleasing *
My version of the WTT Strategy "handled" the COVID-19 Flash Crash without too much pain.

Skate.


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## WilsonFisk (13 August 2020)

Skate said:


> MAfilter = MA( C, 10 ); // 10 week lookback period
> IndexBuyFilter = C > MAfilter; // Index Filter = ON: When the close is greater than the 10 week simple moving average the Index Filter is ON [trailing stop set to 20%] + [buy + sell signals generated]
> IndexSellFilter = C < MAfilter; // Index Filter = OFF: When the close is less than the 10 week simple moving average the Index Filter is OFF [shortens trailing stop to 10%] + [only sell signals generated]




I may be missing something, but it doesn't look like your code for the index filter is actually referencing the index, rather just the individual symbol??  

I am by no means an Amibroker expert so if I am missing it somewhere please let me know.


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## Warr87 (13 August 2020)

I think you may be right as those calcuations came after:

RestorePriceArrays( True );

I'm pretty sure those calcs have to be done before you restore the arrays to the default symbol?


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## WilsonFisk (13 August 2020)

Maybe something like this

IndexCode = ParamStr("Index Symbol","$XAO.au"); 
Index = Foreign(IndexCode,"C");
MAFilter = MA( C, 10);
IndexBuyFilter = Index > MAFilter;
IndexSellFilter = Index < MAFilter; 
RestorePriceArrays( True );


----------



## CNHTractor (13 August 2020)

Warr87 said:


> I think you may be right as those calcuations came after:
> 
> RestorePriceArrays( True );
> 
> I'm pretty sure those calcs have to be done before you restore the arrays to the default symbol?






WilsonFisk said:


> Maybe something like this
> 
> IndexCode = ParamStr("Index Symbol","$XAO.au");
> Index = Foreign(IndexCode,"C");
> ...




@Warr87, to my eye I think you are correct. I've made the following change


```
//2. The "Index Filter" - decides when we will trade & also our trailing stop levels
//=================================================================================
SetForeign( "$XAO.au", True , True ); // I've used the new Norgate Updater (NDU) format - change if the format is different to your data supplier
MAfilter = MA( C, 10 ); // 10 week lookback period
IndexBuyFilter = C > MAfilter; // Index Filter = ON: When the close is greater than the 10 week simple moving average the Index Filter is ON [trailing stop set to 20%] + [buy + sell signals generated]
IndexSellFilter = C < MAfilter; // Index Filter = OFF: When the close is less than the 10 week simple moving average the Index Filter is OFF [shortens trailing stop to 10%] + [only sell signals generated]
RestorePriceArrays( True ); // Restores original price and volume arrays after the call to SetForeign.
```


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## CNHTractor (13 August 2020)

CNHTractor said:


> As to your WTT I have run a series of backtests to see particular statistics over different time frames. Hopefully they will be of interest




I've just looked at the data that I use with Norgate and have clarified a misconception. My subscription level with Norgate does NOT include all historical movements, as such the data I have submitted will not be correct. Sorry for anyone being misled here.

As has been commented before on backtests - care needs to be taken


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## Skate (13 August 2020)

WilsonFisk said:


> I may be missing something, but it doesn't look like your code for the index filter is actually referencing the index, rather just the individual symbol?? I am by no means an Amibroker expert so if I am missing it somewhere please let me know.





*The original code *
@WilsonFisk you are correct the "BUYFilter" references individual positions & not an Index. To keep the version as is - you can change "Index" to "Buy" as it makes no difference running the code - The terminology (Index) got through to the keeper. Sorry about that. If you prefer (a) you can substitute an Index Filter, (b) remove the Buy Filter (c) reword "Index to Buy" or (d) leave the strategy as is "as it makes no difference when running the strategy".

*The Index Filter is really a Buy Filter *(terminology corrected)
Everywhere Index is written you can change Index to Buy as the example below displays

//=================================================================================
//2. The "Buy Filter" - decides when we will trade & also our trailing stop levels
//=================================================================================
MAfilter = MA( C, 10 ); // 10 week lookback period
*BuyFilter *= C > MAfilter; // *Buy Filter *= ON: When the close is greater than the 10 week simple moving average the *Buy Filter* is ON [trailing stop set to 20%] + [buy + sell signals generated]
*SellFilter* = C < MAfilter; // *Buy Filter* = OFF: When the close is less than the 10 week simple moving average the *Buy Filter* is OFF [shortens trailing stop to 10%] + [only sell signals generated]

Skate.


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## TraderJimmy (13 August 2020)

@Skate you've inspired me to start a trial of Norgate and Amibroker. I've started running a few simple backtests, pretty straight forward. The code that you have shared will give me a LOT to chew on, as I want to understand every line.

At the same time, I'm researching strategies and generally educating myself...so my hope is to learn a strategy/system, then code it as a way to learn both the strategy and Amibroker.


----------



## Skate (13 August 2020)

TraderJimmy said:


> @Skate you've inspired me to start a trial of Norgate and Amibroker. I've started running a few simple backtests, pretty straight forward. The code that you have shared will give me a LOT to chew on, as I want to understand every line. At the same time, I'm researching strategies and generally educating myself...so my hope is to learn a strategy/system, then code it as a way to learn both the strategy and Amibroker.




@TraderJimmy, thank you for your kind words, they are appreciated. 

*Hint*
If you do a search I have uploaded a few different strategies that may help you understand a strategy a little better. 

Skate.


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## WilsonFisk (13 August 2020)

Skate said:


> *Hint*
> If you do a search I have uploaded a few different strategies that may help you understand a strategy a little better.




Make sure you include a search around psychology/behaviour as part of that, as you need to have a strategy for how you will act whilst implementing the trading strategy.  

Knowing how you will behave when the market or a trade moves against you, will do wonders for constructing a system as it will give you a baseline of what you are working towards.


----------



## Skate (13 August 2020)

WilsonFisk said:


> Make sure you include a search around psychology/behaviour as part of that, as you need to have a strategy for how you will act whilst implementing the trading strategy. Knowing how you will behave when the market or a trade moves against you, will do wonders for constructing a system as it will give you a baseline of what you are working towards.




@WilsonFisk you nailed it. 

*That's a two thumbs up type of post.*



Skate.


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## Warr87 (13 August 2020)

'Trading in the Zone' is a great book for that. The recent COVID crash provides a good learning opportunity for people. Would you actually keep trading if you saw 20-48% of your money evaporate in a paniced market? If you say you can stomache -25% drawdown, is that actually the case? Losing $25,000 out of a $100,000 isn't easy to stomache.

Good luck with the coding @TraderJimmy . It's addictive. I spend too much time trying to code then actually doing some other work I should be doing. Make sure you check out @trav's post on amibroker and backtesting as well. Google and the AB forum are you friend too. I dare say you will quickly go from the trial of Norgate to an actual subscription too. I tried going for free, and even paid for Amiquote. But quickly abandoned that and went for Norgate. In hindsight maybe I should have saved the $100 for AQ and put it towards Norgate. Oh well, lesson learned. (AQ is a good product btw but quality data is a must.)

@Skate I recently finished some final touches for a daily system and actually removed the index filter based on a suggested from a member here. My system performs much better without it, and barely lost anything in the COVID crash. But since it is designed to buy into pullbacks the index filter was making my DD worse by removing opportunities to recover. Index filter isn't always your friend! Though I recommend it in 90% of cases.


----------



## Skate (13 August 2020)

Warr87 said:


> '*Trading in the Zone*' is a great book for that.




@Warr87, I have to agree to a point but my "Free" eBook: Trading Fundamentals - Skate's Beginners "eBook" version is more concise. (IMHO)
https://www.aussiestockforums.com/posts/1014728/

Skate.


----------



## willoneau (13 August 2020)

Skate said:


> View attachment 107483
> 
> *The original code *
> @WilsonFisk you are correct the "BUYFilter" references individual positions & not an Index. To keep the version as is - you can change "Index" to "Buy" as it makes no difference running the code - The terminology (Index) got through to the keeper. Sorry about that. If you prefer (a) you can substitute an Index Filter, (b) remove the Buy Filter (c) reword "Index to Buy" or (d) leave the strategy as is "as it makes no difference when running the strategy".
> ...



Hi would this work?

IndexCode = ParamStr( " Index Code ", " xao " );
MAfilter = Foreign( IndexCode, "C" );


----------



## Warr87 (13 August 2020)

Wouldn't it be $XAO ? or $XAO.au for norgate users. but otherwise I believe that is right.


----------



## Skate (13 August 2020)

*I didn't realise the amount of interest in the WTT Strategy*
I had planned to make a few posts about the "WTT Strategy" & move on. The modified "WTT Strategy" I uploaded for others to evaluate isn't too shabby for a Model "T". The backtest results have inspired me to code a "Tesla model" for myself. Actually the backtest results don't look too bad for 453 lines of code. I have this grand idea that more lines of code finesses a strategy rather than bloating it, but in this case, the amount of coding is irrelevant.

*Long Story short*
With the interest in the "WTT Strategy" I'm planning to paper trade it alongside the "HappyCat v1 Strategy" with the same start period. The "HappyCat v2 Strategy" now gets the flick.

*Portfolio Configuration includes*
The strategy will be a 20-period Breakout strategy 
1. A 10 period Index Filter
2. A Price filter  
3. A Turnover Filter  
4. A Volume Filter 
5. There are 2 Momentum exits (SMA & ROC) & a two-stage "Looping" Trailing Stop (40% & 10%)

*Reporting will be on Fridays *
I'll post the "WTT Strategy" results at the same time & in the same vein as the "HappyCat Strategy" meaning all the weekly signals will be displayed for both strategies with the weekly reports. To kick off the reporting I have the trading results that are up-to-date as of the end of trade today that I will post shortly.

Skate.


----------



## Skate (13 August 2020)

Skate.


----------



## willoneau (13 August 2020)

y


Warr87 said:


> Wouldn't it be $XAO ? or $XAO.au for norgate users. but otherwise I believe that is right.



Yep but I use Premuim


----------



## Skate (13 August 2020)

CNHTractor said:


> @Skate , Nick Radge has posted his current positions as at 10 August 2020 on his Twitter feed. As a cross check on coding you could see what positions your WTT coded portfolio held against those in Nick's. I will have a look tomorrow, at first glance I'm thinking my coding is only a 60% MATCH  Here is a link to his post https://t.co/tKhbff8VEX




@CNHTractor thanks for the link to Nick's Twitter feed as it gives me the opportunity to check my "Tesla" WTT Strategy benchmarking if the signals align.




*There is a minor difference*
Nick's WTT Strategy exits on the "Trail Stop" levels whereas I have added two additional exits to my strategy being both "Momentum" exits (SMA & ROC). I also have the two-stage "Looping" Trailing Stop (40% & 10%) the same as the original code.

*When the signals align (100%) I have circled the buy position *
As I have two extra momentum I'll exit a little sooner at times. After exiting there maybe a re-entry at a later date. 

*The Chartist Buy Position*







*The Chartist Buy Position*








*The Chartist Buy Position*
*







The Chartist Buy Position



*

*



Upload Limit reached
*
Skate.


----------



## Skate (13 August 2020)

*There is a minor difference*
Nick's WTT Strategy exits on the "Trail Stop" levels whereas I have added two additional exits to my strategy being both "Momentum" exits (SMA & ROC). I also have the two-stage "Looping" Trailing Stop (40% & 10%) the same as the original code.

*When the signals align (100%) I have circled the buy position*
As I have two extra momentum I'll exit a little sooner at times. After exiting there maybe a re-entry at a later date.




*The Chartist Buy Position*
*







The Chartist Buy Position

*






*The Chartist Buy Position*








*The Chartist Buy Position*
*







*
Skate.


----------



## Skate (13 August 2020)

*There is a minor difference*
Nick's WTT Strategy exits on the "Trail Stop" levels whereas I have added two additional exits to my strategy being both "Momentum" exits (SMA & ROC). I also have the two-stage "Looping" Trailing Stop (40% & 10%) the same as the original code.

*When the signals align (100%) I have circled the buy position*
As I have two extra momentum I'll exit a little sooner at times. After exiting there maybe a re-entry at a later date.




*The Chartist Buy Position

*


*


The Chartist Buy Position







The Chartist Buy Position






Summary*
The charts confirm that my version of "WTT STrategy" is pretty close to the original.

*As they say*
"Sometimes good enough is good enough"

END.

Skate.


----------



## martyjames (13 August 2020)

Thank you Skate for all your great work. Plenty to analyse and think about.


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## MovingAverage (14 August 2020)

Warr87 said:


> Would you actually keep trading if you saw 20-48% of your money evaporate in a paniced market? If you say you can stomache -25% drawdown, is that actually the case? Losing $25,000 out of a $100,000 isn't easy to stomache.




IMHO this is part of the problem with simulating systems....you might see a DD of 20% and think that is ok, but in reality I doubt very much that someone who has worked very hard for years to scrape together $100,000 then to put it into the market would be comfortable seeing their $100,000 shrink to $80,000 not know when things will turn around. It is a real mental battle to plow on placing your system trades when you keep getting loss after loss.


----------



## Skate (14 August 2020)

MovingAverage said:


> IMHO this is part of the problem with simulating systems....you might see a DD of 20% and think that is ok, but in reality I doubt very much that someone who has worked very hard for years to scrape together $100,000 then to put it into the market would be comfortable seeing their $100,000 shrink to $80,000 not know when things will turn around. It is a real mental battle to plow on placing your system trades when you keep getting loss after loss.



*Looking at percentages*
If you view backtests in percentages you become quickly conditioned & accepting. A drawdown of 20%, yeah, that's acceptable & let's face it, we have all made the same remark at one stage or another.

*But convert percentages to dollars *
20% converted to dollars takes on a new meaning so don't let percentages fool you into a false sense of security.

*Percentages are relevant to the size of your portfolio.*
(a) On a $20k portfolio, 20% is bearable but trading a larger portfolio it can be devastating & hard to swallow.
(b) On a $100k portfolio, 20% takes on a new meaning as @MovingAverage mentioned in the previous post
(c) Trading a $1m or $2m portfolio 20% becomes very relevant indeed. That's $200k & $400k  of your funds "GONE"

Skate.


----------



## MovingAverage (14 August 2020)

Skate said:


> *But convert percentages to dollars *
> 20% converted to dollars takes on a new meaning so don't let percentages fool you into a false sense of security.




Spot on!


----------



## qldfrog (14 August 2020)

MovingAverage said:


> Spot on!



Please note that the covid crash gave a good indication of your behaviour, i consid that as my validation test: 
Lost all of my wins plus more.i think i pass:-(


----------



## Skate (14 August 2020)

*Update*
I have been asked for a comparison of how "Skate's Modified WTT Strategy" compares to the twitter feed of The Chartist. (the uploaded version)

*Charts*
I previously uploaded the charts for comparison between my "Tesla" version of the "WTT Strategy" but not "Skate's Modified WTT Strategy" that was uploaded in the "Dump it here" thread for members to evaluate.

*Comparison uploads*
I have included "The Chartist" Twitter feed capture & inserted it into the LH top corner of the upper chart. The signals that matched are circled. 

*The lower chart is "Skate's Modified WTT Strategy" *
For comparison, the lower chart is "Skate's Modified WTT Strategy" the strategy that has been uploaded for forum members to evaluate. The signals are very close to the Chartist Twitter Feed, proving the uploaded "Skate's Modified WTT Strategy" maybe basic in construction but when it comes to performance it's a handy strategy to have. Simplicity sometimes works. 

*The charts below are self-explanatory*
The charts have been marked-up so there is no further explanation is needed. In a nutshell "Skate's Modified WTT Strategy" is worthy of further evaluation.
































































*Summary*
"Skate's Modified WTT Strategy" signals are very close to "The Chartist Twitter Feed" & the performance may be slightly better than the original. Sometimes, good enough is good enough.

Skate.


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## Trav. (14 August 2020)

@Skate I am thinking that you might be making a run at the Chartist with a version of the WTT and maybe the Twitter world as well


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## MovingAverage (14 August 2020)

qldfrog said:


> Please note that the covid crash gave a good indication of your behaviour, i consid that as my validation test:
> Lost all of my wins plus more.i think i pass:-(




I'm always cranky no matter what the market does so don't let that be your indicator


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## Cam019 (14 August 2020)

qldfrog said:


> Please note that the covid crash gave a good indication of your behaviour, i consid that as my validation test:
> Lost all of my wins plus more.i think i pass:-(



This reminds me of the Jerry Parker interview on Chat with Traders that I re-listened to again last night (one of my absolute favourites). Jerry says in that interview that the Turtles were told that if they made money, but they weren't following the rules, that they'd be in trouble, but if they lost money, and they were following the rules, they'd probably be okay.

So in my mind, there is really only one question. Were you following the rules?


----------



## qldfrog (14 August 2020)

Cam019 said:


> This reminds me of the Jerry Parker interview on Chat with Traders that I re-listened to again last night (one of my absolute favourites). Jerry says in that interview that the Turtles were told that if they made money, but they weren't following the rules, that they'd be in trouble, but if they lost money, and they were following the rules, they'd probably be okay.
> 
> So in my mind, there is really only one question. Were you following the rules?



I definitively did till my systems were all out..not quick enough in retrospective but isn't it always easier post facts.
The weeks where no signal were given gave me more time to review code ,add better gtfo and actually build fully different concepts


----------



## ducati916 (14 August 2020)

MovingAverage said:


> IMHO this is part of the problem with simulating systems....you might see a DD of 20% and think that is ok, but in reality I doubt very much that someone who has worked very hard for years to scrape together $100,000 then to put it into the market would be comfortable seeing their $100,000 shrink to $80,000 not know when things will turn around. It is a real mental battle to plow on placing your system trades when you keep getting loss after loss.





Which is why the value allocated initially should only represent a small % of total net worth initially. It is easy to increase the % once you are educated and confident in your systems and methodology, impossible to reduce once you have lost 20%. I would say further that you should never go too much past that initial % until you have traded your first crash/bear market. Until you have successfully navigated that, you simply don't understand what you will experience.

jog on
duc


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## Roller_1 (14 August 2020)

Skate said:


> View attachment 107556
> 
> 
> *Update*
> ...




Is everything working correctly in your code skate? I just noticed on the SLR chart you have been in that position for a long time, and there was no exit flagged during the crash. Also the CEL chart.


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## Skate (14 August 2020)

Roller_1 said:


> Is everything working correctly in your code skate? I just noticed on the SLR chart you have been in that position for a long time, and there was no exit flagged during the crash. Also the CEL chart.




The sell condition requires two confirmation in tandem. The exit is conditional on an (and ) statement. Using an (or) statement the exit is conditional of either being met. Others may have a different view.

Skate.


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## MovingAverage (14 August 2020)

Happy FriYay all,
So with all this recent discussion about weekly systems thought I'd share the current performance of my live weekly trades. The graph below is the unit value of my portfolio (not $$ value) and it tells a lot about how my real weekly portfolio is tracking. This is from the start of the year. You can see the Covid draw down which corresponds to an overall system draw down of around 15%. Pretty much all of that draw down has been recovered. The past month certainly has seen it's ups and downs but overall tracking in the right direction. Would love to hear how other live weekly portfolios are tracking.
Cheers MA


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## Skate (14 August 2020)

MovingAverage said:


> Happy FriYay all,
> So with all this recent discussion about weekly systems thought I'd share the current performance of my live weekly trades. The graph below is the unit value of my portfolio (not $$ value) and it tells a lot about how my real weekly portfolio is tracking. This is from the start of the year. You can see the Covid draw down which corresponds to an overall system draw down of around 15%. Pretty much all of that draw down has been recovered. The past month certainly has seen it's ups and downs but overall tracking in the right direction. Would love to hear how other live weekly portfolios are tracking.
> Cheers MA
> 
> View attachment 107574




@MovingAverage another great post. By sharing your equity curve it allows others to benchmark their trading. Well done (boarding on being impressive)

Skate.


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## Skate (14 August 2020)

Skate.


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## MovingAverage (14 August 2020)

Skate said:


> Well done (boarding on being impressive)
> 
> Skate.







"stick to the system" isn't that what they say....sometimes that rule is the hardest rule to follow


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## Skate (14 August 2020)

1. IFN - 17916 @ $0.89
2. SPT - 10,338 @ 1.38
3. WAF - 13,888 @ $0.93




1. PYC - 125,000 Shares @ $0.12
2. NST - 1,022 @ $14.67
3. BBN - 3,504 @ $4.28




Skate.


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## Skate (14 August 2020)

Skate.


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## MovingAverage (14 August 2020)

@Skate I'm interested to note you're re-balancing. So am I correct to assume that if any of your open positions drop to below 5% of total portfolio value then you will buy more to get it up to 5% and that if an open position is more than 5% of total portfolio value you will sell down whatever is required to get it to 5%? I've always found this difficult to model in AB sims.


----------



## MovingAverage (14 August 2020)

MovingAverage said:


> Happy FriYay all,
> So with all this recent discussion about weekly systems thought I'd share the current performance of my live weekly trades. The graph below is the unit value of my portfolio (not $$ value) and it tells a lot about how my real weekly portfolio is tracking. This is from the start of the year. You can see the Covid draw down which corresponds to an overall system draw down of around 15%. Pretty much all of that draw down has been recovered. The past month certainly has seen it's ups and downs but overall tracking in the right direction. Would love to hear how other live weekly portfolios are tracking.
> Cheers MA
> 
> View attachment 107574




I'm still a cranky bastard @qldfrog


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## Skate (14 August 2020)

MovingAverage said:


> @Skate I'm interested to note you're re-balancing. So am I correct to assume that if any of your open positions drop to below 5% of total portfolio value then you will buy more to get it up to 5% and that if an open position is more than 5% of total portfolio value you will sell down whatever is required to get it to 5%? I've always found this difficult to model in AB sims.




@MovingAverage, that's not what I'm talking about when I talk about rebalancing my position size.

*Rebalancing is simply calculating the dollar size of the next bet or series of bets*
Pyramiding works both ways, the bet will either increase or decrease according to the trading funds available.

*Trading in the pre-auction necessitates dollar re-balancing of positions sizing*
Re-balancing will be a direct correlation to the current trading account balance. I increase the size of the next series of bets averaged to have all my trading funds deployed in the markets. Using a (+/-) 3% premium results in "unused" fund. The outstanding funds are added to the regular bet size of the portfolio.

*"Pyramiding Explanation" (positionSize)*
Pyramiding "PositionSize" is a re-balancing technique to reinvestment profits. "Pyramiding (re-balancing) my PositionSizes" ensures every trading Dollar is put into the markets "to fight the good fight".

*How?*
Position-sizing uses the trading Bank balance to calculate the size of the next bet or series of bets. It's simply a way of putting every dollar to work.

*What is the Re-Balancing Formula?*
Trading Bank Balance/outstanding positions = new "PositionSize"
This will now be the new bet for each & every pending trade (the new PositionSize also calculates the number of shares to buy in the pre-auction)

*Most fail to realise pyramiding works both ways*
Pyramiding position sizing works for me as all available funds are constantly in the markets. Most fail to realise pyramiding works both ways. When trading is not going well, position sizing decreased because of the compounded losses, even a string of losses is reflected. But hey, when times are good why shouldn't I take advantages of these conditions & increase my bet sizes. It's the "make hay while the sun shines" theory.

*The uploaded "Skates Modified WTT Strategy" has a re-balancing feature built into the "Exploration Analysis"*
I've explained in a previous post that re-balancing can be done on the fly. When I uploaded the constructed "Skates Modified WTT Strategy" I explained re-balancing is done through the Parameter icon. The parameter icon is the "red circled" small [slider Box] icon on the menu bar.

*How to change the parameters? *
"Left-click" on the parameter icon, a list will appear so you can alter (a) "*the bet size" *(b) The Strategy Breakout Period or (c) change the chart style. I've decided to have a portfolio size of $100k with 20 positions = $5k initial bet size (as shown in the parameter dialogue box below - the red arrow). The parameter setting allows you to adjust your bet size on the fly. Changing your bet size is done by changing the "Trading Funds" dollar size. The strategy will automatically re-calculate the new number of shares to buy.




*Additional information about re-balancing*
https://www.aussiestockforums.com/posts/1088002/

Skate.


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## MovingAverage (14 August 2020)

Very interesting @Skate. For me it does beg the question whether we should ignore the many and varied position sizing strategies. When discussing strategies and their viability across different markets should we not be excluding external factors such as position sizing? Should we agree a position sizing approach that doesn't impact the output of the system? Maybe agree that system modelling/simulation are based on a fixed $100000 staring capital with a 20 position $5000 position. Exotic position sizing strategies can mask the true performance of systems. Not % of portfolio or re-balancing. Just a thought.


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## Skate (14 August 2020)

MovingAverage said:


> Very interesting @Skate. For me it does beg the question whether we should ignore the many and varied position sizing strategies. When discussing strategies and their viability across different markets should we not be excluding external factors such as position sizing? Should we agree a position sizing approach that doesn't impact the output of the system? Maybe agree that system modelling/simulation are based on a fixed $100000 staring capital with a 20 position $5000 position. Not % of portfolio or re-balancing. Just a thought.




*Re-balancing*
Starting portfolio $100k X 20 positions = bet size $5k

*If we are "lucky in trading"*
Closed profits are added to increase the bet size, meaning every dollar is in the markets

*If we are un-lucky & heaven forbid we lose when trading*
With "closed losses", the bet size reduces as your trading funds diminish

*Rebalancing your Trading funds*
When you first start trading a new strategy the portfolio size is fixed. A $100k Portfolio your first 20 bets are fixed (the first 20 bets = $5k per bet) Un-used fund due to trading in the pre-auction using (+/-) the 3% premium - the funds are never fully invested meaning the original bet is never fully exercised (used). The closed profits or losses (plus outstanding funds) calculates the next bet size. Profits compound & your trading balance increases. Meaning, "closed profits" compound & to invest the extra profits the size of the next bet increases. Re-balancing my bet size is a simple strategy that works for me.

Skate.


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## MovingAverage (14 August 2020)

Skate said:


> *Re-balancing*
> Starting portfolio $100k X 20 positions = bet size $5k
> 
> *If we are "lucky in trading"*
> ...



To me that is the simple % of portfolio approach. My confusion over term "re-balancing", which I understand to mean readjusting open positions to meet a requirement. All good.


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## Skate (15 August 2020)

Skate.


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## willy1111 (15 August 2020)

Hi @Skate . . . I haven't been spending as much time on the forum over the past year but have logged in again recently as time permitted as see your thread is still trending well 

Appreciate the efforts you have made to openly share your learnings in this thread.

*Skates version of WTT Strategy*
Over the past few days I have spent some time going through your version of the WTT strategy and the code you have posted at https://www.aussiestockforums.com/posts/1088195/ and there is something I wish to raise or discuss in the interest of learning for all those reading.

*Making use of historical index constituents*
I think I raised it earlier in the thread at some point many months ago and that is to do with making use of historical index constituents whilst using AmiBroker.  It may only be available to those using the platinum version of Norgate Data which I do and as I understand you don't. 

*Backtests with AmiBroker*
I believe you have previously said backtests mean jack all.  However, I am of the belief that they warrant tremendous value as they are the initial evaluation of whether a strategy warrants further investigation - in your case paper trading.

*Breaking up posts*
Over the next few posts I plan to show some backtests of Skates version of the WTT Strategy as generously shared in post https://www.aussiestockforums.com/posts/1088195/ showing the difference in results when making use of historical index constituents.


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## willy1111 (15 August 2020)

*Amending Index Filter Code*
I copied and paste Skates version of WTT Strategy in AmiBroker and amended the index filter code as follows
//=================================================================================
//2. The "Index Filter" - decides when we will trade & also our trailing stop levels
//=================================================================================
Index = Foreign("$XAO","C",True);
MAfilter = MA( Index, 10 ); // 10 week lookback period
IndexBuyFilter = Index > MAfilter; // Index Filter = ON: When the close is greater than the 10 week simple moving average the Index Filter is ON [trailing stop set to 20%] + [buy + sell signals generated]
IndexSellFilter = Index < MAfilter; // Index Filter = OFF: When the close is less than the 10 week simple moving average the Index Filter is OFF [shortens trailing stop to 10%] + [only sell signals generated]

*Backtest Period 1st Jan 2019 to 31 Dec 2019*
For this post I ran all backtests on the period 1st Jan 2019 to 31 Dec 2019.
*
Backtest 1 - Skates version of WTT Strategy (after amending index filter)*
The first backtest I ran is on watchlist All Ords (502 matching symbols) this is the index as it stands today.



*Backtest 2 - Making use of Historical Index Constituents*
Platinum users of Norgate data are able to make use of Historical Index Constituents https://norgatedata.com/amibroker-usage.php  This means that before a trade is taken the software checks to see it is in the relevant index at the time the trade is entered.  This backtest I ran on watchlist All Ords (502 matching symbols) but included code to ensure the stock was in the All Ords at the time the trade was entered. 


*Backtest 3 - Making use of Historical Index Constituents*
This backtest I ran on watchlist All Ords Current & Past (2085 matching symbols).  This backtest takes into account trades for stocks that were once in the All Ords but have since been removed with the condition that when the trade was entered it was in the All Ords at that time.


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## Skate (15 August 2020)

willy1111 said:


> *Backtests with AmiBroker*
> I believe you have previously said backtests mean jack all. However, I am of the belief that they warrant tremendous value as they are the initial evaluation of whether a strategy warrants further investigation - in your case paper trading.




@willy1111, welcome back. Thank you for taking the time & effort to conduct the series of backtests on "Skates Modified WTT Strategy". The difference between the backtest results are a real eye-opener.

*"I believe you have previously said backtests mean jack all"*
Yes I have, many times. If you believe the backtest results you'll become a millionaire in a few short years - "but in live trading", you'll tend to struggle to achieve those results (for a variety of reasons). I trade in the pre-auction & only take the signals from the "Exploration Analysis" (#shares at the Buy & Sell offer)

*Paper trading*
Before I start trading a new strategy it undergoes rigorous paper trading, taking the signals generated by the Exploration Analysis without intervention.

Skate.


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## peter2 (15 August 2020)

@willy1111  Thank you.

Would you get more reliable results if you used a liquidity filter rather than inclusion in an index ?


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## willy1111 (16 August 2020)

peter2 said:


> @willy1111  Thank you.
> 
> Would you get more reliable results if you used a liquidity filter rather than inclusion in an index ?




Hi @peter2  . . . happy to run a backtest on the full asx + delisted (that is no inclusion in any index) - what liquidity filter would you like to see?

I believe the WTT Radge is displaying on his twitter feed is for the full asx, ie index inclusion is irrelevant).

I believe the code posted by @Skate  has a liquidity filter of turnover (close * volume) greater than 500,000 for the current week.  I believe Radge uses a liquidity filter of turnover and volume ema greater than 500,000 over the last 7 periods.


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## Cam019 (16 August 2020)

willy1111 said:


> Hi @peter2  . . . happy to run a backtest on the full asx + delisted (that is no inclusion in any index) - what liquidity filter would you like to see?
> 
> I believe the WTT Radge is displaying on his twitter feed is for the full asx, ie index inclusion is irrelevant).
> 
> I believe the code posted by @Skate  has a liquidity filter of turnover (close * volume) greater than 500,000 for the current week.  I believe Radge uses a liquidity filter of turnover and volume ema greater than 500,000 over the last 7 periods.



I believe it is a micro-cap WTT portfolio.


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## willy1111 (16 August 2020)

Cam019 said:


> I believe it is a micro-cap WTT portfolio.





Thanks @Cam019, that confirms it.  If you read the replies in the link you provided Radge says "I use the whole ASX and same filters as per the turnkey code except min price = $0.10"


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## willy1111 (16 August 2020)

*Backtest 4 - Ignoring Indexes*
For this backtest I created a new watchlist which includes the entire current ASX + ASX Delisted Stocks (4662 symbols) and removed any criteria to be in an index. The liquidity is left unchanged at turnover greater than 500,000 for current week.  Same period 1st Jan 2019 to 31 Dec 2019.


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## Skate (16 August 2020)

willy1111 said:


> *Backtest - Skates version of WTT Strategy (after amending index filter)*
> The first backtest I ran is on watchlist All Ords (502 matching symbols) this is the index as it stands today.




@willy1111 while you're going strong could you please do one more backtest of "Skates Modified WTT Strategy" as uploaded.

*Meaning*
1. "NOT" amending index filter (Backtest as is) as the original WTT Strategy uploaded has a "buy filter" (the terminology in the strategy was used incorrectly)
2. Backtest the original uploaded WTT strategy
3. The backtest using the All Ords (502 matching symbols) but included code to ensure the stock was in the All Ords at the time the trade was entered.

Skate.


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## willy1111 (16 August 2020)

Skate said:


> @willy1111 while you're going strong could you please do one more backtest of "Skates Modified WTT Strategy" as uploaded.
> 
> *Meaning*
> 1. "NOT" amending index filter (Backtest as is) as the original WTT Strategy uploaded has a "buy filter" (the terminology in the strategy was used incorrectly)
> ...




@Skate I am happy to oblige.

1. Cut and paste into AFL Forumla editor and I get the following so not able to backtest until corrected - it is not a filter so shouldn't have any impact:


So I have amended as follows:



I also increased the initial equity from $100,000 to $300,000 as follows :



*2. Backtest as is using All Ords (502 matching symbols) - (no requirement to be in index at time of trade).



3. Backtest using All Ords (502 matching symbols) - *(requirement to be in index at time of trade by adding code "AND NorgateIndexConstituentTimeSeries("$XAO");" to buy conditions).



*


*


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## Skate (16 August 2020)

willy1111 said:


> Making use of historical index constituents
> I think I raised it earlier in the thread at some point many months ago and that is to do with making use of historical index constituents whilst using AmiBroker. It may only be available to those using the platinum version of Norgate Data which I do and as I understand you don't. However, I am of the belief that they warrant tremendous value as they are the initial evaluation of whether a strategy warrants further investigation - in your case paper trading.




@willy1111 thank you for doing this backtest for me. Looking at the comparison between the backtests with & without (Norgate's Index Constituent) the results are "chalk & cheese", being miles apart. The backtest results confirm it pays to have the Norgate's Platinum subscription when developing a new strategy.



CNHTractor said:


> I've just looked at the data that I use with Norgate and have clarified a misconception. My subscription level with Norgate does NOT include all historical movements, as such the data I have submitted will not be correct. Sorry for anyone being misled here. As has been commented before on backtests - care needs to be taken




@CNHTractor your follow up post confirms @willy1111 sentiment about the inaccuracies of backtest results when you are not using Norgate's historical index constituents. Note to self, "refrain from posting backtests in the future"

Skate.


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## Skate (16 August 2020)

*I've received a few "PM's" that I'll share snippets of

1. The first "PM" *
The private message was about posting the "Exploration Analysis" buy & sell signals with my paper trading weekly updates of the "HappyCat & WTT Strategies". By posting the buy & sell weekly signals it may "encourage" others to follow them.

*Snippet *
_"The way you post is very much like providing a signal service". _The concerned member has a valid point & I'll cease posting the buy & sell signals.

*2. The second "PM" *
The second private message was in regards to coding of a "Bollinger Bands Breakout Strategy".

*Snippet*
_"skate i just saw your post on feb 9 i am still trying to improve my BBO system can you do a post or 2 about BBO please". _The BBO (AFL) can be downloaded here: https://www.aussiestockforums.com/posts/1078122/

*What I'm thinking*
After reading a few different posts I've decided to paper trade my "Tesla" version of the "BBO strategy" with added bells & whistles. As I already post weekly updates of the "Action Strategy", "HappyCat Strategy" & the "WTT Strategy". I'm now planning to post the paper trading of the "BBO Strategy" also.

*There are many who trade a variation of the BBO strategy *(there must be ongoing interest)
The "BBO Strategy" is a robust idea, a trusted workhorse that works in all time periods. My only gripe is with the standard "BBO Strategy" settings & parameters no longer work as originally intended. The uploaded BBO strategy has a new way to implement the brilliant idea of John Bollinger.


fiftyeight said:


> I have just started playing around with @Skate BBO system he posted.





qldfrog said:


> That leaves room for one more system ideally suited to going nowhere market, preferably weekly if possible and with a different strategy. I spent the afternoon yesterday on this but ultimately results were not as good as expected so back to the drawing board




Skate.


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## Skate (16 August 2020)

*Forget backtesting *
Using "Share trade Tracker" with "Norgate data" ensures paper trading results are 100% accurate.

*Paper trading a strategy using Amibroker exploration analysis *
Religiously taking signals referencing the number of shares to (buy & sell) at the "offer" price will confirm if the strategy is tradable. Paper trading this way ensures the reliability of results.

*In the next post*
I'll post the paper trading results of the "BBO Strategy" to bring it up to speed with the other two paper trading strategies. (HappyCat & WTT) 

Skate.


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## Skate (16 August 2020)

Skate.


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## qldfrog (16 August 2020)

Skate said:


> View attachment 107703
> 
> *Forget backtesting *
> Using "Share trade Tracker" with "Norgate data" ensures paper trading results are 100% accurate.
> ...



Good afternoon Mr Skate
A bit at a loss how you could do that easily, and also why the trouble?
Backtesting.can be checked to enforce reality
For example, when using a buy on open, you can check that the low price ref(l,+1)is lower than c*0.97 for 3pc margin etc etc
Am i  missing something?
I did these checks initially but do not bother anymore
I can  not see the need to paper rerun vs backtest..
i understand paper =excel but still
I tracked real systems in the past vs backtest and was able to match or understand any difference so this means i now trust AB backtest.
Ad a result, i do not paper trade that way.
Where am i wrong here?


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## Skate (16 August 2020)

qldfrog said:


> Backtesting.can be checked to enforce reality




@qldfrog, I'm saying Amibroker can't be programmed to backtest the way I trade. Paper trading with (OOS data - new data) the results are 100% reflective of what I would have achieved trading my style.

Skate.


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## Skate (17 August 2020)

Skate.


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## Skate (19 August 2020)

*Paper trading start date update*
Deciding to paper trade 3 strategies for 6 months got me thinking that the start date should fall in line with the financial year. Instead of starting on the 1st June 2020 the start date has been shifted to 1st July 2020 instead. 

*Luck & timing plays a significant role when comparing portfolios results*
The starting date can have a big bearing on the performance of the strategy in the short term but should settle over the longer term. As they say "there is never a good time to start trading" & traders need to be aware of the significance of "luck" when deciding to take the plunge. 

*Summary*
The Friday paper trading updates will be reflective of the new start date - 1st July 2020

Skate.


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## over9k (20 August 2020)

Hey skate, here's another cross-post from another thread: 




over9k said:


> Here's some trend for you:
> 
> Three weeks after the big unemployment payments ended and the expected stimulus package didn't happen:
> View attachment 107868
> ...




Might be time to nuke your AUD positions and convert them to USD for a bit


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## Skate (20 August 2020)

over9k said:


> Hey skate, here's another cross-post from another thread: Might be time to nuke your AUD positions and convert them to USD for a bit




@over9k thanks for the idea but I'm happy trading the ASX as there is fresh money pouring into the markets every day. Trading the trend has been profitable so far as I have recouped my losses since the COVID-19 flash crash & my gains are double the amount I initially lost. Also, there is still tremendous steam to come.

Skate.


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## over9k (20 August 2020)

Skate said:


> @over9k thanks for the idea but I'm happy trading the ASX as there is fresh money pouring into the markets every day. Trading the trend has been profitable so far as *I have doubled my losses since the COVID-19 flash crash*. Also, there is still tremendous steam to come.
> 
> Skate.




Er, do you mean gains?


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## Skate (21 August 2020)

peter2 said:


> Would you get more reliable results if you used a liquidity filter rather than inclusion in an index?



*Let me talk about the "Action Strategy"*
Most who trade along with the "Action Strategy" have minimal idea of the system other than it's a trend trading strategy. Every now & again, I drop cryptic messages for those who analyse. @peter2 hinted about not using an Index Filter as a prerequisite for a buy signal - his idea was on another tangent altogether but not without merit.

*The Index Filter versus a Trend Filter*
FYI: The buy signal of the "Action Strategy" is not conditional on an "Index Filter" to enter a position but uses a "Trend Filter" instead. Meaning, the buy signal relies heavily on a "strong trend" to enter a position. However, in saying this an "Index Filter" does play a small part in the exit strategy.  

Skate.


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## Skate (21 August 2020)

over9k said:


> Er, do you mean gains?




@over9k it demonstrates I don't proofread & admittedly the sentence sounded double dutch reading it back. I have corrected the post, thank you.

*The COVID-19 flash crash*
_"Trading the trend has been profitable (for me) so far as I have recouped my losses since the COVID-19 flash crash & my gains are double the amount I initially lost"_.

*Opportunities *
The COVID-19 flash crash gave me the perfect opportunity to take advantage of what was being offered. Opportunities like these don't come around all that often

Skate.


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## over9k (21 August 2020)

I, meanwhile, have been fighting the AUD-USD exchange rate the entire time. Looks like things might finally be flipping in my favour. 

Not to say I don't have any AUD holdings, but having to make 1-1.5% each week just to keep up with the forex movement makes life pretty difficult.


----------



## Richard Dale (21 August 2020)

Why not hedge your currency exposure?


----------



## over9k (21 August 2020)

I'm about 20% ASX, 40% NYSE, 40% AUD (cash).


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## Richard Dale (21 August 2020)

So, why not hedge your currency exposure?


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## over9k (21 August 2020)

I feel like there's a more specific suggestion coming here?


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## Skate (21 August 2020)

Hi @Richard Dale over the last few years of running the “Dump it here” thread I’ve posted many Backtest results without realizing the huge difference between the results over a short period of time. It worth repeating without a “Platinum subscription” backtesting is less than reliable.

*Previous post (that’s worth repeating)*
_“@willy1111 thank you for doing this backtest for me. Looking at the comparison between the backtests with & without (Norgate's Index Constituent) the results are "chalk & cheese", being miles apart. The backtest results confirm it pays to have the Norgate's Platinum subscription when developing a new strategy_”

_“@CNHTractor your follow up post confirms @willy1111 sentiment about the inaccuracies of backtest results when you are not using Norgate's historical index constituents. Note to self, "refrain from posting backtests in the future_”

Skate.


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## Richard Dale (21 August 2020)

over9k said:


> Not to say I don't have any AUD holdings, but having to make 1-1.5% each week just to keep up with the forex movement makes life pretty difficult.




This is where my hedging comment comes in.

If you don't want currency fluctuations to affect your trade outcome, create a hedge against your exposure.  It's fairly easy to do.  

In terms of assessing currency exposure for any given trading system against US stocks, this is easy to do in AmiBroker.  Change your base currency in Tools -> Preferences -> Currencies.  Setting it to USD will show you a currency-hedged approach.  Setting it to AUD will show no hedging.  Make sure you change your initial capital too.

Cheers,
Richard.


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## stafe (21 August 2020)

Hi Skate
I just tried backtesting your code using the all ordinaries as the trading universe but I could not reproduce your results.  The test period was 1/01/2019 to 12/08/2020.

Is the code you used the same as you posted above?  Did you use the all ordinaries as your trading universe?
	

		
			
		

		
	



Thanks
Stafe



Skate said:


> View attachment 107450
> 
> 
> *I have altered the parameters of my "WTT Strategy" to align with the original "WTT Strategy" *
> ...


----------



## Skate (21 August 2020)

stafe said:


> Hi Skate
> I just tried backtesting your code using the all ordinaries as the trading universe but I could not reproduce your results.  The test period was 1/01/2019 to 12/08/2020. Is the code you used the same as you posted above?  Did you use the all ordinaries as your trading universe?
> 
> 
> ...




@stafe if you read back a few posts your concerns have already been addressed. I'll refrain from uploading backtest results as I don't have Norgate's “Platinum subscription” only the "Silver" & I didn't realise the huge difference between the results over a short period of time.

*It worth repeating *
Without Norgate's “Platinum subscription” backtesting is less than reliable.

*Backtest 2 - Making use of Historical Index Constituents*
Platinum users of Norgate data are able to make use of Historical Index Constituents https://norgatedata.com/amibroker-usage.php This means that before a trade is taken the software checks to see it is in the relevant index at the time the trade is entered. This backtest I ran on watchlist All Ords (502 matching symbols) but included code to ensure the stock was in the All Ords at the time the trade was entered. https://www.aussiestockforums.com/posts/1088553/

This is @willy1111 Backtest results (using Norgate's “Platinum subscription”)






willy1111 said:


> *Making use of historical index constituents*
> I think I raised it earlier in the thread at some point many months ago and that is to do with making use of historical index constituents whilst using AmiBroker. It may only be available to those using the platinum version of Norgate Data which I do and as I understand you don't.
> 
> *Backtests with AmiBroker*
> I believe you have previously said backtests mean jack all. However, I am of the belief that they warrant tremendous value as they are the initial evaluation of whether a strategy warrants further investigation - in your case paper trading.



*The previous post is worth repeating*
_“@willy1111 thank you for doing this backtest for me. Looking at the comparison between the backtests with & without (Norgate's Index Constituent) the results are "chalk & cheese", being miles apart. The backtest results confirm it pays to have the Norgate's Platinum subscription when developing a new strategy_”

_“@CNHTractor your follow up post confirms @willy1111 sentiment about the inaccuracies of backtest results when you are not using Norgate's historical index constituents. Note to self, "refrain from posting backtests in the future_”

*So you have the adjusted version of the WTT Strategy*
I have uploaded the most recent version of the "WTT Strategy" just for you.

*FYI*
The version that I'm paper trading "Skate's Version of the WTT Strategy" bears little resemblance to the strategy uploaded.

Skate.


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## Skate (21 August 2020)

Skate.


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## Skate (21 August 2020)

Skate.


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## Skate (21 August 2020)

Skate.


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## Skate (21 August 2020)

Skate.


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## Rsthree (21 August 2020)

Skate said:


> View attachment 107975
> 
> 
> View attachment 107976
> ...





Skate said:


> View attachment 107975
> 
> 
> View attachment 107976
> ...





Just like to raise a glass and say thanks again for Skate's effort and perseverance on this (Action Strategy) live training and trading program. The strategy is turning in great results and giving newbies like myself the training and confidence to stay in the game. Cheers!

Also I'll say again, the weekly system and buying at auction is an extremely efficient way to trade as it takes minimal effort and maintenance. With my recent workload and lack of spare time, employing a more involved way of trading i would have dropped the ball on may occasions.

Just as an example, managing the weekly system takes about 15-20 minutes of effort once a week. In my previous foray into trading I'd be spending an hour or so every night scrutinising charts and then placing the trades during the day. This level of involvement  also plays more on your trading psyche.


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## Newt (21 August 2020)

On Norgate subscriptions and backtesting - have to admit I agree that Platinum is worth it.  After transitioning 12 months ago to Norgate (from the old "Premium Data" product) have been very impressed with speed and reliability of database updates but the option to test against current and historical ASX index consitutents is illuminating.  Beside being technically more accurate, I feel it gives an extra dimension to "challenge" backtests by "shuffling the deck" for the order tickers come up in tests.  The risk of over-fitting depends on your strategy development and testing/walk forward etc testing but any additional insight is helpful.  For $270 extra its a signficant extra expense - but then the future opportunity costs of being misled by poor development/backtesting could add up to much more.


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## Skate (22 August 2020)

Skate.


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## Skate (22 August 2020)

*Market Sentiment*
I previously received a "PM" about how to determine the current market sentiment on a daily time frame & could it quickly catch the change. I've made an extreme amount of posts on market sentiment, realising even the best traders find it difficult to pick the change. The recent recovery from the COVID-19 flash crash is being created haphazardly & it's all to do with the sentiment of traders & nothing else.

*Is there a good explanation to explain the sentiment of the market*
Trends form because of "market sentiment" & that sentiment can change in a heartbeat. It's important to remember, the "sentiment" of players creates momentum in both directions but I've noticed the number of signals increase exponentially with the current (bullish) market sentiment. 

*Developing a Daily Sentiment Strategy*
I'm not one for trading daily but there are those who prefer that method for a variety of reasons. My next few posts hopefully stimulates enough interest to think about developing your own unique "Daily Sentiment Strategy", a trading method that allows you to trade comfortably that suits your personality.

Skate.


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## Skate (22 August 2020)

*


Researching*
The "private message" mentioned in my previous post set off a chain of events challenging me to find a more effective way of generating buy signals. These signals need to be based on sentiment to enter the markets on a daily basis.

*The importance of emotions *(sentiment)
The probability of success increases when we trade with the prevailing market sentiment which means we should only be buying when the overall market is rising. To capture trading opportunities on a daily periodicity we need a more efficient way of determining the sentiment that's currently fluctuating daily.

*Using "sentiment" to predict changes*
When picking up on market sentiment we have the ability to detect a trend as early as possible. Recent emotions resulted in the COVID-19 flash crash which caused the market to trend down extremely quickly, catching most of us. With all downtrends, they eventually turn. The recovery is looking to be the quickest ever as traders sentiment has turned, which gets me thinking, how do we capture this?

Skate.


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## Skate (22 August 2020)

*What is market sentiment & how do we trade it?*
Understanding sentiment can allow us to gauge where the market is heading & hopefully we can capitalise on this change in direction. Market sentiment is a general attitude of traders that can be a positive, neutral or negative. The sentiment is said to be bullish when there is a positive attitude & bearish when it's negative, so how do we capture this?

*Opportunities in trading*
Markets are driven by sentiment, the reason we look for opportunities to trade. The importance & impact of the sentiment of traders shouldn't be underestimated. Technical analysis can help us understand this, but trading this "sentiment" is another kettle of fish.

Skate.


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## Skate (22 August 2020)

*Skate's Daily Sentiment Strategy *
The new "Daily Sentiment Strategy" measures sentiment. The strategy defines both bullishness (over-optimism) & bearishness (over-pessimism) that can lead to a change in a trend.

*Current thinking*
Looking at charts of the last few months has altered my thinking about the waves of rising prices. Traders are beginning to get bullish with increasing confidence as the markets have been on the rise for the last 5 months. 

*"Skate's Daily Sentiment Strategy" measures bullishness/bearishness*
The strategy is based on comparing the number of rising days to declining ones. This idea is not new & not my own but in saying this, it's easy to incorporate into a trading idea. The idea is to include both time & sentiment. 

*How do we do this? *
We simply store a value of (1) for each higher close above the previous period & a value of (-1) when it isn't. With this calculation method, the time is covered & categorised bullish or bearish. In addition, a positive or a negative value serves the sentiment condition. For smoothing purposes, a triple exponential moving average (TEMA) of those plus & minus values is divided by the total number of days of the period generating the signals. Easy peasy!

Skate.


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## Skate (22 August 2020)

*Backtesting*
I made a previous remark that I would resist posting backtest results. But for the evaluation of this Daily Strategy I'll make an exception. Maybe @willy1111 or @stafe may be kind enough to reproduce more accurate backtest results having Norgate's “Platinum subscription” when I upload the strategy (afl).


Skate said:


> I'll refrain from uploading backtest results as I don't have Norgate's “Platinum subscription” only the "Silver" & I didn't realise the huge difference between the results over a short period of time.




*Backtest results from 1st January to 21st August 2020 *(this calendar year)





Skate.


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## TraderJimmy (22 August 2020)

Interesting idea @Skate. So when this sentiment pre-condition is met, what are the buy conditions...a ranking of the stocks showing the strongest sentiment?


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## Skate (22 August 2020)

TraderJimmy said:


> Interesting idea @Skate. So when this sentiment pre-condition is met, what are the buy conditions...a ranking of the stocks showing the strongest sentiment?




@TraderJimmy I was waiting to see if there was any interest before making additional posts.

*Amibroker*
Some members don't have Amibroker so I'll post the code & at the same time upload the (afl) for others to backtest & evaluate. The strategy is uploaded for educational purposes only.

*FYI*
I've used the new Norgate Updater (NDU) format - you will need to change it to suit the format of your data supplier. This strategy has been designed to take advantage of trending markets.

*Skate's Daily Sentiment Strategy for ASF Members
Created by: Skate - Last revision 20th August 2020*

_SECTION_BEGIN( "# Skate's Daily Sentiment Strategy Exploration" );
//=================================================================================
//1. The "SetOptions" are management options & they are a feature of Amibroker
//=================================================================================
TradingFunds = Param( "Trading Funds - $", 5000, 1000, 10000000, 1000 ); // User-definable parameter, accessible via Exploration parameters - changes are reflected immediately. (Default $5k bets) - INSERT any amount
SetOption( "InitialEquity", 100000 ); // $100k Inital Equity (allows for 20 X $5k bets)
SetOption( "PriceBoundChecking", 1 ); // True: Adjust prices so that they fall within the High-Low range
SetOption( "CommissionMode", 2 ); // Use $ amount
SetOption( "CommissionAmount", 19.95 ); // CommSec commission rate
SetOption( "UsePrevBarEquityForPosSizing", 1 ); // True: Use previous bar closing equity to perform position sizing
SetOption( "AllowSameBarExit", False ); // False: Trade is exited & we move to next bar ignoring other signals
RestorePriceArrays( True ); // Restores original price & volume arrays after the call to SetForeign.
SetTradeDelays( 1, 1, 1, 1 ); // Trade delays, the delay is required for backtesting

//=================================================================================
//2. The "Buy Filter" - decides when we will trade & also our trailing stop levels
//=================================================================================
Index = Foreign("$XAO.au","C",True); // I've used the new Norgate Updater (NDU) format -* IMPORTANT: change if the format is different to your data supplier*
MAfilter = MA( Index, 20 ); // 20 Day lookback period
IndexBuyFilter = Index > MAfilter; // Index Filter = ON: When the close is greater than the 20 Day simple moving average the Index Filter is ON [trailing stop set to 20%] + [buy + sell signals generated]
IndexSellFilter = Index < MAfilter; // Index Filter = OFF: When the close is less than the 20 Day simple moving average the Index Filter is OFF [shortens trailing stop to 10%] + [only sell signals generated]

//=================================================================================
//3. Add all our other filters
//=================================================================================
Liq = C * V; // Liquidity Filter
CV = 500000; // Volume Filter
Liqfactor = Liq > CV; // Liquidity Filter
ROCFilter = ROC( C, 20 ) > 30; // Rate Of Change (ROC) Momentum filter
ROCParameter = Param( "ROC Parameter", 8, 0, 52, 1 ); // 8 Day Rate of Change period
MOMFilter = ( ROC( C, 10 ) >= ROCParameter ); // Momentum filter - the closing price of the last 10 Days is greater than the last 8 Days
NoStrength = Close < MA( Close, 12 ); // If the closing price is less then the Simple Moving Average of the last 12 Days it's considered there is no strength in the move

//=================================================================================
//4. Add a sentiment buy condition
//=================================================================================
MAp = Optimize( "MAp", 14, 5, 20, 1 ); // The optimised EMA period (14) is used for the Daily Sentiment calculation.
MApV = Optimize( "MApV", 14, 5, 20, 1 ); // The optimised MA period (14) used when calculating the MA of the Daily Sentiment.
VLow = Optimize( "VLow", 40, 10, 90, 10 ); // The optimised "Low level" is set at (-40) meaning the value is negative
VHigh = Optimize( "VHigh", 40, 10, 90, 10 ); // The optimised "High level" is set at (+40) meaning the value is positive

function DSC( MAp )
{
 R = sign( C - Ref( C, -1 ) ) * V;
 VP = EMA( R, MAp );
 TV = EMA( V, MAp );
 return Nz( 100 * VP / TV );
}

DS = Cross( DSC( MAp ), -VLow ); // Buy if the (Daily Sentiment) crosses -40 from below (VLow)
NoUpTrend = Cross( VHigh, DSC( MAp ) ); // Sell if the (Daily Sentiment) crosses +40 from above (VHigh)

//=================================================================================
// Open new long positions only when the Sentiment is positive
//=================================================================================
Cond1 = C > Ref( HHV( C, DS ), -1 ); // Buy when the closing price of the (Daily Sentiment) crosses -40 (VLow) from below
Cond2 = IndexBuyFilter; // Buy ONLY when the Buy Filter is ON
cond3 = C >= 0.05; // Buy only if the closing price is greater $0.05 (5 cents)
cond4 = C <= 10; // Buy only if the closing price is less than $10.00
cond5 = liqfactor; // Buy only when the Liquidity filter is TRUE
cond6 = ROCFilter AND MOMFilter; // Buy only when the Rate of Change filter & Momentum filter is TRUE

Buy = cond1
      AND cond2
      AND cond3
      AND cond4
      AND cond5
      AND cond6;

//=================================================================================
//5. Add a sell condition
//=================================================================================
Sell = C < MA( C, 50 ) AND NoStrength AND NoUpTrend; // Sell when the close is less than the moving average of the last 50 Days with the closing price is less than the Simple Moving Average of the last 12 Days or Sell when there is NoUpTrend as the trend has ended

//=================================================================================
//6. Add a two-stage trailing stop
//=================================================================================
ts1 = 20;
ts2 = 10;
ts = IIf( IndexBuyFilter , ts1 , ts2 );

ApplyStop( stopTypeTrailing , stopModePercent , ts , exitatstop = 2 ); // Apply Stop = [ts] Trailing Stop [exitatstop = 2] means check High-Low prices but exit NEXT BAR on regular trade price.

//=================================================================================
//7. Remove excessive signals & add "Position Sizing"
//=================================================================================
BuyPrice = Open; // Buy the next day at open
SellPrice = Open; // Sell the next day at open

Buy = ExRem( Buy, Sell ); // Removes additional buy signals
Sell = ExRem( Sell, Buy ); // Removes additional sell signals

//=================================================================================
// Position Sizing
//=================================================================================
PosQty = 20; // Position Quantity = Maximum 20 positions
PositionSize = -100 / posqty; // 100% of the equity divided by the Position Size
SetOption( "MaxOpenPositions", PosQty ); // Maximum number of open position

//=================================================================================
//8. Add "Filters for the Exploration Analysis"
//=================================================================================
Filter = Buy OR Sell; // Buy & Sell Filters

//=================================================================================
//9. Add Buy & Sell coding for use in trading the pre-auction
//=================================================================================
BuyOffered = Close * 1.03; // +3% Buy premium over the last closing price
BuyOffer = ceil( BuyOffered * 100 ) / 100; // The amount is rounded up no matter the price (ceil function used)

SellOffered = Close * 0.97; // -3% Sell premium below the last closing price
SellOffer = floor( SellOffered * 100 ) / 100; // The amount is rounded down no matter the price (floor function used)

//=================================================================================
//10. Add the Exploration code
//=================================================================================
ToBuyPosSize = floor( TradingFunds / BuyOffer ); // Trading Funds divided by buy offer of (+3%) buy premium over the last closing price
ToBuyPosCost = BuyOffer * ToBuyPosSize; // The cost of buying the amount of share

PositionScorer = 100 - Close;  // Lowest priced security at BuySetup trigger is taken first
PositionScore = Ref( PositionScorer, -1 ); // Previous bar (-1 bar)

//=================================================================================
//11. Add columns to report & sort the Exploration Analysis results
//=================================================================================
AddColumn( IIf( Buy, ToBuyPosSize, Null ), "# shares", 1, colorWhite, colorDarkGreen, 90 ); // Exploration Analysis - this column displays quantity of shares to buy
AddColumn( IIf( Buy, BuyOffer, Null ), "$ Buy Offer", 1.2, colorWhite, colorDarkGreen, 110 ); // Exploration Analysis - this column displays pre-auction buy offer price (+3% premium added to the last closing price)
AddColumn( IIf( Buy, ToBuyPosCost, Null ), "$ Cost", 1.2, colorWhite, colorDarkGreen, 80 ); // Exploration Analysis - this column displays the total ($) you will pay for the qty of shares at the +3% primum
AddColumn( IIf( Sell, SellOffer, Null ), "$ Sell Offer", 1.2, colorWhite, colorRed, 110 ); // Exploration Analysis - this column displays pre-auction sell offer price (-3% discount to the last closing price)

SetSortColumns( -2, -3, -4, -5, -6, 1 ); // Sort the columns in correct order

_SECTION_END();

//=================================================================================
//12. Add code to the chart & plots the signals. Also adding a Buy Ribbon
//=================================================================================
_SECTION_BEGIN( "Price" );

SetChartOptions( 0, chartShowArrows | chartShowDates );
_N( Title = StrFormat( "{{NAME}} - {{INTERVAL}} {{DATE}} Open %g, Hi %g, Lo %g, Close %g (%.1f%%) Vol " + WriteVal( V, 1.0 ) + " {{VALUES}}", O, H, L, C, SelectedValue( ROC( C, 1 ) ) ) ); // Chart settings

Plot( C, "Close", ParamColor( "Color", colorBlack ),
      ParamStyle( "Style", styleNoTitle | styleBar, maskAll ) ); // User-definable parameter, accessible via Chart parameters - changes are reflected immediatelly. (Bar Chart Default)

PlotShapes( Buy*shapehollowUpArrow, colorWhite, 0, Low, -20 ); // Displays Buy up arrow on the signal bar
PlotShapes( ( Sell > 0 ) * shapeDownArrow, Coloryellow, 0, High, -40 ); // Displays Sell down arrow on the signal bar
PlotShapes( Ref( Buy, -1 ) * shapeHollowSquare, colorWhite, 0, O, 0, 0 ); // Displays a white square on the buy bar
PlotShapes( Ref( Sell, -1 ) * shapeHollowCircle, colorYellow, 0, O, 0, 0 ); // Displays a yellow circle on the sell bar

BuyFilter = IIf( IndexBuyFilter, True, False ); // If Buy Filter is TRUE (ON), or If Buy Filter is FALSE (OFF),
RibbonColor = IIf( Buyfilter, colorGreen, colorRed ); // If Buy Filter is TRUE (ON) the ribbon is GREEN, or If Buy Filter is FALSE (OFF) the ribbon is Red
Plot( 1, "", RibbonColor, styleArea | styleOwnScale | styleNoLabel, -0.0001, 190 ); // Plots the Buy Filter Ribbon [green = ON] [Red = OFF]

for( i = 1; i < BarCount; i++ )
{
    if( Buy[i - 1] ) PlotText( "Buy\n@ " + O, i, L * 0.9, colorWhite ); // Displays white buy price (opening price) under the white box (buy bar)
_
_  if( sell[i - 1] ) PlotText( "Sell\n@ " + o[ i ], i, H[ i ] * 1.1, colorYellow ); // Displays yellow sell price (opening price) above the yellow circle (sell bar)
}

_SECTION_END();

Skate.


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## Skate (23 August 2020)

*Sentiment of the markets*
The current volatility has the market not knowing which direction to take & for this reason I'm talking about "Market Sentiment". The VIX measures fear & greed & everything in between. I think there's is value in evaluating a stand-alone VIX strategy as sentiment drives the market & there is no better judge then the VIX.


ducati916 said:


> I use the VIX in combination with other indicators (probably about 4 in all). Mine are obviously not coded (big disadvantage, far more time consuming having to look at stuff) but you can still get there (even if you can't code) and have a pretty good idea what is going on. Obviously (or maybe not so obvious) you can use the VIX in both directions (as Mr Skate is doing). There is a significant amount of information contained in this (seemingly) simple indicator. Clearly from the posted backtests, the advantage is clear.




*A VIX indicator versus a VIX Strategy*
Measuring sentiment with an "Indicator" is okay but how do we make it work as a stand-alone strategy?

*Making the VIX tick will be the trick.*
How can we create a strategy to take advantage of the current situation till life gets back to normal. I've made these series of posts searching for a more efficient way to gauge the "sentiment of the markets" a more efficient way to "predict changes" in market direction so we can gain an advantage or try to.

Skate.


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## Skate (23 August 2020)

*
How do we use the Implied Volatility Index (VIX) as a trading strategy?*
Implied volatility (VIX) will help quantify market sentiment using uncertainty & fear displayed in the VIX index (S&P 500 options index) in a "unique way". I'm sure there will be some benefits using this method when trading but my ultimate desire is to stimulate enough interest about "market sentiment" when formulating a trading plan. Finding a trading method that allows you to trade consistently & confidently is going to be the key.


peter2 said:


> We can borrow ideas and indicators from anywhere and anyone but we must first accept them as our own in order to have the confidence to use them properly.



*
My research *
My research has confirmed that the Aussie VIX index (XVI) moves in unison with the S&P 500 options index (VIX), but using the average of the Aussie VIX to measure volatility lacks the accuracy of the alternative.


peter2 said:


> The reason the US VIX is more effective as a sentiment indicator is that the SP500 is a better representation of the overall US market than the XJO in the ASX. Our market is dominated by two sectors, financial and materials. Other industries aren't properly represented in the main indices.




Skate.


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## Skate (23 August 2020)

*It worth repeating again*
Without Norgate's “Platinum subscription” backtesting is less than reliable. "Platinum Subscription" users of Norgate data are able to make use of Historical Index Constituents which means that before a trade is taken the software checks to see it is in the relevant index at the time the trade is entered. I made a previous remark that I would resist posting backtest results but for the evaluation of this Daily VIX Strategy, I'll make another exception. 

*Backtest results using the All Ordinaries (XAO) from 1st January to 21st August 2020 *(this calendar year)





Skate.


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## Skate (23 August 2020)

*How does the Daily Vix Strategy gets it's buy & sell signals*
Before @TraderJimmy asks the question, let me explain the methodology behind the strategy. To get the buy & sell signals I've used a looping function to indicate when the VIX index is below or above its 50-day moving average over a series.

*The buy & sell conditions *(with filters)
When the "fear index" is coming down & is less than (10) we buy. Alternatively, we sell when the "fear index" is going up & is greater than (10).

*Summary*
The idea floated by @ducati916 is clean, simple & easy to implement. Accepting Duc's idea is one thing, adding it as a trading strategy is another. A thorough evaluation should be undertaken before trading this idea.

Skate.


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## WilsonFisk (24 August 2020)

Hi @Skate fantastic insights - I have been using a similar style of filter, albeit significantly more crude (HHV and LLV over x period instead of the MA) to some success.  

One question/thought I would propose is one around using a longer timeframe for trading (again weekly), as I would think there may be too much noise on a daily basis for it to be effective.  

Over a weekly timeframe, I would think there would be sufficient sustained data to confirm 'fear' or 'greed' had set in, where as on a daily it could just be whims of the market??

Food for thought for some peeps I hope.  Nowhere near as insightful as what @Skate usually provides but if it helps 1 person I am happy


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## ducati916 (24 August 2020)

Skate said:


> View attachment 108079
> 
> 
> *How does the Daily Vix Strategy gets it's buy & sell signals*
> ...




Just responding to Mr Skate's thoughts re. 'sentiment'. Sentiment has no place in a trader's/investor's arsenal.

Why?

Because of the way that human memory functions. When humans are faced with complicated real-life problems, we do not undertake a probability calculation: we make up a narrative or we remember a narrative, which constrains future thinking in terms of probability.

Santayana's famous lines: "Those who cannot remember the past are condemned to repeat it:" could just as easily be reframed as: what you remember about the past, will influence what you predict for the future.

Example:






Nobody alive remembers the Spanish Flu. Most are not even aware (prior to COVID) that such an event even took place.

Few may however remember 2009:




And what happened in 2009:





Which from a corona virus perspective was nothing.

So in 2020:




The news (as preserved by Mr bigdog) that identified a new corona virus, was picked up on:




And was (amazingly) recognised as a real black swan event in real time.





But the market, after initially reacting, just nodded off: until, it didn't.

Mr Skate's indicator will exit and re-enter you into the market the second fastest of any indicator (probably) devised to date. I believe I still hold the fastest, however, that will be I'm sure tested in due course.

The purpose of Mr Skate's post is clear: if he can code the indicator, anyone can, if they put in enough work. The nudge in the right direction is already provided.

The takeaway is this: it is very hard to recognise a black swan from the get-go: and even if you do, what exactly did you do to protect your portfolio? The thread from pg1: https://www.aussiestockforums.com/t...cations-of-a-sars-coronavirus-outbreak.35169/

Just reading the first couple of pages indicates that most simply do not appreciate the enormity of the news and what is coming. By pg.20 there is only 1 person who sold shares to lighten. By pg.22 the crash starts: still little action taken.

Anyway, the point is that this thread is an example of just how bad humans are at predicting the future based on news flow.

Take the hint: forget trying to parse the news. Rather, develop something quantitative that operates on probabilities and save/make a fortune.

jog on
duc


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## Skate (24 August 2020)

ducati916 said:


> Just responding to Mr Skate's thoughts re. 'sentiment'. Sentiment has no place in a trader's/investor's arsenal.



@ducati916 I hear you loud & clear. 


peter2 said:


> I'm asking myself how can I contribute to ASF? Reminding you readers that I post to keep myself engaged, focused and on track with whatever trading activity I've decided to share.



*All posters contribute in their own particular way*
The "Dump it here" thread is for the sharing of ideas in such a way to educate those starting out on their trading journey. @WilsonFisk posted some valuable information in his previous post that others should investigate as it's comments like his that give inspiration to us all. Some time ago the Duc dropped something similar about using the VIX that has been invaluable to me.


WilsonFisk said:


> Food for thought for some peeps I hope. Nowhere near as insightful as what @Skate usually provides but if it helps 1 person I am happy



*Posters are always looking for inspiration*
It's good to see Peter is back posting, he's currently wondering "what trading idea to post about next" has got me thinking. I don't trade Daily strategies & to be truthful I consider it to be time-consuming. There is nothing better to spend less than 15 minutes a week trading, placing my orders over the weekend when it suits me. Imagine having to spend 15 minutes a day trading a daily strategy. 

*Being naturally lazy *
I'm wondering if I have the stamina to trade day-in-day-out, but I'm willing to give it a go.

*Skate's Daily VIX Strategy*
This is the perfect strategy to kill two birds with one stone by putting a blow torch to the Duc's VIX idea & trading his idea on a daily basis. Peter made the comment _"I post to keep myself engaged, focused and on track" _so I intend to do the same. Another thing, posting & updating the daily progress of the "VIX Strategy" will keep the "Dump it here" thread active. Whereas some might like to check-in & watch the daily progress. 

Skate.


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## Skate (24 August 2020)

*Skate's Daily VIX Strategy *
Daily Strategy (Start Date: Today 24th August 2020)
$300,000 Capital
20 Position Portfolio
$15,000  Positions re-balanced

*How are the buy & sell signals generated?*
The methodology behind the VIX Strategy is clean, simple & easy to implement. I've used a looping function to indicate when the VIX index is below or above its 50-day moving average over a time series. When the "fear index" is coming down & is less than (10) we buy. Alternatively, we sell when the "fear index" is going up & is greater than (10).

*Going forwards who knows what this strategy will do *
Beginners need to remember all strategies take time to develop, so let's be patient.

*Summary*
Backtesting indicates @ducati916 idea has merit & I'll be interested in how his idea progresses as a stand-alone trading strategy. To kick off the strategy it had one buy signal today (HT1).

Skate.


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## Skate (24 August 2020)

*DISCLAIMER*
I want to make it clear that I'll be posting my trades for the purpose of tracking my own system, it's an educational exercise & it should not to be confused with running a signal service for others to follow. The format will be similar to my previous posts displaying the trades I intend to open and close well in advance keeping an accurate record of my progress for those interested in following the journey. The "Dump it here" thread is an educational thread & by displaying the progress of "Skate's Daily VIX Strategy" will hopefully help to educate others. So there is no confusion my intentions is for others to follow along not trade along.

*Tomorrows Signals*



Skate.


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## Cam019 (24 August 2020)

@Skate, if you're just posting to track your own system - why not post the entries after the days close? Because regardless of whether you post a disclaimer, people will trade along with what you post. It's just human nature.

By posting after the days close, there is no chance for it to be used as a signal service, and you can still track and post your own results.

Just a thought.


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## Skate (24 August 2020)

Skate.


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## Skate (24 August 2020)

Cam019 said:


> @Skate, if you're just posting to track your own system - why not post the entries after the days close? Because regardless of whether you post a disclaimer, people will trade along with what you post. It's just human nature. By posting after the days close, there is no chance for it to be used as a signal service, and you can still track and post your own results. Just a thought.




@Cam019 I hear you loud & clear. The same issue has been raised before. 

*Posting signals in advance *
The reason why I prefer to post the signals in advance is for beginners to understand the logic & in this way it demonstrates why the position is taken. Posting signals before the fact also alleviates others thinking that I have cherry-picked positions after the fact. Posting signals early indicates that there is no puffing of the results on my end. 

*After explaining my point of view *
I've decided to take your advice. Others can view the "open position daily summary" if they are at all interested. Thanks for point this fact out as it's not my intention for others to trade along.

Skate.


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## Fury (24 August 2020)

Been following along avidly and once again thank you for the onslaught of information.
There aren't enough hours in the day for me to research and get on top of everything.
Curious as to why you don't combine strategies, and each one is independent?
Wouldn't finding confluence between different strategies help to yield better results?
If several strategies point toward similar stock, this should help remove some of the noise?
I can see that having too many variables can cause constriction, i guess it's like everything else - finding the happy balance of risk/reward.


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## Roller_1 (24 August 2020)

Skate said:


> View attachment 108120
> 
> 
> @ducati916 I hear you loud & clear.
> ...





Skate said:


> View attachment 108042
> 
> 
> *Backtesting*
> ...




Hi guys

Out of interest i ran this system over Norgates full database, since it hasn't been done yet.

I used the code as is and i have not been through skate's code to check it, i just added the relevant code snippets to test using Norgates historical capabilities.


```
OnLastTwoBarsOfDelistedSecurity = BarIndex() >= (LastValue(BarIndex()) -1) AND !IsNull(GetFnData("DelistingDate"));
OnSecondLastBarOfDelistedSecurity = BarIndex() == (LastValue(BarIndex()) -1) AND !IsNull(GetFnData("DelistingDate"));


Buy = cond1
      AND cond2
      AND cond3
      AND cond4
      AND cond5
      AND cond6
      AND NorgateIndexConstituentTimeSeries("$XAO") // see if the symbol is part of the All ords at the time when a signal is generated
      AND NOT OnSecondLastBarOfDelistedSecurity ; // don't enter if on second to last bar before delisting
//=================================================================================
//5. Add a sell condition
//=================================================================================
Sell = C < MA( C, 50 ) AND NoStrength AND NoUpTrend OR OnLastTwoBarsOfDelistedSecurity; // Exit if security has been delisted during open position
```

This is the tests from 2005 - now








Others can cross check if they have time.


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## Skate (24 August 2020)

Fury said:


> Curious as to why you don't combine strategies, and each one is independent?




@Fury I have made over 200 posts explaining one of my trading strategies (the HYBRID Strategy) that does exactly what you are suggesting. The Hybrid is a 40 position Strategy combinating 3 of my best performing strategies. Each strategy works independently of each other but all 3 totally work in conjunction with each other. Another is my "PANDA Strategy".

Skate.


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## Skate (24 August 2020)

Roller_1 said:


> Hi guys
> Out of interest i ran this system over Norgates full database, since it hasn't been done yet. I used the code as is and i have not been through skate's code to check it, i just added the relevant code snippets to test using Norgates historical capabilities. Others can cross check if they have time.



@Roller_1 I can't dispute your findings as I don't have access to Norgate's Platimum Subscription Package. The results look pretty ordinary & I would appreciate if someone else could verify your results.

*Strategies Uploaded*
All the strategies I've uploaded are from my original 2015 Amibroker template that tested code snippets in my early days of learning. The templates served me well & it's why I'm sharing them as they are perfect for new Amibrokers users to start out with. I've commented the lines of code so it's much easier to understand. *FYI, *I don't trade any of the strategies uploaded. They are for learning purposes only.

Skate.


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## Trav. (24 August 2020)

@Skate is this line correct ? as the comment does not reflect the logic.

Sell = C < MA( C, 50 ) AND NoStrength AND NoUpTrend; // Sell when the close is less than the moving average of the last 50 Days with the closing price is less than the Simple Moving Average of the last 12 Days or Sell when there is NoUpTrend as the trend has ended

As when I tested your code over the same dates as you I found that I could not replicate your number of trades and that only 2 of my trades exited from the above logic, the rest (36) exited due to the trail stop.


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## Skate (24 August 2020)

*Paper Trading uploads*
The paper trading reports I upload at the end of each week are refined, mature strategies that I have traded previously, admittedly with different parameter settings. The "Daily VIX Strategy" is completely new & I'm excited to see if this strategy will perform. Moreover will I have the motivation to stick with trading & reporting the results each day. I need to have the fortitude of @bigdog who never misses reporting every morning.

*Trading a daily periodicity*
After reading a few different threads it got me thinking about trading a daily strategy. It's been over 4 years since trading on a daily basis & I have a couple of excellent strategies if I wanted to start again. When travelling it was hard to trade each day. With COVID-19 the lack of time is no longer an issue. 

*Stepping up the idea*
If I can use the "VIX" as an indicator successfully why can't I use it as a trading strategy. "Skate's Daily VIX strategy" has been a work in progress for over 5 months to get the VIX to perform as a daily strategy. On paper this strategy is a great performer but I'm more interested to see if it could handle trading in the pre-auction mimicking the way I trade using pyramid dollar position sizing. Only time will tell.

Skate.


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## Skate (24 August 2020)

Trav. said:


> @Skate is this line correct ? as the comment does not reflect the logic.
> Sell = C < MA( C, 50 ) *AND* NoStrength *AND* NoUpTrend; // Sell when the close is less than the moving average of the last 50 Days with the closing price is less than the Simple Moving Average of the last 12 Days or Sell when there is NoUpTrend as the trend has ended. As when I tested your code over the same dates as you I found that I could not replicate your number of trades and that only 2 of my trades exited from the above logic, the rest (36) exited due to the trail stop.



@Trav. the "AND" statement is designed to keep you in the trade as long as possible an "OR" statement would be ineffective.

*Play with the sell statement*
If you don't like the sell statement (as is) you could use only the primary sell condition only [Sell = C < MA( C, 50 );] or you could just use the Trailing Stop as the exit. If you use the Trailing Stop (ONLY) the TS needs to be extended to keep the trade active as long as possible when the Index Filter is TRUE.

Skate.


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## Trav. (24 August 2020)

@Skate all good mate, I was just interested to see why the results didn't match and with the high strike rate on the trail stop, which sort of made the sell line redundant hence the question.


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## soso (24 August 2020)

Just a heads up of some potential backtesting error I saw in post https://www.aussiestockforums.com/posts/1089878/



> cond3 = C >= 0.05; // Buy only if the closing price is greater $0.05 (5 cents)
> cond4 = C <= 10; // Buy only if the closing price is less than $10.00



Every time you do comparisons of Close with absolute numbers you should use the unadjusted Close. I rememeber I was bitten by this slight error back when I was backtesting using PremiumData and couldn't believe the good results I got. Although to be fair my ranking algorithm was also affected by this error as I was ranking by 1/C and I was backtesting Russell 3000 which I guess has many more splits and adjustments than AU stocks. 

I think the liquidity filter is affected as well by this.


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## Roller_1 (25 August 2020)

Skate said:


> @Roller_1 I can't dispute your findings as I don't have access to Norgate's Platimum Subscription Package. The results look pretty ordinary & I would appreciate if someone else could verify your results.
> 
> *Strategies Uploaded*
> All the strategies I've uploaded are from my original 2015 Amibroker template that tested code snippets in my early days of learning. The templates served me well & it's why I'm sharing them as they are perfect for new Amibrokers users to start out with. I've commented the lines of code so it's much easier to understand. *FYI, *I don't trade any of the strategies uploaded. They are for learning purposes only.
> ...




No worries, have you thought about getting the platinum it's less than $300 extra and would be good for verification/ validation of your new daily strategies that you are firing up. Especially when the market turns again.  This year you could chuck a tight index/momentum filter on anything to avoid the crash and have big results in the reversal.


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## TraderJimmy (25 August 2020)

soso said:


> Every time you do comparisons of Close with absolute numbers you should use the unadjusted Close.



Hi @soso can you explain this a little more for us noobs? Is "unadjusted close" a different field?


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## Skate (25 August 2020)

Skate.


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## soso (26 August 2020)

TraderJimmy said:


> Hi @soso can you explain this a little more for us noobs? Is "unadjusted close" a different field?




Consider stock ABC has Closing price 20 on 01.01.2019. In 01.01.2020 you have a stock split 1:4, if you are using standard Norgate adjustments for capital events & splits (and you should) then the back price is adjusted so you don't have gaps. So during backtest the price on 01.01.2019 will be 5 (20/4). 

This is fine in most situations & indicators as MA, ROC etc are not affected because the whole time series is adjusted proportionally. But if you use absolute price in backtest comparisons, like a condition Buy = Buy AND C < 10, then you should use unadjusted prices (the exact price you see if you were trading that day) otherwise backtest is not realistic. In example above the condition is triggred, but in real life won't be triggered because the real price is 20, not 5. Hope it's clear.

I think Volume is affected as well.


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## stafe (26 August 2020)

Hi Skate,
I am quite new at this and am trying to teach myself AFL and also how to develop strategies.  Hence I decided to use your code for the weekend trader as learning exercise.

I have a few questions about your code
1.  In your code at line 17 what is the purpose of the 2 lines?
SetForeign( "$XAO.au", True , True );
RestorePriceArrays( True ); 
Aren't these lines redundant as in line 23 is 
Index = Foreign("XAO","C",True);

2. Line 36 is 
MOMFilter = ( ROC( C, 10 ) >= ROCParameter );
shouldn't it be? 
MOMFilter = ( ROC( C, 10 ) >= ROC( C, ROCParameter) );

3. Finally, what is the purpose of the variable TradingFunds which was set to default value of 5000?
Isn't the position size determined by the current equity divided by the maximum number of positions?
ie
PosQty = 20; // Position Quantity = Maximum 20 positions
PositionSize = -100 / posqty;

Please pardon me if my questions are basic.
Thanks for your feedback.
Stafe



Skate said:


> @stafe if you read back a few posts your concerns have already been addressed. I'll refrain from uploading backtest results as I don't have Norgate's “Platinum subscription” only the "Silver" & I didn't realise the huge difference between the results over a short period of time.
> 
> *It worth repeating *
> Without Norgate's “Platinum subscription” backtesting is less than reliable.
> ...


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## Skate (26 August 2020)

stafe said:


> Hi Skate, I have a few questions about your code
> 
> 1.  In your code at line 17 what is the purpose of the 2 lines?
> SetForeign( "$XAO.au", True , True );
> ...




@stafe the uploaded (AFL's) are my old templates from 2015 to help others new to Amibroker understand the code with comments. The (AFL's) are uploaded for educational purposes & are not guaranteed to be error-free. The (AFL's) give others something to play with. The "WTT" Template hasn't been uploaded for others to trade. 

*Copy of the code*
So others can follow your question & my answers I've pasted the code in question.

*Question 1 - "In your code at line 17 what is the purpose of the 2 lines? - Aren't these lines redundant as in line 23"*
Line 17 & Line 23 seem similar & admittedly with line 23 (that is part of the Index Filter) line 17 becomes repetitive & redundant - "until" you you decide to "comment out" the Index Filter to run alternative backtests. 

*Question 2. "Line 36 is MOMFilter = ( ROC( C, 10 ) >= ROCParameter ); shouldn't it be? MOMFilter = ( ROC( C, 10 ) >= ROC( C, ROCParameter) );"*
Line 37 references Line 36 which is an adjustable parameter setting. The reason I used the "param" feature is so others can change this setting of the fly when backtesting. The line of code without the param is: MOMFilter = ( ROC( C, 10 ) >= 8 ) This simply means when the "Rate of Change" of the last 10-period is greater than or equal to the 8-period "Rate of Change" there is momentum that becomes part of the "buy" strategy.

*Question 3. "Finally, what is the purpose of the variable TradingFunds which was set to default value of 5000? Isn't the position size determined by the current equity divided by the maximum number of positions? ie PosQty = 20; // Position Quantity = Maximum 20 position PositionSize = -100 / posqty;"*
Line 10 is an adjustable parameter setting. I've used the "param" feature so if $5k bets is "not the size you want to backtest" you simply have a means to adjust the bet size on the fly without changing any of the code. 

*Why have the bet size adjustable?
Scenario (1) *I prefer $25k bets so I would change $5,000 with $25,000 in the parameter settings before running the Exploration analysis. Changing this amount recalculates the correct number of shares to purchase in the pre-auction. Also by changing the bet size it also calculates the amount being invested in each position as a double-check.
*Scenario (2)* Those trading the "Action Strategy" are limited to $1k bets (so I would change $5,000 with $1,000 in the parameter settings before running the Exploration analysis). Changing the bet size recalculates the correct number of shares to purchase in the pre-auction. ($5k bet size relates to the code you referenced). Also by changing the bet size it also calculates the amount being invested in each position as a double-check.
*
_SECTION_BEGIN( "# Skate's WTT Modified Exploration" );*
//=================================================================================
//1. The "SetOptions" are management options & they are a feature of Amibroker
//=================================================================================
*Line 10 - TradingFunds = Param( "Trading Funds - $", 5000, 1000, 10000000, 1000 ); // User-definable parameter, accessible via Exploration parameters - changes are reflected immediately. (Default $5k bets) - INSERT any amount*
SetOption( "InitialEquity", 100000 ); // $100k Inital Equity (allows for 20 X $5k bets)
SetOption( "PriceBoundChecking", 1 ); // True: Adjust prices so that they fall within the High-Low range
SetOption( "CommissionMode", 2 ); // Use $ amount
SetOption( "CommissionAmount", 19.95 ); // CommSec commission rate
SetOption( "UsePrevBarEquityForPosSizing", 1 ); // True: Use previous bar closing equity to perform position sizing
SetOption( "AllowSameBarExit", False ); // False: Trade is exited & we move to next bar ignoring other signals
*Line 17 - SetForeign( "$XAO.au", True , True ); // I've used the new Norgate Updater (NDU) format - change if the format is different to your data supplier*
RestorePriceArrays( True ); // Restores original price and volume arrays after the call to SetForeign.
SetTradeDelays( 1, 1, 1, 1 ); // Trade delays, the delay is required for backtesting
//=================================================================================
//2. The "Index Filter" - decides when we will trade & also our trailing stop levels
//=================================================================================
*Line 23 - IndexCode = ParamStr("Index Symbol","$XAO.au");*
Index = Foreign(IndexCode,"C");
MAFilter = MA( C, 10); // 10 week lookback period
IndexBuyFilter = Index > MAFilter; // Index Filter = ON: When the close is greater than the 10 week simple moving average the Index Filter is ON [trailing stop set to 20%] + [buy + sell signals generated]
IndexSellFilter = Index < MAFilter; // Index Filter = OFF: When the close is less than the 10 week simple moving average the Index Filter is OFF [shortens trailing stop to 10%] + [only sell signals generated]
RestorePriceArrays( True ); // Restores original arrays after the call to SetForeign.
//=================================================================================
//3. Add all our other filters
//=================================================================================
Liq = C * V; // Liquidity Filter
CV = 500000; // Volume Filter
Liqfactor = Liq > CV; // Liquidity Filter
ROCFilter = ROC( C, 20 ) > 30; // Rate Of Change (ROC) Momentum filter
Line 36 - ROCParameter = Param( "ROC Parameter", 8, 0, 52, 1 ); // 8 week Rate of Change period
*Line 37 - MOMFilter = ( ROC( C, 10 ) >= ROCParameter ); // Momentum filter - the closing price of the last 10 weeks is greater than the last 8 weeks*
NoStrength = Close < MA( Close, 12 ); // If the closing price is less then the Simple Moving Average of the last 12 weeks it's considered there is no strength in the move
//=================================================================================
//4. Add a Buy condition
//=================================================================================
WTTBP = Param( "Breakout Period", 10, 1, 1000, 1 ); // 10 week Lookback period

Cond1 = C > Ref( HHV( C, WTTBP ), -1 ); // Buy when the closing price is greater than the highest High Value of the last 10 weeks 
Cond2 = IndexBuyFilter; // Buy ONLY when the Index Filter is ON
cond3 = C >= 0.05; // Buy only if the closing price is greater $0.05 (5 cents)
cond4 = C <= 10; // Buy only if the closing price is less than $10.00
cond5 = liqfactor; // Buy only when the Liquidity filter is TRUE
*cond6* = ROCFilter *AND MOMFilter*; // Buy only when the Rate of Change filter & *Momentum filter is TRUE*

Buy = cond1
      AND cond2
      AND cond3
      AND cond4
      AND cond5
      AND cond6;
//=================================================================================

Skate.


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## Skate (26 August 2020)

Skate.


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## TraderJimmy (26 August 2020)

soso said:


> Hope it's clear.



Yes, your explanation is very clear thanks. One more question if I may - how exactly do you refer to the unadjusted price? ie. should the AFL read something like "Buy = [unadjusted buy price]"?


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## soso (26 August 2020)

TraderJimmy said:


> Yes, your explanation is very clear thanks. One more question if I may - how exactly do you refer to the unadjusted price? ie. should the AFL read something like "Buy = [unadjusted buy price]"?




If you're using Norgate here it is documented https://norgatedata.com/amibroker-usage.php#unadjclose

Buy = Buy and NorgateOriginalCloseTimeSeries() < 10


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## Skate (27 August 2020)

Skate.


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## Skate (28 August 2020)

Skate.


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## Skate (28 August 2020)

Skate.


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## Skate (29 August 2020)

Skate.


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## Skate (31 August 2020)

Skate.


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## Skate (31 August 2020)

*Dividend Payment - SCP *(Shopping Centres Australia)








Skate


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## peter2 (31 August 2020)

You may notice this opinion expressed in many trader interviews. 

"_Consistency in my returns came only after I converted from being a discretionary trader to a system trader._" 

That's why this thread is so valuable.


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## tech/a (1 September 2020)

While this maybe true for those who need structure and don’t understand how to develop an edge/s. ( I’ve not read the thread only your comment Peter ) 

My beginnings were like many as a systematic trader and still in my Super.
Personally my journey has lead me to un dreamt of R/R and liquidated profit From discretionary trading.

I’d argue that if you can trade profitability as a discretionary trader You’ll be in a much better position to UNDERSTAND and design a trading system/s.


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## Skate (1 September 2020)

Skate.


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## willoneau (1 September 2020)

tech/a said:


> While this maybe true for those who need structure and don’t understand how to develop an edge/s. ( I’ve not read the thread only your comment Peter )
> 
> My beginnings were like many as a systematic trader and still in my Super.
> Personally my journey has lead me to un dreamt of R/R and liquidated profit From discretionary trading.
> ...



Discretionary trading is harder than just following a system with positive expectancy. Because most traders don't even follow a mechanical system with exact rules for any length of time.


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## willoneau (1 September 2020)

OK , my belief at what being a consistently profitable trader is,
a) Using a positive expectancy system, (discretionary, mechanical, fundamental or mix).
b) Money management and risk control.
c) Self control to do both a and b


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## Skate (2 September 2020)

Cam019 said:


> Nick Radge's Bang-For-Buck.




@Cam019 has posted about Nick Radge "Bang for Buck" filter that's worthy of a repost in the "Dump it here" thread: https://www.aussiestockforums.com/posts/1087654/

*To calculate the Bang-for-Buck filter *(Nick Radge)
_"In layman’s terms, divide a $10,000 account by the closing price of the stock on any given day. This number is then multiplied by the average range of the stock for the last 200 days. The average range is the distance the stock has moved from high to low each day over the last 200-days. Dividing this number by 100 will convert the result to dollars and cents which in turn indicates the possible dollar return on any given day. The higher the ratio, the higher the profit potential and therefore selecting higher ratio’s will enable stock selection with potential for movement, which is what we want"_

*"Bang for Buck" PositionScore for Amibroker *
PositionScore = ((10000/Close) * ATR(200))/100; //Nick Radge - "bang for buck".

Skate.


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## Skate (2 September 2020)

*


Cam019 said:



			Nick Radge's Bang-For-Buck.
		
Click to expand...


Gems are everywhere*
With so much information we sometimes fall into the habit of speed-reading, failing to absorb what we have just read without realising that's "Gems" are scattered everywhere, finding & applying them becomes an issue, a lost opportunity.

*A Gem from Nick Radge's Bang-For-Buck article*
_"You will therefore find that capital usage in higher-priced stocks is inefficient compared with lower-priced stocks" _Nick is suggesting that efficiencies can be garnered by taking the "lowest-priced stock" first. The Amibroker code to test his theory is below.

*PositionScore for Amibroker*
PositionScorer = 100 - Close; // Lowest priced security is taken first
PositionScore = Ref( PositionScorer, -1 ); // Previous bar (-1 bar)

Skate.


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## Skate (2 September 2020)

_


peter2 said:



Portfolios: My weekly/daily portfolio has been "bogged" for quite a while now. *It seems that no other buyers bought into the stocks that I did. Bugga.* Plenty have drifted lower and are nearing their exit triggers. Gold stocks have drifted down to their 50% PB levels. I think they're oversold but I must show some discipline and wait for the 1st BB. Portfolio heat is currently 6% (45% invested) and that's enough for me at the moment.
		
Click to expand...


_*Here is another "Gem"*
@peter2 explains for a price to move higher others need to find the same opportunity. Systematic trend trading allows this to happen as we all tend to get the same signals. Trends creates momentum & buyers increase exponentially when the current sentiment is bullish. Capturing a confirmed trend is the easiest form of trading, understanding this allows us to capitalise on the change in direction.

Skate.


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## Skate (2 September 2020)

*10 simple tips that give Nick Radge the trading edge* - https://www.thechartist.com.au/10-simple-tips-that-give-me-the-trading-edge/
Nick Radge is often quoted & for good reason.

*A reader wrote *
_“In trading, what qualities are needed to be your best? In other words, why do you succeed where others failed?”_

*In reply to the question*
Nick had to think long & hard about his trading edge as success is in the eye of the beholder. Nick's 10 simple tips are below.

*1. I study. *
_"Ever since I walked onto the floor of the stock exchange back in 1985 I was enthralled. I spent every lunch break in the ASX book store. Then I found the book store at the Sydney Futures Exchange. So I spent my lunchtimes there. I still study"_

*2. I don’t just study trading. *
_I study traders. All the greatest traders have had to walk the same journey as us. It’s important to understand the context of what you’re doing. So I study their track records, processes, history – just about anything that catches my eye._

*3. I don’t just study traders. *
_"I read between the lines. When people read a trading book they see the words but not the true meaning of what is being said. Many times the valuable lessons are not in the written word. Rather what is being alluded to"_

*4. I have no fear. *
_"The market can’t hurt me. Position sizing and diversification see to that"_

*5. I’m only interested in facts and what is practical and useful. *
_"I have always applied a rules-based approach to trading. Left brain bias. Research, problems and solutions are processed within a structured environment"_

*6. I make decisions based on good process rather than the monetary outcome. *
_"So I have no attachment to losses or periods of losses. Which means I can continue to follow the process and achieve my objectives"_

*7. I accept there is much I can’t control. *
_"I can, however, control my reactions to events – good and bad. Much of that control comes from having no attachment to the money"_

*8. I have patience. *
_"A moderately good strategy applied over the long term will generate more wealth than chasing the latest fad. The Eighth Wonder of the World is compounding. And compounding requires time to develop"_

*9. I am consistent. *
_"I am able to place trades every day, week, month, year. Without fail"_

*10. If all else fails I go fishing. *
_"That’s my meditation"_

*Skate's takeaway "Gem"*
Nick Radge said: _"I read between the lines. When people read a trading book they see the words but not the true meaning of what is being said. Many times the valuable lessons are not in the written word. Rather what is being alluded to"
_
Skate.


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## Skate (2 September 2020)

Skate.


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## Skate (3 September 2020)

Skate.


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## Skate (4 September 2020)

Skate.


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## Skate (4 September 2020)

Skate.


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## Skate (5 September 2020)

*The GTFO Filter*
Using this type of filter ensures your portfolio is fully in or fully out. The bad news is that yesterday's massive move activated the "Action Strategy" GTFO filter. As a result, the "Action Strategy" has to be totally liquidated. Liquidating a strategy is hard to stomach particularly when the strategy ends the week on a positive note.

Skate.


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## Skate (5 September 2020)

Skate.


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## martyjames (5 September 2020)

My testing  on weekly systems shows having a gtfo filter massively smooths out equity curves and lowers DD. For what its worth i think the US market topped last week

cheers


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## Skate (7 September 2020)

Skate


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## frugal.rock (7 September 2020)

G'day Skate,
Completely independent of your GTFO trigger, I had started liquidation of my 2 portfolios on Friday.
I was kicking myself for missing standard fundamentals checks earlier last week.
Portfolios were up ~50% with P1 started 23/6/20 and P2 started 22/8/20 with 50k in each, average of 20 positions at 2.5k each.
The strategies were hybrid systematic discretionary based on TA & FA and chaos theory with a few other unmentionable quirks. (A stropped and honed edge...) 
My exercise has highlighted a few weak areas of my strategies and my exits definitely need work. Am satisfied with my entry strategies and timing of overall. 
Both portfolios are now liquidated with the exception of 2 stocks in each. I consider them to be low risk overall and are close to doing their thing.
Trading without emotions has been the key to my consistency. 
I would like to thank you Skate and @peter2 for your "guidance" in the realms of theory knowledge, more importantly, the application of it. 
Much obliged gentlemen. 
Cheers


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## Bazzi (7 September 2020)

Skate said:


> View attachment 108808
> 
> View attachment 108809
> 
> ...



Hi @Skate 

Thank you for an incredible journey we had with the action strategy that had benefited and guided the followers. I hope it is not the end and I look forward for the next live strategy. 

Cheers!


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## Skate (7 September 2020)

frugal.rock said:


> My exercise has highlighted a few weak areas of my strategies and my exits definitely need work




@frugal.rock sharing information is how we learn & sometimes putting your thoughts on paper helps crystalise your thinking, well done.

*The Action Strategy exercise*
Actioning the buy & sell signals blindly is the takeaway if you traded along with the "Action Strategy". All in all, it was a worthy exercise. Even when we think we know better it's important to remember to follow your trading plan to the letter. Sometimes following your trading plan, strategy or system doesn't always pay off but that's not the point, the point is that we need consistency of our actions. Override your plan or system once & you will do it again & again. A sure-fire recipe for disaster.

*The next project*
@Bazzi the "Action Strategy" was a great project & as far as I'm concerned it's a handy trading strategy, now parked. I'm eager to start another project with some skin in the game for others to follow along. It can be educational to have a glimpse at how others trade systematically.      

*$100k Portfolio *
When others post backtests reports I've noticed the portfolio size of $100k is often used, so that will be the trading amount of my next live trading endeavour. All I have to do is decide on a strategy to trade.

*Trade options - I have two options on how I can achieve this*
(1) Trade a strategy that has been previously parked (laying dormant) waiting for its turn to have a go. These dormant strategies have all passed the requirements to be an active trading system having already completed their paper trading stage of development. “OR”
(2) I can trade one of my strategies that’s currently still in the paper trading stage. I'm leaning this way as uncertainty brings excitement. I’m not saying the “excitement of gambling” but the excitement of "not knowing" how the strategy will perform in the heat of battle.

*The strategy I decide to trade will not be a dog*
I can take comfort knowing if one of my systems has made it to “paper trading” phase it's already proven to have legs. Deciding on which one of my strategies to use will be my next decision.

Skate.


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## Skate (7 September 2020)

Skate.


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## Ante (7 September 2020)

Skate said:


> @frugal.rock sharing information is how we learn & sometimes putting your thoughts on paper helps crystalise your thinking, well done.
> 
> *The Action Strategy exercise*
> Actioning the buy & sell signals blindly is the takeaway if you traded along with the "Action Strategy". All in all, it was a worthy exercise. Even when we think we know better it's important to remember to follow your trading plan to the letter. Sometimes following your trading plan, strategy or system doesn't always pay off but that's not the point, the point is that we need consistency of our actions. Override your plan or system once & you will do it again & again. A sure-fire recipe for disaster.
> ...



@Skate how about you trade the happy cat strategy that you have been paper trading a few weeks ago, the dull cat not the shiny cat as it freaks me out as well. It’s only a suggestion as I’ll be happy to follow anything you decide to trade


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## Skate (7 September 2020)

Ante said:


> @Skate how about you trade the happy cat strategy that you have been paper trading a few weeks ago, the dull cat not the shiny cat as it freaks me out as well. It’s only a suggestion as I’ll be happy to follow anything you decide to trade




@Ante ok, that's a good suggestion. Sometimes the first idea turns out to be the best.

*Done & dusted*
I'll trade the "HappyCat Strategy v1". The "HappyCat v1" was the dull HappyCat whereas "HappyCat v2" was the shinny one. I can't remember but someone else remarked that they didn't like or trust the "shiny" HappyCat.


Newt said:


> I'm just not sure about Mr Happycat 2 - his gold skin is a bit too flashy, and there's something about his pose that makes him look like he's hiding something? *V1 however looks much more trustworthy*



@Newt I know what they mean as @frugal.rock new avatar freaks me out.

Skate.


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## Newt (7 September 2020)

Surely we steely-eyed hard-nosed system traders won't be swayed by such shallow first impressions......


I'd be interested to see your Happy Cat trades too Skate.  
Might even join in trading with small amount if you decide to proceed.


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## peter2 (7 September 2020)

Ha, you "steely eyed hard nosed system traders" make decisions about your trading systems just like discretionary traders. We're all influenced by psychological biases, "feelings", sentiment, emotions, fear and greed. 

I'm not having a dig at anyone, just a jocular moment.

IMHO the Action Strategy was performing nicely. I'm more concerned by the poor performance of the Daily Vix Strategy myself. Glad it's only paper trading. If you want to see what I mean, take out the PBH trade from the batch of 29 trades.


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## qldfrog (8 September 2020)

And before everyone forgets, many thanks to Mr Skate.
I followed and got 5k profit.nothing to laugh at when job is gone and we have to rely on investment
There were implementation differences ,some mistakes on my part but overall results did match and i have a good benchmark to compare my own systems
Thanks again


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## ducati916 (8 September 2020)

peter2 said:


> Ha, you "steely eyed hard nosed system traders" make decisions about your trading systems just like discretionary traders. We're all influenced by psychological biases, "feelings", sentiment, emotions, fear and greed.
> 
> I'm not having a dig at anyone, just a jocular moment.
> 
> IMHO the Action Strategy was performing nicely. I'm more concerned by the poor performance of the Daily Vix Strategy myself. Glad it's only paper trading. If you want to see what I mean, take out the PBH trade from the batch of 29 trades.




The Daily VIX would be my choice. That would really sort the men from the boys. That system lives up to its name.

jog on
duc


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## Rsthree (8 September 2020)

qldfrog said:


> And before everyone forgets, many thanks to Mr Skate.
> I followed and got 5k profit.nothing to laugh at when job is gone and we have to rely on investment
> There were implementation differences ,some mistakes on my part but overall results did match and i have a good benchmark to compare my own systems
> Thanks again




It was the best hands on training I've had for a long time and best part was that I got paid handsomely to participate.

Thanks again Skate your contribution is much appreciated.


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## willoneau (8 September 2020)

I would also like to thank Skate for the Action Strategy as it showed the process needed to be followed when going down the path of a system trader.


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## Warr87 (8 September 2020)

It was good to watch. 

I even put some money aside last week to start trading it this week. Horrible timing it seems given the GTFO trigger and the experiment ending.


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## willoneau (8 September 2020)

I did wonder how long Skate was going to run the system and ending like it has is a perfect example of following your system even if you don't like having to.


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## qldfrog (8 September 2020)

But i think it is a good time to end that Action strategy, and move to a different experience.
By many aspects, action was a smooth ride, very good return, not many heart attacks on the way


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## Skate (8 September 2020)

qldfrog said:


> I think it is a good time to end that Action strategy and *move to a different experience.*






Skate.


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## Skate (8 September 2020)

peter2 said:


> I'm more concerned by the *poor performance of the Daily Vix Strategy* myself. Glad it's only paper trading.




*Don't throw away a good strategy because of a small sample size*
Meaning, "Don't throw the baby out with the bathwater". A small sample of 11 days & one outlier shouldn't be the yardstick. All strategies take time to develop & the VIX Daily Strategy is no different.

*You can't trade the VIX*
This might come as a surprise but there is a problem trying to trade the VIX, why? - because it's a "fear" indicator. In saying this, the VIX is very useful & usable but you can't trade it. It might also come as a surprise that you can't trade the "Bollinger Bands" indicator either because it's an indicator. An Indicator is just that, an indicator. But notwithstanding my comments, we can still use the indicator to our advantage to pick optimal entry & exit points of the bands. The Bollinger Bands (the indicator) is the foundation of many versions of the Bollinger Bands Breakout Strategy (BBO).

*There are parts of the VIX Strategy I find disconcerting*
The VIX (fear & greed indicator) goes up & down like a yo-yo. The Duc went to great lengths for me to understand how he uses the VIX (in conjunction) with a variety of other confirming indicators. Trying to code his fundamental approach utilising the VIX wasn't that hard. Duc's methodology made a great indicator but as a trading strategy is was less than impressive.

*Trend Trading*
With trend trading, we never get in at the start of a trend & unfortunately we need to surrender some open profits to exit. Grabbing the "meat" of the move "over & over" is the secret of successful trading & it's the same trading the VIX. I've explained it all before so I won't go over it again. Using trigger levels of the VIX "move" is at the heart of the idea. The VIX needs to sustain a continuously unbroken level over 10 days (bar-by-bar) to generate buy & sell signals. (a novel idea)

*Members posts*
The "Action Strategy", the "VIX Daily Strategy", the "HappyCat Strategy", the "Ducati Stop & Go Indicator", "Ducati Acceleration Indicator" & the "Ducati Blue Bar Strategy" all have been developed from the words of our resident Guru @ducati916.

*Member interest*
I'm sure the Duc will be taking an ongoing interest in the progress of both reported strategies. (1) The paper trading of the "VIX Daily Strategy" & eventually (2) the "HappyCat Strategy" when it goes live. As traders, we sometimes fail to realise the value contained in the posts in this forum.

Skate.


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## Skate (8 September 2020)

Skate.


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## peter2 (9 September 2020)

I feel that I should clarify my comments about  the performance of the *Daily VIX strategy*. I thought the results poor and in case it was due to the current market I compared the batch of results to another strategy over the same period. I compared it to a swing strategy that captures similar short term moves. This second strategy confirmed that there were plenty of opportunities and that 30 trades or almost 30 (29) was enough to make this assessment. 

I created a list and noted every entry and exit of the trades in the Daily VIX strategy on my charts. Reviewing the trades I realised my mistake. I assessed the performance of the Daily VIX based on an incorrect assumption. The strategy of the Daily VIX system is most definitely not a swing system nor is it a trend following system. It is a system based purely on momentum. I know that @Skate has always called it a momentum system but the word gets used incorrectly far to often. Swing and trend following strategies are often called momentum systems. They're not. They rely on price movement but not momentum (price acceleration).

The Daily VIX system entry is triggered by a specific level of price momentum (not just an upward move) and the exits are triggered by an absence or reversal of momentum.  I was both fascinated and impressed by the exits. They're fast. This is an active system requiring lots a work each day. 

The exits are so fast that the overall W% of this strategy will be lower than most trend following systems. I estimate that it'll average out to be just below 40%. Higher in bull markets and lower in bear markets (with no index filter). This estimate is about 5% lower than trend following systems. In unsuitable market conditions this system will frustrate traders who don't understand it. It will also cause others to make incorrect assumptions about short term performance.  

These fast exits are what makes this strategy work. If you have difficulty selling soon after buying don't try this system. Positive momentum and exiting quickly when it ends ensures this system will create a high AW/AL ratio, I estimate that this will be much higher than swing systems. The AW/AL of trend following systems depend on the distance of the trailing exit stop (hard to estimate).

If we combine the W% of 40% with an AW/AL of 3.5/1 (my estimate) that produces a very good expectancy. We know the number of trades is high (29/11 days) so the profit potential is very good. 

_Dawn is breaking, so I should try to get some sleep._


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## Skate (9 September 2020)

peter2 said:


> The strategy of the Daily VIX system is *a system based purely on momentum*. The Daily VIX system *entry is triggered by a specific level of price momentum* (not just an upward move) and *the exits are triggered by an "absence or reversal of momentum"*.  I was both fascinated and impressed by *the exits. They're fast*. This is an active system requiring lots of work each day. *These fast exits are what makes this strategy work*. We know the number of trades is high (29/11 days) so the profit potential is very good.



@peter2, I've condensed your post to one paragraph as it's a succinct assessment of the Daily VIX Strategy. Selling on the "absence or reversal of momentum" can sometimes be annoying. Selling good positions is frustrating at times, an example today is selling (PBH) but to be fair to the strategy "the momentum has stagnated" thus requiring a sell.

Skate.


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## martyjames (9 September 2020)

Hi Skate
Thanks for all the ongoing education and food for thought! Could you post a backtest report and equity curve of the *Daily VIX strategy?* I know we have discussed in this thread the pitfalls of doing so but would be interested to get a general feel for the system

cheers
Marty


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## Skate (9 September 2020)

@martyjames I try to refrain from posting backtest reports because without Norgate's “Platinum subscription” backtesting is less than reliable. Platinum users of Norgate data are able to make use of Historical Index Constituents which means that before a trade is taken the software checks to see it is in the relevant index at the time the trade is entered. 

*After making the disclaimer*










Skate.


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## martyjames (9 September 2020)

Thank you Skate


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## ducati916 (9 September 2020)

peter2 said:


> The Daily VIX system entry is triggered by a specific level of price momentum (not just an upward move) and the exits are triggered by an absence or reversal of momentum.  I was both fascinated and impressed by the exits. They're fast. This is an active system requiring lots a work each day.
> 
> 
> 
> _Dawn is breaking, so I should try to get some sleep._




That is the key observation. Given that Mr Skate is a closet Quant, it is that measurement of acceleration/deceleration, that lies at the heart of the system.

jog on
duc


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## Warr87 (9 September 2020)

ducati916 said:


> That is the key observation. Given that Mr Skate is a closet Quant, it is that measurement of acceleration/deceleration, that lies at the heart of the system.
> 
> jog on
> duc




and i'm a wannabe quant. willing and able, but no skills .


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## Roller_1 (9 September 2020)

ducati916 said:


> That is the key observation. Given that Mr Skate is a closet Quant, it is that measurement of acceleration/deceleration, that lies at the heart of the system.
> 
> jog on
> duc




There is obviously an interesting VIX twist thrown into that measurement, is the VIX or mom weighted higher i wonder..


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## Skate (9 September 2020)

Skate.


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## Skate (10 September 2020)

Skate.


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## Skate (11 September 2020)

Skate.


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## Skate (13 September 2020)

*Index Filter*
The HappyCat Strategy "Index Filter" is currently off which means there are no buy signals delaying the start of my new project.

Skate.


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## Skate (14 September 2020)

peter2 said:


> I know momentum systems gets used incorrectly far too often. Swing and trend following strategies are often called momentum systems. They're not. They rely on price movement but not momentum (price acceleration).




*The "HappyCat Strategy"*
I've made 28 separate posts about the "HappyCat Strategy" so I won't cover old ground but to say - the "HappyCat Strategy" buys momentum & uses that momentum to enter & exit a position.

*The new "HappyCat Strategy" trading idea*
With all trading ideas, we are trying to tilt the odds of success in our favour by buying into momentum & trends whilst minimizing our losses. Buying good companies at the "right time" & getting off quickly "at the right time" really determines if we are to be profitable in the long run. There are no free lunches when it comes to trading, it's all about swings & roundabouts. Trading is a trade-off.

*More to follow*
So how do we extract the maximum amount of money from the market with minimal risk?

Skate.


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## Skate (14 September 2020)

*What is momentum trading?*
Momentum trading is similar but not the same as trading breakouts. Momentum trading buys positions when the price is rising with the hope of offloading the position to someone else at a higher price. When you decide to start trading there is a way to profit. How? - find securities that are moving higher. Momentum trading is buying & selling positions according to the recent strength of price trends. If there is enough force behind a price move, it will continue to move in the same direction. Sometimes it's disappointing when they don't follow the script.

*The "HappyCat Strategy" isn't a fancy strategy*
Momentum trading is a strategy that uses the strength of price movements & buying positions that are rising & sell when they are considered to have peaked. Working with volatility finds buying opportunities in short-term uptrends & sell them when they start to lose momentum. 

*In a nutshell*
As Momentum traders, we seek to identify the strength of a trend, then open a position to take advantage of the expected price change - closing the position when the trend starts to lose its strength. Simple & effective, well that's the plan at least.

Skate.


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## Skate (14 September 2020)

Skate.


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## Skate (15 September 2020)

Skate.


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## Skate (16 September 2020)

*Why the decisions we make are so important*
Life is one decision after another. We make important & not so important decisions every day & with that said sometimes life just sucks for some. We need to accept that life is a struggle & everyone will have their fair share of its ups and downs as no one is immune from this fact. The only thing you can control is your deliberate thoughts & actions so don't let your happiness hinge on what you can't control. We cannot control most things but we can control how we feel about them by changing our expectations & respect new challenges. Sometimes that's easier said than done.

*Beware*
Overconfidence, lack of attention to details & excessive trust in the judgments of others can bring you undone quick smart in this game.

Skate.


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## Skate (16 September 2020)

Skate.


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## frugal.rock (16 September 2020)

Skate said:


> lack of attention to details



G'day Skate,
Just a little detail, the headings of your columns for daily Vix strategy are mismatched to the results... (cumulative and daily results are crossed)

I don't like to highlight inattention to details as it doesn't bring me joy, however attention to detail is critical to what I do, generally on a daily basis. If I get things wrong, there's the potential for million dollar lawsuits further down the track. 

In this case, the headings are generally irrelevant, the data is all I concern myself with.
Thanks Skate. 👍


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## peter2 (16 September 2020)

My apologies also, I noticed the error in the headings and forgot to mention it.


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## Skate (16 September 2020)

frugal.rock said:


> G'day Skate, Just a little detail, the headings of your columns for daily Vix strategy are mismatched to the results... (cumulative and daily results are crossed) 👍






peter2 said:


> My apologies also, I noticed the error in the headings and forgot to mention it.



*Thank you*
The column headings have been corrected. 

Skate.


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## Skate (17 September 2020)

Skate.


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## Skate (17 September 2020)

peter2 said:


> One reason why people that are successful in one endeavour have difficulty becoming successful in trading could be due to them overlooking the years of learning, effort and experience that they gained in order to be successful. They wouldn't forget that they started at the bottom and worked their way up, but now that they are successful, their business or endeavour is easily maintained with minimal effort. Not many realise that trading is a very competitive business. Not only do they want to start trading at the top level, they assume that they only need put in a minimal effort to be successful. Only the few with ambition and motivation to work towards their trading goals will get there.




*True today as it was in 2008*
@peter2 made a post back in 2008 that until recently I hadn't read. If I didn't find his post interesting or educational I wouldn't repost it here "in full without permission".






						You're not smart enough
					

Now I have your attention the thread should be named "Your not smart enough for short Cuts because its not what counts"  From a discussion in the Beginners - Introduce yourselves!  thread I thought I would start a discussion about something that I have always found a little strange. Why...




					www.aussiestockforums.com
				



_"One reason why people that are successful in one endeavour have difficulty becoming successful in trading could be due to them overlooking the years of learning, effort and experience that they gained in order to be successful. They wouldn't forget that they started at the bottom and worked their way up, but now that they are successful, their business or endeavour is easily maintained with minimal effort. Not many realise that trading is a very competitive business. Not only do they want to start trading at the top level, they assume that they only need put in a minimal effort to be successful. Only the few with ambition and motivation to work towards their trading goals will get there"  _

*Successful trading is not guaranteed*
It’s a major disappointment that many traders don’t make any money. Trading is stressful & emotional when your money is on the line. It takes an enormous amount of time & effort to be a consistently profitable trader as you are required to develop the necessary skills & attributes. It doesn’t matter how disciplined or confident you are, if you don’t have a “robust simple trading method”, you won’t be successful. Forums are full of traders who are losing money because they have no plan & little self-discipline. Traders who lack the required discipline are the traders who go on to break the rules, even rules they set themselves. Breaking your trading rules & drifting away from your trading plan starts one of many bad habits. 

*In a nutshell *
Trading is a very emotional experience & emotions can sometimes sabotage the best of plans, even when trading is travelling nicely it’s difficult to follow the plan. Most losses are not the result of a poor plan, but the failure to follow that plan.  Those who trade well have already been well educated & prepared.

Skate.


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## Skate (18 September 2020)

Skate.


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## Skate (19 September 2020)

*Periodicity when it comes to Trading & Reporting*
The Daily VIX Strategy has been paper trading for 4 weeks now or 20 trading days. There are a few points that I would like to make about trading & reporting on a daily basis. Trading a daily strategy in the pre-auction involves under 20 minutes a day & that includes the administration of trade movements in Share Trade Tracker. The time involved each day is not an issue but it requires you to be involved every day. As an analogy, I'll use pet ownership. A pet requires daily care & attention but when you go on holidays they can become an issue.

*Daily Trading carries more emotions & involvement*
Daily administration carries emotions as you are constantly reminded of the daily volatility of the markets whereas weekly administration is more of "how did we go" this week.

*The VIX Daily Chart - daily volatility is clearly shown*
Trading affects everyone differently & I'm thinking - "is it useful to record the daily fluctuations of the markets". If you look at the blue line in the chart below & imagine the line represents your emotions - could you handle it - trading daily.






*The Daily VIX Chart displayed "Weekly" - using a weekly chart smooths the daily volatility *
Using a weekly "how did we go this week" type of chart takes away the erratic visual behaviour of trading daily




Skate.


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## Skate (19 September 2020)

*The start of the HappyCat project has been delayed another week *
The new project is rearing to go but due to the "Index Filter" of the strategy being "off" - no new signals are generated.

Skate.


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## Skate (19 September 2020)

*It's unhealthy*
Doing the - "What If" - after a position is brought or sold during the heat of trading is unproductive & it can mess with you quick smart. Doing the "What if's" when trading is never encouraged as doubt can fester into anger & anguish.

*On reflection*
The Action Strategy was "closed out" due to the enactment of the (GTFO Filter) but on reflection, I was wondering - how would the "Action Strategy" be travelling if the GTFO Filter wasn't included in the strategy. The GTFO filter measures the average against the speed of a move compared to the overall Index being traded. As with any trading, nothing is perfect but by following your system 100% of the time has proven to be more beneficial than fiddling with personal intervention. Trading is all about consistency.

*What if the "Action Strategy" didn't have a GTFO Filter*
If I was wondering how the strategy would have performed over the last two weeks without the GTFO Filter - there may also be others who are wondering the same thing. 

*How would have the strategy performed without the GTFO Filter?*
The trading results are below with the GTFO Filter removed.







*The "Action Strategy" without the GTFO Filter*







*For comparison - The "Action Strategy with the GTFO Filter included*












*Summary*
There is a difference between the results. The Action Strategy cashed out with a healthy 27.2% profit whereas if the strategy kept trading without the GTFO Filter there would be currently "7 open positions" & a profit of 32.8%. 

*Did the GTFO filter work as designed? *
Heck yeh! - Capital preservation is the name of the game. It's better to be safe than sorry.

Skate.


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## Skate (21 September 2020)

Skate.


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## peter2 (21 September 2020)

Loved your post showing the daily volatility versus reporting the results weekly. I even gave you the gold star for good content. It's very hard to not be influenced by our recent results. Monitoring results of a daily system once a weekly distances us from that daily volatility.  This can only be a good thing. A daily system won't break down in 5 trading days, but a person can become stressed in that time (especially if there's other things happening in your life). 

Loved the suggestion of monitoring a daily system, weekly. It's much easier to do this if the daily procedures are automatic and mechanical (no discretion).



Skate said:


> *Did the GTFO filter work as designed? *
> Heck yeh! - Capital preservation is the name of the game. It's better to be safe than sorry.




I've no doubt that it worked as programmed, but is the programming right?  
IMO the GTFO exit triggered prematurely. You will only know this by researching all prior instances of the GTFO triggers and the effect of each one (individually) on the overall performance. Yep, that's a lot of work. 

Action Strategy vs the VIX Strategy.   You know my preference. I love the Action. 
Ditch the GTFO as a daily system should be able to exit quick enough to protect itself. 

You're still the man @Skate


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## Chronos-Plutus (21 September 2020)

I am getting the feeling that if the Central Bankers don't reassure the markets this week; then we are going back to March levels.

I am ~56% cash, ~22% equities and ~22% physical precious metals at the moment.


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## aus_trader (21 September 2020)

Chronos-Plutus said:


> I am getting the feeling that if the Central Bankers don't reassure the markets this week; then we are going back to March levels.
> 
> I am ~56% cash, ~22% equities and ~22% physical precious metals at the moment.



I thought they were pretty addicted to it by now...


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## Skate (22 September 2020)

Skate.


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## Skate (22 September 2020)

@frugal.rock, a "WOW" 

*Daily Volatility*
Watching the daily volitility can sometimes play with your emotions. Every trader needs to remember that trading is a marathon not a sprint. Some days are lemons whereas other days are lemonade. Meaning there will be good days as well as bad. Accept this fact & you are half way there to getting your emotions under control. 
*
Emotions*
I recently made a post about "imagining" that the equity curve (the line) as your "emotions" & if you could handle trading & reporting daily. If you are highly strung & let your emotions get the better of you - "is it better" - to trade daily & report weekly as the equity curve is smoother.  Hopefully, this smooths out your emotions as well.

*Peter's summary*
@peter2 has a way of summarising my posts & as usual, he's spot on the money. In addition to Peter's comments I wish to make two additional points:
(a) Some are more detached from trading than others & 
(b) Some have a long term vision & are not distracted from short term results.


peter2 said:


> *It's very hard to not be influenced by our recent results. Monitoring results of a daily system once a weekly distances us from that daily volatility. This can only be a good thing. A daily system won't break down in 5 trading days, but a person can become stressed in that time (especially if there's other things happening in your life). Loved the suggestion of monitoring a daily system, weekly*




Skate.


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## Newt (22 September 2020)

As Nick Radge says, "Next 1000 trades".

After even another 50, suspect your equity curve for the Daily VIX strategy will (at first glance) appear much smoother Skate.  Totally agree, very easy to forgot or not understand the emotion what each blip up and down in the equity curve represented and felt like when taking in the "big picture" at a later date.....


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## Chronos-Plutus (22 September 2020)

Newt said:


> As Nick Radge says, "Next 1000 trades".
> 
> After even another 50, suspect your equity curve for the Daily VIX strategy will (at first glance) appear much smoother Skate.  Totally agree, very easy to forgot or not understand the emotion what each blip up and down in the equity curve represented and felt like when taking in the "big picture" at a later date.....




VIX has a mild negative correlation to the DJIA over a 5 year weekly close.


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## Skate (22 September 2020)

*I receive my share of messages & emails*
I've recently received a few messages from members who are eager to trade along with the new "HappyCat Strategy". The "Action Strategy" was an exercise to confirm if it was possible to follow signals blindly if you have confidence in a strategy. I don't know if those who traded along had confidence in me or the strategy or maybe it was a combination of both. The "Action Strategy" turned out to be a "trade along" exercise whereas the "HappyCat Strategy" will be a "follow along" exercise with $100k on the line.

*The HappyCat Strategy*
I'll be reporting on this strategy twice a week. Friday's post will as usual "the week's results" - more of a "how did we go" for the week type of post. Mondays post will be - "after the close" & I'll report the Buys & Sells conducted in the pre-auction. 

*What's stopping me from taking the signals a day latter?*
I was taken aback with this comment at first but soon realised one of the trading systems in my HYBRID strategy does exactly this (the signal is delayed an extra bar) & works well. Taking a signal a day late, "would it really matter that much?" when trading weekly periodicity. I was asked a direct question - "if the signal is sound for Monday why wouldn't the signal be okay to trade in Tuesday's pre-auction?". 

*I was stumped for an answer*
Would it really matter if you took a signal a day late? 

*This got me thinking* 
I conducted such an "exercise" with the results from the recently retired "Action Strategy" & compared them over a short 18 week trading period. The results are in & I'll post the results shortly.

Skate.


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## Skate (22 September 2020)

*This is the results from trading the "Action Strategy as designed*





*"What if" - we traded the signals the next day*
I trade Monday in the pre-auction & the Buy signal is good for a day only. I conducted the exercise of*  -  *"What if" * -  * Mondays signals were actioned in Tuesday's pre-auction & "would it make much of a difference?" (if any). There was a slight difference but nothing that mattered all that much.





*The original "Action Strategy" results*
$5,446 or 27.2% return on investment

*Trading the "Action Strategy" with a "one day delay"*
$5,968 or 29.8% return on investment 

*I'm calling it - "line ball"*
Trading the strategy a day late made little difference over a short 18 week period. The small difference could have gone either way as trading is not an exact science.

*The difference in the Equity curve*




*Summary*
Comparing the two columns above, the returns are negligible. The weekly results are within the margin of the original returns. Basically the results trail each other so taking a signal a day late to me "makes little difference". It's easy to backtest this scenario if you have Norgate's Platimum Data - unfortunately I only have the "Silver Subscription" so my records would be skewed.

Skate.


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## frugal.rock (22 September 2020)

Skate said:


> *I'm calling it - "line ball"*
> Trading the strategy a day late made little difference over a short 18 week period.



It appears that if extrapolated out further over time, an extra small edge is found?

What if.... signals are generated on a Monday evening, and taken/traded on Tuesday open. 
(My hypothesis... unproven)
You must enjoy a long weekend Skate?  
Cheers.


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## Skate (23 September 2020)

Skate.


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## Skate (24 September 2020)

Skate.


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## Skate (25 September 2020)

Skate.


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## MovingAverage (25 September 2020)

I love this thread...haven't visited in a while and just catching up on recent posts. Some great stuff here.


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## Skate (26 September 2020)

CNHTractor said:


> the Jim Berg code




@CNHTractor raised the name "Jim Berg" a skilled trader that went on to win the non-public Investor Journal trading competition in 2002 using his "Volatility based trading system".

*Some get their "Noses out of joint" *
When code is used that is attributed to another without public acknowledgement or recognition seems to upset some. My personal view differs because if the code is freely distributed on the internet it belongs to everyone. Sometimes code snippets lose importance when combined with others snippets that we all seem to collect & use over time.

*In my case *
I have used one line of "Jim Berg" code (the entry condition) - the rest of the code is freely available.

*Volatility based trading system*
A volatility-based trading system developed by Jim Berg helps identify volatility that we can use for our entry signal. Like most good trading systems it is not complicated but the stock must be in an uptrend. The strategy is designed to trade in the pre-auction & the signals are generated using the "Exploration Analysis"

*The system*
Jim Berg's system uses volatility, actually, he uses 2 times the Average True Range of the last (10) days for the entry signal. The (ATR) volatility identify where to enter the trades & hopefully make a reasonable amount of profit - well that's the plan at least.

*The exit *
I've used a vanilla envelope Moving Average exit that has been well tested & suitable for this style of trading.

*No Index Filter*
Also, I should point out this is a Daily Strategy that has no reliance on a "Buy or Index Filter" as it purely enters a position on volatility.

*Upload*
"Skate's Version of Jim Bergs Daily Volatility Strategy" is uploaded for educational purposes for ASF Members who have Amibroker & a reliable data source. I've used the new Norgate Updater (NDU) format for the data  - you need to change the format (suffix) if it is different from your data supplier. "Pad & Align" in the settings need to be adjusted to format (suffix) of your data supplier as well.

Skate.


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## Skate (26 September 2020)

*Delayed *
The start of the new "HappyCat" project has been delayed once again due to the "Index Filter" being off restricting new buy signals being generated.

Skate.


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## Skate (28 September 2020)

*Private messages*
I've been thinking about a private message I received on Friday. Most messages I receive have normally 3 parts to the message body & this recent message followed along with the same format. From the get-go, I should mention that this member was the first to congratulate me on maintaining the "Dump it here" thread for a complete year. My two year anniversary of this thread is quickly approaching.

*Today I want to post about the word THREE*
So you have a better understanding of my next series of posts - let me use the analogy of "life" - there is a:
1. Beginning
2. Middle 
3. End 

*Members post*
Most private messages I receive usually display varying levels of: 
1. Appreciation
2. Criticism 
3. Helpfulness

*Friday's PM*
The private message I received on Friday contained three points that were the inspiration for this post. The message started with:
1. The first paragraph contained an appreciation for the "Dump it here" thread 
2. The next paragraph confirmed that my posts will stick around to help others in the future 
3. The last paragraph was advice on how to improve "Share Trade Tracker". The improvement will be incorporated in the next release of the program.

*To the member*
1. Thank you
2. Thank you
3. Thank you

Skate.


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## Skate (28 September 2020)

*I'm concentrating on THREE today*
The next series of posts will contain three of something. To keep the posts short, I won't go into depth as it's more productive to think about things.

*Staying with the private message theme*
Those who contact me about trading, tend to ask me the same few questions in a variety of ways:
1. When should I buy?
2. What should I buy?
3. When should I sell?

*The answers to those 3 questions*
The answer to those three questions have already been canvassed in detail but most:
1. Don't have the time to read the entire "Dump it here" thread to find the answers
2. Nobody reads yesterday's news
3. They are after a quick answer - that they will quickly forget - in my opinion

Skate


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## Skate (28 September 2020)

*Trading is easy*
1. Trading is easy, everyone can do it - making money when trading is the difficult part
2. Trading consistently is hard to maintain even at the best of times
3. To keep pulling the trigger when the going gets tough is even harder

*Recent trading has been a struggle*
1. Using the (VIX)
2. To trade the (XAO)
3. The equity curve displays how emotional it can be at times

*1. Using the VIX *
The white box displayed in the chart below is the trading period of "Skate's Daily VIX Strategy" - Using the VIX to decide when to enter a position is not always accurate but at times it's the best we have. I've found using the "VIX" is as good as any other method to enter a trade. Money management incorporating a sharp exit handles the rest.







*2. The All Ordinaries XAO (during the trading period)*
Trading is difficult at the best of times - trading is even more of a challenge when the markets are in a downtrend

*






3. The equity curve displays how emotional it can be*
Trading is not all peaches & cream. We all as traders tend to focus on the destination without realising the journey has its many challenges.

*



They say*
Things come in threes

Skate.


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## Skate (28 September 2020)

*Confusing the three "P's"*
Trading successfully depends on having a firm understanding of the three "P's" as they are often confused.
1. Percentages
2. Probability
3. Profitablility

*PhD*
Profitable traders are required to have (PhD)
1. Perseverance
2. Hard-work
3. Determination

Skate.


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## frugal.rock (28 September 2020)

Skate said:


> *They say*
> Things come in threes






Another perspective,
6 P's

Piss Poor Planning
Prevents Profitable Performance


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## Skate (28 September 2020)

frugal.rock said:


> View attachment 112361
> 
> 
> Another perspective,
> ...




@frugal.rock your post can be summed using one "P"




Skate.


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## Skate (28 September 2020)

Skate.


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## ducati916 (29 September 2020)

Skate said:


> *Trading is easy*
> 1. Trading is easy, everyone can do it - making money when trading is the difficult part
> 2. Trading consistently is hard to maintain even at the best of times
> 3. To keep pulling the trigger when the going gets tough is even harder




And to those 3 questions: why is that the case and why is a mechanical system one way to overcome this difficulty? So the answer lies in how a mechanical system is built and executed. It is built through applying a strategy to past market data. Then, you trade it. You trade it by not questioning it.

What you totally ignore is the news feed.

I have noticed that discretionary traders pay far too much attention to the news and are invariably caught out by it. The news is unimportant or already factored in (take your choice). 

How are they caught out?

Through 'Representative Conjunctions': P(A) or P(B) has a higher probability than P(A+B). (A) is the news and (B) is the market's interpretation of the news. So we as discretionary traders, if we think that we can trade the news or interpret the news, are constantly in the domain of P(A+B) which carries the lower probability. Mechanical systems are in the domain of P(B). An example TSLA: Remember tech/a buying TSLA at $800/share? I thought he was mad. Valuations, any number of logical arguments could be put forward, yet, TSLA rose and rose and rose. I was overly influenced by P(A), whereas, if simply I had traded P(B) I could have made a lot of money.

The conjunctive is the word "and" which is represented mathematically by +. The word "or" is disjunctive. Traders need to trade disjunctives and you would hope they choose P(B) and not P(A).

The other factor re. P(B) is the law of large numbers. Now markets don't have enough numbers to fully qualify, but: (a) Indices are easier to trade than (b) sectors which are easier than (c) individual stocks. Adjust your probabilities accordingly. Of course as your probabilities change up or down, so to will your profit probabilities (returns) and risk (losses).

Trading in this manner is hard. It is hard because you will enter trades that make no logical sense to you. Enter the market in late March? Madness. Buy TSLA at $800? Madness. Your system has just lost 5 trades in a row...I knew they were bad trades, and now when trade 6 appears, you don't take it: P(A+B).

jog on
duc


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## Skate (29 September 2020)

Skate.


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## Skate (30 September 2020)

Skate.


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## Skate (1 October 2020)

*I'm getting excited*
My new project - the "HappyCat Strategy" is close to starting this Monday. 

*Start dates are important*
The starting date of any new strategy will have a big bearing on the performance outcome. Beginners need to remember all strategies take time to develop, so let's be patient with the performance of my new project – the HappyCat Strategy.

*Uncertainty*
None of us knows what's going to happen next when trading but what I do know is that "it's vital that we follow our trading rules consistently" otherwise it can destroy the strategies edge. The profitability of the HappyCat Strategy relies on timing the exit with consistency as there are will be an abundance of entry opportunities.

Skate.


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## qldfrog (1 October 2020)

Skate said:


> View attachment 112492
> 
> 
> *I'm getting excited*
> ...



Will it be similar to action strategy, do you accept followers?
With the PPOR move, i have had to distance myself a bit from the forums.
The advantage i found with the action strategy is that i have a whole personal aka excel record of the week to week strategy and buy sell actions and so can do things like comparison with actual knowledge of what happened later on and so validate or not some of my own strategies
Was also good at keeping me focused on my other strategies thru the ups and down


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## Skate (1 October 2020)

*Background*
I've previously explained the working of the "HappyCat Strategy" but as a refresher, the strategy uses volatility & momentum to enter & exit positions. There is a multitude of indicators that can help identify the direction, strength, momentum & volatility but the HappyCat uses only two indicators (ROC & ATR) to keep the strategy simple. Typically, the “HappyCat Strategy” analyses momentum & volatility near the top & bottom of a price range helping to identify where to enter & exit a trade. The two indicators even focus on the volatility & momentum during price consolidation & retracements which is a new idea for me.

*There is a series of criteria that are used to signal a trade*
The primary criteria for the HappyCat to be successful, the positions must be in an uptrend meeting or exceeding conditional parameters to generate a buy signal. The HappyCat Strategy will struggle if the markets decide to trend lower after the position is taken. 

Skate.


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## Skate (1 October 2020)

qldfrog said:


> Will it be similar to action strategy, do you accept followers?
> With the PPOR move, i have had to distance myself a bit from the forums.
> The advantage i found with the action strategy is that i have a whole personal aka excel record of the week to week strategy and buy sell actions and so can do things like comparison with actual knowledge of what happened later on and so validate or not some of my own strategies
> Was also good at keeping me focused on my other strategies thru the ups and down




@qldfrog I have two confirmed members who will be trading along. They will be trading Mondays signals on a Tuesday.

*Signal Service*
So my new project is not confused with a signal service I'll be posting all my signals at the "end of trade" Monday of the positions I've taken in the pre-auction that morning.

*I was stumped answering a question*
Does it matter taking a signal a day late? As I didn't know the answer I conducted extensive testing over a few of my weekly strategies to find out. 

*The result of my research*
In a nutshell - Trading signals the next day (one day delay) made little to no difference to the trading result.

*To my amazement*
The weekly trading results using one day delay were actually most times fractionally better (go figure). The test was conducted using the reporting software "Share Trade Tracker" as I know STT is 100% accurate when positions are taken in the pre-auction using my (-/+ 3%) premium calculations.

*I've posted the results previously*
I posted my research using a delayed entry for the "Action Strategy". The Equity chart confirms taking a signal with one day delay "mimicked the actual returns" of the Action Strategy. If you are interested you can view my previous post here: https://www.aussiestockforums.com/threads/dump-it-here.34425/post-1094656

*The "HappyCat Strategy" reporting *
Reporting of the "HappyCat Strategy" will be twice a week:
(1) Monday "after the close" displaying the actual trades of that morning with position sizing &
(2) Each Friday evening with "how did we go for the week" style of reporting.

*Commitment*
I'll be live trading the "HappyCat Strategy" as a $100k portfolio & in no way am I suggesting for others to trade along even though two members have confirmed that they will be doing so.

Skate.


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## qldfrog (1 October 2020)

Skate said:


> @qldfrog I have two confirmed members who will be trading along. They will be trading Mondays signals on a Tuesday.
> 
> *Signal Service*
> So my new project is not confused with a signal service I'll be posting all my signals at the "end of trade" Monday of the positions I've taken in the pre-auction that morning.
> ...



I will join in
settlement (for my new place) should happen next week so could be a bit chaotic for the first fortnight but will give it a go...


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## Skate (1 October 2020)

Skate.


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## Warr87 (1 October 2020)

qldfrog said:


> I will join in
> settlement (for my new place) should happen next week so could be a bit chaotic for the first fortnight but will give it a go...




count me in as well. i was going to follow the action strategy but you stopped that the week of .


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## Rsthree (1 October 2020)

Skate said:


> @qldfrog I have two confirmed members who will be trading along. They will be trading Mondays signals on a Tuesday.
> 
> *Signal Service*
> So my new project is not confused with a signal service I'll be posting all my signals at the "end of trade" Monday of the positions I've taken in the pre-auction that morning.
> ...




Good to hear that happy cat is finally awake  

I'll be trading  along, looking forward to it.


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## Newt (1 October 2020)

I'll give it a go too Skate, following a day later on what you share.


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## aus_trader (1 October 2020)

I'll be happy to play along to the tune of the Happy Cat, but don't have 100k free in the trading account. Is it still possible ?


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## frugal.rock (1 October 2020)

aus_trader said:


> I'll be happy to play along to the tune of the Happy Cat, but don't have 100k free in the trading account. Is it still possible ?



If you are asking the question, then I think the answer is "no", as you don't have $100k free.

However, once you define what capital you do have, you could decide your own position sizing remembering that brokerage costs will affect return percentages.

At a guess, the strategy may have 20 positions at 5k each, but we have to wait for the details, (unless I missed it...?)

I might be able to manage $20k total, so 20 positions at $1000 each with $9.50 brokerage per trade.


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## Warr87 (2 October 2020)

frugal.rock said:


> If you are asking the question, then I think the answer is "no", as you don't have $100k free.
> 
> However, once you define what capital you do have, you could decide your own position sizing remembering that brokerage costs will affect return percentages.
> 
> ...




that is my plan. $1k positions with IB (so $6 brokerage).


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## aus_trader (2 October 2020)

frugal.rock said:


> If you are asking the question, then I think the answer is "no", as you don't have $100k free.
> 
> However, once you define what capital you do have, you could decide your own position sizing remembering that brokerage costs will affect return percentages.
> 
> ...



I can also trade along with 1k positions + brokerage


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## Skate (2 October 2020)

Skate.


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## frugal.rock (2 October 2020)

Rough end of a day eh? 

My heart goes out to Mr Frog..., 
both my portfolios were eyeing a paper profit of circa $3k today until....Trump dump.

Ended up around $8.4k down on paper...ooof ! 
Did manage to lock in around $2.5k profit for the week though. 
Roll with the punches...


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## aus_trader (2 October 2020)

frugal.rock said:


> Rough end of a day eh?
> 
> My heart goes out to Mr Frog...,
> both my portfolios were eyeing a paper profit of circa $3k today until....Trump dump.
> ...



Yeah, rough week alright. I held back on some purchases for the spec portfolio this week and instead sold two stocks in that portfolio that were not performing.

With the two stocks sold, @Skate has kindly run his " Ducati Daily Blue Bar Strategy " on those two stocks and showed that the selling was in agreement with that system which was gratifying. So thanks again skate 🙏

I feel the same way  for @qldfrog and @Knobby22 for having a terrible week due to  Mesoblast limited (MSB) losses today.

Hope next week turns out to be more +ve for you @frugal.rock, to turn your positions around 🤞


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## Skate (3 October 2020)

*There is never a good time to start trading *
Luck & timing plays a significant role in the performance of any portfolio & as they say "there is never a good time to start trading". Traders need to be aware of the significance "luck & timing" will have when trading a new strategy. 

*Things may not go well for this strategy in the short-term*
The starting date can have a big bearing on the performance of a strategy in the short term but hopefully, things will settle over the longer term.  The "HappyCat Strategy" will take time to develop as the markets are in turmoil at the moment, so let's be patient with the performance of my new project & hope for the best. 

*Donald J Trump*
Wall Street fell on Friday after it was confirmed President Donald J Trump had tested positive to coronavirus. This news doesn't bode well for the start of our markets on Monday. 

*All this uncertainty *
With Trump & the pending U.S. elections, not to mention the ongoing spat with China is making an already shaky market even more so. I'm not talking about a short blip but one that can extend to February 2021 if the election doesn't go Trump's way.

*Let's talk about being positive*
Being positive doesn't mean you have to be happy & upbeat all the time but have an understanding that there are better days ahead.  

Skate.


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## Skate (5 October 2020)

*The "HappyCat Strategy" commenced trading today*
As there are a few who have indicated that they are prepared to "trade along" with this strategy I thought it might be appropriate to explain how I would trade "Mondays signals on a Tuesday". For a buy signal to be generated by the strategy it needs to meet not only the buy condition but a list of other parameters & requirements. In essence, this means Monday's signals that I have traded are still good for the next day.

*Buying at the open*
By trading in the pre-auction, it allows me to snaffle the opening price 99% of the time because I don't chase the price as I either get settled at my (+3%) premium price or I don't. 

*Calculations to trade in the pre-auction*
To achieve the opening price - I add a (+3%) premium to the previous closing price. As an example, if the closing price is $1.00 - this price is multiplied by (1.03) giving a "price offer of $1.03" in tomorrows pre-auction. Trading Mondays signals on a Tuesday using this (-/+3%) premium can eventuate in achieving a different price (sometimes higher sometimes lower) but over the long term it will all come out in the wash & my research has indicated the difference in Portfolio results are negligible.

*Mondays reporting format*
To make this project as smooth as I can, today's updates will have more information than necessary. Over the coming weeks, I'll refine my reporting process so it will be clear to follow.

Skate.


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## frugal.rock (5 October 2020)

G'day Skate,

Any chance of the buy list for a look see before close today?
Much obliged either way.


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## Skate (5 October 2020)

frugal.rock said:


> G'day Skate,
> 
> Any chance of the buy list for a look see before close today?
> Much obliged either way.




@frugal.rock I apologise for the delay in getting back to you as I've been pre-occupied. I'm only too happy to help where I can & it wouldn't have been an issue.

Skate.


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## peter2 (5 October 2020)

Looks like the Happy Cat might have been to the vet over the weekend after choking on the Trump "fur ball" Friday pm. 
This week's start had to be in doubt. I'm pleased to see this "cat" is ready to "rock n roll".


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## Skate (5 October 2020)

Skate.


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## qldfrog (5 October 2020)

fully ready for:


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## qldfrog (5 October 2020)

I have to say this happy cat will be happy among the sharks of Wall Street


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## Skate (5 October 2020)

peter2 said:


> Looks like the Happy Cat might have been to the vet over the weekend after choking on the Trump "fur ball" Friday pm.
> This week's start had to be in doubt. I'm pleased to see this "cat" is ready to "rock n roll".




@peter2 , in my opinion, today looked like being a shocker from all the early news reports. I was thinking what a week to start my new project knowing others were about to follow along. Using your words "this cat is ready to rock-n-roll".

*The work has been done*
If nothing else I know how to follow a plan & pull the trigger. Following a strategy consistently has served me well over the last 5 years. I put a tremendous amount of work into my trading strategies & I'm confident all the hard work has been done.

*What I think or feel is irrelevant *
Take it from me - if I didn't believe this strategy would make money I wouldn't be trading it. I'm "wishing & praying" that other members who decide to trade along with the "HappyCat Strategy" have a stress free experience once again as with the "Action Strategy".

*The "HappyCat Strategy" looks the goods*
Back on the 1st August 2020, I made a post that the "HappyCat Strategy" is my best work so far & it could eventually be my best strategy. It's a big statement that I still stand-by.


Skate said:


> Straight off the bat, after reviewing the backtest & Share Trade Tracker results I'm expecting the "HappyCat Strategy" to be my very best work so far




*Why $100k Portfolio size?*


Skate said:


> *$100k Portfolio *
> When others post backtests reports I've noticed the portfolio size of $100k is often used, so that will be the trading amount of my next live trading endeavour. All I have to do is decide on a strategy to trade.




*Why the "HappyCat"?*


Ante said:


> @Skate how about you trade the happy cat strategy that you have been paper trading a few weeks ago, the dull cat not the shiny cat as it freaks me out as well. It’s only a suggestion as I’ll be happy to follow anything you decide to trade




Skate.


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## Skate (5 October 2020)

Skate.


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## Warr87 (5 October 2020)

orders placed. i'm excited


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## qldfrog (5 October 2020)

To confirm, Mr Skate, your stop losses will be triggered manually at the end of each daily session.
You do not keep ready to trigger trader managed SL as discussed in several other threads.
Thanks again for the opportunity


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## frugal.rock (5 October 2020)

For those buying in tomorrow, expect a strong open... 
thus my interest of this morning's buys before close today... 
however, am guessing that there's only 4 buys due to the Fridays trump dump debacle... a vicious circle!
The futures numbers tell the story and apparently the Orange bloke is chomping to get out of hospital...


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## Skate (5 October 2020)

qldfrog said:


> To confirm, Mr Skate, your stop losses will be triggered manually at the end of each daily session.
> You do not keep ready to trigger trader managed SL as discussed in several other threads.
> Thanks again for the opportunity




*The HappyCat Strategy is a "Weekly Strategy" - I should have made this clearer from the get-go*
@qldfrog this is a weekly system with no manual interference. Exits are triggered "after the close" on Friday & the signals are strategy dependant.

*Follow the signals without thinking*
Following the buy & sell signals consistently will be the key to the profitability of this strategy (even when you are not in agreeance with the signals). The "HappyCat Strategy" will have a habit of selling profitable positions that at times will be hard to stomach. When positions take a breather or run out of steam it's better to follow the system & exit the position & look for another to enter. I'm sure if the signals are followed religiously without additional intervention all will be fine.

*Just to confirm *
All the signals are generated on Friday after the close. The signals will be entered into Monday pre-auction & reported after the close.

*Why after the close*
All my research has been conducted under these test condition & if I report them earlier some will make a decision based on that information. When there is the manual intervention I've found it rarely ends well. Trading the pre-auction using the (-/+ 3%) premium takes out the guesswork of trying to time the purchase - even if you have a conditional order placed in the markets you run the risk the position may fail to execute.

*Stop Loss*
Just to clarify the exit strategy is dependant on a few conditions other than a variable StopLoss which is a safety net. Timing the sell is the "money-making" part of the exercise, selling the position on a Tuesday with "one extra day delay" will make little to no difference.

*The exit strategy*
The exit is at the heart of the "HappyCat Strategy" as buy signals are a dime-a-dozen.

*The heart & soul of the "HappyCat Strategy"*
Volatility & momentum is the heart of all breakout systems but the difference with the "HappyCat Strategy" is that it uses both (ATR & ROC) in unison to filter out the false signals.

Skate.


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## qldfrog (5 October 2020)

Skate said:


> View attachment 112650
> 
> 
> 
> ...



Thanks a lot, just got confused by the specific SL column.my mistake
So all good and standard as per your previous weekly systems or the ones most of us use here.
All orders sets, spreadsheet ready to capture history:
Let's start the adventure


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## peter2 (5 October 2020)

@Skate    Happy Cat query.   I don't see how BSE could be one of the candidates. 
Is this a typo, should it be DSE?


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## Skate (5 October 2020)

peter2 said:


> @Skate    Happy Cat query.   I don't see how BSE could be one of the candidates.
> Is this a typo, should it be DSE?



@peter2 BSE is correct. 

What is the concern with the position?











Skate.


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## peter2 (5 October 2020)

*BSE*:  IMO the ROC is down from it's recent peak. Price hasn't moved up in the past three weeks so it's unlikely to have been triggered by an ATR indicator.  The other candidates have been going up in recent weeks. BSE is the "odd one out". 


I'm unaware of your indicator parameters. So if you've checked it. Onward and upward.


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## Warr87 (5 October 2020)

I also thought BSE was the odd one out. But a signal is a signal. It's a maths game, let's play the numbers (they'll work out).


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## Skate (6 October 2020)

peter2 said:


> *BSE*:  IMO the ROC is down from it's recent peak. Price hasn't moved up in the past three weeks so it's unlikely to have been triggered by an ATR indicator.  The other candidates have been going up in recent weeks. BSE is the "odd one out".
> *I'm unaware of your indicator parameters.* So if you've checked it. Onward and upward.



*BSE - meets the buy criteria*
@peter2 after sowing doubt I've doubled down & rechecked the entire strategy. I can report the entry signals meets the buy criteria. I have changed the Ribbon to indicate the period the buy criteria is TRUE. The signal bar & buy bar are also displayed might help others understand the "HappyCat Strategy" a little better.

*I've changed the ribbon*
I have changed the chart ribbon to reflect when the buy condition is TRUE, red when the condition is FALSE. 




*The signal has been cross-referenced*
My Ducati Blue Bar Strategy is uncannily accurate in picking the turn of a trend & it indicates that the "HappyCat Strategy" is on the right track taking the signal BSE. Whether BSE turns out to be a winner is yet to be determined as only time will tell.






Warr87 said:


> I also thought BSE was the odd one out. But a signal is a signal. It's a maths game, let's play the numbers (they'll work out).



*A signal is a signal*
@Warr87 you are correct, trading is a numbers game, a game of mathematics. (BSE) might be a DUD but at this early stage who really knows. As you say "a signal is a signal". 

*As system traders*
We have one job & one job only - that is to follow the signals religiously without exception.

*In summary*
The buy signal for (BSE) is correct, meeting the entry criteria of the strategy.

Skate.


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## frugal.rock (6 October 2020)

Skate said:


> My Ducati Blue Bar Strategy is uncannily accurate in picking the turn of a trend



My thoughts had me believe Fridays bar could be the first blue bar again as per your chart for BSE, but not with the greatest conviction. 

Maybe it was yesterday's bar throwing some confusion in?
The signal for BSE is usually one that I like, however, there is a couple of other factors which currently invalidate my bias.

Thanks for the explanation.


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## peter2 (6 October 2020)

Thanks @Skate for the further clarification of the signal in the BSE chart.

I'd like to discuss this "signal" further but I don't wish to create any doubts or indecision in the minds of those following the Happy Cat system.

With that in mind. If I was using this strategy I would not consider the latest signal in the BSE chart as a valid signal. I would modify the coding so that it didn't show up. (*)  Even though the entry conditions are still valid (the blue ribbon), there's been no new recent momentum in the price to trigger another entry after the recent trade exit. The recent exit was a trade management exit not a strategy exit. We know that it's the trade management that creates the profitable mathematical edge that we desire. I could classify the recent exit as a reversal of momentum exit. It's not a strategy (trend) exit because we know the trend continues as long as the ribbon remains blue.

(*) My modification:  It may be clearer for the system (entries and exits considered together) if any of the trade mgt exits also trigger the ribbon to turn red. If this were the case in this chart there would be no new entry triggered.

I've placed a tick at the last valid (IMO) entry. I've also circled a second chance entry when the strategy (blue ribbon) turned on again. This second chance is only valid if the first entry was not taken (fully invested, asleep at the wheel etc. ).

It's very important to get into price rallies as early as possible.


----------



## aus_trader (6 October 2020)

peter2 said:


> Thanks @Skate for the further clarification of the signal in the BSE chart.
> 
> I'd like to discuss this "signal" further but I don't wish to create any doubts or indecision in the minds of those following the Happy Cat system.
> 
> ...



Peter, as always we truly value your input and thinking. I hope I have credited you for all your valuable information and the willingness to teach others on ASF, I certainly have learned from the sharing of your knowledge and experience many times.

I kind of remember Skate mention that this Happy Cat strategy can buy into consolidations as well as into strength. Let me see if I can find where it was mentioned and re-quote it (see the part highlighted in blue colour):



Skate said:


> *Background*
> I've previously explained the working of the "HappyCat Strategy" but as a refresher, the strategy uses volatility & momentum to enter & exit positions. There is a multitude of indicators that can help identify the direction, strength, momentum & volatility but the HappyCat uses only two indicators (ROC & ATR) to keep the strategy simple. Typically, the “HappyCat Strategy” analyses momentum & volatility near the top & bottom of a price range helping to identify where to enter & exit a trade. The two indicators *even focus on the volatility & momentum during price consolidation & retracements which is a new idea for me*.


----------



## aus_trader (6 October 2020)

Looks like Ioneer has run away, one of the biggest gainers of today:


----------



## Skate (6 October 2020)

Skate.


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## Skate (7 October 2020)

Skate.


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## Skate (7 October 2020)

peter2 said:


> (*) My modification: It may be clearer for the system (entries and exits considered together) if any of the trade mgt exits also trigger the ribbon to turn red. If this were the case in this chart there would be no new entry triggered.




@peter2 thank you for your suggestion. I have poured over my development notes of the "HappyCat Strategy" & found a version of the strategy that had the highest "probability for profitability". This version of the strategy was quickly discarded for a few reasons. 

*Profits are not the measure of the tradeability of a strategy *
Trading is a constant trade-off between (a) annual return versus the drawdown & (b) the number of round trades over a trading period.

*Improvements*
The "HappyCat Version" of the strategy that I'm trading sits in the goldilocks range of returns. 

*Ramping up the returns of the "HappyCat Strategy"*
When chasing higher returns a modified version trades its head off. Why? because the exit is a breakdown (the reverse) of the original buy condition. What this means in English is the exit is dependant of the buy condition being FALSE or for visual representation, it's when the ribbon turns from blue to red. This sounds simple & clean but positions are not given time to mature into profitability. Personally, I prefer to give each position a bit of slack. I prefer to sell a position dependant on a few different parameters being met.

*Backtesting*
I've said backtesting means "Jack" but in this case, I'll throw up a backtest report to indicate how often this version trades over a short period of time (1st July 2020 to the end of trade today). Over a longer period, the trade count expands exponentially. 

*The breakdown exit version of the "HappyCat Strategy"*
When the buy condition is TRUE a position is entered & when it's FALSE the position is sold. This strategy doesn't finesse the exits but rather exits when the buy condition is no longer TRUE. 

*Crude, fast & effective *
Is one way to describe the BreakDown version of the strategy but I couldn't trade it - No way!

*If I may say*
As a systematic trader, chasing the "highest returns" is not the name of the game. 




Skate.


----------



## Skate (8 October 2020)

Skate.


----------



## MovingAverage (8 October 2020)

Thought I'd do a dump of the current live performance of my weekly system (not the Radge WTT). This is unit price and not actual equity, but shows performance of my live trades.




I'm happy to see the system has been consistently trending north since June and has now recovered all of March's losses and put on more and is up around 28-29% from the March lows. System is currently 25% invested with all current open positions in the green.


----------



## MovingAverage (8 October 2020)

and now for the bad...here is the performance of my live EOD system. 




It has had a great run for many years into March of this year. It came back on line early June but has really struggled to get any traction and went into further drawdown in August. It has started to recover the August drawdown but has a long way to recover from the March losses. It will be full invested tomorrow.


----------



## Skate (9 October 2020)

Skate.


----------



## Skate (9 October 2020)

Skate.


----------



## BoNeZ (10 October 2020)

MovingAverage said:


> It has had a great run for many years into March of this year.



This year has probably been brutal on many systems that have worked well for years.

I have a system that waits for the trend to be well established before buying and holds winning trades for 90+ bars. It's GTFO rule triggered in February and it's struggled to be profitable since then.

The completed trades have either been small profits or a loss. It just hasn't had any big wins yet but they are coming, some of the open trades  are looking very good. The system still works and just needs time for the profitable trades to mature.


----------



## MovingAverage (10 October 2020)

BoNeZ said:


> This year has probably been brutal on many systems that have worked well for years.




My EOD has definitely struggled but on the other hand my weekly has bounced back and is delivering a reasonable result. The point I was trying to highlight with my posts was the importance of trading multiple different strategies with minimal correlation. I don’t think and single system will perform well across all market conditions—up, down and sideways. It’s why I trade multiple systems that have minimal correlation and are suited to different market conditions.


----------



## Skate (12 October 2020)

Skate.


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## Skate (12 October 2020)

Skate.


----------



## Skate (13 October 2020)

Skate.


----------



## Rsthree (13 October 2020)

Skate said:


> View attachment 112963
> 
> View attachment 112964
> 
> ...




Did any of the other happy cat followers have orders unfilled?

I had one order unfilled and another partially filled. I didn't think they (selfwealth) would partially fill an at limit order.

I know that a skates rule is that unfilled orders should be left alone, however following this rule will put me out of step with the program, which is not ideal.  The plan is to try and buy in, hopefully in a pull back over the next day or two.


----------



## Bazzi (13 October 2020)

Rsthree said:


> I know that a skates rule is that unfilled orders should be left alone, however following this rule will put me out of step with the program, which is not ideal.  The plan is to try and buy in, hopefully in a pull back over the next day or two.




It is harder to follow exact moves of the Happy Cat since Skate orders gets filled on Monday open and we if we decide to do the same we place the order for Tuesday when we get to know what are the positions


----------



## Newt (13 October 2020)

Personally I recalculated offers using 3% rule on Mon close - seemed most consistent way to get as close as pragmatically possible.  Didn't include an offer for DEG.  Only my interpretation.....


----------



## Rsthree (13 October 2020)

Newt said:


> Personally I recalculated offers using 3% rule on Mon close - seemed most consistent way to get as close as pragmatically possible.  Didn't include an offer for DEG.  Only my interpretation.....



Yes, I did the same.


----------



## Skate (13 October 2020)

Newt said:


> Personally I recalculated offers using 3% rule on Mon close - seemed most consistent way to get as close as pragmatically possible.  Didn't include an offer for DEG.  Only my interpretation.....




Perfect!

Skate.


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## frugal.rock (13 October 2020)

Rsthree said:


> I had one order unfilled and another partially filled. I didn't think they (selfwealth) would partially fill an at limit order.



Remember, it's not your brokers decision, its the market depth and availablity.... partial or full... that's Mr Market.


Rsthree said:


> I know that a skates rule is that unfilled orders should be left alone



Step to the front of the class for your knuckle rap....

It's a weekly system, there's no reason you can't leave a standing order in for the week. 
Yes, it's breaking Skates rule, but Skates rule is generally intended only for not chasing the price higher. 
If you are going to break the rule, change it up to suit your style, but don't abandon the intent the rule creates, as it's not your system.


----------



## Skate (13 October 2020)

frugal.rock said:


> Remember, it's not your brokers decision, its the market depth and availablity.... partial or full... that's Mr Market.
> 
> Step to the front of the class for your knuckle rap....
> 
> ...




*Don't break the rules - never ever*
1. Only buy positions that the strategy buys.
2. Add (-/+3%) to Monday's closing price to work out Tuesday's pre-auction assures the rules are being followed.
3. Only buy the position the strategy buys on Monday even if the price pulls back on a Tuesday.
4. Follow the signals without thinking will be the key to the profitability of this strategy (even when you are not in agreeance with the signals).

*As system traders*
We have one job & one job only & that is to follow the signals religiously without exception. I put a tremendous amount of work into my trading strategies & I'm confident all the hard work has been done. Buying a position (a delayed signal) in Tuesdays pre-auction will make little difference to the trading results over the longer term. In the shorter term, the position can be purchased a little higher or a little less but it will come out in the wash & not worth worrying about.

*Footnote*
Any purchase outside of the HappyCat Strategy means you will "never get a sell" as the position is not held by the HappyCat Strategy.

*In a nutshell*
DEG will never get a sell signal. The exit is the most important part of the strategy, it's where the money is made.

Skate.


----------



## frugal.rock (13 October 2020)

Skate said:


> Don't break the rules - never ever



Rule #2.
Refer to rule number 1.

I was out of place with my previous conspiracy to break rules and regretted part of the post afterwards...  
Right, nothing to see here, move along please.


----------



## aus_trader (14 October 2020)

frugal.rock said:


> Rule #2.
> Refer to rule number 1.
> 
> I was out of place with my previous conspiracy to break rules and regretted part of the post afterwards...
> Right, nothing to see here, move along please.



Me too, i.e. regret breaking the rules. I am slightly different in that my stock selection is more or less based on stock/company research. So when I buy a stock without doing the work first, usually end up regretting afterwards.

So you guys @frugal.rock, @Skate are spot on with regards to adhering to rules, whatever those rules a strategy is based on.


----------



## qldfrog (14 October 2020)

Skate said:


> DEG will never get a sell signal. The exit is the most important part of the strategy, it's where the money is made.



Obviously, yet i missed the obvious and bought it....
To my excuse, it is a challenge with the move even to open a page or connect but things are improving
Will fix my mistake.
Otherwise,same as other followers: adding 2 to 3% to monday close based on rounding
Some orders not filled and lapsed


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## Skate (14 October 2020)

Skate.


----------



## Rsthree (14 October 2020)

frugal.rock said:


> Remember, it's not your brokers decision, its the market depth and availablity.... partial or full... that's Mr Market.
> 
> Step to the front of the class for your knuckle rap....
> 
> ...



I'm all caught up now the recalcitrant stocks have now been purchased.

All good, the lessons are being learnt. I was well aware  that an order can be partially filled at market and at whatever price is the going rate, however I wrongly assumed that the rules would be different for a limit order where you are placing conditions on the the order.


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## Skate (15 October 2020)

Skate.


----------



## frugal.rock (15 October 2020)

Mr Skate,
I am contemplating the idea of purchasing Share Trade Tracker.
I seem to remember mention of a 6 month trial for ASF members.
Is this current?
Cheers.


----------



## Skate (15 October 2020)

frugal.rock said:


> Mr Skate,
> I am contemplating the idea of purchasing Share Trade Tracker.
> I seem to remember mention of a 6 month trial for ASF members.
> Is this current?
> Cheers.




@frugal.rock there was not enough interest to develop a special version of Share Trade Tracker for forum members thus the 6-month free trial was not implemented.

*Try Share Trade Tracker free for 15 days (No credit card required!)*





						Trading Spreadsheet | Record Track Analyse | XLAutomation
					

A share trading portfolio spreadsheet to record your trading activities. Includes automated updates of share prices, historical price information & display of those to a dashboard to report on performance.




					xlautomation.com.au
				




*Norgate Data*


			Norgate Data - Share Trade Tracker Integration Overview
		


Skate.


----------



## Skate (15 October 2020)

*Share Trade Tracker - 12 benefits*
1. Share Portfolio Tracking has never been easier!
2. Track multiple portfolios from any exchange around the world
3. The Upload Trades is a time-saving benefit for new users to upload multiple trades, or for traders making large numbers of trades frequently.
4. Dashboard updates automatically when you add, delete, or update prices, to display the key indicators of your portfolio performance.
5. Add, update or delete shares quickly & accurately with easy to use pop-up forms.
6. Benefit from Find & Select forms allowing quick & easy search for specific securities or trade types in your workbooks.
7. Better analysis with custom charts to show net unrealised & realised profit/loss and display best and worst-performing stocks in your portfolio.
8. Automated retrieval of share prices & dividends including franking credits & franked % for Australian shares.
9. Profit/Loss and % Gain/Loss automatically recalculated, and custom stop loss / take profit warnings are included to support your trading model.
10. The Custom Ribbon makes navigation easy, displaying all commands to control your worksheets.
11. Worksheet & Dashboard filtering helps you analyse particular aspects of your trading.
12. The brokerage can be set on a Portfolio basis allowing for different Broker arrangements and more time saved

*Reports*
Keep your accountant happy with custom reports providing a summary of your past financial years trading, costs and dividends.

*"Share Trade Tracker Subscriber Guarantee"*
1. Price Guarantee - No price increases for as long as you stay subscribed
2. Free Support - We aim to exceed your expectations when you need help
3. Free Upgrades - Subscribers get all updates, fixes and new features for free

Skate.


----------



## qldfrog (16 October 2020)

Skate said:


> *Share Trade Tracker - 12 benefits*
> 1. Share Portfolio Tracking has never been easier!
> 2. Track multiple portfolios from any exchange around the world
> 3. The Upload Trades is a time-saving benefit for new users to upload multiple trades, or for traders making large numbers of trades frequently.
> ...



Really need to give it a go,my spreadsheets are working but time is precious..


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## Skate (16 October 2020)

Skate.


----------



## Skate (16 October 2020)

Skate.


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## MovingAverage (16 October 2020)

Skate said:


> *Share Trade Tracker - 12 benefits*
> 1. Share Portfolio Tracking has never been easier!
> 2. Track multiple portfolios from any exchange around the world
> 3. The Upload Trades is a time-saving benefit for new users to upload multiple trades, or for traders making large numbers of trades frequently.
> ...




Looks very interesting...does it offer unitization? If not, how does it account for cash inflow and outflow not effecting portfolio P&L?


----------



## Skate (16 October 2020)

MovingAverage said:


> Looks very interesting...does it offer unitization? If not, how does it account for cash inflow and outflow not effecting portfolio P&L?




@MovingAverage I'm unsure of your meaning of "unitization". Share Trade Tracker accounts for cash inflows & outflows with ease as each worksheet includes its own entry form that can be linked to any portfolio.

*Other income*
The "Other Income" worksheet lets you record refunds, rebates or any other income received related to trading activities. To 'Add' the Other Income record select 'Other' from the ribbon and then 'Other Income'.








						Share Trade Tracker Help - Other Income
					

The Other Income worksheet lets you record refunds, rebates or any other income received related to trading activities. To 'Add' an Other Income record select 'Other' from the ribbon and then 'Other Income'.




					sharetradetrackerhelp.xlautomation.com.au
				




*Request a free trial*





						Trading Spreadsheet | Record Track Analyse | XLAutomation
					

A share trading portfolio spreadsheet to record your trading activities. Includes automated updates of share prices, historical price information & display of those to a dashboard to report on performance.




					xlautomation.com.au
				




*Plans from only $19 per month!*
1. No lock-in contracts.
2. Flexible to cancel at any time
3. Fully interactive help files & STT even has its own forum
4. Share Trade Tracker site Map - http://sharetradetrackerhelp.xlautomation.com.au/system/app/pages/sitemap/hierarchy




*I've added hyperlinks that will answer most of your questions (with GIF animation)*

1. Getting Started
Activation
Configuration
Data Source's Explained
Quick Start Guide
Welcome
Why can't I enter Trades?

2. Trading
Activity Config
Buy Trades
Delete Trade
Modify Trade
Open Positions
Sell Trade
Short Trades
Sort Trades

3. Prices
Data Warning
Exchanges
Missing Security
Price Data Source
Security Change
Security Check
Update Prices

4. Data Sources
EOD Historical
Norgate Data
World Trading Data

5. Analysis
Charts
Dashboard
Filter
Open Summary
Print or Export
Reports
VAMI

6. Dividends
Dividend Data Source
Dividend Details
Manual Dividend

7. Support
Contact Support
FAQ's
Known Issues
Release History
Transfer Data
Upgrade

8. Upload
Upload Trades
Upload Trades - Interactive Brokers

9. Other
Cash Accounts
Interest
Other Income
Trading Diary
Unexpected Error

*Summary*
I trust this is a comprehensive answer - even though I didn't totally understand the question.

Skate.


----------



## peter2 (16 October 2020)

I started the Spec portfolio with 40K and after a short time it had earned 4K in profits. This makes the performance +10%. When I add 10K cash to this portfolio to increase the number of positions this changes the performance % value. Is still 10% or is it only 8% as the capital amount has changed. 

One way to calculate the performance of an account that has many deposits and withdrawals of capital is to calculate the VAMI. VAMI can be calculated using any time period, commonly monthly.  I don't know how Share Trade Tracker does their VAMI calculation but if it's a proper VAMI then it would have to include unitisation. 

The Spec portfolio started with 40K units at 1.00 each. At the end of the first month the account had grown to 44K so the current unit value is 1.10. Adding 10K to this portfolio does not mean there's an additional 10K units added to the portfolio. The new deposit is divided by the current unit value to determine the additional units added to the portfolio (only 9090.9). I would have to add 11K to the original capital to maintain the current unit value at 1.10. 

The VAMI calculation should keep track of the current unit value and use this value as the divider in every deposit and withdrawal of capital to ensure a consistent performance report.


----------



## Skate (17 October 2020)

*Share Trade Tracker VAMI Report*
The VAMI (Value Added Monthly Index) is an industry measure of trading performance. The index tracks the monthly trading performance of a hypothetical $1,000 investment. It takes into account the trading profit and loss, income, dividends and costs for your portfolio.

*Share Trade Tracker includes a VAMI chart and data table*
The VAMI chart provides a visual display of the monthly performance and within the data table, the actual calculations are listed for further analysis and understanding. If needed you can set the Starting Investment Amount to be any value and the index calculation will start from that value. You can also use the Filter to display the VAMI for a specific Portfolio or a group of Portfolios.

*Understanding Value Added Monthly Index (VAMI)*
A value-added monthly index chart the total return gained as well as reinvestments. VAMI is one of the most commonly used metrics to depict a fund's overall performance. VAMI's popularity stems from the fact that it is quite descriptive, in that it shows an investor how $1,000 has performed over a given period, and that it is easy to understand. Comparing individual portfolio's performance couldn't be easier.

*The Action Strategy VAMI Chart*




Skate.


----------



## Skate (19 October 2020)

Skate.


----------



## Skate (19 October 2020)

Skate.


----------



## Skate (20 October 2020)

Skate.


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## julo (21 October 2020)

Hello Skate,
I've noticed that you use unadjusted data. Is that an intention? 



Skate said:


> @peter2 BSE is correct.
> 
> What is the concern with the position?
> 
> ...


----------



## Skate (21 October 2020)

julo said:


> Hello Skate,
> I've noticed that you use unadjusted data. Is that an intention?




@julo, I have 3 Silver Norgate data subscription packages & it was an intentional decision to downgrade from a "Platinum" Subscription to "Silver" as it matter of cost. My strategy development days are over & the Platinum Subscription was in excess of my current needs. 

*Strategy Development*
It should be noted - the development of all my strategy was conducted using the Platimum Subscription package that included Historical Data that includes the "Current and Past watchlist". 

*Beta Testing*
I didn’t take up the Platinum package that was available to me as a Norgate Beta Tester. 

*F.Y.I*
1. For strategy development using Amibroker you certainly need Norgate's Platinum Subscription package
2. When trading a strategy using Amibroker all you need is the Australian Stocks (Silver Package) - the package I have

Skate.


----------



## Skate (21 October 2020)

Skate.


----------



## Newt (21 October 2020)

Skate said:


> @julo, I have 3 Silver Norgate data subscription packages & it was an intentional decision to downgrade from a "Platinum" Subscription to "Silver" as it matter of cost. My strategy development days are over & the Platinum Subscription was in excess of my current needs.
> 
> *Strategy Development*
> It should be noted - the development of all my strategy was conducted using the Platimum Subscription package that included Historical Data that includes the "Current and Past watchlist".




Hi Skate - the casual reader would think your strategy development days are far from over from the number of strategies both weekly and daily you've mentioned this year!   
Unless of course most were hatched years ago and only "matured" recently?


----------



## Skate (21 October 2020)

Newt said:


> Hi Skate - the casual reader would think your strategy development days are far from over from the number of strategies both weekly and daily you've mentioned this year!
> Unless of course most were hatched years ago and only "matured" recently?




@Newt, I do have a few strategies waiting to be traded that were developed a few years ago. 

*Within a few weeks *
I’ll be trading 3 new strategies. 2 of the strategies have passed the paper trading period with flying colours. 

*Daily VIX Strategy*
The Daily VIX Strategy is the third strategy in question that I intend to trade at the same time. The VIX Strategy has completed only 9 weeks so far of the paper trading period but I’m itching to throw a daily system into the mix. 

*It’s been tough*
The last 9 weeks has not been all smooth sailing but the VIX Strategy has performed & it’s worthy to be put to work.

Skate.


----------



## julo (22 October 2020)

Hi Skate,
several comments below:



Skate said:


> View attachment 112762
> 
> 
> 
> ...



I partially agree, but based on your backtests results I would rather go for 53 % annual return with 86 trades than only 8 % return with 39 trades. I suppose that results for longer period would bring very different results [in (a)] and that's why you are trading HappyCat strategy w/o Breakdown exit. Or?



Skate said:


> *Improvements*
> The "HappyCat Version" of the strategy that I'm trading sits in the goldilocks range of returns.
> 
> *Ramping up the returns of the "HappyCat Strategy"*
> ...



Can you explain in more detail? I doubt that with longer period the trade count expands exponentially. Because if your trading system does not change its behaviour in time, trade count should be proportional (linear) to time period.



Skate said:


> *The breakdown exit version of the "HappyCat Strategy"*
> When the buy condition is TRUE a position is entered & when it's FALSE the position is sold. This strategy doesn't finesse the exits but rather exits when the buy condition is no longer TRUE.
> 
> *Crude, fast & effective *
> ...



Thanks!


----------



## Skate (22 October 2020)

julo said:


> Can you explain in more detail? I doubt that with longer period the trade count expands exponentially. Because if your trading system does not change its behaviour in time, trade count should be proportional (linear) to time period.




@julo the trade count is driven by volatility & exiting when the ribbon turns red (basically an on & off switch) that doesn't finesse the exits. The HappyCat Strategy uses an index filter which controls the looping trailing stop - not when the position is taken.

*F.Y.I*
At the individual level "volatility of individual positions can whipsaw you in & out of those positions quick smart" & exiting is relative to the length of period the position is being traded. 

*The HappyCat Strategy being traded in the "Dump it here" thread*
The HappyCat version I'm actually trading holds positions over the longer-term (see the chart below) & the exit is not dependant on the volatility turning off. 

*The HappyCat discarded Strategy - Why? because of whipsawing*
The buy & sell position is dependant on the ribbon (Volatility) turning off & on (Blue to Red). As an example: When the buy condition is TRUE a position is entered & when it's FALSE the position is sold. This strategy doesn't finesse the exits but rather exits when the buy condition is no longer TRUE causing the strategy (that has been discarded) to trade its head off. 

*Volatility Ribbon*
When the ribbon turns red (SELL) When the ribbon turns blue (BUY) - the commission would be a killer to the strategy let alone the work involved constantly driving the strategy.




Skate.


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## Skate (22 October 2020)

Skate.


----------



## Skate (23 October 2020)

Skate.


----------



## Skate (23 October 2020)

Skate.


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## Skate (26 October 2020)

Skate.


----------



## Skate (26 October 2020)

Skate.


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## Warr87 (26 October 2020)

Skate said:


> View attachment 113612
> 
> View attachment 113613
> 
> ...




For some reason my account is negative. I just checked and the majority of my fills are close to what you have. I guess the few that are a few % off have caused the difference. i guess i can either set my limit order to your fill price or just continue. I am just buying at the market open on Tuesday. For the rest following on, are you experiencing the same thing? (It's not much of a difference, system is at -0.2% which is nothing and I have experienced much worse in every system I have tested on live data.)


----------



## Skate (26 October 2020)

Warr87 said:


> For some reason my account is negative. I just checked and the majority of my fills are close to what you have. I guess the few that are a few % off have caused the difference. i guess i can either set my limit order to your fill price or just *continue*. I am just *buying at the market open on Tuesday*. For the rest following on, are you experiencing the same thing? (It's not much of a difference, system is at -0.2% which is nothing and I have experienced much worse in every system I have tested on live data.)




@Warr87 there will be short term differences, sometimes better & sometimes a little worse. The HappyCat Strategy has been trading for a heartbeat in "difficult times", the strategy will take time to mature rotating out of low performing positions. Trading the signals without thinking or intervention will be the yardstick for profitability. 

*Suggestion*
Continue buying at the market open on Tuesday with a (-/+) 3% premium of Monday's closing price. 

Skate.


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## Warr87 (26 October 2020)

Don't worry skate, I intend on still trading it. Just like my own MAP strategy, it takes a bit for the low momentum losers to be cut and for it to take off. I remain confident that it will perform well in the long run.

and every 1 of my current live strategies (my Super ASX300 & MAP) dropped today. still not the kind of market most of us here would like.


----------



## Rsthree (26 October 2020)

Warr87 said:


> Don't worry skate, I intend on still trading it. Just like my own MAP strategy, it takes a bit for the low momentum losers to be cut and for it to take off. I remain confident that it will perform well in the long run.
> 
> and every 1 of my current live strategies (my Super ASX300 & MAP) dropped today. still not the kind of market most of us here would like.




I think we had too smooth a run on our previous live trade strategy, so rightly so this one should exercise all the attributes of live trading. I'll take it all on board as good training .


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## Newt (26 October 2020)

Skate said:


> @Warr87 there will be short term differences, sometimes better & sometimes a little worse. The HappyCat Strategy has been trading for a heartbeat in "difficult times", the strategy will take time to mature rotating out of low performing positions. Trading the signals without thinking or intervention will be the yardstick for profitability.
> 
> *Suggestion*
> Continue buying at the market open on Tuesday with a (-/+) 3% premium of Monday's closing price.
> ...




I'm grateful for opportunity to follow as closely as a day later, and agree with Skate the variations to date are within the variations discussed at the beginning (when Skate did backtests on the affect of a one day delay). Personally I'm at -0.1% following the 3% off Mon close premium (or at least was on Friday close).  We're really just down in the noise floor for returns/DD at the moment.

The first live week had a very lively Mon, particularly in a couple of the first basket of stocks from memory.  Not too concerned, but not having checked too closely, also slightly relieved to hear others in the red still.....


----------



## Newt (26 October 2020)

p.s.  Its interesting how much more you pay attention when you have skin in the game - finding it fascinating watching the entries and sorts of stocks Skate is sniffing out in much greater detail than usually apply.  Being more of a "buy on established momentum" trader, its interesting roughly watching the low'ish correlation between Happy Cat and my own TF strategy.  Hoped this might be the case, but fascinating to see it unfold in real time.  Long term Dump It Here readers will be aware Skate likes to jump on every new trend early and hit the exit at first sign of faltering. 

Obviously huge correlation in that both approaches are trading ASX All ords, but does appear to be some "diversification" benefit at this point, and will be interesting to see what plays out over coming months.


----------



## frugal.rock (26 October 2020)

G'day Skate,
With your testing of the current HC system, where a slight advantage was found, for the theoretical buying on Tuesday open, was selling also tested on Tuesday open?
To buy on Tuesday open and sell on Monday open, I would expect,  would provide a further advantage. Not hard stats, just my guess...
Cheers


----------



## Skate (26 October 2020)

frugal.rock said:


> G'day Skate,
> With your testing of the current HC system, where a slight advantage was found, for the theoretical buying on Tuesday open, was selling also tested on Tuesday open?
> Cheers




@frugal.rock, yes the testing was done with a "one day delay" on the buy as well as the sell. Meaning the buy & sell signals from Friday were executed in Tuesday's pre-auction instead of Monday pre-auction.

*Buying on Monday*
I’ve noticed buying on Monday’s - the open can sometimes have over-enthusiastic traders willing to buy positions at a premium. After the markets settle the position will normally (not always) pullback losing a bit of its opening value.

*Buying on a Tuesday *
The market on Tuesday is a settled market (lacking the enthusiastic buyers that were evident on Monday). My research indicates buying on Tuesday makes no difference. Over the longer term, the profitability is either higher or similar when trading Fridays signals on a Tuesday.

*Skin in the game*
Having skin in the game you will tend to ride the strategy emotionally. All systems take time to develop & the HappyCat is no different as it’s just the nature of this style of trading. If we follow the system religiously it gives us the best chance of profitability.

Skate.


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## Warr87 (27 October 2020)

Skate said:


> @frugal.rock, yes the testing was done with a "one day delay" on the buy as well as the sell. Meaning the buy & sell signals from Friday were executed in Tuesday's pre-auction instead of Monday pre-auction.
> 
> *Buying on Monday*
> I’ve noticed buying on Monday’s - the open can sometimes have over-enthusiastic traders willing to buy positions at a premium. After the markets settle the position will normally (not always) pullback losing a bit of its opening value.
> ...




I agree that monday tends to be a bit more enthusiastic. i have been sending my orders as MRKT orders on Tuesday and they have been within 0.005 for most positions that you got filled. This is nothing, even on a larger scale. And to be clear, I wasn't doubting the happy cat strat. was more making an observation and curious as to the other traders. even if it bombed i would only be able to blame myself .


----------



## Skate (27 October 2020)

Skate.


----------



## Warr87 (27 October 2020)

Another rough day. All of my strats lost approx 2% today too. lol


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## Skate (28 October 2020)

Skate.


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## MovingAverage (28 October 2020)

A tale of two systems...importance of trading uncorrelated systems.

My weekly system was tracking well for the month of Oct, then yesterday happened. Result: all of Oct gains wiped out.




Meanwhile, it has pretty much been business as usual for my daily EOD system with yesterday not having a major impact. Result: Oct still looking good.




Difference between the two system: very different stock criterion to make the potential buy universe, very different entry methodologies, and different time frames.

Stay classy ASF.


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## Warr87 (28 October 2020)

My daily EOD took a bunch of hits since Friday. half the months profits gone. Today it rebounded very well but still not near the peaks from a few weeks ago. The weekly is taking some major hits right now. The monthly is the one performing the best right now (though has lost a little over the last 2 weeks but still positive for the month).

mine are all probably relatively highly correlated. something i will need to work on.


----------



## Skate (29 October 2020)

Skate.


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## ducati916 (30 October 2020)

Mr Skate,

Your chart of profit/loss:




Mirrors my VIX chart exactly:




Just check the dates/shape of the chart etc. So Aus. follows tick-for-tick the US. when trading a vol. based strategy.

There are 3 points of critical interest: 12 Oct. and 19/20 Oct. on the VIX and they correspond exactly with your profit chart. In fact you could draw a trend-line under your daily profit chart and exit when that trend is broken and the result would be +$17K in rescued profit.

Obviously in hindsight everything is clear and easy. Recognition of points 12 Oct and 19/20 Oct is the key. Clearly also 28 Oct (if that turns out to be the current bottom) or today 29 Oct (US dates) for re-entry on positions. I think I have the solution, which I have been testing over the last few days. I'll PM you later to see if it works for you.

jog on
duc


----------



## Skate (30 October 2020)

ducati916 said:


> Mr Skate,
> 
> Your chart of profit/loss:
> 
> ...












Skate.


----------



## Skate (30 October 2020)

Skate.


----------



## Skate (30 October 2020)

Skate.


----------



## Skate (31 October 2020)

ducati916 said:


> I think I have the solution, which I have been testing over the last few days. I'll PM you later to see if it works for you.




*I'm sure the Duc won't mind if I give an update *
@ducati916 was good to his word & contacted me with a tailored made solution to suit the "Daily VIX Strategy". Duc explained his solution in detail with additional confirmation graphs to further explain his exit methodology. The solution was coded & added to my original strategy with a slight improvement at first. The problem was that I added Duc's solution as an additional exit instead of the only "EXIT". It didn't take me long to work that one out.

*Duc's solution worked a treat*
Adding Duc's exit idea to my original strategy made a huge improvement by removing my looping exit & replacing it with the information that Duc had suggested.

*I was blown away*
Duc's raw idea worked a treat & I've been working on it all day - massaging the parameters trying to boost the results. To my surprise, Duc's original idea turned out to be the best fit for the strategy. (no fiddling was required at all)

*Backtesting*
I'm not a big fan of Amibrokers backtesting & without Norgate's "Platinum Subscription" the longer the backtest period the larger the inaccuracy of the results. I've used a short period as an example of the difference that it made.

*Short backtest period *
The backtest period for (1st July 2020 to 30th October 2020) should be accurate enough. I have circled some of the metrics in red that has impressed me.




*Backtest*
Amibroker's Backtest is one thing but using the signals from Duc's solution & recording them in "Share Trade Tracker" gives a 100% comparison between the Original Strategy versus Duc's modified exit - in the next few posts I'll supply the corresponding graphics.

*Comparing "Share Trade Tracker" results *
The "Share Trade Tracker" results of Duc's solution added to the strategy are impressive.

More to follow...

Skate.


----------



## Skate (31 October 2020)

=====================================================================================================================

*Using Duc's modified exit



*

Skate.


----------



## Skate (1 November 2020)

=====================================================================================================================

*Using Duc's modified exit





Thank you*
I wish to publicly thank @ducati916 for his ongoing help & assistance in providing not only the idea for the "Daily VIX Strategy" but the solution to improve the profitability of the strategy. (caring is sharing)

Skate.


----------



## Newt (1 November 2020)

Sounds likes impressive work - kudos to both Skate and Duc.

Gosh this is a big slippery mountain we're climbing - just when you think you're closer to the top, turns out there's another 10,000 ft still hidden in the clouds....

Skate, do you feel these VIX parameters are mainly suited to your daily trading, or would there still be value incorporating into signals or index filter for Weekly timeframe trend following?  I'm guessing that the extra degrees of "nimbleness" is very handy on Daily, but the edge is perhaps dulled on longer timeframes.


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## ducati916 (1 November 2020)

Newt said:


> Sounds likes impressive work - kudos to both Skate and Duc.
> 
> Gosh this is a big slippery mountain we're climbing - just when you think you're closer to the top, turns out there's another 10,000 ft still hidden in the clouds....
> 
> Skate, do you feel these VIX parameters are mainly suited to your daily trading, or would there still be value incorporating into signals or index filter for Weekly timeframe trend following?  I'm guessing that the extra degrees of "nimbleness" is very handy on Daily, but the edge is perhaps dulled on longer timeframes.





Mr Newt,

As you can see from the charts (in the previous post which are weekly) posted by Mr Skate the improvement is in the weekly (and therefore included by definition will be the daily) profit drawdown.

However, Mr Skate's strategy is designed as a daily strategy. The exit is therefore a daily exit. 

The beauty of mechanical trading is the on/off, black/white nature of it. It (mechanical trading) does away with excessive complexity and decision making, both of which I am convinced through many years of hit and miss subjective analysis, creates many of the issues traders encounter: ie. second guessing entries, exits; second guessing the importance of economic data, news stories covering the hot issue of the day (and there is always a hot issue of the day) and most deadly of all, slowly being seduced by the 'trend'.

Mechanical, if well designed and most importantly, executed, eliminates all of those issues for the trader.

So the new signal, is not a step up in complexity, rather a step down to (a logical) simplicity.


jog on
duc


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## Skate (1 November 2020)

Newt said:


> Sounds likes impressive work - kudos to both Skate and Duc.




*Duc deserves the kudos*
The Action Strategy, the HappyCat Strategy, Duc’s Blue Bar Strategy & the Daily VIX Strategy have all been developed from information passed kindly to me by @ducati916



Newt said:


> Skate, do you feel these VIX parameters are mainly suited to your daily trading, or would there still be value incorporating into signals or index filter for Weekly timeframe trend following? I'm guessing that the extra degrees of "nimbleness" is very handy on Daily, but the edge is perhaps dulled on longer timeframes.




@Newt, *Duc's exit is finely tuned to the Daily VIX Strategy*
I'm sure with additional work Duc's solution would translate over to a weekly strategy without issue "but not in its current form".

*Where were the improvements?*
Duc noticed the exit wasn't correlated with the volatility at the individual level. The entry signals are from the VIX. The exit signals were from a combination of (a) the VIX, (b) StaleStop & (c) the GTFO filter. The issue was to rid the strategy of all of my exit conditions I just described replacing it with a lower volatility band "ONLY". It's amazing how simple & clean Duc's solution was.

*Duc could see the issue clearly*
After it was explained to me in detail I could see the issue as well. Duc's solution was a two-fold solution as it not only improved the strategy performance but it also keeps me in the better trades a little longer. Previously I was exiting a good position too quickly.

*Exits are now dependent on hitting or exceeding a volatility band *
I'm hoping I haven't overstepped the mark as I make a habit of never talking about "private messages" but I'm sure I've given nothing away that can be replicated.

*After the US elections*
I was planning to trade the Daily VIX strategy after the US elections. Even in its original form, it's a handy strategy & "I was happy to trade it".

*Duc's solution *
The information Duc's has provided improved the Daily VIX Strategy immensely & it will now be the version I'll be trading shortly.

Skate.


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## Newt (1 November 2020)

Thanks both of you for the further detail.  I'm becoming a firm believer that while its good to "soak up as much as possible", sometimes you can't make use of new information until your personal trading development and experience catches up - or you bump into someone else that questions long held assumptions and shows different ways of doing things.

Daily VIX, HappyCat etc all sound to be predicated on volatility changes as well as price trends.  The pressure cooker of Coronavirus year has led to some revelations in my trend/momentum trading and index/GTFO filters, but yet to much make progress with (usefully) integrating volatility.  Doesn't mean it won't happen when time and inspiration allows.....


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## qldfrog (2 November 2020)

Skate said:


> *Duc deserves the kudos*
> The Action Strategy, the HappyCat Strategy, Duc’s Blue Bar Strategy & the Daily VIX Strategy have all been developed from information passed kindly to me by @ducati916
> 
> 
> ...



Good morning,
A mammoth task ahead when i will finally have some free time to review these posts and check if and how they could improve my systems.

There is always, i feel, a problem of *terminology* and exact definition in these volatility related posts.
*Vix* as ^VIX - CBOE Volatility Index?
*Vol* as volume or volatility?
*Individual vix*..no such thing as standard so we mean volatility of an individual stock..
well:
Many ways to get a number there...i know, i tried several
So what are we talking about?
Volatility in price? in volume traded? a mix of? And which attached timeline?
We even have an asx volatility index..which i did not find very useful when i tried to use it a couple of months ago.
I am very interested in this domain as i have 4 live systems out of 5, plus Mr Skate happy cat ,which were initiated from the volatility talk from Mr Ducati and fully indepently developed.
But sometimes i am completely lost when reading some posts here.
We need a thesaurus....


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## ducati916 (2 November 2020)

qldfrog said:


> Good morning,
> A mammoth task ahead when i will finally have some free time to review these posts and check if and how they could improve my systems.
> 
> There is always, i feel, a problem of *terminology* and exact definition in these volatility related posts.
> ...





Mr Frog,

VIX as in VIX futures for the indices (SPX, DOW, NASDAQ):




Vol: as in implied volatility.

So essentially what I am looking at is an exit/entry based on historical levels of IV (10 years). You will find that Options traders will rank in quartiles, or by some other measure, levels or a ranking of IV of Options on individual stocks, which in part are based on the aggregate (VIX) IV levels.

As I trade 99% ETFs, the VIX is a robust entry/exit signal for my positions. Mr Skate's profit graph tracked the VIX VERY closely, hence an entry/exit predicated 100% on VIX was likely (proven now) to improve profitability.


jog on
duc


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## Skate (2 November 2020)

qldfrog said:


> *Individual vix*..no such thing as standard so we mean volatility of an individual stock..




@qldfrog you have nailed it - exits are dependent on the volatility of individual stock.

*Clarification*
1. The entry signals are from an extended look-back period of the VIX.
2. The OLD (original) exit signals was a combination of (a) the VIX, (b) a momentum StaleStop & (c) a modified version of the GTFO filter.
3. The NEW exit is at the individual level  - meaning each position exits when the close is less than or equal to a lower volatility band.
4. Good positions are held for longer as they are not dependent on a “momentum stale exit”.
5. The new exit depends only on “volatility “ at the individual level.
6. By not exiting until a position hits the lower volatility band it :
(a) reduces stock turns because of two reasons that have been explained to me that I won’t go into.
(B) The increase in profitability is because of a new volatility exit.

*Volatility exit*
Using a volatility exit gives stronger positions time to develop. Meaning, strong positions are held for a longer period because they are not subjected to a time dependent momentum exit.

*Summary*
Each position exits because of the volatility at the individual level. A position is not sold until it hits a lower volatility band. The average hold time has been extended from approx 14 days to 30 days.

Skate.


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## debtfree (2 November 2020)

Thank you @Skate and @ducati916 for your continued work in the VIX Strategy. The latest change is certainly impressive and makes a lot of sense, outstanding change so well done to you both.

Is there any chance of us having a peek at the lists of Buy Shares, Open Positions and Sold Trades that made these new results? Would love to view them on my charts.

Thank you both once again.


----------



## Skate (2 November 2020)

debtfree said:


> Thank you @Skate and @ducati916 for your continued work in the VIX Strategy. The latest change is certainly impressive and makes a lot of sense, outstanding change so well done to you both.
> 
> Is there any chance of us having a peek at the lists of Buy Shares, Open Positions and Sold Trades that made these new results? Would love to view them on my charts.
> 
> Thank you both once again.




@debtfree, i’ll post them with the Monday updates after the close.

Skate.


----------



## qldfrog (2 November 2020)

Skate said:


> @qldfrog you have nailed it - exits are dependent on the volatility of individual stock.
> 
> *Clarification*
> 1. The entry signals are from an extended look-back period of the VIX.
> ...



Clear and neat, thanks a lot


----------



## qldfrog (2 November 2020)

Opening a new subject
One of my systems got stuck with ajm..ajm will go under receivership and basically is now worthless.any way to avoid this based on your experience? Second time it happens in my systems so 10k in smoke which basically reduces much gains to zero sum overall.
Stock filters can help but not that much.any mecanical way to avoid or reduce this risk you have found..i could play within the asx 50 realm i know....
And even with historical data, can you backtest in AB and take these into account?


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## Skate (2 November 2020)

*The Daily VIX Strategy *
The original strategy has an improved volatility exit. The daily updates of the original Daily VIX Strategy have been discontinued

*Replacement*
The original VIX Strategy entry criteria is unaltered - but the original exit has been replaced with a volatility exit as suggested by @ducati916

*"Duc's VIX Strategy" *
The updated strategy will be marked as Duc's Daily VIX Strategy & the trading results will be updated weekly after the close on Friday. (not daily)

Skate.


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## Skate (2 November 2020)

debtfree said:


> Thank you @Skate and @ducati916 for your continued work in the VIX Strategy. *Is there any chance of us having a peek at the lists of Buy Shares, Open Positions and Sold Trades that made these new results? *Would love to view them on my charts.











































Skate.


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## Skate (2 November 2020)

Skate.


----------



## Skate (2 November 2020)

Skate.


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## rnr (2 November 2020)

qldfrog said:


> Opening a new subject
> One of my systems got stuck with ajm..ajm will go under receivership and basically is now worthless.any way to avoid this based on your experience? Second time it happens in my systems so 10k in smoke which basically reduces much gains to zero sum overall.
> Stock filters can help but not that much.any mecanical way to avoid or reduce this risk you have found..i could play within the asx 50 realm i know....
> And even with historical data, can you backtest in AB and take these into account?




Hi @qldfrog,

Minimum Price, Turnover and Volume requirements should exclude a number of problem issues, one would assume.

Cheers,
Rob


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## debtfree (2 November 2020)

Thank you @Skate, much appreciated.


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## qldfrog (2 November 2020)

rnr said:


> Hi @qldfrog,
> 
> Minimum Price, Turnover and Volume requirements should exclude a number of problem issues, one would assume.
> 
> ...



but no garantee  and especially when you target small caps.
so should the optimal number of portfolio positions be increased when dealing with these, reducing so the exposure per code; @peter2  had some interesting foray into these more speculative shares in his thread


----------



## Trav. (2 November 2020)

rnr said:


> Hi @qldfrog,
> 
> Minimum Price, Turnover and Volume requirements should exclude a number of problem issues, one would assume.
> 
> ...




@qldfrog I think that we have all been burnt by suspensions / delisting etc and I have purposely move away from the spec end of the ASX due mainly to this issue. As @rnr points out there is one option to filter out stocks but sometimes **** happens and then you have to manage your exposure (risk) for this type of event as you highlighted. 

We all read about 10 or even 100 baggers but not many people publicize there bottom draw which is pretty full by chasing these elusive bag's, especially for us mugs who have no inside knowledge...

As an example have a look at how many companies were delisted from the ASX in the last 6 months - varying reasons of course but I had no idea there were that many.









						Delisted companies
					






					www2.asx.com.au


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## peter2 (2 November 2020)

@qldfrog *and other system traders.* @Skate's mentioned this before and I'll repeat it again with additional comments.
A trading system is not the same as a trading plan. A trading system can be executed as a TP and this is what has been commonly presented in many journals (threads) on ASF.  The benefit is that it's quick and convenient but the downside is that this method misses fairly obvious potential problems. An example, The VIX system selected *CGL* after a large spike in price that triggered the system buy signal. A person using the system as a TP buys on the next open. I would never have bought *CGL* because the price spiked higher after a takeover offer (TO) was announced.

My TP has a selection system and then the candidates go through an additional screening process. The screening process includes a brief check on the news and would have noted the takeover offer. The TO offer caps the price and this makes the potential reward too small for the risk. Trading candidates with a poor R:R mean there's no trade. Candidates that spike +100%/d or have huge range bars also fail this requirement in the secondary screening process.

The System finds the candidates. The additional screening process checks for any commonsense (fundamental) concerns;
(i) Is the potential Risk: Reward OK?
(ii) Company activities. Knowing this helps me to assess the RR also.
(iii) Cash on hand (check last quarterly report). I don't want to trade a company that is running out of cash.
(etc) I have a few others that are relevant to my personal biases so won't include them here BUT they're on my screening checklist so I don't forget to check them.

While the secondary screening process seems like a great idea. I will mention that this will cause me to miss out on great buy signals generated by the system. Eg. I will never trade old fashion media companies. I missed great short term price swings in *SWM* and *NEC* because of my bias against them. I need to remind myself that trading short term price moves is not the same as medium term weekly trades. What I think about the companies shouldn't matter in the short term when I'm trading price momentum.

I'm prepared to discuss *AJM* and will do so in the *AJM* thread.


----------



## qldfrog (2 November 2020)

peter2 said:


> @qldfrog *and other system traders.* @Skate's mentioned this before and I'll repeat it again with additional comments.
> A trading system is not the same as a trading plan. A trading system can be executed as a TP and this is what has been commonly presented in many journals (threads) on ASF.  The benefit is that it's quick and convenient but the downside is that this method misses fairly obvious potential problems. An example, The VIX system selected *CGL* after a large spike in price that triggered the system buy signal. A person using the system as a TP buys on the next open. I would never have bought *CGL* because the price spiked higher after a takeover offer (TO) was announced.
> 
> My TP has a selection system and then the candidates go through an additional screening process. The screening process includes a brief check on the news and would have noted the takeover offer. The TO offer caps the price and this makes the potential reward too small for the risk. Trading candidates with a poor R:R mean there's no trade. Candidates that spike +100%/d or have huge range bars also fail this requirement in the secondary screening process.
> ...



one simple rule you quote: discarding takeover offer (TO) also means you will never profit from bidding war which are quite frequent and could reach a final price well over the initial bidder offer.not all black and white;
I get what you say about TP vs TS but as soon as you introduce discretion, be it activities, domain, even cash on hands, you introduce bias or reliance on figures or reports that may be untrue, obsolete..or for me untrustworthy.
For a listed company, i trust share price present and historic, volume and not much else to be honest so my desire  for system trading


----------



## Skate (6 November 2020)

Skate.


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## Skate (6 November 2020)

Skate said:


> *Duc's solution worked a treat*
> Adding Duc's exit idea to my original strategy made a huge improvement by removing my looping exit & replacing it with the information that Duc had suggested.



*Summary*
"Skate's Daily DUC-VIX Strategy" with @ducati916 improved exit has turned a good strategy into an excellent strategy & is now added to the stable of my trading systems.



Skate said:


> *After the US elections*
> I was planning to trade the Daily VIX strategy after the US elections. Even in its original form, it's a handy strategy & "I was happy to trade it".



*This will be the final weekly report*
As "Skate's Daily DUC-VIX Strategy" will be trading "live" as of Monday this post will be the final update.




Skate.


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## peter2 (7 November 2020)

@Skate  Thank you again for the Daily Duc-VIX updates. I marked my charts with the VIX entries and exits and as usual, I learned something from them. ( I wonder how many others did it? )

I've never chased price. When (not if) I miss the perfect entry I let it go. I don't chase price and buy it late. I do this because a higher price makes the initial risk size much larger. If I want to chase price then my pos size model would see me buying less shares as price goes higher. This larger initial risk may not be apparent to a trader who always buys a set parcel size (ignorance is bliss or the increased risk is acceptable).

The latest Duc modified exit is a very good exit strategy. Your back test results show that. What I've seen and deduced from the latest batch of VIX results is that even a late entry can be made profitable with a good exit strategy. A good exit strategy corrects the mistakes from a poor entry strategy. It may be better to say that a good exit strategy keeps the losses low in spite of the entry method used. 

I've looked at the last 40 VIX trades and IMHO the entries are late in about 25% of them. I don't mean late by one or two bars. Here's two examples of what I consider late entries into a price swing on a daily chart. 




It doesn't matter what happens to price from now on. Where ever the VIX system gets out of these two trades it could have done better. IMO the Daily Duc-VIX system can do better in 25% of the trades it starts. 

This observation gives me another way I can push my trading performance (stretch my mindset). I can use the spec portfolio and push myself to buy even when I've missed the perfect entry. In this way I can track the results of the trades with late entries.


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## aus_trader (7 November 2020)

peter2 said:


> @Skate  Thank you again for the Daily Duc-VIX updates. I marked my charts with the VIX entries and exits and as usual, I learned something from them. ( I wonder how many others did it? )
> 
> I've never chased price. When (not if) I miss the perfect entry I let it go. I don't chase price and buy it late. I do this because a higher price makes the initial risk size much larger. If I want to chase price then my pos size model would see me buying less shares as price goes higher. This larger initial risk may not be apparent to a trader who always buys a set parcel size (ignorance is bliss or the increased risk is acceptable).
> 
> ...



In agreement here Pete, I usually get killed chasing price. I recently made a vow to ASF that I won't chase price, so I'll stick with that.

I will watch all this high-tech action from the sidelines where it's safe and hopefully learn something.


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## Skate (7 November 2020)

peter2 said:


> *The latest Duc modified exit is a very good exit strategy*. A good exit strategy corrects the mistakes from a poor entry strategy. It may be better to say that a good exit strategy keeps the losses low in spite of the entry method used.
> *I've looked at the last 40 VIX trades and IMHO the entries are late in about 25% of them. *




@peter2 your observations are spot on & compared to my other (weekly) trading strategies I would have to agree. I pride myself on getting into a trend early & exiting early as well when momentum slows or stalls.

*The DUC-VIX Strategy*
Using the VIX as an entry condition is fraught with danger without knowing how to take advantage of a great indicator. @ducati916 suggested how he uses the indicator & on face value, I was confused to understand how his methodology could be relevant with the lookback parameters he was suggesting. Like most, I've read till my eyes have bleed & I've never read anything that the DUC passed on to me. His entry condition borders on being simply brilliant.

*Late entry*
The late entry is directly correlated to my parameter settings & the number of filters that I use to ultimately decide on a "confirmed" entry. The entry can be sharper & I have exhausted my bag of tricks to time the entry using alternative parameter settings. The raw entry suggested by the DUC is solid as a rock & when "true" - the ribbon turns "blue". The delayed entry comes about by the additional momentum confirmations that I use at the individual level.

*Duc's recent suggestion was to use (upper & Lower) volatility band*
I've read @ducati916 private messages trying to glean his instructions more clearly to garner the "intent of his words". The original help was how to use the VIX indicator to its best advantage & his methodology is a beauty. The most recent help was to sharpen the entry & exit using volatility bands. With this new information, it sent me on a path of exploring ways to take advantage of his most recent suggestion.

*I'm sure Duc won't mind if I quote one of his passages  *
_"The issue is to 'predict' (or best guess the VIX) when it is topping, when it is bottoming and to steal a march on it"_

*My mind was racing - how to take advantage of the bands*
My initial reaction was to use the upper band to take profits. The alternative - when the close touches the bottom band "exit". The theory was clean & simple till it was tested.

*Take Profit Stop (not my best idea)*
Using the upper Volatility Band for taking profits stifled the strategy performance so the idea was given the flick quickly. Concentrating on the exit from this point resulted in the strategy profitability improving - How? - by not exiting good positions prematurely. (in simple terms - not using a momentum exit)

*More to follow*
After re-reading @ducati916 "PM's" & @peter2 recent post - there is a solution I've found that is worthy of another post. The solution revolves around utilising Duc's upper volatility band & my method of implementing it.

Skate.


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## Skate (7 November 2020)

*The DUC-VIX Strategy goes live on Monday*
After exploring ways to take advantage of Duc's new suggestion - "utilising the upper volatility band" - it's too late to implement the suggestion into my VIX trading strategy before the system goes live on Monday.

*Every new idea needs to be "fully tested & investigated" *
I'm not sure how others test new theories but I try to "break" the advantages of any new idea. Why? because trading is a constant trade-off between risk & reward.

*My first idea was a dud*
Using the upper volatility band as a "Take Profit Stop" was a DUD. My latest idea - using the upper band as an additional "confirmation of volatility" at the individual level works quite well.

*There are profitability improvements *
Using the upper band & incorporating volatility as an additional entry condition has the benefit of lowering stock turns & reducing the false entries. The commission cost is also lower.

*The upper volatility band (used as a confirmation band)*
How Duc utilises the VIX as an indicator is simply brilliant "but" difficult to "get your head around at first" (well it was for me). Using the upper & lower volatility band is just another layer taking the strategy to a new level.

*I've tested the idea*
Using the upper band as confirmation of volatility at the individual level has pleasing results, worthy of further investigation.

*The backtest results look impressive*
@ducati916 raw idea of using volatility bands for entry & exits is impressive. Using the upper volatility bands to complement the entry condition - tests okay. Frankly, the improvements were immediate (without any optimisation).

*Amibroker Backtest results - speaks volume*
1. The backtest period is from 1st January 2020 to 6th November 2020
2. For simplicity $100k Portfolio (20 X $5k positions)
3. The only difference between the two backtest results is the backtest on the "left" has an additional entry condition using the "UPPER" volatility band to formulate a new entry. Using the upper band adds confirmation of volatility at the individual level.




*Summary*
I'm over the "moon" incorporating DUC's new exit strategy but slightly disappointed that there is a lack of time to truly evaluate the new volatility entry condition - "using the upper volatility confirmation band". To be honest, I wouldn't trade the new idea till it was fully tested.

Skate.


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## Newt (7 November 2020)

I'm fascintated by the interplay of discretionary trading and had won experience (Duc) fed into cold hard maths and algorithm (Skate).  It may well be that the agorithmic interpretation of Duc's methodology misses (or averages out) the subtlety of some entries and exits. 

However, for most of us, human psychology issues (fear, FOMO, over-riding signals) has the potential to damage a strong discretionary strategy to the extent I'd certainly prefer to be algorithmic every time.   Greatly appreciate the tantalizing glimses of the interplay in the background between skate and duc.

On thje late entry concerns Peter2 has raised, I've also found it hard, over many years and strategies, to not incorporate momentum checks on buy signals.  Yes, it does sometimes greatly delay entry and you lose profit and increase risk measured from price bases (or bottoms).  However the backtesting metrics don't lie, and the sweet spot for reliability of returns versus established momentum seems to generally be skewed toward including some degree of "waiting for momentum confirmation".  The average win/loss and DD figures are the metrics that improve, along with final profits.  The real challenge is of course finding a way to systematically enter safely and hopefully many bars before other trend traders.  This is just entries - we've heard here consistently the money is in the exit - so that is another challenge again.


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## ducati916 (7 November 2020)

Looking first at the data generated from all the tests, a number of axioms can be stated. However, before getting to that, a look at the comment below.

This thread has taken an interesting direction with @peter2 contribution:

_I've never chased price. When (not if) I miss the perfect entry I let it go. I don't chase price and buy it late. I do this because a higher price makes the initial risk size much larger. If I want to chase price then my pos size model would see me buying less shares as price goes higher. This larger initial risk may not be apparent to a trader who always buys a set parcel size (ignorance is bliss or the increased risk is acceptable)._

Given that this is a 'mechanical' based thread, also quite relevant. So as an example of a mechanical system that does buy (chase price higher) higher prices, increasing the position size, we have the original Turtle System. Chunk units, which consisted of a number of futures contracts, would be bought on an increasing basis as the trend proved itself.

@Newt seems to echo the Turtles:

_On the late entry concerns Peter2 has raised, I've also found it hard, over many years and strategies, to not incorporate momentum checks on buy signals. Yes, it does sometimes greatly delay entry and you lose profit and increase risk measured from price bases (or bottoms). However the backtesting metrics don't lie, and the sweet spot for reliability of returns versus established momentum seems to generally be skewed toward including some degree of "waiting for momentum confirmation". The average win/loss and DD figures are the metrics that improve, along with final profits. The real challenge is of course finding a way to systematically enter safely and hopefully many bars before other trend traders. This is just entries - we've heard here consistently the money is in the exit - so that is another challenge again._

Duc's Axiom 1

A (great) trader's purpose in trading, is to to do those things that create winning trades, while avoiding those that create losses.

Corollary: A trader's job is to create winning trades.

Axiom 2

Winning trades result from trades taken (as do losing trades).

Axiom 3

All winning trades and losing trades occur within the context of total capital.

Corollary: There is a predictable relationship between the number of winning trades made and the number of losing trades made on total capital.

Question: Do winning and losing trades represent a pure accomplishment or are they coloured by market conditions (for example bull/bear market, nominal vol. levels, news, macro-considerations, etc). If they are so coloured, how should that be accounted for?

jog on
duc


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## ducati916 (7 November 2020)

In relation to the posited question: this equation considers (a question raised through the years on this forum) whether the ASX follows or is influenced by the US market.

My position is as below:




Now there are all manner of other effects, illusions and interesting stuff that happens. One which has been discussed on numerous occasions is 'Seasonality', which if you are in any doubt is a real phenomenon.

jog on
duc


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## ducati916 (8 November 2020)

One version of the above visualised in 3 charts.






Now there should be a number of takeaways contained therein.

jog on
duc


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## Skate (9 November 2020)

Skate.


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## Skate (9 November 2020)

Skate.


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## debtfree (9 November 2020)

Thanks @Skate for the update.

Quick question in regards to today's purchase PLS.
Is the purchase price correct at 0.43 or is it a typo as I can't see that it got down to that price on my chart.


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## Skate (9 November 2020)

debtfree said:


> Thanks @Skate for the update.
> 
> Quick question in regards to today's purchase PLS.
> Is the purchase price correct at 0.43 or is it a typo as I can't see that it got down to that price on my chart.







@debtfree you have an eagle eye. I've left it too late to alter the previous post so I'll correct my mistake & reposted the correct charts shortly

Skate.


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## Skate (9 November 2020)

@debtfree picked up a mistake in my previous HappyCat report & it was too late to alter the previous post so I'll repost the HappyCat Strategy report again correcting my mistake.







































*I had one job to do & I stuffed it*
So did this guy, he put the wrong cover on the wrong hole - just in case others were wondering why I chose this graphic.



Skate.


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## Skate (10 November 2020)

peter2 said:


> I'm posting a snippet of an equity curve of one of my portfolios. *I'm doing this to reinforce a point that is often made by experienced traders/investors and is overlooked by beginners. *I'm also doing this as I'm feeling very satisfied with the work I've done in this portfolio.
> 
> *The point:* Trading profitably is a high performance activity and at the elite level it's predominantly psychological. We know that two people trading the same system can get very different results. *The difference is due to the mindsets of the traders.* It's been a difficult year for many of us, myself included.





			https://www.aussiestockforums.com/threads/p2-starts-another-asx-portfolio-wkly-dly.35039/post-1100385
		




Warr87 said:


> I think the profit factor below is not entirely accurate, or rather, not entirely representative of the system. Why? Well, as soon as I started I had all my stops hit due to the COVID crash. Needless to say, the current win% is pretty good and shows how I clawed back after an immediate and large drawdown from the beginning. (At least that's my justification haha)








						Weekly Portfolio - ASX
					

Week 36  Buy: 12 buys Sell: 1 stale exit  Index is up. The XAO gained a lot this week. According to my spreadsheet I gained 3%. Not bad since I'm only 25% invested.   According to my current spreadsheet I'm at -3.06% but according to Share Trade Tracker I would be out of drawdown. Something to...




					www.aussiestockforums.com
				




*It's refreshing*
When members post graphics or trading results as @peter2 & @Warr87 it gives junior members a glimpse into the life of those who actually trade - in the vein of helping others benchmark their own trading results & frankly I'm no different. Sharing information is a way that helps others understand trading a little better.

*Benchmarking*
2020 has been a challenging trading year. Indicivisness & indecision raised its ugly head when COVID-19 "flash crash" hit with a vengeance - most traders (a) didn't know whether to sit on the sideline or (b) keep having a go, trading through the turbulent times. With some, it was a combination of both.

*Charts & results*
The recent charts & trading results concentrate on the period from "Jan/Feb 2020" to the results achieved so far this week. In the spirit of sharing, I'll post my equity curve for the same period so others understand how trying it was to trade through a period of uncertainty. Looking over & comparing results from different traders can help crystalise what can be achieved from experienced traders.

*It's been tough*
A win rate of 39% on face value seems low but in a very volatile trading environment, it's not too shabby. The "Profit Factor" of 2.32 was hard-fought to achieve. It goes to prove if you -  "Win more when you win than you lose when you lose" you are halfway there as a half-decent trader.




Skate.


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## ducati916 (11 November 2020)

I would disagree with that it is predominantly psychological. Trading at the elite level is, I would argue skill based. The skill required is a designed/built methodology/strategy. At the elite level, everyone is expected to manage psychological issues professionally, unless the system traded is predicated on psychology, then and only then, would a psychological flaw reveal itself, resulting in returns below that which would be expected. As an example, Taleb's style of trading (now managed exclusively by his business partner). This is a purely psychological way of trading, hundreds if not thousands of small losses waiting for the gargantuan win.

Success, which vaults you into the elite level is predicated upon the skill in building/designing a system of trading that consistently, in any market conditions, returns a profit.

There are many styles and niches available to create consistent profits. Mechanical systems are a primary example of a niche style of trading. Taking for the moment, long only systems (which seem to predominate for obvious reasons) are all systems equal in their returns? Most mechanical systems run backtests...are those backtests equivalent? Without even looking at them, I would wager 10c that they are not. Can above average psychological intervention improve a bad system? Probably not. Therefore, improving the system is paramount. Trust me on this, it is a lot easier psychologically to trade a really profitable method than a horrible one.

You saw Peter studying the entry charts of Mr Skate's system, looking to improve (if possible) his system. That is someone seeking continued improvement in skill...not psychology. That is what is required. Executing trades based on trading rules is a given. If you are still struggling with that, then either (a) your strategy is poor or (b) you are trading too large.

jog on
duc


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## Skate (11 November 2020)

*Differences*
@peter2 remarked _"Trading profitably is a high-performance activity and at the elite level, it's predominantly psychological. We know that two people trading the same system can get very different results" - _@ducati916 remarks _"Trading at the elite level is, I would argue skill-based. The skill required is a designed/built methodology/strategy"_

*When trading*
(a) Having the correct mindset when trading is critical 
(b) Trading profitably is definitely skill-based

*In a nutshell *
I agree with both positions stated by Peter & the Duc as they complement each other.

*I would also add *
"By not strictly adhering to your trading plan goes a long way to explain why we achieve different results - trading the same system"

*Something always works*
My equity curve above demonstrates that technical analysis works - The secret using technical analysis is knowing "what will work in the future".

*Trading is all about risk, opportunity & probability*
Technical traders spend a lot of time formulating a trading strategy & those traders who understand risk, tend to trade more successfully. Accepting the fact that not every trade will work out helps immensely.

*Trading doesn't have to be complicated *
Trading is all about finding a style & strategy you are comfortable with & simply going for it. When starting out, start trading with small amounts & by doing so you will learn as you go. Losing small amounts is less painful. Having a stake in the game with "your money" on the line - tends to focus you & your "learning will increase tenfold".

*Reading charts*
Looking at charts we tend to see patterns everywhere & usually well after the fact - that's not helpful. Some trading patterns can help us with our trading while other patterns are worthless - why? our mind has a way of tricking us to see patterns that are simply not there.

*The secret to trading profitability is picking when something has changed*
Technical Analysis, systematic trading removes the psychological element Peter talks about. When trading, often the simplest tools can work best in confirming when a change has occurred. @ducati916 posts are chock full of charts trying to explain when & where patterns have changed - thus giving all members a fighting chance to exploit it.

Skate.


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## Warr87 (11 November 2020)

Skate said:


> https://www.aussiestockforums.com/threads/p2-starts-another-asx-portfolio-wkly-dly.35039/post-1100385
> 
> 
> 
> ...




I don't know how you still kept that profit factor, lol. Your systems were always more responsive than mine. It took me until August to get back to breakeven, which I am taking as a win. The latest market hasn't been kind either. Right back into a drawdown again. I would characterise the current market as volatile sideways. My index filter has been right on the cusp and momentum is being cut short. It's been an odd year. I know even in a sideways market my system will still find a few momentum winners. At least I've proven to myself that when the market is trending upwards I can win (June to August alone was amazing).


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## Skate (11 November 2020)

Warr87 said:


> I don't know how you still kept that profit factor, lol. Your systems were always more responsive than mine. It took me until August to get back to breakeven, which I am taking as a win. The latest market hasn't been kind either. Right back into a drawdown again. I would characterise the current market as volatile sideways.




*Horses for courses *
@Warr87 I trade multiple strategies & I'm prepared to display each strategy separately in descending order. The first graphic is a combination of my trading strategies. It clearly proves that not all strategies are created equal.

*To be fair*
Each strategy has a defined job so we are comparing apples & oranges.

*FYI  *
I have 4 parked strategies at the moment that have traded in the past waiting for the ideal conditions to reactivate.

*This graphic is a combination of my trading strategies *




*Strategies are displayed in descending order that needs "Clarification" *
Strategy 1 = is my "Buy & Hold" Strategy
Strategy 2 = is my "LIC Investment" Strategy





*# Clarification 2*
Strategy 3 to 8 are my active trading strategies 










*The market has been roaring since 6th March 2020*
During this period there were a few minor setbacks - but that was expected as "it's just the nature of a recovering market" (@ducati916 has covered this extensively in his thread)




Skate.


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## Warr87 (11 November 2020)

Thanks for the additional clarification. It's nice to see how a combined portfolio taking different appraoches can come together. I remember hearing a quote from my audio books (going to paraphrase a little and I can't remember who said it) that a 'newb' trader will try and find the perfect entry/exit for a perfect system. A more experienced trader is looking to accumulate strategies, knowing that there is no perfect entry/exit, or one strategy that will always win. My own performance is hard to qualify given I have changed capital allocation (I was, however, beating the XAO quiet comfortable so happy with that). Ideally i'd like to 'restart' my performance tracking as I don't intend on any more major capital injections right now. I'm now at the point that I'm deploying a CFD/crypto strategy, weekly momentum, and monthly momentum (with a daily momentum in papertrading). A mean-reversion system using ASX200 CFD is also in papertrading. Why? Well, like what you have I want a few systems that trade different because the market changes. I'm looking forward to next year's trading as I think things will improve.




Skate said:


> *Horses for courses *
> @Warr87 I trade multiple strategies & I'm prepared to display each strategy separately in descending order. The first graphic is a combination of my trading strategies. It clearly proves that not all strategies are created equal.
> 
> *To be fair*
> ...


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## Newt (11 November 2020)

Yes, thanks for sharing Skate.  You''re working pretty hard on this trading gig now for someone who sounds like they could just as easily be fully retired and watching Netflix (or Foxtel Boxing?) all day.  Is your wife still talking to you?


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## Newt (11 November 2020)

ducati916 said:


> View attachment 114456
> 
> 
> I would disagree with that it is predominantly psychological. Trading at the elite level is, I would argue skill based. The skill required is a designed/built methodology/strategy. At the elite level, everyone is expected to manage psychological issues professionally, unless the system traded is predicated on psychology, then and only then, would a psychological flaw reveal itself, resulting in returns below that which would be expected. As an example, Taleb's style of trading (now managed exclusively by his business partner). This is a purely psychological way of trading, hundreds if not thousands of small losses waiting for the gargantuan win.
> ...




I'm reminded of the very first post in this thread Duc.  From time to time the "trading table" analogy comes up , and basically it won't be stable with the 4 pillars of edge (strategy), money management, psychology, continuous education and improvement.  I suspect the importance of these varies depending on your experience and time trading.  Most of us start out just trying to find and edge, and trading is properly (psychology).  Later we realise how important risk and money management is.  Depending on who your mentor(s) may be, every 5-10 years you realise how little you actually know and may start again from a different viewpoint and potentially all of the above benefit all over again (Dunning-Kruger?).

There's a great trading meme of a beginner trader pushing a giant boulder uphill, and every time he thinks he's reached the top of the mountain there's another of these "pillars" to master, and thus push the boulder up an even steeper slope.  Damned if I can find it tonight though!


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## Skate (12 November 2020)

over9k said:


> Do NOT pay attention to the technicals, they are NOT relevant in this market. [They] can only see their formulas and technical analysis - analysis which does not work in these market conditions.
> What I am saying is that this market is the virus. Understand the aforementioned effect(s) the virus has on the market and you will understand what the market's going to do in this next wave which is not going to happen, but rather, is already underway.




*The "Dump it here" thread*
I was reminded recently - _"The info, research, continued discussion and help is first class and still done in a pleasant environment". _It's a reminder that this thread is not a contest of ideas, but a thread that allows alternative ideas & views to be freely expressed, such as those @over9k is currently posting about (COVID-19) & what effects that will have on the markets going forward. 

*We all know the markets fluctuate*
Trading psychology that @peter2 mentioned is something most people don’t think about when trading. However, when trading for yourself, your emotions will have an unavoidable impact on your outcome. Reading alternative views is healthy as it allows us to make an informed choice of how we invest. Every price in the market is the sum of all hopes, fear, pride & greed. Knowing this, technical traders try to capitalise on this information. This is the skill @ducati916 spoke about.  

*Experience*
Therefore the hardest part of trading is learning from experience or time in the market, it's learning how to control your emotions & how to keep persisting even when your account suffers a few losses. It’s about being realistic & having an understanding that we are probably only ever going to be "average traders" at best "but that’s okay".  

*Trading is about probabilities *
Accepting that there is no "one" easy approach that guarantees success in this game as @Warr87 eluded to - you start to gather a combination of strategies that allows you to "dance to the music being played" - just as the conditions in the markets that COVID-19 has recently caused. Just to reiterate - If it weren't COVID, it would most likely be something else. @over9k is merely expressing a view that "we aren't out of the woods just yet" & an extra layer of caution is required to trade in these uncertain times.

*Members expressing an alternative view enriches this thread*
Technical Analysis, Fundamental Analysis or a combination of both have a position at the table in this thread, reading alternative trading information adds additional tools for us to make smarter & sharper trading decisions. 

*Summary*
I don't subscribe to the many of the views expressed on this forum - but I do enjoy reading them nevertheless. Having a "closed mind" is the killer of innovation when it comes to trading.

Skate.


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## ducati916 (13 November 2020)

Just returning briefly to the psychology/skill question:





Not all strategies are equal. Building a good or highly profitable strategy is not a psychological problem. It is a skill problem.

Where the confusion seems to be arising is: (a) if a novice is provided with a good, profitable system, there is a good chance due to psychological issues, he will lose money: (b) an experienced trader will make money because he will not commit psychological errors, defeating the profitability of the system.

Building the system is an exercise of skill.

A Stanford University Professor, Carol Dweck (confusingly) of the Psychology Dept., provided a paper on 'Mindset'. In it she describes 2 types of mindset: (a) growth and (b) fixed. A growth mindset (is in her research) superior to a fixed one. A growth mindset is one which *developed through hard work, good strategies, and input from others.* A fixed mindset is one in which the person relies upon innate talent.

It could (fairly) be argued that pursuing a growth mindset is a psychological strength and that therefore psychology is important to elite traders. I would accept that but differentiate it by saying that the psychological effort is directed towards skill acquisition, which for novice traders could well be an improvement in psychological skills. Later, however, additional skills must be aimed at improving profitability through creating higher profitability methods.

jog on
duc


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## Skate (13 November 2020)

Skate.


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## Warr87 (13 November 2020)

I never got a fill on PLS (in the happcat strat, my MAP strat got it on monday).

nice to see the happycat coming through.


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## Skate (13 November 2020)

*I've had a request*
A member was wondering:
(1) how did the Duc-VIX strategy perform this week? &
(2) how did my "live trading" of the VIX go this week?

*Duc-VIX strategy has been retired *
I've explained that I've already posted the final update of the "Duc-VIX strategy" but I'm willing to post one more update as at the end-of-trade today. I explained I won't be giving weekly updates of the performance of the "VIX live Strategy" - other than to say "it had a great first week".

*I was curious why he wanted to know? *
Short answer - he was afraid to trade this week because of all the uncertainty of the US elections & the increase in COVID-19 cases around the world.

*What a great week to start new strategies*
I fully accept that there is never a good time to start trading a new strategy, especially in uncertain times such as the past week - but when the signals are there, "I trade them". I'm a firm believer trading "one week too early or one week too late" makes little difference over the longer term.

*I'm glad I started trading on a great first week *
I can report - the daily "Live-VIX Strategy" took-off on Monday - straight out of the boxes & all three new strategies are firing.

*Duc-Vix Update*
As requested, I'll post one more update of the retired "Duc-VIX Strategy" (as at end-of-trade today)




































*I have an attitude of gratitude*
I must thank @ducati916 once again for his unsolicited help in how I could take advantage of VIX indicator.

*Recently*
The Duc recently suggested how I could "fine-tune the exit of the VIX Strategy". His exit strategy (his solution) made a good strategy a "great strategy". (thanks Duc)

*Definitely*
This will be the final update of "Duc-VIX Strategy"




Skate.


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## Skate (14 November 2020)

*I've been thinking about the CAM Strategy*
The CAM strategy is a great little performer but lacks the punching power of my other trading strategies. The CAM strategy signals depend on pullbacks & continuation of trends. @peter2 explains how he takes advantage of breakouts as well.

*This got me thinking*
Duc's recent suggestion was to use (Upper & Lower) volatility bands. Incorporating the upper & lower volatility bands on the buy-side as well as the sell-side is a nifty idea, new to me. The original CAM Strategy relies on a few different metrics that I've posted about previously. Using Duc's volatility bands certainly improves the profitability of the CAM Strategy & I'm suggesting those who also trade the CAM Strategy to do the same & investigate how they can be used to improve the trading results of the CAM Strategy.

*The exit & entry strategy of the CAM*
The original exit has been complemented with an additional volatility exit & a confirmed volatility entry as suggested by @ducati916. Additional volatility filters ultimately decide when the trend is "confirmed" assisting in a cleaner sharper entry. The exit has also been more refined using a lower volatility band to keep you in the better trades.

*Adding - Volatility Upper & Lower Bands*
Using the upper band & incorporating volatility as an additional entry condition has the benefit of lowering stock turns & reducing false entries. The lower band assists in holding better trades a little longer. My "time delay - momentum exit" has been eliminated. Using the upper & lower band as confirmation of volatility at the individual level has pleasing results when applied to the CAM Strategy, worthy for others to investigate as I have. Using volatility bands for entry & exits is impressive.

*Without a doubt, a positive outlook is important when it comes to incorporating new ideas *
To that end, believing that your overall trading will be profitable is certainly valuable. However, mismanagement of your trading is another thing. Trading by its very nature is risky, but there are ways to manage & minimise the risks - one risky way of trading is taking on undue amounts of risk or staying too long in a trade that has moved against you – following that path is a recipe for disaster & this is the very area volatility bands tend to eliminate.

*In summary*
There comes a time when I have to get down off my "Soap Box" as the last thing I want to do is bore readers with stuff that I have posted about previously (In my defence - applying Duc's idea to the CAM Strategy is something new. A refresher of the CAM Strategy is always handy to refocus & re-invigorate a previous strategy that we have discussed & paper traded in this thread, sometimes its fun to go over stuff we tend to forget or neglect)

*Backtest Confirmation*
Adding volatility bands to the CAM Strategy & the Improvements are obvious. The recent backtest is from the 1st July to end-of-trade Friday the 13th November 2020




Food for thought..

Skate.


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## Warr87 (14 November 2020)

Very nice. The day strategy I am papertrading with python + IB is actually a modified CAM strategy. The CAM strategy is a solid strategy IMO. My version: daily, only trade PB and Trends (removed the CT condition), and modified the ranking to a purely momentum position score.


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## Skate (15 November 2020)

peter2 said:


> I'm feeling very *satisfied *with the work I've done in this portfolio.




*In my opinion *
@peter2 has nailed it. Having satisfaction with the effort you have put into trading successfully is the key that keeps you going, always striving to be better.



Skate said:


> It’s about being realistic & having an understanding that we are probably only ever going to be *"average traders" *at best "but that’s okay".




*You would expect me to say something similar *
In my opinion "I've nailed it as well". As a self-declared perfectionist, I've come to terms with being an "average trader" something that was hard to swallow in the early days knowing the amount of effort I've put in. Don't get me wrong as a systematic trader - I'm doing ok.

*How the big boy's trade*
Major trading firms invest in outstanding companies at attractive prices. By doing so they are exploiting competitive advantages in order to continually earn returns on their investments. They are extremely focused on the fundamentals of the business value, on risk-adjusted returns rather than any benchmark we as "average traders" use. They are the "Ocean liners" of trading where we are the "speed boat" - having the ability to turn on a dime.



peter2 said:


> I'm posting a snippet of an equity curve of one of my portfolios. I'm doing this to reinforce a point that two people trading the same system can get very different results. It's been a difficult year for many of us, myself included. It's immensely satisfying to see the results of that patience and focus work out so well.




*An insight - benchmarking*
@peter2 post above has been sliced & diced to reinforce my next point. Posting actual trading results give others a benchmark of sorts. In business, it's all about percentages, so our focus is directed at turnover. Trading is very similar in many respects as it's all about probabilities. Focusing on a win rate is a poor metric. My winning percentage is less than a coin flip & if it was a school "report card" it would have a big red "F" circled on it - as a fail. The "Win/Loss" ratio should be the area of focus.

*My trading report card - the last two calendar years*
I'm posting one of my better portfolios to reinforce the point I was making in the previous sentence. The results are from a good strategy that has had a considerable amount of my time allocated to it - proving my point of being an "average trader" is okay. I've withheld the profit & loss amounts but included the commission paid in the last two years, proving "CommSec" is the real winner in this trading game. The graphic below is from the last two calendar trading years (1st Jan 2018 to 13th November 2020) - well for nearly two years. In the last two calendar years, the last quarter of 2018 & the first quarter of 2020 were difficult periods but I realise trading is a long game, a marathon not a sprint.




Trading is a tough gig - by any metric.

Skate.


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## Warr87 (15 November 2020)

You say "average trader" but I suspect your sharpe ratio (or other metric) is better than a hedge fund. Your CAR is probably much higher too. One thing I think people forget about us vs. the big guys is that we are managing our own money so we can take on greater risk and therefore greater returns. A fund that suffers a 20% drawdown isn't going to have many clients left, lol. Whereas for us, we keep going knowing withdrawing funds right there would kill our ability to reclaim loses.

I do enjoy this forum to help with the benchmarking. When I'm in a drawndown or have a bad week, there is comfort knowing that others are in the same boat. That is, my loses aren't an aberration.


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## Newt (15 November 2020)

I haven't come across any other public forums where ideas and actual trading performance are shared so openly.  The last 3 years have certainly been demanding, but also a crucible for learning and improvement if you're willing to do the hard yards.  Very inspired by the ongoing drive for improvement here.  

If you guys are "average", then I'll be perfectly happy just to be "bit below average" as long as the long term equity curve is upwards.


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## qldfrog (15 November 2020)

Skate said:


> *In my opinion *
> @peter2 has nailed it. Having satisfaction with the effort you have put into trading successfully is the key that keeps you going, always striving to be better.
> 
> 
> ...



Your quote about brokerage is quite frightening
With the same trades, my brokerage costs would be half
So 10k saved
Not that my broker is perfect as i can not add a buy order unless i have the cash available which means in switch days, i might have to wait for executed sales before entering buys
But I know comsec was ready to match the 10$ a trade when i asked..
So maybe just ask,😊 the 10k saving can be redirected to the asf legal fund or a charity of your choice if you wish to and if you do not need the cash👍


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## qldfrog (15 November 2020)

Newt said:


> I haven't come across any other public forums where ideas and actual trading performance are shared so openly.  The last 3 years have certainly been demanding, but also a crucible for learning and improvement if you're willing to do the hard yards.  Very inspired by the ongoing drive for improvement here.
> 
> If you guys are "average", then I'll be perfectly happy just to be "bit below average" as long as the long term equity curve is upwards.



Same here mr Skate was the trigger to my renewed effort on systems, so much to learn from the interactions here.i am nearly 4 months behind with the big move just completed..so many ideas I am looking forward to hot steamy summer days where i will be stuck inside and so have time to work back on systems


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## Warr87 (15 November 2020)

Newt said:


> I haven't come across any other public forums where ideas and actual trading performance are shared so openly.  The last 3 years have certainly been demanding, but also a crucible for learning and improvement if you're willing to do the hard yards.  Very inspired by the ongoing drive for improvement here.
> 
> If you guys are "average", then I'll be perfectly happy just to be "bit below average" as long as the long term equity curve is upwards.




lots of good ideas and discussion! I definitely wouldn't have progressed so quickly without the help of a few members here.

In one of my trading books (i think it was 'How to Day Trading for a living') it mentioned the necessity to be engaged in a community. performance noticeable dropped when they tried to act alone.


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## Skate (15 November 2020)

ducati916 said:


> Frustration is important. It leads to some hard thinking.




*My best strategy going into 2020 was my "Weekly PANDA Strategy" *
I've made many posts about my best strategy "The Panda Strategy" it was a consistent performer that wasn't too shabby. When the strategy was stress-tested with the recent COVID-19 panic selling, the exit was slow to react. The strategy fell well short of my expectations reacting too slowly.


peter2 said:


> IMO the PANDA system is one of the best I've seen. It works brilliantly in mildly bullish markets and kills it in fully bullish markets. It's a seriously good system.



*The Panda Weekly Strategy was quickly shelved for maintenance  *
Up until COVID hit my Panda Strategy was a stellar performer - the idea behind the strategy is still valid but in its current form slow too exit. I have been working hard to sharpen how it picks downturns quicker - it's been a frustrating and annoying process & my coding effort over the last eight months wasn't rewarded as expected. Maybe it's not that I'm annoyed with myself rather it's "frustration" that I couldn't find a more responsive weekly exit.

*Repurposed*
The Panda Strategy has been repurposed as a "Daily" strategy. Backtesting has shown periodicity is not a concern as the entry strategy is valid across multiple time frames.

*Trading the "Panda Strategy" *
The Panda strategy entry condition stays the same but the exit strategy has a reworked that quickens "fivefold" eliminating my major concern. I now have two daily strategies. As I'm no longer making daily reports of "Duc-VIX Strategy" - the Daily Panda will be something new to report on. Live trading of my repurposed "Daily Panda Strategy" has a portfolio limited of $100k just in case it falls short of the backtesting results.

*The Daily Panda Strategy started last week *
To keep the thread active & fresh I'm prepared to post daily updates so others can follow its progress. I've made a ton of posts about the entry condition of the Panda Strategy saving me from explaining it all again. (Search: Panda - posts by Skate if interested) The exit strategy is primarily a wide trailing stop with a looping volatility exit as an absolute fail-safe.

Skate.


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## Skate (15 November 2020)

Skate.


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## Skate (16 November 2020)

Skate.


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## Skate (16 November 2020)

Skate.


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## Skate (17 November 2020)

Skate.


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## Skate (17 November 2020)

*Weekly versus a Daily system*
There are merits "trading" in both time frames but for "me" I still prefer a weekly system - I'm a believer if it works for you it's right for you & there are merits trading both. Trading the VIX & Panda strategies has been an eye-opener. Trading daily allows you to (1) exit mid-week instead of hanging out till the end of the week - (2) allows you to take advantage of mid-week moves for a quicker entry into a trend.

*Exits are important*
After watching the markets these past few weeks adding a volatility exit to my strategies - simply works. Over the last two years, I've raised the question around the "entry versus the exit" scenario & which is considered more important when it comes to the profitability of any trading plan. I still hold the position that the "exit" is where the money is made. I now have to concede the entry is also significant - otherwise, each strategy performance would mirror each other.

Skate.


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## Skate (17 November 2020)

*Trend following is a system proven*
I’m dumbfounded that there are so many ways to bet on the share market but over a long period I've found it’s much easier to go with the trend rather than fighting against it.

*Trends come & go *
It pays to be vigilant when trading trends as they come & go with great regularity. Getting into a confirm trend "locks you out" of the early gains, sad I know - but I've come to realise "it's better to be safe than sorry". Looking back at the VIX daily trading equity curve (the line graph) bears out the daily volatility we all have experienced during the past 8 months. It's worthy to remember "trends" can & do change on a dime because they are fueled by greed. Whatever metric or indicator you use to "confirm a trend" - educate yourself thoroughly to understand how your chosen indicator works. All indicators are not created equal & they all display a certain degree of lag.

*Consistency of signals is important*
You need to thoroughly test each indicator, understanding that the "consistency of signals" is the primary concern. Consistency is the metric that should be used - rather than the profit or profit percentage. You need to test each indicator before you start trading "because" when your money is on the line - things can get complicated very quickly bringing emotions to the surface that you never knew existed. 

*You need to "condition yourself" *
Having the correct mental attitude allows you to think clearly under pressure when things start going south. The way you respond under pressure is the essence of trading successfully - getting your emotions in check can be "tricky to master" but not impossible to do.

Skate.


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## Skate (17 November 2020)

*Trading strategies vary in performance*
Some strategies are better suited to certain market conditions than others, that's a given. I'm now a believer that you can have the best of both worlds trading a few different strategies & timeframes. 

*In essence - traders want to know *
(1) what to buy 
(2) when to buy & 
(3) when to hop off the ride. 

*All three elements are important *
If you can nail these three you are halfway there in developing a handy strategy, however, the profitability of a strategy depends on doing a few other things precisely.

*I've elevated the "entry" to "significant"*
Most traders concentrate on the entry believing if the "right" stock is bought at the "right" time all will work out in the end. In my experience, the correct timing of the exit is where the money is ultimately made. Cutting losing trades early & holding better positions is the secret of being a profitable trader. Alternative views have already been expressed in this thread that "buying" is most important to successful trading. Recently I've changed my thinking & now have elevated the entry to "significant" however, with mechanical trading, timing the "exit" is still the hardest part.

Skate.


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## Skate (18 November 2020)

Skate.


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## Skate (18 November 2020)

*I've been thinking*
Posting the daily results of my Panda Strategy is nothing but a pure indulgence for me. I'm now wondering if there is any educational value in doing so.

*Posting daily results keep the thread active*
(1) I'm unsure if others would track the Panda Strategy other than @peter2 or
(2) alternatively, members might be interested in benchmarking their daily strategy against one of my live systems as @Warr87 mentioned in a previous post or
(3) others may be interested in following along each day to see if the strategies trade successfully or not. Who knows.

Skate.


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## Warr87 (18 November 2020)

I'm finding it useful. You giving us another strat to follow has prompted me to check the progress of my daily strat thats being papertraded (it's being run through python script so don't have a daily performance system setup just yet). I have labled it a failure. It is breakeven after approx 3months. The backtest over the same period would have yielded +16%. I was having issues with the calcs being performed in python matching to the values that AB was giving me. I'm not experienced enough to work it out right now. But with your daily systems update, I've decided to move my papertrading to manual (AB + Share Trade Tracker). I don't have an extra chart setup in STT like you do, so it will make showing results harder.

You could also do a weekly review if daily is too much?


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## drewdubs (18 November 2020)

Skate said:


> *I've been thinking*
> Posting the daily results of my Panda Strategy is nothing but a pure indulgence for me. I'm now wondering if there is any educational value in doing so.
> 
> Skate.




The daily/weekly reporting uploaded by yourself and others is certainly beneficial to me Mr Skate, particularly through the volatile periods we've been having.  I have found it useful to assist in benchmarking performance of my mechanical trading system against the community and is pushing me to keep searching for little improvements that I believe would otherwise take longer to contemplate.

The reporting of the Daily VIX system when there was a string of daily losses, and the surrounding commentary provided by yourself and others was also invaluable.  I learnt a lot.  This really tested my system exits and entries once again, as well as my resolve to keep following a consistent, methodical approach as per the generated signals.  

Thanks to you and the many others for contributing your time, knowledge and experience.


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## soren_lorensen (18 November 2020)

thanks for uploading/updating, certainly very interesting, where does your dashboard with all the key performance metrics come from?

cheers

-soren


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## Warr87 (18 November 2020)

soren_lorensen said:


> thanks for uploading/updating, certainly very interesting, where does your dashboard with all the key performance metrics come from?
> 
> cheers
> 
> -soren




That's 'Share Trade Tracker'.  An excel spreadsheet you can buy. The cumulative total, though, is custom chart added by @Skate, but the dashboard and the buy/open/sold tables are part of the provided package.


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## soren_lorensen (18 November 2020)

Warr87 said:


> That's 'Share Trade Tracker'.  An excel spreadsheet you can buy. The cumulative total, though, is custom chart added by @Skate, but the dashboard and the buy/open/sold tables are part of the provided package.



Well, checked it out appears to be discontinued and not available for sale anymore.


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## Warr87 (18 November 2020)

soren_lorensen said:


> Well, checked it out appears to be discontinued and not available for sale anymore.




That's interesting. I only bought it last month, so news to me! Let's hope this wont affect any current users.


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## frugal.rock (18 November 2020)

Just a quick word.
Mr Skate, the educational value is there for others in many respects.

Unfortunately, I didn't get to download the phantom PDF file you posted late on a Saturday night, I clicked the file but it was gone....

Opportunity has been like trying to grasp smoke lately.
The gap between the here and now and the elusive doesn't fill for many here, including myself. 
That's where you provide pieces to a puzzle. 

We're all looking for that edge, for which due to human nature, the goal posts are constantly changing.

Thank you for your efforts. The rest is up to us.


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## soren_lorensen (18 November 2020)

Warr87 said:


> That's interesting. I only bought it last month, so news to me! Let's hope this wont affect any current users.








						Trading Spreadsheet | Record Track Analyse | XLAutomation
					

A share trading portfolio spreadsheet to record your trading activities. Includes automated updates of share prices, historical price information & display of those to a dashboard to report on performance.




					xlautomation.com.au
				




this one right?


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## Skate (18 November 2020)

soren_lorensen said:


> thanks for uploading/updating, certainly very interesting, where does your dashboard with all the key performance metrics come from? - soren



@soren_lorensen all the metrics & graphics are from Share Trade Tracker (discontinued from sale). The advantage with Share Trade Tracker was the ability to add extra worksheets to the workbook & linking the formulas.

Skate.


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## Warr87 (18 November 2020)

soren_lorensen said:


> Trading Spreadsheet | Record Track Analyse | XLAutomation
> 
> 
> A share trading portfolio spreadsheet to record your trading activities. Includes automated updates of share prices, historical price information & display of those to a dashboard to report on performance.
> ...



thats the one.

I guess they wont be incorporating my suggestion into the next version lol.


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## Skate (18 November 2020)

Warr87 said:


> That's interesting. I only bought it last month, so news to me! Let's hope this wont affect any current users.



@Warr87 if you have any questions about Share Trade Tracker you can email: support@xlautomation.com.au

*Share Trade Tracker will no longer be offered for sale *
After 9 years and hundreds of releases, XLAutomation is sad to announce that Share Trade Tracker will no longer be offered for sale on the XLAutomation website. While the product is considered a worthwhile tool by many of our dedicated users we have been unable to attract a sufficient number of subscribers to make the continued development and support a profitable activity for our business.

*What does this mean for you as an active subscriber to Share Trade Tracker? *
1. XLAutomation will honour your existing subscription of Share Trade Tracker & provide support until the expiry of the existing subscription
2. At the end of that subscription you will retain access to Share Trade Tracker for life
3. After all subscriptions are expired we will no longer offer support for Share Trade Tracker as a product

*When will this start? *
1. From Monday 9th of November, 2020 we will remove Share Trade Tracker from our site for sale
2. We set all existing subscriptions to expire on the next renewal

*After the expiry of your subscription*
If you continue using Share Trade Tracker after the expiry of your subscription & require support you have the option to approach XLAutomation directly via their consulting services. This is available for any feature that already exists in Share Trade Tracker or new functionality that you would like to include to the existing spreadsheet. We realise this may be surprising and disappointing news for our loyal subscribers to Share Trade Tracker. Be assured that XLAutomation has not taken this decision lightly given the time & effort that has been invested in the development of Share Trade Tracker.

Skate.


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## Warr87 (18 November 2020)

Skate said:


> @Warr87 if you have any questions about Share Trade Tracker you can email: support@xlautomation.com.au
> 
> *Share Trade Tracker will no longer be offered for sale *
> After 9 years and hundreds of releases, XLAutomation is sad to announce that Share Trade Tracker will no longer be offered for sale on the XLAutomation website. While the product is considered a worthwhile tool by many of our dedicated users we have been unable to attract a sufficient number of subscribers to make the continued development and support a profitable activity for our business.
> ...




thanks for the clarification!


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## Skate (18 November 2020)

frugal.rock said:


> Mr Skate, the educational value is there for others in many respects





soren_lorensen said:


> thanks for uploading/updating, certainly very interesting





Warr87 said:


> I'm finding it useful





drewdubs said:


> The daily/weekly reporting uploaded by yourself and others is certainly beneficial to me Mr Skate



*The Daily Panda Strategy*
(a) After reading the posts above - it's worthwhile for me to keep posting daily updates for the PANDA Strategy. 
(b) I didn't want to keep posting daily updates for the sake of posting. 
(c) Thank you for the replys.

Skate.


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## peter2 (18 November 2020)

Thanks again @Skate for posting the Panda System trade details. I have been looking at the effectiveness of the entries. Ehlers DSMA is an indicator that I've not examined so I've been curious. My curiosity has been satisfied, thank you. 

I do enjoy seeing your application of the systematic trading process. It's very elegant and effective. My trading process feels clunky and much more time consuming in comparison. Seeing your process makes me want to improve mine. 

btw: The ROC > 20 when used with my 1st BB strategy filters out many, many losing setups.  I've been looking at it on the US markets and together the prospects seem much better. I'll never know for sure without back testing it properly.


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## Skate (19 November 2020)

peter2 said:


> Ehlers DSMA is an indicator that I've not examined so I've been curious. My curiosity has been satisfied, thank you.




@peter2 realises this is a beginners thread & I try extremely hard to keep my posts to the sheer basics, chunking all my post. Sometimes more advanced members will take a deeper interest in developing their own skills to separate them from the average trader. By posting more technical information at times I believe goes somewhat to help them achieve this.

*Ehlers mathematical formula - summary*
I've placed my summary of "Ehlers DSMA" at the start of my post as understanding Ehlers DSMA is lengthy & at times dry & boring. So in summary, the DSMA is simply an adaptive moving average that features rapid adaptation to volatility in price movement. It accomplishes this adaptation by modifying the alpha term of an EMA by the amplitude of an oscillator scaled in standard deviations from the mean. The DSMA’s responsiveness can be changed by using different values for the input parameter period of which I found crucial when trading our Aussie market. 

*For those more technical in nature*
To better understand the alpha term of an EMA you can reference this page for a clearer understanding  -  https://www.itl.nist.gov/div898/handbook/pmc/section4/pmc431.htm - otherwise don't get caught up on the technicals that Ehlers is so obsessed with.

*The Panda Strategy relies heavily on Ehlers basic idea of "Deviation Scaled Moving Average" (DSMA)*
John Ehlers - Deviation-Scaled Moving Average (DSMA) is simply an "adaptive moving average" with the unique feature of rapid adaptation to volatility in price movement. It's worth remembering that moving averages have two characteristics - (1) they lag & (2) they smooth data. But there are different ways to tweak them. DSMA is one way to make them more adaptive to current prices & make the smoothing heavier.

*It's a mouthful & hard to understand*
DSMA accomplishes this adaptation by modifying the alpha term of an EMA by the amplitude of an oscillator scaled in standard deviations from the mean. The DSMA’s responsiveness can be changed by using different values for the input parameter period & well suited to the Panda Strategy, being a trend-following system. Ehlers basic idea is valid but with most good ideas the parameter setting has been overused - thus negated. After saying this his "Technical Indicator" is a mathematical formula using the moving average of price but by adding a "volume relationship" lifts his idea to a new level helping to determine the probable direction of the price.

*The DSMA is a data smoothing technique *
Ehlers DSMA acts as an exponential moving average (EMA) with a dynamic smoothing coefficient. The smoothing coefficient is automatically updated based on the magnitude of price changes. In the Deviation-Scaled Moving Average (DSMA), the standard deviation from the mean is chosen to be the measure of this magnitude. The DSMA indicator provides substantial smoothing of the data even when price changes are small, while quickly adapting to these changes.

*DSMA's design for those still following*
The DSMA indicator has minimal lag yet is able to provide considerable smoothing. DSMA’s responsiveness is achieved by varying its lookback period, therefore, the standard deviation can be calculated as the square root of the average sum of the squares of the smoothed filter waveform over the input period. When you divide the root-mean-square (RMS) into the smoothed filter waveform, it scales the waveform in terms of standard deviations. When you start with alpha computed in terms of the input period & then multiply it by the variable deviations, it scales alpha both in terms of the input & current volatility 

*In terms of the current volatility *
The scaling goes in the right direction at the right time. When the price deviation of the oscillator is large, the root-mean-square (RMS) is large, & consequently alpha is large. When alpha is large, there is "minimal" EMA filtering & the filter quickly adapts to the current prices. Conversely, when the price deviation of the oscillator is small, the root-mean-square (RMS) is small & alpha is small. When alpha is "small", the EMA produces heavy smoothing.

*Reference*
Even if the brilliance of Ehlers DSMA makes little sense at first - this post will serve as a repository of information of one of his better ideas.

Skate.


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## Skate (19 November 2020)

*Back to the basics*
Technical indicators are mathematical formulas that use "price, volume & time" to help traders determine the probable direction of the price the security may take in the future. It's the relationship between the three that brings it all together. There are literally hundreds of ways to trade the markets, some much better than others - trend following is my all-time favourite. In saying this, you need to find an approach that you can borrow, test & then adapt to suit your own circumstances. I've spent countless hours in the early years backtesting data, refining the information & developing my own strategies.

*Manage your Money, Risk & Trading Psychology*
How? - By first having a deep understanding of "Money, Risk & Trading Psychology" - it pays to research all three. Also, you need to be aware of your emotional intelligence & how it can directly affect your trading & trading outcome. Once you have a clear understanding you can set about developing a trading strategy - going onto "fine-tuning" your entries & exits. In doing so it will give you the confidence in trading your own structured trading system.

*Next - develop your "Trading Plan"*
Your "Trading Plan" trumps your trading strategy. Your trading plan should encompass all your trading rules, "non-negotiable" rules that should be observed religiously. With any style of trading "technical analysis" is at the heart of all my trading decisions. Technical analysis is an important skill to master & doing so helps avoid all the drama so many other traders go through. To expand your potential you need to master these skills to trade more effectively. Miss one step & you could miss out on profits or worse - increase your losses.

*Become a good decision maker *
As with life, trading is all about making a series of decisions (unemotional decisions) & by developing a lock-tight system your trading will run more efficiently & effectively - our ultimate desire. Another skill is to learn how to stay motivated - how to create a set of goals. Keeping a positive attitude sets you on a path of obtaining a high-level of motivation. Developing self-discipline, plus self-motivation is essential in this game.

*Self-praise is no recommendation *
But in this case, it's true. With a mixture of educational posts & the shared experience of other members makes the "Dump it here" thread the perfect thread for "beginners" when they first start out on their perilous trading journey. This thread is an ideal first experience into the "world of trading" - outlining the dangers associated with trading. With the additional posts from senior members, contains many engaging valuable lessons that shouldn't be overlooked. Sharing sound knowledge is the DNA of this thread.

Skate.


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## Skate (19 November 2020)

Skate.


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## Newt (19 November 2020)

For those wanting to research and play bit more with Ehler's DSMA, here are a few more links/resources to read and try.  I'd also suggest setting up the DSMA period as a Param input field for Amibroker users - very quickly gives you a feel on price graphs how DSMA responds to short and long period values against  other options such as exponential moving average, or plain moving average.  





__





						TRADERS’ TIPS - JULY 2108
					

Traders' Tips, a collection of code provided by developers to help implement trading ideas and techniques presented in the pages of Technical Analysis of Stocks & Commodities Magazine.



					traders.com
				






			https://www.mesasoftware.com/papers/DEVIATION%20SCALED%20MOVING%20AVERAGE.pdf
		




			https://forum.amibroker.com/t/deviation-squared-moving-average-dsma-troubleshooting/16334


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## ducati916 (20 November 2020)

Skate said:


> *Back to the basics*
> Technical indicators are mathematical formulas that use "price, volume & time" to help traders determine the probable direction of the price the security may take in the future. It's the relationship between the three that brings it all together. There are literally hundreds of ways to trade the markets, some much better than others - trend following is my all-time favourite. In saying this, you need to find an approach that you can borrow, test & then adapt to suit your own circumstances. I've spent countless hours in the early years backtesting data, refining the information & developing my own strategies.
> 
> Skate.





Moving past the basics.

1. Entries are as important as exits. 
2. To have great entries/exits, traders must be able to identify turning points ahead of lagging indicators: proactive not reactive.
3. Turning points have different speeds.
4. The speed is correlated to the unexpectedness of the news, the pre-existing direction of trend and the general level of vol. that has prevailed.
5. Is the turning point a counter-trend in a continuing trend, or the end of the trend. You need to know, particularly if you are a long only trader.

To achieve the above necessitates going past the superficial data of the market that you are trading and finding the (a) internal dynamics of your particular market, (b) inter-market correlations that lead your market, (c) incorporating a macro-viewpoint that is consistent with your market, not for a timing of entry/exits, but the start and end of macro-trends, because (d) your mindset (bias) will trip you up if you are a bull in a new bear market and vice versa.

jog on
duc


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## Skate (20 November 2020)

Newt said:


> *For those wanting to research and play a bit more with Ehler's DSMA, here are a few more resources to read and try*.





Skate said:


> Ehlers basic idea is valid but with most good ideas *the parameter setting has been overused - thus negated.*



@Newt has posted some good resources to read more about Ehlers DSMA indicator - looking at new trading ideas from a few different angles is always valuable.

*DSMA*
The idea & the mathematics behind "Ehlers DSMA" is not new. Ehlers has a habit of twisting his earlier ideas & making them new again. Also, Ehlers DSMA indicator modifies the alpha term of an "EMA" whereas Tushar Chande, uses the RSI to adjust the alpha term to achieve similar results. Perry Kaufman, on the other hand, uses his "Effectiveness Ratio" to adjust the alpha term - meaning they all achieve similar outcomes using different indicators & methods. Why mention this?* - *For others to understand the logic behind the idea which is sound, solid & effective (to a point - I might stress)

*The DSMA Strategy versus the "Panda Strategy"*
What's the difference other than the name? Well, the DSMA indicator is the heart of the "DSMA Strategy" using the raw signals from Ehler's maths. The results aren't too "shabby" if you have the stomach to trade those signals. The Panda Strategy uses precisely the same engine to drive the strategy with the exception of additional "filters" & a few different parameter settings as-well-as @ducati916 volatility exit. 

*Mathematical gymnastics*
The settings & parameters used by Ehler, in my opinion, has been overused & the edge "negated". Applying a little more mathematical gymnastics to Ehler's original idea turns the DSMA into a more stable & easier to trade strategy. I've called the new & improved version - the "Panda Strategy" for distinction.

*The Backtest results *
The backtest results between the "DSMA Strategy" & the "Panda Strategy" displays the differences (circled in red) a few improvements made. The proof is in the pudding.




*Summary*
I'm just saying, don't get carried away with an idea that has merits - just do your homework.

Skate.


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## Skate (20 November 2020)

ducati916 said:


> *Traders must be able to identify turning points ahead of lagging indicators*: proactive, not reactive. Turning points have different speeds. The speed is correlated to the unexpectedness of the news, the pre-existing direction of the trend and the general level of vol. that has prevailed *& is the turning point a counter-trend in a continuing trend or the end of the trend*.




@ducati916 raises some interesting points that lead to this post. I was reminded by a "PM" today of the unique features of the CAM Strategy that goes hand-in-glove with Duc post "moving past the basics". Developing a single trading technique & using it all the time can sometimes be unhelpful dealing with varying market conditions such as the past few months.

*Trading pullbacks in trending stocks*
One of the tools @peter2 uses to his advantage is trading pullbacks in trending stocks. Reading his thread gives you an idea of how & when he uses such a method. Since the market does not trend all the time, you need a way to determine when it’s appropriate to trade pullbacks. Backtesting can yield insight into when to use this approach & determine what types of pullbacks & filters are most profitable. 

*High volume bullish bar*
Peter recently gave an example of a pattern he likes - a high volume bullish bar (HVBB) & how using that pattern in isolation can affect your trading results saying: _"I know that many short term traders want to jump right in immediately. It might work out or it may not. Jumping in without a plan or an acceptable RR is gambling"_ 

*Moreover*
In that same vein of trading patterns (pullbacks) - In what market conditions should the pullback technique be used? 
Knowing the answers to both examples, trading (HVBB) & (PB) can make you a more effective trader & lessen your risk.

Skate.


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## peter2 (20 November 2020)

Skate said:


> *Moreover*
> In that same vein of trading patterns (pullbacks) - In what market conditions should the pullback technique be used?
> Knowing the answers to both examples, trading (HVBB) & (PB) can make you a more effective trader & lessen your risk.




I'll respond immediately.  I trade the 1st and 2nd *pull-backs* when I've missed the start of the trend. I prefer to trade pull-backs when the market is going sideways to slightly up. In these conditions the W% of *break-outs* drops off and this becomes very frustrating. I reduce the angst and trade more pull-backs than break-outs.

In strong bull markets we can buy almost anything and make a profit. 

My third group of trades is the *reversal*. I'm reminded of @rnr 's suggestion that reversals should only be traded when the market is starting to reverse after a significant dip/fall. I agree with this idea.


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## ducati916 (20 November 2020)

Skate said:


> *Trading pullbacks in trending stocks*
> One of the tools @peter2 uses to his advantage is trading pullbacks in trending stocks. Reading his thread gives you an idea of how & when he uses such a method. Since the market does not trend all the time, you need a way to determine when it’s appropriate to trade pullbacks. Backtesting can yield insight into when to use this approach & determine what types of pullbacks & filters are most profitable.
> 
> Skate.




Successful trading is informational advantage. Whatever your market, your edge lies in your informational advantage. What is an informational advantage? It is anything that gets you into the trade and out of the trade (far) ahead of your competition.

Some examples:
(a) inside information;
(b) speed of trade execution (front running measured in mili-mili-seconds);
(c) Market Makers (trade flow information and power to set the price);
(d) Quant AI algos;

Typically what we have:

(e) Pattern recognition

The better hidden the pattern, the higher the probability that it will work out as obvious patterns are targets for the above traders looking to leverage their informational advantage. In this day and age that probably means if you are a systems trader that your 'pattern' has to be something a little different. If it is not, it does not mean that it is non-profitable, but likely it will have lower numbers and rely to a far greater extent on really disciplined execution.

The two areas of disguise are, unsurprisingly, entries and exits. The stuff in the middle is pretty obvious even to complete novices. Strong entries have a further advantage to confer, they generally protect you from being shaken out of the trade prematurely, before it really takes off. An example: a sharp trend lower with a sharp reversal higher into some chop. Prices move higher or lower? In other words, a consolidation forming support or formation of a short (long) term top?

Some patterns:

(i) chart pattern;
(ii) chart pattern + technical analysis applied to chart pattern;
(iii) inter-market patterns (charts);
(iv) inter-market charts + applied technical analysis;

So all of the above will have +/- similar % of working out, given an unknown market trend. Add a market trend that is aligned with your pattern traded, that is recognised as such, that is an additional informational advantage. Go one step further, knowing the secular trend and the counter-cyclical trend. Informational advantage. Knowing that the secular trend is going to end? Informational advantage. All of those informational advantages are available to us.

These various patterns constitute a significant number of moving parts (no-one said getting rich was easy) to observe, interpret and integrate into a trading system correctly.

jog on
duc


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## Skate (20 November 2020)

Skate.


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## Skate (20 November 2020)

Skate.


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## Skate (20 November 2020)

Warr87 said:


> *I presume everyone did well this week*. All my systems are up.



I'm sure everyone is rolling in it this week.


peter2 said:


> *In strong bull markets, we can buy almost anything and make a profit.*



*FYI *
This month has been my best month on record & there is one more week to go (So-Far-So-Good)

Skate.


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## Warr87 (20 November 2020)

Skate said:


> View attachment 114998
> 
> View attachment 114999
> 
> ...




My HappyCat is at +4.4%. Not a bad return! Obviously this strong upturn can't last and we will all lose some of these profits. Still interesting to see 2 lost positions compared to yours results in such large differences. But even if I had chased price, I would have just bought at a higher price and still without the profit margin you have (never chase). I hope other live followers are enjoying the returns as well!


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## Warr87 (20 November 2020)

Skate said:


> I'm sure everyone is rolling in it this week.
> 
> *FYI *
> This month has been my best month on record & there is one more week to go (So-Far-So-Good)
> ...




Must be satisfying!

I've been estatic to see my profits go up. I am quickly reminded that any such good run will come to an end and as trend traders we will give up part of the profits while we let it run. But until then, enjoy the ride.


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## Skate (22 November 2020)

peter2 said:


> Thanks for sharing this project on "pocket pivots". I was interested in how you were going to code the pocket pivot (PP) The PP seems to be a better entry into a trend than the regular break-out of horizontal resistance. The main benefit is the smaller initial risk when compared to the standard BO-HR. Smaller initial risk allows for larger size winners.




*Have you ever wondered why some strategies perform better than others?*
Most trend traders are having a field day at the moment because the price is being pushed higher. More traders are entering back into the markets with the "fear of missing out". Institutional investors are prepared to take on more risk at this stage pushing prices higher as well.

*A Strategy going gangbuster at the moment (The Pocket Pivot Strategy)*
Peter has eluded "that there are many different buy points" that meet the definition of a pocket pivot & some perform better than others. While researching "Pocket Pivots" it was soon apparent that there are multiple ways to calculate it. I was curious to find which calculation worked better (better is very subjective) & frankly the methods used to establish a "Pocket Pivot" is just pushing around the edges, meaning the outcome didn't really change that much. The idea behind a pocket pivot is buying in-the-pocket. "Buying in the pocket" is easier said than done & difficult to code. Adding a strength indicator sharpens entries, thereby reducing false signals. In simple terms, a "Pocket Pivot" is a price/volume pattern that reveals larger moves.

*Pocket Pivots are featured in the book - "Trade Like an O'Neil Disciple: How We Made Over 18,000% in the Stock Market"*
Many times in the book they refer to a base formation & strength of the position within a consolidation period. I've found it very hard to code all the parameters explained in the book - it's near impossible with so many variables. Having a feel for the markets is not a parameter that can be coded & this "feel" is the very reason O'Neil was a freak trader.

*How my "Pocket Pivot Strategy" backtested over two time periods*
I have included the first backtest period between "1st January to 20th November 2020" if others were wondering if the strategy could cope with the COVID-19 flash crash. The second backtest period is from "1st July 2020 to 20th November 2020" that clearly shows the "Pocket Pivot Strategy" performs well in trending markets. I've made posts about "Pocket Pivot" previously saving me time to explain it all over again - search for my previous posts if interested.

*Disclaimer *
I didn't trade the "Pocket Pivot Strategy" between 1st January to 30th June 2020 - if others were wondering.




*Summary*
For those looking for an edge - revisiting "Pocket Pivots" might go some way to achieve it.

Skate.


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## Newt (22 November 2020)

Impressive numbers Skate.  The programming up of O'Neill pivot points is definitely trcky with subjective definitiions required.  

Presumably your design decisions here were primarly around the entry "squeeze and pop" out of the pivot (entry), then the "other legs of the table" include qualifying entry parameters (including position scoring), position sizing, and volatility trailing exit logic?


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## Newt (22 November 2020)

Didn't write that well - when you're playing with other strategy ideas, do you usually just change the entry and migrate over most of your existing Position Scoring and Exit code, or find you need to heavily modify all of it?

(Rarely do I play with other ideas and end up with such promising numbers!)


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## Skate (22 November 2020)

Newt said:


> Didn't write that well - when you're playing with other strategy ideas, *do you usually just change the entry and migrate over most of your existing Position Scoring and Exit code*, or find you need to heavily modify all of it? (*Rarely do I play with other ideas and end up with such promising numbers!*)




@Newt I've found each new strategy needs to be written separately, basically from the ground up. Parameters & settings have to be optimised as well. When it comes to "PositionScore" any trend following rating will do. Over the years I've found just dropping new entry conditions into a template never seems to works out, well not for me at least (been there done that). In saying this - using a strength indicator sorts the wheat from the chaff. 

*The "exit strategy" *
The "Pocket Pivot Strategy" is unique as it has three exits. (1) a dedicated Pivot Exit (2) a Volatility Exit & (3) a two-stage Trailing Stop. 

*A momentum exit is not suited at all *
In the book - "Trade Like an O'Neil Disciple: How We Made Over 18,000% in the Stock Market" they use a "Take Profit" exit - AFAIC, a Take Profit exit certainly didn't work for me. Using a momentum exit stifles performance & not suggested.

*What I can tell you *
The "Pocket Pivot Strategy" loves to have free rein as the "Pocket Pivot " code does all the work. Whether you trade the "Pocket Pivot Strategy" using a "Weekly or Daily" periodicity really doesn't matter - surprisingly the results are very similar. I should also point out the parameter settings are slightly different between the periodicity selected (as you would have guessed). My preference is to trade the strategy as a weekly system. Also, as a hint, don't overuse filters as my research has found the "Pocket Povit Strategy" doesn't like to be restrained & certainly hates being curtailed by an Index Filter. 

*The reason for my post today?*
At times I like to nudge others so they don't forget about some of the strategies I have written about previously. I try to post about strategies or ideas that have the potential to make money, pure & simple.

Skate.


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## Newt (22 November 2020)

Very helpful and thought provoking.  
Thanks Skate.


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## ducati916 (23 November 2020)

So my question is for the mechanical chaps:

Here we have your current market:




Your seasonality:




And a longer term chart of your market:




An example of one of Mr Skate's systems:




So my question:

You have a back test of period X (let's say 2016 - current). Your system is profitable on backtesting. Do you then back test discrete periods: say Dec. 2017 to March 2018, then Dec. 2017 to Jan. 2018, Jan 2018 to March 2018, etc, to find the change in within the aggregate? The purpose being to identify when your system is indicating a deviation away from the expected average of periods? If not why not?

Your market as against the US




Have you chaps tested whether US breakdowns correlate to your market: prima facie, it looks to be the case.

Intra-day, Friday, your market:




Implications for today?


jog on
duc


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## qldfrog (23 November 2020)

ducati916 said:


> So my question is for the mechanical chaps:
> 
> Here we have your current market:
> 
> ...



For what it is worth and from a forever apprentice and not a Master,
what I do:
part one:
seasonality: no, not taken into account at all
But discrete check: definitively;
I do not apply a mathematical formula for a period definition but I created scripts to backtest on a set of finite periods
And these are expected to cover recent events and various market  moves:
Recent only as in my opinion, while history does kind of repeat, backtesting on markets more than 10y old is useless: apples and orange;
I mechanically test against different annual starts:
01/01 2010 to now
then 01/01/2011 to now
then etc;
I also test on the last 10 calendar years 01/01 to 31/12 of each year
This is the basic dumb stuff
then a set of manually chosen periods including crash, boom , slow or so so markets on short or long periods:


2/07/2010..29/06/20127/01/2011..30/12/20117/01/2005..15/11/20193/01/2014..27/12/20193/01/2014..28/02/20206/07/2018..28/12/20185/07/2019..27/12/20195/01/2018..28/12/20184/01/2019..27/12/20193/01/2020..9/04/20203/03/2017..28/02/20201/03/2019..21/02/20209/08/2019..20/03/2020
I found this very interesting when comparing results and in my opinion a must have.
Just a press of a button and AB spew up the reports that I can then compare between systems or after a small change..then up to me for final  choice.
That assumes backtests are representative of actual trades which they do ...
until i hit issues like my ZL laggard being at 10X worse than backtest of same period, but this definitively means an error somewhere in my code.
note: The ZL extra is being sold and closed today until I can analyse the issue, if a system was not able to win last week, it never will....


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## qldfrog (23 November 2020)

important note: based on how long it takes for your system to get fully invested, some may ramp up on 3 to 6 months, it is important to either extend the minimal period, and ensure a ramp-up period to properly analyse behaviour:
no point starting on 01/02/2019 to check crash behaviour if your system is still 90% cash when the crash hits..common sense.


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## Skate (23 November 2020)

ducati916 said:


> *So my question: *You have a back test of period X (let's say 2016 - current). Your system is profitable on backtesting. Do you then back test discrete periods: say Dec. 2017 to March 2018, then Dec. 2017 to Jan. 2018, Jan 2018 to March 2018, etc, to find the change in within the aggregate? The purpose being to identify when your system is indicating a deviation away from the expected average of periods? If not why not?




@ducati916 you have raised some interesting points. Let me give you an overview of what I used back in my strategy development days. There are many ways of developing a system that eventually gives you the confidence to trade a particular strategy. Confidence is the keyword as no matter how fastidious you are in the development phase, nothing is certain trading it.

*Back in the old days*
I'm referring to (2013) my early days when I was trying to figure all this stuff out, I stumbled on the ability to "Backtest" my ideas. The more you learn - the more you understand the importance of having statistical data to compare results. I soon realised I could use that same data & run a "Monte Carlo Simulations". Monte Carlo Simulations adds randomness to the strategy by running several thousand simulations using different data points to compute the average of the results. 

*Microsoft Excel*
Originally, I used Microsoft Excel to visualise this data from the Monte Carlo Simulations creating a histogram showing the minimum & maximum return. With that same data, I was able to create a "scatter plot" to show the average annual returns versus the maximum drawdowns. But from AmiBroker version 5.94 onwards, a Monte Carlo simulator is built-in to the backtest, saving you all this extra work.

*The general idea behind Monte Carlo analysis*
Monte Carlo Analysis is a process of validating the robustness of the Trading Strategy by performing multiple trial runs using a combination of positions from your trading system (backtested data). It's worthy to note "seasonality" automatically becomes part of the equation. You can use these statistics to analyse the characteristics of your trading system - simulating a set of Equity curves using random numbers from the backtest data. These large sets of simulations are then used to find the likely probability of unseen risks in your trading the strategy. The Monte Carlo Simulations "out-of-sample" (OOS) results are the true measure of the strategy. Why? because the strategy has been developed using "in-sample" data & is already known.

More to come...

Skate.


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## Skate (23 November 2020)

*Monte Carlo Simulation*
This process allows you to randomly select any number of Monte Carlo runs. I run either 100 or 1,000 runs all depending on how quickly I want to view the results. The more runs the more reflective the results will be. I prefer to use 1,000 runs which means a 1,000 different trades from the original trade list. 1,000 runs are used to produce new random trades thus it's unlikely to pick the original "PostionScored" trades.

*1,000 runs will give a random perspective of the robustness of your strategy*
Understanding the robustness of your trading system helps identify any problem with your trading strategy. It's worthy to understand "Monte Carlo" analysis will not solve any problems. To put it in simple terms "Monte Carlo Simulation" is just a validation process - a tool to help you create a better trading system.

*Interpreting the results*
The results of the Monte Carlo simulations are displayed in the "Monte Carlo" tab of the Backtest report. At the top of the backtest results, the Monte Carlo tab displays a table that gives values of a few key statistics derived from the cumulative distribution charts.

*Here are the results from my actual trading strategies*
I have highlighted the areas of importance - at a quick glance, it tells me the story I want to know in a heartbeat. The two have been uploaded for you to compare. I should say in advance both are profitable strategies.




*What does the chart mean?*
The first column shows the percentile level. The values along the line is designated by the heading that is easy to read & understand. Scan your eyes to the 10th percentile of the LH chart (Pocket Povit results) - this tells us that 10% of the time the annual profit would equal (+25.32%) or lower. So we can say that there is about a 10% chance that our system would make money. The RH chart (the KingFisher Strategy) - this tells us that 10% of the time the annual profit would equal to or less than (-8.2%) drawdown. It is important to note that the table above is generated using the analysis settings (Monte Carlo) tab with - "Use negative numbers for drawdown" turned on.

*Turning on "Use negative numbers for Drawdown" option*
Means, all drawdown numbers will become negative making more sense that is easier to relate to.




*1% percentile *
Moreover, the 1% percentile value of the "Pocket Povit" Strategy Maximum Drawdown is (-19.16%) - This percentile tells you that in 1% of cases you would experience drawdowns equal or worse (more negative) than (-19.16%) whereas the "KingFisher" Strategy Maximum Drawdown is (-28.59%) - This percentile tells you that in 1% of cases you could experience drawdowns worse than (-28.59%) directly comparing the level of risk being taken on. The "1% percentile value" of (-19.16% & -28.59%) respectively tells you that in 1% of cases you would experience drawdowns more negative than those listed. When comparing the two strategies the 10% percentile & below are "pessimistic" scenarios & hardly the norm so don't get too hung up on those results listed above (but they are handy to know).

*99% percentile *
The 99% percentile row shows that the drawdowns could be worse than the specified amount, 99% percentile value of (-2.92% & -3.70%) respectively means that in 99% of cases you will see drawdowns worse than (-2.92% & -3.70%) respectively. The table above is read "row-wise" & (small percentiles) refer to "pessimistic" scenarios or the worst case to put it into perspective.


ducati916 said:


> The purpose being to identify when your system is indicating a deviation away from the expected average of periods? If not why not?



*Tools at our disposal*
This is a long-winded way of assuring @ducati916 that systemic traders have the tools to do the "what-if" & "worst-case" scenarios - having a full understanding of the risk involved trading each strategy. I'm unable to speak for others but I certainly make the best use of these tools.

Skate.


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## elbee (23 November 2020)

Skate said:


> 1,000 runs are used to produce new random trades thus it's unlikely to pick the original "PostionScored" trades.



The Amibroker monte carlo process does not use any trades that were not included in the "PositionScored" backtest.
The process  randomly picks trades from the original backtest trade list to produce a new random set of trades.  This new random set contains the same number of trades, they are ordered randomly and some original trades may be skipped and some used more than once. 
Refer to the Amibroker documentation https://www.amibroker.com/guide/h_montecarlo.html


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## Skate (23 November 2020)

elbee said:


> The Amibroker monte carlo process does not use any trades that were not included in the "PositionScored" backtest.
> The process  randomly picks trades from the original backtest trade list to produce a new random set of trades.  This new random set contains the same number of trades, they are ordered randomly and some original trades may be skipped and some used more than once.
> Refer to the Amibroker documentation https://www.amibroker.com/guide/h_montecarlo.html




@elbee contributions to the "Dump it here" from long term members are always appreciated & warmly welcomed.

Skate.


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## WilsonFisk (23 November 2020)

elbee said:


> The Amibroker monte carlo process does not use any trades that were not included in the "PositionScored" backtest.
> The process  randomly picks trades from the original backtest trade list to produce a new random set of trades.  This new random set contains the same number of trades, they are ordered randomly and some original trades may be skipped and some used more than once.
> Refer to the Amibroker documentation https://www.amibroker.com/guide/h_montecarlo.html




I have found making the "PositionScore" random you no longer have a set trade list, and it does indeed become more random.  It essentially removes your position score as a source of Alpha from the strategy.  

Can be useful to determine whether your entry and exit conditions are robust vs the PositionScore filtering.  



*How about Monte Carlo randomization instead of bootstrap test?*
_
The Monte Carlo randomization is different than bootstrap test because it does not use actual (realized) trade list from the backtest but it attempts to use "all individual returns whenever they are realized or hyphotetical". For example when trading system is generating way more signals than we can actually trade due to limited buying power, then we have to choose which trades we would take and which we would skip. Normally this selection is a part of trading system and in AmiBroker PositionScore variable tells the backtester which positions are preferred and should be traded. In randomization test, instead of using some analytic/deterministic PositionScore, you use random one. If there are more signals to open positions than we could take, this process would lead to randomized trade picks. Now using Optimize() function and random PositionScore we can run thousands of such random picks to produce Monte Carlo randomization test:

step = Optimize( "step", 1, 1, 1000, 1 ); // 1000 backtests
// with random trade picks from the broad universe (make sure you run it on large watch lists)
*PositionScore* = mtRandom();

Randomization test has one big disadvantage: can not be used in many cases. When system does not produce enough signals each bar there is not much (if any) to choose from. Also, more importantly, MC randomization makes false assumption that all "trading opportunities" (signals) are equal. In many cases they are not. Pretty often our trading system has specific, deterministic way to pick trades from many oppotunities by some sort of ranking/scoring. When system is using a score (rank) as a core component of the system (rotational systems do that) - if you replace analytic score of with random number you are just testing white noise not the system._


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## stasisbr (23 November 2020)

Skate said:


> View attachment 114677
> 
> 
> *Adding - Volatility Upper & Lower Bands*
> ...





Some gold here and I hope more people were paying attention to this along with @ducati916 often referencing a noticeable relationship between the ASX and the VIX. 

On my system there's a significant difference in testing on a modified WTT system when using the VIX as part of the index filter.

Stasis.


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## Skate (23 November 2020)

Skate.


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## Skate (23 November 2020)

Skate.


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## Lone Wolf (23 November 2020)

WilsonFisk said:


> I have found making the "PositionScore" random you no longer have a set trade list, and it does indeed become more random.  It essentially removes your position score as a source of Alpha from the strategy.
> 
> Can be useful to determine whether your entry and exit conditions are robust vs the PositionScore filtering.




If you want to keep the position score in your code while also getting an idea of how robust your system is, you can add an element of randomness into whether you take or skip each signal.

step = Optimize( "step", 1, 1, 1000, 1 );
Buy = buyCond AND Random() >= 0.20;

Random() generates a value between 0 and 1. So in the above, you have a 1 in 5 chance of skipping the trade. So all trades taken are still valid since they are still filtered by your position score, but you now have variance in each run.


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## Newt (23 November 2020)

Lone Wolf said:


> If you want to keep the position score in your code while also getting an idea of how robust your system is, you can add an element of randomness into whether you take or skip each signal.
> 
> step = Optimize( "step", 1, 1, 1000, 1 );
> Buy = buyCond AND Random() >= 0.20;
> ...




Strange, but I was pondering if it might be possible to manually introduce a small portion of randomness into Monte Carlo and backtests runs earlier today, and now Lone Wolf you've nicely shown exactly how to do it - thank you!


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## qldfrog (24 November 2020)

Newt said:


> Strange, but I was pondering if it might be possible to manually introduce a small portion of randomness into Monte Carlo and backtests runs earlier today, and now Lone Wolf you've nicely shown exactly how to do it - thank you!



This highlight one of the flaw of AB MC.
If your system is very selective, indeed, hardly any difference, so @Lone Wolf  option is great.
Have to remember removing it from final code too...😊


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## Skate (24 November 2020)

Skate.


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## MovingAverage (24 November 2020)

Lone Wolf said:


> If you want to keep the position score in your code while also getting an idea of how robust your system is, you can add an element of randomness into whether you take or skip each signal.
> 
> step = Optimize( "step", 1, 1, 1000, 1 );
> Buy = buyCond AND Random() >= 0.20;
> ...




That is my prefered way of doing monte in AB. Simply export the optimization results into Excel and you can do some great visual/charting analysis of your systems performance. This is much better than doing a single run. Although I'd suggest you push the 1000 value to much higher to get a better perspective. Only thing I'd add is that you're better to use mtRandom() over the regular Random() function. Be very careful about selecting the random comparison value (you use 0.2), choose the wrong value and the number of trades you take will have an adverse impact on your system.


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## Lone Wolf (24 November 2020)

MovingAverage said:


> That is my prefered way of doing monte in AB. Simply export the optimization results into Excel and you can do some great visual/charting analysis of your systems performance. This is much better than doing a single run. Although I'd suggest you push the 1000 value to much higher to get a better perspective. Only thing I'd add is that you're better to use mtRandom() over the regular Random() function. Be very careful about selecting the random comparison value (you use 0.2), choose the wrong value and the number of trades you take will have an adverse impact on your system.




Good point on the random value and the number of open trades. I can't weigh in on what value to use as I haven't used it in years. My current system doesn't use position score so I just use the "position score = mtRandom()" Method that @WilsonFisk mentioned earlier.

You are also correct about mtRandom(). Random() would make an array, which you'd then assign to a variable and check the value of that variable on each bar as one of your buy conditions. What I actually did was create and check a random number at time of assigning a value to Buy, no array required.

There is an interesting article on the Alvarez Quant Trading website about using monte carlo in Amibroker that talks about adding a small element of randomness to your trade signals. I haven't tried it, but it might be good if you want to check if you've curve fit your system.


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## Skate (25 November 2020)

Skate.


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## peter2 (25 November 2020)

@Skate  Seems like you and I are the only ones looking at these extraordinary results from the PANDA. 

Starting capital is $100K, so +16K  is +16% in 13 or 14 days!  We're drooling and no-one else has commented.  
I think you've set the bar too high.


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## lindsayf (25 November 2020)

These results and others by Skate are terrific.
The speed with which you take an idea to the market in such a systematic way is really admirable.
And must be so rewarding when the market conditions help with such great starts.
Such nice work and so nicely documented.


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## Bazzi (25 November 2020)

peter2 said:


> @Skate  Seems like you and I are the only ones looking at these extraordinary results from the PANDA.
> 
> Starting capital is $100K, so +16K  is +16% in 13 or 14 days!  We're drooling and no-one else has commented.
> I think you've set the bar too high.




I will say it out loud,  I wish we can follow the PANDA similar to how Skate did with The Action Strategy. It is magnificent to have 16% in less than two weeks and I am drooling to follow it live to maybe make my money grow that way .. ... I love following a proven strategy which I believe I won't be able to achieve myself!


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## Rsthree (25 November 2020)

Bazzi said:


> I will say it out loud,  I wish we can follow the PANDA similar to how Skate did with The Action Strategy. It is magnificent to have 16% in less than two weeks and I am drooling to follow it live to maybe make my money grow that way .. ... I love following a proven strategy which I believe I won't be able to achieve myself!




I've been admiring the spritely Panda myself but the trade along Happy Cat is not too shabby either, only a couple of points behind, albeit over a 5 week period. Being a weekly strategy its probably a better return on level of effort required. But of course, skate is doing all the hard work.


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## Newt (25 November 2020)

Fascinated here too.  Following allowing with Happy Cat if proving very educational.   Think I've mentioned before - with "skin the game" I'm much more inclined to pay attention to entries, exits, buys/sells and can see Happy Cat is significantly diversified to how I normally (systematically) trade.  Along with the recently shared "Pocket Pivot" backtests, very thankful.  And still learning......probably forever......

Panda Daily certainly seems to be living up to its predecessor and surpassing.


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## soren_lorensen (25 November 2020)

Agree too, the results are terrific, is there more info on the various systems employed and the approaches used? It would be good build them and backtest them over different periods, i guess some details are contained in this thread but haven't found yet.

Vastly superior to my own systems.

Also very impressed how polite it is in here.


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## Skate (26 November 2020)

Skate.


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## Skate (27 November 2020)

*Elves pop up in the strangest places *
It won't be my fault if trading doesn't do well today. Bloody hell, he's trading one of my best strategies - so I guess I'll be safe. 

*Wally*
I hope he realises that NTO doesn't get sold until Monday. This little Elf (Wally) is somewhere new each day. I wake up each morning wondering where's Wally. (who started this tradition anyway?)




Skate.


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## rnr (27 November 2020)

Skate said:


> *Elves pop up in the strangest places *
> It won't be my fault if trading doesn't do well today. Bloody hell, he's trading one of my best strategies - so I guess I'll be safe.
> 
> *Wally*
> ...




Hi @Skate,

No need to worry about Wally as it is quite obvious he is a great pianist....with hands on keyboard and feet ready to depress the pedals as required......so why isn't there any music?

I've got it, plain as the nose on your face, yep it's the sheet of music in front of him that's confusing the issue! 

Cheers, Rob


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## Skate (27 November 2020)

Skate.


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## Skate (27 November 2020)

Skate.


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## Skate (28 November 2020)

*"Pocket Pivot"*
As mentioned previously - O'Neil used a "Pocket Pivot" strategy to find initial candidates that were filtered in a discretionary manner. Many times O'Neil refers to a "base formation & strength" of the position within a consolidation period. 

*The Pocket Pivot concept is an early entry buy point*
A Pocket Pivot Strategy can get into a position early before it breaks out of its base. The issue some feel uncomfortable with is that Pocket Pivot points are subjective & can have multiple “pocket pivot points” as positions move higher. There are also multiple ways to calculate the "Pocket Pivots" & as they say "all roads lead to Rome". I've decided on passing up the more elaborate ways to trade Pocket Pivots using minimal throttling allowing the buy condition to do all the heavy lifting. Other than using a strength indicator - the Pocket Pivot code does all the work.

*Price/volume footprints*
The pocket pivot is often described as a "footprint,". A footprint is a fancy way of saying a buyable "pivot point," or "pocket pivot buy point". Using a Pocket Pivot or pivot points is a simple way (a tool) of buying positions as they progress higher within uptrends, extended from a prior base or price consolidation. Knowing this fact, allows us to enter a position after strength has been confirmed. FYI, there are multiple pivot points to enter in a move. Meaning, there is plenty of pocket pivot buy points & it pays to remember they are not all the same – meaning a strength filter (IMHO) is required to sort the chaff from the wheat - entering from strength within the move.

*Something to watch out for* 
Pocket pivots that occur when a position takes a quick dip south & then goes on to make new highs, now that’s a handy footprint to watch out for.

Skate.


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## Skate (28 November 2020)

*Moreover*
A picture paints a thousand words. These are a few typical "Pocket Pivot Strategy" entries (no-frills entry at that). The charts below display "pivot points" entries. 






















Skate.


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## Skate (28 November 2020)

Skate.


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## Skate (28 November 2020)

*I've traded a "Pocket Pivot Strategy" with pleasing results (in the past)*
My latest version of the Pocket Pivot Strategy goes somewhat of alleviating the issues that have caused me grief in the past - "that I have previously posted about" saving me going over old ground.

*Shootout*
I consider the "HappyCat Strategy" to be one of my best strategies (if not the best) so I'll be using the HappyCat as the benchmark.

*The Pocket Pivot Strategy*
I've been paper trading my latest version of the "Pocket Pivot Strategy" to compare the results to the "HappyCat Strategy".

*Both strategies are performing "at-the-moment" *
Let's not forget - trading has been kind to all sorts of trading strategy at the moment - because of the roaring Aussie market.

*Same period & value*
By doing a direct comparison - I'll be comparing apples to apples - even though as strategies are "apples & oranges".

Skate.


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## Skate (28 November 2020)

*Versus *












*Summary*
To close to call with 7 & 8 weeks respectfully of trading.

*All I'm saying*
Using "pivot points" aka a "Pocket Pivot Strategy" is worthy of a second & third look. The idea behind the strategy is sound - boarding on being a "rock-solid" way of entering a move.

Skate.


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## peter2 (28 November 2020)

Your description of the pocket pivots matches what I look for to get into a trade before it breaks-out. I prefer to see above average volume but don't always get it. I prefer the bar to be larger than normal and trigger a range move, don't always get it. I like to see it trigger the ROC but don't always get it either. This variability is what makes this pattern tricky to identify. Wait a few bars and it's easy to see them in hindsight. Occasionally we'll see an obvious PP as it is also a high volume bullish break-out bar. 

If your code can identify them with an efficacy of >70% then you're going to do very well. I'll order one dose of your PP vaccine please.


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## Skate (28 November 2020)

peter2 said:


> *variability is what makes this pattern tricky to identify*




@peter2 you have nailed it again. Coding the "Pocket Pivot Strategy" has been a pain in my side for a few years. I've struggled no end.

My latest version of the "Pocket Pivot Strategy" was frustrating to code & by persisting I've ended up with another handy strategy. 

I'm currently pleased with its performance so far. (only time will tell) 

Skate.


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## Newt (28 November 2020)

Don't know how much your willing to share Skate, but as you know, PP's are close to my heart and very interested in your latest interpretation of this pattern.   O'Neill and his "disciples" were probably the first time I could quantitatively believe there was a reproducible, visible, edge that had the potential to be coded into Amibroker for systematic trading, then statically reviewed for validity.

My thoughts on elements you may or may not have chosen to incorporate (only talking entry conditions here), and regardless of daily/weekly etc:

a.  Price making (or close to making) new highs in X bars
b.  Volume > high bear bar volume (or possibly any bar's volume) in last X bars
c.  Volume > MA(V, X bars)
d.  Pricing risking above recent contraction (very tricky to specify - e.g. short term volatility below long term for X bars and ROC of price relatively flat
e.  Price starting to move higher strongly (e.g. bullish bar(s) where range > recent average size/volatility/SD)
f.  Above medium or long term MA of price
g.  ROC not down, but may be starting to rise (typically not in strong upward trend or entry is more a typical momentum play)
h.   Other more general criteria (e.g. Price, average market turnover)
i.  Not in a strong market downtrend (Index filter)
j.  Position Score for filtering trades


Clearly a decent position sizing (money management) and exit is required to augment a worthwhile entry, but speculating on entry logic for now.


p.s. While I'm giving you the 3rd degree, did this latest PP interest begin after Peter2's comments on the risk on entry for certain new Happy Cat positions?      (BSE I think - will have to check back)


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## Newt (28 November 2020)

Oh - didn't see you've posted all those graphs earlier today - will have to do some catching up....


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## peter2 (28 November 2020)

I may have posted this pdf before. It's freely available from the authors.


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## Newt (28 November 2020)

Have seen the summary before, but very timely - thanks for sharing Peter2.


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## Skate (29 November 2020)

peter2 said:


> The weekly *RCL* charts shows the "pocket pivot" that we're discussing in @Skate's thread.
> The blue arrows in my charts indicate the high volume bullish bars. Some of them are pocket pivots.







*A Pocket Pivot Strategy can get into a position early before it breaks out of its base *
The issue some feel uncomfortable with is that Pocket Pivot points are subjective & can have multiple “pocket pivot points” as positions move higher. There are also multiple ways to calculate the "Pocket Pivots"




Skate.


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## Skate (29 November 2020)

*Have you ever wondered why some strategies perform better than others?*
When trading two different strategies the entry & exit is determined by the buy & sell conditions.

*Trading is like having "stray sex"*
The more condoms you apply the safer you "perceive to be" but the "tradeoff" is reduced sensitivity.

*With trading*
The more levels of protection you add to your strategy the safer you "perceive to be" but the "tradeoff" is two-fold, more stock turns & reduced drawdowns at the cost of reduced profits at times.

*It's a struggle*
Trading is treading a fine line between accepting the risk versus the perceived rewards.

*Comparison*
Once the "Pocket Pivot Strategy" enters a position it will not execute an exit till either one of three conditions is met. The "KingFisher Strategy" on the other hand is a bit of a "scaredy-cat" exiting when any of the seven exit conditions are met.

*The "Pocket Pivot Strategy has three exits. *
(1) Pivot exit
(2) Volatility exit
(3) Two-stage Trailing exit

*Whereas my "KingFisher Strategy" exit strategy has the full suite *
(1) Stale Stop Default Position exit
(2) Stale Stop Period exit
(3) GTFO exit
(4) Stale ROC Negative exit
(5) Stale Stop Hit Timer exit
(6) Volatility exit 
(7) Two-stage Trailing Stop

*How the* *"KingFisher Strategy" handled (RCL)*
There is no-way the "KingFisher Strategy" will give any position extra wriggle room.

*

*

Skate.


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## Skate (29 November 2020)

*From another perspective*
The daily "Panda Strategy" has a habit of jumping on & off breakouts. Simple, crude but effective.




Skate.


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## julo (30 November 2020)

Skate said:


> *Please Note *(it's critical to the CAM Strategy)
> (a) The CAM system works well in a positive trend & generates a tremendous amount of Buy signals.
> (b) PositionScore is critical to the CAM strategy success.
> (c) In a BEAR market the CAM Strategy performance suffers with large drawdowns.
> ...






Skate said:


> *For better Results *
> Nonetheless, to maximize your odds, you can apply the strategy to a *preselected watchlist* of securities that demonstrate trendiness.




Skate,
I have a question about (e) "trending universe of stock": in my opinion it is the same as having an extra buy condition which confirms/detects trend. Or am I missing something?
Thanks!


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## Skate (30 November 2020)

julo said:


> Skate,
> I have a question about (e) "trending universe of stock": in my opinion *it is the same as having an extra buy condition* which confirms/detects trend. Or am I missing something?
> Thanks!




*The CAM Strategy*
@julo your logic is sound as "parameters & filters" formulate your buy condition. The idea behind the CAM Strategy is valid - but in its current form, it's lacking in a few departments. I trade a modified version of CAM strategy with a unique set of parameters with additional filters because the standard CAM rules are not enough to maximize the odds of profit. If you don't have any attachment to money - trade the CAM Strategy in a falling market & you will soon realise its shortcomings.

*The heart of the strategy*
camUP = ( ( adxRising == True ) AND( macdRising == True ) ); // Uptrend
camPB = ( ( adxRising == False ) AND( macdRising == False ) ); // Pullback
camDN = ( ( adxRising == True ) AND( macdRising == False ) ); // Downtrend
camCT = ( ( adxRising == False ) AND( macdRising == True ) ); // CounterTend

*NOTE *
The CAM Strategy works well only when the trend is positive at the individual level (at the stock level). The CAM Strategy doesn't rely on an Index Filter as it's not required when using "The heart of the strategy" conditions displayed above. Using the basic rules above to filter the trades is not enough to maximize the odds of profit, it's super critical to apply this trading system to stocks that clearly demonstrates trendiness.

*Google search*
If you do a google search there are a plethora of "Trend Direction Indicators" that you can add to the CAM Strategy. A rate-of-change (ROC) indicator is a momentum-based indicator that measures the percentage change in price. You can use the (ROC) as a trend indicator & it's easy to use. There are also much simpler ones to try.

*Look for my uploaded templates*
I have uploaded 12 steps to code a base system - search for (The procedure to code the WTT Strategy will be in 12 easy steps to follow) & read the comments as well. With trading & coding, nothing comes easy. It's a distinct benefit to possess a (PhD) -  PhD is an acronym for *P*ersistence, *H*ard-work & *D*etermination 

Skate.


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## Skate (30 November 2020)

*Tricks of the trade*
This is a neat trick that I use in my development phase to (a) check a strategy against a strategy (b) parameters against parameters & (c) quickly swap charts to visualise the buy & sell positions to gather how effective the changes have been. Using the same chart you can quickly switch between versions of the strategies & instantly see the changes. Switching is instantaneous & you are not swapping from one chart to another. (the signal change)

*How is it done?*
I code 4 different systems into one strategy or 4 different versions of the same strategy into one. I use the "Param" feature to simply switch ( strategy ) 
ChangeStrategy = Param( "Change Strategy Here", 1, 1, 4 );

*Example*
The first two switches are shown out of four. I code up to 4 but the amount isn't limited.







*Backtesting is made simpler & chart swapping is even easier*
@Trav. may elect to do a post - how to code using the (switch) feature - as the possibilities with Amibroker is limitless. 

Skate.


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## Warr87 (30 November 2020)

Skate said:


> *The CAM Strategy*
> @julo your logic is sound as "parameters & filters" formulate your buy condition. The idea behind the CAM Strategy is valid - but in its current form, it's lacking in a few departments. I trade a modified version of CAM strategy with a unique set of parameters with additional filters because the standard CAM rules are not enough to maximize the odds of profit. If you don't have any attachment to money - trade the CAM Strategy in a falling market & you will soon realise its shortcomings.
> 
> *The heart of the strategy*
> ...




my current modified paper trading of the CAM strat is trading either the PB or UP (I removed the CT entry), using a shorter length of ADX for direction confirmation, and using a ROC momentum ranking. The ranking certainly adds to the effectiveness of the strat.

From 1/1/2020 to Today, 30/11/2020 (Daily)


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## Skate (30 November 2020)

Skate.


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## Skate (30 November 2020)

Skate.


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## Skate (1 December 2020)

Skate.


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## Skate (2 December 2020)

Warr87 said:


> *my current modified *paper trading of the *CAM strat is trading either the PB or UP (I removed the CT entry)*, using a shorter length of ADX for direction confirmation, and using a ROC momentum ranking. The ranking certainly adds to the effectiveness of the strat.




*There is no reason to re-invent the wheel*
I often hear that markets have changed & new strategies are needed for the new game. Well, the markets have changed but the underlying fundamental rules for success don’t seem to. For all the advancements in technology, the market is still driven by the same two opposing forces, fear and greed. (IMHO) There is nothing new when it comes to trading & some of the old ideas are still relevant no matter how old they are. Changing a good strategy as Warr has done - is half the fun. A strategy that you feel comfortable with gives you the confidence to trade it.

Skate.


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## Skate (2 December 2020)

Newt said:


> trading will often not be "easy". How often do we hear people want to become "consistently profitable traders", without defining what they actually means. What timeframe, what DD, what psychological pain, etc. Long term, there is potential for it to be very financially rewarding. There is also a strong theme that you should improve yourself as a person as well as a trader if you embrace continuous improvement, never assuming you "know it all".




*Experience as a trader - takes time*
You could read hundreds of books, which is exhausting & mentally draining by the way. Understanding what you have just read is another thing entirely. The “Dump it here” thread has become lengthy but it’s what I’ve found important & beneficial to me as a trader.

Skate.


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## Skate (2 December 2020)

peter2 said:


> *The point:* Trading profitably is a high performance activity and at the elite level it's predominantly psychological. We know that two people trading the same system can get very different results. The difference is due to the mindsets of the traders. It's been a difficult year for many of us, myself included.




*Trading this Financial year*
The "virus" has affected so many lives as well as the markets. The COVID-19 flash crash came so swiftly most would not have experienced trading like it. The drop in my portfolio was horrendous. Giving back open profits wasn’t fun. I was luckier than most as I was in a position of holding large profits. The loss at the time "hurt" nevertheless. After trading for 5 years I realise trading is not always peaches & cream, I've also come to realise that “Persistence, Hard-work & Determination” (PhD) is a definite requirement in this game.

Skate.


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## Skate (2 December 2020)

Warr87 said:


> *Month 4.* Beginning of the 4th month. How time flies by. The system did ok last month. Overall I am happy. There is a marked improvement. *Stats are noticeable better than last month*. It may seem far fetched, but I am aiming for +20% return by the end of the 12months. I think this is doable (barring any new flash crash). *1.8% may not seem like a lot but the increasing win/loss ratio and profit factor mean its just a matter of time.*




*It’s not the stats that are important*
The takeaway was the positivity behind the stats. Being positive doesn't mean you have to be happy & upbeat all the time but have an understanding that there are better days ahead.

*Here is an insight*
Contrast & compare - Ladies don’t check out men, ladies check out ladies. Why? Because ladies like to contrast & compare. As communal animals we all contrast & compare at times – it’s a measure of how we are doing & as traders we are no different.

Skate.


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## frugal.rock (2 December 2020)

Skate said:


> Being positive doesn't mean you have to be happy & upbeat all the time but have an understanding that there are better days ahead.



Are there better days ahead?
Or is that light at the end of the tunnel really an oncoming freight train?
There may be better days ahead, or these may be the better days.
Know where the alcoves are and maintain access, especially when looking at the "light at the end of the tunnel".


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## Skate (2 December 2020)

frugal.rock said:


> *Are there better days ahead?*



@frugal.rock (IMHO) if we trade wisely I "believe" we haven't seen anything yet.

*Opinions are like ar$eholes (everyone has one)*
In my opinion, the really good days are still ahead of us. Ask the same question to 10 different traders & I'm sure each answer will be conflicting with the other. Just remember trading is a marathon & markets are constantly fluctuating. Knowing when to get in & more importantly where to get out is the key to trading profitably. I've been trading for 5 years & the more I learn the better I perform. Let me post up my trading results & explain why averaging is so important in keeping you focused & motivated.

*Contrast & compare *
Long term averages are essential when looking at your overall returns. Good bookkeeping & record keeping is important when it comes to trading. Why? - because how we feel our trading is doing is irrelevant. At times we will make decisions on how we are feeling at that moment - rather than being driven by the facts. Feelings often get in the way of facts.

*Big wins & big losses are irrelevant *
Consistency is the name of the game as it’s the true measure when it comes to trading & that's where "averaging" comes into play. Statistical results are a "report card" of how one is performing. The longer you trade – the more the results will vary. Averaging should be the benchmark, not individual trading spikes.  If this were a school report, it would be a "fail" which is far from the truth. I have circled what is important to me with a few comments noted on the side.

*Trading results*
The statistics below are an average of my first 5 years of trading. Each year the results vary (which is only natural) but averaging the 5 years gives me a clearer picture of how I'm performing.




Skate.


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## Skate (2 December 2020)

Skate.


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## Skate (3 December 2020)

julo said:


> Skate,
> I have a question about (e) "trending universe of stock"




*How do we protect ourselves against the next flash crash?*
I have posted recently about finding buyable "pivot point," & I use those pivots to enter a position as the engine of one of my strategies. @julo rightly asked about "trending stock". Can we take advantage of trending stock & how do we go about defining what is an uptrend & when do they start?

*On the flip side *
How do we define the start of a "downtrend"?

*Trading the last quarter of 2018  (calendar year) & trading the first quarter of 2020 (calendar year)*
Both periods caused real concerns with my trading. I was saved from additional losses both times because of my GTFO filter (albeit a little late). Both periods caused uncertainty that I hadn't experienced before. The drop in my portfolio was horrendous both times even thou the cause of the loss was completely different. At both times the loss really "hurt". I realise trading is not always peaches & cream, but to my way of thinking, there must be a better way of protecting my capital when the next crash appears.

*Can we harness what we know? *
Back in early 2019, I tried my darndest to apply principles that I already knew & that was "Volume & Trendness" make money, but how do I exit a little quicker than the masses. Ask 10 different traders how to define a confirmed uptrend & how to define a downtrend & I'm sure there would be 10 conflicting replies.

*The answer to those questions *
Of what defines the start of an uptrend & what defines the start of a downtrend is the task I set myself. I revisited my original work of 2019 again in March 2020 after I felt the Chinese burn of the COVID-19 flash crash. By-the-way the monetary loss in 2020 was much higher than in 2019. I needed to find a genuine solution ASAP & code the solution into a new strategy.

More to follow...

Skate.


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## Skate (3 December 2020)

*It's taken 6 months & an additional 8 months to find a solution*
I have completed my new strategy - the "BullRush Strategy". I've been rigorously testing the strategy to find its weak points. At this stage, all looks good as my definition of an uptrend seems sound. A defined uptrend with volume is a safe entry point. I've stripped away all filters other than volume as I want to enter the trend as soon as possible once it's been confirmed (basic stuff really). 

*Next, I had to define the "start" of a downtrend*
Defining a downtrend is easier said than done. Trend indicators are so bland & unfortunately "lag" in varying degrees. Trend direction indicators are useful to a degree but sharpness is not one of their strong points & at times unreliable. 

*The answer was to code a buy & sell signal*
The buy signal defines the start of an uptrend with volume & the downtrend defines a "stale exit". Meaning, we enter a position on a defined uptrend & exit the position on a defined downtrend. I consider the uptrend "stale" as soon as my defined downtrend starts. The solution to protecting against the next crash is simplistic in its application - so why did it take 14 months to figure it out?

*Example*
The example I'll use will be between the "KingFisher Strategy" & the new "BullRush Strategy". The "KingFisher Strategy" is one of my current trading strategies & is no slouch.

*Backtest period*
1st January 2020 to 3rd December 2020 (until today) - the new "BullRush Strategy" exiting at the first sign of a defined downtrend comes at a cost. The benefits well exceed the additional stock turns.



*The next post*
Will show how the two strategies handled the recent COVID-19 flash crash?

More to follow...

Skate.


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## Skate (3 December 2020)

*Well, let's view how the two strategies handled the recent COVID-19 flash crash*
I think I'm on a winner with the "BullRush Strategy"

*Protect my capital - was the brief*
The "BullRush Strategy" exits at the first sign of a defined downtrend. Exiting quickly at the first sign of trouble results in more stock turns (commission cost) but the DrawDown becomes stomachable. The backtest results display the efficiency in handing a QUICK downturn - no matter the cause.

*The COVID-19 Flash Crash Backtest period*
The backtest period is from 1st January 2020 to 30th April 2020. The period of the backtest encapulates the flash crash. The period I've used show (a) the leadup to the crash & (b) the recovery after the crash






*I'm just saying*
I knew there was an answer, coding the answer was the difficult part.

*Summary*
On face value - the initial brief I had set myself has been achieved. The "BullRush Strategy" appears to be effective in protecting my capital against a quick crash.

Skate.


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## Roller_1 (3 December 2020)

Skate said:


> *Well, let's view how the two strategies handled the recent COVID-19 flash crash*
> I think I'm on a winner with the "BullRush Strategy"
> 
> *Protect my capital - was the brief*
> ...



G'day Skate

What about in other market regimes? Looks pretty good in this CY, how about the GFC or the choppiness from 2013-17? 

Cheers


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## Skate (3 December 2020)

Roller_1 said:


> G'day Skate
> What about in other market regimes? Looks pretty good in this CY, how about the GFC or the choppiness from 2013-17?




@Roller_1 It's easy to backtest the scenario you have put forward if I had Norgate's Platinum Data - unfortunately, I only have the "Silver Subscription" so my records would be skewed. Also, my Norgate data only goes back for 9 years. (2011)

*Choppiness of 2013-17?*
Keeping my post on the topic I have uploaded screen captures so you can visualise the two time periods that caused me financial grief. 

*A recap for others*
1. For strategy development using Amibroker you need Norgate's Platinum Subscription package
2. When trading a strategy using Amibroker all you need is the Australian Stocks (Silver Package) - the package I have

*Trading the last quarter of 2018 (calendar year) & trading the first quarter of 2020 (calendar year)*
Both "highlighted periods" caused real concerns with my trading. The drop in my portfolio was horrendous both times even thou the cause of the loss was completely different. At both times the loss really "hurt". The displays below are of the periods of concern (they are the blue squared area)








*The associated XAO Chart (circled)*
My equity curve mirror the All Ordinaries 








*Backtest results*
The backtest period as indicated by the date range (1st September 2018 to 30th December 2018)








*Portfolio Equity*
The backtest period as indicated by the date range (1st September 2018 to 30th December 2018) - the same period





*Summary*
I confirmed in my previous post the "BullRush Strategy" appears to be effective in both time periods that raised concerns for me with my trading. The drop in my portfolio both times was horrendous. Pain has a way of focusing me. Each post I make champions an idea that's been beneficial to my trading.

Skate.


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## Skate (3 December 2020)

Skate.


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## soren_lorensen (3 December 2020)

Skate, Wow, another system churning out the goods, how many do you trade?

Pity you don't have the survivorship free bias data to run a 10 or 15yr backtest.


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## 2Finn5 (4 December 2020)

You post some very interesting and thought-provoking graphs and ideas @Skate, and now I have to go look at my current systems now with the suspicion that they could be much improved


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## Skate (4 December 2020)

2Finn5 said:


> You post some very interesting and thought-provoking graphs and ideas @Skate, and now I have to go look at my current systems now with the suspicion that they could be much improved




@2Finn5 each post I make champions an idea that's been beneficial to my trading. Seeking improvements in "an already good strategy" is the fun side of trading, especially when the way I trade tends to be a bit boring.

*Fiddling*
Don't fall into the trap of modifying a perfectly good strategy disguised as strategy improvement. Improvements I've made is to be better prepared for the next major correction.

*Worth remembering*
"Good is not good when better is expected" & "Happiness is desiring what you have". Understanding these two sayings whilst having an "attitude of gratitude" goes a long way in this life.

Skate.


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## Skate (4 December 2020)

Skate.


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## Skate (4 December 2020)

Skate.


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## Skate (4 December 2020)

peter2 said:


> *A note:* I'm always wary about posting my results when I'm in the zone and in sync with the market moves. The results can look too good. Let me remind you that there will be times when I'm not in sync with the markets. Longer-term readers of my threads will remember many times when I've zigged and the market zagged. In the manner of Dr Flippe-Floppe Fly let me revel in my own greatness for a little while.





peter2 said:


> The different portfolio performances start dates is due to luck. It's just luck that sees the system buy at the start of what turns out to be a great trend. Start later and the system misses the perfect entry. A system with multiple entry strategies will produce subsequent signals to get into this trend. This is a significant factor in the performance of @Skate 's systems.





soren_lorensen said:


> Skate, Wow, another system churning out the goods, *how many do you trade?*



@soren_lorensen to answer you vaguely - I trade quite a few strategies seriously & the ones below not so seriously.

*I've been called an over-sharer *
Sharing information is how we learn. I'm posting actual results of 6 strategies I started trading a few weeks back.

*Each portfolio started with $100k (20 X $5k positions) *
These six $100k strategies are being traded (live)  even though they are still on probation. No strategy is worthy of being traded with "gusto & vigour" until they have proven they can handle it with the big guys. If you are an avid reader of the "Dump it here" thread you will know one, two or even three of the strategies. Rest assured all strategies have proven themselves & have been paper traded with impressive results - so none of them are slouches. How they get their signals is not important "but what is important" is their varying portfolio results over the last three weeks. (they all started trading the same week) Some strategies have performed better than others & are all in profit.

*There is never a good time to start trading*
Luck & timing plays a significant role in the performance of any portfolio when you start trading live. As they say "there is never a good time to start trading". To a great degree, our success or failure in the market is a function of our luck. We like to think that our results are a direct consequence of our insight & efforts, but the reality is that luck plays a big part in how our systems perform. No matter how smart we are, or how hard we work, we will regularly be hit by circumstances that are unforeseen & unknowable.

*Start dates are important*
Depending on the starting date of trading a new strategy, this can have a big bearing on the performance outcome of the strategy. Nothing works perfectly in trading so the next best thing is to accept 'that sometimes it works well & other times "not so well". Those that can handle that, tend to do well. I say "just go with the flow". Trading successfully relies on luck & you create your own luck by doing "all the right things".

*Here we go*
The chart below shows the trading results of the 6 Portfolios mentioned above. Just remember you are not comparing "apples to apples" or even "apples to oranges" but we are comparing one fruit group to another. I should also say, each strategy is uncorrelated to each other.




Skate.


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## soren_lorensen (4 December 2020)

Skate, thanks for detailing, assume you trade them all on ASX only? not US or other markets?  we do have good US EOD data from PremiumD and i believe they will be adding a TSX set soon (Canadian market)

Your systems are day/weekly frequency trading but no automated or script running intraday?

Do any of the systems sell short?

cheers


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## Skate (4 December 2020)

soren_lorensen said:


> Skate, thanks for detailing,* (1) assume you trade them all on ASX only? not US or other markets? * we do have good US EOD data from PremiumD and i believe they will be adding a TSX set soon (Canadian market)
> *(2) Your systems are day/weekly frequency trading but no automated or script running intraday?
> (3) Do any of the systems sell short?*




*Question 1*
_*I assume you trade them all on ASX only? not US or other markets? *_
@soren_lorensen you have assumed correctly - I only trade the ASX (All Ordinaries). 

*Question 2*
_*(a) Your systems are day/weekly frequency trading but (b) no automated or script running intraday? *_
(a) I trade a combination of daily & weekly systems
(b) Correct.

*Question 3
Do any of the systems sell short?*
No.

Skate.


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## Skate (5 December 2020)

*Holidays are off the cards (at the moment)*
Mrs Skate’s Holiday money has been sitting idle for over 11 months & today has decided to put her “Holiday money” to work until our holidays are back on the agenda again. (who knows how long that will be)

*"Have you got a good strategy"?*
Sure, I’ve just the perfect one for you. It’s the Zebra Strategy. 
The "Zebra Strategy" doesn’t trade that often & holds good positions longer than a strategy normally would. 
"Perfect, that will do, let's give it ago"

*With Mrs Skate’s permission*
I’m able to track the results of the "Zebra Strategy" & post the weekly results in the “Dump it here” thread. Mrs Skate’s new “Zebra Strategy” goes live on Monday. I’m praying that it makes money as my “meat & veg” just might be on the line.

More to follow

Skate.


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## Skate (5 December 2020)

*Trading is not always "peaches & cream"*
There are 3 buy signals for Mondays pre-auction that are listed below. 50% of my buys are usually duds with my style of trading. It's also important to remember that new strategies can take time to accumulate into profits. 










*I'll upload the charts of the three signals so you can visualise the previous buy performance.*
Zebra Weekly Chart for ASX (BLX)






*Signal (EOF)*
Zebra Weekly Chart for ASX (EOF)






*Signal (WGO)*
Zebra Weekly Chart for ASX (WGO)





*Summary*
The previous purchase of (EOF) didn't go so well. But as a systems trader, I need to keep taking the signals as they are generated. Nothing works perfectly in trading - sometimes it works & other times "it doesn't" - that's trading for you.

Skate.


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## Skate (6 December 2020)

Newt said:


> I happened to take in Chat with Traders podcast#205 this week - Michael Katz from Seven Points Capital.
> 
> 
> 
> ...




@Newt posted a hyperlink to a podcast that I highly recommend, it's a must-listen for those trying to figure it out. In this episode, Michael Katz answers questions on Strategies & development, Trade Management, Trader Development & Prop Trading at the end. https://chatwithtraders.com/ep-205-michael-katz/

*To listen to others podcasts in the series* 








						Podcast Episodes
					

All Episodes On this page you’ll find every episode of Chat With Traders podcast. To get notified of new episodes, you may subscribe here. 249: Jack Kellogg Valet Driver Turns $20k into $11mil over 6 years after Wipe Out | Jack Kellogg 248: David Sun Systematic Options Trading – Minimize Risk...




					chatwithtraders.com
				






Newt said:


> In Australia we've been fortunate to have Aaron Fifield (Chat with Traders) and Andrew Swanscott (Better System Trader) putting out a lot of fantastic material.  Better System Trader podcast Steve Ward talks about the inevitable "J curve" to profitability most traders endure and ways of reducing the depth and time in drawdown before (hopefully) establishing sustainable profitability. Better System Trader Episode 164




*Another great podcast posted by Newt *
In this episode, they speak with Steve Ward who has over 25 years of teaching, coaching & training experience. Steve Ward works with traders, fund managers & banking professionals across the globe. Steve’s work is focused on delivering evidence-based practical strategies & tactics. In the podcast, they discuss a number of performance accelerators in trading. http://bettersystemtrader.com/164-performance-accelerators-steve-ward/

*To listen to others podcasts in the series *








						Home | Better System Trader
					

90% of traders fail.Be part of the 10% that don't. Discover expert trading tips to trade Better every day. DON't miss a thing! become an insider to stay in the loop NOV 9th 2022 NEXT episode released neW EPISODE RELEASED! How do successful traders make better decisions? Are your trading...




					bettersystemtrader.com
				




Kudos goes out to Newt for posting such great educational material.

Skate.


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## Roller_1 (6 December 2020)

Skate said:


> @Roller_1 It's easy to backtest the scenario you have put forward if I had Norgate's Platinum Data - unfortunately, I only have the "Silver Subscription" so my records would be skewed. Also, my Norgate data only goes back for 9 years. (2011)




Aren't you worried that you are curve fitting your new systems to your selected time period though or your preconceived bias for how the market works? It isn't really unfortunate it is just a 'small' investment in your trading business really in my opinion. 

If you test a weekly system from 2018-now it is only approx 150 bars worth of data. Not enough to get a decent sample size of trades imo. I don't think that if someone developed a daily strategy over 6 months of data it could be called thoroughly tested, isn't it a similar situation? 
They might be great systems and i hope they are but i just don't understand how you can trust them if/when the market changes again?


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## Skate (6 December 2020)

Roller_1 said:


> Aren't you worried that you are curve fitting your new systems to your selected time period though or your preconceived bias for how the market works? It isn't really unfortunate it is just a 'small' investment in your trading business really in my opinion. If you test a weekly system from 2018-now it is only approx 150 bars worth of data. Not enough to get a decent sample size of trades imo. I don't think that if someone developed a daily strategy over 6 months of data it could be called thoroughly tested, isn't it a similar situation? They might be great systems and i hope they are but i just don't understand how you can trust them if/when the market changes again?



@Roller_1 fair enough.




*Update*
With additional data - there is another buy (MLD)









Skate.


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## Skate (7 December 2020)

*I have decided to stay with my original 3 purchases (MLD) has been deleted*
I've been thinking, once I post my buy orders they shouldn't be altered. Others who read this thread might not have read the amended post above. So in keeping with this idea - I have deleted (MLD) from the buy list.




Sorry for the confusion...

Skate.


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## peter2 (7 December 2020)

There's even more pressure when trading other peoples money. In this case, your wife's holiday money. We all know that if you lose any of it you'll have to replace it. Your wife can't lose. This is going to be your toughest test yet. 

You're posting late at night, evidence of the pressure you're under.


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## ducati916 (7 December 2020)

Roller_1 said:


> Aren't you worried that you are curve fitting your new systems to your selected time period though or your preconceived bias for how the market works? It isn't really unfortunate it is just a 'small' investment in your trading business really in my opinion.
> 
> If you test a weekly system from 2018-now it is only approx 150 bars worth of data. Not enough to get a decent sample size of trades imo. I don't think that if someone developed a daily strategy over 6 months of data it could be called thoroughly tested, isn't it a similar situation?
> They might be great systems and i hope they are but i just don't understand how you can trust them if/when the market changes again?





Facts: (a) markets go up, (b) markets go down, (c) markets go sideways. From those 3 facts, which never change, how much data is actually required? What we are actually talking about is the ability to recognise when one state changes into another. The big market moves:







Pretty much every move that you would worry about, building a long only system, is encapsulated in 15yrs worth of market data.

Now I don't trade mechanical systems. I don't use software to backtest. Therefore I could be way off base re. the volume of data required. However, what we are talking about is actually human psychology and human psychology coded. We are moving into AI and potentially machines teaching and executing themselves in the market, but we are not quite there yet. Even if we were there, there still remain only 3 available options.

How does more data improve your probabilities?

jog on
duc


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## qldfrog (7 December 2020)

ducati916 said:


> Facts: (a) markets go up, (b) markets go down, (c) markets go sideways. From those 3 facts, which never change, how much data is actually required? What we are actually talking about is the ability to recognise when one state changes into another. The big market moves:
> 
> View attachment 115950
> View attachment 115951
> ...



Agree and in my view 15y is farrrrrr too much.
I mentioned in my thread i do not backtest on data older than 10y old
Why?
If you are old enough, remember 2005 trading market.
Quant trading? Overseas interests in asx?
Quantitative easing?
None of these existed..or nowhere near as at current level.
What is constant is human nature as Mr Duc stated,and robots trying to emulate that human nature....
So what you want is backtest on down time,up time and going nowhere time.
That should cover your base.
We were even lucky having a recent crash 
Note i am mechanical system trader


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## investtrader (7 December 2020)

Duc,

I agree exactly -  (a) markets go up, (b) markets go down, (c) markets go sideways. I have spent countless hours curve fitting systems to the data, but that was many many years ago using software way more complicated that Amibroker. It is like searching for the holy grail - more data, more indicators, more rules etc etc etc. Now this may be okay for Medallion, but for just about everyone else it is folly. Just check the performance of hedge funds - absolutely pathetic.
My view is less 'rules' and more about risk mitigation. Just need some way to jump on a trend and then ride it. Take out the noise - way easier on weekly charts and Aussie stocks and suffer some drawdowns which are the price of admission. Look for less 'efficient' markets - good luck system trading the S&P500 for example.
Don't get too hung up on actual backtest numbers - look at the trades and see if they make sense. Then rinse and repaeat over and over - but it gets pretty bloody boring after a while. The only excitement comes from periods like March this year.

Cheers

Gary


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## Roller_1 (7 December 2020)

ducati916 said:


> Facts: (a) markets go up, (b) markets go down, (c) markets go sideways. From those 3 facts, which never change, how much data is actually required? What we are actually talking about is the ability to recognise when one state changes into another. The big market moves





ducati916 said:


> Pretty much every move that you would worry about, building a long only system, is encapsulated in 15yrs worth of market data.




Hey Ducati,
i agree that markets do what you stated but HOW they do that is obviously very important and like you said in the last 15 years there have been alot of market cycles, great for seeing how a certain system(s) would react over that period. The data is just a mechanism to validate your views of the market, why not use what is available? Skate is only testing on 2 years of data. i guess it's like seeing one earnings report or whatever fundamental guys read  and deciding if it's a good company or not. Like Nick Radge say do you want to make money or save money.

Especially in 2019/20 you could probably put a tight stop on any weekly system and get good results (avoid the crash, ride the boom) but in 2015-18 in might have a 40% drawdown from whipsawing in and out of positions. 

i agree with frogs post below about too much data too, i don't know what the experts say but like from said from 2000-2010 the market was a very different place. But ill still test a system from 07-2010 to see how it goes over an extended crash. 




qldfrog said:


> Agree and in my view 15y is farrrrrr too much.
> I mentioned in my thread i do not backtest on data older than 10y old
> Why?
> If you are old enough, remember 2005 trading market.
> ...


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## ducati916 (7 December 2020)

Roller_1 said:


> Hey Ducati,
> 1. i agree that markets do what you stated *but HOW they do that is obviously very important *and like you said in the last 15 years there have been a lot of *market cycles,* great for seeing how a certain system(s) would react over that period.
> 
> 2. The data is just a mechanism to validate your views of the market, why not use what is available? Skate is only testing on 2 years of data. i guess it's like seeing one earnings report or whatever fundamental guys read  and deciding if it's a good company or not. Like Nick Radge say do you want to make money or save money.
> ...





Mr Roller, I have highlighted/underlined your points that I think merit further discussion.

1. First off, HOW markets do what I stated, is exactly how they do it: (a) they go up, (b) they go down, (c) they go sideways. You introduce the market cycle. With which I agree. However, they also only: (a) they go up, (b) they go down, (c) they go sideways. My point being whatever the market environment, they can only do (a), (b) or (c).

2. Is more data better than less? This is really the question. If it is (and I don't work in this milieu) why is it?

3. Different from what and different how? If we are talking about data points revealing price/date and not valuations, fundamentals, news stories etc. (and that should all already be reflected in the price if we believe markets are efficient over time) surely we only have data that goes: (a) they go up, (b) they go down, (c) they go sideways.

jog on
duc


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## Skate (7 December 2020)

Roller_1 said:


> The data is just a mechanism to validate your views of the market, why not use what is available? *Skate is only testing on 2 years of data*. i guess it's like seeing one earnings report or whatever fundamental guys read  and deciding if it's a good company or not.




@Roller_1, all your comments are valid when it comes to Amibroker backtesting. The market is completely chaotic & unpredictable due to the infinite amount of information pouring into the markets second-by-second, let alone "year-after-year-after-year".


ducati916 said:


> *Is more data better than less? This is really the question*




I'm creating strategies (for my own personal use) with less backtest data & (IMHO) using less data doesn't invalidate my research or backtest results. By "paper trading" those strategies over a period of time will determine if the strategy meets the benchmark to go live. Recent comments about the data required for meaningful analysis varies, such as those you have posted & those posted by @ducati916, @investtrader, @qldfrog & @Warr87 "over the time" are all valid points "in my opinion". The way you handle your own analysis "gives you the confidence" to take a strategy to the next level.

*The 'Dump it here' thread is about ideas *
I corral my ideas & comments in this thread, ideas that I've found helpful in my trading experience. I'm constantly promoting ideas & sometimes they create a discussion that stimulates us all. Thinking about what is posted is a "valuable part" of this thread & it's a perfect platform for others to express an alternative view or offer a helpful hint. All comments are welcomed, whether the comments are related to system or discretionary trading.

*"Skate is only testing on 2 years of data"*
Any period of backtesting I post means "Jack" to me & it should mean "Jack" to others as I've previously stated to "ad-nauseam". Price history without "Delisted Equities" & "Historical Index Constituents" causes the inaccuracies in the backtesting results. The results I post should not be relied upon.

*We should be all multi-millionaires*
Backtesting at times displays outstanding results that "can't" be reproduced in real trading for various reasons. Run a backtest of any good strategy over the last 10 years & we are all multi-millionaires - but in reality, we are far from it.

*The 'Dump it here' thread*
The 'Dump it here' thread was originally intended to help beginners find their feet, start them off on the right foot (as to say) & is now followed by a few seasoned traders.

*Accurate or inaccurate backtesting results*
There are times when trading can go south for no good reason that will be unavoidable no matter how good our backtesting results are. Trading has no regards as to how smart we are, or how hard we work, we will regularly be hit by something unforeseen & the next big dip might be just around the corner (who knows).

*Trading is Bat-**** scary for beginners & seasoned traders alike *
All I'm saying is - "we are not immune to losses" just because we have the "comfort" of a great backtest.

Skate.


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## Roller_1 (7 December 2020)

ducati916 said:


> Mr Roller, I have highlighted/underlined your points that I think merit further discussion.
> 
> 1. First off, HOW markets do what I stated, is exactly how they do it: (a) they go up, (b) they go down, (c) they go sideways. You introduce the market cycle. With which I agree. However, they also only: (a) they go up, (b) they go down, (c) they go sideways. My point being whatever the market environment, they can only do (a), (b) or (c).
> 
> ...




1. although true, it is a pretty narrow view of the world i think just because the market has rose 10% a trading system won't show a 10% rise. 
both chart snippets below of the All Ords show a 10% rise. I know what market i would like to be trading a trend system on... probably not the best example because of different lengths but you get my point. 




2. More data just gives your more trade examples and different market cycles to test the system on. As i said earlier if it is there why not use it. I think most experienced/ long term profitable traders would agree that it is important to test over a period to get a larger sample size of trades. In the end you want confidence that you have an edge with your money that you are putting at risk.

3. When i said 'very' different that may be incorrect bit i think with the advancement of technology and the other reasons that @qldfrog listed the market has changed somewhat. But i don't think that it makes that data useless.


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## DaveDaGr8 (7 December 2020)

How far back you should backtest ?? 

Here's is an excel snipit of 10 systems backtested 20 years back to Jan 2000.




If you look at the bottom row, clearly the best systems over the full 20 years are WTT_AU, *MR_US* BB_MR.

However, looking closer at the second bottom row ( last 10 years ) *MR_US* has almost been the worst performer even though it was the best performer from 2000-2010. Clearly it's not working anymore and it's out of the trading plan. MR_AU also is/ was a poor performer. That's not to say that Mean Reversion systems are dead, the last column ( BB MR) is a mean reversion system that i still trade and works quite well in both ASX 300 and SP 500/1500 ( not shown ).

The top row ( weightings ) shows the weights for the systems that i currently value ( ie, better recent performance ). They're a balance between growth and diversity ( non correlation). The last 2 columns on the right in green are (ave) the Average of the systems, (weight) The return of the systems with weighting applied.

The most important aspect of this picture is that *NO system is a clear winner*. They almost all have negative years, some have stellar years, some are more volatile, some work better in negative markets.

The chart below shows JUST how much of a mess the market is. All of the systems are profitable, but you would be hard pressed to be comfortable with any single one of them. The black dashed line is the average and green weighted.





To complete the picture here's another sheet showing some basic monthly metrics and how combining them is an effective strategy.




By averaging the systems the losing months drops considerably, volatility is manageable, monthly ave growth is good.

My point is that a lot of insights can be gained by looking at a longer picture and how strategies can fit together into a model. Correlation is not something that can be measured in days, weeks or months but more in years over a broad range of conditions.

As for system development, it is important to pick a time frame, a universe and a goal. 6 months is ample time as markets generally change within 6 months. What is important is that if your system works well for specific conditions, then you need to know when those conditions are met or not and switch that system on or off.


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## Roller_1 (7 December 2020)

Skate said:


> @Roller_1, all your comments are valid when it comes to Amibroker backtesting. The market is completely chaotic & unpredictable due to the infinite amount of information pouring into the markets second-by-second, let alone "year-after-year-after-year".
> 
> 
> I'm creating strategies (for my own personal use) with less backtest data & (IMHO) using less data doesn't invalidate my research or backtest results. By "paper trading" those strategies over a period of time will determine if the strategy meets the benchmark to go live. Recent comments about the data required for meaningful analysis varies, such as those you have posted & those posted by @ducati916, @investtrader, @qldfrog & @Warr87 "over the time" are all valid points "in my opinion". The way you handle your own analysis "gives you the confidence" to take a strategy to the next level.
> ...




Indeed i have bought many shiny things with 'Backtest' money. =] 

"Price history without "Delisted Equities" & "Historical Index Constituents" causes the inaccuracies in the backtesting results. The results I post should not be relied upon."

What happens if we enter a sustained bear market an the systems you are paper trading suddenly show bad returns or worse drawdowns than your backtests, would this invalidate the systems? 

I just don't get why you wouldn't want to test on the best data, it's cheap compared to a 20% DD on a $300k account!

I'm sure others are gaining ideas and like you said getting a headstart. I don't want to discredit your ideas or anything i'm sure you are more successful in trading and life than me, i just feel things could be done better in regards to showing beginners best practices.


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## Roller_1 (7 December 2020)

DaveDaGr8 said:


> How far back you should backtest ??
> 
> Here's is an excel snipit of 10 systems backtested 20 years back to Jan 2000.
> 
> ...




Good post Dave, 

there is a new Backtesting software coming out in the next few months that you might be interested in. It's called Realtest and is created by Marsten Parker one of the traders featured in the new 'Market Wizards' book. i've been Beta testing it and it's great for portfolio level backtesting. ie combing systems together and seeing the impacts on a whole portfolio. 

I've coded a few different MR systems in it and the learning curve isn't too bad if you've used Amibroker. I will probably convert all my short term systems over to it, much more user friendly and faster for both backtesting and system design imo. I might make a thread for it once it comes out.


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## Skate (7 December 2020)

Roller_1 said:


> I don't want to discredit your ideas or anything i'm sure you are more successful in trading and life than me,* i just feel things could be done better in regards to showing beginners best practices*.




@Roller_1 you have been a one-man band stimulating discussion to bring this docile thread back to life (for a day), thank you.

*Previously*
In my early days I had Norgate Platinum Subscription for all my strategy development & have posted about this frequently in this thread - today I'm just playing around the edges bouncing & posting new ideas that might be beneficial for others to "think about". In my very first post (back in December 2018) the "Dump it here" thread was a platform dedicated to helping others.


Skate said:


> *Helping Others*
> You might want to dump stuff here to help others




*"I just feel things could be done better in regards to showing beginners best practices"*
On reflection, you have a valid point. Thinking about it on a deeper level leads me to believe helpfulness from more experienced members has been light on the ground. I shouldn't cast wide aspersions because without the input from regular posters this thread would have died long ago. Whether I've fallen short of showing beginners "best practice" isn't the point, if I'm right or wrong isn't important. The important thing is this thread gives new members a vehicle to try & figure it all out. All members have the right to freely express a view or an alternative view without being challenged or ridiculed, the essence of a friendly thread.

*As traders, we are all different, enjoying a different level of experience *
The sole purpose of this thread is to help others gain knowledge so they can self educate. I've posted & shared my actual trading journey "explaining" what I've found beneficial. The thread is for the exchange of ideas in a friendly manner & over time you value some posters more than others. Some members have the knack of nailing posts accurately & succinctly from a position of experience & knowledge, a position I can only dream of having.

Skate.


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## Skate (7 December 2020)

Skate.


----------



## Skate (7 December 2020)

Skate.


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## Skate (7 December 2020)

Skate.


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## soren_lorensen (7 December 2020)

With the Skate "Zebra" system, you have 20x$1K parcels, if you purchase the stock on Commsec, you'd have to always do better than 4% to just make the round trip.  The commission burn will be a drag,  this would be effectively paying 200 basis points to buy/sell - when many brokers offer 5-10bps.

ahh just spotted $10 commissions but still high


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## Skate (7 December 2020)

soren_lorensen said:


> With the Skate "Zebra" system, you have 20x$1K parcels, if you purchase the stock on Commsec, you'd have to always do better than 4% to just make the round trip.  The commission burn will be a drag,  this would be effectively paying 200 basis points to buy/sell - when many brokers offer 5-10bps.*ahh just spotted $10 commissions but still high*




*$10 commissions each way*
This equates to 2% commission drag to buy & sell one position. Commission drag is very important when it comes to trading & it's the reason why a small portfolio can't be re-balanced. Many people never start trading because they’re worried about losing their money. With that said, it is critical to make smart trading decisions. You can learn as you go by trading small positions & if you make a mistake small loses are bearable.

*Why post the results of the "Zebra Strategy"*
To show those "wanting to have a go" at trading it's possible to start small. I've found fear & self-doubt keeps them from getting started as trading looks a lot like gambling. The very act of getting started is much more important than getting it right. The only way you succeed in this game is by taking "an interest" & having skin in the game.

*You need money to make money*
If you are thinking to turn $20,000 into millions, that's gambling, not trading. Instead, good traders look to make an average of 25% per year, so the best Mrs Skate could hope for trading the Zebra Strategy would be a profit of $5,000 if all goes to plan. "Dipping your toe" in is half the fun of trading, having a go with money you can afford to lose. (trading is an exciting & emotional past time)

*Summary*
In saying all this - trading doesn’t have to be super complicated or time-consuming. Also, you don’t have to be rich either. There are plenty of easy ways to get started without having a ton of money & without being the world’s foremost trading expert. Trading the "Action Strategy" was stressless & hopefully trading the "Zebra Strategy" will be another.

Skate.


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## DaveDaGr8 (7 December 2020)

Roller_1 said:


> Good post Dave,
> 
> there is a new Backtesting software coming out in the next few months that you might be interested in. It's called Realtest and is created by Marsten Parker one of the traders featured in the new 'Market Wizards' book. i've been Beta testing it and it's great for portfolio level backtesting. ie combing systems together and seeing the impacts on a whole portfolio.
> 
> I've coded a few different MR systems in it and the learning curve isn't too bad if you've used Amibroker. I will probably convert all my short term systems over to it, much more user friendly and faster for both backtesting and system design imo. I might make a thread for it once it comes out.



Looks interesting. I'll have to give it a whirl, although it's going to be hard to give up my excel spreadsheet !!!


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## Roller_1 (7 December 2020)

DaveDaGr8 said:


> Looks interesting. I'll have to give it a whirl, although it's going to be hard to give up my excel spreadsheet !!!




This is an example of a chart you can produce to see how different strategies react with each other, this is using a example script. 
It's a great piece of software


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## Warr87 (7 December 2020)

Roller_1 said:


> This is an example of a chart you can produce to see how different strategies react with each other, this is using a example script.
> It's a great piece of software
> 
> View attachment 116006



Looks like something I have been after.


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## soren_lorensen (7 December 2020)

Yes, the commission drag is relevant to the overall performance and needs to be considered.

I have a couple of systems myself that perform okay 20-30% CAGR with similar drawdowns over a 15year period backtest.

One thing that would be useful is the ability to code into the system the taxes you'd pay to get a realistic equity curve and against a comparison of  other asset classes, like  property for example.


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## Roller_1 (8 December 2020)

soren_lorensen said:


> Yes, the commission drag is relevant to the overall performance and needs to be considered.
> 
> I have a couple of systems myself that perform okay 20-30% CAGR with similar drawdowns over a 15year period backtest.
> 
> One thing that would be useful is the ability to code into the system the taxes you'd pay to get a realistic equity curve and against a comparison of  other asset classes, like  property for example.




All of those things can be done easily in Realtest and probably can be done in AB. 

It's pretty easy to test different allocation amounts, withdrawals etc. 

I think Marsten is going to start a youTube channel to show what Realtest can do.


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## Skate (8 December 2020)

Skate.


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## peter2 (8 December 2020)

PANDA watching. It's interesting that the Panda portfolio has stalled. All twenty positions as a batch have stalled. I would expect that a few would continue going higher and keep the momentum in the portfolio. We're not seeing this at the moment.

I think this is a timing issue due to starting all twenty positions at the same time.


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## Skate (9 December 2020)

peter2 said:


> PANDA watching. It's interesting that the Panda portfolio has stalled. All twenty positions as a batch have stalled. I would expect that a few would continue going higher and keep the momentum in the portfolio. We're not seeing this at the moment. I think this is a timing issue due to starting all twenty positions at the same time.



@peter2 the Panda Strategy has stalled but it's more reflective of the current market conditions rather than starting all the positions just a few days apart. The Panda Strategy will not release a position till the volatility at the individual level collapses or the position is taken out by the trailing stop. Going sideways or taking a breather isn't a concern with this strategy, rather it's to be expected. Most daily systems I've coded in the past the exits are responsive - the Panda works a little different. Holding a position in a sideways market longer than expected & longer than I usually like is a built-in feature of the strategy.

Skate.


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## pythagoras (9 December 2020)

'looks' all fantastic and promising, however, my brain doesn't quite comprehend it all,,,,,,,yet.
What software and spreadsheets are you using?


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## Skate (9 December 2020)

pythagoras said:


> 'looks' all fantastic and promising, however, my brain doesn't quite comprehend it all,,,,,,,yet.
> What software and spreadsheets are you using?




@pythagoras, there are 3 pieces of software I couldn't live without as a trader: (1) AmiBroker (2) Norgate data (3) Share Trade Tracker. I use "Share Trade Tracker" as my portfolio manager & have so for many, many years. The reports displayed in the "Dump it here" thread are generated using "Share Trade Tracker". 

Skate.


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## pythagoras (9 December 2020)

Skate said:


> @pythagoras, there are 3 pieces of software I couldn't live without as a trader: (1) AmiBroker (2) Norgate data (3) Share Trade Tracker. I use "Share Trade Tracker" as my portfolio manager & have so for many, many years. The reports displayed in the "Dump it here" thread are generated using "Share Trade Tracker".
> 
> Skate.




Hi Skate, thanks for the intel on what tools you are using.

I see that ' Share Trade Tracker ' has been discontinued. Is there a place to download the tool?


Thank you.

Kind regards,

Py


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## Skate (9 December 2020)

pythagoras said:


> Hi Skate, thanks for the intel on what tools you are using. I see that ' Share Trade Tracker ' has been discontinued. Is there a place to download the tool?




@pythagoras, in my haste in responding to your question I should have mentioned that "Share Trade Tracker" is no longer offered for sale. Share Trade Tracker didn't attract a sufficient number of subscribers to continue development even though it's considered a worthwhile tool. Some time back I offered an extended 6 month trial of "Share Trade Tracker" & still there was a lack of interest. Thus the offer was never implemented. I'm sure others will post an alternative to Share Trade Tracker for you to try. 

Skate.


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## Skate (9 December 2020)

Skate.


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## soren_lorensen (9 December 2020)

Skate said:


> @pythagoras, in my haste in responding to your question I should have mentioned that "Share Trade Tracker" is no longer offered for sale. Share Trade Tracker didn't attract a sufficient number of subscribers to continue development even though it's considered a worthwhile tool. Some time back I offered an extended 6 month trial of "Share Trade Tracker" & still there was a lack of interest. Thus the offer was never implemented. I'm sure others will post an alternative to Share Trade Tracker for you to try.
> 
> Skate.




Yes, contact the developer, they have made it available to users of the aussiestockforum for 2hrs of equivalent consultancy, i.e. about $280+GST


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## soren_lorensen (9 December 2020)

soren_lorensen said:


> Yes, contact the developer, they have made it available to users of the aussiestockforum for 2hrs of equivalent consultancy, i.e. about $280+GST



sorry meant for @pythagoras


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## Skate (10 December 2020)

Skate.


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## Willzy (10 December 2020)

Hey all, I have a question that I'm hoping someone on this forum can help me with.

I have a system which trades specific US stocks such as MSFT or VISA etc. The system trades LONG only, holds positions for 1-10 days and is mean reverting in nature. It will trade between 150-250 positions per year. Positions must be taken at the close of the market when the signal for entry or exit is calculated. 

Currently I trade the system live using Admiral Markets Metatrader 5 platform trading CFD's on the stocks. Automation is important because of my irregular day job.

Like all mean reversion strategies the system is highly susceptible to commission drag. In my case the size of the spread is roughly 0.1% of the traded volume ie a $10,000 position will cost me $10 round trip plus swap rates for the CFD's. The system uses a small amount of leverage less than a 2:1 ratio so a margin loan account could do the job.

The system is currently profitable with these costs but if I can get the cost of trading down it would be worth the effort in re-writing the robots and changing platforms. 

I understand that it is possible to find some brokers who offer $0.00 commission on US Equities this would save me big $$$ But I still need access to automation and if possible some form of leverage...

Possible solutions could be
Interactive Brokers with an API ==> probably beyond my skills as a programmer
TradeStation == > Might be possible but I have no experience with them.
Several Non-ASIC regulated MT5 brokers based in Europe / Cypres ==> could be a bit dodgy

Any suggestions or recommendations or past experence with IB or TradeStation would be greatly appreciated as this particular problem is doing my head in...

Cheers Guys!


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## peter2 (10 December 2020)

Accumulate the profit that you're earning from the cfds and pay someone to code an API to use on IB as IB have the cheapest costs in Aust. I'm a TS client and pay a minimum $5ew for up to 1000 shares. The zero commission rates are for US clients only (as far as I know).


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## Willzy (10 December 2020)

peter2 said:


> Accumulate the profit that you're earning from the cfds and pay someone to code an API to use on IB as IB have the cheapest costs in Aust. I'm a TS client and pay a minimum $5ew for up to 1000 shares. The zero commission rates are for US clients only (as far as I know).




Hi Peter, 

Thanks for the heads up with TradeStation  They were in serious contention but $5ew is probably no better for the size of account I currently trade. $5 each way will be competitive in the future though!

Are there any other costs with running TradeStation?

Cheers
Willzy


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## Willzy (10 December 2020)

Further to my reply above. Is anyone here running an API with IB and if so did you get someone to build the API or go it alone? All info is appreciated 

Cheers


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## Warr87 (10 December 2020)

Willzy said:


> Further to my reply above. Is anyone here running an API with IB and if so did you get someone to build the API or go it alone? All info is appreciated
> 
> Cheers




i hired a programmer. he did a great job but i had some issues. not his fault. he was used to doing intra-day so a portfolio level design was different for him. i found him, and a bunch of other candidates, on the freelance website UpWork.

i stoped the papertrading with the API/IB since the TA libraries in python were giving different values to AB. The data was the same from norgate (norgate have a python library). It was a complete mystery to both of us which is why I gave up on it (for the moment).

If you don't necessarily want a python program written up to work with the API, you have options to use the Smart API from The Chartist. Another option is Alera Portfolio Manager. Both of these integrate into IB's API to send orders. The Chartist doesn't offer screenshots or an overview of how it works, and APM offers minimal info and tells you to go to a third party site and buy there course on automating AB with IB. I wish I knew more about these 2 programs. (The Chartist API is also one off payment, APM is an ongoing subscription fee or free with an IB demo account.)

Let me know how you go. I am tempted to go with either Chartist or APM but I also need more info to make a decision.


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## julo (11 December 2020)

investtrader said:


> My view is less 'rules' and more about risk mitigation. Just need some way to jump on a trend and then ride it. Take out the noise - way easier on weekly charts and Aussie stocks and suffer some drawdowns which are the price of admission. Look for less 'efficient' markets - good luck system trading the S&P500 for example.




Hi @investtrader / Gary,
do I understand your point correctly? You recommend less efficient market because there are imperfections that can be used in our favour? And S&P500 is too effective (and hard to trade) because there are many (clever) sharks in the sea?
Thanks!


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## investtrader (11 December 2020)

julo said:


> Hi @investtrader / Gary,
> do I understand your point correctly? You recommend less efficient market because there are imperfections that can be used in our favour? And S&P500 is too effective (and hard to trade) because there are many (clever) sharks in the sea?
> Thanks!



Yes, that is what I meant. IMHO if you take a trend following system and apply it to the S&P 500 stocks it generally does poorly compared to ASX stocks.


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## Warr87 (11 December 2020)

investtrader said:


> Yes, that is what I meant. IMHO if you take a trend following system and apply it to the S&P 500 stocks it generally does poorly compared to ASX stocks.




I'm sure that would be true. But a MR system, from my understanding, is better for indexes so I wouldn't be surprised if a trend following system would not perform as well.


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## Skate (11 December 2020)

Skate.


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## Skate (11 December 2020)

Skate.


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## Skate (11 December 2020)

Skate.


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## barney (11 December 2020)

Thanks for your continued input  Mr. @Skate  

The Cat is happy, The Panda is purring and the Zebra is displaying his stripes for the moment


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## Skate (12 December 2020)

Skate.


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## Skate (12 December 2020)

qldfrog said:


> Find it interesting and maybe an incentive for me to give a go to a back to basic trend system, to add diversification





Warr87 said:


> if you do have that divergence then maybe a basic trend system would be a good idea!




The two quotes by @qldfrog & @Warr87 got me thinking about making a post of a "simple trend trading strategy" - with a twist of course. As trend trading strategies go, using "Guppy's Multiple Moving Averages" would be a suitable choice as it's easy to follow & understand. The relationship between the 12 exponential moving average (EMA) tells the story of long & short term buyers.

*The Guppy Multiple Moving Average (GMMA) indicator*
This nifty homegrown lagging indicator provides an exciting approach using 12 (EMA). The Guppy Multiple Moving Averages is a great tool if you are considering building a trend-following system. The (GMMA), is a fine technical indicator that identifies the strength & changes in trends. The changes in the trend are indicated by the GMMA ribbon. The combined (EMA) ribbon times the entry & when to get out of a trade.

*Multiple Blue & Red Lines* (moving averages)
The (GMMA) is composed of multiple lines that help traders see the strength or weakness in a trend better than if only using one or two moving averages or (EMAs). Compression to the expansion of the “lines of the ribbon” tells one story whereas the reverse (expansion to compressions) tells another. On the other hand, the "crossing" of the ribbons, is a whole other story in itself.

*GMMA Ribbon colours*
The short-term investors are represented by the “Blue Ribbon” & the longer-term investors are represented by the “Red Ribbon”. To keep the post short, those interested can do their own research as to how these lines (of the ribbon) interact. We can use the association of the "GMMA ribbon" (the lines) to our advantage. The downside to (GMMA) - it’s a "lagging indicator" that will never catch the low of the pivot but at times goes very close.

*Twisting the GMMA*
I’ve twisted Guppy’s idea. I've taken the average of Guppy's slow & fast-moving (EMA's) then added a smoothing factor. Using the average of the EMA bands (IMHO) sharpens the usefulness of the indicator allowing me to turn the GMMA indicator into a complete trend trading strategy.

More to follow...

Skate.


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## Skate (12 December 2020)

*Cracking the GMMA indicator*
As a trend trader, it’s just not enough to identify a confirmed trend. Timing the entry (when to jump into a trend) is so important. The Guppy's (GMMA) Indicator allows you to get into a trend as soon as possible & to get out after a trend has reversed.

*Reading the chart below*
I've marked the chart in yellow that holds an interest (the strategy signal area). Other patterns repeated within the chart are considered false patterns. The GMMA ribbon (the indicator) identifies the trend, the strength of the trend & the reversal of the trend. The "blue ribbon" is the short term exponential moving averages (EMA) whereas the "red ribbon" is the long term exponential moving averages (EMA). The "GMMA Strategy" uses the average of the averages. (how's that for double Dutch)

*Marked in "yellow"*
The multiple lines of the Guppy's (GMMA) help traders identify the strength or weakness within a trend. The "GMMA Strategy" has a buy signal for Monday 14th December 2020 so I'll use that as the example. (EMR)




*Backtesting & Monet Carlo runs*
I've explained to @Roller_1 recently that I have the basic Norgate data package. Norgate Silver subscription doesn't include "Delisted Equities" or "Historical index constituents" & that's why I normally post recent backtests for this very reason. To me, backtesting gives a base comparison at best, a comparison between strategies or within a strategy. Backtesting & real-live trading 'in my opinion' will never truly align as there are so many variables. Backtesting on historical data alone means "JACK" & should never be relied upon. 'Out-of-sample' data is the only true measure of value, meaning paper trading is the only real measure of a systems worth.

*It's worth remembering*
You're up against traders who will have more experience, more information & much more money than you, so we need to concentrate on survival when thinking about developing a trading system. Making money in this game is secondary.

*Short backtest period*
The "GMM Strategy" backtest period is for this calendar year (1st Jan - to - 11th Dec 2020). The results posted below "should never be relied upon" but it gives a clear example that using Guppy's GMMA is worthwhile in coding a simple trend trading strategy. The results are posted in the spirit of sharing.











*Summary*
The 'Dump it here' thread is about ideas, ideas that I've found helpful in my trading experience. The Guppy GMMA indicator falls within the scope of this thread.

Skate.


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## Warr87 (12 December 2020)

For a 'simple' trend following system I was thinking something as simple as a donchian, or an MACD system. But can't argue with your results!


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## investtrader (13 December 2020)

Hi Skate,
Why doesn't the system take a Buy on about 17th Jan? Do you have another rule besides the GMMA signal?
Cheers


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## Skate (13 December 2020)

investtrader said:


> Hi Skate,
> Why doesn't the system take a Buy on about 17th Jan? Do you have another rule besides the GMMA signal?
> Cheers




@investtrader the succinct answer to your question is yes & there are other rules besides the crossing of the two ribbons for a buy signal. The GMMA ribbon as shown on the chart was for example purposes so others would know what I was trying to convey. The GMMA ribbons are subjective in interpretation due to compression & expansion of the ribbon EMA lines. The "compression to expansion" & "expansion to compression" of the GMMA EMA ribbon (long & short) tells a powerful story where the price might be heading next.

*"Buy on about 17th Jan?"*
The reason the position was not taken earlier (on about 17th Jan) was due to the fact the "Buy Condition" wasn't satisfied. The GMMA buy signal of my "GMMA Strategy" is the average of the "6 short term EMA's" crossing over the "6 long term EMA's" with a smoothing factor applied. The buy signal is also at the mercy of filters & parameters. If you look at both charts you can see that there is an "incomplete cross" of the EMA's (the yellow circled area). The 2nd chart below is expanded for clarity








*Closeup view of the chart in question*
The closeup shows the "incomplete cross" of the EMA's (the yellow circled area). FYI - the "GMMA Strategy" buy condition is "the average of the average" with a smoothing factor applied. I should also point out if you use a low smoothing factor the signals are closer to pivot low but creates a fair amount of whipsawing. A longer smoothing factor reduces whipsawing but at the cost a later signal. It's a trade-off.




Skate.


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## investtrader (13 December 2020)

Okay, I see. You are strictly using a cross as opposed compression of the averages.


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## qldfrog (13 December 2020)

Skate said:


> @investtrader the succinct answer to your question is yes & there are other rules besides the crossing of the two ribbons for a buy signal. The GMMA ribbon as shown on the chart was for example purposes so others would know what I was trying to convey. The GMMA ribbons are subjective in interpretation due to compression & expansion of the ribbon EMA lines. The "compression to expansion" & "expansion to compression" of the GMMA EMA ribbon (long & short) tells a powerful story where the price might be heading next.
> 
> *"Buy on about 17th Jan?"*
> The reason the position was not taken earlier (on about 17th Jan) was due to the fact the "Buy Condition" wasn't satisfied. The GMMA buy signal of my "GMMA Strategy" is the average of the "6 short term EMA's" crossing over the "6 long term EMA's" with a smoothing factor applied. The buy signal is also at the mercy of filters & parameters. If you look at both charts you can see that there is an "incomplete cross" of the EMA's (the yellow circled area). The 2nd chart below is expanded for clarity
> ...



Thanks Skate, GUPPY why not, as good as any start base, and better than many.I will play on this concept and try to add a basic system to my portfolio.And thanks for providing a comparison backtest to ensure I am not completely off the chart
Trying to remember simplicity is best


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## Skate (14 December 2020)

Skate.


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## Skate (14 December 2020)

Skate.


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## Skate (14 December 2020)

Skate.


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## Skate (15 December 2020)

Skate.


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## Skate (16 December 2020)

Skate.


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## Skate (17 December 2020)

Skate.


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## Warr87 (17 December 2020)

your systems performances always make me feel inadequate @Skate, lol.


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## qldfrog (17 December 2020)

Warr87 said:


> your systems performances always make me feel inadequate @Skate, lol.



But isn't it great?
Imagine your system always beating others, on a so so day you would think: well was a down day, nothing to change or fight for, and on a great day, you would be beaming self congratulation and reflecting on how good you are..
No such risk here, we are all humble apprentices with a sky as a limit


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## othmana86 (18 December 2020)

Hi Skate. New here so this is my first post. 
I went through your code for WTT strategy.Curios if you were still paper trading it? Have you got an update on it at all?
I currently have a tradelongterm subscription with Nick wedge trading US stocks. I wanted to diversify and trade on the ASX and looking for a systemic strategy that’s low maintenance. I’m relatively experienced but time is a factor.. 

Appreciate you teaching the layman’s how to code on Amibromer


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## Skate (18 December 2020)

othmana86 said:


> Hi Skate. New here so this is my first post. I went through your code for WTT strategy. Curios if you were still paper trading it? Have you got an update on it at all? I currently have a tradelongterm subscription with Nick wedge trading US stocks. I wanted to diversify and trade on the ASX and looking for a systemic strategy that’s low maintenance. I’m relatively experienced but time is a factor. Appreciate you teaching the layman’s how to code on Amibromer




Hi @othmana86

Thank you for making your first post in the "Dump it here" thread & it's always pleasing when new members take the time to read some of my posts.

*Warning*
Every strategy I have uploaded were from my first attempt at coding a trading system. I traded each uploaded strategy back in (2015) but I wouldn't recommend others trading the same strategy in today's markets. The strategies uploaded are for those new to Amibroker. The strategies are educational rather than strategies to trade, that's all.

*Basic understanding*
I uploaded my first attempt at coding so those new to Amibroker would get a basic understanding of how to construct a strategy from scratch - a slight glimpse into coding a mechanical trading system.  The procedure to code the WTT Strategy was in 12 easy steps to follow. Read from here: https://www.aussiestockforums.com/threads/dump-it-here.34425/post-1087843

*The WTT Strategy*
I constructed my version of the WTT strategy from what I have read. Only those who own a copy of "Radges WTT Strategy" would know the nuances & parameter settings.

*Not long ago*
I uploaded screenshots to display the signal comparison of "Radges WTT" compared to my uploaded version - the signals were very close. Read from here: https://www.aussiestockforums.com/threads/dump-it-here.34425/post-1088062 or here https://www.aussiestockforums.com/threads/dump-it-here.34425/post-1088098 or here https://www.aussiestockforums.com/threads/dump-it-here.34425/post-1088102

_*"I wanted to diversify and trade on the ASX and looking for a systemic strategy that’s low maintenance"*_
The WTT is a simple breakout strategy. I'm "currently trading" my version of the WTT Strategy & its a good performer but one of the worst performers in my trading stable. The idea of a "period" breakout is simple, sound & easy to code.

*Here are the differences between my code & what I know of Radges WTT parameters*
1. My version of the WTT Strategy "Index Filter" uses a lookback period from *20 weeks* == The Radge "WTT strategy" uses a *10 week* lookback period for the Index Filter
2. My version of the WTT Strategy the "Trailing Stop" is set at *20%* when the Index Filter is ON == The Radge "WTT strategy" uses *40%* when the Index Filter is ON
3. My version of the WTT Strategy uses a moving average as *an additional exit* == The Radge "WTT strategy" *only uses a "Trailing Stop Exit"* driven by the Index Filter.
4. My version of the WTT Strategy uses a "Price Filter of (*min $0.05 *& Max of $10.00) == The Radge "WTT strategy" uses a (*min $1.00* & Max of $10.00)
5. My version of the WTT Strategy also uses additional filters & exit criteria that I don't discuss.

*Others may like to upload a backtest of Radges WTT (for comparison)*
There are members who have purchased the Radge WTT code & they may upload a backtest from 1st January 2020 the "start of this calendar year" as well from the start of this Financial year (2020/2021) for comparison. I'll upload the backtests from my version of the WTT Strategy so you can get an idea of its trading performance & results.

*1st January 2020 the "start of this calendar year"*







*1st July 2020 the "start of this financial year"






"Actual" Trading results of Skate's version - WTT Strategy*




Skate.


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## othmana86 (18 December 2020)

Skate
I’ve been on a lot of forums for other rubbish. Can I just say that the level of detail you give in your answers is phenomenal. Great work!

WTT is still a pretty good performer. Win/loss Is lower than 50 but profit factor is high. Im having a look at your happy cat weekly and that’s a stronger performer for sure. What’s the story on that one? Is the code available on that just so I can understand it.

Any feedback from anyone else on nick radges WTT?


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## stasisbr (18 December 2020)

@Skate @othmana86  What universe are you testing on? I can run a backtest against the turn key code.


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## othmana86 (18 December 2020)

stasisbr said:


> @Skate @othmana86  What universe are you testing on? I can run a backtest against the turn key code.




hey man!
Thanks. Let’s try it on the ASX XAO. I think that’s what skate has it on..


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## Skate (18 December 2020)

othmana86 said:


> Skate I’ve been on a lot of forums for other rubbish. Can I just say that the level of detail you give in your answers is phenomenal. Great work! WTT is still a pretty good performer. Win/loss Is lower than 50 but profit factor is high. Im having a look at your happy cat weekly and that’s a stronger performer for sure. What’s the story on that one? Is the code available on that just so I can understand it.
> 
> Any feedback from anyone else on nick radges WTT?




@othmana86 as you are a new member to our "Dump it here" family - let me give you a bit of background. If you search for "HappCat" by "Skate" there are tons of posts to read about the strategy. (40 to 60 posts)

*Previous to the "HappyCat Strategy"*
As a small exercise, I coded a strategy from a post of another forum member @ducati916. This thread is chock full of gems scattered by other members & it was only fitting I turn his words into "Action" thus the name of the strategy - the "Action Strategy". I traded this strategy live so others could experience trading first hand & a few forum members traded along with me. When that strategy ended I was looking to trade another strategy & one member suggested trading the "HappyCat Strategy" live. 

*It's been tough*
I must say trading these past few weeks would have been difficult for the best of strategies & the "HappyCat" has been no different given the recent market conditions. 

*Buy condition*
I don't care how good a strategy is at jumping on a trend - but if you don't have the follow-through it's all for naught. Once you place the trade "everything else becomes irrelevant" as it's in the hands of the trading gods. Sitting on your hands at times is the best strategy until you get a sell signal. Sitting tight is sometimes hard to do but realistically that's what we have to do. As a systems trader, you must follow the signals religiously. If you can handle & accept that 50% to 60% of the buy signals will be duds - you'll be okay as a trader.

*Find more information about the "HappyCat Strategy"*
Read from here: https://www.aussiestockforums.com/threads/dump-it-here.34425/post-1085974

Skate.


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## Skate (18 December 2020)

stasisbr said:


> @Skate @othmana86  What universe are you testing on? I can run a backtest against the turn key code.




@stasisbr, the backtesting was conducted on the "All Ordinaries" XAO.

$100k portfolio (20 X $5k positions).
1st Date Backtest: 1st January 2020 to 17th December 2020
2nd Date Backtest: 1st July 2020 to 17th December 2020

Thanks for doing this - it would be great to check the comparison.

Skate.


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## Skate (18 December 2020)

Skate.


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## stasisbr (18 December 2020)

It certainly struggled with the March crash with default settings. For reference here's the upto date performance details from Radge's website. publicly available under the view performance link - https://www.thechartist.com.au/product/weekend-trend-trader-strategy/



Also noting that the publicly available results use slightly different criteria. 





Universe for the below is XAO ( Norgate Data - ASX All Ords Current and Past)
Index Filter is XAO. All other settings are the default.

1st Date Backtest: 1st January to 17th December 2020










2nd Date Backtest: 1st July 2020 to 17th December 2020









As a reference I run a modified version of this code with better results. everything needed to make it profitable is in this thread 

and I believe some other members have the turnkey code, and that may be slight variances in the code over time so it would be interesting to see other outputs of the base.


----------



## Skate (18 December 2020)

Skate.


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## Skate (18 December 2020)

Skate.


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## Skate (19 December 2020)

Skate.


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## qldfrog (19 December 2020)

Skate said:


> View attachment 116737
> 
> 
> View attachment 116738
> ...



How is Mrs Skate handling the negative results so far?
Isn't it a play you can not win?
If a success..expected...
If a failure, blames ahead😊


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## Skate (19 December 2020)

qldfrog said:


> How is Mrs Skate handling the negative results so far?
> Isn't it a play you can not win?
> If a success..expected...
> If a failure, blames ahead😊




@qldfrog, Mrs Skate fully realises negative returns early are to be expected as it takes time to fill a strategy & become profitable. Mrs Skate also realises the amount of work that goes into every one of my strategies. The success of the "Zebra Strategy" is expected by both of us. 

*Strategy failure*
Failure of this strategy will be caused by "unexpected" trading conditions & hopefully not because of the "inadequacies" of the strategy. 

*It's tough *
It's hard trading for most of us at the moment & its been a real slog these past few weeks. 

*Trading a low $20k portfolio with $10 commission is not helping *
The round trip is 2%, ouch!! - early days yet. Short term results are not the measure of any strategy. Trading is a "marathon, not a sprint"

*Women traders*
I've found women to be better traders as they are able to handle the riggers of trading much better than us macho men, they can handle the emotional side of trading - much, much better. Also, women shine under pressure. Well, mine does.

Skate.


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## Newt (19 December 2020)

Couple of days late, but happy 2nd anniversary for your Dump it Here thread Skate.

I know my trading eyes are quite a bit wider from all the knowledge shared by all those that have contributed.  Thanks for taking the time everyone to pay back what you've been taught, learned, or figured out never to do again!

Cheers!          🍸    😎 🎅 🎄 🍺


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## lindsayf (19 December 2020)

Skate said:


> @qldfrog, Mrs Skate fully realises negative returns early are to be expected as it takes time to fill a strategy & become profitable. Mrs Skate also realises the amount of work that goes into every one of my strategies. The success of the "Zebra Strategy" is expected by both of us.
> 
> *Strategy failure*
> Failure of this strategy will be caused by "unexpected" trading conditions & hopefully not because of the "inadequacies" of the strategy.
> ...



How is $20 round trip 2% of $20000?


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## Skate (19 December 2020)

Newt said:


> Couple of days late, but happy 2nd anniversary for your Dump it Here thread Skate.
> 
> I know my trading eyes are quite a bit wider from all the knowledge shared by all those that have contributed.  Thanks for taking the time everyone to pay back what you've been taught, learned, or figured out never to do again!
> 
> Cheers!       🍸  😎 🎅 🎄 🍺




@Newt thanks for those kind words. Bouncing & sharing ideas is how we all learn. I've also benefitted from priceless gems others have contributed.

Skate.


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## stasisbr (19 December 2020)

I'd say 10 positions, each 2k,


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## Skate (19 December 2020)

lindsayf said:


> *How is $20 round trip 2% of $20000?*




@lindsayf, thank you for allowing me to clarify my previous statement. 

*Calculations*
The calculation was done on the "bet size" not the "portfolio size"
CommSec has a commission rate of $10 for purchases of $1,000 & under (that's why we can't re-balance this portfolio)

*My simple maths*
1% of $1000 = $10
Bet size = $1,000
$10 commission on $1,000 = 1% 
To buy & sell cost $20 on $1,000 (round trip = 2%)

*Scenario *
The calculations are done on $1,000 position sizing - if the position was a loser the commissions stay the same but result in a "larger commission percentage".

*On the flip side*
If the position is a winner the commission goes from $10 to $19.95 - CommSec is the winner by a country mile. This is the reason why "trading a small portfolio" is behind the eight-ball from the get-go.

Skate.


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## ducati916 (19 December 2020)

Mr Skate,

Is there a 'system' hiding in here?







This data is only tracked for the 1 week post IPO. Seems an ideal holding period. Possibly long term they continue on their merry way. Or not. But for a 1 week holding, interesting. Possibly @peter2 might have some ideas as I know he trades the US also.

jog on
duc


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## Skate (19 December 2020)

ducati916 said:


> Mr Skate, Is there a 'system' hiding in here?




@ducati916, this question is beyond my "pay grade". 

*As you have asked a question I feel that I should at least respond *
There is not a Technical analysis system that I know of that can take advantage of an IPO listing. In the secondary market, Technical analysis takes advantage of price movements looking for market inefficiency with no regards to the true value of the company but it’s perceived value. The perceived value is whatever a person is "willing to pay".

*Fundamental analysis looks for an underpricing of the IPO*
Fundamental analysis helps figure out if the companies IPO price is valued at a discount (lower than you believe it is worth). Fundamental analysis is the vehicle of choice as past earnings can be valued. The price movement in the first week (IMHO) can be explained by either (a) the IPO's inaccurate pricing methodology, (b) incomplete disclosure of the fundamentals of the company or (c) something other than public knowledge. The IPO "initial" price is a "guesstimate of value" but once it goes to the secondary market it's open slather a "free-for-all" with no buying or selling restrictions. The secondary market "price" (value) is always correct by consensus. 

*Technical Analysis*
With more trading data the scrutiny of the technical analysis comes into its own. In my opinion, there is no "system" hiding in the "captures" you have uploaded. 

Skate.


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## peter2 (19 December 2020)

Re: the apparent success of the US IPO's.  The Fed and low interest rates are fueling the constantly rising US markets. These conditions are making the probability for instant success by an IPO very high. ASX IPOs have not had the same success. Many are trading below their opening day's price. 

My systematic approach would be to spread the IPO capital across as many IPOs as possible to ensure buying into the better ones.


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## ducati916 (20 December 2020)

Skate said:


> @ducati916, this question is beyond my "pay grade".
> 
> *As you have asked a question I feel that I should at least respond *
> There is not a Technical analysis system that I know of that can take advantage of an IPO listing. In the secondary market, Technical analysis takes advantage of price movements looking for market inefficiency with no regards to the true value of the company but it’s perceived value. The perceived value is whatever a person is "willing to pay".
> ...





Mr Skate and @peter2 thanks for the response. So I have undertaken some really intensive research (4 examples) which suggest a methodology, if any were particularly interested. Here are the 4 stocks: 2 winner, winner chicken dinner and 2 losers.




The IPO lists at $5. Day 1 shoots up.




Lists at $20, day 1 shoots up.




A loser: lists at $6, day 1 shoots up, day 2 fail (but still above IPO price).




Lists at $5.90 and day 1 collapses.

So on this truly representative sample a system emerges: Check listing price. Day  before pre-market (night before) place order 10% above listing price (or whatever) close of trading day 1 sell.

This is simply a variation of the bracket orders we used to place in my prop. days. We were generally closed out by lunch-time.

jog on
duc


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## peter2 (20 December 2020)

For those who are interested in the performance of ASX IPOs. The 61 Financial website has some nice looking charts.  Recent IPOs


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## julo (21 December 2020)

Skate said:


> @stasisbr, the backtesting was conducted on the "All Ordinaries" XAO.




@Skate
Your backtest is on XAO including past constituents? I was testing several trending strategies on 'XAO current' vs 'XAO current + past' on period 01/01/2020 till now and there is really huge difference in performance. Of course I expected different results, but not such big difference. 
For the sake of completeness, I ran tests also on S&P to confirm @investtrader statement (post #4307) and results were poor as expected.


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## Skate (21 December 2020)

julo said:


> Your backtest is on XAO including past constituents?




@julo, my backtesting is done without "Norgate's Index Constituent" being an inaccurate reflection of the results. I upload backtests (usually a recent period) for a comparison of results between strategies. I've made over 100 posts acknowledging that without (Norgate's Index Constituent) the results mean "JACK" & shouldn't be relied upon. It was an intentional decision to downgrade from a "Platinum" Subscription to "Silver". My strategy development days are over & the Platinum Subscription was in excess of my current needs.

*Strategy Development*
It should be noted - the development of all my strategies was conducted using the "Platinum Subscription" package that included Historical Data with "Current and Past watchlist".


Skate said:


> @willy1111 thank you for doing this backtest for me. Looking at the comparison between the backtests with & without (Norgate's Index Constituent) the results are "chalk & cheese", being miles apart. The backtest results confirm it pays to have the Norgate's Platinum subscription when developing a new strategy.





Skate said:


> @CNHTractor your follow up post confirms @willy1111 sentiment about the inaccuracies of backtesting results when you are not using Norgate's historical index constituents. Note to self, "refrain from posting backtests in the future"





Skate said:


> *F.Y.I*
> 1. For strategy development using Amibroker you certainly need Norgate's Platinum Subscription package
> 2. When trading a strategy using Amibroker all you need is the Australian Stocks (Silver Package) - the package I have




*What I should have done*
I should have uploaded a comparison between what I "know" of Radges WTT settings & parameters & compared it to my version of his strategy (which I might do later today). When I posted the 12 steps in constructing a strategy using the WTT Strategy as an example. A few members who purchased Radges WTT Strategy explained the setting differences - I posted those differences so others weren't confused.

*How about*
Would you be kind enough to upload the WTT results without using "Current and Past watchlist" for a direct comparison to the results I posted previously? - I'll do the same when I get a break from trading today.

Skate.


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## Skate (21 December 2020)

Skate said:


> *How about*
> @julo,  would you be kind enough to upload the WTT results without using "Current and Past watchlist" for a direct comparison to the results I posted previously? - I'll do the same when I get a break from trading today.




*Important*
The backtesting results below are without "Norgate's Index Constituent" but gives a direct comparison.

@julo* here are the differences between my WTT code & what I know of Radges WTT parameters*
1. My version of the WTT Strategy "Index Filter" uses a lookback period from *20 weeks* == The Radge "WTT strategy" uses a *10 week* lookback period for the Index Filter
2. My version of the WTT Strategy the "Trailing Stop" is set at *20%* when the Index Filter is ON == The Radge "WTT strategy" uses *40%* when the Index Filter is ON
3. My version of the WTT Strategy uses a moving average as *an additional exit* == The Radge "WTT strategy" *only uses a "Trailing Stop Exit"* driven by the Index Filter.
4. My version of the WTT Strategy uses a "Price Filter of (*min $0.05 *& Max of $10.00) == The Radge "WTT strategy" uses a (*min $1.00* & Max of *$100.00*)
5. My version of the WTT Strategy also uses additional filters & exit criteria that I don't discuss.

*#1. Backtest comparison *- 1st January 2020 to 21st December 2020 (today)
Skate's version of the Weekend Trend Trader (WTT) Strategy "versus" Radge's Weekend Trend Trader (WTT) Strategy






*#2. Backtest comparison *- 1st July 2020 to 21st December 2020 (today)
Skate's version of the Weekend Trend Trader (WTT) Strategy "versus" Radge's Weekend Trend Trader (WTT) Strategy



Skate.


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## investtrader (21 December 2020)

I actually don't think that is a direct comparison. You are using a different universe - low price shares. I know that price leverage can improve it a lot.


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## Skate (21 December 2020)

investtrader said:


> I actually don't think that is a direct comparison. You are using a different universe - low price shares. I know that price leverage can improve it a lot.




*The backtest*
As @julo has confirmed, backtesting without "Norgate's Index Constituent" the results are inaccurate. To somewhat alleviate this I posted a direct comparison of the two (with their respective parameters)

*It gives a comparison* (maybe not a direct comparison as you have said)
@investtrader the comparison was between two strategies using their respective parameters. I agree, using different parameters & filters will give differing results. I've used the same PositionScore in both as I'm not sure what PositionScrore the Radge WTT Strategy uses these days.

*Genuine Backtest (WTT)*
It would have been great if others posted their results using the genuine Radge's WTT Strategy.

Skate.


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## othmana86 (21 December 2020)

Hi skate. @Skate I’ve been testing out your WTT code and playing around with some figures etc. I’m not new to coding just new to Amibroker. Albeit my coding skills are very limited. So just fiddling.
I noticed something which i can’t explain so hoping you may be able to.

Using your Standard wtt code   , I used the explore button to get me signals for a particular week. In this case let’s say 20th jan 19 to 25th jan 19. I get about 4 buy signals. When I click on the backtest with the exact period, I get about 8. 4 exactly the same as “explore” plus another 4. What’s the deal that?

I am going to assume that would not accurately resemble live trading which makes the backtest redundant..

thoughts?


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## Skate (21 December 2020)

othmana86 said:


> Hi skate. @Skate I’ve been testing out your WTT code and playing around with some figures etc. I’m not new to coding just new to Amibroker. Albeit my coding skills are very limited. So just fiddling.
> I noticed something which i can’t explain so hoping you may be able to.
> 
> Using your Standard wtt code   , I used the explore button to get me signals for a particular week. In this case let’s say 20th jan 19 to 25th jan 19. I get about 4 buy signals. When I click on the backtest with the exact period, I get about 8. 4 exactly the same as “explore” plus another 4. What’s the deal that?
> ...




@othmana86 that sounds strange. Check your AA Setting & make sure (1) you have the correct index suffix for your data supplier, (2) you have Pad & Align checked & (3) Add artificial future bar is checked.






*If all fails *
Check if the signals are the same using "1 recent bar(s)" - The issue would be a settings issue I'm sure.




Skate.


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## Skate (21 December 2020)

Skate.


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## Skate (21 December 2020)

Skate.


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## Skate (21 December 2020)

Skate.


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## Lone Wolf (21 December 2020)

othmana86 said:


> Hi skate. @Skate
> Using your Standard wtt code   , I used the explore button to get me signals for a particular week. In this case let’s say 20th jan 19 to 25th jan 19. I get about 4 buy signals. When I click on the backtest with the exact period, I get about 8. 4 exactly the same as “explore” plus another 4. What’s the deal that?
> 
> I am going to assume that would not accurately resemble live trading which makes the backtest redundant..
> ...




Backtest and explore are looking for different things. Explore is looking for signals generated in that period. It will include signals for the following week. (trades to be taken outside your window) Backtest will look for any trades opened during that period. The signals for those backtest trades occurred in the week prior to your window.

Or maybe more simply - The backtest results for that period should match the exploration results seen at the end of the previous week.

Below is an example, I used Jan this year as 2019 didn't give me many results.

Explore for Sun 19th Jan to Fri 24th Jan:


Backtest for the same date (does not match the above):


Exploration run at the end of the week prior to the backtest window - Fri 17th Jan:
(These explore results from the week before match the backtest results above)


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## julo (21 December 2020)

Skate said:


> *How about*
> Would you be kind enough to upload the WTT results without using "Current and Past watchlist" for a direct comparison to the results I posted previously? - I'll do the same when I get a break from trading today.
> 
> Skate.



@Skate I was testing CAM and GMMA, not WTT. Anyway, I was planning to look on WTT, so I hope I will post results this week.


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## Skate (22 December 2020)

*Putting out a call*
There must be a member who trades the genuine "Radge WTT" who is willing to post up a 6 month backtest.

*This can't be correct*
I'm sure the turnkey "WTT Strategy" would perform better than the backtest I've posted below. 

*The backtest period is from 1st January 2020 to 30th June 2020 *
This was a period that caused most traders real grief.



Skate.


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## Skate (22 December 2020)

Skate.


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## othmana86 (22 December 2020)

Lone Wolf said:


> Backtest and explore are looking for different things. Explore is looking for signals generated in that period. It will include signals for the following week. (trades to be taken outside your window) Backtest will look for any trades opened during that period. The signals for those backtest trades occurred in the week prior to your window.
> 
> Or maybe more simply - The backtest results for that period should match the exploration results seen at the end of the previous week.
> 
> ...



@Lone Wolf @Skate Thank you gents, you were both right. a. i had the settings incorrect and b. The backtest vs exploration matched the previous week. ill post the settings up in the next post just to make sure they are correct. I am also looking for someone to do a 10 yr back test on the code with and without historical constituents. I have made some modifications  I am happy to pay someone to do it as well, I just don't want to purchase the platinum  just yet...I need to see value in it. whos keen?


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## DaveDaGr8 (23 December 2020)

WTT ( Not Radges or Skate's ).

                        Without historic constituents.                                                                                                 And With









Same code, same Universe (ish), just without/with historic constituents.


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## othmana86 (23 December 2020)

Wow! I’m actually shocked at the difference.


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## DaveDaGr8 (23 December 2020)

The universe that i tested on was the ASX current ( 2528 symbols )  vs  current & delisted ( 4615 symbols ).




So around 2000 extra companies don't exist today that did exist in the past.

The 2 main reasons that we're interested in are.
1 - It does really really badly and dies. Most of the times this is a slow death and trend systems will be well out of these. Sudden deaths can and do happen and can't be avoided.

2 - It goes really really well and they get merged, takeovers etc. This is where Trend systems should already be in a well established trend.

Looking back further than 2-3 years ( especially on the low end of town ) and you're missing out on all the companies that did so exceptionally well that they don't exist anymore.


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## peter2 (23 December 2020)

Amibroker back testing question related to current topic. 

Our system starts a trend trade in a stock eg Bellamy's and the system holds it until it's taken over by China. 
In real life the position is sold before Bellamy's gets delisted. How does the Ami back tester handle this situation?


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## 2Finn5 (23 December 2020)

peter2 said:


> Amibroker back testing question related to current topic.
> 
> Our system starts a trend trade in a stock eg Bellamy's and the system holds it until it's taken over by China.
> In real life the position is sold before Bellamy's gets delisted. How does the Ami back tester handle this situation?




you can tell Amibroker to sell any stocks before they delist in your backtests https://norgatedata.com/amibroker-faq.php#exitpriortodelisting


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## Roller_1 (23 December 2020)

Skate said:


> View attachment 116897
> 
> *Putting out a call*
> There must be a member who trades the genuine "Radge WTT" who is willing to post up a 6 month backtest.
> ...





the WTT book from memory was written for the russel 3000. Hence the high(er) price filters.


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## Skate (23 December 2020)

qldfrog said:


> Yesterday saw my worst trading day for my systems and i lost 20pc of my profit since july outch




*Risk & Reward*
Trading is more difficult than most realise because it's a trade-off between the risk you are willing to take versus the reward associated with that risk.

*Backtest*
The backtest results below are irrelevant. 

*Visualisation of the Risk versus reward*
I've posted the backtest so you can visualise the Risk versus Rewards of trading. 

*The STOCH Strategy *
This would be the perfect strategy for a new trader on their "training wheels" as the strategy has a high win rate with half-decent returns (rewards). Trading infrequently also somewhat goes to elevating the emotional side of trading.

*Disclaimer*
1. The Flying Pelican Strategy (currently being traded)
2. The ORB Strategy (currently being traded)
3. The STOCH Strategy ("never traded" - as it falls well short of my risk tolerance)





Skate.


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## Skate (23 December 2020)

Skate.


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## qldfrog (23 December 2020)

Skate said:


> *Risk & Reward*
> Trading is more difficult than most realise because it's a trade-off between the risk you are willing to take versus the reward associated with that risk.
> 
> *Backtest*
> ...



just realised I made a mistake in my spreadsheet: and a positive  result I did not loose 11k, "just" 6k which is not my worst day ever :-!   and then in line with expected loss based on the fall yesterday...hopefully will catch up later on, but we are in a weird market not helped by the coming Xmas/NY break


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## Warr87 (23 December 2020)

qldfrog said:


> just realised I made a mistake in my spreadsheet: and a positive  result I did not loose 11k, "just" 6k which is not my worst day ever :-!   and then in line with expected loss based on the fall yesterday...hopefully will catch up later on, but we are in a weird market not helped by the coming Xmas/NY break




yup. does seem to be a weird market. i lost a lot of profits yesterday but rebounded a bit today. i seem to be following closely to you and skate with my fluctuations.


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## qldfrog (23 December 2020)

Warr87 said:


> yup. does seem to be a weird market. i lost a lot of profits yesterday but rebounded a bit today. i seem to be following closely to you and skate with my fluctuations.



yes small rebound today.All good but no real direction at this stage


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## Warr87 (24 December 2020)

qldfrog said:


> yes small rebound today.All good but no real direction at this stage




my weekly is doing good. its my monthly and daily that are suffering right now tbh.


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## Lone Wolf (24 December 2020)

DaveDaGr8 said:


> WTT ( Not Radges or Skate's ).
> 
> Same code, same Universe (ish), just without/with historic constituents.




So in your test, you had significantly better results when you used the historical constituents list? Is this consistent with other systems you've tested? My findings have always been the opposite. I don't think I've ever had a system perform better with historic constituents considered.

Are you just doing as recommended by Norgate and adding the historial constituent check to your Buy condition?
"AND NorgateIndexConstituentTimeSeries("$XAO")"


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## DaveDaGr8 (24 December 2020)

Years ago when i first bought the platinum pack, all my systems performed significantly worse. I don't really know how most perform now with/without constituents added as it's not something i generally test. It took a long time to get my systems behaving better.

For those 2 tests, the first one was run setting ASX as the market not a watchlist. $XAO only gives you the top 500 ASX stocks. There's no need to use Norgates constituent time series as we're not filtering to an index, just using/testing the whole market.

The second test is a bit trickier. There are 2 markets that you need to merge, ASX and AU Delisted Stocks. If you go into your NDU and select watchlist library you can create a new dynamic watchlist which i've labelled "ASX FULL & DELISTED". This will give you a full watchlist of  4784 stocks today AND as a bonus, once you do it it automatically updates and is added to Amibroker. Again there's no need to use norgates function as we're just testing on the whole market, not filtering against an index.

I do use "OnLastTwoBarsOfDelistedSecurity" as a buy/sell condition.

If i were to test against XAO,XJO,XKO indexes ( ie when a stock moves in or out of these indexes ) .... then yes i would add norgates constituent function.

If you head to https://www.thechartist.com.au/product/weekend-trend-trader-strategy/ and click on view performance, you can see that Nicks "Test Universe" is ALL ASX stocks current and delisted (3731). Not sure where the other 1000 are but he might prefilter it somewhere, or it's old. So I am testing as he had designed.

P.S. ... I really have just winged it, so if i've made a mistake let me know.


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## Lone Wolf (24 December 2020)

DaveDaGr8 said:


> For those 2 tests, the first one was run setting ASX as the market not a watchlist. $XAO only gives you the top 500 ASX stocks. There's no need to use Norgates constituent time series as we're not filtering to an index, just using/testing the whole market.




Thanks Dave. My mistake. I missed that WTT uses all ASX stocks rather than the All Ords. That explains it for me.

What you did with merging two markets into a new watchlist is interesting. If for some reason you didn't want to do this, you can filter by multiple markets. Change the Category so that multiple entries are "Market", tick "Match any" and you get the 4784 stocks you want.

I had a look, but I can't see where Nick might be getting 3731 stocks from either. He may be using a different delisted list, or as you say, have some other filter in place.


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## DaveDaGr8 (24 December 2020)

hahaha ... I knew there must've been an easier way to do it.

At least we both got the same number ... so we're either both right or both wrong.


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## Skate (24 December 2020)

Skate.


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## Skate (24 December 2020)

Skate.


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## Skate (24 December 2020)

Skate.


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## Skate (24 December 2020)

Skate.


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## qldfrog (24 December 2020)

Skate said:


> View attachment 117109
> 
> 
> Skate.



Santa portrait most appropriate😊


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## Skate (26 December 2020)

Skate.


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## julo (29 December 2020)

Hi everybody!
I've seen many portfolio performance charts where author compares performance of his strategy to index. *Q: It that methodically correct?*
I have doubts:
1. when I use adjusted data (dividends, splits etc.), results reflect reinvestment of the dividend payment to the stock, which dividend was payed from. Right? 
2. there are no adjustments for index (such as S&P500), but if I held perfect portfolio mirroring S&P, I would receive roughly 3 % annually as dividend yield.
*A: So I think, that in that case annual return of S&P should be increased by dividend payments. In other words, buy and hold strategy on S&P500 has annual return 7 % (past 14 years) and therefore I should assume that return, which is used for comparison to other strategies, should be around 10 %. Assuming no commissions. Am I right? *
Maybe I am reinventing the wheel, but I would like to confirm / reject this hypothesis. 
Thanks for your opinions!


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## Skate (29 December 2020)

Skate.


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## Skate (29 December 2020)

Skate.


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## Skate (29 December 2020)

Skate.


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## Sir Burr (29 December 2020)

julo said:


> I've seen many portfolio performance charts where author compares performance of his strategy to index. *Q: It that methodically correct?*




Yes if with the ASX, the All Ordinaries Total Return Index (XAOA) is used.


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## Sir Burr (29 December 2020)

Lone Wolf said:


> I had a look, but I can't see where Nick might be getting 3731 stocks from either. He may be using a different delisted list, or as you say, have some other filter in place.




Back in the day when I traded the Growth Portfolio and it went for a long slippery slide, resources were removed.
These can be filtered out with Norgate and possibly doing the same with WTT


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## qldfrog (29 December 2020)

Skate said:


> View attachment 117335
> 
> View attachment 117336
> 
> ...



I am happy to see Mrs Skate's Zebra warming up at last.
I favor peace within wedlock


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## Skate (30 December 2020)

Skate.


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## Skate (31 December 2020)

qldfrog said:


> my systems jumped on this one and I even missed one entry this morning as it overshot my entry point




*Year in review*
This post was going to be about reviewing my trading results for the last Calendar year because of the Covid-19 flash crash & how it affected my trading. 2020 was a year that highlighted the disparaging difference between the well off & the not so well off, (through no fault of their own) The image of the long Centrelink queues on TV was hard to watch. Financially it was by far my best trading year. Covid-19 provided traders with an opportunity not offered to many others, barring a few businesses. Explaining my trading results in more detail would be puffing & at risk of sounding like "The FLY" without the profanities. Reading @Garpal Gumnut recent post is a reality check for all of us. Read here: https://www.aussiestockforums.com/threads/trading-psychology.14239/post-1105707 & here: https://www.aussiestockforums.com/threads/trading-psychology.14239/post-1105713

*I made a post in the AVZ thread that I quickly deleted *
The deleted post was an example between a Trading Strategy & a Trading plan. A Trading plan trumps a Trading Strategy each & every time - it's the very reason why @qldfrog missed the signal highlighted above in his post. He missed the signal because of his Trading Plan.

*I went on to say in the "deleted post" *
In regards to missing a signal, you-win-some, you-lose-some, it's just the nature of how we elect to trade. But missing a trade still hurts to some degree. Selling a profitable trade is harder to swallow than missing a signal when the position recovers on the same day of its exit. See below (OMH) was exited yesterday only to rebound.




*Backtesting means Jack*
Back in the "old days", (2015) I use to trade the backtest feature of Amibroker using "Add artificial future bar" but soon realised that this method had a few shortcomings as re-balancing was an issue. The main issue using the Backtest feature to trade was that Amibroker took the trade with no consideration of my "Trading plan". A trading plan trumps a trading strategy every time & this is why "Amibroker Backtesting" means Jack.





*Trading using the Backtest feature*
Trading using the backtest feature looks the goods but coding in a Trading Plan has eluded me. Trading using the backtest takes the signal with no regard to your Trading Plan. Trading using the backtest feature it records the buy signal even though the signal is not taken. When this happens it will never generate another signal if the position is not taken for a variety of reasons. Here is a perfect example from yesterday.

*Backtest Signals*



*Long story short*
I missed EMR as it gapped over my 3% premium to the last closing price. My order was purged at the end-of-trading. Being philosophical "you win some, you lose some". It's worth noting that Amibroker Backtest can't be overridden to compensate for missed (not purchased) positions.

*Trading using the Explore feature*
I trade using the explore feature as it displays the vitals I'm after. In a previous [post] I explained, Mick Doohan, (who won five consecutive 500cc World Championships) when he arrived at a new track, he wanted to know two things (1) Which way the track ran (clockwise or anticlockwise) & (2) What was the lap record. I trade much the same as I want to know three things (1) What to buy, (2) How many shares to buy & (3) What price to offer in the pre-auction. It's simple & clean. This is the post I'm referring to, I'm biased but it's a good read - https://www.aussiestockforums.com/threads/dump-it-here.34425/post-1014594

*Exploration Signals*



*Exploration Analysis*
This style of trading generates all signals & not limited to "position sizing" - a definite advantage.

Skate.


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## Bazzi (31 December 2020)

@Skate, We are admirers of your trading systems you established and tweaked. Would you consider having it similar to "thechartist" making it available to subscribers to have it auto trade (Like IB API) to remove our emotion factor in trading?

Thanks, Bazzi


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## Skate (31 December 2020)

Bazzi said:


> @Skate, We are admirers of your trading systems you established and tweaked. Would you consider having it similar to "thechartist" making it available to subscribers to have it auto trade (Like IB API) to remove our emotion factor in trading?
> Thanks, Bazzi




@Bazzi I have a stack of great trading systems & trade many of them. All my original systems were developed when I had the equivalent of today's Norgates platinum subscription. If I was trading back in 2008  when the GFC hit it would have turned out to be a "non-event" for me, meaning I would have had a great year trading my systems in 2008 & a tremendous 2009. 

*Trading in 2011 was entirely different *
Trading in 2011, my systems were neutral - all breaking even or making a few dollars which were pleasing, (2011) is my benchmark year.

*Trading in the first quarter of 2020*
2020 with the Covid-19 flash crash was not a concern at first as my strategies weathered 2008 & 2011 nicely, falsely giving me a sense of security - believing I'd be ok no matter what. @bigdog gave me an early heads up to what was about to happen. Being a staunch system trader I would follow the system & trading plan without even blinking. To my dismay, I lost some serious coin in two short weeks of trading. This was the first time I was disappointed with my coding efforts in not protecting me against unforeseeable circumstances. It was the first time my wife felt uneasy with trading as it was a lot of money to lose in such a short period.

*The HappyCat & Panda Strategies*
I'm trading these strategies & posting the results live as a forum exercise for those trying to understand what is required to trade successfully. The Action & Zebra strategies were also a forum exercise to demonstrate how hard it is to trade a small portfolio. Trading small "if managed correctly", is a "foot in the door" to experience trading for the very first time. 

*What I'm trying to say*
Losing my money doesn't worry me but if you were to lose one dollar of your money because trading one of my systems - it would be devastating for me. A cross too heavy to bear.


Sir Burr said:


> Back in the day when I traded the Growth Portfolio and *it went for a long slippery slide*, resources were removed.




*Would you consider having it similar to "thechartist" making it available to subscribers?*
No, never.

Skate.


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## captain black (31 December 2020)

Skate said:


> It's worth noting that Amibroker Backtest can't be overridden to compensate for missed (not purchased) positions.




That's not correct.

Use a buystop as part of your entry condition, adjust your trade delays and set the buystop entry condition to false if the low of the entry day gaps up greater than the previous close plus 3%.


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## Sir Burr (31 December 2020)

Skate said:


> No, never.




Skate, I would never say never. Maybe if system gurus had independent audits providing actual traded results.


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## Skate (31 December 2020)

@captain black, I just realised I forgot to wish you a Merry Xmas. Trading is motoring along just nicely at the moment. The Covid-19 crash made Mrs Skate feel ill wiping out a large chunk of money, now that's an experience I wouldn't like to repeat.

*Trading Equity curve update*
The combined Equity curve is from 1st July 2019 to today. Trading is back on track. I was lucky to have had a sizable amount of open profits that allowed me to keep pulling the trigger.




All the best for the New Year !!

Skate.


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## Skate (31 December 2020)

Skate.


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## Skate (31 December 2020)

Skate.


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## Skate (31 December 2020)

Skate.


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## qldfrog (31 December 2020)

captain black said:


> That's not correct.
> 
> Use a buystop as part of your entry condition, adjust your trade delays and set the buystop entry condition to false if the low of the entry day gaps up greater than the previous close plus 3%.



Not that it matters a lot but the way i was doing it was similar, adding a voluntary look forward to check that tomorrow open was below my allowed pc gap.
But then it was adding potentially extra buy whereas in real world, i was just missing a buy.
I personally think backtest means a lot, and you need to ensure any difference between backtest and real is explained.can be errors, shot up above buy limits, etc.
As long as you understand any difference, then go ahead.if not.stop..and this is what i did with one system 2 months ago.
will go into forensic investigation once i get some time.once again thanks Skate for the emulation.i also understand your reluctance cf openning a black box service.things can go wrong and you do not want to feel responsible.i myself (sorry for the poor form) do NOT want to give such advices to either family or friends as they will forget their 100 to 150 gain ,to only remember their 150 to 110 loss.
human nature


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## Skate (31 December 2020)

Sir Burr said:


> Skate, I would never say never. Maybe if system gurus had independent audits providing actual traded results.




*HappyCat Equity Chart Correction*
@Sir Burr is correct - This is why it's so important to have independent audits of quoted results. The Equity Chart for the HappyCat Strategy had the wrong date for today - being a short week the week ended today (31st December 2020) & not tomorrow which is obviously the 1st January 2021. I ran out of time to correct the mistake so I'm making a corrected re-post.

*Corrected Chart*



Apologies for the error.

Skate.


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## captain black (31 December 2020)

qldfrog said:


> Not that it matters a lot but the way i was doing it was similar, adding a voluntary look forward to check that tomorrow open was below my allowed pc gap.




There's no need to use forward looking code.

Skate's been corrected on this issue several times and still makes the same incorrect statement. It's important that beginners are given factual information.


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## qldfrog (31 December 2020)

captain black said:


> There's no need to use forward looking code.
> 
> Skate's been corrected on this issue several times and still makes the same incorrect statement. It's important that beginners are given factual information.



Thanks @captain black , i just reread your way,will try to add it.
May i ask: does this handle the missed buy properly and your buystop trigger does not add an extra buy (if any available)?
i mean the above during backtest..


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## Skate (31 December 2020)

Skate said:


> In regards to missing a signal, you-win-some, you-lose-some, it's just the nature of how we elect to trade. But missing a trade still hurts to some degree. *Selling a profitable trade is harder to swallow than missing a signal when the position recovers on the same day of its exit.* See below (OMH) was exited yesterday only to rebound.





*OMH (O.M. Holdings)*
I'm sure I'm not cut out to trade a Daily Strategy. Out of (OMH) one day & back in the very next bar.


*The Panda Strategy (Todays Exploration Signals)*









Skate.


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## Warr87 (31 December 2020)

qldfrog said:


> Not that it matters a lot but the way i was doing it was similar, adding a voluntary look forward to check that tomorrow open was below my allowed pc gap.
> But then it was adding potentially extra buy whereas in real world, i was just missing a buy.
> I personally think backtest means a lot, and you need to ensure any difference between backtest and real is explained.can be errors, shot up above buy limits, etc.
> As long as you understand any difference, then go ahead.if not.stop..and this is what i did with one system 2 months ago.
> ...




I have some family (the ones who know about my trading) suggest I manage theres. I'm reluctant. I'm ok with losing my own money, but I wouldn't feel good losing my families. If my account blows up, thats on me. I'd feel stupid. I'd feel too guilty if it was a families account.

A friend of mine knows about my CFD crypto trading too, who also wants me to trade and do it for him. Told him I would give him my EA, help him setup MT4, but I definitely wasn't going to provide a service to him. Same problem as above: losing my money is one thing, losing someone else's is very different.


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## investtrader (31 December 2020)

Anyone use this for market timing?


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## Rsthree (31 December 2020)

Bazzi said:


> @Skate, We are admirers of your trading systems you established and tweaked. Would you consider having it similar to "thechartist" making it available to subscribers to have it auto trade (Like IB API) to remove our emotion factor in trading?
> 
> Thanks, Bazzi




Actually I've been meaning to ask a question in a similar vein. Skate would you ever consider becoming a trading educator. You're already doing it in an informal way through the forum and I gather that its something you enjoy doing.

You certainly have the background for it, amongst other skills, I recall reading that your career included train the trainer and course development. 

Your approach, your knowledge of amibroker, your system delevelopment skills and experience would provide a wealth of value for the beginner and seasoned trader alike. I'd be the first to sign up.


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## Skate (31 December 2020)

Rsthree said:


> Skate would you ever consider becoming a trading educator




@Rsthree there is already a flood of educators with much more experience than me.

*The "Dump it here" thread is a collection of posts that have been helpful to me in my trading *
I vividly remember back in 2013 only one forum member was willing to help while others wanted to belittle "someone new". I had trouble understanding the basics of trading from a business sense.

*Let me quote a few passages from a good educational book *
Let's start with mature traders, those who’ve been around the block or two. Over time your views will change, soon realising that the secret to trading successfully is "staying in the game" & not necessarily making a lot of money quickly but compounding it over time. Beginners tend to gyrate from one idea to another based on what they think is going on in the market or what they have read.

*Markets*
Markets are highly efficient, but not perfectly so. Having a Trend Following system with a trading strategy exploits the inefficiencies over time. Trading has a natural ebb & flow that affects everyone emotionally when they persist in one way or the other, most traders want calm & servility but this is the wrong mindset to have, as traders we need chaos & volatility.

*Trading is easy, making money trading is the difficult part *
Trading consistently & successfully is even harder, which is why the majority of people who try to make money from trading fail. Slow, steady & methodical trading will win the race as there is never, ever, overnight success. Every strategy & every trader will have periods of good performance & periods of poor performance, yet beginners tend to worry about the short term ups & downs of their account.

*Patience*
For a strategy to work, you need to be patient as it can take months for a strategy to develop into profits. That's just the nature of the beast. It's very difficult for anyone (not just me) to say if a strategy is a good one or not for "you" since it all depends on the kind of trader you are & what's your maximum "pain" level when things start to go not as expected.

*I'm not an expert by any means*
A successful profitable trader, yes.

*My views are not always correct but that's not the point of this thread*
The point is for others to have their say & expand on a post by adding their slant or point of view - that's how we learn & help others. I can honestly say, I've tried my best.

Skate.


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## investtrader (1 January 2021)

"Over time your views will change, soon realising that the secret to trading successfully is "staying in the game" & not necessarily making a lot of money quickly but compounding it over time." 
Skate, this may be the most important sentence any trader can read - well said. Unfortunately, it is the reason that 90% of traders fail - they spend too much time searching for the holy grail instead of finding something that suits their personality and getting into the grind. So even though I feel this way the majority of traders searching for an ''edge'' will just gloss over this and never know the significance of it before giving up.
I just did a quick search of Australian share funds on the Netwealth platform over 3 years performance and the top one out of lots was about 16% p.a. I think there only a few that actually beat the benchmark incl divs. and most were pathetic.  My point being, don't get too worried if you can't match a backtest showing 30,40 or 50% per year. If you can regularly beat 15% you are a star in the financial services industry. You can then build on that.


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## Newt (1 January 2021)

investtrader said:


> Anyone use this for market timing?
> View attachment 117498




Personally use #XAO13WHL.au as feel its a bit more responsive for trading small and micro cap end of town.


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## investtrader (1 January 2021)

Yes, that does look good. Have to play around adding as a filter.


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## Newt (1 January 2021)

Its tricky to get something that reliably fits your risk profile, but have found Skate's defensive approach of a variable stop that tightens on the filter generally gives better RAR/MDD performance than tying to block buys when your filter activates.  Strong stocks that meet buy condtions still rarely pop up during market downturns and can be expensive to miss if you're blocking all buys.  Similarly, tighter defensive trailing stops in market downturns should contain DD but often won't kill the rare stocks that keep trending strongly.

As I get more grey hair, worry more about DD and being defensive in trading and on the road than pure CAR and minimising time to destination.  Heck, that's arguably been the biggest lesson from rotten 2020 and the CoronaCrash


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## Skate (2 January 2021)

Ante said:


> @Skate how about you trade the happy cat strategy that you have been paper trading a few weeks ago, the dull cat not the shiny cat as it freaks me out as well. It’s only a suggestion as I’ll be happy to follow anything you decide to trade






peter2 said:


> IMHO the Action Strategy was performing nicely.






qldfrog said:


> But i think it is a good time to end that Action strategy, and move to a different experience.
> By many aspects, action was a smooth ride, very good return, not many heart attacks on the way




*Along with the Action Strategy, the HappyCat & the Panda Strategy have run their course*
1. The Action Strategy was developed from the posts of @ducati916 & it was a simple exercise if one could follow a mechanical system blindly. It takes mental strength to trade this way.
2. After the Action Strategy came to an end I was looking for a new project for the thread. The HappyCat Strategy was being "paper traded" at the time & it was suggested to trade it live. It was an exercise to post real results to stimulate interest if the strategy would turn out to be successful or crash & burn (watching it unfold in real-time). The Portfolio sizing was restricted to what I believed most members viewed as the "norm" when paper trading or backtesting a new strategy. ($100k X 20) positions.
3. The Panda Strategy, well I've given it a go. (35days or 8 weeks to be precise). It was an exercise to discover if a good weekly strategy would be able to trade successfully on a daily basis. It's doing okay, but not to the level of its bigger brother trading the weekly periodicity. I'm biased, I prefer to trade weekly as it's the equivalent of boxing in slow motion.


Skate said:


> *Getting started*
> Don’t let fear or self-doubt keep you from getting started. The very act of getting started is much more important than getting it right.




*The Zebra Strategy*
I started this exercise (with permission) for a few reasons. I've lost focus that this thread is to help those just starting out, wanting to trade but don't know where to start. Most have money lying idle & sometimes a "nudge" is all it takes to put that money to work. It's challenging to trade a small portfolio as the commission costs are a drag on the performance of any strategy. Trading the Zebra Strategy will be a challenge but it's a foot in the door for Mrs Skate & might be for others. This week will be the week the strategy will be full.

*Future posting of the Zebra Strategy*
Some might have missed the boat, others might want to see the strategy unfold further to gain the confidence to take a plunge, so I'll post differently from the start this week. I'll display the weekly signals rather than the positions that are purchased or sold. The format change is so new members to the thread can pick up anywhere along the way & not limited to a closed system. Posting weekly signals is not a "signal service" but for educational value by following along with the entry & exit positions. This idea is in the same vein as @peter2 - displaying securities of interest.

Skate.


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## Skate (2 January 2021)

Skate.


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## Skate (2 January 2021)

Skate.


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## Skate (2 January 2021)

*The Zebra Strategy *
When the positions below are executed the strategy will have its 20 positions.


*Old Format*




*Next week  there will be a new format*
The new format will be the Exploration signals generated each week for the educational value of those who are new to trading to follow along. These signals will be posted on Saturday well in advance of Mondays open.

*New weekly format*



*Weekly results*
Weekly trading results will be posted as usual on Friday. (after the close of trade)




Skate.


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## qldfrog (2 January 2021)

Skate said:


> View attachment 117589
> 
> 
> View attachment 117592
> ...



Thanks @Skate for that exercise:
What did I get from both Action and cat runs?

Action: has been reassurance vs my own live strategy: relatively similar in behaviour and overall money gaining.
Happy cat: guiding hand into actually increasing the sheer $amount within a single strategy: I now have allowed similar amount $100k in my strategies

Happy cat:
 behaved quite differently from my current strategy in term of exit, entryor  when I was in buy lock etc; the beauty is that by "kind of "(1d delay) following Mr Skate, I have a whole set of fully recorded buy sell orders overly successful I can now use against my own systems.
Will be priceless during the next development.

So thanks a lot for that learnings:
 triggering first the motivation in 2019 to restart systems,
 then helping into the commitment and then reinsurance; removing the panic during bad days, and keeping modesty when a great week is here

Now what do I do with my happy cat portfolio: do i liquidate all, a clean slate;
do I keep the parcels I have buy signal for in my other systems and only sell my sell signals;
after all wouldn't it be silly to have both a buy and a sell on the same shares on Monday?
will we have too many people selling the same shares at the same time and are we going to influence the market?
I have no clear answer .Will make a decision by Monday


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## Skate (2 January 2021)

qldfrog said:


> Now what do I do with my happy cat portfolio: do i liquidate all, a clean slate;
> do I keep the parcels I have buy signal for in my other systems and only sell my sell signals;
> after all wouldn't it be silly to have both a buy and a sell on the same shares on Monday?
> will we have too many people selling the same shares at the same time and are we going to influence the market?
> I have no clear answer .Will make a decision by Monday




@qldfrog now that's a good point. I appreciate your predicament as what to do next with the HappyCat Strategy.

*As a suggestion*
It appears you have a sizable investment & others may as well. As a suggestion, I'll supply the raw weekly signals on Saturday mornings. The "Equity" line chart will be posted on Fridays as usual to visualise its ongoing progress. I'll do this as an educational exercise for those more seasoned readers.

*FYI*
I'll still be trading this strategy. I was starting to clog the "Dump it thread" with so many graphics.



*This will be an example of my Friday HappyCat post  *








*This will be a sample of the Exploration Analysis Signals (Saturday)*
As an educational exercise - posting raw signals on a Saturday will give everyone the chance to look at the charts before the opening of the market on a Monday.




*Will this be beneficial to you?*
I don't want anyone following my systems to be left in the lurch.

Skate.


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## qldfrog (2 January 2021)

Skate said:


> @qldfrog now that's a good point. I appreciate your predicament as what to do next with the HappyCat Strategy.
> 
> *As a suggestion*
> It appears you have a sizable investment & others may as well. As a suggestion, I'll supply the raw weekly signals on Saturday mornings. The "Equity" line chart will be posted on Fridays as usual to visualise its ongoing progress. I'll do this as an educational exercise for those more seasoned readers.
> ...



Thanks for the attention.that will allow some of us to delay decision-making.i have too many shiraz and visitors lately with the silly season to think clearly


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## investtrader (2 January 2021)

Hey Skate. I noticed that you have a 'stale' stop after 4 bars?  Is this more like an initial stop? Any clues as to what the stale stop is? Thanks


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## Skate (2 January 2021)

investtrader said:


> Hey Skate. I noticed that you have a 'stale' stop after 4 bars?  Is this more like an initial stop? Any clues as to what the stale stop is? Thanks




@investtrader the StaleStop is a combination of 3 exit conditions. (using the "OR" feature)

*The StaleStop *
(a) The StaleStop exits after a certain number of bars  when there is a loss in momentum.
(b) The StaleStop also will execute after a percentile drop of the ROC filter over a "nPeriod" from the High of the entry price. (the buy price) 
(c) A simple GMMA exit (simple & effective) without going into detail it's. Basically its a cross of the average of Guppy's Multiple Moving Average  (Average of the slow guppy crossing the average of the fast guppy)

Skate.


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## Warr87 (2 January 2021)

I intend on still following on with the HappyCat strat if the signals are going to still be provided, for educational purposes of course .


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## Rsthree (2 January 2021)

Warr87 said:


> I intend on still following on with the HappyCat strat if the signals are going to still be provided, for educational purposes of course .



Likewise. But I will forge ahead regardless.


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## investtrader (2 January 2021)

Hey Skate,
Thanks that is very helpful. I have code where I played around with a Guppy cross as a buy signal , but not as a sell. Also plyed with a loss of momentum as a sell, but never happy with any of it. Something to work on. Always tinkering when I have time.
Cheers
Gary


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## Newt (3 January 2021)

I'd be grateful for a chance to continue learning and trading along on Happy Cat too please Skate if you decide to do so.


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## Skate (3 January 2021)

Newt said:


> I'd be grateful for a chance to continue learning and trading along on Happy Cat too please Skate *if you decide to do so.*




@Newt, it's done & dusted as I'll be posting the ongoing results on a Friday & my signals on a Saturday. I remember a few members contacted me privately me when they missed the opportunity of trading along with the Action Strategy. If you didn't follow the Action Strategy from the getgo you were restricted from joining in as the weekly signals were never shown.

*The HappyCat & Panda Strategies*
Both strategies now have 20 positions restricting new readers from joining in to learn "or" have a bit of fun experiencing trading first hand. By supplying signals it allows (a) those who are invested to stay invested & (b) anyone can join in at any time in the future. Also having live performance figures posted may be the catalyst to have a go. Meaning if any wanted to dip their toe in the water, it's a perfect opportunity.

*The HappyCat Strategy*
Starting the HappyCat this week there are 3 buy signals to get someone started & there will be more next week.

*The Zebra Strategy*
If starting with the Zebra Strategy this week there are 5 buy signals to get someone started & there will be more next week. If someone misses following along (a) this week they can start fresh next week, or (b) the week after. Otherwise, they can be involved by just watching along each week.

*For new members*
I'll do a separate post to explain how I trade Exploration Signals in the pre-market.

Skate.


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## Warr87 (3 January 2021)

Was the 'example' exploration in post  #4,425 this weeks ? I missed last weeks buy so I am still short 2 positions I believe.


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## Skate (3 January 2021)

Warr87 said:


> Was the 'example' exploration in post  #4,425 this weeks ? I missed last weeks buy so I am still short 2 positions I believe.




@Warr87, correct. 

*Below is this week's HappyCat Exploration signals *
If you need to buy two positions buy the first two as the signals have been PositioScored (ranked in order). Those with the full complement of positions (20) there is nothing to action this week.

*This week - HappyCat Exploration Analysis Signals*



Skate.


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## Skate (3 January 2021)

*The information below relates to a $100k Portfolio with (20) X $5,000 bets.*
The comments go somewhat to explain what each area of the Amibroker Exploration Analysis relates to.




*Suggestion*
As this is a $100k portfolio (20 X $5k bets). The number of shares to buy at the Buy offer equals the bet size of $5,000.

*What if I only have $10,000 to invest?*
Simply divide $10,000 by 20 positions. It's still a 20 position portfolio (20 X $500 bets). Alternative you can have a 10 position portfolio at $1,000 bet size (it's up to you)

*How do I work out have many shares to buy for $500?*
The buying price is the closing price plus a 3% premium to the last closing price.
Example (1) to work out the Offer Price, multiply the closing price by 1.03 = the offer price in the pre-auction. So if the closing price is $1.00 ($1.00 X 1.03) = $1.03 is the Offer Price.
Example (2) If the last closing price is $3.00 ($3.00 X 1.03) = $3.09 the Offer Price.

*So how many shares do I buy if I have a $500 bet size - purchasing (NHC)?*
Divided $500 by the offer price of $1.46 (500 / 1.46 = 342 shares) total investment = $499.32 - if the +3% premium is fully exercised, plus commission.

Skate.


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## Trav. (3 January 2021)

@Skate just a quick question and maybe this should *not *be directed to you but to the *readers *of your thread who are looking for education by following your trades.

*Question - What are you learning when Skate publishes a list of Exploration Signals ?*

1. Are you reverse engineering trades on a chart to see conditions for entry / exit?
2. Are you learning how to place a trade with your broker?
3. Are you not learning anything at all and just blindly following a good system trader?
4. Other?

I don't really like posting anything that can be deemed negative or condescending but I do truly wonder what people are learning here as I will be honest that I look at option 1 and only option 1 to see how my system(s) can be improved.

@Skate I believe that I have said this before but I will say it again - I do really appreciate your work and giving back to the members of ASF, as I have learnt a lot and while you keep posting I will continue to learn so thanks again.

Cheers

Trav


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## qldfrog (3 January 2021)

Trav. said:


> @Skate just a quick question and maybe this should *not *be directed to you but to the *readers *of your thread who are looking for education by following your trades.
> 
> *Question - What are you learning when Skate publishes a list of Exploration Signals ?*
> 
> ...



I posted my own lessons learnt from Mr @Skate posted trade system.
Change along time as i became more "experienced"
Motivation by example
Then dedication
Then bolstering confidence
And lately building a set of buy sell history used as you hint for reverse engineering.
Not that I expect or aim at retrieving Mr Skate formula, but give me test cases to improve/ followso nowadays your option 1 and  confidence by number should we hit the proverbial. Lemmings effect😊


----------



## qldfrog (3 January 2021)

qldfrog said:


> I posted my own lessons learnt from Mr @Skate posted trade system.
> Change along time as i became more "experienced"
> Motivation by example
> Then dedication
> ...



I just do not see how i could improve my systems without comparison and just having someone quoting " i made xxx% this year " does not help whereas real unfake trials like these are priceless.and so far even returning some $
No negative


----------



## PetEarwig (3 January 2021)

Hi Skate & others, Following on Trav's question regarding Skate's follow along strategies and opportunities for learning. I am new to trading during 2020 and while I haven't posted much as yet, I have been reading throughout the year and have found Skate and many of the other contributors to be most helpful. I haven't followed the strategies as not all the stocks in a strategy fit my own ethical comfortabilities regarding some of the companies. However, I still have been trying to study and understand the rationale regardless of wether I would personally purchase the stock. I think as a new trader/investor, watching how long the trades are allowed to stand has been invaluable, my own early trades were sometimes the right buy, but then I sometimes panicked at the slightest drop, fearing a crash. Consequently, I missed out on some healthy profits due to fear. This has been a privilege to watch many of you trade and explain what your rationale has been. I continue to learn and find my own comfort level. So thankyou. Craig


----------



## Newt (4 January 2021)

Trav. said:


> @Skate just a quick question and maybe this should *not *be directed to you but to the *readers *of your thread who are looking for education by following your trades.
> 
> *Question - What are you learning when Skate publishes a list of Exploration Signals ?*
> 
> ...




I don't always know what I don't know (usually don't know?), well anyway, this year has really opened my eyes to just how many niches, variations, entries, exits, stops, etc are possible in our little ASX500 trend trading corner of trading.  Even if I don't immediately feel a strategy, approach, diversification is suitable for me, you never know when something might become a useful tool in the future.

Its been surprising watching when Happy Cat has good and bad days too.  Have come to realise there is probably genuine diversification against the way I normally trade "later" or conservative momentum.  Considerably more than what I had expect from random chance/probability.  Personally didn't REALLY pay too much attention to individual holdings and day to day variations when Skate shared summaries, but you sure as heck do when there is some money on the line.

Never too proud to learn when there are hard facts and data being shared.  Did genuinely try to explore some volatility and BO themes based on Duc, Skate and others earlier this year without success, but starting to see glimses of how others jump on price action early in the trend as the number of shared trades piles up.


----------



## Skate (4 January 2021)

Newt said:


> starting to see glimses of how others jump on *price action* early in the trend as the number of shared trades piles up.




@Newt, I've realised that trading daily is not for me. I'm planning to cease trading my daily systems so I'm prepared to explain the Flying Pelican Daily Strategy.

*The Flying Pelican Strategy *
As Newt has mentioned "price action" it's a perfect segway to explain a simple (RSI) strategy that's easy to follow with few moving parts. The Flying Pelican Strategy concentrates on picking "price swings". The only downside to the strategy is eradicating false signals.  Traditionally the (RSI) is considered "overbought" when above 70 & "oversold" when below 30. I prefer 80 & 20 as the benchmark as it gives the position more latitude at both ends.

*The Relative Strength Indicator*
The Flying Pelican Strategy is based on a popular momentum oscillator - the (RSI). The strategy uses a 3 three-period (RSI) as its base.

*The buy condition*
Enter a new position when the close of a (6 period) moving average of a (3 period) RSI crosses above 20

*The Sell Condition*
Sell when the close of a (6 period) moving average of a (3 period) RSI is greater than 80.

*That's the simplicity of the strategy*
The 3 period RSI crossing above 20 & 80 drives the entry & exits conditions. Without optimised parameters, it struggles to trade effectively.




*The Flying Pelican Daily Strategy - A recent 6 month Backtest*
The short backtest period is from 1st July 2020 to the end of trade Friday. The Flying Pelican Strategy performs better than the Panda Strategy with fewer moving parts.




Skate.


----------



## Skate (4 January 2021)

*Interesting post*
"How to make money on the stock market". Sharon uses a "high-level", common-sense approach while David was taught "no one" will ever be able to time the market. “Dollar-cost averaging, in his opinion, is the best way to minimise volatility risks & grow capital over time.

*As a system's trader*
Both methods explained above is at odds of how I trade. Timing the market is the only way I can trade profitably. I guess its horses-for-courses, reinforcing, as "traders" we are all different.

*The hyperlink to the article*








						Investors reveal how they make money on the stock markets
					

Ever wondered how investors make money on the stock market?




					www.news.com.au
				




Skate.


----------



## Newt (4 January 2021)

Yum, a new strategy to watch.  Sounds fascinating.    Where's my popcorn?  
Presumably you're still have other layers of trailing stops and filters in addition the RSI "engine" Skate?

Interesting about you stopping Daily trading.  Was wondering last year if you'd eventually transition into shorter timeframes, or how it might be affecting your trading/life/family balance having so many strategies on the go at once.  

It has been very educational watching yourself and Peter2 trading both daily and weekly and giving insights from time to time on what you both see as the pros and cons for the extra work.  Daily isn't a realistic or fun proposition for me holding down a day job and keeping up with a family, but its somehow reassuring that weekly timeframe trading isn't missing out on any great proportion of possible returns.


----------



## Rsthree (4 January 2021)

Trav. said:


> @Skate just a quick question and maybe this should *not *be directed to you but to the *readers *of your thread who are looking for education by following your trades.
> 
> *Question - What are you learning when Skate publishes a list of Exploration Signals ?*
> 
> ...




In my case I am hitting all of your 4 points but only a part of the third one.   

I load all the stocks for each strategy in my amibroker watch list and I try to reconcile the buy and sell signals by scrutinising the charts. Mostly I can see the trigger for the buy and sell in the chart but some do leave me stumped.

A big learning for me is the buying at auction approach. Its a simple concept and easy to execute but I probably wouldn't have considered it without a having been guided to use it. With my recent work commitments I wouldn't have managed without it.

Another big one is allowing the price room to breathe. Left to my own devices I would have bailed on a number of the stocks in Action, Happy Cat and Zebra Strategies. In fact I almost had my finger on the button in the early days of Action strategy trades. So yes it has taught me to blindly follow the programme. I'm a lot more relaxed now about the trading process than I was 6 months ago, than you Skate.


----------



## Skate (4 January 2021)

Newt said:


> Yum, a new strategy to watch.  Sounds fascinating.    Where's my popcorn?
> *Presumably you're still have other layers of trailing stops and filters in addition the RSI "engine" Skate?
> 
> Interesting about you stopping Daily trading.*  Was wondering last year if you'd eventually transition into shorter timeframes, or how it might be affecting your trading/life/family balance having so many strategies on the go at once.
> ...




@Newt the Flying Pelican Strategy is simple in its execution but you are correct there is more to exit strategy than what I have described. Trading a weekly strategy is a weekend endeavour that never ties you down to a designated time frame. 

Skate.


----------



## Warr87 (4 January 2021)

PetEarwig said:


> Hi Skate & others, Following on Trav's question regarding Skate's follow along strategies and opportunities for learning. I am new to trading during 2020 and while I haven't posted much as yet, I have been reading throughout the year and have found Skate and many of the other contributors to be most helpful. I haven't followed the strategies as not all the stocks in a strategy fit my own ethical comfortabilities regarding some of the companies. However, I still have been trying to study and understand the rationale regardless of wether I would personally purchase the stock. I think as a new trader/investor, watching how long the trades are allowed to stand has been invaluable, my own early trades were sometimes the right buy, but then I sometimes panicked at the slightest drop, fearing a crash. Consequently, I missed out on some healthy profits due to fear. This has been a privilege to watch many of you trade and explain what your rationale has been. I continue to learn and find my own comfort level. So thankyou. Craig




I just finished the audio book, 'Trend Trading' by Michael Covel. The concept of holding onto a stock and a lot of bits of wisdom were used through the book. Give it a read as well. Being able to take a loss is hard, but its an important part of trading (at least how we do it here as equities trend traders).


----------



## othmana86 (7 January 2021)

gday @Skate
ive spent the last couple of weeks working and learning amibroker and started with your WTT code. its been a really nice learning process. i got lots of help from @DaveDaGr8, absolute legend.

i have a question regarding your trailing stop loss.

//=================================================================================
//6. Add a two-stage trailing stop
//=================================================================================
ts1 = 20;
ts2 = 10;
ts = IIf( Indexbuyfilter , ts1 , ts2 );

ApplyStop( stopTypeTrailing , stopModePercent , ts , exitatstop = 2 ); // Apply Stop = [ts] Trailing Stop [exitatstop = 2] means check High-Low prices but exit NEXT BAR on regular trade price.


does that look at the previous highest candle and calculate 20% from there if the index is above x moving average and 10 if its below x moving average. If that is what it does, i am unclear on how exactly it does it from a coding perspective. please enlighten us 
i believe thats how radge had it in his WTT just not clear if thats exactly how its coded..


Thank you


----------



## Skate (8 January 2021)

othmana86 said:


> ApplyStop( stopTypeTrailing , stopModePercent , ts , exitatstop = 2 ); // Apply Stop = [ts] Trailing Stop [exitatstop = 2] means check High-Low prices but exit NEXT BAR on regular trade price.
> *Question -* does that look at the previous highest candle and calculate 20% from there if the index is above x moving average and 10 if its below x moving average. If that is what it does, i am unclear on how exactly it does it from a coding perspective. please enlighten us
> i believe thats how radge had it in his WTT just not clear if thats exactly how its coded..
> Thank you




@othmana86,* let me clear up a few points*
Nick Radge uses a "looping trailing stop" NOT an "ApplyStop" function. The WTT strategy I uploaded was an example of how to code a simple strategy in a dozen steps. The basic code uploaded was one of my first attempts from (2015) & it served me well at the time. The strategy uploaded was something to "learn with" & definitely "not to trade with". The "ApplyStop" is an Amibroker function. It's a trailing stop which means it trails under the closing price of the last bar starting from the "signal bar". (Radge uses a 40% Trailing Stop when the Index Filter is on & reduces to 10% when the Index Filter turns off). I personally prefer to start my (looping trailing stop) from the "buy bar" & not the signal bar. It's a minor different but important.

*The Radge WTT Strategy*
The WTT turnkey strategy uses a looping trailing stop & doesn't use an "ApplyStop" function. ApplyStop doesn't plot stops – it only triggers them in backtest mode whereas the WTT plots the trailing stop on the chart.

@Trav. *"Amibroker-tips-and-tricks" thread has posted practical looping trailing stop examples & explanations "with Amibroker code"*





						Weekly Portfolio - ASX
					

@Warr87 it would be wise to read about (State verses Pulse signals)  System One Check system 1 (EMA Cross) buy criteria  -  Is your Buy criteria (State or Impulse) ?  Quick comment "Cross" is an Pulse signal, and ">" is a State signal.  If you use State signals Using a State signal ">" function...




					www.aussiestockforums.com
				








						Amibroker FAQ
					

Does any one have or seen any code for a rolling 12 month returns profit table?  i.e instead of each month displaying that months return it would display a rolling 12 month CAR  This would be a great tool for looking into a systems consistency. I've tried to build my own no luck as yet. Don't...




					www.aussiestockforums.com
				








						AmiBroker Tips and Tricks
					

@CNHTractor you can try this code, @Trav. code slightly modified for Norgate (NDU)  @Skate, thanks for that code. Yes it gets me closer to @trav but there is a difference in that @trav exploration is at a sector level, eg $XSJ, $XMJ, etc whilst your code is at the Index level $XJO.  When I run...




					www.aussiestockforums.com
				








						Amibroker FAQ
					

Does any one have or seen any code for a rolling 12 month returns profit table?  i.e instead of each month displaying that months return it would display a rolling 12 month CAR  This would be a great tool for looking into a systems consistency. I've tried to build my own no luck as yet. Don't...




					www.aussiestockforums.com
				








						Amibroker FAQ
					

@qldfrog thanks mate,   I have learnt a lot from this forum so giving back when I can is very rewarding and the least that I can do.




					www.aussiestockforums.com
				








						AmiBroker Tips and Tricks
					

Thanks I'll suggest that he look for outliers that might skew the results.  Back test across 5 years ( Jan-16 - Dec-20).  One observation I can share with you concerns the number of positions (open trades) in the portfolio. The testing started with 20 equal positions. Results ordinary, so I...




					www.aussiestockforums.com
				




*Below is reading material on how a trailing stop works*
How to plot a looping trailing stop can be found here: https://www.amibroker.com/kb/2007/0...iling-stop-in-the-price-chart/comment-page-1/

*ApplyStop - apply built-in stop*


			AFL Function Reference - APPLYSTOP
		

SYNTAX :  ApplyStop( type, mode, amount, exitatstop, volatile = False, ReEntryDelay = 0, ValidFrom = 0, ValidTo = -1, ActivationFloor = 0 )
RETURNS :  Nothing
FUNCTION:  Controls built-in stops from the formula level (allows optimization of stops)

*Parameters:*
type =
0 = stopTypeLoss - maximum loss stop,
1 = stopTypeProfit - profit target stop,
2 = stopTypeTrailing - trailing stop,
3 = stopTypeNBar - N-bar stop

*Mode:*
0 - disable stop (stopModeDisable),
1 - amount in percent (stopModePercent), or number of bars for N-bar stop (stopModeBars),
2 - amount in points (stopModePoint);
3 - amount in percent of profit (risk)

*Amount:*
Percent / point loss / profit trigger / risk amount. This could be a number (static stop level) or an array (dynamic stop level)

*ExitAtStop:*
* ExitAtStop = 0 - means check stops using only trade price and exit at regular trade price (1) - (if you are trading on the close it means that only the closing price will be checked for exits & the exit will be done at the closing price)
* ExitAtStop = 1 - check High-Low prices & exit intraday on a price equal to stop level on the same bar when a stop was triggered
* ExitAtStop = 2 - check High-Low prices but exit NEXT BAR on regular trade price.

Skate.


----------



## dpong (8 January 2021)

@Skate
Here are the results of a run of dpong's WTT Strategy from Jan 1 2019 through Jan 6 2021.   Initial equity was set to 300,000 per other examples I've seen.  The universe of stocks is the Russell 3000 for stocks priced between $1 and $20.   The regime filter uses the S&P 500.

As my first attempt at coding a strategy I tried to do it "pure" and true to the Weekend Trend Trader book as best I could.  I took Skate's WTT strategy that he shared with us and then modified the heck out of it.  I would not be this far along without that starting place!  So thanks, Skate!

I am using free data from yahoo finance at this time.

If the SPX is above it's 10 week moving average we use 10% trailing stops.
If the SPX is below it's 10 week moving average we use 40% trailing stops.

In 2020 I was physically trading this system against the SPX400, SPX600, and NASDAQ100.  What I have learned so far from backtesting is that this system does much better when run against Russell 3000 for stocks priced between $1 and $20.  This is the universe of stocks for which Nick published the backtest in his book.


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## dpong (8 January 2021)

The one thing I do in the strategy which was not in the book is I use Nick's bang for buck to set the ranking.  This, too, was shared here by @Skate .  I have found that it has a significant impact on the results. 

PositionScore = ((10000/Close) * ATR(200))/100; //Nick Radge - "bang for buck".
//PositionScore = ROC(20);  //I used to use this.


----------



## dpong (8 January 2021)

Oops, reverse that:

If the SPX is above it's 10 week moving average we use 40% trailing stops.
If the SPX is below it's 10 week moving average we use 10% trailing stops.


----------



## dpong (8 January 2021)

_SECTION_BEGIN( "Weekend Trend Trader 4.7" );
/********************************************
Skate's WTT Weekly Modified Strategy for ASF Members
Created by: Skate - Last revision 12th August 2020
Heavily Modified by: dpong 6th January 2021
*********************************************/

//=================================================================================
//1. The "SetOptions" are management options & they are a feature of Amibroker
//=================================================================================
TradingFunds = Param( "Trading Funds - $", 5000, 1000, 10000000, 1000 ); // User-definable parameter, accessible via Exploration parameters - changes are reflected immediately. (Default $5k bets) - INSERT any amount
SetOption( "InitialEquity", 100000 ); // $100k Inital Equity (allows for 20 X $5k bets)
SetOption( "PriceBoundChecking", 1 ); // True: Adjust prices so that they fall within the High-Low range
SetOption( "CommissionMode", 2 ); // Use $ amount
SetOption( "CommissionAmount", 0.0 ); // CommSec commission rate
SetOption( "UsePrevBarEquityForPosSizing", 1 ); // True: Use previous bar closing equity to perform position sizing
SetOption( "AllowSameBarExit", False ); // False: Trade is exited & we move to next bar ignoring other signals
SetTradeDelays( 1, 1, 1, 1 ); // Trade delays, the delay is required for backtesting


//=================================================================================
//2. The "Index Filter" - decides when we will trade & also our trailing stop levels
//=================================================================================
SetForeign( "^SPX", True , True ); // I've used the new Norgate Updater (NDU) format - change if the format is different to your data supplier
MAfilter = MA( C, 10 ); // 10 week lookback period
RegimeFilter = C > MAfilter; // Index Filter = ON: When the close is greater than the 10 week simple moving average the Index Filter is ON [trailing stop set to 20%] + [buy + sell signals generated]
RestorePriceArrays( True ); // Restores original price and volume arrays after the call to SetForeign.
//=================================================================================
//3. Add all our other filters
//=================================================================================

TimeFrameSet(inDaily);          //Switch to Daily time-frame 
AvgVolumeInDaily = MA(V, 7);                    //Get 7 day average Volume
AvgTurnoverInDaily = MA(C, 7) * AvgVolumeInDaily;      //Get 7 day average of Close * Volume

TimeFrameRestore();   //Switch back to weekly time-frame.

AvgVolume = TimeFrameExpand(AvgVolumeInDaily, inDaily);
AvgTurnover = TimeFrameExpand(AvgTurnoverInDaily, inDaily);

//Make sure AvgTurnover > $500,000 and AvgVolume > 500,000 shares
LiqFactor = (AvgTurnover > 500000) AND (AvgVolume > 500000);


//Liqfactor = MA(V,20) > 100000;  // Avg volume 20 periods greater than 100,000.
ROCFilter = ROC( C, 20 ) > 30; // Rate Of Change (ROC) Momentum filter

BreakoutPeriod = Param( "Breakout Period", 20, 5, 100, 1 ); // 20 week Lookback period

//Compute Donchian Channel upper AND lower
DonchianUpper =HHV(H,BreakoutPeriod);
DonchianLower = LLV(L,BreakoutPeriod);


//=================================================================================
//4. Add a Buy condition
//=================================================================================

// Condition 1 is a *new* 20 week breakout, so look back 8 weeks.
Cond1 = Ref(DonchianUpper, -1) < C;
Cond1 = Ref(DonchianUpper, -2) >= Ref(DonchianUpper, -1) AND Cond1;
Cond1 = Ref(DonchianUpper, -3) >= Ref(DonchianUpper, -2) AND Cond1;
Cond1 = Ref(DonchianUpper, -4) >= Ref(DonchianUpper, -3) AND Cond1;
Cond1 = Ref(DonchianUpper, -5) >= Ref(DonchianUpper, -4) AND Cond1;
Cond1 = Ref(DonchianUpper, -6) >= Ref(DonchianUpper, -5) AND Cond1;
Cond1 = Ref(DonchianUpper, -7) >= Ref(DonchianUpper, -6) AND Cond1;
Cond1 = Ref(DonchianUpper, -8) >= Ref(DonchianUpper, -7) AND Cond1;


Cond2 = RegimeFilter; // Buy ONLY when the Index Filter is ON
cond3 = C >= Param("Min Buy Price", 1.00, 1.00, 500.00, 1); // Buy only if the closing price is greater than min price.
cond4 = C <= Param("Max Buy Price", 20.00, 10.00, 5000.00, 1); // Buy only if the closing price is less than max price
cond5 = liqfactor; // Buy only when the Liquidity filter is TRUE
cond6 = ROCFilter; // Buy only when the Rate of Change filter is TRUE

Buy = cond1
AND cond2
AND cond3
AND cond4
AND cond5
AND cond6;



//=================================================================================
//5. Add a sell condition
//=================================================================================

Sell = 0;  //We will handle sells "manually" when stop loss is hit

//=================================================================================
//6. Add a two-stage trailing stop
//=================================================================================


longTrailPerc = IIF(RegimeFilter, 0.40, 0.10);
stopValue = H * (1.0 - longTrailPerc);

bBuySignal = 0;
trailARRAY = Null;
trailstop = 0;

for( i = 1; i < BarCount; i++ )
{

   if( trailstop == 0 AND (Buy[ i ] OR bBuySignal) ) 
   { 
      if(bBuySignal) {
        trailstop = stopValue_;
        bBuySignal = 0; //turn off the signal
        }
      else
        bBuySignal = 1;
   }
   else Buy[ i ] = 0; // remove excess buy signals

   if((trailstop > 0) AND Close[ i ] < trailstop )
   {
      Sell[ i ] = 1;  //This is the sale!
      trailstop = 0;

      if (i+1 < BarCount)
        SellPrice = Open[i+1];  //Use tomorrow's open
      else 
        SellPrice = Close;   //Use today's close.
   }

   if( trailstop > 0 )
   {
      trailstop = Max( stopValue, trailstop );
      trailARRAY[ i ] = trailstop;
   }

}





//=================================================================================
//7. Add "Position Sizing"
//=================================================================================
BuyPrice = Open; // Buy the next day at open
SellPrice = Open; // Sell the next day at open

Buy = ExRem( Buy, Sell ); // Removes additional buy signals
Sell = ExRem( Sell, Buy ); // Removes additional sell signals
InTrade = Flip(Buy, Sell);  //Array is 1 if in the trade, otherwise 0

PosQty = 20; // Position Quantity = Maximum 20 positions
PositionSize = -100 / posqty; // 100% of the equity divided by the Position Size
SetOption( "MaxOpenPositions", PosQty ); // Maximum number of open position

//=================================================================================
//8. Add "Filters for the Exploration Analysis"
//=================================================================================
Filter = Buy OR Sell; // Buy & Sell Filters

//=================================================================================
//9. Add Buy & Sell coding for use in trading the pre-auction
//=================================================================================
BuyOffered = Close * 1.03; // +3% Buy premium over the last closing price
BuyOffer = ceil( BuyOffered * 100 ) / 100; // The amount is rounded up no matter the price (ceil function used)

SellOffered = Close * 0.97; // -3% Sell premium below the last closing price
SellOffer = floor( SellOffered * 100 ) / 100; // The amount is rounded down no matter the price (floor function used)

//=================================================================================
//10. Add the Exploration code
//=================================================================================
ToBuyPosSize = floor( TradingFunds / BuyOffer ); // Trading Funds divided by buy offer of (+3%) buy premium over the last closing price
ToBuyPosCost = BuyOffer * ToBuyPosSize; // The cost of buying the amount of share

PositionScore = ((10000/Close) * ATR(200))/100; //Nick Radge - "bang for buck".
//PositionScore = ROC(20);  //I used to use this.

//=================================================================================
//11. Add columns to report & sort the Exploration Analysis results
//=================================================================================
AddColumn( IIf( Buy, ToBuyPosSize, Null ), "# shares", 1, colorWhite, colorDarkGreen, 90 ); // Exploration Analysis - this column displays quantity of shares to buy
AddColumn( IIf( Buy, BuyOffer, Null ), "$ Buy Offer", 1.2, colorWhite, colorDarkGreen, 110 ); // Exploration Analysis - this column displays pre-auction buy offer price (+3% premium added to the last closing price)
AddColumn( IIf( Buy, ToBuyPosCost, Null ), "$ Cost", 1.2, colorWhite, colorDarkGreen, 80 ); // Exploration Analysis - this column displays the total ($) you will pay for the qty of shares at the +3% primum
AddColumn( IIf( Sell, SellOffer, Null ), "$ Sell Offer", 1.2, colorWhite, colorRed, 110 ); // Exploration Analysis - this column displays pre-auction sell offer price (-3% discount to the last closing price)
AddColumn( Ref(trailARRAY, 1), "Stop Loss", 1.2, colorWhite, colorGreen, 110);  //see stop loss 
//AddColumn( IIf(Buy, AvgVolume, Null), "Avg Vol" , colorWhite, colorGreen, 90);
//AddColumn( IIf(Buy, AvgTurnover, Null), "Avg Turn", colorWhite, colorGreen, 90);


SetSortColumns( 2, -3, -4, -5, -6, 1 ); // Sort the columns in correct order
_SECTION_END();

//=================================================================================
//12. Add code to the chart & plots the signals. Also adding an Index Ribbon
//=================================================================================
_SECTION_BEGIN( "Price" );

SetChartOptions( 0, chartShowArrows | chartShowDates );
_N( Title = StrFormat( "{{NAME}} - {{INTERVAL}} {{DATE}} Open %g, Hi %g, Lo %g, Close %g (%.1f%%) Vol " + WriteVal( V, 1.0 ) + " {{VALUES}}", O, H, L, C, SelectedValue( ROC( C, 1 ) ) ) ); // Chart settings

Plot( C, "Close", ParamColor( "Color", colorBlack ),
ParamStyle( "Style", styleNoTitle | styleCandle, maskAll ) ); // User-definable parameter, accessible via Chart parameters - changes are reflected immediatelly. (Bar Chart Default)

PlotShapes( Buy*shapehollowUpArrow, colorBlack, 0, Low, -20 ); // Displays Buy up arrow on the signal bar
PlotShapes( ( Sell > 0 ) * shapeDownArrow, ColorRed, 0, High, -40 ); // Displays Sell down arrow on the signal bar
PlotShapes( Ref( Buy, -1 ) * shapeHollowSquare, colorBlack, 0, O, 0, 0 ); // Displays a white square on the buy bar
PlotShapes( Ref( Sell, -1 ) * shapeHollowCircle, colorRed, 0, O, 0, 0 ); // Displays a yellow circle on the sell bar


Indexfilter = IIf( RegimeFilter, True, False ); // If Index Filter is TRUE (ON), or If Index Filter is FALSE (OFF),
RibbonColor = IIf( Indexfilter, colorGreen, colorRed ); // If Index Filter is TRUE (ON) the ribbon is GREEN, or If Index Filter is FALSE (OFF) the ribbon is Red
Plot( 1, "", RibbonColor, styleArea | styleOwnScale | styleNoLabel, -0.0001, 190 ); // Plots Index Filter Ribbon [green = ON] [Red = OFF]

for( i = 1; i < BarCount; i++ )
{
if( Buy[i - 1] ) PlotText( "Buy\n@ " + O, i, L * 0.9, colorBlack ); // Displays white buy price (opening price) under the white box (buy bar)

if( sell[i - 1] ) PlotText( "Sell\n@ " + o[ i ], i, H[ i ] * 1.1, colorRed ); // Displays yellow sell price (opening price) above the yellow circle (sell bar)

}


//Plot Donchian high and low
Plot(DonchianUpper,"DU",colorBlue,styleThick, zorder=-5);
Plot(DonchianLower,"DL",colorBlue,styleThick, zorder=-5);
//PlotOHLC(DonchianLower, DonchianUpper, DonchianLower, DonchianUpper, "", ColorRGB(250, 250, 255) , style=styleCloud, zorder=-5);

//Plot Stop Loss Levels
for( i = 1; i < BarCount; i++ )
{

    if (Buy) PlotTextSetFont("+", "Arial", 14, i, H + (H * 0.07), colorRed);

    if( InTrade ) PlotTextSetFont( "+", "Arial", 12, i, trailARRAY, colorBlack ); //plot stop loss 

}
//Plot(MAFilter, "SMA", colorOrange, styleLine | styleThick, zorder = 5);

_SECTION_END();_


----------



## dpong (8 January 2021)

I have a correction for my code.

I had coded:

PositionScore = ((10000/Close) * ATR(200))/100; //Nick Radge - "bang for buck".

But I realized ATR(200) is coded for a daily system.  The equivalent for a weekly system is ATR(40).

So it should be:

*PositionScore = ((10000/Close) * ATR(40))/100; //Nick Radge - "bang for buck".

[UPDATE: I'm still finding some bugs, so I probably should have waited before posting.]*


----------



## dpong (8 January 2021)

The code was sometimes missing a sell signal.   So I moved the code that raises the stops to the beginning of the loop instead of the end.


```
//=================================================================================
//6. Add a two-stage trailing stop
//=================================================================================


longTrailPerc = IIF(RegimeFilter, 0.40, 0.10);
stopValue = H * (1.0 - longTrailPerc);

bBuySignal = 0;
trailARRAY = Null;
trailstop = 0;

for( i = 1; i < BarCount; i++ )
{

    //Raise stops first, before checking for
    if( trailstop > 0 )
    {
      trailstop = Max( stopValue[i], trailstop );
      trailARRAY[ i ] = trailstop;
    }

   if( trailstop == 0 AND (Buy[ i ] OR bBuySignal) )
   {
      if(bBuySignal) {
        trailstop = stopValue[i];
        bBuySignal = 0; //turn off the signal
        }
      else
        bBuySignal = 1;
   }
   else Buy[ i ] = 0; // remove excess buy signals

   if((trailstop > 0) AND Close[ i ] < trailstop )
   {
      Sell[ i ] = 1;  //This is the sale!
      trailstop = 0;
      
      if (i+1 < BarCount)
        SellPrice[i] = Open[i+1];  //Use tomorrow's open
      else
        SellPrice[i] = Close[i];   //Use today's close.
   }

}
```

I don't think my chart is very pretty, but here it is.  Using "+" sign for stop loss levels and red "+" for signal bar.


----------



## Skate (8 January 2021)

dpong said:


> The code was sometimes missing a sell signal.   So I moved the code that raises the stops to the beginning of the loop instead of the end.
> 
> 
> ```
> ...




@dpong, sharing is caring & your posts reflect your willingness to help. Helping others is the heart & soul of the "Dump it here" thread, well done.

Skate.


----------



## dpong (8 January 2021)

Skate said:


> @dpong, sharing is caring & your posts reflect your willingness to help. Helping others is the heart & soul of the "Dump it here" thread, well done.
> 
> Skate.



Thank-you, sir.  I was afraid I might have been using up too much band-width in your thread. 

I look forward to following your Flying Pelican Strategy outline.  Too bad it's a daily system.  Like you, I think once you've done weekly you never want to go back.

I'm very happy to be here.


----------



## Skate (8 January 2021)

dpong said:


> Thank-you, sir.  I was afraid I might have been using up too much band-width in your thread.
> 
> I look forward to following your Flying Pelican Strategy outline.  Too bad it's a daily system.  Like you, I think once you've done weekly you never want to go back.
> 
> I'm very happy to be here.




@dpong post to your heart's content. Forget the daily "Flying Pelican Strategy" & the daily "Panda Strategy" - the only thing I'll miss is the income from both but the funds will be deployed in other strategies waiting their turn to have a go at live trading.

*The HappyCat Strategy*
I'll be reporting the ongoing progress of the HappyCat Strategy this afternoon after the end of trading. For those who want to understand the entry & exit points of the strategy, signals are posted on a Saturday well in advance of the markets open on Monday. It's an exercise so others can follow along to get a better understanding of why positions are taken. 

Skate.


----------



## dpong (8 January 2021)

After bug fix:




In Nick's backtest run he very specifically said he filters for 7 *day* moving average of volume > 500,000 and 7 *day* moving average of "turnover" > $500,000.   The area of the code where I tried to accomplish this is here.  It is working as if I did it properly.  I had to temporarily change the time frame to daily, grab the moving averages I needed, and then switch back to weekly.  This could be of interest.  All criticisms of this code are welcomed.


```
//=================================================================================
//3. Add all our other filters
//=================================================================================

TimeFrameSet(inDaily);          //Switch to Daily time-frame
AvgVolumeInDaily = MA(V, 7);                    //Get 7 day average Volume
AvgTurnoverInDaily = MA(C, 7) * AvgVolumeInDaily;      //Get 7 day average of Close * Volume

TimeFrameRestore();   //Switch back to weekly time-frame.

AvgVolume = TimeFrameExpand(AvgVolumeInDaily, inDaily);
AvgTurnover = TimeFrameExpand(AvgTurnoverInDaily, inDaily);

//Make sure AvgTurnover > $500,000 and AvgVolume > 500,000 shares
LiqFactor = (AvgTurnover > 500000) AND (AvgVolume > 500000);
```


----------



## Skate (8 January 2021)

*Trading returns are unpredictable*
I don't want to steal @ducati916 thunder by posting an excerpt from the "Fly" blog but it serves a purpose here in this thread.

_"I ended the day down 0.5%, more or less a nothing-burger, done via 89 trades that makes you wonder why go through all the trouble. But then you "look at the longer term returns" and know you’re doing the right thing. These types of days happen and there is nothing you can do about it. Admittedly"_

Skate.


----------



## Skate (8 January 2021)

othmana86 said:


> ive spent the last couple of weeks working and learning amibroker and started with your WTT code. its been a really nice learning process.




*Back in the old days*
The year was late 2014 or early 2015 @captain black gave me a simple weekly breakout strategy to play around with. The kindness of the Captain got me started in figuring out what was required to trade systematically.  Back on the 13th November 2020, I was revisiting old strategies I traded back in my early days. The strategy was the "BlueWren Strategy" & with additional knowledge improvements flowed.

*I was looking to trade another strategy*
I'm surprised that a simple breakout strategy still works efficiently with today's volatility. The resurrected strategy has been trading for 9 weeks with pleasing results.

*The results below are from "live trading" *(not backtest results)
The BlueWren Strategy is 20 positions $100k portfolio (bet size $5k)










*It's worth remembering*
The kindness of others should never be underestimated.

Skate.


----------



## Skate (8 January 2021)

*While I'm reminiscing*
I've been back trading my old KingFisher strategy a few weeks now (9 weeks to be precise) & it's travelling as well-as-expected with the recent swings in the markets. 

*I was curious*
At the start of November 2020, I was eager to find out if my old strategies after being "tweaked" would still be as relevant today as yesteryear. To my surprise, they still work. The last two weeks have been extremely kind to all my systems.

*The results below are from "live trading" *(not backtest results)
The KingFisher Strategy is 20 positions $100k portfolio (bet size $5k). 





Skate.


----------



## dpong (8 January 2021)

IMHO the charts look better on the strategy I programmed on Tradingview.com.   But there is not an adequate stock scanner available there. 

Before purchasing AmiBroker I was using Stockcharts.com as my stock scanner. Unfortunately they do not allow Russell 3000 as a scan filter.

I am in this trade live.


----------



## othmana86 (8 January 2021)

@Skate certainly using your WTT as a learning process and not to trade. atleast not in its standard form. I honestly wouldnt have even conisdered diving into making my own mechanical system if it wasnt for this good starting point. Got help from davedagr8 as well which is nice.
Thank you both..

Theres still alot for me to learn.. there is things happening in the exploration vs backtest that i cant explain. Example the entry point of a particular symbol is correct on both the backtest and the exploration. The same symbol exits on exploration via a trailing stop, but stays open and running with a backtest..

@dpong do you want me to run your code on the ASX with historical constituents and do a 20 year backtest?


----------



## dpong (8 January 2021)

othmana86 said:


> @dpong do you want me to run your code on the ASX with historical constituents and do a 20 year backtest?



Why not?  Sure.


----------



## Skate (8 January 2021)

othmana86 said:


> @Skate certainly using your WTT as a learning process and not to trade. atleast not in its standard form. I honestly wouldnt have even conisdered diving into making my own mechanical system if it wasnt for this good starting point. Got help from davedagr8 as well which is nice.
> Thank you both..
> Theres still alot for me to learn.. there is things happening in the exploration vs backtest that i cant explain. Example the entry point of a particular symbol is correct on both the backtest and the exploration. The same symbol exits on exploration via a trailing stop, but stays open and running with a backtest..




@othmana86, it's difficult getting your head around the differences between an Exploration Analysis versus a Backtest Report. @Lone Wolf gave you the comparisons between a backtest & exploration as they are looking for different things. Explore is looking for signals generated in that period. It will include signals for the following week. Backtest will look for any trades opened during that period. The signals for those backtest trades occurred in the week prior to your window. Or maybe more simply - The backtest results for that period should match the exploration results seen at the end of the previous week.

*Refresher*
As for your most recent issues, others will most likely explain it more succinctly than I could. In the meantime, I'm suggesting you revisit Lone Wolf's post as sometimes a second read makes things clearer. Also, the post has real examples attached. The post I'm referring to can be found here: https://www.aussiestockforums.com/threads/dump-it-here.34425/post-1104950

Skate.


----------



## dpong (8 January 2021)

Here's another i am live trading.  I love the adaptive trailing stops.  

You can see how they work, yeh?


----------



## dpong (8 January 2021)

Here are a couple of more examples.  To let you visualize how the stops work.


----------



## othmana86 (8 January 2021)

@Skate yeah i referred back to that post. for entry ive got that sorted..its fine they match.  i got the dates worked out so a big tick there.
The issue i am having at the moment is the exit, which is why i asked how your exit is done. ill give you an example to help explain what im currently trying to solve..
so on 
exploration signal generated to buy VMS on 18/12 for an entry on the 21/12. at 0.05c. tick
backtester also shows signal on the same day. tick

exploration signals an trailing stop exist on 31/12 for an exit the next candle 4/01 at .05c.
backtester keeps it running...does not close the trade. which is the correct way because it did not close -20% from the entry bar.
which  begs the question..how can i rely on the exploration signals? so somethings wrong just not sure what yet..


----------



## othmana86 (8 January 2021)

dpong said:


> Here are a couple of more examples.  To let you visualize how the stops work.
> 
> View attachment 117995
> 
> View attachment 117997



They look very good mate...good work!
this is a code in TV?


----------



## Skate (8 January 2021)

othmana86 said:


> @Skate the *exploration signals an trailing stop exist on 31/12 for an exit the next candle 4/01 at .05c.*
> backtester keeps it running...does not close the trade. which is the correct way because it did not close -20% from the entry bar.
> which  begs the question..how can i rely on the exploration signals? so somethings wrong just not sure what yet..
> View attachment 117996
> ...




@othmana86 I'm assuming you have altered my original code. Please upload the (WTT.afl) that has given you the results in the post above.

Skate.


----------



## Skate (8 January 2021)

*Simplified posting of the HappyCat Strategy weekly results*








Skate.


----------



## othmana86 (8 January 2021)

#include_once "Formulas\Norgate Data\Norgate Data Functions.afl"
stockInIndex = NorgateIndexConstituentTimeSeries("$XAO.AU");
stockIn200 = NorgateIndexConstituentTimeSeries("$XJO.AU");
stockIn50 = NorgateIndexConstituentTimeSeries("$XFL.AU");

OnSecondLastBarOfDelistedSecurity = !IsNull(GetFnData("DelistingDate")) AND (BarIndex() == (LastValue(BarIndex()) -1) OR DateTime() >= GetFnData("DelistingDate") ) ;
OnLastTwoBarsOfDelistedSecurity = !IsNull(GetFnData("DelistingDate")) AND (BarIndex() >= (LastValue(BarIndex()) -1) OR DateTime() >= GetFnData("DelistingDate") );

_SECTION_BEGIN( "# Skate's WTT Modified Exploration" );
//=================================================================================
//1. The "SetOptions" are management options & they are a feature of Amibroker
//=================================================================================
TradingFunds = Param( "Trading Funds - $", 5000, 1000, 10000000, 1000 ); // User-definable parameter, accessible via Exploration parameters - changes are reflected immediately. (Default $5k bets) - INSERT any amount
InitialEquity= 20000;
SetOption( "InitialEquity", InitialEquity ); // $20k Inital Equity (allows for 20 X $5k bets)
SetOption( "PriceBoundChecking", 1 ); // True: Adjust prices so that they fall within the High-Low range
SetOption( "CommissionMode", 2 ); // Use $ amount
SetOption( "CommissionAmount", 6 ); // CommSec commission rate
SetOption( "UsePrevBarEquityForPosSizing", 1 ); // True: Use previous bar closing equity to perform position sizing
SetOption( "AllowSameBarExit", False ); // False: Trade is exited & we move to next bar ignoring other signals
SetForeign( "$XAO.au", True , True ); // I've used the new Norgate Updater (NDU) format - change if the format is different to your data supplier
RestorePriceArrays( True ); // Restores original price and volume arrays after the call to SetForeign.
SetTradeDelays( 1, 1, 1, 1 ); // Trade delays, the delay is required for backtesting
//=================================================================================
//2. The "Index Filter" - decides when we will trade & also our trailing stop levels
//=================================================================================
Index = Foreign("$XAO.au","C",True);
MAfilter = MA( Index, 10 ); // 10 week lookback period
IndexBuyFilter = Index > MAfilter; // Index Filter = ON: When the close is greater than the 10 week simple moving average the Index Filter is ON [trailing stop set to 20%] + [buy + sell signals generated]
IndexSellFilter = Index < MAfilter; // Index Filter = OFF: When the close is less than the 10 week simple moving average the Index Filter is OFF [shortens trailing stop to 10%] + [only sell signals generated]
RestorePriceArrays( True ); // Restores original arrays after the call to SetForeign.
//=================================================================================
//3. Add all our other filters
//=================================================================================
Liq = C * V; // Liquidity Filter
CV = 2000000; // Volume Filter
Liqfactor = Liq > CV; // Liquidity Filter
ROCFilter = ROC( C, 20 ) > 30; // Rate Of Change (ROC) Momentum filter
ROCParameter = Param( "ROC Parameter", 8, 0, 52, 1 ); // 8 week Rate of Change period
MOMFilter = ( ROC( C, 10 ) >= ROCparameter ); // Momentum filter - the closing price of the last 10 weeks is greater than the last 8 weeks
NoStrength = Close < MA( Close, 12 ); // If the closing price is less then the Simple Moving Average of the last 12 weeks it's considered there is no strength in the move
//=================================================================================
//4. Add a Buy condition
//=================================================================================
Cond1 = C > Ref( HHV( C, 10 ), -1 ); // Buy when the closing price is greater than the highest High Value of the last 20 weeks
Cond2 = IndexBuyFilter; // Buy ONLY when the Index Filter is ON
cond3 = C >= .05; // Buy only if the closing price is greater $0.05 (5 cents)
cond4 = C <= 10000; // Buy only if the closing price is less than $10.00
cond5 = liqfactor; // Buy only when the Liquidity filter is TRUE
cond6 = ROCFilter AND MOMFilter; // Buy only when the Rate of Change filter & Momentum filter is TRUE

Buy = cond1
AND cond2
AND cond3
AND cond4
AND cond5
AND cond6
AND NOT OnLastTwoBarsOfDelistedSecurity
// AND stockinindex
;
//=================================================================================
//5. Add a sell condition
//=================================================================================
Sell = C < MA( C, 30 ) AND NoStrength; // Sell when the close is less than the moving average of the last 50 weeks with the closing price is less than the Simple Moving Average of the last 12 weeks
Sell = Sell OR OnLastTwoBarsOfDelistedSecurity;
//=================================================================================
//6. Add a two-stage trailing stop
//=================================================================================

ts1 = 20;
ts2 = 8;
ts = IIf( Indexbuyfilter , ts1 , ts2 );
ApplyStop( stopTypeTrailing , stopModePercent , ts , exitatstop = 2 ); // Apply Stop = [ts] Trailing Stop [exitatstop = 2] means check High-Low prices but exit NEXT BAR on regular trade price.
//=================================================================================
//7. Add "Position Sizing"
//=================================================================================
BuyPrice = Open; // Buy the next day at open
SellPrice = Open; // Sell the next day at open

Buy = ExRem( Buy, Sell ); // Removes additional buy signals
Sell = ExRem( Sell, Buy ); // Removes additional sell signals

PosQty = 20; // Position Quantity = Maximum 20 positions
PositionSize = -100 / posqty; // 100% of the equity divided by the Position Size
SetOption( "MaxOpenPositions", PosQty ); // Maximum number of open position
//=================================================================================
//8. Add "Filters for the Exploration Analysis"
//=================================================================================
//Filter = Buy OR Sell; // Buy & Sell Filters
//=================================================================================
//9. Add Buy & Sell coding for use in trading the pre-auction
//=================================================================================
BuyOffered = Close * 1.00; // +3% Buy premium over the last closing price
BuyOffer = floor( BuyOffered * 100 ) / 100; // The amount is rounded up no matter the price (ceil function used)

SellOffered = Close * 1.00; // -3% Sell premium below the last closing price
SellOffer = floor( SellOffered * 100 ) / 100; // The amount is rounded down no matter the price (floor function used)
//=================================================================================
//10. Add the Exploration code
//=================================================================================
ToBuyPosSize = floor( TradingFunds / BuyOffer ); // Trading Funds divided by buy offer of (+3%) buy premium over the last closing price
ToBuyPosCost = BuyOffer * ToBuyPosSize; // The cost of buying the amount of share
PositionScorer = 100 - Close; // Lowest priced security at BuySetup trigger is taken first
PositionScore = Ref( PositionScorer, -1 ); // Previous bar (-1 bar)

s1 = Sell; // s1 are the original sell signals

if( Status("action") == actionExplore )
{
SetTradeDelays(0,0,0,0);
PositionScore = Positionscorer;
Equity( 2 );
SetSortColumns( 3,-4);
}

Filter = Filter = Status("LastBarInRange") AND (Buy OR Sell); // Buy & Sell Filters


ts = 0; // text selector ....
ts = IIf(Buy,1,0); // Buy signal
ts = IIf(s1,2,ts); // Sell signal
ts = IIf(Sell AND NOT s1,3,ts); // Stop signal

tl = "\nBuy\nSell\nStop"; // String array.

//addmultiTextColumn (ts,tl,"Action",1.2,colorWhite,IIf(Buy,colorDarkGreen,IIf(s1,colorRed,colorOrange)),60);

/***************** HIDE COLUMNS FOR VISUAL ***************/
AddColumn(IIf( Buy, BuyOffer, Null ),"Buy",1.2,colorWhite,IIf(Buy,colorDarkGreen,colorWhite),60);
AddColumn(IIf( Sell, SellOffer, Null),"Sell",1.2,colorWhite,IIf(S1,colorRed,colorWhite),60);
AddColumn(IIf(Sell and NOT s1,SellOffer,0),"Stop",1.2,colorWhite,IIf(Sell AND NOT s1,colorOrange,colorWhite),60);
AddColumn(PositionScorer,"Score");

//AddTextColumn("WTT","Strategy");
//AddTextColumn("ASX","Universe");
//AddTextColumn("MOO","Order Type");
//AddColumn(0,"Buy Stop",1.4); // No buy stop
//AddColumn(0,"Buy LMT"); // no limit
//AddColumn(0,"Sell LMT"); // no limit

AddColumn(-positionSize,"Position Size %");
AddColumn(-positionsize*InitialEquity/100/C,"# Shares");
AddColumn(ts,"ts"); //
//SetSortColumns( 2, -3, -4, -5, -6, 1 ); // Sort the columns in correct order
_SECTION_END();


//=================================================================================
//12. Add code to the chart & plots the signals. Also adding an Index Ribbon
//=================================================================================
_SECTION_BEGIN( "Price" );


SetChartOptions( 0, chartShowArrows | chartShowDates );
_N( Title = StrFormat( "{{NAME}} - {{INTERVAL}} {{DATE}} Open %g, Hi %g, Lo %g, Close %g (%.1f%%) Vol " + WriteVal( V, 1.0 ) + " {{VALUES}}", O, H, L, C, SelectedValue( ROC( C, 1 ) ) ) ); // Chart settings

Plot( C, "Close", ParamColor( "Color", colorBlack ),
ParamStyle( "Style", styleNoTitle | styleBar, maskAll ) ); // User-definable parameter, accessible via Chart parameters - changes are reflected immediatelly. (Bar Chart Default)

PlotShapes( Buy*shapehollowUpArrow, colorWhite, 0, Low, -20 ); // Displays Buy up arrow on the signal bar
PlotShapes( ( Sell > 0 ) * shapeDownArrow, Coloryellow, 0, High, -40 ); // Displays Sell down arrow on the signal bar
PlotShapes( Ref( Buy, -1 ) * shapeHollowSquare, colorWhite, 0, O, 0, 0 ); // Displays a white square on the buy bar
PlotShapes( Ref( Sell, -1 ) * shapeHollowCircle, colorYellow, 0, O, 0, 0 ); // Displays a yellow circle on the sell bar
PlotShapes(Buy*shapeUpArrow,colorGreen,0,Low);
PlotShapes(Sell*shapeDownArrow,colorRed,0,High);

Indexfilter = IIf( IndexBuyfilter, True, False ); // If Index Filter is TRUE (ON), or If Index Filter is FALSE (OFF),
RibbonColor = IIf( Indexfilter, colorGreen, colorRed ); // If Index Filter is TRUE (ON) the ribbon is GREEN, or If Index Filter is FALSE (OFF) the ribbon is Red
Plot( 1, "", RibbonColor, styleArea | styleOwnScale | styleNoLabel, -0.0001, 190 ); // Plots Index Filter Ribbon [green = ON] [Red = OFF]

for( i = 1; i < BarCount; i++ )
{
if( Buy[i - 1] ) PlotText( "Buy\n@ " + O, i, L_ * 0.9, colorWhite ); // Displays white buy price (opening price) under the white box (buy bar)

if( sell[i - 1] ) PlotText( "Sell\n@ " + o[ i ], i, H[ i ] * 1.1, colorYellow ); // Displays yellow sell price (opening price) above the yellow circle (sell bar)

}
_SECTION_END();
//=================================================================================
//Bonus Section - Additional Metrics - Win/Loss ratio
//=================================================================================
_SECTION_BEGIN( "Win/Loss Ratio" );
// BONUS - Additional Metrics - Win/Loss ratio for the previous years and includes the number of trades per year
procedure vgWinLossPerYear( YrWin, YrLoss, Yrcnt, trade, mode )
{
dt = IIf( mode == 1, trade.ExitDateTime, trade.EntryDateTime );
n = floor( DateTimeConvert( 8, dt ) );

if( trade.GetProfit() >= 0 ) // profit only
VarSet( YrWin + n, Nz( VarGet( YrWin + n ) ) + 1 );
else // loss only
VarSet( YrLoss + n, Nz( VarGet( YrLoss + n ) ) + 1 );

// cnt all per year
VarSet( Yrcnt + n, Nz( VarGet( Yrcnt + n ) ) + 1 );
}

SetCustomBacktestProc( "" );

if( Status( "action" ) == actionPortfolio )
{
bo = GetBacktesterObject();
bo.Backtest();

yr = Year();
fbr = Status( "FirstBarInRange" );
lbr = Status( "LastBarInRange" );
first_yr = LastValue( ValueWhen( fbr, yr ) );
last_yr = LastValue( ValueWhen( lbr, yr ) );

// iterate closes trades
for( trade = bo.GetFirstTrade(); trade; trade = bo.GetNextTrade() )
vgWinLossPerYear( "YrWin", "YrLoss", "Yrcnt", trade, 0 );

// iterate open trades
for( trade = bo.GetFirstOpenPos(); trade; trade = bo.GetNextOpenPos() )
vgWinLossPerYear( "YrWin", "YrLoss", "Yrcnt", trade, 0 );

// Output per year stats to report file
for( i = first_yr; i <= last_yr; i++ )
{
YrCnt = VarGet( "Yrcnt" + i );
bo.AddCustomMetric( StrFormat( "Year%g (%g trades): WinRatio %1.2f%%, LossRatio %1.2f%%",
i, YrCnt, VarGet( "YrWin" + i ) / YrCnt * 100, VarGet( "YrLoss" + i ) / YrCnt * 100 ) );
}
}

_SECTION_END();_


----------



## othmana86 (8 January 2021)

here it is


----------



## Skate (8 January 2021)

othmana86 said:


> exploration signals an trailing stop exist on 31/12 for an exit the next candle 4/01 at .05c.




@othmana86 as suspected the strategy I uploaded has been modified. I'm sure @DaveDaGr8 will sort it out for you.

*This is my WTT Version - chart for (VMS)*
The signal bar on the 18/12/2020 is correct & currently, the position is still open




Skate.


----------



## Trav. (8 January 2021)

othmana86 said:


> exploration signals an trailing stop exist on 31/12 for an exit the next candle 4/01 at .05c.
> backtester keeps it running...does not close the trade. which is the correct way because it did not close -20% from the entry bar.
> which begs the question..how can i rely on the exploration signals? so somethings wrong just not sure what yet..



I haven't read the whole exchange but you have 2 different set trade delays which is causing your problem ( what I can see )

*SetTradeDelays( 1, 1, 1, 1 )*; // Trade delays, the delay is required for backtesting

if( Status("action") == actionExplore )
{
*SetTradeDelays(0,0,0,0);*
PositionScore = Positionscorer;
Equity( 2 );
SetSortColumns( 3,-4);
}


----------



## dpong (9 January 2021)

othmana86 said:


> They look very good mate...good work!
> this is a code in TV?



Correct.  Thanks.


----------



## Trendnomics (9 January 2021)

Since we are all sharing many systems (covering all the animals in Noah’s ark), I thought I would share one of my own (very simple, yet very profitable). Back-tests have been performed over the same "statistically significant" period as all the other systems presented in this thread (by others). I know back-testing means “jack”, but here are the details and results:




Trading Period = 01/01/2020 to 07/01/2021
Initial Trading Capital = $100,000
Number of Positions = 50
Index Filter = None
Universe = Any ASX Ordinary Stock (including delisted)
Shorting = No

A single run of the strategy results in the following:






A Monte-Carlo simulation (2000 run) of the strategy results in the following:




*Profit Stats*
Maximum Profit:                                  $187,526.46 (187.53%)
Average Profit:                                    $75,675.56 (75.68%)
Minimum Profit:                                      $9,794.98 (9.79%)
Standard Deviation:                                $26,124.02 (26.12%)
Probability of Profit:                                         100.00%
Probability of Loss:                                             0.00%

*Percent Winning Trade Stats*
Maximum percentage of winning trades:                           53.44%
Average percentage of winning trades:                           48.26%
Minimum percentage of winning trades:                           44.03%
Standard Deviation:                                              1.38%

*Percent Losing Trade Stats*
Maximum percentage of losing trades:                            55.97%
Average percentage of losing Trades:                            51.74%
Minimum percentage of losing trades:                            46.56%
Standard Deviation:                                              1.38%

*Maximum Peak-to-Valley Percent Drawdown Stats*
Maximum Absolute Percent Drawdown:                            40.4258%
Average Absolute Percent Drawdown:                            29.8859%
Minimum Absolute Percent Drawdown:                            15.5345%
Standard Deviation:                                            3.5881%

The code (Metastock + Tradesim) for this strategy is as follows:

Entry = (Ref(ExtFml("TradeSim.Rand"),-1) <= 0.05) 
{If yesterday’s randomly generated number is less than or equal to 0.05, then BUY}

Exit = (Ref(ExtFml("TradeSim.Rand"),-1) >= 0.9)
{If yesterday’s randomly generated number is greater than or equal to 0.9, then SELL}

Off coarse the results could be improved by adding an index filter.


----------



## dpong (9 January 2021)

Here is one way that I visualize my trades.  It is a histogram chart, done in Excel, and is generated directly from my trading journal.  There are currently 20 open trades and 41 closed trades for a total of 61.  These are my results from running WTT live since about 1 Jan 2020.

The simulated "bell curve" represents what a normal distribution might look like.  I manually put the left side of the "bell curve" just to the left of my biggest single loss, which is $1,200 on this chart.  Then I place the right side of the bell curve just past +$1,200 so it is symmetrical.  We are looking for a positive edge, so we are most interested in trades that fall outside the normal distribution.  Currently I have 12 trades outside of the bell curve.  This is also known as a "fat tail."  It is exactly what you want.

[Each trade is placed in a bin according to it's gain or loss, and the number of trades in each bin are summed.]

[Amibroker generates a similar chart during backtesting.]


----------



## DaveDaGr8 (9 January 2021)

Good pickup.

I think Trav is on the right track here.

Applystop is supposed to work from High to Low values, not the close ( i think ). I have always run looping stops so it's never been an issue.

If you add these 2 lines to your code it might give you a clearer picture

AddColumn(HHV(H,BarsSince(Buy)),"Stop check BT",1.4,colorWhite,IIf(LLV(L,BarsSince(Buy))<HHV(H,BarsSince(Buy))*.8,colorRed,colorDarkGreen));
AddColumn(HHV(H,BarsSince(Ref(Buy,1))),"Stop check EX",1.4,colorWhite,IIf(LLV(L,BarsSince(Ref(Buy,1)))<HHV(H,BarsSince(Ref(Buy,1)))*.8,colorRed,colorDarkGreen));

This is more a debugging type line to see if there is a pattern of errors.




So thinking about it this is what is really going on under the hood. Green is NOT stopped out, so the backtester wouldn't ( didn't) have stopped out, but the explorer did for VMS due to the different tradedelays. It looks like the issue has come from the first bar. The explorer used the value of .067 and Backtester .063.

Sorry to lead you astray, i don't use applystop and i thought that would work. My Bad

I'll have a think about this more tomorrow.


----------



## qldfrog (9 January 2021)

Trendnomics said:


> Since we are all sharing many systems (covering all the animals in Noah’s ark), I thought I would share one of my own (very simple, yet very profitable). Back-tests have been performed over the same "statistically significant" period as all the other systems presented in this thread (by others). I know back-testing means “jack”, but here are the details and results:
> 
> View attachment 118023
> 
> ...



Interesting.unless you take a piss
this means that randomly selected 50 stocks kept on average 2 weeks since 01/01/2020 would have returned on average 75%
Considering xao was just below 7000 Jan last year and just above now,hard to believe unless you do invest 2k each time regardless of portfolio worth and want to demonstrate this approach.
Maybe i am just too nice and think you want to make a point?
Added: i missed the image of the cat 🙄


----------



## Skate (9 January 2021)

*Explanation Notes*





						Dump it Here
					

Skate.




					www.aussiestockforums.com
				




*This week "HappyCat" Exploration Analysis *



Skate.


----------



## DaveDaGr8 (9 January 2021)

Another way to do this would be to set tradedelays (0,0,0,0) at the top and then offset your entry/exit price using

buyprice = ref(open,1);
sellprice = ref(open,1);

Doing this i ended up getting all 3 signals you're looking for on the SIGNAL day at the correct price. This backtest is actually buying on the NEXT trade open. For VMS that's the 8/1 @.055 which matches the chart.




I don't think we can have tradedelays(1,1,1,1) in the explorer because of the equity(2) command, which is needed to translate stops into sells for the explorer to pick up. It's a rabbit hole.

Another way would be to use the looping stop and use the correct entry bar, then we CAN remove the equity(2) command.


----------



## Trav. (9 January 2021)

DaveDaGr8 said:


> It's a rabbit hole.



 I think that sums up trading in a nutshell.


----------



## dpong (9 January 2021)

In a for loop using i++, I handled that this way.  It is important to realize (I think) that there may not always be a bar for tomorrow. 

Don't walk off the edge of the universe.  I think.

      if (i+1 < BarCount)  
         SellPrice_ = Open[i+1];  //Use tomorrow's open
      else 
         SellPrice = Close;   //Use today's close._


----------



## Skate (9 January 2021)

My previous post has been deleted as it serves no purpose.

Skate.


----------



## dpong (9 January 2021)

@Skate do you think it is possible to create a "successful" weekly system using mean reversion?  My initial reaction was that mean reversion would be successful only as daily or intraday, but now I'm wondering.  

Do you (or anyone else) have an opinion on viability of a weekly mean reversion strategy?

Much thanks.


----------



## Skate (9 January 2021)

dpong said:


> @Skate *do you think it is possible to create a "successful" weekly system using mean reversion?*  My initial reaction was that mean reversion would be successful only as daily or intraday, but now I'm wondering.
> 
> Do you (or anyone else) have an opinion on viability of a weekly mean reversion strategy?
> 
> Much thanks.




@dpong, I've traded a "daily" Mean Reversion Strategy (MRS) but not weekly. Trading with CommSec the commission rate of $29.95 each way was a killer even though the strategy was profitable. I traded the (MRS) for around 6 months a few years ago. I haven't revisited it since.

Skate.


----------



## dpong (9 January 2021)

Skate said:


> @dpong, I've traded a "daily" Mean Reversion Strategy (MRS) but not weekly. Trading with CommSec the commission rate of $29.95 each way was a killer even though the strategy was profitable. I traded the (MRS) for around 6 months a few years ago. I haven't revisited it since.
> 
> Skate.



Thanks.  I was afraid of that.  Wow those are high commissions!  I trade in the US and for stocks I'm paying $0.  Maybe I could trade a daily system once I retire.  One can dream.


----------



## Trendnomics (9 January 2021)

qldfrog said:


> Interesting.unless you take a piss
> this means that randomly selected 50 stocks kept on average 2 weeks since 01/01/2020 would have returned on average 75%
> Considering xao was just below 7000 Jan last year and just above now,hard to believe unless you do invest 2k each time regardless of portfolio worth and want to demonstrate this approach.
> Maybe i am just too nice and think you want to make a point?
> Added: i missed the image of the cat 🙄




In terms of back-test validity and potential future viability, the Hasard Cat Daily Strategy may just be as valid as any of the other back-tested systems in this thread - the truth lies in applying an actual statistically significant period to the back-tests.


----------



## dpong (9 January 2021)

_I cut and pasted incorrectly.  I have corrected the code in this quotation._


```
if (i+1 < BarCount)
         SellPrice = Open[i+1];  //Use tomorrow's open
      else
         SellPrice = Close[i];   //Use today's close.
```

_I was trying to express my concern that there are cases where doing:

buyprice = ref(open,1);

...could be dangerous because if our bar is currently the last bar, trying to grab the open at last bar+1 might be an error.  Using Ref( Array, N) where N is a positive number gives me pause.  I did it in my code snippet only after I made sure that I wasn't working on the last bar.  

If I am mistaken in my thinking, it would be a learning moment for me if someone straightened me out.  _


----------



## Rsthree (9 January 2021)

Skate said:


> View attachment 118053
> 
> 
> *Explanation Notes*
> ...



Did I miss this week's Zebra update or has the Zebra been locked in the stable and no more petting allowed.


----------



## Skate (9 January 2021)

Trendnomics said:


> In terms of back-test validity and potential future viability, the Hasard Cat Daily Strategy *may just be as valid as any of the other back-tested systems in this thread* - the truth lies in applying an actual statistically significant period to the back-tests.




*Hasard Cat Daily Strategy *
@Trendnomics your backtest results are as valid as any others that have been posted in this thread. In saying this, I personally believe backtests results shouldn't to be trusted or relied upon when actually trading the strategy live.

*Live trading results*
Posting actual live trading results is the true measure (IMHO).

Skate.


----------



## Skate (9 January 2021)

Rsthree said:


> Did I miss this week's Zebra update or has the Zebra been locked in the stable and no more petting allowed.




@Rsthree I believe posting excessively was strangling the thread. I'm posting the signals for HappyCat as @qldfrog had a sizeable investment in the strategy. 

*The Zebra Strategy*
I wasn't going to upload the Exploration Analysis of the Zebra Strategy until someone requested it as I didn't know if there was an interest in it.

Skate.


----------



## stasisbr (9 January 2021)

I believe @Trendnomics is referring to the fact that many many systems are showing fantastic results for this year post crash however if one was to test those same systems against a wider timeframe the results may be vastly different. Hence the use of a cheeky dartboard method in the backrests (random entry and exit signals 😉)


----------



## Skate (9 January 2021)

*This week "Zebra Strategy" Exploration Analysis*




Skate.


----------



## Trendnomics (9 January 2021)

stasisbr said:


> I believe @Trendnomics is referring to the fact that many many systems are showing fantastic results for this year post crash however if one was to test those same systems against a wider timeframe the results may be vastly different. Hence the use of a cheeky dartboard method in the backrests (random entry and exit signals 😉)


----------



## Skate (9 January 2021)

Trendnomics said:


> View attachment 118082





Skate said:


> *Fooled by Randomness*
> Fooled by Randomness by Nassim Nicholas Taleb




*We are constantly being fooled by randomness*
"Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets" is a book by Nassim Nicholas Taleb that I have mentioned once or twice before in the "Dump it here" thread. "Fooled by Randomness" was very insightful book as-well-as a good read, a real eye-opener to say the least. Taleb's book deals with the fallibility of human knowledge & it was mentioned in the video posted by @Trendnomics. This book explains why some people are successful where others aren't so lucky.  Fooled by Randomness is an investigation of luck, uncertainty, probability, human error, risk, and decision-making in a world we don’t understand.


Trendnomics said:


> In the long term, the randomness of the markets will shrink all ego's.




*The ONE Thing by Gary Keller with Jay Papasan*
The surprisingly simple truth behind extraordinary results is another fantastic read.

Skate.


----------



## Skate (9 January 2021)

*An insight*
Let me post three charts so others can see how each position performed (TNE, PWH, & WGN)

















*Trading is unpredictable *
The ebb & flow of the markets makes trading interesting. At times "lemons turn to lemonade" & at other times it's not always "peaches & cream". With trend trading, we get a signal to get in & a signal to get out. The period "in-between" those signals are out of our control.

Skate.


----------



## Rsthree (9 January 2021)

Skate said:


> @Rsthree I believe posting excessively was strangling the thread. I'm posting the signals for HappyCat as @qldfrog had a sizeable investment in the strategy.
> 
> *The Zebra Strategy*
> I wasn't going to upload the Exploration Analysis of the Zebra Strategy until someone requested it as I didn't know if there was an interest in it.
> ...



Thank you, I too am invested in Happy Cat and happy to see it live on.
I've also been following Zebra with great interest     so thank for continuing to post  both.

Perhaps these live trading posts deserve their own thread.


----------



## qldfrog (9 January 2021)

Trendnomics said:


> In terms of back-test validity and potential future viability, the Hasard Cat Daily Strategy may just be as valid as any of the other back-tested systems in this thread - the truth lies in applying an actual statistically significant period to the back-tests.



no argument on that AND THIS IS NOT A PERSONAL ATTACK:
but I do not believe the system you mentioned with random selection of 50 stocks from xao exiting on average after 10d will give you anything like what you show.
in the time period you mentioned 1/01/2020 to 7/01/2021 (the period you indicated) , the XAO went from  6855 to 7024;
That is obviously an average with a small obviously survival bias so higher than real life experience

As you have a _relatively _significant  sample of mostly fully invested stocks as per your entry selection(1/20th stock are a buy so you will be fully invested statically nearly all along), you should get the average return of 2.4% or so, sure stats can play a bit around but with few stock  takeovers and diseappearances I seriously doubt you will get any such example result , especially your MC runs.
Nowhere even in the order of magniture near 76% return unless you have an error in your code or its execution, like still investing 50x$2k during drawdown o similar error
Statistically, it is so unlikely and such an outrageous outlier that I will not even code it ..If someone has enough time to play, please do code it independently and tell us if the result are even above 5% return (average with MC runs)
I' d be surprised
with all respect, I do not believe such post is really helpful for the beginners


----------



## qldfrog (9 January 2021)

Trendnomics said:


> In terms of back-test validity and potential future viability, the Hasard Cat Daily Strategy may just be as valid as any of the other back-tested systems in this thread - the truth lies in applying an actual statistically significant period to the back-tests.



but it is not.....


----------



## qldfrog (9 January 2021)

stasisbr said:


> I believe @Trendnomics is referring to the fact that many many systems are showing fantastic results for this year post crash however if one was to test those same systems against a wider timeframe the results may be vastly different. Hence the use of a cheeky dartboard method in the backrests (random entry and exit signals 😉)



Sure, cheeky but not real, so my issue;
better use a real example let's say from mid march to jan 2021 where I am sure a dart throwing monkey would cash enough to drive a ferrari.


----------



## qldfrog (9 January 2021)

anyway, enough poluting that thread.Apologies Mr Skate


----------



## Habakkuk (9 January 2021)

qldfrog said:


> but it is not.....




Trendnomics is right. I get similar results. This gets you in the ballpark. 


Optimize("MC run #", 10, 1, 2000, 1);
PositionScore = Random();

PosQty = 50;
PosSize = 2000;

SetOption("CommissionMode", 1);
SetOption("CommissionAmount", 0.1);    // 0.1% some brokers, not Commsec
SetOption("InitialEquity", 100000);
SetOption("MaxOpenPositions", PosQty);
SetPositionSize( PosSize, spsValue);

SetTradeDelays (0,0,0,0);

Buy = 1;
BuyPrice = O;

Sell = 0;
SellPrice = C;

ApplyStop(stopTypeNBar, stopModeBars, 20, exitatstop = 0, 0);


I didn't spend any time optimising the only parameter used. Didn't wait for 2000 MC runs either.
Would be a waste of time, a system that can pick any ASX microcap in this type of market.


----------



## qldfrog (9 January 2021)

hum, ok, I bite the bullet: here is random monkey test
that is the code:

TimeFrameSet( inDaily );
//settradedelays( 1, 1, 1, 1 );
// Trading system
initialEquity = 100000;
Optimize("MC run #", 10, 1, 2000, 1);
PositionScore = Random();

PosQty = 50;
PosSize = 2000;

SetOption("CommissionMode", 2);
SetOption("CommissionAmount", 10); 
SetOption("InitialEquity", 100000);
SetOption("MaxOpenPositions", PosQty);
SetPositionSize( PosSize, spsValue);



RoundLotSize = 1;          // No fractional shares
SetOption( "AllowSameBarExit", False );
SetOption( "AllowPositionShrinking", False );
SetOption( "MCEnable", 1 );
SetPositionSize( 100 / PosQty, spsPercentOfEquity ); // Fixed Fractional Sizing

//Rank the stocks when multiple signals occur
PositionScore = Random()*1000;

SetTradeDelays (0,0,0,0);

Buy = Random()< 0.05;
BuyPrice = O;

Sell = Random() >= 0.9;
SellPrice = C;

and that is the result, even worse than I thought but with 1330 trades we get $26000 brokerage? so wo brokerage a 5% loss which is as expected, much more after brokerage


So our monkey on the 01/01/2020 to 07/01/2021 wold have had a 31% loss
MC :
	

		
			
		

		
	



So in short, reality still exists and beginners: your back tests are actually still significant and meaningful;
_CQFD in French: what had to be demonstrated..._
So Mr Skate and usual followers of this thread, please carry on providing and analysing your backtests.
These are helpful and *not* complete BS
Have a good night


----------



## stasisbr (9 January 2021)

Hey QldFrog,

I don't think the MC results in the single test run are representative due to how MC works in AB.  You have the optimize code in the afl which provides the more realistic view of what impact the randomised signals have. e.g



I feel like I'm defending @Trendnomics, but its really just that I believe the point they made regarding this years trading is something that's valid and should be kept in mind. Is the randomise entry/exit system the best example? maybe not, were the posted results from a cherry picked run? maybe so. But for a more *real* example, I coded up Skate's Flying Pelican Daily strategy from the other week, this years results were fantastic, longer term not so much (This is obviously not @Skate 's actual code, but my coding based on his description of entry/exit and some other entry/exit conditions added).






To your point about beginners and validity of backtest results, I do agree there's value there, be it learning or comparing results during comparative timeframes or live trading versus paper. And I'd add that if someone new takes away from this convo an awareness that testing should be done over a better sample of market conditions and subsequently save's themselves some big losses then great!.

cheers,


----------



## qldfrog (9 January 2021)

stasisbr said:


> Hey QldFrog,
> 
> I don't think the MC results in the single test run are representative due to how MC works in AB.  You have the optimize code in the afl which provides the more realistic view of what impact the randomised signals have. e.g
> View attachment 118099
> ...



No denying that, thanks for the input you can run thst code as many times as you want, you will not get a winner, even less a 75pc gain...
 we discussed here and in other threads how it is worthwhile running backtests on different selected periods: i personally have a script running backtests on around 30 or so intervals: dumb annual, dumb cumulative, and selected market conditions
Every person is then free to select his her preferences or how far in the past they see any relevance.
All issues widely discussed...


----------



## dpong (10 January 2021)

Speaking of Taleb, and Fooled by Randomness, and the frailty of humans...

dpong's WTT strategy did this from 2014 through 2016.  THREE YEARS!!




Nick's advice is to trade through the drawdowns.  How can a mere human trade this? 

Meanwhile, the overall market is doing this:

[Buy and hold would have outperformed for these 3 years.]

[Heck, even being in cash would have vastly outperformed.]




And yet, 2014 through 2016 was but a small part of the journey to this:




In a way, the "right thing to do" would have been to continue trading the system.  [Maybe.]  But how could a mere human do that?  And should he?  I'm trading WTT and struggling with this eventuality.  I mean right now it's great.  But what will I do when the time comes?  I'm not sure.

[Suggestions are welcomed.]


----------



## dpong (10 January 2021)

How to Power Through Trading Losses with Nick Radge.


----------



## qldfrog (10 January 2021)

dpong said:


> Speaking of Taleb, and Fooled by Randomness, and the frailty of humans...
> 
> dpong's WTT strategy did this from 2014 through 2016.  THREE YEARS!!
> 
> ...



1) are we highjacking this thread?if mr Skate want to move us aside, i would understand but your post is quite worthwhile.
2)the way i see it:
It is a very personal approach so may not fit everyone.
-when designing, i ensure that down times are not catastrophic so my systems are not optimised to be stellar either
- try to have different systems running in parallel which can benefit from all situations

Look at overall system performance and potentially increase or reduce slightly the respective amount..but your losing systems will naturally be smaller and winning systems bigger..the beauty
That way you can still have long underperformance periods and sleep well.
As long as backtests match real trading for most parts, you should be able to stay invested.
As noted in my thread,one volatility US system has benn a heavy looser since inception but in other situations,it could be a stellar winner. i keep it as you would pay an insurance premium.

 other people would close all but best performing and run like that...
Gambling spirit or not?
hope it helps


----------



## qldfrog (10 January 2021)

dpong said:


> Speaking of Taleb, and Fooled by Randomness, and the frailty of humans...
> 
> dpong's WTT strategy did this from 2014 through 2016.  THREE YEARS!!
> 
> ...



Just want to add: it is VERY healthy to think about thos eventuality now, before the heat and angst of the action.
Document your thoughts and have a plan.easier to apply ecisting plan than designing one when **** happens.
Have the plan coded in your systems if you can to reduce emotions during execution


----------



## Skate (10 January 2021)

qldfrog said:


> are we highjacking this thread?



On the contrary, the interaction, banter & graphics is how we learn. Every poster brings a new perspective to trading as we see everything through our eyes & lived experiences.


dpong said:


> In a way, the "right thing to do" would have been to continue trading the system





qldfrog said:


> Have the plan coded in your systems if you can to reduce emotions during execution




Trading is full of uncertainties. Nick once said (paraphrased) - Your strategy needs to have a mathematical advantage by "winning more when you win" than you "lose when you lose". Trading a system professionally developed & tested should give you the confidence to push through the bad times. Confidence, allows you to keep pulling the trigger, stepping up to the plate. "Confidence is the key to trading successfully"

Skate.


----------



## Habakkuk (10 January 2021)

qldfrog said:


> No denying that, thanks for the input you can run thst code as many times as you want, you will not get a winner, even less a 75pc gain...




Your code, 50 MC runs. Can't fit more on a page.

Average return 40% or $40,000
Highest: $1.8 Mil
Lowest: -$10,000


----------



## Warr87 (10 January 2021)

dpong said:


> Speaking of Taleb, and Fooled by Randomness, and the frailty of humans...
> 
> dpong's WTT strategy did this from 2014 through 2016.  THREE YEARS!!
> 
> ...




I don't think people would trade through a 3 year draining of your equity. You can weather a system drawdown if you have confidence that it will recover. Looking at that chart I would say there is something fundamentally wrong with the system. Was that Radge's WTT code modified or someone's own coding of the WTT? Either way, I would've thought that a filter (which Radge usually employs) would stop the bleed from the account. The code I have bought from Radge had a filter and was on the conservative side, mostly because the majority of clients can't handle a 20% drawdown. I think even Radge would have rethought the system reliablity with that kind of drawdown as he is about the numbers. When you start having multiple deviations way from what is expected and shown in backtests, there is a fundamental error somewhere. I like to develope my systems over rather benign period, try not to optimize anything if I can. Then run it against an event or bad years (2008, 2014, 2018, 2020). It's easy to get a system that worked great in, say 2009, its a lot harder to have an un-optimized system that runs goood most years and avoid ruin in big negative market events.


----------



## qldfrog (10 January 2021)

Habakkuk said:


> Your code, 50 MC runs. Can't fit more on a page.
> 
> Average return 40% or $40,000
> Highest: $1.8 Mil
> ...



Nope my code my run negative as much as you try...
And if you just think about it make sense as xao is the average so obviously if you randomly pick the average you get it back..
Step back out of your focus and think about it.just that back step view.
i might have a clue at what you do: you reinvest 2k on 50 positions all the way down and up the chart and yeap as you put extra money all the way you should get around 40pc...from your low....
Can not help further.


----------



## dpong (10 January 2021)

Warr87 said:


> I don't think people would trade through a 3 year draining of your equity. You can weather a system drawdown if you have confidence that it will recover. Looking at that chart I would say there is something fundamentally wrong with the system. Was that Radge's WTT code modified or someone's own coding of the WTT? Either way, I would've thought that a filter (which Radge usually employs) would stop the bleed from the account. The code I have bought from Radge had a filter and was on the conservative side, mostly because the majority of clients can't handle a 20% drawdown. I think even Radge would have rethought the system reliablity with that kind of drawdown as he is about the numbers. When you start having multiple deviations way from what is expected and shown in backtests, there is a fundamental error somewhere. I like to develope my systems over rather benign period, try not to optimize anything if I can. Then run it against an event or bad years (2008, 2014, 2018, 2020). It's easy to get a system that worked great in, say 2009, its a lot harder to have an un-optimized system that runs goood most years and avoid ruin in big negative market events.



Thank-you for your thoughtful reply.  I coded this WTT strategy attempting to stick exactly to what Nick outlined in his book Weekend Trend Trader.  Of course there was some interpretation involved, but I am convinced it is true to what was described in the book.  No deviations.

I don't have Nick's code.  Could you do me a favor and simply explain on what the filter is based?  Equity drawdown or... ?   I'm kind of new to this, though I have been live-trading my WTT system (written on a different platform) for just over 1 year.   I am eager to learn as this is why I joined ASF.

Thanks,
dpong

[Nick's backtest in the book goes to Nov 2012.]


----------



## Warr87 (10 January 2021)

dpong said:


> Thank-you for your thoughtful reply.  I coded this WTT strategy attempting to stick exactly to what Nick outlined in his book Weekend Trend Trader.  Of course there was some interpretation involved, but I am convinced it is true to what was described in the book.  No deviations.
> 
> I don't have Nick's code.  Could you do me a favor and simply explain on what the filter is based?  Equity drawdown or... ?   I'm kind of new to this, though I have been live-trading my WTT system (written on a different platform) for just over 1 year.   I am eager to learn as this is why I joined ASF.
> 
> ...




it's been a while since I've read Radge's book (where I believe he describes the WTT and other strategies).

A filter is a broad term. I use a few of them, as I know a number of members here. 

Filters I use:

Index filter (index must be 'up' in order to trade. need to chose appropriate index that represents the universe of stocks you are trading)
Price filter (a min/max of price allowable. I wont buy shares less than 5c per share. They are too illiquid. I also don't buy stocks too expensive, it's a lot harder for a $20 stock to move 20% than a 5c share.)
Volume filter (a minimum number of shares traded. Often combined with Price Filter for similar reasons, the liquidity of stocks).
Momentum filter (Already has a certain amount of established momentum before you can enter. Using ROC (rate of change) within AB for this one).


```
// Variables  //
VolumeTotal = V;
VolumeMA = MA(V, 10);
PriceF = Close > 0.05 AND Close < 10;

// Index Filter //
SetForeign( "$XAO.au" );
Index_Up = C > MA(C, 10);
RestorePriceArrays();
```

My buy conditions are used in conjunction with the filters.


```
Buy= MapBuyCondition AND PriceF AND Index_UP;
```

In this code above, as long as my MapBuyCondition (which are my buy rules) is true, with the PriceF being true (price range defined further above) and the index (XAO in this case) is up, defined as a close above a 10 period moving average).

My sell condition is simply a close below a MA. You could make the system sell as soon as the Index_UP == False, which is immediately moving to cash as soon as the market is no longer 'Up'. I don't do that, I do this instead:


```
//--------------------- Sell --------------------- //
Exit_Percent = IIf( Index_Up, 40, 10 ); //Dynamic index filter
ApplyStop( stopTypeTrailing, stopModePercent, Exit_Percent, ExitAtStop = 2 ); //Trailing stop
```

This is a dynmaic stop. If the market is 'down' as I have defined it, I adjust my trailing stop to 10% not the usual 40%. Why? Because in a down market stocks are likely to continue moving down so giving it wider range with a 40% trailing stop would just bleed my money (sometimes like a massive hemorrhage) .

Hope that helps ya mate. Add in a few filters and I'm sure things will improve. I see filters as a protection against loss capital. You can go overboard with filters too. Adding rules to a system will often increase the metrics, but you can go too far where it will take few trades. I suggest sticking to an index filter on a weekly system (doesn't work well on a daily system tbh). And establishing a minimum price is also a good idea. Check your positionscore too. That, too, can also make or break a system's edge (having rules is great, but deciding which trades to take over others will impact your mathematical edge).


----------



## Habakkuk (10 January 2021)

qldfrog said:


> Nope my code my run negative as much as you try...
> And if you just think about it make sense as xao is the average so obviously if you randomly pick the average you get it back..
> Step back out of your focus and think about it.just that back step view.
> i might have a clue at what you do: you reinvest 2k on 50 positions all the way down and up the chart and yeap as you put extra money all the way you should get around 40pc...from your low....
> *Can not help further.*




I didn't ask for your help. I ran YOUR code and posted the 50 MC runs from it.
But I know why you get your results.


----------



## dpong (10 January 2021)

@Warr87 Thank-you kindly.  The code samples are particularly useful.


----------



## Warr87 (10 January 2021)

dpong said:


> @Warr87 Thank-you kindly.  The code samples are particularly useful.




Thought they might be mate. I think I got most of those code snipets from members here too.


----------



## Trendnomics (10 January 2021)

Habakkuk said:


> Your code, 50 MC runs. Can't fit more on a page.
> 
> Average return 40% or $40,000
> Highest: $1.8 Mil
> ...




Could still add a very selective index filter to drive my point further.



qldfrog said:


> anyway, enough poluting that thread.Apologies Mr Skate




Please don't get too precious about staying "on-topic", on a thread titled "Dump it here" with the following brief:



Skate said:


> Sometimes you feel like dumping stuff & this thread might be the perfect place.
> 
> *Helping Others*
> You might want to dump stuff here to help others
> ...




To those that get my point - well done - upward forward.
To those that don't get my point - good luck - deeper inward.


----------



## investtrader (10 January 2021)

As there is a discussion about performance. I add this to my systems. When you do lots of trades, it brings you back to earth. 

SetOption( "CommissionMode", 1 ); // SIMULATE SLIPPAGE PER TRANSACTION
SetOption( "CommissionAmount", 1 ); //1% PER TRANSACTON


----------



## qldfrog (10 January 2021)

Trendnomics said:


> Could still add a very selective index filter to drive my point further.
> 
> 
> 
> ...



Sure
Fell free to put real money into that random system and keep us informed along .... I personally would enjoy having a 75pc return system between 1/01/2020 and now with 0 loss possibility.


----------



## Warr87 (10 January 2021)

investtrader said:


> As there is a discussion about performance. I add this to my systems. When you do lots of trades, it brings you back to earth.
> 
> SetOption( "CommissionMode", 1 ); // SIMULATE SLIPPAGE PER TRANSACTION
> SetOption( "CommissionAmount", 1 ); //1% PER TRANSACTON




i double my commissions as a 'dumb' way to account for slippage. there are more elegant ways to do it but it works for me. wouldr ather over estimate commissions and have it profitable.


----------



## Skate (10 January 2021)

*While we are talking about live trading results*
I "live" trade a handy weekly strategy & I'm prepared to upload the signals from the (a) Exploration Analysis as well as the signals from (b) the backtest feature. (you can use either/or)

*The period for the appraisal*
1st June 2020 to 30th June 2020. This weekly strategy never stopped trading during this period. I've selected this period because it included "February & March 2020" (the COVID Crash) a period where I dropped 70% of my open profits. I've also included the recovery phase from April to June 2020. The actual trading results for this period will be disclosed by whoever appraises the signals. (that's if someone has the time or inclination)

*FYI*
This is one of my better strategies.

*I would appreciate someone doing an independent appraisal*
2020 has been very kind to me & I imagine last year has been kind to every other trend trader.

*Question*
Is there anyone who will do an appraisal? (before I upload the Excel files)

Skate.


----------



## Roller_1 (10 January 2021)

Skate said:


> *While we are talking about live trading results*
> I "live" trade a handy weekly strategy & I'm prepared to upload the signals from the (a) Exploration Analysis as well as the signals from (b) the backtest feature. (you can use either/or)
> 
> *The period for the appraisal*
> ...




i probably can if it's the backtest trade list, will you disclose the account size at the start or not? But in saying that in the end people are only validating a backtest, not actual results. So you might as well upload the AB report


----------



## Skate (10 January 2021)

Roller_1 said:


> i probably can if it's the backtest trade list, will you disclose the account size at the start or not? But in saying that in the end people are only validating a backtest, not actual results. So you might as well upload the AB report




@Roller_1, thank you for responding. I trade this strategy live & have done so for a long time. I take my signals religiously from the Exploration Analysis. Whereas others trade from the signals of the Backtest feature (backtest trade list). This is a seasoned strategy, meaning I have cut a small window of signals for appraisal. The period in question is the scary period of 2020. Some might like to know the results of how the strategy performed during this 6 month period. Both files are in Excel format - so they are easy to follow.

*The point of the exercise*
If someone started to trade for the first time, they would have started at the very worst time. They decide to trade a $100k Portfolio (20 X $5k bets) between 1st January 2020 to 30th June 2020 (end of the financial year). Knowing what we know now (a period of extreme volatility) how would this strategy have performed?

*Example - Exploration Analysis capture*





*Example - Backtest trade signals capture

*

Let me know if you are still interested. (posting a backtest report wouldn't have served the purpose) - if I upload the files they will be in Excel Format.

Skate.


----------



## barney (10 January 2021)

Trendnomics said:


> Since we are all sharing many systems *(covering all the animals in Noah’s ark) *




Lol ...... I was only thinking yesterday how clever Mr @Skate 's  System naming actually is  

However, until Mr. Skate gives us his "Blobfish" system, I am sure we are nowhere near the biblical proportions required to qualify for the "Noah" award you suggest! 

ps If the Blobfish system ever does emerge, I suspect it may be a leading Indicator towards "Armageddon"😲


----------



## Skate (10 January 2021)

Skate said:


> *The point of the exercise*
> If someone started to trade for the first time,* they would have started at the very worst time*. They decide to trade a $100k Portfolio (20 X $5k bets) between 1st January 2020 to 30th June 2020 (end of the financial year). Knowing what we know now (a period of extreme volatility)* how would this strategy have performed?*





*As there was no interest*
It seems pointless to display the backtest results as I have little faith in the results compared to "live trading". The exercise was to take the signals without exception (admittedly a new trader would have struggled to keep trading during the COVID crash)

*These are "actual" buys & sells*
I've taken every signal & traded through the COVID cash & at times it wasn't pretty.

*There are two scenarios that I'll give *
(1) Trade from the 1st January & CASH OUT on the 30th June 2020
(2) Trade from the 1st January & stop BUYING on the 30th June 2020 & HOLD those positions till the end-of-close on Friday (8th Jan 2021)

*Why hold the remaining positions? *
BECAUSE it has taken 6 months to get a good hand (poker pun). Once you get 20 good positions, turn that strategy into a "Buy & Hold" system. (as a second example of trading)

*Trading Results for scenario 1*
Trade results from the 1st January & CASH OUT on the 30th June 2020







*Trading Results for scenario 2*
Trade from the 1st January & stop BUYING on the 30th June 2020 & HOLD those positions till the end-of-close on Friday (8th Jan 2021) - Turning a "Trend Trading System" into a "Buy & Hold System".




*Just the basics have been uploaded*
I won't upload the other "detailed reports" as I only try to post what I think everyone is interested in.

*Summary*
It takes time for a strategy to develop into profitability, that's what beginners fail to realise & accept.

Skate.


----------



## dpong (10 January 2021)

Skate said:


> *The point of the exercise*
> If someone started to trade for the first time, they would have started at the very worst time.




I lived through this exact scenario.  Started trading WTT around January.  By 28 February was down -15.47%.  By then I was 100% cash as WTT had raised all stop losses to 10% and out I was.  It felt lousy.  I wasn't happy but I realized that in a crash such as this it was not the fault of the strategy and that the strategy was perfectly viable.  As a weekly system it did feel like we got out a little slower than I would have liked.  

 The first new trade was 20 April for Amazon and it felt just terrible taking that trade.  But it was the absolute best time to buy.  That portfolio finished up 2020 with a return of 24.04%.  The strategy worked fine.


----------



## Warr87 (10 January 2021)

dpong said:


> I lived through this exact scenario.  Started trading WTT around January.  By 28 February was down -15.47%.  By then I was 100% cash as WTT had raised all stop losses to 10% and out I was.  It felt lousy.  I wasn't happy but I realized that in a crash such as this it was not the fault of the strategy and that the strategy was perfectly viable.  As a weekly system it did feel like we got out a little slower than I would have liked.
> 
> The first new trade was 20 April for Amazon and it felt just terrible taking that trade.  But it was the absolute best time to buy.  That portfolio finished up 2020 with a return of 24.04%.  The strategy worked fine.




read my thread. same here lol. have to remember, if your system loses 20% straight up, well think, was it a market crash? yes? ah, ok, well that explains it. if you lost the same amount without a market crash, then you start asking some serious questions.

the tradeoff with weekly is that it cuts out the noise by ignoring everything between. the downside is that with sudden and violent moves against the market during the week, no chance to react. sometimes the market will just go down tuesday and wednesday, but by friday its higher than i was on monday. dont try and predict.

glad you finished with a return of 24% and glad you followed through. you are probably doing better than mates who haven't got a system if they trade at all. 

if you read my thread you will see that i was really unsure about taking trades after the crash. it felt like the market could gapdown at any moment. but in the end, like you, those trades ended up being huge winners.


----------



## dpong (11 January 2021)

The Amazon trade, FWIW.  [Only 1 share purchased.]  

[I love charts.]


----------



## Nomadronnie (11 January 2021)

Hi all.

I have to make $15k AUD in 2-3 months (by April 10 at latest), what high risk stocks should I invest in?

I have very little knowledge of stocks, but need to get the **** out of my family business as my parents are *****ing me.

Willing to risk $ to get the returns I want


----------



## Warr87 (11 January 2021)

Nomadronnie said:


> Hi all.
> 
> I have to make $15k AUD in 2-3 months (by April 10 at latest), what high risk stocks should I invest in?
> 
> ...




Honestly don't know if this is a troll or not? no one is going to give you advice on that. What it sounds like what you are after is the casino?


----------



## WilsonFisk (11 January 2021)

Skate said:


> *The point of the exercise*
> If someone started to trade for the first time, they would have started at the very worst time. They decide to trade a $100k Portfolio (20 X $5k bets) between 1st January 2020 to 30th June 2020 (end of the financial year). Knowing what we know now (a period of extreme volatility) how would this strategy have performed?




I started on 13 February 2020 with my first non-discretionary trading strategy (I call it my 'Active Trading' strategy, as I dont have to be active) which is only a week or two off probably the worst time to start from a sequencing risk point of view.  In saying that, I am comfortable around how and more importantly why it performed.  




It too backs @Skate comment around give it some legs.  It started buying back in early June, and time has given it some legs compared to just buying the market as a whole.

The return on this is probably far off, what some others in this thread achieved over that time, but I have been investing my time and resources into 2 small business operations and a young family, so system development is a part time/casual interest.

*Sequencing Risk and Index Filters*

There are a lot of fund managers and retirement product providers that are banging on about sequencing risk and why its important, understandably a retiree with all their super in a balanced fund retiring at the start of this year would have been drawing income out of their super in a falling market.  Not good - but not an issue for me (mortgage and family wont let me retire for a while  ).

I have put this sequencing risk into context of the index filter discussion, and think that the index filter is a crude method in alleviating this sequencing risk (effectively reducing draw down as per my system above when it flatlined).  

More importantly I have also put some thinking into some of @Skate musings in this thread, some of @ducati916 insights and analysis of the markets and sectors over the last 6 months.  

*What have I learnt though*

That when the proverbial hits the fan, there is unrelenting selling across the board
The market over the last 12 months has shown there are significant differences between sectors
That an index filter (XAO as an example) can be good at getting you out of the market, but can be slow getting you back in
That a filter based on a particular sector can be more appropriate than the broad index eg. XIJ as a filter for tech stocks would have had you back in much sooner


Hopefully food for thought, am I right, maybe or maybe not.  I haven't been able to code something like that up yet, but have been loosely apply it to my discretionary trading with success.  

I will figure something out. 

In the meantime I will continue to use my crude index/vix based GTFO filter on my existing system until it no longer performs within my risk/return expectations and trade pattern


----------



## Skate (11 January 2021)

WilsonFisk said:


> I started on 13 February 2020 with my first non-discretionary trading strategy (I call it my 'Active Trading' strategy, as I dont have to be active) which is only a week or two off probably the worst time to start from a sequencing risk point of view. *In saying that, I am comfortable around how and more importantly why it performed*.




@WilsonFisk, what a quality post. Your returns aren't too shabby either.


WilsonFisk said:


> I have put this sequencing *risk into context of the index filter discussion, and think that the index filter is a crude method in alleviating this sequencing risk *(effectively reducing draw down as per my system above when it flatlined).




*Index Filter*
I use an Index Filter to drive my Trailing Stop only these days. When the "Index Filter is On" I have a generous trailing stop & when the "Index Filter is OFF" the trailing stop shortens considerably.  


WilsonFisk said:


> That an index filter (XAO as an example) can be good at getting you out of the market *but can be slow getting you back in*




*You have hit the nail on the head*
Index filters can keep you out of the market when there is chaos & volatility to take advantage of (as demonstrated in your chart). My buy is conditional on strength & momentum. The Index Filter as a "buy condition" has outlived its usefulness (as far as I'm-concerned personally)

Great post mate!

Skate.


----------



## Skate (11 January 2021)

Nomadronnie said:


> I have to make $15k AUD in 2-3 months (by April 10 at latest), what high risk stocks should I invest in?




*Private messages*
We all get our share of private messages. Members who contact me are interested in one strategy or another. Some just want a suggestion of what to trade.

*I'm just throwing it out there*
I've been working on a simple Commodity Channel Index (CCI) strategy to generate "entry & exits" signals - it's a simple concept that generates interesting results. Google a "CCI trading strategy" & follow your nose.

*Here is a hint *
Swap out the WTT engine (of my uploaded WTT strategy) & replace it with a CCI  indicator to generate the signals.

*The Commodity Channel Index (CCI)*
The (CCI) momentum oscillator identifies cyclical trends as it determines the difference between the mean price of a security & the average of the means over a chosen lookback period. Simply the CCI indicator compares this difference.

*In a nutshell*
The issue that most traders have using the CCI momentum oscillator is that they believe it displays "excessive lag" making it an unreliable generator of buy & sell signals. Massaging a few parameters I've found the CCI indicator to be more than useful as a trading strategy.

*The (CCI) momentum oscillator is worth a second look*
Whether you use a CCI or RSI indicator to determine a trend is splitting hairs. Both indicators shine when there is good volatility & momentum present.

*FYI*
As a trading strategy, the CCI indicator is perfectly okay to use.

*Skate's CCI Trading Strategy*
Below are two 6 months backtest (as an example)
(1) from 1st January to the 30th June 2020.
(2) from 1st July to 31st December 2020.




Skate.


----------



## barney (11 January 2021)

Nomadronnie said:


> Hi all.
> 
> I have to make $15k AUD in 2-3 months (by April 10 at latest), what high risk stocks should I invest in?
> 
> ...




I'm curious.  What the Family business is that you need to escape, Ronnie?

Plus, how is making 15K going to get you "out of the business"?   

Genuine questions, if yours were also


----------



## dpong (12 January 2021)

@Skate I found an example of an afl that is using a CCIFast and CCISlow cross.   May I ask if you are doing something similar, or something simpler than this?


```
CCISlow=Param("CCISlow",30,30,100,10);
CCIFast=Param("CCIFast",10,5,30,5);
 
Buy = Cross( CCI(CCIFast), 0 ) AND CCI(CCIFast) > CCI(CCISlow) ;
 
Short = Cross( 0,CCI(CCIFast)) AND CCI(CCIFast) < CCI(CCISlow);
```


----------



## Skate (12 January 2021)

dpong said:


> @Skate I found an example of an afl that is using a CCIFast and CCISlow cross.   May I ask if you are doing something similar, or something simpler than this?
> 
> ```
> CCISlow=Param("CCISlow",30,30,100,10);
> ...




*Simple works*
@dpong that is one of the many codes you can use. A simple moving average (SMA) cross is effective as a trading system & a (CCI) cross (IMHO) would be just as effective. Using the code you posted is a good start in researching if a (CCI) indicator can be turned into an effective system to trade. You can use that code for your buy & sell signals remembering that there is much more to a strategy than a signal generator.

Skate.


----------



## newbietostocks (12 January 2021)

Hi, I am new to stocks. I was wondering if someone could help me please as clearly I don't understand a lot haha.

I am trading equities in U.S stocks on CMC markets, no international fees. I purchased 50 apple stocks @ $129.420 USD per stock = $6471 USD. However my profit and loss section says I paid net $169.42 AUD per share = $130.44 USD in currency conversion. I was expecting that any sale of shares above $129.420 USD would result in profit but this doesn't seem the case?

I've attached it so you can get a better idea of what i'm talking about.

Really appreciate any help! Thanks so much.

(Also if there is a more appropriate section with better visibility please let me know)


----------



## Warr87 (12 January 2021)

newbietostocks said:


> Hi, I am new to stocks. I was wondering if someone could help me please as clearly I don't understand a lot haha.
> 
> I am trading equities in U.S stocks on CMC markets, no international fees. I purchased 50 apple stocks @ $129.420 USD per stock = $6471 USD. However my profit and loss section says I paid net $169.42 AUD per share = $130.44 USD in currency conversion. I was expecting that any sale of shares above $129.420 USD would result in profit but this doesn't seem the case?
> 
> ...



I would be looking at your FX rate and see if the changes in AUDUSD are affecting your profits.


----------



## newbietostocks (12 January 2021)

So would this screen update as the FX rate updates? For example if I purchased at 0.772  and it is now 0.775.

Would you be able to explain how FX rates work briefly please? If i lock an order for a stock at $100 USD a stock and it is $1 USD to $1.25 AUD, but then by the time the order is executed, it has changed to $1.30 AUD, it means I will pay more than what I originally locked?

Is that right?


----------



## Skate (12 January 2021)

*Share Trade Tracker update*
It's a real shame that the development of STT has been halted. If anyone is interested in obtaining a copy of STT I suggest you send a request to support@xlautomation.com.au & mention you are a member of the Aussie Stock Forum. 

*XLAutomation consulting services*
XLAutomation still provides consulting services to supply a copy of the Share Trade Tracker workbook. Their minimum consulting charge is 2 hours @ $140/hr (ex GST) & for that cost, you would receive a copy of the STT workbook & one serial key to activate the product. There is "No Support" offered as part of this charge. If in the future you do require support to enhance or fix an issue then this would incur further consulting service costs.

*So here is the deal *
Contact the email address support@xlautomation.com.au if you want to purchase this consulting service & receive a copy of Share Trade Tracker. (The total cost is $280 excluding GST) 

Skate.


----------



## Warr87 (12 January 2021)

newbietostocks said:


> So would this screen update as the FX rate updates? For example if I purchased at 0.772  and it is now 0.775.
> 
> Would you be able to explain how FX rates work briefly please? If i lock an order for a stock at $100 USD a stock and it is $1 USD to $1.25 AUD, but then by the time the order is executed, it has changed to $1.30 AUD, it means I will pay more than what I originally locked?
> 
> Is that right?



I believe the screen would change as the FX changed. 

Im not sure about the order. I imagine the actual price bought may change but this depends on how CMC route their intentional orders. Despite being a CMC customer, I have no idea. Either way, the value of your stock is obviously changed by changes in FX rate. You are an Australian citizen and trading from Australia so the value of your account will be in Aud. This is also why business and some more advanced investors/traders hedge currency to not be subjected to FX fluctuations. 

Hope that helps mate.


----------



## investtrader (12 January 2021)

WilsonFisk said:


> I started on 13 February 2020 with my first non-discretionary trading strategy (I call it my 'Active Trading' strategy, as I dont have to be active) which is only a week or two off probably the worst time to start from a sequencing risk point of view.  In saying that, I am comfortable around how and more importantly why it performed.
> 
> View attachment 118172
> 
> ...



@WilsonFisk I found this https://decodingmarkets.com/simple-breakout-system-sector-filter/  Not quite what you wanted but may help. Also a bit more advanced is this http://www.amibroker.com/kb/2016/01...r-categories-that-can-be-used-in-backtesting/


----------



## Skate (12 January 2021)

dpong said:


> @Skate I found an example of an afl that is using a CCIFast and CCISlow cross.




*I have a new project*
@dpong found a snippet on the internet for a CCI strategy. As a quick & dirty example I placed his buy signal into the "WTT strategy" that I constructed in 12 easy steps.

*The original strategy *
When you start coding you have to start somewhere. The uploaded (afl) is from (2015) it was one of my first attempts to code a strategy so I can't guarantee it's not without errors. If this is where "I started coding" it's a perfect place to start for others new to Amibroker.

*Calling all members*
I'll upload the first version (v1) of "dpong's CCI" strategy.

*The challenge *
Is it possible as a collective to develop a (CCI momentum indicator) into a half-decent trading strategy?

*My version is (V1) *
Someone needs to do a backtest on the first version (v1) of the "CCI Strategy" as a base. Let's use the period from 1st July 2020 to 30th December 2020. (the start of this financial year)

*This is an opportunity for all to get involved*
Involvement can be the way of (a) discussion or (b) a minor re-write of the strategy or (c) a complete re-code of the CCI Strategy.

Skate.


----------



## investtrader (12 January 2021)




----------



## investtrader (12 January 2021)

Universe is All Ords (current list). Looks pretty good.


----------



## Skate (12 January 2021)

@investtrader thank you for taking an interest in the "CCI Strategy" & for quickly posting a backtest report. 

*We now have a base backtest*
Development of the "CCI Strategy" will start from here.

Skate.


----------



## stasisbr (12 January 2021)

Skate said:


> @investtrader thank you for taking an interest in the "CCI Strategy" & for quickly posting a backtest report.
> 
> *We now have a base backtest*
> Development of the "CCI Strategy" will start from here.
> ...




Is there an error with the index filter portion of the code? this is assuming that the intent of the index filter is to reference the XAO and not the MA of the individual symbol.

Should this:

//=================================================================================
//2. The "Index Filter" - decides when we will trade & also our trailing stop levels
//=================================================================================
MAfilter = MA( C, 10 ); // 10 week lookback period
IndexBuyFilter = C > MAfilter; // Index Filter = ON: When the close is greater than the 10 week simple moving average the Index Filter is ON [trailing stop set to 20%] + [buy + sell signals generated]
IndexSellFilter = C < MAfilter; // Index Filter = OFF: When the close is less than the 10 week simple moving average the Index Filter is OFF [shortens trailing stop to 10%] + [only sell signals generated]
//=================================================================================
//3. Add all our other filters



be this:

//=================================================================================
//2. The "Index Filter" - decides when we will trade & also our trailing stop levels
//=================================================================================
SetForeign( "$XAO.au", True , True ); // I've used the new Norgate Updater (NDU) format - change if the format is different to your data supplier
MAfilter = MA( C, 10 ); // 10 week lookback period
IndexBuyFilter = C > MAfilter; // Index Filter = ON: When the close is greater than the 10 week simple moving average the Index Filter is ON [trailing stop set to 20%] + [buy + sell signals generated]
IndexSellFilter = C < MAfilter; // Index Filter = OFF: When the close is less than the 10 week simple moving average the Index Filter is OFF [shortens trailing stop to 10%] + [only sell signals generated]
RestorePriceArrays( True ); // Restores original price and volume arrays after the call to SetForeign.
//=================================================================================


----------



## stasisbr (12 January 2021)

investtrader said:


> Universe is All Ords (current list). Looks pretty good.




any else from a testing configuration perspective?  pad/align to XAO/Weekly/?


----------



## Skate (12 January 2021)

stasisbr said:


> Is there an error with the index filter portion of the code? this is assuming that the intent of the index filter is to reference the XAO and not the MA of the individual symbol.
> 
> Should this:
> 
> ...




@stasisbr you can change the code to your heart's content (improvements can be found). When you have a version ready "upload your improved strategy" so others can test it "OR" further improve on it. 

*Important*
So others can see your work - "comment" the changes you have made with (*// stasisbr*)

Skate.


----------



## chips88 (12 January 2021)

Skate said:


> *XLAutomation consulting services*
> XLAutomation still provides consulting services to supply a copy of the Share Trade Tracker workbook. Their minimum consulting charge is 2 hours @ $140/hr (ex GST) & for that cost, you would receive a copy of the STT workbook & one serial key to activate the product. There is "No Support" offered as part of this charge. If in the future you do require support to enhance or fix an issue then this would incur further consulting service costs.
> 
> 
> Skate.




Have you had many problems with the workbook in the past Skate? I'm interested in paying the one off, providing its not buggy as hell and I will have to contact them and pay for support each time I have an issue.

Cheers


----------



## Skate (12 January 2021)

chips88 said:


> Have you had many problems with the workbook in the past Skate? I'm interested in paying the one off, providing its not buggy as hell and I will have to contact them and pay for support each time I have an issue.
> 
> Cheers



@chips88, Share Trade Tracker is one piece of software I couldn’t live without. The software is perfect (IMHO).

*Drop my name *
When you email support - mention that you were referred by Skate, it can’t hurt.

Skate.


----------



## stasisbr (12 January 2021)

Skate said:


> @stasisbr you can change the code to your heart's content (improvements can be found). When you have a version ready "upload your improved strategy" so others can test it "OR" further improve on it.
> 
> *Important*
> So others can see your work - "comment" the changes you have made with (*// stasisbr*)
> ...




Hi Skate,

That was my intent, but I'm curious to know more about investtrader's data setup as I get a different result for backtesting 1/07/2020 - 30/12/2020 using the code as provided. Perhaps someone else can also run a backtest so we have a wider sample.

Data Source is Norgate Platinum, however the code doesn't use the norgate specific functions, 
Date range is 1/07/202 - 30/12/2020
Watchlist is All Ords Current only and it has 497 symbols in it.
Pad and Align is on and using XAO.au
Timeframe is weekly



InvestTrader BacktestStasisbr Backtest


----------



## Skate (12 January 2021)

stasisbr said:


> That was my intent, but I'm curious to know more about investtrader's data setup as I get a different result for backtesting 1/07/2020 - 30/12/2020 using the code as provided. *Perhaps someone else can also run a backtest so we have a wider sample.*
> 
> Data Source is Norgate Platinum, however the code doesn't use the norgate specific functions,
> Date range is 1/07/202 - 30/12/2020
> ...




@stasisbr, good suggestion - let's wait for another backtest to get our baseline

*Data Source:* Norgate Platinum
*Date range:* 1/07/2020 - 30/12/2020
*Watchlist:* All Ords Current & Past
*Pad and Align:* using XAO.au
*Timeframe:* Weekly

Skate.


----------



## dpong (12 January 2021)

Skate said:


> *I have a new project*



I plan to get involved.  Are we running this as a daily or weekly strategy?


----------



## dpong (12 January 2021)

dpong said:


> I plan to get involved.  Are we running this as a daily or weekly strategy?



Sorry, I see it is labeled as a weekly system.


----------



## Skate (12 January 2021)

dpong said:


> I plan to get involved.  Are we running this as a daily or weekly strategy?





Skate said:


> *Timeframe:* Weekly



@dpong the strategy is from your snippet of code & the details are:

Portfolio size $100k
Bet size $5k
Index - All Ordinaries
Backtest Data Source: Norgate Platinum
Backtest Date range: 1/07/2020 - 30/12/2020
Watchlist: All Ords Current & Past
Pad and Align: XAO.au
Timeframe: Weekly

Skate


----------



## dpong (12 January 2021)

I trade the US markets, so the data I have is the data I have.  Here I am trading against the Russell 3000 and using the S&P500 instead of the Australian index.  Obviously the code does not currently reference the index filter at this time. 

SetForeign( "^SPX", True , True ); // I've used the new Norgate Updater (NDU) format - change if the format is different to your data supplier

[It is a very chipper first run!  I'm quite surprised.]


----------



## dpong (12 January 2021)

The profits are quite outstanding.  The MaxDD is a little bit troubling, and could be an area to improve.

[Though the CAR/MaxDD @ 1.92 is actually quite good!  Perhaps I should withdraw my comment.]

[I'm still using free data from Yahoo finance.  Will soon be using Norgate data US Platinum.]


----------



## dpong (12 January 2021)

I ran the test back from 1995.  Sure there are lots of problems doing that but still worth a look.  (Survivorship bias,  Index delisting, etc.)

It shows a few things. 
1) Using only 2020 as a baseline may be problematic.  2020 in many ways was a trend follower's dream come true.
2) MaxDD and CAR/MaxDD are much worse in this run.  Improvements in this area would be welcomed.
3) Long term Annual Return still looks compelling.


----------



## dpong (13 January 2021)

For reference, here is where I found the CCI crossover code:









						A Simple and Efficient CCI Trading System: Amibroker AFL
					

In this post we'll go through a very simple CCI Trading System. The results of this system is quite impressive and consistent when backtested on Daily timeframe.




					tradingtuitions.com
				




[They have many examples and system examples.  Obviously(?) I am not affiliated with them in any way.]


----------



## dpong (13 January 2021)

Made a small change by tightening up the tight stop from 10% to 5%.   Using only 2020 I got a slight improvement in Annual Return and CAR/MaxDD.  Naturally, we would need to test on different time series to see if I'm merely curve-fitting 2020.


----------



## dpong (13 January 2021)

Using 1995-2020 long term data the CAR was slightly lower and CAR/MaxDD was also slightly lower.   Neither were lower by much.  

[Just a whisker.]


----------



## dpong (13 January 2021)

Sorry about the size of my graphics.

Using 2020 data only, changing Position Score makes a significant improvement.

[This strategy makes a *lot* of trades.]


----------



## Skate (13 January 2021)

dpong said:


> For reference, here is where I found the CCI crossover code:
> 
> 
> 
> ...




@dpong you didn't mention that the parameter setting was for a Daily Strategy.

*Question*
1. Did you backtest the strategy from the original source: https://tradingtuitions.com/cci-trading-system-2/

*Remark*
There seems to be little interest in developing a CCI Strategy so we will give it the flick.






Skate.


----------



## dpong (13 January 2021)

That is too bad, @Skate because I am very interested in it.  I Googled CCI trading system as you suggested and that is what I found.  I saved it in AmiBroker as an example to read later.  Then I asked you if this is how you are using CCI.  I didn't test the original code, but I have been testing the code you provided. 

I'm running the code that you provided with this formula on weekly data and it is getting stellar results on my US data, although the drawdowns are large.

I'm currently running an optimization for the Fast and Slow CCI to see if I can find a good spot to set these.

Just because the authors ran it daily, I see no reason for me to not use it weekly, if it works.  [I was psyched.]


----------



## stasisbr (13 January 2021)

Skate said:


> @dpong you didn't mention that the parameter setting was for a Daily Strategy.
> 
> 
> *Remark*
> ...




Hi Skate,

Just an observation that from your initial post to dismissing the CCI activity was about 12 hours and most of that was overnight, perhaps a bit quick?   Your time to dismiss the WTT was also reasonably quick I felt.


----------



## Skate (13 January 2021)

dpong said:


> I'm running the code that you provided with this formula on weekly data and it is getting stellar results on my US data, *although the drawdowns are large*.




@dpong the drawdown is acceptable trading the Aussie All Ordinaries. To overcome a large drawdown you can add a momentum stop or a stale exit. Fiddling with a strategy is half the fun while remembering not to curve fit the strategy to any time period. Also, I've used a conservative Price Filter, an area that can be investigated.

Skate.


----------



## dpong (13 January 2021)

Skate said:


> @dpong the drawdown is acceptable trading the Aussie All Ordinaries. To overcome a large drawdown you can add a momentum stop or a stale exit. Fiddling with a strategy is half the fun while remembering not to curve fit the strategy to any time period. Also, I've used a conservative Price Filter, an area that can be investigated.
> 
> Skate.



Thank-you for your advice, sir!   I hope I did not pollute your thread too much, overnight.  And I did not mean to mislead you that the code I took was from an author advising it works best on a daily chart.  It was certainly not my intention.  [I just the new guy, so sorry.]


----------



## Skate (13 January 2021)

stasisbr said:


> Hi Skate,
> Just an observation that from your initial post to dismissing the CCI activity was about 12 hours and most of that was overnight, perhaps a bit quick?   Your time to dismiss the WTT was also reasonably quick I felt.




@stasisbr, when there is no interest, there is no interest. 

Skate.


----------



## dpong (13 January 2021)

I'm new at this so better not accept my conclusions too easily here, but I am trying.

I ran an optimization of CCIFast and CCISlow for this CCI strategy on US data for 2018, 2019, 2020.  [I'm optimizing for CAR/MDD.]

For CCISlow it appears that values of 10 or 15 appear to be promising.







Given that CCIFast will be 10 or 15, then potential candidates for CCISlow look to be between 30 to 50.  Even 70 through 100 could be viable.

[50 looks like a prime candidate.]




I will continue my testing.  @Skate kindly PM me if I should slow down, thanks!


----------



## dpong (13 January 2021)

I'm about to cool it. 

I just ran a backtest on 2018, 2019, 2020 using CCIFast = 15, CCISlow = 50. 
CAR = 64.76% and CAR/MAXDD = 2.06. 

Not too shabby.


----------



## Warr87 (13 January 2021)

dpong said:


> Thank-you for your advice, sir!   I hope I did not pollute your thread too much, overnight.  And I did not mean to mislead you that the code I took was from an author advising it works best on a daily chart.  It was certainly not my intention.  [I just the new guy, so sorry.]




I would follow skates advice there. I ran the code against AllOrds and it was good but some years it was completely flat. I would be a bit reluctant to run it as a stand-alone system (I would want to combine it with another strategy). Not sure what it looks like on the US market but what skate says is correct. Try a stale filter, a momentum filter. Try and see why it has those large drawdown's during that period. the goal wont be to curve fit a rule/method to get the best outcome but adding a rule that preserves capital during those moments. WHen I design my systems I make sure the system rules, in general, work well. Then I add my filters to preserve capital during those down times but with rules that make sense and are sound.


----------



## silent1a (13 January 2021)

Interesting how we all get slightly different results from the same code and source.
Amibroker with original code + Norgate Platinum
1/7/2020 - 30/12/2020

Current All Ords  | All Ords at time of purchase (inc. Delisted)  | (Bonus) Entire ASX (inc. Delisted)


----------



## silent1a (13 January 2021)

The original code does need optimising as the cherry picked results may seem incredible but the 10 year returns show a different story.
1/1/2010 - 31/12/2020
Current All Ords (Not possible unless you can read the future) | All Ords at time of purchase (inc. Delisted) | (Bonus) Entire ASX (inc. Delisted)


----------



## peter2 (13 January 2021)

Finally, all those six month back tests were driving me crazy.  Thank you @silent1a


----------



## Skate (13 January 2021)

silent1a said:


> Interesting how we all get slightly different results from the same code and source.
> Amibroker with original code + Norgate Platinum
> 1/7/2020 - 30/12/2020





dpong said:


> *Not too shabby.*




@silent1a I have to agree with @dpong - your backtest results aren't too shabby. Thank you for doing a backtest & supplying additional results.

*What we need now*
Someone to make amendments to improve the returns. I'm sure "dpong" will address the high drawdowns with the U.S. markets. @Warr87 suggested the (CCI) Strategy suffers in a few different time periods, this needs to be addressed.

*The Commodity Channel Index (CCI)*
The (CCI) momentum oscillator identifies cyclical trends. The issue that most traders have using the CCI momentum oscillator is that they believe it displays "excessive lag" making it an unreliable generator of buy & sell signals - well that's true to a certain extent but filtering can alleviate false signals to some degree.

Skate.


----------



## Skate (13 January 2021)

silent1a said:


> The original code does need optimising as the cherry picked results may seem incredible but the 10 year returns show a different story.




@silent1a, @dpong code snippet was for a "Daily Strategy" not weekly - this could be the issue. 

Skate.


----------



## silent1a (13 January 2021)

Something is wrong when CCIFast is trying to be slow.
Did a quick optimisation of CCIFast and CCISlow between 2~20 weeks.

I may look into changing the other parameters or adding other filters.

*Data Source:* Norgate Platinum
*Date range:* 1/01/2010 - 30/12/2020
*Watchlist:* All Ords Current and Past (All Ords at time of purchase)
*Pad and Align:* using XAO.au
*Timeframe:* Weekly


CAR/MDD Graph


----------



## Warr87 (13 January 2021)

A few minor edits.


----------



## Skate (13 January 2021)

Warr87 said:


> A few minor edits.




*Comparison*
Backtest Date range: 1/07/2020 - 30/12/2020 




Skate.


----------



## barney (13 January 2021)

I confess Mr @Skate  that coding is over my head, but I am intrigued/slash impressed with the process you and the other chaps are able to formulate to gain an advantage.

I wonder, given the massive amount of data you have presented over the last couple of years, whether the Thread may eventually morph into several Sub-Threads which feed off the Original? 

That in itself might be an "Indexing" nightmare, but I suspect you could come up with an appropriate coding system for that as well  

Either way, well done on what may become an ASF "War and Peace"


----------



## Skate (14 January 2021)

Skate said:


> @silent1a, @dpong code snippet was for a "Daily Strategy" not weekly - this could be the issue.







*Daily CCI Strategy*
Originally the code snippet that @dpong posted was for a "Daily Strategy" so I'm attaching a Daily Strategy for review. Make sure you change the periodicity to daily before running a backtest.

Skate.


----------



## silent1a (14 January 2021)

Does well enough in the latter half of the decade but badly in the first half.

*Strategy: *Skate's dpong CCI DAILY Modified Strategy
*Data Source:* Norgate Platinum
*Date range:* 1/01/2010 - 30/12/2020 in 1 year intervals
*Watchlist:* All Ords Current and Past (All Ords at time of purchase)
*Pad and Align:* using XAO.au
*Timeframe:* Daily




I may create my own daily strategy for when I have enough time to trade it.


----------



## Skate (14 January 2021)

silent1a said:


> Does well enough in the latter half of the decade but badly in the first half.




@silent1a, thank you for doing a backtest on the "CCI Daily Strategy". The strategy couldn't handle 2011 (my benchmark) so it's not tradeable in its current format. A " CCI Strategy" is a momentum strategy, meaning it works well in a bull market & not so well in others. The strategy has been uploaded so others can experience basic coding first hand & hopefully encourages others to do a bit of research.

Skate.


----------



## Skate (15 January 2021)

Skate.


----------



## qldfrog (15 January 2021)

Skate said:


> View attachment 118488
> 
> View attachment 118489
> 
> ...



Isn't it weird that my implementation, so basically mostly  the same components bought at a different time managed to get a +2pc on the same week?
One of us could be doing a recording mistake , the only difference i am aware is flc that i got out of as i purchased initially much higher and so reached the %SL and was replaced by a different packet.
Have all a great weekend


----------



## Skate (15 January 2021)

qldfrog said:


> Isn't it weird that my implementation, so basically mostly  the same components bought at a different time managed to get a +2pc on the same week?
> One of us could be doing a recording mistake , the only difference i am aware is flc that i got out of as i purchased initially much higher and so reached the %SL and was replaced by a different packet.
> Have all a great weekend




@qldfrog it's just a timing issue, the HappyCat Strategy has only been running for a heartbeat. Monte Carlo simulation confirms trading the same strategy at different times renders different results.

Skate.


----------



## julo (16 January 2021)

Hi folks,
I am testing weekly strategy with calculations on daily bars. Strategy results significantly change with the day of week (Mon-Fri) when trading is done - i.e. Trading on Mondays results in double returns in comparison to trading on Tuesdays. Did you experience the same behaviour? I consider trading such strategy quite risky. 
Will be glad for any opinion!


----------



## Rsthree (16 January 2021)

qldfrog said:


> Isn't it weird that my implementation, so basically mostly  the same components bought at a different time managed to get a +2pc on the same week?
> One of us could be doing a recording mistake , the only difference i am aware is flc that i got out of as i purchased initially much higher and so reached the %SL and was replaced by a different packet.
> Have all a great weekend




Overall mine is tracking Skate's result, just a fraction of a percent higher.


----------



## qldfrog (16 January 2021)

Rsthree said:


> Overall mine is tracking Skate's result, just a fraction of a percent higher.



Will check, with just one or 2 trades in the last 2 weeks, the weekly% change should be really similar.i might have made a mistake in my spreadsheet


----------



## Skate (16 January 2021)

investtrader said:


> *"Over time your views will change, *soon realising that the secret to trading successfully is "staying in the game" & not necessarily making a lot of money quickly but compounding it over time." - Skate, this may be the most important sentence any trader can read - well said.




*Our views do change over time*
With more trades under your belt, you tend to accumulate a sizable amount of "closed profits". If you were lucky to trade the 2019 calendar year you would have made a bucket load of money. Trading in 2020 (calendar year) started well only to experience a horrendous period not only for traders but for the whole human race. The Covid-19 flash crash gave traders a unique opportunity (chaos & volatility). Some traders were shell shocked while others took advantage of the situation. 2020 was my best trading year by far & I suspect it's the same for most system traders. With two great years under your belt, what do you do with the closed profits?

*How do I re-invest "closed" profits?*
This could be an issue for some & it certainly was for me. I'll answer this in the next few posts.

Skate.


----------



## Skate (16 January 2021)

Skate said:


> *How do I re-invest "closed" profits?*




*Traders love profit it's the dopamine that keeps us trading*
Some traders have a hard time knowing that there are two types of profits. There are "Closed" profits & there are "Open" profits.

*Profits are easy to distinguish*
"Open Profits" belong to the markets whereas "Closed Profits" belongs to you. When you accept this fact, trading becomes much easier.

Skate.


----------



## Skate (16 January 2021)

Skate said:


> *How do I re-invest profits?*
> This could be an issue for some & it certainly was for me. I'll answer this in the next few posts.




*How do I handle trading investment profits?*
Let's start with profits from a "set & forget" type of investments that being (Investing in "LIC's & Buy & Hold" type portfolios). With investments rather than trading, it's an easy question for me to answer - "Dividend Reinvestment". 

*DRP*
A dividend reinvestment plan merely is reinvesting the dividends, by automatically buying additional shares with the dividend, rather than taking the cash. The downside is that capital gains tax (CGT) still applies, so if you participate in a dividend reinvestment plan, it will be treated as if you have received a cash dividend. Well, that's life!

Skate.


----------



## Skate (16 January 2021)

Skate said:


> *How do I re-invest "closed" profits?*




*Over time your views will change*
Certainly, I have changed my views on how I now handle "closed profits". Once I use to re-balance my bet size using closed profits. Even after increasing my bet size, I would go on to increase the number of shares in my portfolio. Both methods have been kind to me in the past but as with all things, you start to look for alternative ways to re-invest those closed profits for a better advantage. The "closed profits" gave me a perfect opportunity to start trading strategies that have been waiting patiently for their chance to prove themselves trading alongside the big boys.

*These profits allowed me to "trade live" two small accounts*
The Action Strategy & the HappyCat Strategy. Looking back it's a pity I stopped trading the Action Strategy in the "Dump it here" thread as it's still outperforming most of my other trading strategies. I take comfort knowing that its replacement (the HappyCat Strategy) is purring along.

*Closed profits are still flowing in*
These extra funds will now allow me to start trading another new strategy - "The Shield Strategy"

Skate.


----------



## Skate (16 January 2021)

*"The Shield Strategy"*
Trading this strategy will be a little different to most in the past. I'll be using closed profits to build this strategy over time. I have $35k of closed profits that will give me 7 new positions to kick it off with. Additional closed profits will be used to build the strategy into a 20 position portfolio. "The Shield Strategy" will be complete when it turns into a $100k Portfolio (20 Positions X $5k bets).


bigdog said:


> *Stocks Fall as Economic Pain Deepens, Rally Runs Out of Gas*
> Wall Street closed out its first losing week in three with another drop on Friday after reports showed the pandemic is deepening the hole for the economy, as Washington prepares to throw it another lifeline - discouraging data on the economy. The S&P 500 fell 1.5% over the week.




*"The Shield Strategy" starts on Monday*
After reading @bigdog post today I know I will need some luck starting out.

Skate.


----------



## Skate (16 January 2021)

*Starts Monday: *18th January 2021
*Commencing Portfolio Size:* $35k (7 starting positions)
*Portfolio size when completed:* $100k  (20 X $5k position)



barney said:


> *given the massive amount of data you have presented over the last couple of years it may become an ASF "War and Peace"*




*War and Peace*
These series of posts are informational in nature as to how I will now handle "open profits" (if there are any) moving forward. I won't be clogging up the thread posting on-going results as it's already been stated by @barney that the "Dump it here" thread is becoming too big.

Skate.


----------



## Skate (16 January 2021)

*Positions of interest*







Skate.


----------



## Skate (16 January 2021)

*Positions of interest




*

Skate.


----------



## barney (16 January 2021)

Skate said:


> been stated by @barney that the "Dump it here" thread is becoming too big.    Skate.




Its big, but I wouldn't say too big Mr. @Skate  

Punters may need a lazy weekend or two to get from start to finish however🧐


----------



## qldfrog (16 January 2021)

barney said:


> Its big, but I wouldn't say too big Mr. @Skate
> 
> Punters may need a lazy weekend or two to get from start to finish however🧐



The issue i see is it is very hard to find back a post you remember reading on dump it
search fct or not, it is nearly mission impossible


----------



## Newt (18 January 2021)

*How do you calculate "R" (Van Tharp risk) in Trend Trading?*

From time to time I've pondered what is the Risk/Reward equation for trend trading.  Wonder what other people think?  Van Tharp says let R be the initial risk.  For a trend following system with an initial wide stop % risk of say 20% trailing stop, a win rate of 50% (therefore loss rate 50%), average win% say 48%, average loss say 12%.

Does that mean I should count typical R as the average loss of 12%, average win is 48%, so expected R multiple on average is 4?

OR, should I count R as 20%, the initial  stop risk on all trades, giving an average R multple of 48/20 = 2.4?


If a tree falls in the forest, will the trader still make a profit???


----------



## Warr87 (18 January 2021)

I don't think the risk/reward is fully applicable to trend following. you can't define the reward. if you are trend trading then you are letting your wins ride. your risk is defined, but not the reward. I think profit factor would play a better metric. look at your average win vs average loss.


----------



## Newt (18 January 2021)

Warr87 said:


> I don't think the risk/reward is fully applicable to trend following. you can't define the reward. if you are trend trading then you are letting your wins ride. your risk is defined, but not the reward. I think profit factor would play a better metric. look at your average win vs average loss.




I wouldn't argue with that Warr.  Most of our trend trades in the weekly timeframe would be medium or long term in the mind of day, swing or short term position traders.  And our risk per trade may start off frequently with relatively wide stops, but the risk of open profit and trailing stops is variable as the trade proceeds. 

Often see peter2 talking about R multiple, but usually on short daily timeframe trades (no more than week or so).  Just wondering if any weekly trend traders think in terms of "R" I guess....


----------



## Skate (18 January 2021)

Newt said:


> *How do you calculate "R" (Van Tharp risk) in Trend Trading?*
> From time to time I've pondered what is the Risk/Reward equation for trend trading.  Wonder what other people think?




@Newt, as a systematic trend trader the risk/reward ratio is set by the amount of maximum loss that may occur as you stated. @Warr87 main comment was that "you can't define reward" but as you & I know the risk can be calculated. The maximum loss (risk) is dependant on a few variables such as the type of stop that coded into your strategy. I make a habit of using a few different exit conditions being a volatility stop, a stale exit or a plain vanilla two-stage trailing stop. So defining risk isn't clear cut as most would expect.

*The profit is expressed in terms of R−multiples *
Van Tharp prefers to express expectancy in terms of expected profit per "unit of risk". As you say @peter2 uses "R" (AFAIK) to equalise the risk with each trade - where I take a different approach entirely as I don't use "R" or " R multiples" as a metric. 

*Risk*
The amount risked is the maximum amount of money you can lose. Every time a trade is taken the risk depends on the stop we use & the position size calculations in our trading system. Expectancy is simply the mean, or average across multiple trades a mathematical formula that tells you how much you will win on the average per dollar risked. I'm sure Peter will have an input as he is the master utilising "R" or " R multiples" in his calculations & reporting.

Skate.


----------



## Newt (18 January 2021)

Thanks Skate.  I finally got around to coding Expectancy into my backtest reports for a new strategy that was being messed with on the weekend (then realised what Amibroker calls "Avg. Profit/Loss %" is effectively "Expectancy", so its always been in there anyway).

In no way rational, but seeing typical weekly TF following strategies come up with expectancies in the order of $18 per $100 invested seemed a bit sad.  Intuitively though it would be around double that.

Lies, damned lies and statistics.  So many facets in backtest and trading KPI reports to consider than just CAR, R multiple or expectancy of course.


----------



## Warr87 (18 January 2021)

defining risk is very important for us trend traders because we know we will take a lot of small losses to get on the right side of a big win. the R:R works for p2 because he uses profit targets. using a trailing stop is just our way of managing risk. expectancy and positive skew are better definers of our R:R. think of some of the well known trend traders, they wouldnt think of defining a reward component in a set amount, rather they will see where it goes. probably best to think of things in terms of expectancy like skate suggestions. It's a good metric I think.


----------



## Newt (18 January 2021)

Good points.  Most would agree including any regular profit target in a longer term trend stategy is detrimental.  I've seen the odd example of of people doing it in rare circumstances.

Early ASF member "stevo" comes to mind as one....
Would have to go digging, but seem to recall he had some great posts worth reviewing.


----------



## Skate (18 January 2021)

Newt said:


> In no way rational, but seeing typical weekly TF following strategies come up with* expectancies in the order of $18 per $100 invested seemed a bit sad*.




@Newt if you can achieve half that figure ($9 per $100 invested) you would have a half-decent system. $18 per $100 invested you would have a great system.

Skate.


----------



## Warr87 (18 January 2021)

Skate said:


> @Newt if you can achieve half that figure ($9 per $100 invested) you would have a half-decent system. $18 per $100 invested you would have a great system.
> 
> Skate.



agreed. mine come up lower than that lol. i'd be happy with $18 lol


----------



## Newt (19 January 2021)

To be fair, was only a short period (since Corona Crash).

Also noted Expectancy for an older system with much lower long term returns fairly close to new systems, even though there was a significant difference in number of trades taken.  The older system was only able to take about half the trades of the more aggressive systems and thus not get a chance to express and edge as often.

Agree that Profit Factor, Payoff Ratio definitely worthwhile metrics to monitor.  Don't think I'll be losing too much sleep over Expectancy for trend following.


----------



## Skate (19 January 2021)

*HappyCat - Expectancy Metrics*



*HappyCat - Actual Trading Metrics*



Skate.


----------



## Newt (19 January 2021)

Congrats Skate - outstanding performance for Happy Cat, and not sure whether to be cranky how well its doing (against other strategies of my own) or exuberant that I put some money aside for HC which has closely followed your metrics.

That profit factor is going to take a while to average down (assuming it ever does!).


----------



## Skate (22 January 2021)

Skate.


----------



## qldfrog (23 January 2021)

Just watched a nice video from Nick Radge on share trade trackerhttps://www.thechartist.com.au/portfolio-management-software/
With the amount of different systems i have it might soon be a must have and i might have to bite the bullet..


----------



## Skate (23 January 2021)

qldfrog said:


> Just watched a nice video from Nick Radge on share trade trackerhttps://www.thechartist.com.au/portfolio-management-software/
> With the amount of different systems i have it might soon be a must have and i might have to bite the bullet..




@qldfrog, you have given me an idea for a series of posts.

*I'll do my best to keep it simple*
I'll explain in a series of posts why Amibroker is so important in developing strategies. I'll combine 6 strategies into one strategy & add the "HappyCat Strategy" as a benchmark. I'll than correlate all those strategies into "Share Trade Tracker" & do reporting of those strategies for the week of trading that has just completed. Trading this week was patchy so it will be a good example.

*Share Trade Tracker*
STT has the ability to report collectively or individually. I'll add extra worksheets to the STT workbook displaying a combined "Equity Curve Chart" as-well-as individual self-seeking worksheets to display the "Equity Curve" for each individual strategy.

*Not only that*
I'll take the post a bit further by taking those Exploration Signal of the strategies & show the results of those strategies. The STT results will be one week of trading as if those strategies started trading live from last Monday. 

*Bear with me*
The post will be as basic as possible so it's not "boring or confusing" to understand. The graphics, the explanation should be easy to follow along, giving a peek into how I do things. It will take a little coding effort & time to combine 7 strategies into one & set up a "Share Trade Tracker Portfolio" to report on those strategies.

Skate.


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## Skate (23 January 2021)

*AmiBroker Param Function*
The “Param Function” is the handiest feature that I use in my strategy development phase. The “Param function” allows me to switch between my definable parameters. This feature adds a new user-definable parameter to your strategy which is accessible via a Parameters dialogue box.

*Important*
The “Param function” can be either a "Slider bar" or a "Drop down list" type (it's up to you which to use). I'll post an example of both of these in a later post.

*Naming the parameter*
You can "name" the parameter that will be displayed in the parameters dialogue box that has meaning to you. The parameter allows you to pick the field for the indicator (a field which is used to calculate values of the indicator).

Skate.


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## Skate (23 January 2021)

*Accessing the Parameters dialogue box*
You can open the “Parameters dialogue box” by right mouse clicking over a “Chart” or in the “Exploration Analysis” section select the "Parameter icon" on the menu bar if you wish to change a parameter or two. And by-the-way, those changes are reflected immediately.

*Chart access to the parameter setting*
Right mouse click on a “Chart” of interest to display “Parameters dialogue box” to alter any parameter





*Exploration Analysis access to the parameter setting*
In the “Exploration Analysis” section select the "Parameter icon" on the menu bar if you wish to change a parameter or two.




Skate.


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## Skate (23 January 2021)

*Bundling allows comparison*
To test a series of strategies the parameters feature (“Param Function”) is invaluable as it quickly allows switching between (a) Strategies, (b) Backtest method, (c) Exploration model to be used, & (d) Parameter settings of defined filters within a strategy. An example of how to code a switch function can be found on @Trav. thread https://www.aussiestockforums.com/threads/amibroker-tips-and-tricks.35508/post-1104531

*Two examples of the Switch Function*
1. Switching the Strategy
2. Switching the Exploration Mode

Skate


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## Skate (23 January 2021)

*The Switch Strategy*
This strategy holds 7 individual strategies. Using the switch function I can select the strategy for Backtesting or Exploration Analysis. By selecting the strategy it sets the unique "Buy & Sell" condition, filters, StaleStop, VolatilityStop, & TrailingStop for that strategy as each strategy is difference when it comes to these settings.

*The parameter can be selected by (1) a drop-down list or (2) a slider-bar*
The “Param Function” quickly allows the switching of the parameter by using either a drop-down list or a slider bar

*Drop-down list (to change the strategy)*



*Slider-bar (to change values)*



Skate.


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## Skate (23 January 2021)

*Backtest Results*
Listed below are the 6 strategies that are in the "Switch Strategy". The Backtest results aren't important - the comparison of the strategies are. The backtest period is the last calendar year (2020) 1st  January 2020 to 30th December 2020

*Which strategy should be traded?*
Forget the "HappyCat Strategy" - out of the other 6 which strategy should be traded if you could only pick one & why?




Skate.


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## CNHTractor (23 January 2021)

Skate said:


> *Which strategy should be traded?*
> Forget the "HappyCat Strategy" - out of the other 6 which strategy should be traded if you could only pick one & why?




@Skate, I'd be wanting to trade the "Flying Pelican" 
Why? - the CAR/MDD of 3.08 is the highest. On other metrics the annual return of 53% is great and the MDD of 17.3% is well within my comfort zone.

I will be interested in hearing other opinions   

btw, all of the other strategies I'd be happy with as they all fall in line with my comfort zone metrics, particularly CAR/MDD and MDD


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## Skate (23 January 2021)

*Let's talk naming convention of strategies *
1. The Flying Pelican Strategy - A majestic bird, I'm amazed it can fly & I'm hoping its the same for this strategy
2. The ORB Strategy - ORB is short for "Orbital" & in quantum mechanics, it can be used as a mathematical function, well suited for coding.
3. The CPR Strategy - CPR is an acronym for "Cardio Pulmonary Resuscitation" (CPR) useful in many emergencies, even when trading
4. The Pocket Pivots Strategy - The strategy is described in the book "Trade Like an O'Neil Disciple'" by Dr. Chris Kacher & Gil Morales (read the book )
5. The Shield Strategy - stands for "Strategic Helping Intervention Especially Losing Direction" that's designed to keep me safe & focused.
6. The COMBO Strategy - simply it's a combination of different ideas I have.

*After the first week - how did they go?*
1. The Flying Pelican Strategy - Holding 10 positions - 1st-week profit +$977
2. The ORB Strategy -  Holding 3 positions - 1st-week profit +$316
3. The CPR Strategy -  Holding 3 positions - 1st-week profit +$316
4. The Pocket Pivots Strategy -  Holding 8 positions - 1st-week profit +$367
5. The Shield Strategy -  Holding 3 positions - 1st-week profit +$607
6. The COMBO Strategy -  Holding 6 positions - 1st-week profit +$554

*In a nutshell*
Total weeks profit of $3,137 from an investment of $158,197 - 33 positions of a possible 120 position portfolio




Skate.


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## Skate (23 January 2021)

*Share Trade Tracker*
Keeping all trading strategies in one place. The Dashboard is a summary page which is just the icing on the cake. The reporting feature is expansive & only limited by your imagination.

*Let's add a worksheet to the STT workbook*



Skate.


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## Skate (23 January 2021)

CNHTractor said:


> @Skate, I'd be wanting to trade the "Flying Pelican"
> Why? - the CAR/MDD of 3.08 is the highest. On other metrics the annual return of 53% is great and the MDD of 17.3% is well within my comfort zone.




*The additional worksheet*
As @CNHTractor picked the "Flying Pelican Strategy" I'll post the individual worksheet for that strategy.

*Hint*
All the other individual strategies the reporting format are exactly the same.







*The PDF report for the "Flying Pelican Strategy"*



Skate.


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## Skate (23 January 2021)

*For those who are interested*
The HappyCat Exploration signals will be supplied by "private message request" only. 

*Private message body*
"HappyCat please"
The request will need to be made each week as this will be the only post on the matter.

*Why?*


Warr87 said:


> I made a mistake with the HappyCat strategy. I worked on the weekend and I thought I had seen the signals Friday arvo. I remembered Monday morning that I hadn't. By the time I did it was around midday. I missed one of the buys (as it took off).




Skate.


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## Skate (23 January 2021)

*It's the same deal*
For those who are interested in the "Zebra" Exploration signals, they will only be supplied by weekly "private message request".

Skate.


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## frugal.rock (23 January 2021)

One word. 
Awesomeness. 
Oh, and glad the Santa hat has been packed away....Santa Skate was freaking me out.


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## Skate (23 January 2021)

CNHTractor said:


> @Skate, I'd be wanting to trade the "Flying Pelican"
> Why? - the CAR/MDD of 3.08 is the highest. On other metrics the annual return of 53% is great and the MDD of 17.3% is well within my comfort zone.
> I will be interested in hearing other opinions
> btw, all of the other strategies I'd be happy with as they all fall in line with my comfort zone metrics, particularly CAR/MDD and MDD




*It's horses for courses*
The time period & trading conditions can give you a false sense of security. The only true test IMHO is doing the hard yards & take the time to "paper trade" those strategies over 6 to 12 months with (OOS) live trading. It's a pity, most new traders don't understand the level of work required before $1 is invested.

*Example *
The "Pocket Pivot Strategy" has been on a roll this Financial year (backtest period 1st July 2020 to end of trade 23rd January 2021) If you are strictly looking for profits the "Pocket Pivot Strategy" is a consistent performer. But if the CAR/MDD or MDD % is your metric of choice - the "Flying Pelican Strategy" still wins in this time slot.




Skate.


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## Skate (23 January 2021)

CNHTractor said:


> btw, all of the other strategies I'd be happy with as they all fall in line with my comfort zone metrics, particularly CAR/MDD and MDD




@CNHTractor, I'm with you - any of those strategies would be handy have in your stable.

Skate.


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## othmana86 (23 January 2021)

Skate said:


> *Backtest Results*
> Listed below are the 6 strategies that are in the "Switch Strategy". The Backtest results aren't important - the comparison of the strategies are. The backtest period is the last calendar year (2020) 1st  January 2020 to 30th December 2020
> 
> *Which strategy should be traded?*
> ...



flying pelican for me. The profit factor is really attractive at 3.91. RRR of 8-1 is amazing  as well. Not to mention the obvious car/mdd and max drawdown look very nice. Would be interested to see results over a number of years.  But amazing work on all your strategies in particular happy cat and pelican


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## othmana86 (23 January 2021)

@Skate. How would have your systems performed in the tricky period between 2014-and early parts of 2016?


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## barney (23 January 2021)

frugal.rock said:


> One word. Awesomeness.  Oh, and glad the Santa hat has been packed away....Santa Skate was freaking me out.




Lol.

After a couple of quick discussions with Mr @Skate on an unrelated topic to this thread, I am now of the opinion that He ....

Lives in another time zone, or more likely Time Warp.

Anyone who can fit this much information/work/effort into their daily schedule is not living in regular 24 Hour days.

So I have deduced that Mr Skate is in fact an Alien and lives on another planet!

Alternatively he is just really clever


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## Skate (23 January 2021)

othmana86 said:


> @Skate. How would have your systems performed in the tricky period between 2014-and early parts of 2016?




@othmana86 tricky periods sort the wheat from the chaff when it comes to trading. I use 2011 as my personal benchmark. I wasn't trading back then but I know of others who did & it wasn't pretty. If my strategies can handle 2011 I'm sure they will handle most things.

*Confidence*
When you have put in the hard yards developing a strategy, trading confidence naturally flows.

Skate.


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## DanSlam (23 January 2021)

I am so lost right now, can someone point me in the right direction where i can consume some knowledge?


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## Skate (23 January 2021)

DanSlam said:


> I am so lost right now, can someone point me in the right direction* where i can consume some knowledge?*




@DanSlam welcome to the "Dump it here" thread. To answer your question, the first place to start would be to read my "free" ebook, that can be found here https://www.aussiestockforums.com/posts/1014728/ then if you have a question - use the search feature. Search for "keywords" of interest by "Skate" as I've covered most things of interest. Alternatively, read my entire thread as I've crammed 3 years of study & posted only information that helped me become a better trader, that can be found here https://www.aussiestockforums.com/threads/dump-it-here.34425/post-1005967

*Trading*
Trading is just about selecting companies that you believe will increase in price over time. Once you place your buy order, just hang on for the ride as its all you can do from here on, the only thing left for you to do is manage you sell orders as everything is in the lap of the gods. Trading is an emotional roller coaster & how you manage your psychology really matters even more than your stock selection.

*Trading is all about price movement.*
Nothing works perfectly in trading so the next best thing is to accept 'that sometimes it works well & other times not so well'. Those that can handle that tend to do well. I say just go with the flow. Trading success is all about "luck" & you create your own luck by doing all the right things.

*A tip for new traders*
Forget about the money & focus on the process of successful trading. The more you obsess about the money the more likely it will derail your success. Slow steady & methodical trading will win the race & there is never, ever, overnight success.

*Everyone*
Every strategy & every trader will have periods of good performance & periods of poor performance yet beginners tend to worry about the short term ups & downs of their account. To be successful you need to accept that you will have "losing periods" that's just part of the game & most of all remain focused on the long term outcome.

*So much to understand*
It’s frustrating & time-consuming trying to figuring out all this stuff, you don’t know what you are expected to know, this leads to reading & listening to everyone, absorbing heaps of useless information that will turn out to be irrelevant in the early stages of trading.

*Experience*
Therefore the hardest part of trading is learning from experience or time in the market, it's learning how to control your emotions & how to keep persisting even when your account suffers a few losses. It’s about being realistic & having an understanding that we are probably only an average trader at best but that’s okay. Hopefully, my thread goes someway explaining the financial stress of trading - if not, my next hope is that you achieve personal growth & education.

Skate.


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## dpong (25 January 2021)

I have been and continue to be interested in what @Skate calls his "Stale" stop-loss.   I had no idea how to code such a thing, but the idea seems sound.  I currently have a few stocks that initially trended strongly higher, but currently are operating in a range.  They do seem stale.

I'm trading Weekend Trend Trader which uses 20 week break-outs.  I code Donchian(20) channels to visualize that. 

In a happy accident, today I noticed that the upper Donchian channel for Amazon had turned lower.   So there has been no new high for 20 weeks.  This seems to be a reasonable test of staleness for my WTT strategy.  

I will definitely code this up and backtest to see whether it acts as an improvement over the existing system.


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## Skate (25 January 2021)

dpong said:


> I have been and continue to be interested in what @Skate calls his "Stale" stop-loss. I had no idea how to code such a thing, but the idea seems sound




@dpong, the StaleStop that I use is much different to the ones below but it will be a starting point for you to evaluate. I notice that you use a Looping trailing stop & would suggest you add this exit as you need to store the bar at entry - so if either is hit (Trailing Stop or StaleStop) it will give you a sell signal.

With an ApplyStop you add the StaleStop to the code.

@Trav. may elect to post using both methods below as (1) inclusion of a StaleStop in a Trailing Stop or (2) inclusion of a StaleStop in an ApplyStop. (give Trav a "PM" & ask if he would have the time)

*Simple StaleStop examples*
I've quickly coded you two examples using a 5 week period. In English, it means after 5 weeks if the position is not performing we are out of the sucker.
StaleStop = HighestSinceBars( Buy, H, 1 ) == 5;
StaleStop = ROC( Close, 5 ) < 0;

*After reading this*
You may not need Trav's help.


dpong said:


> I will definitely code this up and backtest to see whether it acts as an improvement over the existing system.




Skate.


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## frugal.rock (25 January 2021)

Skate said:


> *Experience*
> Therefore the hardest part of trading is learning from experience or time in the market, it's learning how to control your emotions & how to keep persisting even when your account suffers a few losses. *It’s about being realistic & having an understanding that we are probably only an average trader at best but that’s okay.*



It really is true.
Keep it real and understand it all falls under the "law of averages", and that we need  a method to produce results better than "average", when considering the law of averages.
Otherwise we are setting ourselves up to simply break even at best, and taking into account brokers fees, we are likely to go backwards.

Had a few rough weeks on the "stonkier" of my two portfolios, last week was a welcome recovery.
Up the ladders, down the snakes.
Aiming for the "1%" email..(again). *BSM *is in this portfolio and has been helping results along nicely.


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## Skate (29 January 2021)

@Nameless_  made a recent post about what is required to start trading going on to say "_I work full time,_ _so I understand I have time constraints learning Amibroker AFL. Given the steep learning curve, I was thinking it may be easier to cough up the 990 bucks for a turnkey code. Cheapest Norgate data is 270 bucks a year, *so its hard to know which is the best* *way to start"*. _

*It cost money to make money*
Most starting out don't want to spend "any money" to start trading, some only want to spend as "little as possible" - whereas others want to know the true cost of doing business, starting out the correct foot.

*What are the setup costs to trade straight away?*
New members join our community seeking answers to allay their fears & doubts when it comes to trading.

*Setup costs with any new endeavour *
As with all-new endeavours, whether its fitness or sport requiring equipment, there is always an initial cost. When starting out you'll tend to spend the least amount as possible, that's just human nature. When you come to the realisation that "it's for you" you can always buy bigger & better later on.

*It's precisely the same when it comes to trading*
Most beginners want to spend the least amount as possible. Why? because in most cases they haven't got a lot of cash to burn or money they can afford to lose. To "have a go" at systemic trading you need to spend a little before you start, we'll call it "your setup costs".

*I'll list what you'll require & what you'll need to buy*
Assuming you have a computer with a "Windows Operating System" & internet connection, there is little else required other than the 6 points below & nerves of steel.

*1. Amibroker *
https://www.amibroker.com/ Amibroker is a Technical Analysis Software that includes Charting. The cost is $359 for the Professional "64bit Edition" that includes 24 months of free upgrades & support. After you purchase Amibroker you'll need an independent data feed. Norgate Data is the perfect companion.

*2. Norgate Data *
https://norgatedata.com/prices.php The data is only available on a 6 or 12 months subscription-based service. The basic silver subscription package is $148.50 for 6 months, prepaid in advance.

*3. Turnkey AFL Strategy *
https://www.thechartist.com.au/product-category/turnkey-trading-systems/ The Chartist Turnkey Trading Systems costs as little as $990. All of the Turnkey Trading Systems are specifically designed for Amibroker. Each strategy has been professionally coded.

*4. Trade recording software *
https://www.aussiestockforums.com/threads/dump-it-here.34425/page-228#post-1107643 - Share Trade Tracker records & analyses your trades & tracks your trading performance. The price "update feature" has a built-in Norgate Data API for accurate record keeping. The total cost is $308.

*5. Brokers account *
https://www.commsec.com.au/support/frequently-asked-questions/956.html A CommSec CDIA account is a cash management account specifically designed for CommSec share traders, allowing you to access your funds. The total cost to set up an account that allows you to have access to CommSec's trading platform is $0 (Free)

*6. Stake money *
$20,000 is the minimum amount "to having a go" which allows you to have (20 X $1k bets). Commission cost is an important consideration as @dpong recently quoted "_I believe that paying attention to commission drag is important, and especially so with an account of that size"_

*What have you got to lose? *
The most you can lose is your stake money & set up costs, which should be the money you can afford to lose without causing financial hardship.

*A summary of the startup cost*
Amibroker = $359
Norgate Data = $148.50
The Chartist - Turnkey Strategy = $990
Share Trade Tracker = $308
Stake (Starting Capital) = $20K

*The initial cost to trade*
$21,805.5 would be your initial outlay & anything less, you are dreaming & not fair dinkum. @qldfrog recently made the remark "_anything less should NOT be your focus_" - a good point to remember.

Skate.


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## othmana86 (29 January 2021)

@Skate very nice post mate.  I related to each one of those points
I’ll give you my own short experience 

I have minimal coding experience, first year uni was about the only time I coded which was along time ago. I realised it’s like learning to ride a bike though you never really forget it.  The language is different but the principals remain the same. Not to mention the huge amount of resources available to you. Amibroker documents very well!

Spending money was another point you covered; for me it was “I don’t want to waste this money if I am not going to benefit” I.e make my money back. I started off with the norgate free trial, free version of amibroker, free version of skates WTT (thank you) and that gave me a really good feel for it. I also read the whole “dump it here” thread. Gems everywhere!

I’ll add that I got heaps of support from you guys here special mention to @DaveDaGr8.

once I realised it can be done successfully and after spending hours on it, I purchased the platinum norgate and pro version of amibroker.
I guess the moral of the story is; there is ample opportunity for you to try it for free and if it’s your cup of tea move to the next level. You still need the $20k though 

I do sometimes get the thought; screw it I am going to purchase the WTT for $990. Haven’t yet though, staying strong


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## silent1a (29 January 2021)

Skate said:


> *4. Trade recording software *
> https://www.aussiestockforums.com/threads/dump-it-here.34425/page-228#post-1107643 - Share Trade Tracker records & analyses your trades & tracks your trading performance. The price "update feature" has a built-in Norgate Data API for accurate record keeping. The total cost is $308.



I'm experiencing some slowdown with the STT especially when using the upload feature. (The initial upload was fast enough)
Some stats: 
Period: On and off from 2012
No. Trades: 600~
No. Strategies: 11 (6 are past data)

Do you dump all your trades into the tracker from whenever you started or do you break them up into yearly / strategy chunks?
Also was expecting the per strategy daily/weekly graphs but it was easy enough to create one.


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## Skate (29 January 2021)

silent1a said:


> Do you dump all your trades into the tracker from whenever you started or do you break them up into yearly / strategy chunks?
> Also was expecting the per strategy daily/weekly graphs but it was easy enough to create one.



@silent1a I'm unsure what you question is as your post is conflicting. Are you referring to just the speed (transfer rate) or have you an issue with using the bulk upload feature. If so, are you uploading using the bulk Upload Worksheet or are you a bulk Upload from Interactive Brokers (report output)? http://sharetradetrackerhelp.xlautomation.com.au/support/transfer-data

*Hint menu*
All menu icons have hint menus & if that fails you can use the help menu.

*Chunking data*
All files are uploaded in one transfer as there is no need to upload data chunks what so ever.

*Speed*
If you are experiencing a slower speed than normal, that's another issue entirely. If its a speed issue I suggest you download the latest version 3.5.2. This will also alert you for missing securities that need to be updated manually.

Skate.


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## silent1a (29 January 2021)

Skate said:


> *Speed*
> If you are experiencing a slower speed than normal, that's another issue entirely. If its a speed issue I suggest you download the latest version 3.5.2. This will also alert you for missing securities that need to be updated manually.



Thanks for the help. Found the issue to be a corrupted workbook probably due to a seemingly stable overclocked PC (Ryzen). I've transferred all the trades to a new workbook and it's working fine now.


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## Skate (29 January 2021)

Skate.


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## qldfrog (29 January 2021)

Skate said:


> View attachment 119262
> 
> View attachment 119263
> 
> ...



Sad consolation that my weekly strategy losses are in line with the Master  
Ups and downs


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## Warr87 (29 January 2021)

qldfrog said:


> Sad consolation that my weekly strategy losses are in line with the Master
> Ups and downs




same. past 2 days alone were pretty brutal for my 3 strategies lol. by the looks of my MAP strat I lost 10% in the past 2 weeks. equity curve looks similar to skates so that makes me feel a little happier lol.


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## Skate (30 January 2021)

qldfrog said:


> Sad consolation that my weekly strategy losses are in line with the Master
> Ups and downs





Warr87 said:


> same. past 2 days alone were pretty brutal for my 3 strategies lol. by the looks of my MAP strat I lost 10% in the past 2 weeks. equity curve looks similar to skates so that makes me feel a little happier lol.




*Trading*
Watching the weekly volatility can sometimes play with your emotions. Every trader needs to remember that trading is a marathon, not a sprint. Some weeks are lemons whereas other weeks are lemonade as there will be good weeks as well as bad weeks. Accept this fact & you are halfway there in controlling your emotions. How you handle your positions while controlling your emotions will eventually decide how successful you will be as a trader. Trading has a high attrition rate when the going gets tough.

Skate.


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## Skate (30 January 2021)

*Let's visualise weekly volatility*
The HappyCat Strategy has had it's fair share of weekly volatility as shown in the Equity Curve below.




Skate.


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## Skate (30 January 2021)

*Let's visualise actual results versus backtest results*
The HappyCat Strategy actual monthly trading results versus the backtest results. The same HappyCat Strategy displaying the monthly volatility.





*Monthly Backtest Results*



Skate.


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## Newt (30 January 2021)

Skate said:


> *Let's visualise actual results versus backtest results*
> The HappyCat Strategy actual monthly trading results versus the backtest results. The same HappyCat Strategy displaying the monthly volatility.
> 
> View attachment 119303
> ...




Very interesting post Skate.  Its an interesting challenge which stats you choose to benchmark against, and so easy to get out of sync with your system signals if capital is short or you miss out on a buy offer.  Had never considered running a one month backtest for comparison like that.  Your systems have tended to be so nimble buying positions we probably should be surprised how close the performances were.  From memory there haven't been many sell signals on some of the orignal stocks, so many have held up well versus monthly backtests along the way.


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## Skate (30 January 2021)

*Volatility, emotions (fear & greed)*
To understand the recent volatility in our markets you only have to read a few of @ducati916 recent posts as to how sentiment drives the markets in general.

*Volatility*
It doesn’t matter what system you are trading - the best way to handle volatility is to just accept it. Periods of high volatility will always come and go, always has and always will! - Don't jump at shadows - just roll with it

*Let's be clear*
At the company level, nothing & I mean "nothing" has changed this past week but the share price reflects differently. Volatility drives our emotions (fear & greed) & as trend traders we live & die by it. Market swings are part of the game, sometimes intentionally & other times not so much. For us it's the same game, we hop on "enthusiasm" when the prices are going up & ride it like a bucking bronco. The ride is over when our strategy throws us off the trade. We get back up, dust ourselves off & start over again waiting for the next ride. Trend trading is a rise & repeat game taking advantages of large numbers.

Skate.


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## qldfrog (30 January 2021)

Skate said:


> *Let's visualise actual results versus backtest results*
> The HappyCat Strategy actual monthly trading results versus the backtest results. The same HappyCat Strategy displaying the monthly volatility.
> 
> View attachment 119303
> ...



Dear Mr Skate, when this happens, i then go a step further: why?
Backtest vs real should match but for known cases: missed buy,missed sell or obliged to sell at market after the open,and human error like typos etc
When they do not match after these corrections, it usually means you are looking forward in the code or similar and the explore results change with time 
I do not sleep well with live systems which do not match their backtests after correction for known factors


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## Skate (30 January 2021)

*Humans are deeply flawed creatures*
All humans are manipulators (some just don't realise it) to get a desired or favourable outcome for themselves (go figure) 

*What drives share prices *
Let's have a direct look at the weekly volatility of ANZ, CBA & BHP. Nothing has changed for these companies in the last week but it's abundantly clear that the market participants were spooked.

*Who spooked them do you ask?*
Frankly, the other participants, that's who. Trading is an auction & with all auctions, people bid to what they "believe" the company is worth & not what the company is "actually" worth, that's left up to the fundamental traders to work out.

*Example*
Monday, 25th January the opening price of ANZ was $24.68 - closing on Friday 29th January 2021 was $23.71 (the price collapsed because of the emotion of fear)
Monday, 25th January the opening price of CBA was $85.11 - closing on Friday 29th January 2021 was 83.51 (the price shifted down because of the emotion of fear)
Monday, 25th January the opening price of BHP was $46.45 - closing on Friday 29th January 2021 was $43.56 (the price always shifts because of emotions)

*Emotions*
I recently made a post about "imagining emotions" & if you could handle daily or weekly trading. If you are highly strung & let your emotions get the better of you it's better for you to trade daily as your emotional curve is smoother over a shorter period. But if you can accept my last few posts on trading systematically, just go with the flow, take your punches & keep trading.

Skate.


----------



## Newt (30 January 2021)

qldfrog said:


> Dear Mr Skate, when this happens, i then go a step further: why?
> Backtest vs real should match but for known cases: missed buy,missed sell or obliged to sell at market after the open,and human error like typos etc
> When they do not match after these corrections, it usually means you are looking forward in the code or similar and the explore results change with time
> I do not sleep well with live systems which do not match their backtests after correction for known factors




QF, I'm guessing if Skate ran a backtest from early Oct 2020 to now, then showed the monthly performance for Oct, Nov, Dec and Jan they would be much closer to the actual performance.  The monthly backtest figures shown were from 1st month to end of each month individually, if I'm not mistaken.


----------



## Newt (30 January 2021)

There was the whole "Gamestock" thing this week too which may have spooked many people.  Mr Musk seems to be replacing Donald as the new star Tweeter!









						Elon Musk's tweets are moving markets — and some investors are worried
					

Bitcoin's value jumped over 20% to $38,566 on Friday after Elon Musk changed his personal Twitter bio to #bitcoin. His tweets have caused other assets to shift.




					www.cnbc.com
				





It doesn't worry me too much, but do wonder if the "shorting pirhanas" get bit better each year herding large groups of long investers into the nets, then gorging themselves in a short sharp frenzy of shorting profits from the panic to exit.  In the ever continuing arms race and after what we saw in Feb/March last year, their algos and software/hardware don't mess around on the odd strong down days.....


----------



## qldfrog (30 January 2021)

Newt said:


> QF, I'm guessing if Skate ran a backtest from early Oct 2020 to now, then showed the monthly performance for Oct, Nov, Dec and Jan they would be much closer to the actual performance.  The monthly backtest figures shown were from 1st month to end of each month individually, if I'm not mistaken.



Ok, if so yes so that's very different and just highlight the importance and luck attached to a starting date, even with a good system.
Not much to compare in that case


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## Skate (30 January 2021)

*What's trading all about?*
As traders, we buy a position in the hope that "sometime in the future" we will be able to offload the position to someone at a "higher price" than when we brought it. That's trading in a nutshell.

*Traders make money in the markets by exploiting changes in the prices *
Most traders put all their effort into buying, whereas successful traders put most of their effort into selling. While stock selection & timing of the entry is essential, selling is where we make our money.

*Trading with the trend*
Trends exist in all markets & can be traded profitably. Finding profitable repeatable patterns & then timing when to enter the trade is the primary concern of most technical traders. Technical traders spend an enormous amount of time on analysis, yet analysis is the easiest part of the trading process - whereas our primary objective as traders is to limit our losses. Also, it pays to stay with the trend, but get out when it clearly ends.

*Trading is much more than analysis.*
Trading is a very emotional experience & emotions can sometimes sabotage the best of plans, even when trading is travelling nicely it’s still difficult to follow the plan. Most losses are not the result of a poor plan, but of failure to follow it. In the long run, it will be more profitable to trade the market rather than try to predict it. We as humans are really good at one thing - selecting only the evidence that supports what we want to believe, ultimately leading us to react instead of responding.

*Reacting versus Responding*
Responding to a situation gives us time to think, reacting doesn't.

Skate.


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## Newt (30 January 2021)

Skate said:


> *Let's visualise weekly volatility*
> The HappyCat Strategy has had it's fair share of weekly volatility as shown in the Equity Curve below.
> 
> View attachment 119299
> ...




Personally there has been amazing value watching the experienced traders on ASF share their decisions through thick and thin.  Peter2 has been a rock over recent years staying calm in the very good times, but going about his "thing" tightening stops etc and continuing to post on bad days/weeks.

Likewise, find it both interesting and comforting seeing your post above today Skate.  On a multiyear backtest this week was a 5% blip down.  Totally agree its much more of an emotional rollercoaster over the few short days its happening though.

Makes ..... me...... think..........of............slow.................motion.........................boxing when things are s#$t


----------



## silent1a (30 January 2021)

Skate said:


> *Let's visualise actual results versus backtest results*
> The HappyCat Strategy actual monthly trading results versus the backtest results. The same HappyCat Strategy displaying the monthly volatility.



The strategy will probably better reflect your actual results if you instead tested the entire period it was trading instead of monthly tests so the suboptimal monthly sells (which also encourages more buys the next month due to zero positions) aren't skewing the result.

Which I guess Newt covered already.


Newt said:


> QF, I'm guessing if Skate ran a backtest from early Oct 2020 to now, then showed the monthly performance for Oct, Nov, Dec and Jan they would be much closer to the actual performance.  The monthly backtest figures shown were from 1st month to end of each month individually, if I'm not mistaken.







The profit table under charts will show monthly results but will require a little bit more work to figure out the actual dollar figure.


----------



## silent1a (30 January 2021)

I've been wondering how you exit out from an under-performing strategy?
Do you liquidate everything at the end of a certain week/month/year or do you wait for each Sell signal to come?

It could also be built into the strategy like the GTFO trigger if you didn't plan to take anymore buy signals.


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## Skate (30 January 2021)

Newt said:


> On a multiyear backtest this week was a 5% blip down




*Investing versus trading*
Investing can sometimes be a little easier "mentally" to handle than trading & it has its place. Following well-designed strategies (to the letter) can have a similar effect. When it comes to trading, it's not a level playing field & it's more profitable to trade the market rather than try to predict it. 

*Pep Talk*
My series of posts today were about emotions & how fear sometimes drives us in the wrong direction. The pep talk today was a way of saying "stay the course" & "roll with the punches". Systematic traders should keep trading the signals, those who do, make it.

*When it comes to trading it's not a level playing field*
There is no way any of us sitting at home with limited information, slow internet service, using off the shelf trading software can find better opportunities than the professional trader or the multinationals that spend millions of dollars on research having easy access to company management. These companies employ teams of traders who have the sharpest, fastest & sometimes the most "unethical minds" in the world - "that's who you are trading against".

Skate.


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## Skate (30 January 2021)

silent1a said:


> I've been wondering how you exit out from an under-performing strategy?
> Do you liquidate everything at the end of a certain week/month/year or do you wait for each Sell signal to come?
> 
> It could also be built into the strategy like the GTFO trigger if you didn't plan to take anymore buy signals.




@silent1a that's a great question. To understand exits a little more search for keywords (Stale Exit, Exit, GTFO, etc) by Skate, as it will save me a lot of retyping.

*How do I exit an under-performing strategy?*
Each strategy should have an exit plan. Multiple exits cover a variety of scenarios & I tend to use many. Trailing stops are "Index Dependant" & are the base ingredient for any decent strategy. Using a volatility exit gives stronger positions time to develop. Meaning, strong positions are held for a longer period because they are not subjected to a time-dependent momentum exit. My StaleStop is an example of this. The GTFO filter is another. Exit strategies are designed to do their own job independent of others. Basically when the momentum stalls or decreases I want to be off the sucker.

*Some of my exit strategies*
(1) Stale Stop Default Position exit
(2) Stale Stop Period exit
(3) GTFO exit
(4) Stale ROC Negative exit
(5) Stale Stop Hit Timer exit
(6) Volatility exit
(7) Two-stage Trailing Stop

*Follow your plan*
Mechanical Trading can be a simple endeavour if you are disciplined to follow the rules & stick to your trading plan. When the appropriate signal shows up, place your order without fear or trepidation. With a fully tested strategy, there is no need to second guess the signals.

*The emotional spectrum*
Multiplying the emotions of all the traders & you get a sense of the complexity of the psychological forces at work in the markets. Panic, depression, euphoria (the entire emotional spectrum) all take on a new intensity when your hard-earned cash is on the line which is why trading is so scary to beginners. These emotions consequently can generate similar strong feelings in us causing a reaction - that is, to buy or sell without following your trading plan or strategy. Traders tend to react rather than respond, which is a real shame.

Skate.


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## Skate (30 January 2021)

*Momentum is important*
I've previously explained the working of the "HappyCat Strategy" but as a refresher, the strategy uses volatility & momentum to enter & exit positions. There is a multitude of indicators that can help identify the direction, strength, momentum & volatility but the HappyCat uses only two indicators (ROC & ATR) to keep the strategy simple. 

*The “HappyCat Strategy” analyses momentum & volatility*
Typically, most strategies gauge momentum & volatility in "certain ways" but the “HappyCat Strategy” analyses momentum & volatility near the top & bottom of a price range helping to identify where to enter & exit a trade. The two indicators even focus on the volatility & momentum during price consolidation & retracements which could be new to some.

Skate.


----------



## Skate (30 January 2021)

*All strategies struggle under certain condition*
The HappyCat Strategy will struggle if the markets decide to trend lower after the position is taken (event by this weeks performance). Trend trading system, in general, perform much better when markets are "buoyant" rather than the way they traded this past week, that's a given. 

*Between when you buy & when you sell a position *
This period in between is out of your hand. Let me repeat that, the period in-between when you buy & when you sell is totally out of your control & the trading gods will sometimes use you as a punching bag.

*Common Reasons for Not Selling *(as a system trader)
People have a whole host of reasons they use to justify not exiting a trade when their trading system has given them a clear signal to exit. Some of the more common reasons are - "they believe" it will go back up again, sometimes they simply fail to follow their strategy exit signal promptly.

*Opportunities in trading come all the time*
If your stock is weak enough to generate a sell signal, then don't look for excuses, just sell. The money is better off invested in another, stronger position - if the market conditions permit.

Skate.


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## Skate (31 January 2021)

Skate said:


> *What's trading all about?*
> As traders, we buy a position in the hope that "sometime in the future" we will be able to offload the position to someone at a "higher price" than when we brought it. That's trading in a nutshell.




*Trading successfully is not easy*
While trading appears easy, few maintain outstanding results over the long term, as it requires time, focus, discipline, patience, & the ability to follow a trading plan perfectly. If you have a natural tendency for "loss aversion" avoiding losses rather than obtaining gains can lead to poor & irrational trading decisions. Loss aversion causes you to sell positions too early or too later as "loss aversion" works both ways. There are some traders who refuse to sell "loss-making" positions in the hope of making their money back while others sell too early missing out on longer-term gains.

*Humans are wired wrong to be successful traders *
Emotions can sometimes be our worst enemy. Successful traders are methodical in their procedure to analyse, rationally deciding a course of action while understanding the "limitations of their knowledge". Good Traders will continuously challenge their best ideas & will remain completely unemotional in their decision-making process. To remain unemotional in their decision-making is almost impossible. In times of "extreme stress" (such as the past week of trading) adrenalin releases, our heart rate & blood pressure increases, fogging our decision-making process.

*As Albert Einstein said *
_“Everything should be made as simple as possible, but no simpler.”_ But the problem with some traders is that they have a tendency to oversimplify highly complex matters - as Confucius once said _“Real knowledge is to know the extent of one’s ignorance"_

*John Kenneth Galbraith also said *
_“One of the greatest pieces of economic wisdom is to know what you do not know”_. It's dangerous to be overconfident believing you know the answers with limited knowledge. Confirmation bias causes mistakes for many of us. Indeed, relying on information which confirms the decisions that we have "already made" leads to being overconfident. All mental habits & bias, "self-defeats" the best of us.

Skate.


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## ducati916 (1 February 2021)

Skate said:


> *Humans are wired wrong to be successful traders *
> Emotions can sometimes be our worst enemy. Successful traders are methodical in their procedure to analyse, rationally deciding a course of action while understanding the "limitations of their knowledge". Good Traders will continuously challenge their best ideas & will remain completely unemotional in their decision-making process. To remain unemotional in their decision-making is almost impossible. In times of "extreme stress" (such as the past week of trading) adrenalin releases, our heart rate & blood pressure increases, fogging our decision-making process.
> 
> 
> ...




This one caught my eye. The reason that it caught my eye is because this is the generally accepted position. From Steenbarger:



> "Any trade, however, is merely a probabilistic bet.  Would I attach myself to a relationship if my wife was faithful 75% of the time?  Of course not.  I have to stay detached from my trades and their outcomes because I know that there will always be occasions when the odds fail to play out.  I own my trades--I take ownership for them--but I cannot allow them to own me.
> 
> That is very different from staying emotionally attached to the market itself.  That emotional attachment is similar to empathy:  you're not just observing market activity, but *feeling* it.  As a psychologist, I have to be fully attuned to the person I'm working with.  I can't be distracted with thoughts about myself, how much money I'm making from my sessions, etc.  In that emotionally attuned state, I can pick up on subtle shifts in tone of voice and shifts of topic that tell me what's going on with the other person.
> 
> ...




jog on
duc


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## qldfrog (1 February 2021)

ducati916 said:


> This one caught my eye. The reason that it caught my eye is because this is the generally accepted position. From Steenbarger:
> 
> 
> 
> ...



It took me years to become detached to the market, yes pissed off by a 10k loss in a day but so different from 20y ago..with far lower at stake then.
I view that trading money very differently from the day to day coin.i will try to save 2$ here at woolies but do not hesitate to put 20k or buy 4 positions this morning as my system told me too.once you trust your system to be statistically right on the long term, it geels ok, could these 20k go in smoke sure
Difference between the coin in the pocket and the trading balance is probably helped by the devaluatio of money worth by qe universal income aka job keeper etc.this also greatly helped in turning to pre retirement..why bother


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## Rsthree (1 February 2021)

qldfrog said:


> It took me years to become detached to the market, yes pissed off by a 10k loss in a day but so different from 20y ago..with far lower at stake then.
> I view that trading money very differently from the day to day coin.i will try to save 2$ here at woolies but do not hesitate to put 20k or buy 4 positions this morning as my system told me too.once you trust your system to be statistically right on the long term, it geels ok, could these 20k go in smoke sure
> Difference between the coin in the pocket and the trading balance is probably helped by the devaluatio of money worth by qe universal income aka job keeper etc.this also greatly helped in turning to pre retirement..why bother



I've just been practising my deep breathing every time I look the portfolio over the last week.


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## qldfrog (1 February 2021)

Rsthree said:


> I've just been practising my deep breathing every time I look the portfolio over the last week.



Learn didgeridoo, double gains😉


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## peter2 (1 February 2021)

This is how system traders handle losing weeks.


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## qldfrog (1 February 2021)

peter2 said:


> This is how system traders handle losing weeks.
> 
> View attachment 119430



Just part of the drawdown stats we say but teeth are gritty with all this  sand😊


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## Skate (3 February 2021)

*It appears I have issues with my Chrome Browser *
Posting & responding to the "Dump it here" thread will be an issue until it's sorted. I have no other issues using the "Google Chrome Browser" other than being restricted from accessing the AussieStockForums website.

Skate.


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## silent1a (3 February 2021)

Skate said:


> View attachment 119472
> 
> *It appears I have issues with my Chrome Browser *
> Posting & responding to the "Dump it here" thread will be an issue until it's sorted. I have no other issues using the "Google Chrome Browser" other than being restricted from accessing the AussieStockForums website.
> ...



I usually use Firefox but I have no issue with Chrome either.

Do you use a VPN?
Have you tried a different browser such as Firefox or MS Edge?

Could also check with Joe to see if your IP was blocked.

Could also be your cache is too large for ASF. You can clear this in Settings > Privacy and security


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## DaveDaGr8 (3 February 2021)

403 - Forbidden is generally the server rejecting you.

1 - Launch an incognito chrome page and try from there.  ctrl-shift-N
If that works you will have to clear all caches, history etc. in settings->Privacy and security.

2 - Reset the modem ... turn it off for a good minute of 2 to clear any caches.


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## Skate (3 February 2021)

@silent1a & @DaveDaGr8 thank you for your suggesting helpful hints. I've tried all that has been recommended without success. I'm now using Microsoft Edge without issue.

Skate.


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## Skate (5 February 2021)

Skate.


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## qldfrog (6 February 2021)

I should have kept the Cat . Great results


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## Skate (6 February 2021)

qldfrog said:


> I should have kept the Cat . Great results



*Aussie Stock Forums give us an insight into how other traders think*
The recent banter between @qldfrog & @ducati916 is a perfect example. When members struggle there is always a member who is willing to give their time & knowledge in the hope of helping others. I try extremely hard to keep my posts to the sheer basics. 

*I'm just saying *
A trading system is usually most effective when "implemented consistently". One problem frequently encountered is the "difficulty" in following a system that's often difficult to maintain. A few losses & "emotions" can rule the day, second-guessing their own system.

Skate.


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## Skate (6 February 2021)

*There are literally hundreds of ways to trade the markets*
There are some much better than others but "trend following" is my all-time favourite. In saying this, you need to find an approach that you can borrow, test & then adapt to suit your own circumstances while having a deep understanding of "Risk, Trading Psychology & Emotional intelligence" as all three directly affect your trading & trading outcome. Once you have a clear understanding you can set about developing a trading strategy that will give you the confidence in trading your own structured trading system.

*Education never stops*
@peter2, "p2-asx-weekly-portfolio" & the "Dump it here" threads both aim to educate in their own way explaining how to capture price fluctuations by exploiting profitable repeatable patterns, whereas @Trav. thread "Amibroker Tips and Tricks" takes care of the coding education. If you do nothing more than reading these three threads you will have a sound grounding in how to trade successfully.

*What I've found*
One of the keys to my success is combining different strategies together. When you are able to combine less correlated strategies, it is possible to smooth drawdown, boost win rate & therefore improves your overall risk-adjusted returns. I mention ‘less correlated’ instead of ‘uncorrelated' because it's rare to find profitable strategies that are completely uncorrelated. 

Skate.


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## Skate (6 February 2021)

ducati916 said:


> Having observed Mr @Skate profit graphs for some period of time, across a few systems, they all seem to display the characteristic of slowing profit prior to a drawdown of open profits. This warrants further investigation, especially as an exit tigger in-of-itself, of which the above is one way that you could play it.



*Randomness of trading*
The randomness of trading can fool us because most don't think probabilistically as "what we think we know" can be dangerous if not kept in perspective. Good decisions come from learning how to think well. Our return from trading is influenced by scrutiny of our systems, as-well-as controlling our emotions when the going gets tough. Also, in this game, you need "lots & lots" of luck.


qldfrog said:


> Comparing to the cat is hard as mr skate has a recipe for getting in good shares that i am nowhere near finding even if he states that all the info is there in the dump it posts



*Finding the next profitable trade matters*
Finding the next trade comes from analysing your strategy, assessing the probability of returns & then trading it to the letter (giving yourself the best opportunity of success). It is this kind of thinking, a balance between openness to new ideas & being sceptical of everything is a fine line to tread.

Skate.


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## Skate (6 February 2021)

peter2 said:


> I've always liked the idea of using your system's equity curve as a management tool. If your systems respond quickly to save losing open profits then you've got to accept that it will get out prematurely some times. The entry strategy of the Happy Cat is very similar to many of @Skate's systems. They're all momentum based, ie price has started to move higher. Your systems should be trading many of the same stocks that skate's systems select.





Newt said:


> Tuning exits, stalestops, trailing stops etc for the preferred timeframe to optimize medium to long term profit/winners without losing too much open profit seems to be something Skate is particularly skilled at (and we see Peter2 do it all the time in tough times - they both make it look easy, when it obviously ain't!).




@peter2 & @Newt make some excellent points.

*Equity Curve*
The only way I use an "equity curve" as a tool is to keep me focused long-term. Newt's comment of not "losing too much open profit seems to be something Skate is particularly skilled at" - is an overstretch (see the graph below)

*My 2-year equity curve*
Traders need to endure - as there is no way to sugar coat it. Each "Blue Circle" on the chart below - hurt like a bitch. Endurance & knowing there would be better times ahead, kept me going. Persistence & endurance got me back to the green line, meaning it's taken a while but I'm back on track.




*Recipe*
When you combine positivity with "Patience & Persistence" it makes success achievable more quickly. Being motivated about any passion gets you started & commitment to that passion is what keeps us going.  (a recipe we all should follow)

*Perception & interpretation of information is always consistent with what we believe*
There isn't much about the way we function that beliefs don't play a major role in as everything we perceive has a way of proving it. Simply jumping to a conclusion without bothering to assess the full range of possibilities is an inbuilt weakness we all suffer, not only as traders.

*Rolling with the punches*
Trading is not a smooth journey because people are the markets with their full range of emotions on display. By looking at my equity curve above you wouldn't think my strategies are consistent performers, no way. Some weeks you get punched & other weeks you take a hiding, that's just trading.

Skate.


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## silent1a (6 February 2021)

Hmm,



I can only see this settling back down after the meme stock craze but:


Skate said:


> *Follow your system*
> I was told many years ago, "Don't think you are smarter than your system"




Maybe I'm onto a winner for the February stock comp.


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## ducati916 (8 February 2021)

Skate said:


> *There are literally hundreds of ways to trade the markets*
> There are some much better than others but "trend following" is my all-time favourite. In saying this, you need to find an approach that you can borrow, test & then adapt to suit your own circumstances while having a deep understanding of "Risk, Trading Psychology & Emotional intelligence" as all three directly affect your trading & trading outcome. Once you have a clear understanding you can set about developing a trading strategy that will give you the confidence in trading your own structured trading system.
> 
> 
> ...




I thought that this was a very valuable post, but have only had time now to respond. Below are a list of stock based strategies. They all have their own strengths and weaknesses, but allow different psychological profiles to trade comfortably.

They also have applicability in different market environments. Some are far more defensive than a long only (mechanical/discretionary) system. Some are more aggressive. They all (obviously) have different risk/reward profiles. Some benefit from leverage, others are far too risky to leverage.

I am particularly fond of and tend to specialise in the market neutral strategies as you can (generally) go huge size w/o carrying directional risk, these are ideal to leverage, some I will comfortably go 100:1 on. Others I wouldn't dream of leveraging.

Strategies:
(a) Trend trading long;
(b) Trend trading short;
(c) Pairs trading;
(d) Event trading;
(e) Gamma scalping;
(f) Open only strategies;
(g) Close only strategies;
(h) Arbitrage;
(i) Convertible arbitrage;
(j) Earnings strategies;
(k) Carry trades;
(l) Technical trades;
(m) Fundamental trades;
(n) Mechanical trades;
(o) Convergence trades (similar, though different to pairs trades).

Time available to trade, capital, knowledge, risk tolerance, psychological profile, and what your broker can actually supply you with re. instruments, will all play a part in those strategies that you can trade successfully and those that you should probably stay away from.

jog on
duc


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## Warr87 (8 February 2021)

I like the idea of market neutral positions. May be something I will look into later. i'm under the impression that this wouldn't be the easiest in australia though? but i'm naive on the topic.


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## qldfrog (8 February 2021)

Warr87 said:


> I like the idea of market neutral positions. May be something I will look into later. i'm under the impression that this wouldn't be the easiest in australia though? but i'm naive on the topic.



Mr Ducati @ducati916  went into a bit of explanation about the Market neutral positions onh is Bull market thread.Very very interested but as I understood it:
- probably better suited to a bigger (US) market;
- some of the "protection" does not seem that easy /cheap to implement
That is what I took of a quick maybe misunderstood review of it.


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## Warr87 (8 February 2021)

Yea I assume its better suited to larger markets. Even using options, while doable in aus, appears to be easier and more effective in the US. We have some bear ETFs too that add some possibilities but the great access to larger markets with more liquidity and more instruments has a greater advantage. when i eventually trade in the US, I will likely start with with long-only but want to add a shorting component to be more market neutral. But thats for the future. duc implements a lot of different ways to go about it. He is much more diverse and his flexibility is something to be admired!


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## Skate (11 February 2021)

ducati916 said:


> trade comfortably in different market environments.




*I'm often asked, "what makes a good strategy?"*
A good trading strategy is not necessarily one with a high proportion of winning trades, rather it is the one that is reliably profitable & robust across a range of "market indexes".

*It might come as a surprise*
The entry condition is the least important aspect of designing a profitable trading system as they are a dime-a-dozen. A profitable trading strategy needs to survive during periods of adverse movements in the market. Finessing the exit is where the money is ultimately made. Selling a position too early or selling it too late is a recipe for poor performance & disappointment.

*All strategies need to be tested & evaluated - that’s a given*
Thoroughly evaluating a trading strategy will improve the confidence needed to trade it, while giving an insight into its behaviour. It also pays to remember that all backtests apply to past performance & there is no guarantee of the same performance going forward. Trading a well-evaluated strategy with good backtest results would most likely ensure the balance of probability would be in your favour.

*Stick to the plan*
If we can stick religiously to the trading rules, you could be confident of producing profitable outcomes in the future. Also, when live trading, don't be tempted to alter the strategy when the going gets tough.

Skate.


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## TJW11 (12 February 2021)

I was wondering if anyone knew of an “investor group” that meets with a particular interest in Amibroker. Would love to participate to grow my abilities here. With the advent of Zoom into our lives, online would also be good. Possibly the participants and watchers of this thread may like to create a ‘Skate” group 😊


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## Skate (12 February 2021)

Skate.


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## DaveDaGr8 (12 February 2021)

TJW11 said:


> I was wondering if anyone knew of an “investor group” that meets with a particular interest in Amibroker. Would love to participate to grow my abilities here. With the advent of Zoom into our lives, online would also be good. Possibly the participants and watchers of this thread may like to create a ‘Skate” group 😊




In Melbourne the ATAA have a SIG that meets once a month. I went a few times years ago so i can't vouch for how they are now.


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## TJW11 (12 February 2021)

DaveDaGr8 said:


> In Melbourne the ATAA have a SIG that meets once a month. I went a few times years ago so i can't vouch for how they are now.



Thanks, I'm in Sydney so Melbourne for a physical meeting doesn't work. However open to online. 

Basic question is whether there are "investor groups" out there that would be into systematic trading as opposed to "quasi" fundamentalists?


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## peter2 (12 February 2021)

Newcomers to investing and trading very often don't realise the value that is offered by more experienced people in the profession. For example, beginners won't realise the immense value within the pages of @Skate's ebook for beginning traders available here at ASF.

Another recent example is @DaveDaGr8 's excellent suggestion of the ATAA meetings. The ATAA is a national association with monthly meeting in every state. During the pandemic meetings have been presented online, recorded and archived for it's members.  There's now hundreds of presentations covering almost every trading style. If you can't find a trading style that appeals to you in this archive then you're not looking or you're not cut out to be a technical trader.  All beginning traders should seek out this easily accessible knowledge base for their education. You can't start a journey without knowing how you're going to get to your destination.


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## Skate (13 February 2021)

*All projects come to an end*
I had planned to retire the "HappyCat Strategy" at the end of February but I have decided to pull the pin early.

*The Action Strategy & the HappyCat Strategy *
Both exercises were dual-layered. The first layer was to give confidence to those who were itching to have a go at trading as both strategies provided the perfect vehicle (IMHO). The second layer was for others to watch a small portfolio develop from scratch in real-time.

*Minor correction*
There will not be a HappyCat update next Friday as the strategy has come to its end.

Skate.


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## Skate (13 February 2021)

peter2 said:


> Newcomers to investing and trading very often don't realise the value that is offered by more experienced people in the profession. For example, beginners won't realise the immense value within the pages of @Skate's ebook for beginning traders available here at ASF.




Kind words are always appreciated.

Skate.


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## frugal.rock (22 February 2021)

G'day Skate, 
I came looking for the weekly results, didn't see the "Happy Cat" had finished up last week.

It would seem that we have come to the end of a chapter?. I hope there will be many more, or at least some.

For anyone reading this, I will say that I have learnt a large majority of what I know about trading and investing through Skates thread.

The knowledge learnt here has been applied and shaped in my own quirky discretionary manner and I have developed methods which invariably work for me and my nonuniformed brain. 

I think there's a lot to be said for a coded strategy, a trading plan locked in cement. 
Skate has proven that time and again. 
Personally, I hope to be starting a strategy like this in the next week or 2.

Whilst it is fun trading around like a chook with no head (to a degree), returns of circa 50% are achievable with a lot less stress.

If one was to delve into and learn all the concepts mentioned in this thread, I am convinced they too would become successful at what they strive to achieve in their trading or investing future.

Thank you Skate.


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## fiftyeight (23 February 2021)

Thought this might be the best place to ask for a big favour from the systems traders.

Does anyone have a EOD/4 hr FX system they would be willing to share either here or privately?

Might be asking a bit much haha, even point me in the right direction would be great. Not trying to reinvent the wheel, find the holy grail or find a money printer, just something simple where I can control risk.

Not sure what I have done to skew THE algos, I have not looked at systems for a while, but I am seeing a bit of content re prop trading. Maybe there is an increase in firms after everything went nuts last year. Interested to see what it is all about, and where exactly their ‘trading is easy’ schtick breaks down.

Looking for a shortcut, but knowing I will still have a fair bit of work. Having a decent system or starting in the right direction will save a fair bit of time.


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## othmana86 (27 February 2021)

How’s everyone tracking this crazy crazy month?? Staying strong ?


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## qldfrog (27 February 2021)

othmana86 said:


> How’s everyone tracking this crazy crazy month?? Staying strong ?



Had a week of hell as per journal but nothing especially dramatic system wise.overall, very eventfull..i sometimes long for quiet and boring 😊


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## Rsthree (27 February 2021)

othmana86 said:


> How’s everyone tracking this crazy crazy month?? Staying strong ?



It was a good month to test your commitment and confidence in your system and strategy. I made one rookie error and hopefully its taught me the lesson I needed to learn.


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## Skate (27 February 2021)

*The trading results of the last four months *
Opening up about personal trading results brings real-life trading into perspective for beginners just starting out with starry eyes. (100K - 20 position Portfolio)




*The tone of the comments*
Reading recent comments is concerning inasmuch as the "tone of the comments" rather than the comments themselves. To understand the events in our markets you only need to just read a few of @ducati916 recent posts to understand what drives the markets in general. It doesn’t matter what system you are trading - you are at the mercy of the market. The best way in handling volatility is to accept it.

Skate.


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## Skate (27 February 2021)

peter2 said:


> The markets always settle down after the initial shock although the huge selloff makes a mess in the charts. I still think it's correct to buy this dip but I'll need prices to rally to trigger me into a trade.




*To be successful you need to remain focused on the long game*
Understanding what drives the market is the key that leads to making better decisions. It’s frustrating & time-consuming trying to figuring out all this stuff. How you handle your positions while controlling your emotions will eventually decide how successful you will be as a trader. 

*Self-doubt is a killer in this game*
Trading has a high attrition rate when the going gets tough.

Skate.


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## Skate (27 February 2021)

*Trading has a natural ebb & flow *
Market movements affect everyone emotionally & most traders prefer calm but this is the wrong mindset to have. As traders, we need chaos & volatility. It’s easy to envision a scenario of complete doom when markets keep behaving as they have. Trading consistently is hard at times while being focused on the larger picture. Concentrating on daily or weekly blips is one reason why traders fail to make money from trading.

Skate.


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## Skate (27 February 2021)

*The more you obsess about the money the more likely it will derail your success *
Methodical trading will win the race. Every strategy & every trader will have periods of good & poor performance yet beginners tend to worry about the short-term ups and downs of their account.

*A blatant plug for System Trading  *
Tech & Peter2 have their own style of trading & I have another. I'm not saying one is better than the other but I'm only concerned with making money with the least amount of effort. Systemic trend trading allows me to do this - because "System Trading Works"

Skate.


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## ducati916 (28 February 2021)

Skate said:


> *The tone of the comments*
> Reading recent comments is concerning inasmuch as the "tone of the comments" rather than the comments themselves. To understand the events in our markets you only need to just read a few of @ducati916 recent posts to understand what drives the markets in general. It doesn’t matter what system you are trading - you are at the mercy of the market. The best way in handling volatility is to accept it.
> 
> Skate.




An interesting post. More interesting than maybe intended.

Elements that constitute the 'market':

(a) Price;
(b) Time;
(c) Volume;
(d) Vol;
(e) Micro fundamentals;
(f) Macro fundamentals;
(g) Sentiment;
(h) News/events.


All of those elements can form in concert, individually or as a selection, the constituents of you strategy or system. Hence the tremendous variability in trading strategies between traders/investors.

@tech/a is a trader of volume as it relates to price (see his thread). @Skate is a trader of price via a systematic, coded approach. @peter2 is a trader of price with some volume. We have some value (fundamental) chaps. Largely these choices revolve around emotional comfort and success. You are successful, therefore you are comfortable. If you are comfortable, generally you will be successful as you will trade the strategy consistently.

What caught my eye was: you need to accept volatility. Well yes you can or you can directly trade vol. That is what I do. I am indifferent to market direction. I trade vol. and price. Price in either direction, but what I seek primarily is high vol. and crazy moves. So vol. is an opportunity to build a trading strategy, rather than something to be accepted or endured.

This is not to say this form of trading is risk free. There are risks. It is simply that the risk is different to risk as it is normally quantified on this and other threads and the above examples, which are price based risk.

jog on
duc


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## qldfrog (28 February 2021)

ducati916 said:


> An interesting post. More interesting than maybe intended.
> 
> Elements that constitute the 'market':
> 
> ...



And you can get a direct price volatility link with _US_ shares like VXX..if it helps anyone.
Just be aware this is NOT a buy and dorget stock as it self combust VERY quickly


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## Joe90 (28 February 2021)

fiftyeight said:


> Thought this might be the best place to ask for a big favour from the systems traders.
> 
> Does anyone have a EOD/4 hr FX system they would be willing to share either here or privately?
> 
> ...



Have a look at Trading Made Simple by eelfranz on forexfactory. The content is in the first 2-3 pgs, followed by 5800pgs of BS as its the most discussed system on ff.  Its a MT4 indicator based discretionary system. I haven't seen this being used as a mechanical system anywhere yet.


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## fiftyeight (28 February 2021)

Joe90 said:


> Have a look at Trading Made Simple by eelfranz on forexfactory. The content is in the first 2-3 pgs, followed by 5800pgs of BS as its the most discussed system on ff.  Its a MT4 indicator based discretionary system. I haven't seen this being used as a mechanical system anywhere yet.




Cheers, will have a read tonight. That is a lot of discussion haha

I have been going through older posts on ASF to find some ideas to test, some quality posts and threads that are lost unless you go hunting


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## steve2222 (1 March 2021)

fiftyeight said:


> Cheers, will have a read tonight. That is a lot of discussion haha
> 
> I have been going through older posts on ASF to find some ideas to test, some quality posts and threads that are lost unless you go hunting



Just came across this one from another link in FF. But this does use as a component 'averaging in' though. Interesting concept though and seems like it would be applicable (surprisngly given upward drift) to stocks and indicies.:









						Developing a self-adapting algorithm (Part I): Finding a basic pattern
					

In the upcoming series of articles, I will demonstrate the development of self-adapting algorithms considering most market factors, as well as show how to systematize these situations, describe them in logic and take them into account in your trading activity. I will start with a very simple...




					www.mql5.com
				












						Developing a self-adapting algorithm (Part II): Improving efficiency
					

In this article, I will continue the development of the topic by improving the flexibility of the previously created algorithm. The algorithm became more stable with an increase in the number of candles in the analysis window or with an increase in the threshold percentage of the overweight of...




					www.mql5.com


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## Skate (2 March 2021)

qldfrog said:


> I noticed even some of my big wins AGI, SWM,BNO can not sustain or even do exit on emergency SL far from their peak
> BNO f.e. exited today after a low of 32.5c far from its rises to 48.5c on the 22nd just a week ago - What's the relevance? well this is to me the perfect sign of a market top



As a systematic trend trader, I'm more concerned about trading the signals & signals are all that I have.

*Prophecies of doom & gloom come & go *
Market rise & fall. @ducati916 today has put forward differing scenarios. When the Executive Chairman & CIO, Hamish Douglass of Magellan Financial Group is uncertain how 2021 will playout what hope have we in forecasting.






						Magellan Financial Group (MFG) Executive Chairman & CIO, Hamish Douglass - Part 1
					

Magellan Financial Group (MFG) Executive Chairman & CIO, Hamish Douglass speaks with Tom Piotrowski about his view that 2021 will be the year of living dangerously. He discusses what he describes as the series of issues which are making markets complex and dangerous and also warns investors to...




					www.commsec.com.au
				








						Magellan Financial Group (MFG) Executive Chairman & CIO, Hamish Douglass - Part 2
					

Magellan Financial Group (MFG) Executive Chairman & CIO, Hamish Douglass speaks with Tom Piotrowski about the likelihood of COVID-19 continuing to mutate, his expectation central banks will ban cryptocurrencies & his recent investment in Netflix.




					www.commsec.com.au
				




*If you have a strategy that's working - keep working it*
When the market starts going down, new traders know little how to preserve profits & they watch their profits quickly disappear. Eventually, the pain becomes too great & tends to sell all of their holdings at a substantial loss. This usually occurs right at the market bottom. To add insult to injury, this is when the market starts going back up again. Trading to me is a business & should be treated as such.

*Getting the exit right is always a hard task*
Exits need to fit your personality more than entries. What I mean by that is too many people look at what makes the most money & then they can't trade it because of the drawdowns, trade frequency, or other problems that cause them emotional angst. One of the first steps to becoming a good trader is to understand that you can't maximize everything. Don't even try as you'll learn to improve your strategy over time.

*You may elect to stop trading in sideways markets*
A lot of traders keep their positions open in sideways markets where I don't. Traders fail to realise you don't make much money going sideways. In a sideways market, if you violate the rules of (a) good money management or (b) a sound "stalestop" exit strategy, you are going to pay, & pay dearly. This is when an exit strategy is everything when trading.

*Maximizing will kill your strategy*
There is no "one best" strategy. There are strategies that will allow you to trade with enough success to make money. If you try to find the maximum money-making strategy, it will wrap itself around your neck & choke the life out of you. Most traders talk about a "trading system" but you never hear them say that their systems only work well when the market is in an uptrend. No matter what strategy you are currently trading they all tend to suffer in tough times - times we are experiencing at the moment. (it pays to remember that)

*Charts of interest - (1) AGI, (2) SWM, & (3) BNO

1. AGI*




*2. SWM*




*3. BNO*



If I listen to the news & certain posts on this forum - as a systematic trend trader I'm fu¢ked.

Skate.


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## qldfrog (3 March 2021)

Skate said:


> As a systematic trend trader, I'm more concerned about trading the signals & signals are all that I have.
> 
> *Prophecies of doom & gloom come & go *
> Market rise & fall. @ducati916 today has put forward differing scenarios. When the Executive Chairman & CIO, Hamish Douglass of Magellan Financial Group is uncertain how 2021 will playout what hope have we in forecasting.
> ...



Much appreciated.
To put things clear,like probably many, systematic trading is not the only wealth "management" used to handle one's assests and we most often use discretionary investment.
Not always successfully as in my case.
And with very negative weeks influencing mood: from market related events, company foldings to rain storm misses or location of speed camera  :-(
This above post is in no way a sudden lost of faith in systemised trading and was published in a thread dealing with a highly discretionary component by someone much more experienced and expert than i ever be.

Exit or non entries (or both) are part of systems which statistically tend to lessen the effect of global down trend.

And this works: as of yesterday night, my daily trend  system has only 2 out of 20 active positions,and the weekly one 11 out of 20 ,with 8 of these entered this week..and potentially closed next monday: who knows.

Only the new kid on my stable: daily Guppy has been designed for ultra quick reaction, and full exposure .so it is natural it is more affected and so shows more DD,retracing of gain.either as a flaw or just part of its gene.
But yes a systematic trader will still be affected when there is no global, or niche, trend.
Then there are non trend systems:
And these can hammer you too: for me volatility or BO systemised approaches.But that is another story.


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## investtrader (3 March 2021)

Ha Ha ... well said. Again, the hardest part is to cut out the noise. You can always find predictions of doom.


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## ducati916 (4 March 2021)

Skate said:


> 1. As a systematic trend trader, I'm more concerned about trading the signals & signals are all that I have.
> 
> *2. If you have a strategy that's working - keep working it*
> When the market starts going down, new traders know little how to preserve profits & they watch their profits quickly disappear. Eventually, the pain becomes too great & tends to sell all of their holdings at a substantial loss. This usually occurs right at the market bottom. To add insult to injury, this is when the market starts going back up again. Trading to me is a business & should be treated as such.
> ...





1. Both discretionary traders and systematic traders should react to market signals. If you are reacting to something else, news, economic numbers, etc. that is a very tough game to play. Market signals are reliable in that you know if you are wrong/right/late/early/whatever very quickly.

2. What do we actually mean by strategy?





My question: is mechanical trading a (i) strategy or a (ii) tactic? If it is a strategy, imo, that is not sufficient. You need a variety of tactics within that strategy.

3. Exits. Taken by most to mean exiting an individual position or positions. I look at it on a sector by sector basis. Now if you (and most are trading individual names) are trading individual names, further classifying them by sector and concentrating on strong trending sectors (should) increase your win rate. Easy to do as a discretionary trader. A little more complicated as a mechanical trader as it introduces a further variable. Subjective? Exit sectors that are weak, enter sectors that are strong.





4. Agreed.

5. I would argue that you need a variety of tactics for different market environments. We haven't had a prolonged bear market for a while. But when we do, ways to make money are different in a bear than a bull. If you plan to sit out, well fine, that is a tactic. If you don't, then a long only strategy is doing the hard yards. It can be done...but it is harder.

6. News is dangerous, as it is so often bad/late/incorrect/prejudiced/whatever. Trading other peoples opinions is mad, bad and dangerous. Developing multiple strategies & tactics within strategies for different markets, particularly a market in transition, which is the truly skilled part (anyone can recognise a bear/bull after a point in time) and requires a way to recognise that transitory period. Market tops are faaaaaar harder than market bottoms.

In summary: to a man armed only with a hammer, gradually everything starts to look like a nail.


jog on
duc


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## qldfrog (4 March 2021)

ducati916 said:


> 1. Both discretionary traders and systematic traders should react to market signals. If you are reacting to something else, news, economic numbers, etc. that is a very tough game to play. Market signals are reliable in that you know if you are wrong/right/late/early/whatever very quickly.
> 
> 2. What do we actually mean by strategy?
> 
> ...



I think systemised trading in the rough version i use, with lower skills/less experience, is a tool so definitively a tactic to..and that is the strategy: leverage/just benefit from trending market, or BO wo being influenced in my case by my mood, news or subjective factors.
And it works, but if there is no trend, or no BOs well, however good your tactic/tool..you are not going to progress and will experience a slow grinding of money.


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## Skate (6 March 2021)

peter2 said:


> It's hard to trade more when the market conditions seem unfavourable. This handicap prompts the question why not automate the process and create a trading system. If I did create a portfolio of automated trading systems, what would I do then?




*So, the question is - How do you create a trading system?*
There is always a level of risk trading systematically can be rewarding but not usually in the short term as this style of trading takes time to develop.

*Opportunities can be identified*
By trading systematically I'm identifying stock displaying patterns with long-term opportunities. Trading these patterns can be slow to develop as there can be a lag before the strategy starts to gain momentum. Most don't understand how the trend really works, & how it impacts all strategies, both for trading & for development, so I thought I would share my opinion.

*So here we go*
Beginners are very concerned about finding a system that works all the time. They are especially concerned about entries. They want to hit the entry as close to the turning point of a trend as possible. Both of those issues are a complete waste of time. The reality of it is when a market is trending up, it really doesn't matter much what you are using for entries as long as you are entering in the direction of the trend.

More to follow.

Skate.


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## Skate (6 March 2021)

*How do you go about creating a trading system?*
In a few posts, it's hard to convey what it takes to develop a system you can trade with confidence. 

*Let's first talk about entries*
A few simple trend indicators are all you need to see when to enter a trade. Entries during trends require almost no brain cells. Once we have our entry, the problem becomes one of exit strategy & money management.

*Volatility & Volume*
"Volatility & Volume" the real driver of a trend - meaning we enter a trend on volatility & volume - getting off when the trend turns. There are so many indicators that measure both of these, the trick is getting two indicators to work in unison. It pays to do your own research to find indicators that will work for you. Getting into a trend is not that difficult using an indicator, using two is sometimes better. Getting out of a trend & timing the exit is a little more complex.

*Mental toughness*
Giving a good strategy to someone else is not the measure of a strategy - it's the "mental toughness" of the trader that is the real decider if you'll be a winner or not.

More to follow.

Skate.


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## Skate (6 March 2021)

*A trading system is usually most effective when "implemented consistently"*
One problem frequently encountered by individual traders is the "difficulty" in following a system. Sticking to a system requires discipline & discipline is often difficult when trading - as "emotions" can rule the day. Traders tempted to second-guess their strategy is a recipe for disaster.

*You should develop an exit strategy that works*
Exit strategies are too numerous to discuss & there is no such thing as the "best" exit. There are exits that work for all styles of trading. Beginners tend to test everything across a broad range of market conditions. That's doing things the hard way. Educate your mind & understand how trading actually works & you can change what you are doing according to market conditions.

More to follow.

Skate.


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## Skate (6 March 2021)

*First figure out the trend*
There are several ways to do this & they're all easy. On a weekly chart, you can use a 10-week moving average. When the index of choice is above the 10-week moving average, the market is in an uptrend. That's the easiest way to define things. Alternatively, you can use a 100-week moving average on a daily chart. It doesn't matter that much. Pick one.

*Okay, how do you determine the trend?*
As I said, stick a couple of trend indicators on a chart as they all work about the same. There's no "best" one. See how they look on a chart with a few symbols during a period of time when the market is definitely in an uptrend. Then backtest them on a bunch of stocks. Use the same trend indicator formula for entries & exits. To exit just reverse the entry - don't worry about fine-tuning your exits at this stage. If the trend indicator returns a reasonable amount of money, then you're in business.

More to follow.

Skate.


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## Skate (6 March 2021)

*Next, develop your exit*
The exit strategy needs a little more work than the entry strategy - so don't look for the entry that makes the most money because the drawdowns can be a killer.

*Pick exit strategies that you are comfortable with*
Look at the exits on a chart. If you feel good about what you are seeing, backtest them. If the backtest gives you reasonable results even if they're less profitable than some other set of conditions - you're in business.

More to follow.

Skate.


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## Skate (6 March 2021)

*Keeping it simple & the performance will follow*
Only test your strategy when the market is in an uptrend to start with & see how the system performs. If it does pretty well during the uptrends, then you've got your uptrend system.

*Reverse the process for downtrends*
Most decent trend indicators identify downtrends just a good as they do up trends. If you backtest test your uptrend system when the markets are in a downtrend, guess what - it will perform poorly & I'll let you know shortly why.

More to follow.

Skate.


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## Skate (6 March 2021)

*Now, why would you trade it during a downtrend?*
Well, here's a clue - "don't" unless you want to lose your money. 

*Index Filters*
I'm suggesting that you use an Index Filter (when first starting out) or until you sort this conundrum out. An "Index Filter" can stifle a good strategy but until then - stay on the side of caution. The more you trade - the more you will understand the markets. I'm first to admit, getting your head around "how trading really works" - is really hard.

*Here I go again - "Entries mean little"*
You can use almost anything to enter a position when the markets are in an uptrend. During trending markets, money is easily made. In the sideways markets, very few strategies make money. Trading in a downtrend is even harder. So, "only hold positions in an uptrend" it's a no-brainer. If you trade a good strategy in a downtrend, it's going to look very, very bad, & it should. So don't struggle trying to "fix something that's most likely not broken".

More to follow.

Skate.


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## Skate (6 March 2021)

*There is no "one best" strategy*
There are strategies that will allow you to trade with enough success to make money. Most trading books talk about somebody's personal trading system or a system that beginners can't seem to get enough of. You never hear that their system only works well when the market is in an uptrend - that's common with all strategies that perform. Develop your own simple methods. It will serve you much, much better.

I've said it before & I'll say it again 
Watching "YouTube" videos is better than reading a book. Why? Reading requires deep concentration & being in the moment. Your mind wanders constantly without realising it. 

*6-minute videos*
For those who want to understand the basics of systematic trading, watch the next series of videos they will serve you well. There are 47 in the series but you only need to watch the handful I'm recommending. The videos can explain it more succinctly - allowing me to stop rambling.

More to follow.

Skate.


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## Skate (6 March 2021)

*The internet is chock full of those pushing their own barrow*
Forget the marketing, pay attention to "information". I've selected these educational videos as it's as basic as it gets as far as system trading goes. Understand the principle behind the method & you'll be well-grounded.

*There is something for everyone*
Even seasoned traders who are currently struggling with their trading trying to "figure out" why their systems are letting them down - this series of videos is for them as it will help to explain why. If I was in this group of traders, I'd to the first to try & understand why trading is not performing in line with backtest results.

*Repeating what we already know*
It takes time for a poster to pass on information they already know in the hope it resonates with a few. All I'm asking in return is to watch a series of short videos attached.

*Please watch the videos in order - it won't take long *

1.1) Algo Trading for a Living | Making it all worthwhile and reaching your full potential. - YouTube

1.2) Algo Trading for a Living | Are you over-leveraging, and risking everything? - YouTube

1.3) Algo Trading for a Living | How to increase the profit-making potential of your capital - YouTube

2.1) Fine-Tuning Trading Systems by Analyzing Trade Open and Close Data | Algo Trading for a Living - YouTube

2.2) Trade Entry and Exit Timing Optimization for Algorithmic Traders | Algo Trading for a Living - YouTube

3.1) How to Improve your Algo Trading | 14 Hints & Tips - YouTube

3.2) Algo Trading | Making your hard work worthwhile | 14 Hints & Tips to take you to the next level - YouTube

3.3) Your Trading Strategy Premise and Edge | 14 Essential Algo Trading Hints and Tips - YouTube

4.1) Fourteen Rapid-Fire Tips for Algo Traders (Tips 8-14) - YouTube

4.2) How to reach your full potential as an Algorithmic Trader | 14 Algo Trading Hints and Tips - YouTube

4.3) Why your trading system can lose its edge | 14 Algo Trading Hints and Tips - YouTube

Skate.


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## frugal.rock (8 March 2021)

frugal.rock said:


> Aiming for the "1%" email..(again).



It's all doom and gloom. 
1% email received for the last week, woohoo. (Monetary figures edited out.)
It's just a percentages & numbers game, is the way i look at it. I find its easier to accept losses in your stride this way.






Skate said:


> *You may elect to stop trading in sideways markets*
> A lot of traders keep their positions open in sideways markets where I don't. Traders fail to realise you don't make much money going sideways. In a sideways market, if you violate the rules of (a) good money management or (b) a sound "stalestop" exit strategy, you are going to pay, & pay dearly. This is when an exit strategy is everything when trading.




I had a little think about this, so out loud...

*So, what entails a sideways or crabby market?*

Lets use the example of;
say 50% of stocks are going up, and 50% of stocks are going down, thus balancing out to a flatline.
(For this example let's ignore market capitalisation or MC.) 

In reality, it may be very different when taking into account MC, but I would hazard a guess statistically, (law of averages/ big numbers), that the 50:50 scenario could be close to reality.
Not necessarily so and in any case, shouldn't be assumed so, however without data to prove it either way, lets go with 50:50.
This means in a sideways market, in theory, out of a random selection of 10 stocks, 5 may go up, 5 may go down.

*So, what entails a uptrend or bull market?*

Same as above except the ratio will be higher as the trend is up.
Example; 70% of stocks are going up, 30% are going down.
(For this example, again let's ignore market capitalisation or MC.) 
This means in a uptrend market, in theory, out of a random selection of 10 stocks, 7 may go up, 3 may go down.

*A bear trend?*

Lets just reverse above;
Example; 30% of stocks are going up, 70% are going down.
This means in a downtrend market, in theory, out of a random selection of 10 stocks, 3 may go up, 7 may go down.

*What is this; Amateur Hour?*
Yep it is... the thread is in the beginners area after all, and I ain't an expert (a drip under low pressure..)

*Back to Market Capitalisation*

Lets bring market capitalisation into the mix, just in theory only, and apply it to the above examples.

In thinking about the value of any one particular company in comparison to another particular company, it has the potential to sway these basic statistics dramatically.
Example;
*MQG* with a MC of $ 52,175,000,000  (lets call it $50 billion) and
*BOQ*  with a MC of $   4,954,000,000 ($5 billion rounded up ?)

So using these two companies as example,
whatever effect *BOQ* has on moving the indicie or sector index it comes under, (being the XFJ or S&P/ASX 200 Financials), *the effect that MQG will have will be 10 x greater than that of BOQ.*

So we see, apples aren't apples.
To say the market is going sideways, doesn't actually mean that out of a random selection of 10 stocks, 5 may go up, 5 may go down.

In reality, it may be closer to either of the bull or bear trends figures in relation to actual *STOCK *figures going up or down.
Without hard data analysis to prove actual numbers, its just guesswork.

That leads me to thinking of individual indicies, which could be thought of "one bigarse stock" in comparison to the All Ordinaries, being the final indicie or aggregrate of the whole market.
So again, if a few of these "bigarse stocks" (ie; individual sectors) have a bigger overall MC (or weight), they have the power to sway the All Ordinaries (the market aggregate) potentially in a different direction to the theoretical majority of stock directions.

So the question I pose, is a bull trend really a bull trend, is sideways really sideways, is a down trend really a down trend when the above is taken into consideration?

By monetary valuations or MC they are, no doubts about it. (I guess "follow the money" can be taken at either macro or micro levels.)
By grass roots individual stocks movements, without statistical data to prove it, the trends are hidden by the noise of the bigger end of town.
I believe this may provide quite a few niche trade areas in a few sectors at any one particular time, regardless of the overlying and in your face market trends and sentiment.
Further, I believe in these niche areas/ sectors, rotation is rife.

I should stop thinking out loud now, apart from thinking;
does anyone know if (or how) Amibroker can extract statistics such as mentioned above to determine what exactly is going on with overall individual sector constituents (stocks) directions?
Cheers. 🤪


----------



## qldfrog (8 March 2021)

frugal.rock said:


> It's all doom and gloom.
> 1% email received for the last week, woohoo. (Monetary figures edited out.)
> It's just a percentages & numbers game, is the way i look at it. I find its easier to accept losses in your stride this way.
> 
> ...



Indexes are used for different purpose, i used xnt for example to compare the results of my systems.that way, i know if i am better off working these system or just put money in an etf asx200.
Then index used as an indicator: well you are right in Australia especially, the banks rio bhp woolies and coles are an enormous part of the ASX so having the ASX down does not mean you are not part of boom8ng bull market in a sector or small caps.
I will just say that when crashes occur, it is very hard to find anything going up..
But tech did boom during the so called covid crash etc.
Ideally, you should use sector index but then what is the lunk between technology 1 and Google...same sector..not much in common.
You have to use crude tools.
What is this 1%?
If i understand well a comparison between your portfolio and the portfolio of a very narrow tribe using that broker so very specific type of investors? Think about it? Why do you even care? Ego polishing maybe..probably why this broker does that but you know nothing of the comparison sample.i would unsubscribe from this ASAP if i were you.can not be beneficial in any way imho


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## qldfrog (8 March 2021)

qldfrog said:


> Indexes are used for different purpose, i used xnt for example to compare the results of my systems.that way, i know if i am better off working these system or just put money in an etf asx200.
> Then index used as an indicator: well you are right in Australia especially, the banks rio bhp woolies and coles are an enormous part of the ASX so having the ASX down does not mean you are not part of boom8ng bull market in a sector or small caps.
> I will just say that when crashes occur, it is very hard to find anything going up..
> But tech did boom during the so called covid crash etc.
> ...



Sorry for the typos above and missing s etc, smartphone typing has its limit


----------



## Joe90 (10 March 2021)

frugal.rock said:


> does anyone know if (or how) Amibroker can extract statistics such as mentioned above to determine what exactly is going on with overall individual sector constituents (stocks) directions?



You can create your own indexes using the addtocomposite function in Amibroker. 
See example 1 here - https://www.amibroker.com/guide/a_addtocomposite.html
Some more here - https://backtestwizard.com/addtocomposite-amibroker/


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## silent1a (10 March 2021)

frugal.rock said:


> does anyone know if (or how) Amibroker can extract statistics such as mentioned above to determine what exactly is going on with overall individual sector constituents (stocks) directions?



Here's another useful tool. Look through the rest of the thread for usage examples.




__





						AmiBroker Tips and Tricks
					

Sharing a couple of things that I learnt today and should be part of your backup, as I have learnt the hard way ( as usual )  - When creating your own snippets of code Amibroker creates a new file C:\Program Files\AmiBroker\UserSnippets.xml  - When creating notes for each stock Amibroker stores...




					www.aussiestockforums.com
				





Trav. said:


> *Norgate Data - Determining the Sector/Industry Index symbol for the current security*
> 
> I had been using some code to look up the relevant index and thought that there must be a better way to do this.
> 
> ...


----------



## ducati916 (13 March 2021)

Skate said:


> *Now, why would you trade it during a downtrend?*
> Well, here's a clue - "don't" unless you want to lose your money.
> 
> *Index Filters*
> ...





Mr Skate @Skate has designed systems that do not seemingly rely on entries. There are alternative threads that emphasise entries see @peter2 and @tech/a threads.

I also am an 'entries' man.

Let us look at various entries into TSLA, but it is applicable to any stock.

So Mr Skate runs (predominantly) weekly systems, so I have focussed on the weekly timeframe. Obviously I have emphasised the point that I wish to make. Also, all the analysis is hindsight, which makes everyone look like a genius.  

An entry at the box is obviously less optimal than an entry at the circle.

This leads directly into a second point: stop losses. SL are a risk management tool. There was some discussion re. SL's on tech/a's thread, that unfortunately was cut short. The point however is, there is a natural market support area that logically supports a SL, which is the entry at the circle. This SL is information as opposed to noise.

Where exactly, would you place a SL on an entry at the square? There is no logical market based point at which a SL conveys information rather than noise. Any SL at the square is simply noise. The SL will be almost certainly be calculated on the trader's risk tolerance. This is nonsense. A trade is not entered on risk tolerance. A trade is entered on a probability of success.

As markets are fractal, a SL can be placed 'logically' in lower timeframes. As a reference, higher timeframes should be monitored as the noise/information ratio rises in lower timeframes.

Some further thoughts on SL: they are a tool which are (very) far from being infallible. To be infallible, price would need to follow a stochastic process. Price does not do so: (the closest markets too this are currency markets)  markets close each day, at the weekend and most importantly, even intra-day when trading is suspended. This fact invalidates a SL as an infallible risk management tool. I gave up using SL as risk management tool 15 odd years ago.

Trailing SL have a use, but they also have all the above issues. The primary reason for a trailing stop is that your trade has met the expectation of your initial analysis in placing the trade and you are trying to maximise your profit through serendipity. That is a valid use of a trailing SL. A trailing SL and a market/instrument exit are however not the same thing. I won't belabour the point, but it is something that each trader will need to come to terms with based on their individual strategy.




Mr Skate suggested monitoring the market. An excellent idea. Easily done.




Further filters can be considered: the stock as a ratio to the market or outperformance, which indicates a strong(er)/weak(er) trend as compared to the market.

This type of analysis is an alternative method for gauging the strength of the trend of the stock to the market. It allows you to trade stronger counter-trend stocks in weak (sideways) markets and even (carefully) Bear markets.




Which brings us back to entries. 

The advantage of a timely entry is that it gives us timely (informational) exits. Now exits are where you either book your profit or loss. A better entry is a better exit.

In summary: entries and exits are opposite sides of the same coin: the coin being each individual trade. They are synergistic. An easy way to increase your edge and profitability.

jog on
duc


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## Beaches (13 March 2021)

ducati916 said:


> A better entry is a better exit.
> 
> In summary: entries and exits are opposite sides of the same coin: the coin being each individual trade. They are synergistic. An easy way to increase your edge and profitability.
> 
> ...




Most definitely agree.
Good entries improve the trade potential.


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## qldfrog (13 March 2021)

I am a novice and not an especially successful one, but i start with basic entry selection then refine exits, often common ideas between most strategies,then go back to entries..which i find harder
There are gems in Mr Ducati post above.
Many thanks
Ps i find it bothering to have a profitable strategy with around 30pc win rate , and think about all the losses which could be reduced..so look at entries then


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## Skate (13 March 2021)

ducati916 said:


> Mr Skate @Skate has designed systems that *do not seemingly rely on entries*. There are alternative threads that emphasise entries see @peter2 and @tech/a threads. *I also am an 'entries' man.*






Skate said:


> *I've elevated the "entry" to "significant"*
> Most traders concentrate on the entry believing if the "right" stock is bought at the "right" time all will work out in the end. In my experience, the correct timing of the exit is where the money is ultimately made.






Beaches said:


> Good entries improve the trade potential.






qldfrog said:


> I am a novice and not an especially successful one, but i start with basic entry selection then refine exits




*My views in the 'Dump it here' thread are just that*
Whether you agree with my point of view or whether I'm right or wrong isn't important - all members have the right to freely express a view or an alternative view, the essence of this thread. When @ducati916 posts I take notice, he is one member whose views are always "on the money". It's refreshing when members take the time & effort to post alternative points of view.

*The entry is important & significant *
Trading is all about timing the entry as "buying" at the right time is important to the success of any trading system that @Beaches alluded to. I should also correct the record by saying that all my systems rely on timing the entries which is "significant" however, with mechanical trading, timing the "exit" is still the hardest part of coding a half-decent strategy.

*Alternative Views*
Over the last two years, I've raised the question around the "entry versus the exit" scenario & which is considered more important when it comes to the "profitability" of any trading plan. I still hold the position that the "exit" is where the money is made. I now have to concede the entry is also significant - otherwise, each strategy performance would mirror each other. 

*Most people tend to remember the last thing that they read*
So, in the spirit of reinforcing my position, I'll make a series of posts slanting the discussion towards why "timing the exit" trumps "timing the entry".

Skate.


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## Skate (13 March 2021)

*To keep it simple - as traders want to know*
(1) what to buy
(2) when to buy &
(3) when to hop off the ride.

*All three elements are important*
If you can nail these three you are halfway there in developing a handy strategy, however, the profitability of a strategy depends on doing a few other things precisely.

Skate.


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## Skate (13 March 2021)

*Trend following is a system proven*
I’m dumbfounded that there are so many ways to bet on the share market but over a long period I've found it’s much easier to go with the trend rather than fighting against it. @ducati916 mentioned @peter2 & his style of trading. (posted in his "p2-asx-weekly-portfolio").

*I'm just saying *@peter2 *style depends on experience & skill *
The style I trade is a little bit different & a lot less complex. Both threads ("p2-asx-weekly-portfolio" & the "Dump it here" thread) aim to educate in their own unique way by explaining how to capture price fluctuations - exploiting profitable repeatable patterns.

*Entries are a dime a dozen*
There is always robust banter when I raise the benefits of the "exit versus the entry". I consider the "exit" is "fractionally" more important than the "entry" when it comes to profitability as "exits" is ultimately where the money is made.

*Getting out is always emotional*
Timing the exit is extremely difficult whereas getting into a trend is much easier as trends are happening all the time. Let's not split hairs, trends are trends & there are so many different types. There are even trends within a trend.

Skate.


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## Skate (13 March 2021)

*When others disagree*
The "Dump it here" thread gives a perfect platform for others to express an alternative view rather than debating that one is better than the other. The "Dump it here" thread is for the "exchange of ideas, not a contest of ideas".

*Traders make money in the markets by exploiting changes in prices*
Most traders put all their effort into buying whereas I support the idea that successful traders put most of their effort into selling. While I concede stock selection & timing the entry is important - but - when the trade is closed is far more important to the "profitability of the strategy". All I'm saying "selling is where we (ultimately) make our money" & it’s "much more important" than the dime-a-dozen buy-in strategy.

*What's trading all about*
As traders, we buy a position in the hope that sometime in the future, we will be able to offload our position to someone at a higher price than we brought it.

*I'm just saying *
"Timing the offload is considerably more difficult than buying into a position"

Skate.


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## Skate (13 March 2021)

*In my experience, the correct timing of the exit is where the money is ultimately made *
Cutting losing trades early & holding better positions is the secret of being a profitable trader. When a trade goes against you - how you handle the position will eventually decide how successful you will be as a trader. IMHO - the timing of your exit has to be the most important part of your trading strategy. 

*Making money trading*
How do we make money trading? - to me, it's the wrong question. To me, I'm more concerned with answering the question - How do you prevent losing your money when trading? 

*Explanations of how not to lose your trading funds*
@peter2 explain this in detail, whereas @ducati916 takes a different & unique approach both methods require skill & experience. Experience comes from the time in the markets. 

*Time in the markets*
The lack of time is the missing ingredient when it comes to beginners just starting out on their trading journey. Trying to understand something that's complicated "that seems" to be simple is the second part of the equation.

Skate.


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## Skate (13 March 2021)

*Been there - done that*
New traders spend a lot of time researching, reading articles, books & searching the forums looking for the best trade entry, with little or no effort in structuring an exit plan or a trading plan in general. Finding entry conditions as I said previously is a dime-a-dozen exercise. Whether the entry is based on trend breakouts or pullbacks within a trend or trend continuations it doesn't matter. There are multitudes of reasons to enter a trade, knowing when to get out is the "most" important. 

*Entries & Exits*
Talking about just two parts of the strategy without even raising the idea of money management, position sizing or risk management is not doing justice to a system. 

*Confidence*
A trading strategy that times the "entry & exit" with good money management, position sizing & risk management than you have a strategy you can trade within your trading plan. 

*Time & Skill*
Trading "mechanically" solves both issues that beginners face. If you have a good strategy, (in your opinion) you'll trade it with confidence the main ingredient in this game.  

Skate.


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## Skate (13 March 2021)

*The benefits of trading a mechanical system are "consistency of signals"*
If you can trust your signals, it gives you the confidence to keep pulling the trigger & no intervention (skill) is required.

*I only want to buy into a confirmed trend *
All traders want to get on the move quickly, any breakout will do that displays price & volume (that's a given) but where I differ is in my approach to getting off the ride. Traders can have the sharpest entry but if they stay on the ride too long all their good work is for nought. 

*From my experience *
Traders experience difficulties deciding when the ride is over. I'm not concerned about grabbing profits - I'm concentrating on timing the exit with consistency & if I can achieve this the money will flow. Different strategies require different exits, it's about dancing to the music being played. Not one exit works for every strategy.

*We as humans are really good at one thing *
"Selecting only the evidence that supports what we want to believe"

Enough said..

Skate.


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## Newt (13 March 2021)

Skate said:


> *We as humans are really good at one thing *
> "Selecting only the evidence that supports what we want to believe"




I agree  

(wait a moment....!????  )


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## Skate (14 March 2021)

*Keeping the thread active*
I've been a bit slack lately & stopped posting new ideas. Without stimulating new ideas, we tend to close off our minds to all things market-related. I have recently been reminded that a loss of inquisitiveness stifles the learning progress.



peter2 said:


> _*Shooting the breeze:*_  The idea is to start a portfolio of large caps. The spec portfolio has done very well but while that was progressing nicely I've missed out on some very good moves in the large cap stocks. Looking at the charts of ANZ (other banks), BHP/RIO and FMG, I see opportunity missed.




*Been there & done that (back on the 27th March 2020)*
Investing can sometimes be mentally easier to handle than trading & IMO, the opportunity Peter referred to has passed. Fear & uncertainty at times can lead to poor judgment about timing. There is a suite of strategies that can highlight mispriced positions.






						Dump it Here
					

Hello Skate, None of what I use is based on Ehlers work or indicators. This is something that I have been working on for 15 years originally based on the work of Hurst and James Maggio and has undergone a lot of trial and error. As mentioned to  a reply in another thread about repainting. One...




					www.aussiestockforums.com
				






Skate said:


> *Investing rather than trading*
> @Smurf1976 without even realising has given @bfhoon some really sound investing advice to make a profit over a 3-5 year period, opportunities like these don't come around all that often. @bfhoon has already stated: _"Eventually I would really like to have a fair bit of money tied up in the ASX that could potentially earn me at least 50 to 60K after tax via dividend payments at least $800,000 invested for that kind of return" _I've recently invested $800k equally in ANZ, BHP, CBA & MQG - @Smurf1976 calls them "beaten up large caps" which is a good analogy. If those 4 positions can reclaim their former glory over the next 2 years with dividends along the way they have the potential to represent a good risk/reward investment that will not only meet @bfhoon's criteria but hopefully exceed it - only time will tell.




*Going over some old posts*
Peter has dropped so many gems over time & sometimes "What's old is new again". The post below is from 2016 & the logic is sound - but "with a twist", it has the potential to be something fresh & new.



peter2 said:


> _Entry_: We won't buy when price is going down. We wait for price to go up and close above an entry trigger. The entry trigger is based on a 2 or 3 bar count back level off the higher swing low. This trigger level is similar to a 1.5(2) x ATR(10) increase off the higher swing low. There's a few possibilities here. We could use a 2bar count back line (CBL) on the daily chart (popularised by D Guppy) OR we could use a 123Low setup using the 1hr chart.




*That's given me an idea*
I'm now shooting the breeze "using Peter's catchphrase". What if we took Guppy's idea that Peter posted about & used it in another way? Let's say, using a lookback period of 1 month (4 weeks) for the entry? Clean & crisp - with recent data to work with.

*It seems simple*
The premise of the twist - If the current bar is between the High & low of the previous 4th bar (not counting the current bar) - the position is considered to be stable. Next, if that bar is displaying early signs of momentum - it confirms the buy setup. Filters & parameters will take care of the rest.

Skate.


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## Skate (14 March 2021)

*Inspiration & new ideas*
Moreover, I've made a series of posts recently about how easy it is to get into a trend. Trends are happening all the time no matter what the market is doing. I've also explained "Index Filter" keeps you on the right side of the markets. I'll use an Index Filter as the basis of my initial stop loss only, throwing caution to the wind.

*The new trading idea has limitations*
Confirmation of the signals set a high bar at times but nether-the-less, signals do come along "but not with abundant regularity". 

*The "Sphere Strategy"*
I would like to say it a work in progress but in reality "ideas" keep rotating as my thinking process is most likely different from most. I could paper trade this idea (in private) but what would be the fun of that.  

*I'll post the weekly paper trading live (so there is no fudging of results)*
With additional thread content, prior signals & charts will give a select group something to follow. All ideas start somewhere & with paper trading, I have no idea if the "Sphere Strategy" will be ultimately a tradeable strategy. 

*The portfolio*
For ease of following along, I will use a standard $100k (20 position portfolio)

Skate.


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## Skate (14 March 2021)

Skate.


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## Skate (14 March 2021)

Skate said:


> Fear & uncertainty at times can lead to poor judgment about timing. *There is a* suite of *strategies that can highlight mispriced positions*.




*Let's talk about opportunities*
Value investing is a timing-related issue. What looks good one week can be a "terrible buy" the next. Remembering, this statement works both ways. 



kahuna1 said:


> I find ... his shared CV19 views alarming on every level. Actions, views on future and understanding of PAST events.




@kahuna1 made that statement on the 3rd April 2020 & fair enough the statement was valid then.



peter2 said:


> @kahuna1 got this one right. *MFG* has significantly underperformed over the past six months.
> Something has seriously gone wrong with this fund manager.




*No arguments here*
Peter's comments "are true" but that doesn't mean it's not a good buy (at the moment) if you are a value investor. 

*I'll put it on record*
Recently, I've had two bites at (MFG) the first for 7,868 shares & the other for 5,277 shares. Why? because I'm a systems trader & my Bee Strategy has it as a roaring buy.



Dona Ferentes said:


> Performance is the measure of MFG success, and maybe attracting too much money, and the *fees that flow*, has trapped them.




*About Company Performance*
I have to agree with @Dona Ferentes at the company level - but - I would like to take the opportunity to add my twist. 

*About Strategy Performance*
Strategy performance is measured in the price differential between the buy-in price & the selling price.

Skate.


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## Skate (14 March 2021)

*The other side of the coin - MFG is currently a buy*
What I hope to achieve is to give a sense that (MFG) at this time is a worthy buy (well I think so) only time will tell. When you are reading my reasoning all I say is be objective, rather than jumping to conclusions. First off, I'll have to admit Magellan Financial Group share price is down after the fund manager gave its monthly Fund Under Management (FUM) update for February 2021.

*Strengthening my position - an article by - Jaz Harrison*
Jaz is a keen investor who loves to thoroughly poke holes in an investment idea before it has a chance of making it into her portfolio. Jaz invests for the long-term and doesn't sweat the small stuff. She strongly believes that empowering people with knowledge is the best way for them to take charge of their finances, which is exactly the approach she takes with her own money and investments.

*Jaz goes on to say - I think the Magellan share price is a buy*
The Magellan share price has suffered in the wake of this inflation/interest rate sell-off. It has dropped over 30% since 20 November 2020. Some of Magellan’s investments haven’t grown recently, but this is a very "short-term horizon" in investment terms.

*However, there are also a number of attractive features about Magellan*
Magellan continues to see Funds Under Management (FUM) inflows. Magellan’s new investments – Guzman y Gomez, Barrenjoey, and FinClear – are all doing well. If you read the Australian Financial Review, you might have seen that Barrenjoey seems to pinch a quality individual from other local investment banks at least once a week.

*Another reason to think that Magellan can be a solid performer*
Magellan has a high dividend payout ratio. Fund managers don’t need to keep much capital to grow, so Magellan can pay large dividends to investors – this adds to the total shareholder return, without impacting growth much. Magellan currently has a trailing partially franked dividend yield of 5.1%. Using earnings estimates on Commsec, it’s valued at under 14 times the projected earnings for the 2023 financial year. So, that positive.

*So, why update you on Magellan?*
There was chatter on the Magellan thread "that's" falls outside my current thinking. In my opinion "Magellan" has positioned itself for long-term gains. I'm counting on Magellan recovering to its previous glory & if it does "capital gains" will be jumping off the screen. (that my end Game)

Skate.


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## Skate (14 March 2021)

*The benefits of trading a mechanical system are "consistency of signals"*
If you can trust your signals, it gives you the confidence to keep pulling the trigger & no intervention (skill) is required.



peter2 said:


> The idea is to start a portfolio of large caps. The spec portfolio has done very well but while that was progressing nicely *I've missed out on some very good moves in the large cap stocks*. Looking a the charts of ANZ (other banks), BHP/RIO and FMG, I see opportunity missed.




peter2 said: I've missed out on some very good moves in the large-cap stocks, I see opportunity missed.

*Final word*
I'm just saying most opportunities have been lost but (MFG) is still ripe for the picking. Investing for the long term can be very rewarding & mentally easier to handle than trading.

*How will (MFG) pan out?*
Only time will tell & time is on my side.

Skate.


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## peter2 (14 March 2021)

Skate said:


> The benefits of trading a mechanical system are "consistency of signals"




If I may be so bold as to modify this statement to; The benefits of trading a mechanical system are "consistency of exits". 
After all, isn't it the exits that make the money.


----------



## Wilham (15 March 2021)

Hi all,

Thanks everyone for your contributions to this thread, so much interesting information and discussion!

@Skate, I hope this post fits within the dump it here ethos.

I've been back testing a version of a BBO from unholy grails (nothing new here haha) and have made some modifications to it to lower the draw downs I feel quite significantly. I was hoping to get some pointers and/or constructive criticism of the backrest report or things I should consider to determine if this strategy is robust? I appreciate there is a limit to information in the backrest report.

*At a high level the system*:
- buys a Bollinger bands break out
- exits when the lower band is broken or exits with a market filter
- uses a trailing stop that also changes tightens with a market filter

*Back test details*:
Start: 100k
Positions: 2% of equity, haven't limited max open positions
Commissions: 0.25% to allow for some slippage
Universe: norgate platinum ~1992 to present all ords including delisted

*Current thoughts:*
1. Trade volume is high, ~1 per day
2. Winners don't run, I think this is linked to the low DD characteristics but investigating it
3. It didn't open new trades Feb-Jul 2020 which I'll like to try improve.

I've gained so much from this forum over the years of lurking, hopefully this can be useful to others as well.


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## Skate (15 March 2021)

Wilham said:


> @Skate, I hope this post fits within the dump it here ethos.




@Wilham thank you for posting. This is exactly the right thread for you & your post.

*Looking at the backtest report, thinking "What if" or "if only"*
At face value, the figures look great in your backtest report but the story it tells is minimal. Forget about being a multi-millionaire as per the report (that wouldn't have happened) but concentrate on using the report to find improvements hidden within the parameters that you have used. Using a Bollinger Band Breakout Strategy profitably is dependent on the deviations of both bands, the lookback period within the periodicity that you elect to use.  

*There are a few suggestions *
1. I would prefer to see a backtest for the calendar year for 2011- that is my first benchmark with system development.
2. I would also like to look at the Monte Carlo report & concentrate on the Annual Return report. (now that tells a powerful story)

*Bollinger Band "Background" for others*
Bollinger Bands a technical indicator developed by John Bollinger. The indicator forms a channel around the price movement. The channels are based on standard deviations & a moving average. Bollinger bands can help you establish a trend's direction, spot potential reversals & importantly monitor volatility. All of this can help you make better trading decisions if you follow a few simple guidelines.

*The Basics*
Bollinger bands have three lines, upper, middle & lower. The middle line is a moving average of prices. There is "no magic moving average number", so it's important that the moving average (the middle line) aligns with the techniques & strategy being traded. The upper and lower bands are drawn on either side of the moving average. The distance between the upper and lower band is determined by standard deviations. (these parameters & "others" are critical to the profitability of the strategy)

Skate.


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## Skate (15 March 2021)

@Wilham I've made multiple posts on the Bollinger Band Breakout Strategy & recently uploaded some Amibroker code.

*The Bollinger Bands theory has merit*
(a) The bands track market volatility, prices are relatively high when prices are at the upper band and relatively low when they are at the lower band.
(b) Powerful signals that usually follow Bollinger band squeezes make Bollinger Bands an important tool for all traders
(c) Bollinger Bands indicator has been a technical tool that continues to be of immense value to many traders.

*Urban's Daily Bollinger Band Daily Breakout Strategy*
When I read comments from Urban Jaekle's book (Trading Systems 2nd Edition) I was doing cartwheels with excitement & couldn't wait to test Urban's Bollinger Bands Strategy using his methodology. Urban's Daily Bollinger Band Breakout Strategy is rather disappointing. It should be noted that the Bollinger band code supplied on his website is basic without being a trading strategy. In my opinion Urban's Daily Bollinger Band Breakout Strategy shouldn't be traded - not even with "counterfeit money"

*Bollinger Bands Weekly Breakout Strategy*
I'll upload "Skate's version" of Urban's Bollinger Bands Weekly Strategy so you can do a similar backtest. The strategy uploaded is a rough & dirty interpretation of Urban's methodology & not guaranteed to be error-free. (I've commented on the code for readability). The "BBO" code has been extracted from Urban Jaekle's new book that has been disclosed in full on his website.

*Uploading & comparing the results *
Taking the time to do a backtest & upload the results of "Skate's modified" interpretation of Urban's BBO code & comparing the results should be an interesting exercise for others to view.

*Would I trade the uploaded Strategy? *
No way !!

*All I'm saying*
Bollinger Bands is a trading idea & it pays to understand "oils ain't oils"

Skate.


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## Wilham (15 March 2021)

Skate said:


> @Wilham I've made multiple posts on the Bollinger Band Breakout Strategy & recently uploaded some Amibroker code.
> 
> *The Bollinger Bands theory has merit*
> (a) The bands track market volatility, prices are relatively high when prices are at the upper band and relatively low when they are at the lower band.
> ...



Cheers skate, I'll run some additional testing including your code and try provide a comparison for those interested in future. 

Personally I'm not interested in total profit etc. After slippage and mostly taxes it's pretty irrelevant imo. 

I'm not too familiar with Monte Carlo in amibroker yet, will do some further reading. Some kind of walk forward testing would be good too, guessing returns/DD will be heavily influenced by year of commencement. 

Wilham


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## qldfrog (15 March 2021)

Wilham said:


> Cheers skate, I'll run some additional testing including your code and try provide a comparison for those interested in future.
> 
> Personally I'm not interested in total profit etc. After slippage and mostly taxes it's pretty irrelevant imo.
> 
> ...



If I may
instead of trying a period 1992 to present, work on a recent year;
In 1992, was there many qant around?, fast trading? were Central bank covering your asses?
what I mean is you try to compare the performance of a ferrari in 2020 against the speed of a roman charriot in a mud track in 10BC..
totally irrelevant IMHO;
I would dare saying testing anything before 2006 and expecting a relevance in 2021 is a folly;
Anyway:
then try to run and compare with 2011 as per Monsieur Skate; the 2019 crash?
how does your system behave and  handle the crash then the recovery ?
what about the yoyo period we have had since nov 2020 to now basically?
We are REALLY lucky to have many types of markets within the last 2 y..use these to your advantage
PS I noticed you have a 42% exposure during some of the longest bull market in history,
if not during that given period, when would your system get in ? A bad sign IMHO
also: std error: 1986636?????
what does the MC show?


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## Wilham (16 March 2021)

Skate said:


> @Wilham I've made multiple posts on the Bollinger Band Breakout Strategy & recently uploaded some Amibroker code.
> 
> *The Bollinger Bands theory has merit*
> (a) The bands track market volatility, prices are relatively high when prices are at the upper band and relatively low when they are at the lower band.
> ...



Hi Skate, thanks for providing the code. I've done some comparison tests as you can see below. Only change I made to your AFL was to add a "gonetogod" sell exit when delisted as I'm using current and past XAO consistuents. 

*1992 to present



2008 only



2011 only



2020 to present

*

I also did annual runs for each year from 1992 to 2020 as well for my system only:



I'm running a monte carlo analysis currently so will aim to upload some details on that tomorrow.


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## Wilham (16 March 2021)

qldfrog said:


> If I may
> instead of trying a period 1992 to present, work on a recent year;
> In 1992, was there many qant around?, fast trading? were Central bank covering your asses?
> what I mean is you try to compare the performance of a ferrari in 2020 against the speed of a roman charriot in a mud track in 10BC..
> ...



Hi qldfrog - thanks for taking the time to reply. 

My thought process was that if I could design a system that performed well over a longer period of time in totality, as well as individual years.. or periods eg this year. I would be better than targeting solely recent data as it would have exposure to more market types. I do agree with what you are saying, but would be interested on your thoughts? 

I ran 2006-2020 and 2019-2020 out of interest as well. As you pointed out with my exposure my parameters pull up my stops and elimates new entries when the market filter is heading 'bearish' quickly. There are multiple flatline periods below where this is evident. This is still a WIP system so that is something I will look at investigating but I'm not concerned currently if I can generate a 'decent' return given my low exposure (maybe naively?). 

This system doesn't utilise scaling either, so I've been toying with how to add 1-2 scale-ins with the hope of doubling down on winning trades.. however I doubt it will be so easy  





Happy trading


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## Wilham (16 March 2021)

I'm by no means experienced with MC simulations, I ran 1000 instances using positionscore from Harro26 here. 
PS=Optimize("Postion Score",1,1,1000,1);
PositionScore = Random()*PS;

Will add my thoughts later today when I have time.


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## othmana86 (16 March 2021)

Wilham said:


> I'm by no means experienced with MC simulations, I ran 1000 instances using positionscore from Harro26 here.
> PS=Optimize("Postion Score",1,1,1000,1);
> PositionScore = Random()*PS;
> 
> ...



Hey man
Are you using position score as part of your code if you are or planning to then that isn't the best method.
i used a different method which was posted by @LoneWolf which works really well. Have it as part of your buy method. Just be very careful, make sure you take it out of your production code. made the mistake many times and had a few WTF is going on moments. 

step = Optimize( "step", 1, 1, 1000, 1 );
Buy = cond1 AND Random() >= 0.20

I found the best way to differentiate between strategies is to plot CAR v MDD as below. CAR is X and MDD is Y. Green strategy 1 blue strategy 2.


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## Wilham (16 March 2021)

othmana86 said:


> Hey man
> Are you using position score as part of your code if you are or planning to then that isn't the best method.
> i used a different method which was posted by @LoneWolf which works really well. Have it as part of your buy method. Just be very careful, make sure you take it out of your production code. made the mistake many times and had a few WTF is going on moments.
> 
> ...



Thanks for the tip, I'll have a look using your version. Yes, I do use a simple position score to preference lower priced stocks (forget who suggested this if I'm honest). I found this had a noticeable but minor effect on car but just removed it for simplicity with the MC Sim.


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## Skate (16 March 2021)

Skate said:


> *Let's talk about opportunities*
> Value investing is a timing-related issue. What looks good one week can be a "terrible buy" the next. Remembering, this statement works both ways.




*Let's talk about timing*
There is a great article to read (hyperlinked below) about the luck of timing when entering the markets. The article is about a novice investor who entered the Aussie market after the COVID plunge. Whether you are a trader or investor "timing" can be a matter of luck.



Skate said:


> *There is never a good time to start trading *
> Luck & timing plays a significant role in the performance of any portfolio




*Sue Park, a novice investor entered the markets when others were fearful*
Sue decided it was a great time to buy shares for the first time ever when panicked investors were hitting the "sell" button (March 16, 2020). The Australian markets had plunged 30 percent from its record high just three weeks earlier. I should also point out that the short-lived plunge lasted just 11 weeks. The rapid "vee-shaped" plunge & recovery even fooled the most senior traders.



Skate said:


> *Opportunities *
> The COVID-19 flash crash gave me the perfect opportunity to take advantage of what was being offered. Opportunities like these don't come around all that often




*Story condensed*
Ms. Park decided to buy shares in banks, the hard-hit travel sector, Telcos, and buy-now, pay-later (BNPL) companies. But she refused to buy oil and alcohol stocks as she considers them to be "very obviously evil". It's fair to say the fledgling investor has made a killing on the market.



Skate said:


> *There are plenty of opportunities*
> At any given time, there are plenty of opportunities in the share market as there are some excellent quality companies that are growing and out performing their competitors right now & the trick is finding them.




*FOMO & TINA*
The article starts out with the story of Sue Park & then goes on to explain the progress of the markets over the last 12 months. Along the way, the article articulates the meaning of two acronyms (FOMO - Fear Of Missing Out) & (TINA - There Is No Alternative) both drivers of the markets.

Please have a read
Record-breaking market frenzy will come to an 'abrupt halt', experts warn (msn.com)

Skate.


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## Wilham (16 March 2021)

On another line of thought. 

Has anyone converted a system from daily to weekly and what was the impact on CAR/MDD? I they would go down and up respectively but keen to hear anyone's experiences with that.


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## Skate (16 March 2021)

Wilham said:


> On another line of thought.
> 
> Has anyone converted a system from daily to weekly and what was the impact on CAR/MDD? I they would go down and up respectively but keen to hear anyone's experiences with that.




*Let's talk about a BBO Strategy*
The BBO Strategy can be traded from "minutes to months" as the idea is sound across all time frames. When trading a similar idea - the strategy construction is completely redesigned with differing periodicity. Trading the same idea as a Daily or Weekly Strategy is not a simple matter of changing one or two parameters. The idea may be the same but the coding similarities normally end there.

*Periodicity impacts CAR/MDD*
Trading is a constant trade-off & there are advantages of trading different time frames but I prefer & gravitate towards weekly systems, but that's just me. I'm more concerned with making the most amount of money from the least amount of effort.

*Your question about trading weekly versus daily allows me the opportunity to express my views*
Putting the question about the impact that periodicity has on CAR/MDD I would rather make a boxing comparison. Trading weekly is like boxing in slow motion, meaning you have time to "respond" when trading is not going your way. Trading on a daily time frame you are always "reacting" to price movements.

*Responding gives you time to think*
I make it one of my trading rules never react always respond. (it's one of my life rules as well)

*Summary (Weekly versus a Daily)*
There are merits to trading both time frames but for "me" I prefer trading a weekly system as it reduces the workload & stress. There is always a robust discussion when Daily versus Weekly trading is raised but I'm a believer "if it works for you, it's right for you". By posting consistent messaging - reinforces my point of view.

Skate.


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## qldfrog (16 March 2021)

othmana86 said:


> Hey man
> Are you using position score as part of your code if you are or planning to then that isn't the best method.
> i used a different method which was posted by @LoneWolf which works really well. Have it as part of your buy method. Just be very careful, make sure you take it out of your production code. made the mistake many times and had a few WTF is going on moments.
> 
> ...



Is there a way to highlight , bold and underline that post.i remember reading about this way of testing systems consistency from @Lone Wolf months and months ago,and could not find it back and here it pops up again.Credit to the wolf and also @othmana86 .
This is a gem of a code snippet 👍🙏


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## Lone Wolf (16 March 2021)

qldfrog said:


> Is there a way to highlight , bold and underline that post.i remember reading about this way of testing systems consistency from @Lone Wolf months and months ago,and could not find it back and here it pops up again.Credit to the wolf and also @othmana86 .
> This is a gem of a code snippet 👍🙏



On this topic, it's worth repeating the advice @MovingAverage threw in:


MovingAverage said:


> That is my prefered way of doing monte in AB. Simply export the optimization results into Excel and you can do some great visual/charting analysis of your systems performance. This is much better than doing a single run. Although I'd suggest you push the 1000 value to much higher to get a better perspective. Only thing I'd add is that you're better to use mtRandom() over the regular Random() function. Be very careful about selecting the random comparison value (you use 0.2), choose the wrong value and the number of trades you take will have an adverse impact on your system.


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## Skate (17 March 2021)

*Investing versus trading*
I normally refrain from posting in other threads but @peter2 raised the idea of a Large Cap Portfolio, a portfolio that I have already constructed. Peter's suggestion was for a 5-position portfolio & it's exactly the size I had set for my portfolio. Why 5 positions? It allowed a heavy concentration of funds in a few positions - making it a worthwhile exercise.

*Worthy of a repost in the "Dump it here" thread*


> peter2 said:
> The large caps (LC) move the index and *it's going to be very important to buy these at the earliest opportunity*. I will start the large cap portfolio (5 positions) soon. It'll be a low activity portfolio and I'll post actions and progress in this thread. *The main aim for the large cap portfolio is to earn more than a term deposit (TD) + tax*. This is not a very high standard but I don't want to leave the money at the bank earning next to nothing when I have the skill to earn a little more.




@peter2 from my perspective I'll detail how I handle my Large Cap "Investment Strategy"

*Spare funds hanging around*
There is a distinction between trading & investing. I wish to make a comment on how I handle my "Large Cap Portfolio". This portfolio currently holds 5 positions & is an investment strategy seeking (a) capital gains & (b) dividends.

*Investing is different from trading*
Unfortunately, investing in "mispriced" positions rely on doing a few things differently (from trading) as far as I'm concerned. The main difference between the two is (a) the value invested in each position increases significantly & (b) the position relies on the "time in the markets" - not the "timing of the entry" to develop its long-term potential.

*Horses for courses*
With investing, timing the entry isn't critical but "time in the markets is". In this game, we have one objective "which is" to skim the price differential between the entry & exit price. Coding an idea allows you to target opportunities that you believe you can profit from.

*Mean Reversion Strategy*
Years ago, I traded a mean reversion strategy, the idea was sound but not that profitable. This concept allowed me to expand on this idea to develop a strategy specifically targeting positions that historically become quickly oversold than exhibiting strong signs of a recovery.

*The Bee Strategy sprung to life*
This Bee Strategy (the idea) was dormant for quite some time & I was resolved to the fact that this strategy wouldn't give many signals - if any. The last quarter of 2018 was the first sign the Bee Strategy sprung into "life" giving a few signals but the signals were short-lived.

*The COVID flash crash*
Near the end of March 2020 (the 19th March to be precise) the "Bee Strategy" started to produce signals. At that time, I was more concerned about actioning the GTFO filter, exiting over a hundred positions to reduce the hemorrhaging.

*Investment signals*
At that time, the Bee Strategy signals were ANZ, BHP, MQG & BHP (all positions were taken). Recently the "Bee Strategy" flashed another buy signal being MFG which was taken immediately, as the first four signals turn out to be very rewarding.

*Four weeks later another MFG signal*
I've reported that I've taken an extra position in MFG on that second signal. These 5 positions now make up an investment portfolio - a buy & hold strategy to be precise. My thinking & actions of a Large Cap Portfolio is similar but different, giving an alternative method.

Skate.


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## Skate (17 March 2021)

Boggo said:


> Be very wary of some of these sites as apart from professionals like Radge they will send you broke.
> 
> Look up @Skate, @peter2, @tech/a in no particular order, actually just about anyone on here. You will learn a lot more but it may not be as pretty or appealing and you will have to do the hard yards but it will save losing money and confidence.




*Where does the motivation & inspiration come from?*
The "Dump it here" thread has evolved over time but the theme still remains the same - helping others understand the importance of self-education with all things trading.

*Investing*
I normally don't post about investing as it's the poor cousin to trading. Simply, trading requires more skill with an upscale in risk. The other issue is "developing a profitable trading system" that takes a lot of work & time (requiring upskilling).

*Technical Analysis*
Technical Analysis to me is a vague terminology - a method of predicting the market's future movements.

*Predicting is an "inappropriate terminology" *
I'll use a softer word (which basically means the same) - "probability".

*Probability is a "get out of jail" terminology *
Using the word "probability" implies ambiguity because with all probabilities - it will either happen or not. The word is perfect to cover your ar$e when things go south. Technical analysis at times gets a "bad rap" because we are working with an "in-exact science". The markets are a combination of emotions. Technical analysis suffers at the hands of some posters because it is a "discipline" normally practiced without discipline.

Skate.


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## Skate (17 March 2021)

*Entering the market*
With any endeavour there are multiple techniques to achieve the same outcome. 

*Fundamental analysis is one technique & technical analysis is another*
Combining technical analysis with systematic (mechanical) trading gives mathematical proof of the "efficacy of applied rules". I appreciate that "efficacy" is being overused at the moment with the "Covid vaccine" but the "efficacy" of testing results gives the confidence to start trading it. I used at times a combination of methods & ideas gleaned from other respected posters. I've shared the general concepts & at times they have been useful to others. Sometimes it exciting to watch an idea go from paper trading & ultimately go live.

*There is a multitude of traders who prosper from trading systematically*
Mechanical trading (systemically) is all about a process by which we look for trading signals & on that evidence of "profitability" the statistical significance allows us the possibility to trade those technical signals with confidence. At times simple technical & trading rules have often led to profits - extensive evaluation of the performance is the key ingredient.

*The Action Strategy*
This Action Strategy is currently parked but @ducati916 idea for the strategy has been proven beyond doubt to be sound.

*The Sphere Strategy*
This "Sphere Strategy" came from an idea @peter2 posted back in 2016. Peter traded the idea (a concept developed by others) with success. Twisting these original ideas means I don't have to re-invent the wheel. I'm just approaching the idea from a different (unique) angle. I have already outlined the buy condition of the "Sphere Strategy" a few posts back saving me from re-posting the concept again. I'm excited to experience if using a short four-week lookback period of a stable position (IMO) can be successfully traded when momentum has been confirmed.

*What am I hoping to achieve?*
Well, other than keeping the "Dump it here" thread active & relevant - I wanted to paper trade (experiment) with the crazy idea (in real-time) confirming that entries (into a trend) are a dime-a-dozen & timing the exit becomes an important factor of profitability of any strategy.

Skate.


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## ducati916 (17 March 2021)

qldfrog said:


> If I may
> instead of trying a period 1992 to present, work on a recent year;
> In 1992, was there many qant around?, fast trading? were Central bank covering your asses?
> what I mean is you try to compare the performance of a ferrari in 2020 against the speed of a roman charriot in a mud track in 10BC..
> ...





This post seemingly was overlooked. It really should not have been. It is central to the issue of backtesting mechanical based systems.

The basic premise that seems to be predominating is; the more information I have as a trader and use in my backtest, the more (statistically) certain I can be of my proposed system.

The (statistical) confidence level increases (however) in a non-linear proportion to the number of observations (n) and which results in an improved confidence level, as the square root of (n).

The issue that Monsieur Frog has identified is (and why this is the case) that the 'market's' distributions are non-symmetric, particularly in the ones that we are primarily interested in: market dislocations (lower) or (black swan) events. Looking at 1987, 2019, 2020 will provide you with far more relevant information than 1992 - 2021 inclusive.

jog on
duc


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## Cam019 (17 March 2021)

ducati916 said:


> This post seemingly was overlooked. It really should not have been. It is central to the issue of backtesting mechanical based systems.
> 
> The basic premise that seems to be predominating is; the more information I have as a trader and use in my backtest, the more (statistically) certain I can be of my proposed system.
> 
> ...



I fundamentally disagree. The more data you have to run a back test, the more statistically significant the results will be.

The less parameters a system has and the longer the historical data set, the bigger the trade sample size will be and therefore the more confidence you can have that your system will perform within the backtested results, over time.

I never understood the idea that people would try and backtest a system over a small historical data set of say, 1 year, to try and either reduce drawdown or get a positive return over a black swan or economic crisis event. If your system trades all the markets the same and the longs and shorts the same, the bigger the trade sample size, the more statistically significant the results and the more certainty you have regarding the range of expected outcomes the system could face over time.


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## MovingAverage (17 March 2021)

ducati916 said:


> This post seemingly was overlooked. It really should not have been. It is central to the issue of backtesting mechanical based systems.
> 
> The basic premise that seems to be predominating is; the more information I have as a trader and use in my backtest, the more (statistically) certain I can be of my proposed system.
> 
> ...



I mean no disrespect when I say this, but I don't agree with the generalized proposition that old data (pre 1992 as suggested by frog) or that '87, '19 and '20 will be more relevant that 1992 - 2021. What is important first and foremost is that you have a statistically relevant number of trades in your backtest--in other words your sample size in statistics parlance. To suggest that you need to test over a certain time period without regard to the system characteristics (e.g., hold time, trade frequency etc) is naïve at best.  For example, for a short hold time system such as a swing system you may get a statistically relevant number of trades within a six month period, but in contrast a long hold system may require a backtest period of 5 years to get a statistically relevant number of trades. What specific period you backtest over is irrelevant to a degree--what is critical is that post backtesting (optimization)  the systems performance on out of sample data is carefully reviewed. So by all means backtest your system on pre '92 data but make sure you forward test (not optimizing) on data post '92 to see if it consistently performs to your requirements. This should of course include forward testing on out of sample data that represents a range of market conditions, pullback, sideways and heading north. Also, (and I'm probably misunderstanding your point) but the z-score / t-score is the common measure of statistical confidence and there is nothing non-linear about them.


----------



## qldfrog (17 March 2021)

MovingAverage said:


> I mean no disrespect when I say this, but I don't agree with the generalized proposition that old data (pre 1992 as suggested by frog) or that '87, '19 and '20 will be more relevant that 1992 - 2021. What is important first and foremost is that you have a statistically relevant number of trades in your backtest--in other words your sample size in statistics parlance. To suggest that you need to test over a certain time period without regard to the system characteristics (e.g., hold time, trade frequency etc) is naïve at best.  For example, for a short hold time system such as a swing system you may get a statistically relevant number of trades within a six month period, but in contrast a long hold system may require a backtest period of 5 years to get a statistically relevant number of trades. What specific period you backtest over is irrelevant to a degree--what is critical is that post backtesting (optimization)  the systems performance on out of sample data is carefully reviewed. So by all means backtest your system on pre '92 data but make sure you forward test (not optimizing) on data post '92 to see if it consistently performs to your requirements. This should of course include forward testing on out of sample data that represents a range of market conditions, pullback, sideways and heading north. Also, (and I'm probably misunderstanding your point) but the z-score / t-score is the common measure of statistical confidence and there is nothing non-linear about them.



With my english as a foreign language, i might have been misunderstood, but i preach the opposite: in clear words:
Testing on old data, and by old i mean anything pre GFC is irrelevant.
I disagree with your idea of the more data the better: this would be true in a static environment, but the market is not static, forever changing and i am talking here about the mechanics, the mental response of traders and qants.
Would you be happy to analyse the average speed of a butterfly and take into account its chrysalis and caterpillar stage to have more data?
I want to follow mr Skate animal analogies😊
If you use a monthly system, you have no better choice i agree than spanning years and years..good luck for it to be relevant.
Hope it clarifies my point of view..which is just that, and never pretented to be a truth
The only constant in the market is the change


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## Skate (17 March 2021)

*Opinions & differing points of view*
The recent exchanges (between differing points of view) in this thread demonstrate why the "Dump it here" thread is different to most other threads as it allows every member the right to express their views on a subject or topic respectfully.

*Opinions are welcomed in the 'Dump it here' thread*
It's a perfect segue to remind others that we all enjoy reading differing points of view because that's how we learn. "Refrain" is sometimes advisable because we're all "wordsmiths to a point" & challenging poster serves no purpose, it's much like masturbating in public, it may feel good to you, but it looks disgusting to everyone else.

*Express your views*
Whether your view is right or wrong isn't important, what's more important, this thread gives you the ability to express your views without being ridiculed or challenged. Every member enjoys a different level of experience & expertise. Posting an alternative view is the "heart & soul" of this thread as displayed in the last series of posts. I'm just saying, without self-moderation, the tone can quickly escalate. 

Skate.


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## ducati916 (17 March 2021)

Cam019 said:


> 1. I fundamentally disagree. The more data you have to run a back test, the more statistically significant the results will be.
> 
> 2. The less parameters a system has and the longer the historical data set, the bigger the trade sample size will be and therefore the more confidence you can have that your system will perform within the backtested results, over time.
> 
> 3. I never understood the idea that people would try and backtest a system over a small historical data set of say, 1 year, to try and either reduce drawdown or get a positive return over a black swan or economic crisis event.





Cam019 said:


> 4. If your system trades all the markets the same and the longs and shorts the same, the bigger the trade sample size, the more statistically significant the results and the more certainty you have regarding the range of expected outcomes the system could face over time.




1. This statement is true if we are talking about the height/weight/lifespans of humans or similar. It is categorically false when you are talking about financial markets.

2. Your 'statistical confidence' will undoubtably be higher. Unfortunately, it means nothing in financial markets.

3. Because that is where, depending of course how you trade (leverage etc) is where you blow-up.

4. Simply incorrect.

jog on
duc


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## ducati916 (17 March 2021)

MovingAverage said:


> 1. I mean no disrespect when I say this, but I don't agree with the generalized proposition that old data (pre 1992 as suggested by frog) or that '87, '19 and '20 will be more relevant that 1992 - 2021.






MovingAverage said:


> 2. What is important first and foremost is that you have a statistically relevant number of trades in your backtest--in other words your sample size in statistics parlance.






MovingAverage said:


> 3. To suggest that you need to test over a certain time period without regard to the system characteristics (e.g., hold time, trade frequency etc) is naïve at best.






MovingAverage said:


> 4. For example, for a short hold time system such as a swing system you may get a statistically relevant number of trades within a six month period, but in contrast a long hold system may require a backtest period of 5 years to get a statistically relevant number of trades.






MovingAverage said:


> 5. What specific period you backtest over is irrelevant to a degree--what is critical is that post backtesting (optimization)  the systems performance on out of sample data is carefully reviewed. So by all means backtest your system on pre '92 data but make sure you forward test (not optimizing) on data post '92 to see if it consistently performs to your requirements.






MovingAverage said:


> 6. This should of course include forward testing on out of sample data that represents a range of market conditions, pullback, sideways and heading north. Also, (and I'm probably misunderstanding your point) but the z-score / t-score is the common measure of statistical confidence and there is nothing non-linear about them.




1. And no offence or otherwise taken.

2. I disagree. What is important is that your system can hold up to the infrequent dislocations that blow you up. Now some of that risk will be in how you actually trade (Futures, Options, Stocks, CFDs, etc.) and the leverage you have in the system. That is not a function of the number of observations in total that you have.

3. Not a certain time period: specific market conditions.

4. Irrelevant.

5. There was a (brief) discussion on Monte Carlo analysis. Unfortunately it didn't really go anywhere. Essentially, MC is an attempt to look at everything that could happen, but didn't. The answer lies in a much more robust understanding and analysis of MC.

6. See above.

jog on
duc


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## MovingAverage (17 March 2021)

qldfrog said:


> With my english as a foreign language, i might have been misunderstood, but i preach the opposite: in clear words:
> Testing on old data, and by old i mean anything pre GFC is irrelevant.
> I disagree with your idea of the more data the better: this would be true in a static environment, but the market is not static, forever changing and i am talking here about the mechanics, the mental response of traders and qants.
> Would you be happy to analyse the average speed of a butterfly and take into account its chrysalis and caterpillar stage to have more data?
> ...



I'm not suggesting more data is better--I'm suggesting that a statistically relevant amount of data be used. If you used more data than is statistically relevant then no adverse influence will result other than allowing you to have a higher level of confidence in your results--there is no down side to using more data than is statistically relevant. However, use a sample size that is not statistically relevant then you must would apply a low level of confidence in your results. Your reference to monthly systems is very apt here--I said on this forum before that I abandoned my monthly system because I just simply could not have any faith in the backtesting results--could not get a statistically relevant result even over 20 years so very low confidence. The key is understanding the statistical confidence you have in your sample size and then applying the appropriate level of error to your results. I appreciate the real world analogies, but system trading is nothing more than applied statistics. Stock market price data is nothing more than discrete time series data and statistical analysis is a well established form analysis for such data. Anyway, each to their own and whatever works for everyone is good--just sharing my thoughts.


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## ducati916 (17 March 2021)

Skate said:


> *Opinions & differing points of view*
> The recent exchanges (between differing points of view) in this thread demonstrate why the "Dump it here" thread is different to most other threads as it allows every member the right to express their views on a subject or topic respectfully.
> 
> *Opinions are welcomed in the 'Dump it here' thread*
> ...





And this (particular) topic seems to have stirred some very different and opposing viewpoints, which is a good thing.

jog on
duc


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## MovingAverage (17 March 2021)

ducati916 said:


> ducati916 said:
> 
> 
> > 2. I disagree. What is important is that your system can hold up to the infrequent dislocations that blow you up. Now some of that risk will be in how you actually trade (Futures, Options, Stocks, CFDs, etc.) and the leverage you have in the system. That is not a function of the number of observations in total that you h




Hang on a minute--I was referring about a statistically relevant sample size. What you are talking about is something very different, unrelated and not relevant to my point. In fact your response is confirming one of my very points in which I said it is important to do out of sample testing across a range of market conditions--which as you point out MUST include infrequent dislocations that blow you up.


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## ducati916 (17 March 2021)

MovingAverage said:


> Hang on a minute--I was referring about a statistically relevant sample size. What you are talking about is something very different, unrelated and not relevant to my point. In fact your response is confirming one of my very points in which I said it is important to do out of sample testing across a range of market conditions--which as you point out MUST include infrequent dislocations that blow you up.




Your general point is that more data is better than less data. I am saying that that is simply not the case. We agree that specific samples of data are required.

jog on
duc


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## MovingAverage (17 March 2021)

ducati916 said:


> Your general point is that more data is better than less data. I am saying that that is simply not the case. We agree that specific samples of data are required.
> 
> jog on
> duc



No my general point is not that more data is relevant--like I said, a statistically relevant amount of data is what is need. They are two very different things and should not be confused. It may seem like one and the same, but trust me in the world of statistics they are chalk and cheese.


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## ducati916 (17 March 2021)

MovingAverage said:


> No my general point is not that more data is relevant--like I said, a statistically relevant amount of data is what is need. They are two very different things and should not be confused. It may seem like one and the same, but trust me in the world of statistics they are chalk and cheese.





Statistical confidence increases with the number of observations of the variable under observation, which is statistically relevant data, to which I am referring. I am not advocating adding in data re. hemlines etc.

So let us get a little less abstract and more specific.

Take Mr Skate's various systems: these have been designed with the 'exit' as the (or one of the prime) variables. The premise being: money is made on the exit.

Now, return to last year when the markets crashed. Did the exits save Mr Skate? To a point, yes, he still exited the market holding profits. But essentially the profits were decimated.

How did other mechanical systems hold up last year? They didn't.

Now they were backtested, and all gave the illusion of having a max drawdown of 'X'. They were all wrong. They were all wrong because of the very issue highlighted.

If, they had 'recognised' the signs as they were building, they would have exited much earlier. That is the value of studying, backtesting, whatever, the outliers that we have had far more frequently than the relevant statistical data has forecast in terms of probabilities.

jog on
duc


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## qldfrog (17 March 2021)

ducati916 said:


> Your general point is that more data is better than less data. I am saying that that is simply not the case. We agree that specific samples of data are required.
> 
> jog on
> duc



MA has the view that all data is the equal so that :
what was true a generation ago is still true.
I would say
Yes and no, true as to human psyche, false as to its implementation and so day to day influence on the market
This is where we differ, and as a consequence i am in the view that "too old" zillion data testing is useless.
But yes if you have relevant data, the more the better.we all agree


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## qldfrog (17 March 2021)

ducati916 said:


> Statistical confidence increases with the number of observations of the variable under observation, which is statistically relevant data, to which I am referring. I am not advocating adding in data re. hemlines etc.
> 
> So let us get a little less abstract and more specific.
> 
> ...



We all remember the black swan zillion of lifetime probability not to happen..which happened in the last crash.quite interesting article at the time so always remember stats can tell you whatever you want them to say ..based on the data selection...


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## MovingAverage (17 March 2021)

ducati916 said:


> Now they were backtested, and all gave the illusion of having a max drawdown of 'X'. They were all wrong. They were all wrong because of the very issue highlighted.




I am glad you have highlighted this, but it illustrates one of the major issues I have with a lot of people that trade mechanical systems and not the systems per se. I say I have a major issue with the people deliberately but a lot of people trading mechanical systems do not have sufficient understanding of how to properly analysis system that deal with time series discrete data.

Most people will do a single backtest across 20 years of data and to further add to the system they will over optimize (or curve fit). They get a fantastic looking system that averages a CAGR of 35% and a drawdown of 20%. Guess what, then they jump straight into live trading that system and as you allude to they encounter a tough market and experience a 35% drawdown and maybe after a few years they're at a CAGR of 8%.

Well based on your comment I'm guessing you would blame the system--but I don't because that person didn't comprehensively test that system to full understand the systems bounds and perhaps that 8% CAGR and 35% DD was well within the systems behavior. Anyone that runs a single simulation of 20 years of data and then goes live is seriously asking for trouble but I don't blame the system.

If you do proper MC analysis, and I'm not talking about that crappy MC testing in Amibroker, but proper statistical analysis you will have a far more insightful understanding of what to expect from your system. The reality is that a system will have a range within which key parameters will fall if correctly tested. Proper MC analysis (not Amibroker MC rubbish) will yield a distribution (or range) within which you can expect your system to perform. For example, proper statistical analysis will reveal that the DD will have a mean of 18% with a certain SD from the mean at 95% confidence interval. This applies to any system parameter you wish to track. In other words, proper statistical analysis will give you a mean and what you can expect in terms of extremes from that mean.

The other thing that a lot of people don't do is out of sample testing. It's one thing to refine and tune your system over certain data, but you better test that on data that you didn't test and refine your system on. In other words, this will give you some insight in your systems ability to perform on future data. This is one of the biggest oversights a lot of system traders make.

Anyway, the point I'm making is that in the scenario you provide--I don't blame the system I blame the person for not having engaged in proper MC testing of their system.


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## MovingAverage (17 March 2021)

qldfrog said:


> MA has the view that all data is the equal so that :
> what was true a generation ago is still true.
> I would say
> Yes and no, true as to human psyche, false as to its implementation and so day to day influence on the market
> ...



I'm kind of saying that. What I saying is that if you test and refine your system over a period 1990 to 1995 and your then perform out of sample testing (not optimizing of system parameters) over the discrete period of 1996-2000, 2001-2005, 2006-2010, 2011-2015, 2016-2020 and all sim results across those years yield acceptable results then I would say your system appears to work well on future data. That is why a say old data (in this case 1990 to 1995) is not irrelevant. Maybe it isn't always the case but to discount old data outright just because times were different might be doing you a disservice.


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## qldfrog (17 March 2021)

MovingAverage said:


> I'm kind of saying that. What I saying is that if you test and refine your system over a period 1990 to 1995 and your then perform out of sample testing (not optimizing of system parameters) over the discrete period of 1996-2000, 2001-2005, 2006-2010, 2011-2015, 2016-2020 and all sim results across those years yield acceptable results then I would say you system appear to work well of future data. That is why a say old data (in this case 1990 to 1995) is not irrelevant. Maybe it isn't always the case but to discount old data outright just because times were different might be doing you a disservice.



I will have to go but.
If you do so, can I genuinely ask: do you use price as a realm selection? for example to filter out 2c stocks etc..?
If you do then how do you reconcile the fact a 2c worth in 1992 is probably a 5c worth or more today?
Sure possible to use a cpi indexed price as a tgreshold but outside the beginner coding usage.
So i just want beginners to think about what their code backtest is supposedly testing with 30y old data.
Nice discussion.i agree we disagree😊


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## MovingAverage (17 March 2021)

qldfrog said:


> I will have to go but.
> If you do so, can I genuinely ask: do you use price as a realm selection? for example to filter out 2c stocks etc..?
> If you do then how do you reconcile the fact a 2c worth in 1992 is probably a 5c worth or more today?
> Sure possible to use a cpi indexed price as a tgreshold but outside the beginner coding usage.
> ...



I like having a respectful disagreement...after all if everyone traded the same we'd have no market to trade .

I live trade a number of systems and no I don't apply a price filter directly, but I see your point. I do apply a turnover filter (must have min $ turnover) which is derived from price and volume, but it isn't a fixed value and it will vary depending on the trade size. I haven't thought it through too much but I guess your point might be relevant to me and I'll take it onboard and think it through.


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## Lone Wolf (17 March 2021)

MovingAverage said:


> The other thing that a lot of people don't do is out of sample testing. It's one thing to refine and tune your system over certain data, but you better test that on data that you didn't test and refine your system on. In other words, this will give you some insight in your systems ability to perform on future data. This is one of the biggest oversights a lot of system traders make.



One trap about out-of-sample testing that's easy to fall into is repeatedly using the same data sets. You test your system on in-sample data, looks great. You test it on out-of-sample data, it falls apart. What do you do? You go back to the system and make some adjustments. Test it again on the same data and it looks much better this time. But really, you've just made your out-of-sample data part of the in-sample data set. You can't keep making adjustments until the same out-of-sample test comes good.


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## Quanta (18 March 2021)

Hey Guys,

Quick question MovingAverage, when you state:


> _If you do proper MC analysis, and I'm not talking about that crappy MC testing in Amibroker, but proper statistical analysis you will have a far more insightful understanding of what to expect from your system._




How do you go about this? Do you use Amibroker and import your results into Excel for analysis?

I'm on the learning curve, most of the stuff discussed to test robustness I do as it just made sense, next step is expanding data analysis.

Thanks in advance.


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## ducati916 (18 March 2021)

MovingAverage said:


> 1. I am glad you have highlighted this, but it illustrates one of the major issues I have with a lot of people that trade mechanical systems and not the systems per se. I say I have a major issue with the people deliberately but a lot of people trading mechanical systems do not have sufficient understanding of how to properly analysis system that deal with time series discrete data.
> 
> 2. Most people will do a single backtest across 20 years of data and to further add to the system they will over optimize (or curve fit). They get a fantastic looking system that averages a CAGR of 35% and a drawdown of 20%. Guess what, then they jump straight into live trading that system and as you allude to they encounter a tough market and experience a 35% drawdown and maybe after a few years they're at a CAGR of 8%.
> 
> ...





1. The issue that I have with mechanical systems and I suppose by extension the people that design them is that they, for the most part, seem to be blind to the intrinsic flaw that lies at the heart of mechanical based trading.

2. A mechanical system is an automated strategy. Certain strategies will do well in certain market environments and potentially outperform their initial code. Markets change. Sometimes that change is subtle and the system still returns a profit, sometimes it is radically different and a period of underperformance will ensue. Sometimes the monkey wrench gets tossed in and s**t blows up. Now you could have multiple systems (strategies) and chop and change them as market conditions change. That however is 'discretionary', which (possibly) systems traders decry?

3. Being the polite chap that I am, yes, it is the 'system's' fault.

4. Well good. This is the topic that came up a few posts back and (seemingly) was resoundingly ignored. This is something worthy of a detailed discussion. The results, if properly done, will toss many systems currently being traded on the scrap heap.

5. This is where the MC is critical. The data that we have, even if you had data from 1880 to the current day, is not sufficient. Now that statement may seem to contradict my position. It doesn't. This point is raised by @Lone Wolf in his post.

6. And this should be rectified.

* I see another post, just above is curious.

jog on
duc


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## MovingAverage (18 March 2021)

Quanta said:


> Hey Guys,
> 
> Quick question MovingAverage, when you state:
> 
> ...



Hey Quanta,
I use two applications depending on what I want to do. I use TradeSim and/or Excel. With both applications I dump sim outputs from Amibroker into CSV files and then just import into TradeSim or Excel. You really can do some great statistical analysis with Excel. TradeSim I really like because it is specific to stocks and you can drill down into more trade related stuff than Excel. But you can do a whole lot with Excel and enough analysis to decide if you want to go live or not. Only downside to TradeSim (and it isn't major) is that it expects the CSV data to be in a particular format--they openly publish the CSV input format. So for TradeSim it is not a simple matter of exporting from Amibroker (which you can do for Excel). In the AFL code of your system you have to write the CSV file in the format required for TradeSim. If you're comfortable with AFL then this should NOT (thanks frog) be a big deal.
Good luck.
MA


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## qldfrog (18 March 2021)

MovingAverage said:


> If you're comfortable with AFL then this should be a big deal.



This should NOT be a big deal .
This exchange has been quite interesting.Thanks Mr Skate to allow us to highjack your thread 👍

One last point from me: this is not black and white: of course you need sufficient data to be statistically relevant, of course you need out of sample data trials to be able to judge possible responses inc DD but yes markets change and old data probably looses relevance if time affected: cpi, new robot trading,etc.
Overall, it is still better to work with these flaws than just randomly throwing money at shares and pray! 
And this is what most beginners do, i did too  ...with either success in boom time that they parade around and become so called experts at the BBQ events, or big losses and become investment property addicts for the rest of their life😊


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## MovingAverage (18 March 2021)

qldfrog said:


> This should NOT be a big deal .



Fixed


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## MovingAverage (18 March 2021)

ducati916 said:


> 6. And this should be rectified.
> 
> 
> 
> ...




I often think that a lot of mechanical system traders would benefit hugely from a course in statistical analysis--even a basic one. Anyhow, as you say...Jog On


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## ducati916 (18 March 2021)

ducati916 said:


> A mechanical system is an automated strategy. Certain strategies will do well in certain market environments and potentially outperform their initial code. Markets change. Sometimes that change is subtle and the system still returns a profit, sometimes it is radically different and a period of underperformance will ensue. Sometimes the monkey wrench gets tossed in and s**t blows up. Now you could have multiple systems (strategies) and chop and change them as market conditions change. That however is 'discretionary', which (possibly) systems traders decry?




No one seems to have picked up on this point, maybe, irrelevant to mechanical systems traders.

So over the past few months, the market changed. Interest rates became a thing and volatility, less of a thing. Those that follow my other thread will probably have noticed, less on the VIX more on TNX and DXY. Tech. in pretty much the same time frame went from hot to meh to shite.

Now I don't analyse the stocks being selected in Mr Skate's systems, mostly because they are Aussie stocks. However I do know that @Skate employs a 'ranking' methodology. Now (again) I'm not sure how they rank stocks, but it should rank them based on sectors and stocks within those sectors. For example: rising curve ++financials - - Tech. Stocks that fall in the financial sector get a higher ranking than Tech. There are all manner of subtle variations. 

The reason is that the filter may grab a Tech stock that has some good news attached, whatever: once that 'good news' plays out over a day or two, that stock will revert to its sector. It will not continue to outperform, whereas, even average/shite financials will run. Possibly the systems selection strategy might cover this, but I doubt it. Possibly Mr Skate can expand on this criteria and whether the scans are or could be (made) to be discriminating enough.

jog on
duc


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## Skate (18 March 2021)

ducati916 said:


> *The issue that I have with mechanical systems and I suppose by extension the people that design them is that they, for the most part, seem to be blind to the intrinsic flaw that lies at the heart of mechanical based trading*. Certain strategies will do well in certain market environments and potentially outperform their initial code.




*I'm amazed*
The recent flurry of quality post prosecuting each side of the argument is astounding. Read individually they all have a certain degree of merit - but @ducati916 has a valid point about mechanical-based trading. Trading a system that's ridged (inflexible) on a constantly changing market.



ducati916 said:


> Possibly Mr Skate can expand on this criteria and whether the scans are or could be (made) to be discriminating enough.




*Great point*
And by the why - another thought-provoking post. The series of recent posts go to the heart of the question.

"Why do we buy a position trading a mechanical system?".

*Summary*
Over a few posts (so I can chunk the answer) I'll try to answer the question.

Skate.


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## Skate (18 March 2021)

*Backgrounding first - Falling Interest rates*
At times circumstances shape your future & the falling interest rates shaped my financial future.

*I'm a 6% guy *
Why 6%? - 6% returns mean I'll never run out of money in my life. Inflation is included in that calculations (inflationary forces reduces true value)

*Living in a cranky & unstable world*
There are no free rides in this world & financial freedom is never stable. The reason we work is to survive & create a life that one can be happy with. 

*Trading isn’t about getting rich *
I've posted this many times, it's more about financial independence supporting yourself without an income, being able to choose to live your life on your terms.

*Who decides?*
The only person who can make sure you’re able to do it on your terms is you - this is the true measure of what life is all about as far as I'm concerned.

Skate.


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## barney (18 March 2021)

No particular input from me.  @ducati916  and @Skate 

You guys are very clever. I understand the premise of your Trading ideas/systems etc etc

I'm personally either too old or too lazy to implement something similar, however,

I certainly enjoy  (and obviously many others also) appreciate the detail you chaps present, so thanks for that.

I often wish I had the aptitude to be more regimented like you both, 

But, I am a simple musician who plays by ear, so that will never happen


ps. I'm doing ok being a lazy musician so all is good


pps Carry on as you were gentlemen.  The Dump Thread will likely live on far longer than all of us. Well done Mr Skate


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## Skate (18 March 2021)

*Back to trading *
Like most "trading became an obsession" after a period of time. Returns from trading started to become the scorecard. The measures of personal development as the results provided the motivation to keep going & the motivation to improve.

*Mechanical Trading*
The years of study, Backtesting ideas (running 5 computers - 24/7) - exporting those statistical results to a Monte Carlo simulation was a worthwhile exercise giving a raw indication if the trading idea had the potential (probability) of profitability. In hindsight, the effort developed into rewards (if only by the luck of timing). What was significant - the confidence that the results gave at the time.

*Sample of trades*
This is one of my trading systems - it's a mature system traded over many years. At face value, a win rate of 40% looks a bit low but within the range of a Mechanical Trend Trading Strategy. Also, my Equity curve would certainly highlight the views that @ducati916 recently made about the fluidity of markets & the changing sectors within that market. Markets are fluid & change with every heartbeat. The jaggedness of the curve would bear this out.




*The ocean*
Waves are forming every minute of every day, some days the waves are larger than others (that's a given) but if I was a surfer (which I'm not) I would pick my day to enjoy the pastime. Trading to me is no different.

Skate.


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## MovingAverage (18 March 2021)

Skate said:


> *Back to trading *
> Like most "trading became an obsession" after a period of time. Returns from trading started to become the scorecard. The measures of personal development as the results provided the motivation to keep going & the motivation to improve.




This is a very interesting topic and one that I'm sure has the potential to generate another flurry of posts. "Returns from trading started to become the scorecard". Yes, returns is an important measure, but for me it is a secondary important measure and doesn't top my scorecard measure. For me personally my priority is to chase a nice tight standard deviation in returns. Why, it delivers a better level of predictability and lessens surprises. Yes, a tight standard deviation generally comes at the cost of a higher return, but I also don't like the wild ride that comes with surprises.


----------



## Skate (18 March 2021)

barney said:


> I'm personally either too old or too lazy to implement something similar




@barney, when we fail to listen, we forgo the right to learn. 

*Every poster has something to contribute *
Barney, I've read most of your posts & at times you tend to sell yourself a bit short. 

*I'm posting information that worked for me *
@ducati916, @peter2, @qldfrog, @Newt, @tech/a, @Warr87, @Joe90, @frugal.rock, @othmana86, @bigdog, @lindsayf, @debtfree, @CNHTractor, @Saqeeb, @martyjames, @Cam019, @rnr, @Rsthree, @MovingAverage @Lone Wolf, & @Beaches all have their own "particular style & trading experience" posting in a manner that they feel will be helpful to others. (sorry if I've missed a contributor to this thread, I've gone from memory)

*Sharing is caring *
Without realising it, we are all in this game together just playing different positions on the same team. (even if at times it doesn't feel that way)

Skate.


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## Wilham (18 March 2021)

Skate said:


> @barney, when we fail to listen, we forgo the right to learn.
> 
> *Every poster has something to contribute *
> Barney, I've read most of your posts & at times you tend to sell yourself a bit short.
> ...



Great conversation going on here. I'm sitting on the sidelines taking it all in as I'm still several steps behind you all in experience here.


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## Skate (18 March 2021)

MovingAverage said:


> This is a very interesting topic and one that I'm sure has the potential to generate another flurry of posts. "Returns from trading started to become the scorecard". Yes, returns is an important measure, but for me it is a secondary important measure and doesn't top my scorecard measure. For me personally *my priority is to chase a nice tight standard deviation in returns*. Why, it delivers a better level of predictability and lessens surprises. Yes, a tight standard deviation generally comes at the cost of a higher return, but I also don't like the wild ride that comes with surprises.




*Trading means something different to everyone*
Back when I was in system development "tight standard deviation in returns" (the scattergun chart of returns) was important as a tight range eliminated outliers (to some degree) but the reference @ducati916 made about shifting market forces (my wording) making an extreme amount of sense. In saying this - the very points that you have made are just as sound. (With each point of view put forward "the poster" always slants the presentation in their favour)

*Trading signals*
When it's working, (in relation to trading) I tend to keep working it. I try to post (ideas) to stimulate the thinking of others. I'm not saying "Do as I do" but for others to "Think about what they are doing" - that's all. (my views are from my perspective)

Skate.


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## Skate (18 March 2021)

Wilham said:


> Great conversation going on here



@Wilham, I knew I'd miss someone from memory (thank you for your contribution to this thread)

Skate.


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## Skate (18 March 2021)

*I had planned to make a series of posts*
Thinking more deeply about the recent flurry of posts, I've come to the realisation there is no point in detailing an answer about an activity with so many variables (the very point @ducati916 alluded to).

*In defence of "system trading"*
The "Dump it here" thread is full of practical examples of buying into an uptrend. Trading this way "sometimes it works". In my case, having a 40% strike rate works for me which is enough to make trading a profitable pastime.

*Mechanical trading*
Trading systematically is a series of scenarios: "if this happens - do this" but only if it meets or exceeds certain parameters. Even the best idea with the wrong filters & parameter settings will struggle to be profitable.

*Exiting*
Knowing when to get off the position (exiting) is the "big one" to sort out - as far as I'm concerned.

*Having a great exit strategy at times is not enough*
This is the very point raised by @ducati916 but exiting the way I do is the best exit I have. In my defence, the exit signals are "consistent" (as @peter2 commented - "tongue in cheek"). With trading, there is always a trade-off - "you win some, you lose some". When you accept this, you start to understand trading.

*Trading is a numbers game*
Casinos are also a numbers game but with trading the more you play the better you become.

Skate.


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## MovingAverage (18 March 2021)

Skate said:


> *In defence of "system trading"*
> The "Dump it here" thread is full of practical examples of buying into an uptrend. Trading this way "sometimes it works". In my case, having a 40% strike rate works for me which is enough to make trading a profitable pastime.



This is a good point. And reminds me that some systems traders often develop and trade a single system across many different market conditions--up, down and sideways. Problem is getting a single system to deal efficiently with all those market conditions is a bit of a holy grail. Kind of like a committee setting out to design a race horse, but in the end it finishes up with a camel. Too many compromises and a system that can be somewhat average. For me I've had much greater results trading very different and separate systems for different market conditions.


----------



## Wilham (18 March 2021)

MovingAverage said:


> This is a good point. And reminds me that some systems traders often develop and trade a single system across many different market conditions--up, down and sideways. Problem is getting a single system to deal efficiently with all those market conditions is a bit of a holy grail. Kind of like a committee setting out to design a race horse, but in the end it finishes up with a camel. Too many compromises and a system that can be somewhat average. For me I've had much greater results trading very different and separate systems for different market conditions.



If you can, would you mind elaborating on this? My thought is that the common problem of when and for how long is the market going to trend isn't solved by this. I'd be interesting to understand how you turn on and off your systems accordingly? Alternatively are your systems across different universes?


----------



## MovingAverage (18 March 2021)

Wilham said:


> If you can, would you mind elaborating on this? My thought is that the common problem of when and for how long is the market going to trend isn't solved by this. I'd be interesting to understand how you turn on and off your systems accordingly? Alternatively are your systems across different universes?



I use an overarching TSI indicator (Trend SI and not the True SI indicator) to determine the general trend of the market. If you're an AB user you can find the AFL for it in their library. I'm over simplifying things for the sake of keeping it simple, but this indicator serves me well in switching my systems in an out. I "turn on" my breakout system when the TSI indicates a broader upward direction and I "turn on" my swing system when the TSI suggests the market is moving sideways. I don't short so my systems tend to remain inactive when TSI suggests a broader downtrend. I guess there are any number trend strength indicators you could use for the broader market, but I've been using TSI for several years with reasonable results. In relation to your universe question, I should add by break out system trades only XAO with turnover filter applied and my swing system trades all listed equities with turnover filter applied


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## Skate (18 March 2021)

MovingAverage said:


> I use an overarching TSI indicator (Trend SI and not the True SI indicator) to determine the general trend of the market.





Wilham said:


> If you can, would you mind elaborating on this? My thought is that the common problem of when and for how long is the market going to trend isn't solved by this.




*Let's talk about a momentum indicator*
@MovingAverage posted that he uses the TSI indicator (an oscillates that moves between 100 & -100) to gauge the strength of a trend. I've recently posted that there is a multitude of indicators you can use for a trend entry into a position & the TSI indicator certainly fits the bill. Admittedly the TRI Indicator does a half-decent job as a momentum indicator - but there are many applications for this indicator.

*The TSI can provide an early indication of a trend*
The TSI can also provide an early indication of whether the prevailing trend will continue or reverse but I want to discuss one way that I use the indicator as the basis of a "trading system".

*So how can we trade the TSI momentum indicator?*
As the TSI indicator is an oscillator, oscillating between (100) & (-100) we can use the zero-line as our base. As the TSI oscillator moves from a negative number to a positive number (basically meaning crossing from below zero to above) we can use this as the activation of our buy condition. Our aim is to get into a trend & the TRS indicator moving above the zero lines does this. Add parameters & filters to your buy condition & then you have a trend strategy.

*Summary*
When the TSI indicator crosses above the zero-line this is a sign that the individual position has turned "bullish". By the way, trading this way eliminates the use of an Index Filter. By contrast, when the TSI crosses below the zero-line, this is a sign the price action has turned "bearish".

*Just keep in mind *
If you change the lookback period, length, or smoothing periods, the indicator will respond to price action accordingly. Using the TSI as an exit strategy is not advisable (as far as I'm concerned) as at times the indicator is slow to react - even though this is a "Low Lag Indicator"

*Forget the backtest results *(They aren't that important)
The "backtest results" are posted to indicate that "any entry into a trend" can be profitable.




Skate.


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## Lone Wolf (18 March 2021)

MovingAverage said:


> I use an overarching TSI indicator (Trend SI and not the True SI indicator) to determine the general trend of the market. If you're an AB user you can find the AFL for it in their library.



Is it actually called the Trend Strength Indicator (TSI)? I've been searching google and the Amibroker library for 45 minutes and can't find it. There's one post on the Amibroker forum, but that's not an oscillator like Skate suggests.


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## Wilham (18 March 2021)

If we can set aside the MC and statistic significance for a moment (if that is possible given the below? ) I would really be interested in this groups discussion on how to test a system. The majority of research I've done states you need to optimize with IS data, test it over OOS data then perform WF testing of the entire system (or how I've understood it). When designing a system, if I use a simplified example of BBO I'm playing with at the moment how do you go about this in practice?

Say I have 4 variables I'm trying to optimize: 
Var 1: Period of the moving average I use for the index filter
Var 2: BB MA period
Var 3: BB Deviations
Var 4: Trailing stop 20%

Using either the full data set I have for ASX, or going by the 2006-present discussion. I can optimise my variables and test them out of sample without overlapping. Then have a period of WF testing of the full system. The first example I can test my potentially less 'relevant' variables over the more recent data that includes a wide range of market types. The latter example I could use the sample method and have less WF timeframe available, or just paper trade it live. 




I've been using the top method. My rationale being following a trend should be similar through time in terms of characterists. If I can select robust variables that turned an acceptable CAR/MDD from 1992-2005 and then test this over 2006-2020 with accpetable returns I can be reasonably comfortable that it would continue to work going forward. 

Couple questions as I think I've missed some things in my understanding: 
1. Without inherently 'fitting' my optimisations, how do I go back and tweak my system or variables in a design, built, test loop? Is it by finding robust variables that are profitable around my 'best' value. e.g. Var 2 of 100 days, where 80-120 all return a CAR/MDD result that is varying levels of favourable? 
2. Is the above even a good way to optimize a system, appreciating people have person preferences etc. 
3. Can your IS time periods overlap, e.g. 1992-1994, then 1993-1995 and so on..

The point of this isn't which is better, but I haven't seen much discussion here or on the internet on HOW people with successful systems do this.. usually people in my situation who are far from experts. I feel like a primary school student with the professors but I'm hoping some other students are sitting behind me listening in as well.


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## MovingAverage (19 March 2021)

Lone Wolf said:


> Is it actually called the Trend Strength Indicator (TSI)? I've been searching google and the Amibroker library for 45 minutes and can't find it. There's one post on the Amibroker forum, but that's not an oscillator like Skate suggests.



Trend. I’ll post up the AB link (think I should be able to do that) a bit later today


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## MovingAverage (19 March 2021)

Wilham said:


> If we can set aside the MC and statistic significance for a moment (if that is possible given the below? ) I would really be interested in this groups discussion on how to test a system. The majority of research I've done states you need to optimize with IS data, test it over OOS data then perform WF testing of the entire system (or how I've understood it). When designing a system, if I use a simplified example of BBO I'm playing with at the moment how do you go about this in practice?
> 
> Say I have 4 variables I'm trying to optimize:
> Var 1: Period of the moving average I use for the index filter
> ...




Here is my 2 cents worth...testing is a two step process: 1) tune (optimize) on your in sample data; 2) test on out of sample data. Personally, walk forward I wouldn't worry about because in AB it continually tunes your parameters on in sample and uses that on the next out of sample block. I don't understand this process because their is generally a low correlation. Make sure your out of sample testing has roughly the same amount of trades and your system generated on in sample. Your out of sample testing does not need to be consecutive years following your in sample--e.g., if you in sampled over 1992 to 1995 your out of sample does not need to be the consecutive blocks of 1996 - 1998, 1999 - 2001 etc. What is important is that you just use any data outside. In this regard, I will typically randomise the date range of the out of sample data. For example, I might randomly select the first out of sample range to be July 2001 to Feb 2004, Oct 2004 to March 2007 and so on. Also, if you have access to US market data run your system (do not tune) over that data to see how it performs. This is another form of out of sample data. The main focus of out of sample testing is to ensure it continues to return a positive EV. 

In relation to your question 1, I also start on out of sample using the MC mean values for my out of sample data. As for your question 3, I stay away from using any overlap because I like there to be a low correlation between in and out data


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## MovingAverage (19 March 2021)

Lone Wolf said:


> Is it actually called the Trend Strength Indicator (TSI)? I've been searching google and the Amibroker library for 45 minutes and can't find it. There's one post on the Amibroker forum, but that's not an oscillator like Skate suggests.



Here is a link to the original article:  https://engineeringreturns.wordpress.com/tsi/

I've made a few tweaks to my implementation, but it is fundamentally the same.


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## MovingAverage (19 March 2021)

Wilham said:


> If we can set aside the MC and statistic significance for a moment (if that is possible given the below? ) I would really be interested in this groups discussion on how to test a system. The majority of research I've done states you need to optimize with IS data, test it over OOS data then perform WF testing of the entire system (or how I've understood it). When designing a system, if I use a simplified example of BBO I'm playing with at the moment how do you go about this in practice?
> 
> Say I have 4 variables I'm trying to optimize:
> Var 1: Period of the moving average I use for the index filter
> ...



One other point and sorry if this is turning into a class in statistics. But what I like to do is plot the distribution of system's key performance metrics (e.g., CAGR, DD, W/L ratio etc) from the in sample testing from MC. Then I take the same key performance metrics from a single run on the out of sample data and see where they fall within the distributions. If the single run metrics fall with 2SDs of the distributions it gives me a much better level of confidence on the system's performance on future data. If the single run metrics are outside the 2SD my level of confidence in the system's ability to perform as expected on future data is very low and I go back to the drawing board


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## qldfrog (19 March 2021)

MovingAverage said:


> Here is a link to the original article:  https://engineeringreturns.wordpress.com/tsi/
> 
> I've made a few tweaks to my implementation, but it is fundamentally the same.



dead link for afl code , but I found
function TSI()

{
Ratio   = abs(Close - Ref(Close,-10)) / ATR(10)  ;
Result  = MA(MA(Ratio,10),100);
return Result;
}
hope it helps


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## MovingAverage (19 March 2021)

qldfrog said:


> dead link, but I found
> function TSI()
> 
> {
> ...



That's pretty much it. There are some interesting discussions on another forum about this indicator and a few interesting suggestions for refinement. You can also add a signal line to the TSI (which I use in conjunction with the TSI), which is the main difference between my version and the TSI as originally proposed


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## qldfrog (19 March 2021)

MovingAverage said:


> That's pretty much it. There are some interesting discussions on another forum about this indicator and a few interesting suggestions for refinement. You can also add a signal line to the TSI (which I use in conjunction with the TSI), which is the main difference between my version and the TSI as originally proposed



Sorry MA, not sure I understand what you mean about signal line?are you saying a line of code about signal?, a line(threshold)? Sorry for the stupid question :-(


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## MovingAverage (19 March 2021)

qldfrog said:


> Sorry MA, not sure I understand what you mean about signal line?are you saying a line of code about signal?, a line(threshold)? Sorry for the stupid question :-(



Like the MACD indicator in AB...there is the MACD line and there is a Signal line. I have incorporated a Signal line into my TSI


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## qldfrog (19 March 2021)

MovingAverage said:


> Like the MACD indicator in AB...there is the MACD line and there is a Signal line. I have incorporated a Signal line into my TSI



for newbies like me: whar is signal? in MACD case:
_The signal line is a 9-day EMA of the MACD line. As a moving average of the indicator, it trails the MACD ...._
Basically a smoother view of the indicator to remove noise.Dummies like me need full explanation


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## MovingAverage (19 March 2021)

qldfrog said:


> for newbies like me: whar is signal? in MACD case:
> _The signal line is a 9-day EMA of the MACD line. As a moving average of the indicator, it trails the MACD ...._
> Basically a smoother view of the indicator to remove noise.Dummies like me need full explanation



 Although in my case the signal I use with my TSI is not a 9-day EMA of the TSI.


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## Skate (19 March 2021)

qldfrog said:


> Sorry MA, not sure I understand what you mean about signal line?



*I want to clear up a few points*
@Wilham raised a valid point & asked about additional information from @MovingAverage to which trend indicator he uses. 

*Interest turned to the (TSI) indicator *
Simply put, the (TSI) is a double smooth momentum oscillator of changing prices. The (TSI) captures these fluctuations & then applies smoothing. Pretty simple really.

*Let me explain the (TSI) in English*
The (TSI) is a calculation of the price change from one period to the next. It is accomplished by calculating a 25-period (EMA) of this price change. (the first step of the process)

*Here is the twist for double smoothing *
Then the results of the first step - calculate the 13-period (EMA) of this 25-period (EMA).  Wham, bam, thank you, mam - we have just created double smoothing.

*The Signal Line*
@qldfrog was curious about the signal line. The signal line is simply an exponential moving average of TSI. @MovingAverage made the reference to the (MACD) signal line as a mental comparison & the comparison stops there.

*The Buy Signal*
In my previous post, I used a simple "Signal line crossover" to demonstrate the simplicity of getting into an uptrend. Using the zero-line cross is the simplest way to generate a signal. (posted previously)

*For the more advanced*
The first part, which is the double smoothed price change, sets the (+/-) representation of the TSI. The indicator is negative when the double smoothed price change drops below the (zero-line) & positive when it's above the (zero-line). The double smoothed absolute price change normalizes the indicator & limits the range of the (TSI) oscillator. 

*In other words*
The TSI indicator measures the double smoothed price change relative to the double smoothed absolute price change. A string of large positive price changes results in relatively high positive readings, signalling strong upside momentum. A string of large negative price changes pushes the TSI into negative territory.

*The (TSI) is an oscillator that fluctuates between positive & negative in relation to the zero-line*
As with many momentum oscillators, the centreline defines the overall bias. Positive momentum when TSI is above the (zero-line) & negative momentum when it's below.

*If this has sparked an interest*
You can find more about momentum indicators by doing a "search by @Skate" - I'm sure I've made dozens of posts on the subject.

Skate.


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## Skate (19 March 2021)

Beaches said:


> I think you need to assume that many here on ASF are completely new to trading




*The summation by* @Beaches *nailed it. *
At times I'm guilty of explaining the not-so-obvious with an understanding that's what's obvious to most is not obvious to all. At times readers will ask a technical question that relies on a technical answer. The (TSI) indicator raised interest with even the more seasoned readers of this thread thus a post to explain a simple indicator in terms that can be understood.

*Back to *@Wilham 
Asking questions is how we learn but questions should be the last resort not the first. Searching for answers is the first port of call - having those answers clarified is another. (Education is something that is done to you. Learning is something you do for yourself)

*I wish to make a general observation*
I'm just saying - if you have a crazy idea by all means test it to death. But if you are testing a trading idea as the (BBO Strategy) that's has a zillion "Publicised Backtests Reports " with a library of books written about the implementation of the idea - why is there a need for additional confirmation of results? 

*The internet is awash with published (BBO) code with backtest results*
Pick one & if it displays a positive expectancy & you have an urge to trade - trade it with small amounts at first till your confidence & experience increase.

Skate.


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## MovingAverage (19 March 2021)

Hope this is the right place, but I'm in the mood for a dump on trading psychology. Might be a welcome break from all that boring chat about statistics. I really struggle with the extremes of trading and the up side extreme is just as challenging for me. On Monday of this week I entered a long position on ONE with an entry price of around $0.17. Nothing special was just another one of my system buys for the day. ONE has had a massive jump in the past few days and as of a few minutes ago it was trading at around $0.40 so I'm at around 130% up. I'm seriously tempted to override my system and sell before close today--I've never gotten used to massive rises in a short timeframe and my experience tells me such rises come back to earth just as quickly. Bird in the hand and all that stuff.


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## barney (19 March 2021)

Hey @MovingAverage   This is definitely not advice.  Personally, it depends on why I initially bought any given Stock s as to how much wiggle room I give it.

ie  Buy-hold/investment, or purely a trade?

A filter which I often check on a Stock that has had *ultra high intra-day Volume*, is the *VWAP*

I checked ONE and today it's VWAP is currently sitting around *34.7 cents*.  The SP when I started typing was* 38 cents (now 37.5*)

So there have been a lot of shares traded at *above the VWAP* 

Definitely not a red flag, but might be worth considering when sitting on large gains??

ps I don't trade systems, so take with a grain of salt

pps  I wonder if some kind of back test could be done to see the historic relationship between large moves relative to VWAP and where a Stock Closes in relation to said daily moves etc etc??   Mr. @Skate?    

Cheers.


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## MovingAverage (19 March 2021)

barney said:


> Hey @MovingAverage   This is definitely not advice.  Personally, it depends on why I initially bought any given Stock s as to how much wiggle room I give it.
> 
> ie  Buy-hold/investment, or purely a trade?
> 
> ...



Certainly appreciate your perspective. 

This gain is a significant outlier for my system--hence my nervousness. I should probably pay more attention to VWAP


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## barney (19 March 2021)

MovingAverage said:


> I should probably pay more attention to VWAP




Yeah it won't tell you when to Buy or Sell of course, but it definitely gives perspective knowing at what level the bulk of the money changed hands over a given day (and more importantly, days)

Bit hard with ONE today because of the huge one day spike.  It closed at 37.5 with a VWAP of around 34.5 so at least today, that is positive price action. 

Hopefully Mr. Skate might have done a little research on it's usefulness


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## ducati916 (19 March 2021)

MovingAverage said:


> market conditions.






MovingAverage said:


> Hope this is the right place, but I'm in the mood for a dump on trading psychology. Might be a welcome break from all that boring chat about statistics. I really struggle with the extremes of trading and the up side extreme is just as challenging for me. On Monday of this week I entered a long position on ONE with an entry price of around $0.17. Nothing special was just another one of my system buys for the day. ONE has had a massive jump in the past few days and as of a few minutes ago it was trading at around $0.40 so I'm at around 130% up. I'm seriously tempted to override my system and sell before close today--I've never gotten used to massive rises in a short timeframe and my experience tells me such rises come back to earth just as quickly. Bird in the hand and all that stuff.





So never heard of it.

This is it?




Some US context:







Healthcare on a bit of a bounce. Does it start a new uptrend?

Maybe yes, maybe no. Too early to tell.




jog on
duc


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## MovingAverage (19 March 2021)

ducati916 said:


> So never heard of it.
> 
> This is it?
> 
> ...



Yup that's the one. Never heard of it...me neither--it was just another buy. I've set up Stator to flag any of my holding that have 10% plus daily price rises and this came to my attention yesterday.


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## MovingAverage (19 March 2021)

barney said:


> Yeah it won't tell you when to Buy or Sell of course, but it definitely gives perspective knowing at what level the bulk of the money changed hands over a given day (and more importantly, days)
> 
> Bit hard with ONE today because of the huge one day spike.  It closed at 37.5 with a VWAP of around 34.5 so at least today, that is positive price action.
> 
> Hopefully Mr. Skate might have done a little research on it's usefulness



My system is flagging it as a sell for Monday so my dilemma is solved for me


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## Skate (19 March 2021)

barney said:


> pps I wonder if some kind of back test could be done to see the historic relationship between large moves relative to VWAP and where a Stock Closes in relation to said daily moves etc etc?? Mr. @Skate?





barney said:


> Hopefully Mr. Skate might have done a little research on it's usefulness




@barney the issues you raised, frankly, I never think about (or want to). The issue @MovingAverage raised, those of trading by emotions - I've covered many times before in this thread.

*I keep my trading style simple & consistent*
I get in - I get out & everything in between is out of my control. My energy is spent researching new trading ideas & sharpening the signals of the strategies that I already trade. When you get a series of trades under your belt (experience) you tend to roll with the punches rather than reacting to them.

Skate.


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## Skate (19 March 2021)

Skate.


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## MovingAverage (19 March 2021)

Skate said:


> When you get a series of trades under your belt (experience) you tend to roll with the punches rather than reacting to them.
> 
> Skate.




Just sharing my observations and experiences. I spend a lot of time with professional traders (both quants and non-quants)--some of these guys would do more trades in a month than others would do in several lifetimes. For a lot of those guys the emotion is always there. In retail circles the phrase "next 1000 trades" is often thrown around, but to be honest I think finding that state is like finding nirvana.


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## barney (19 March 2021)

Skate said:


> @barney the issues you raised, frankly, I never think about (or want to).




I was just about to reply with another post, but thought better of it.  

Adding my discretionary biases seems inappropriate on your Thread. 

So I will gracefully retire back to my cave of  apparent randomness, lol

Appreciate your thoroughness as you know!

Cheers.


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## Lone Wolf (19 March 2021)

MovingAverage said:


> Here is a link to the original article:  https://engineeringreturns.wordpress.com/tsi/
> 
> I've made a few tweaks to my implementation, but it is fundamentally the same.



Thanks. You get more hits when you understand that the I in TSI stands for "Index" instead of "Indicator".



Skate said:


> *Interest turned to the (TSI) indicator *
> Simply put, the (TSI) is a double smooth momentum oscillator of changing prices. The (TSI) captures these fluctuations & then applies smoothing. Pretty simple really.




Thanks Skate, your post on the TSI is good info. But I believe you are referring to the True Strength Index whereas MA was referring to the Trend Strength Index.


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## qldfrog (19 March 2021)

MovingAverage said:


> My system is flagging it as a sell for Monday so my dilemma is solved for me



The most overide I would ever consider is a SL, in no way a sell if Ido system trading.
Already adding an untested SL is really really borderline: 
the way I see it: how/who am I to even think I can guess the market..


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## MovingAverage (19 March 2021)

qldfrog said:


> The most overide I would ever consider is a SL, in no way a sell if Ido system trading.
> Already adding an untested SL is really really borderline:
> the way I see it: how/who am I to even think I can guess the market..



See to me I don’t really ever think about over riding a SL. A correctly implemented SL will always kick in right? In what situation would you override a SL? I often think about exploring a profit exit to address the concern I have about giving up significant rises. Yes a SL is there but you will always give up a reasonable amount of unrealised profit if just using a SL


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## qldfrog (19 March 2021)

MovingAverage said:


> See to me I don’t really ever think about over riding a SL. A correctly implemented SL will always kick in right? In what situation would you override a SL? I often think about exploring a profit exit to address the concern I have about giving up significant rises. Yes a SL is there but you will always give up a reasonable amount of unrealised profit if just using a SL



???
You have a system, do have gains you are afraid to loose and want to override your system.
At the very least,give a chance to your system to be proven right and instead of putting a sell order, put a sl order.
Conditional sell...
Anyway,just my view, each to his her own


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## Joe90 (20 March 2021)

MovingAverage said:


> That's pretty much it. There are some interesting discussions on another forum about this indicator and a few interesting suggestions for refinement. You can also add a signal line to the TSI (which I use in conjunction with the TSI), which is the main difference between my version and the TSI as originally proposed




Some background on how to use the Trend Strength Index, including performance stats...
https://cssanalytics.wordpress.com/2010/06/28/trend-strength-index-tsi/
https://cssanalytics.wordpress.com/2010/06/29/trend-strength-index-tsi-results-summary/
http://www.nonrandomwalk.com/Blog/tsi.html


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## qldfrog (20 March 2021)

Joe90 said:


> Some background on how to use the Trend Strength Index, including performance stats...
> https://cssanalytics.wordpress.com/2010/06/28/trend-strength-index-tsi/
> https://cssanalytics.wordpress.com/2010/06/29/trend-strength-index-tsi-results-summary/
> http://www.nonrandomwalk.com/Blog/tsi.html



Thanks @Joe90, some great links here


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## MovingAverage (20 March 2021)

qldfrog said:


> ???
> You have a system, do have gains you are afraid to loose and want to override your system.
> At the very least,give a chance to your system to be proven right and instead of putting a sell order, put a sl order.
> Conditional sell...
> Anyway,just my view, each to his her own



Because of the specific exit I use in that system I know that historically rapid rises like this tend to give back (not all). This particular trade is an outlier and I know how my system responds to similar scenarios—hence my concern.


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## qldfrog (20 March 2021)

MovingAverage said:


> Because of the specific exit I use in that system I know that historically rapid rises like this tend to give back (not all). This particular trade is an outlier and I know how my system responds to similar scenarios—hence my concern.



What about coding it as part of your system and see if statistically you are better off or not?
If it helps:
Do not want to lead the thread away but this is a dangerous slide if you start mixing feeling and ..not so..systematic trading.
for you to decide.Peter openly uses a mixed approach,system doing the early detection and signal, discretionary decision then  and this is fine as it is the design.

I was under the impression you were following a more systematic approach, and if so i believe you should have a think then and maybe code an exit if you wish too, but away from the heat of the moment.
A great opportunity actually as you will sell, per system on monday and so wo pressure


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## MovingAverage (20 March 2021)

qldfrog said:


> What about coding it as part of your system and see if statistically you are better off or not?
> If it helps:
> Do not want to lead the thread away but this is a dangerous slide if you start mixing feeling and ..not so..systematic trading.
> for you to decide.Peter openly uses a mixed approach,system doing the early detection and signal, discretionary decision then  and this is fine as it is the design.
> ...




I often think about coding it, but just haven't got around to it yet. Other fish to fry at the moment. I'm more focused on managing the downside, but I could do a simple assessment by implementing AB's Profit Target. I do trade purely systematic and my system always alerts me to outliers, which this is. I'll often review the outliers as means for doing a sanity on the overall system's behavior.


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## MovingAverage (20 March 2021)

Joe90 said:


> Some background on how to use the Trend Strength Index, including performance stats...
> https://cssanalytics.wordpress.com/2010/06/28/trend-strength-index-tsi/
> https://cssanalytics.wordpress.com/2010/06/29/trend-strength-index-tsi-results-summary/
> http://www.nonrandomwalk.com/Blog/tsi.html



Interesting, thanks Joe.

I'm curious that they compare TSI to ADX and state most people use ADX as a trend filter. I've spent a bit of time evaluating ADX over a range of scenarios (admittedly only on the ASX) and it has always been a massive disappoint for me. I've revisited it many times over the years and nothing. I don't actually know any one that uses ADX as a serious trend filter and in fact I'd love to know if anyone here actually uses it? Maybe ADX works well on the Nasdaq but my experience tells me it is horrible on the ASX.


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## Skate (20 March 2021)

Lone Wolf said:


> Thanks Skate, your post on the TSI is good info. But I believe you are referring to the True Strength Index whereas MA was referring to the Trend Strength Index.




*Assuming *
Reminds me of a story of a bereavement card being notated with (LOL) the sender assumed (LOL) meant (Lots-Of-Love)

*Who would have thought?*
(WTF) Some acronyms are sometimes confusing & by the way how others interpret them. I assumed (WTF) meant (Way-To-Funny) or is that just me?

*Let's talk about the real TSI in question (The Trend Strength Index)*
True Strength & Tend strength - there is a difference. I should also thank @Joe90 for the hyperlinks that I also appreciated. Straight off the bat, there are similarities between an "Average Directional Index" (ADX) & a "Trend Strength Index" (TSI). Both of these, are trend strength indicators & not trend directional indicators. With Trend Strength, you need to understand that they can be either going up or going down.

*Backgrounding *
To clear up the confusion of acronyms - I'll make a brief description of the recent indicators & their individual uniqueness.

*TSI (Tend Strength Index)*
Unfortunately, the "Tend Strength Index" (TSI) does not reveal the trend direction. The "Tend Strength Index" (TSI) behaves differently under differing conditions that users should be aware of. The "Tend Strength Index" (TSI) gives "strength reading" in Up-trends, Down-trends & at times in Sideway-trends. Also, if the "Tend strength Index" (TSI) is not used or coded correctly this indicator can catch you off guard "quick smart" when price reverses quickly. Why? - because the "Tend Strength Index" (TSI) does not indicate trends, but rather indicates the strength-of-them. To summarise, the (TSI) is not a trend indicator, but a "strength of trend indicator", whereas a good "True Strength Indicator" used in conjunction would be able to ignore those situations.

*True Strength Index (a directional indicator)*
Simply put, the "True Strength Index" (TSI) is a double smooth momentum oscillator of changing prices that reveals the direction of the trend. The "True Strength Index" (TSI) initially captures these fluctuations then applies "double smoothing" to reduce the lag of these signals.

*ADX*
Unfortunately, the (ADX) also does not reveal the direction of the trend. The average directional index (ADX) shows the strength but not the direction of the price that is trending. Trading in the direction of a strong trend reduces risk & increases profit potential. The (ADX) & (TSI), are both "Trend Strength indicators" & can be confusing to use because both are interpreted differently from other indicators. Most indicators move up when prices rise, and they fall when prices decline, that’s not necessarily the case with both the (ADX) & (TSI) indicators.

*MACD*
As a reference was made about the "Moving Average Convergence Divergence" (MACD) indicator, it's only fair that I give a brief outline of this indicator. On the other hand, the (MACD) indicates price momentum that identifies price direction as it rises above its trigger line or falls below its zero-line. To summarise, the (MACD) by designed reveals changes in the strength, direction, momentum, & duration of a trend.

I trust this clears up my confusion of the acronyms.

Skate.


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## Warr87 (20 March 2021)

MovingAverage said:


> Interesting, thanks Joe.
> 
> I'm curious that they compare TSI to ADX and state most people use ADX as a trend filter. I've spent a bit of time evaluating ADX over a range of scenarios (admittedly only on the ASX) and it has always been a massive disappoint for me. I've revisited it many times over the years and nothing. I don't actually know any one that uses ADX as a serious trend filter and in fact I'd love to know if anyone here actually uses it? Maybe ADX works well on the Nasdaq but my experience tells me it is horrible on the ASX.



Off the top of my head, the CAM system uses it.


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## MovingAverage (20 March 2021)

Warr87 said:


> Off the top of my head, the CAM system uses it.



Excuse my ignorance...CAM?


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## Skate (20 March 2021)

MovingAverage said:


> Excuse my ignorance...CAM?




*1. The CAM Strategy* - summary
The CAM strategy buys pullbacks in existing trends and buys countertrends when the rally continues.






*(a) The CAM Strategy* - Trading Plan (*Enter LONG*)
Buy before the open on Monday in the pre-auction at the open if today (Friday) is a GOLD-coloured bar [which represents the CAM-PB, meaning that both the 10-period (ADX) and (MACD) are declining] but the 14-period (CCI) is above zero, *-* *OR -* if today (Friday) is a BLUE-coloured bar [which represents the CAM-CT, meaning the 10-period (ADX) is declining but (MACD) is rising] and today’s close crosses above the 13-period EMA.

*(b) The CAM Strategy* - Trading Plan (*Exit LONG*)
Sell before the open on Monday in the pre-auction if Fridays end of close is a RED-coloured bar [which corresponds to the CAM-DN, that is, the 10-period (ADX) is rising but the (MACD) declines] and today’s (Friday) close is below the 13-period EMA.






						Dump it Here
					






					www.aussiestockforums.com
				




Skate.


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## Skate (20 March 2021)

*My apologies*
I posted a stored progressive data snapshot for the Sphere Strategy (yesterday) instead of the exploration analysis signals from the final adjusted data set. I'm sure it would have made no difference as the updated signals would have been selected rather than the incomplete signal, I posted yesterday. The new Exploration list is for the accuracy of the exercise.




Skate.


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## qldfrog (20 March 2021)

Skate said:


> View attachment 121634
> 
> 
> View attachment 121635
> ...



I tried quickly to incorporate the tsi to control the entries of some existing trend systems,
No improvement i could see. .
anyone using tsi?


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## MovingAverage (20 March 2021)

qldfrog said:


> I tried quickly to incorporate the tsi to control the entries of some existing trend systems,
> No improvement i could see. .
> anyone using tsi?



Yes I’m actively using it, but I only use it to switch between different systems—I don’t use it to filter buys sigs within a system


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## MovingAverage (20 March 2021)

qldfrog said:


> I tried quickly to incorporate the tsi to control the entries of some existing trend systems,
> No improvement i could see. .
> anyone using tsi?



Not sure how you tried it, but keep in mind it doesn’t indicate trend per se. You should use a trend indicator (eg MA cross over) and use TSI to confirm with current trend is strong, weak or indifferent.


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## Skate (20 March 2021)

qldfrog said:


> I tried quickly to incorporate the tsi to control the entries of some existing trend systems,
> No improvement i could see. .
> anyone using tsi?






MovingAverage said:


> Not sure how you tried it, but keep in mind it doesn’t indicate trend per se. You should use a trend indicator (eg MA cross over) and use TSI to confirm with current trend is strong, weak or indifferent.




*My clarification *
Using the "Tend Strength Index" (TSI) has its limitations inasmuch that it confirms the strength of the trend rather than the trend direction. The practical application of a "Tend Strength Index" (TSI) as a stand-alone indicator as-far-as I'm concerned is stifled by its inherent limitations. Matching the "Tend Strength Index" (TSI) with other indicators there are slight improvements - but nothing to write home about.

*True Strength Index (a directional indicator)*
The "True Strength Index" (TSI) has strong trading applications as it reveals the direction of the trend & captures it nicely. The "True Strength Index" (TSI) reduces the lag of these signals which is the real head-turner.

*Summary*
1. The "Tend Strength Index" (TSI) has limited practical applications.
2. The "True Strength Index" (TSI) is a different "kettle-of-fish" & I've recently posted the backtest results of a stand-alone strategy using the "True Strength Index". The "True Strength Index" (TSI) is a perfect engine of an entire trend strategy. A (V8) engine at that.

*Combining the indicators*
Adding the "Tend Strength Index" (TSI) to the "True Strength Index" (TSI) & using it as a stand-alone strategy the buy condition improves slightly. Using both indicators in unison has practical applications & slight improvement can be achieved.

Skate.


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## Skate (21 March 2021)

qldfrog said:


> * anyone using tsi?*




@qldfrog I've used both (TSI) indicators with success combing an "AND" & "OR" statement annexed to the buy condition. Using both indicators reduce false breakouts of forming trends.

*A simple line of code*
Using the zero-line of the "True Strength Index" (TSI) oscillator has strong trading applications, so has the "Tend Strength Index" (TSI) under certain conditions - using both indicators with filters & tuned parameters certainly adds value.

*Sample Code for @qldfrog *
BuyTSIsetup = TSI AND sig > 0 OR TSIndicator > 1.65;

*In English*
When the double smoothed (TSI) & the signal line are both higher than zero - forms the first part of the buy condition. The "OR" statement becomes an additional buy condition. So, if the "Tend Strength Index" (TSI) is greater than 1.65 (the standard measure of trend strength) is the other buy signal (but limited). Add parameters & other filters to the system & it becomes a worthy trend strategy.

Skate.


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## qldfrog (21 March 2021)

MovingAverage said:


> Not sure how you tried it, but keep in mind it doesn’t indicate trend per se. You should use a trend indicator (eg MA cross over) and use TSI to confirm with current trend is strong, weak or indifferent.



Thanks: Yes, understand that .
Was added as an AND tsi>xx to existing trend system but only reduced results,did not reduce dd either on the very quick tests i did.
I have to highlight this was not an extensive proper investigation and was added on top of existing properly tested systems.
I might not have much room for improvement on these...


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## Skate (21 March 2021)

MovingAverage said:


> Hope this is the right place, but I'm in the mood for a dump on trading psychology. *I really struggle* with the extremes of trading and the up side extreme is just as challenging for me. *I'm seriously tempted to override my system* and sell before close today--I've never gotten used to massive rises in a short timeframe and my experience tells me such rises come back to earth just as quickly. Bird in the hand and all that stuff.




@ducati916 answers your concerns about trading psychology with his perfect summation.



> ducati916 said:
> *The thing with having many balls in the air concurrently, is that the market can chop and change rapidly. Trends appear and disappear very quickly. Holding positions becomes harder to do. The impact on trader psychology is to increasingly grab quick profits. It becomes habit forming and that much harder to sit in a trade for the big(ger) gains that are available in catching a good trend.*




*Trading psychology*
@ducati916 sums up trading psychology precisely - not only in "general terms" but adds special meaning, especially with the current market conditions. There is no denying that this calendar year trading has been a tough gig so far. Meaning, with current trading conditions, sticking with your trading plan becomes difficult if not impossible for most.

Skate.


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## qldfrog (21 March 2021)

Skate said:


> @ducati916 answers your concerns about trading psychology with his perfect summation.
> 
> 
> 
> ...



not impossible but hard indeed, see my posts after 2 weeks of $4k or so loss a day..day after day..part of it was discretionary, but even for discretionay there was a plan behind the discretionary: "make money" , not "lose 20k a week"


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## over9k (21 March 2021)

"If you've bought right, all you have to do is hold tight" 

@MovingAverage Have you had any hedges in place? I bought banks & energy/oil a while back and have watched them soar while all my tech holdings have been smashed over the last month. I'm about even over the last 4-5 weeks as a result. 

I also wonder if you're not looking at the upside here - if you have a situation where A is down but B is up TEMPORARILY, then that's a golden opportunity to take your profits from B and pump them into A when the market flips back in the other direction again. 

I just made a series of giant posts over in the economic implications of coronavirus thread explaining why I think this move is temporary just FYI


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## MovingAverage (21 March 2021)

over9k said:


> "If you've bought right, all you have to do is hold tight"
> 
> @MovingAverage Have you had any hedges in place? I bought banks & energy/oil a while back and have watched them soar while all my tech holdings have been smashed over the last month. I'm about even over the last 4-5 weeks as a result.
> 
> ...




Thanks for the response. I’m a simple man and like to keep things simple so don’t bother with hedging. I do a little foreign investing and will, when possible,  hedge for FX movements but I don’t bother hedging for domestic positions. Curious, by taking profits in B and pumping into A when down are you referring to a dollar cost averaging strategy? If so I’m not a fan of that, but that’s just me personally. Thanks again


----------



## over9k (21 March 2021)

MovingAverage said:


> Thanks for the response. I’m a simple man and like to keep things simple so don’t bother with hedging. I do a little foreign investing and will, when possible,  hedge for FX movements but I don’t bother hedging for domestic positions. Curious, by taking profits in B and pumping into A when down are you referring to a dollar cost averaging strategy? If so I’m not a fan of that, but that’s just me personally. Thanks again



Nah different thing.

At the moment the market is getting smashed by inflation expectations. But there are some things which run up (and run HARD) when inflation goes up - banks for example.




The inverse correlation between the two (the fact that they move in opposite directions to each other) provides a golden opportunity if a flip in the opposite directions is only temporary like this ultra-high-tech graph I've drawn has. 

You would obviously only do this if you think that the two curves are going to revert to their previous trend/what we see at the moment is only temporary though (which I do).


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## qldfrog (21 March 2021)

Skate said:


> @qldfrog I've used both (TSI) indicators with success combing an "AND" & "OR" statement annexed to the buy condition. Using both indicators reduce false breakouts of forming trends.
> 
> *A simple line of code*
> Using the zero-line of the "True Strength Index" (TSI) oscillator has strong trading applications, so has the "Tend Strength Index" (TSI) under certain conditions - using both indicators with filters & tuned parameters certainly adds value.
> ...



if it helps:
working with TSI, I get indeed VERY good win rates:in the 60% '
well well above my usual figures..yet I do not manage to better my existing system overall return, DD CAR etc
This is a new situation for me, so maybe I need to check my exit in a different light
very interesting


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## MovingAverage (21 March 2021)

over9k said:


> Nah different thing.
> 
> At the moment the market is getting smashed by inflation expectations. But there are some things which run up (and run HARD) when inflation goes up - banks for example.
> 
> ...



That’s all good stuff, but to be honest I’m a humble retail system trader and I can’t code that stuff into my system so don’t bother 😂. Appreciate that it’s serious stuff but it’s just not on my radar


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## over9k (21 March 2021)

Ah yes, it's all macroeconomic stuff so a totally different thing.


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## Skate (23 March 2021)

over9k said:


> *Jack Bogle*
> "If you've bought right, all you have to do is hold tight"



*Timing the markets (System Trading)*
It's often said that timing the market rarely works but as a systematic trend trader, that's all I do. The accuracy of system trading is disappointing but profitable. I've made a series of posts about how I "jump on & off trends". Timing when you hop on is "significant" but timing when to hop off is "critical" - to the performance of any strategy.

*Time in the markets (Value Investing)*
This type of investing can be referred to as a "buy & hold" passive investment style. Buy & Hold strategies, relies on the theory that "overtime" markets go up, driven by solidly profitable companies. I'm not saying you can "buy & take your eye off the ball" but rather check periodically that the original investment decision is still applicable.

Skate.


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## Skate (23 March 2021)

*There is an alternative way to make money (in the markets)*
Fear is the emotion traders constantly battle evident with the COVID flash crash a year ago. At the time of the crash, no one was sure how deep or how long the crash would persist. Fearfulness is the emotion "why traders" sold in March 2020. To be perfectly honest "I'm included in this group" as I was fearful of losing "open profits".

*The decimation of trading accounts*
There are others who at the time did so to stop their trading account from being decimated. At times "panic selling" is a wonder drug in relation to trading but as an investor, it never quite works out that well.

*Re-entering the markets*
I re-entered the markets quickly not because the market was going back up but rather panic selling was abating. Some were fearful of a second dip as they believed more pain was yet to come. Fear was also the emotion, why some traders didn't jump back in at first "lacking confidence" to do so. Others who jumped back in - did so but not to their pre-Covid levels.

*When traders sell, it gives others an "opportunity" to buy *
Capitalising on falling markets is the same as having a punt that the theory of "mean reversion" really works (most of the time). The "timing" of an investment doesn't carry the same weight as the "timing" of a trade.

*Investing when there is a pricing mismatch*
Historical evidence & previous trading experience of respected traders guide us - how "extraordinary" returns can be achieved when investing when there is a pricing mismatch.

Skate.


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## Skate (23 March 2021)

*Learning to understand *
I don't often post links to videos but I'm suggesting you watch the YouTube video below - it might be the best 82 minutes that you can invest in your trading education.

*Generalisation of the content*
The content is important but not in-as-much as the underlying methodology & thinking behind the specific content. If you are truly committed to making money in the markets - this video is in the must-watch category.

*Video Length (1:12:23) *
I'm sure most will pass on the opportunity to view the video because of its length. Most would rather read one-liners because it's easy & requires little effort. Reading a book or watching a video requires a tremendous amount of concentration. People by "human nature" are just like water & as water tracks the easiest path so do people. Self-education is lacking with most today, they want everything handed to them because they haven't the time to learn.

*The 12-step recovery process of trading*



Skate.


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## MovingAverage (23 March 2021)

Skate said:


> *Learning to understand *
> I don't often post links to videos but I'm suggesting you watch the YouTube video below - it might be the best 82 minutes that you can invest in your trading education.
> 
> *Generalisation of the content*
> ...




Appreciate the link and I'm about 40 mins in, but I am getting the feeling this is an advert for index funds highlighted by all the negatives associated with active investments/funds. There is some good stuff in there, but just doesn't seem like a balanced perspective so far. Anyway, I'll stick with it to the end.


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## Skate (23 March 2021)

MovingAverage said:


> Appreciate the link and I'm about 40 mins in, but I am getting the feeling this is an advert for index funds highlighted by all the negatives associated with active investments/funds.





Skate said:


> *Generalisation of the content*
> The content is important but not in-as-much as the underlying methodology & thinking behind the specific content. If you are truly committed to making money in the markets - this video is in the must-watch category.




*Advert for index funds*
I made reference to this in my previous post. The underlying methodology & specific content is important - the self-promotional part of the presentation isn't. 



MovingAverage said:


> There is some good stuff in there, but just doesn't seem like a balanced perspective so far. Anyway, I'll stick with it to the end.




*Anyway, I'll stick with it to the end*
Good work!

Skate.


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## MovingAverage (23 March 2021)

Skate said:


> *Advert for index funds*
> I made reference to this in my previous post. The underlying methodology & specific content is important - the self-promotional part of the presentation isn't.
> 
> 
> ...



Got to the end. I thought they did a good job on the high-level overview of the statistical properties. The point they made that I think people would do well to remember is that "risk is what generates your return". Thanks for posting.


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## MovingAverage (23 March 2021)

MovingAverage said:


> Got to the end. I thought they did a good job on the high-level overview of the statistical properties. The point they made that I think people would do well to remember is that "risk is what generates your return". Thanks for posting.



oh and I thought the actual ticker tape from the 29-32 crash was very cool.


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## Skate (24 March 2021)

Skate said:


> *Investing when there is a pricing mismatch*
> Historical evidence & previous trading experience of respected traders guide us - how "extraordinary" returns can be achieved when investing when there is a pricing mismatch.




*Unloved (ASX:NCM)*
I'm not posting to influence, but rather to put on record that my "Bee Strategy" is designed to find value, generating another signal last Friday. The latest (weekly) signal was for an entry into Newcrest Mining (NCM) last Monday. Even though the daily signal was for the 13th of March 2021.

*6 Signals so far (ANZ, BHP, CBA, MFG, MQG, NCM) *
I've posted that the "Bee Strategy" has produced 5 signals to date "since the Covid flash crash" back in March 2020. All positions so far have been taken. The "Bee Strategy" rarely produces signals but when it does, they are normally "on the money".

*The 6th weekly signal (NCM) *
The weekly "Bee Strategy" generated a signal for (NCM) on Friday the 19th March 2021 for a "buy at the open" on Monday 22nd March 2021. The "Bee Daily Strategy" generated the same entry signal on the 13th of March 2021. I prefer to trade "Weekly" as in IMHO - weekly signals confirm the trend a little better (cutting out the majority of false starts)

*Alternative to trading*
Investing rather than trading can be at times less stressful, an alternative way to grow your capital base. With trading, you buy a position hoping sometime in the future you can offload it to someone else at a higher price. Investing applies the same principle but the "hold time" increases.

*Set & Forget Investing*
The "Bee Investment Strategy", invests for dividends & capital gains. Investing at times can simply be a "set-&-forget" way of parking trading funds for the long haul. If positions are added at the "right time", investing this way can be stress-free. (you still need to have a system in place (to generate the signals) rather than entering on a gut feeling).

*Time dependant*
Over time there is a double whammy, dividends, & capital gains. The "dividends can be reinvested" through their dividend reinvestment plan (DRP) - most large caps provide this feature or you can have the dividends paid into your bank account for living expenses, it’s up to you to decide how the dividends are dispersed.

*Investing can be scary*
No investment strategy is safe, but value investing can at times be less risky. I'm just saying "when you can't take a trick" or when "system trading" is a hard slog there are other ways to park substantial funds waiting for the tide to change.

*Daily Chart - (NCM)*



Skate.


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## Skate (25 March 2021)

ducati916 said:


> *I suspect that it is the wrong market environment for a BO system.* A BO system is a real bull market system. The current market has moved from Bull to neutral, or even possibly a very early Bear. We won't really know until a little further down the track, but either way, *now is time to play defence.*
> 
> jog on
> duc



*There are alternatives*
When systems are not behaving as expected (due to market conditions) - value investing can be the alternative. (rotation of strategies) 

Skate.


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## ducati916 (25 March 2021)

Skate said:


> *There are alternatives*
> When systems are not behaving as expected (due to market conditions) - value investing can be the alternative. (rotation of strategies)
> 
> Skate.




Two responses to this:

(i) absolutely have at least 2 systems, one for bull and one for bear as a minimum; and
(ii) is 'value' a bear market system?;
(iii) if so, is it combined with some version of $cost averaging or are you still operating some form of hard exit?

I have seen the posts on the value system. Is this a 'technical' scan of 'value' or are there fundamental screens added to the technicals? I have never seen a purely technical scan for value. It is always combined with fundamental screens. Even then, you should actually check that the numbers provided in the financials are legitimate. There was the instance of a honey maker cooking the books, outright fraud, that was punted as a 'value' stock.

jog on
duc


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## Skate (25 March 2021)

ducati916 said:


> Two responses to this:
> 
> (i) absolutely have at least 2 systems, one for bull and one for bear as a minimum; and
> (ii) is 'value' a bear market system?;
> ...




*(i) Multiple Systems*
You are absolutely correct. It's wise to have systems that work in all markets (horses for courses) 

*(ii) Value investing*
IMHO value investing works in all markets as the strategy looks for mispricing (only)

*(iii) Dollar Cost Averaging*
Value investing is very reliant on indicators. The drawback of "trading by indicators" is each time the condition is met a "signal is generated". The good thing about "trading by indicators" - it allows dollar-cost averaging.

*Is this a 'technical' scan of 'value' or are there fundamental screens added to the technicals?*
I'm a numbers guy. Fundamentals are unreliable (AFAIC), not only for the issue you raised (cooking the books) but for a few other reasons as well.

*I have never seen a purely technical scan for value*
Terminology can at times muddy the waters (or a post). When I talk about "value investing" I'm referring to investing in mispriced securities. I've never had much joy trading "mean reversion systems" for a couple of reasons (1) short holding periods (2) associated high "commission costs" but that's not to say that we can't build on the premise of the idea (not the idea).

*Scanning for value*
For the technical traders, I use 3 indicators that look for mispricing. Using the 3 indicators in conjunction with each other paints a picture. The picture is incomplete until a directional move is confirmed. (that's what I'm after). Index selection, strict parameter setting, stringent filters, & PositionScore defines the confirmation. Admittedly this type of strategy delivers infrequent signals. (downside)

*I use 3 Indicators*
There are just three indicators I use in the "Bee Strategy" (MACD, RSI & StochD). By folding indicators back on themself are self-confirming (double confirmation for a better word). Only the (StochD & MACD) are used in this manner. The RSI is the final arbitrator. Simple, effective & easily implemented.

*I try hard to promote new ideas*
My idea of buying mispriced securities is not for everyone - but trading the "Bee Strategy" (value investing) works for me. 

Skate.


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## frugal.rock (25 March 2021)

Skate said:


> *There are alternatives*
> When systems are not behaving as expected (due to market conditions) - value investing can be the alternative. (rotation of strategies)



I personally love the good old discretionary "system" which just rolls along with the punches and is always adapting on the fly, as is required by the ever changing market dynamics...IMO



			https://www.aussiestockforums.com/attachments/24032021-port-jpg.121780/


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## Skate (25 March 2021)

frugal.rock said:


> I personally love the good old discretionary "system" which just rolls along with the punches and is always adapting on the fly, as is required by the ever changing market dynamics...IMO
> 
> 
> 
> https://www.aussiestockforums.com/attachments/24032021-port-jpg.121780/




*No discretionary for me*
The 50/50 - 80 rule scares me to death. 

*50/50 - 80 rule*
The 50/50-80 rule simply states - when there is a 50% chance of getting it right (given the choice of the call) you will be wrong 80% of the time. Meaning I wouldn't trust myself making a discretionary call (I don't process those skills - where others do).

Skate.


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## ducati916 (25 March 2021)

Skate said:


> *I have never seen a purely technical scan for value*
> Terminology can at times muddy the waters (or a post). When I talk about "value investing" I'm referring to investing in mispriced securities. I've never had much joy trading "mean reversion systems" for a couple of reasons (1) short holding periods (2) associated high "commission costs" but that's not to say that we can't build on the premise of the idea (not the idea).
> 
> *Scanning for value*
> ...








Ok, now you have me really nervous. I simply don't have time to go deeply into the financials, so I just ran a quick scan.

So a couple of charts:

So the 1'st chart is just a bog standard price chart. Essentially, at the bottom last year it traded at $21 and change. It looks technically, a x2 bottom. I'm not sure where a 'mispricing' could enter into the scan, but...




Now the 'fundamentals':




I won't go into detail, but ugly.

How is this mispriced? Mispriced to its reserves as against POG/POC?


jog on
duc


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## Skate (25 March 2021)

ducati916 said:


> Ok, now you have me really nervous. I won't go into detail, but ugly. How is this mispriced?




*Backgrounding*
When I'm posting ideas into the way I trade, I always discuss the thinking behind the methodology. More importantly, I always display the "signals in advance" when discussing trading positions taken. 

*Rearward looking*
I'm not a fan of hindsight bias nor a fan of those who explain trading after-the-fact. Charts do tell a story but it rarely reveals the direction of the next bar or bars. It's well worth remembering, we all trade on the right-hand side of a price chart.

*Signals*
Weather signals are just signals - interpreting the signals gives a fair indication of the weather to come. Trading signals do much the same but the markets are more unpredictable due to the nature of emotions.

*6 Signals *
I have posted the timing of the 6 positions taken so far, being (ANZ, BHP, CBA, MFG, MQG, NCM). The "Bee Strategy" allows large values to be invested, it's just the nature of the beast.

*Summary*
It's safe to say @ducati916 has a different view "at-the-moment" of (NCM) than I do, plain & simple.

Skate.


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## Skate (27 March 2021)

ducati916 said:


> A bit of schadenfreude from this chart




*How apt is that *
Schadenfreude is a German word & we don't have an English equivalent. The word is best described as an emotion. Rather than feeling sympathy, "pleasure is derived from another person's misfortune"

*The screen capture below has been taken from* @ducati916 *thread* (without permission)
It's a fair summation (AFAIC) of the emotions experienced by many. Being a "trader & investor", has struck a chord. For me, the timing is a little off but that's the (S&P 500) chart.



*I'm assuming we all felt the burn of the "Covid Flash Crash"*
Sometimes traders & investors like to pigeon-hole themselves into one particular style. By being open to combining styles may provide the best opportunity to make the most profit. Fear & greed directly drives the markets & it’s our perception that creates the value at any given moment. While one person sees a buying opportunity of a lifetime, another sees the complete meltdown of the markets. Deciding when to be in the market & when to stay out is a personal decision (that's usually driven by emotions). Emotions can be good & bad, recognising the difference is the secret to trading.

*In the next post*
I'll post a similar chart, a chart of events - the timeline as it related to "my trading" during & after the (Covid Flash Crash).

Skate.


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## Skate (27 March 2021)

*This is how the "Covid Flash Crash unfolded for me*
1. @bigdog raised the first warning with me on 25th February 2020.
2. As a systems trader (no matter what) I don't action any position until the strategy indicates to do so.
3. The "Get The Fu¢k Out" (GTFO) filter activated on Friday the 28th of February 2020
4. All my positions were liquidated at the open on the 3rd March 2020.
5. The "Bee Strategy" (a value investing strategy) generated buy signals on (19/20/23rd of March 2020) & all positions were taken.
5. I recommended "trading" on Monday the 11th May 2020 & have never stopped to this date.
6. The "Bee Strategy" analysis generated (coughed up) the final two buy positions (to complete the strategy) this month (March 2021)
7. Recent "trading" has been a slow grind, but with a combination of strategies, it's all sweet.




*Confirmation Posts*
Value investing to me is investing in "mispriced" securities


Skate said:


> @investtrader this "perceived value" style of trading is not dependant on a "sustained rally" but buying in the "hope" that sometime in the future the price will go back to the mean - using our trading experience (the Bee Strategy). I imagine there will not be a trigger for upside volatility in the short term & having money sitting in cash is unproductive. Making large investments in quality shares at a lower price has three benefits (1) Price appreciation over time (2) Dividends being paid along the way & (3) Idol money being put to work.
> 
> *Two recent purchases *
> I have recently purchased $200k of each (1) BHP & (2) ANZ for the three reasons I mentioned above.




*The reason for the mass exit* (GTFO Filter)
The GTFO filter performed as intended & saved my bacon. The hemorrhaging of "open profits" was cauterized by the GTFO filter to stop the bleeding.


Skate said:


> *I'm posting about one of my filters (the "GTFO" Filter)*
> I've exited all my positions (28th February signals) & now I'm in (100% cash) sitting on my hands these last few weeks. The last few weeks have highlighted the importance of an "exit strategy" & why the timing of an exit is so critical. I thought it would be appropriate to make a post about the added protection I have built into all my strategies, the "GTFO" filter.




*Summary timeline of the ("Bee Strategy")*
1. On the 19th & 20th, March 2020 (BHP & ANZ) were taken
2. On the 23rd March 2020 (MQG & CBA) were added to the strategy.
3. This month March 2021 (MFG & NCM) completes the 6-position portfolio.

*Trading evaluation*
By providing my actual trading timeline & chart (with notations) - hopefully, go some way of benchmarking for others. By referring back to a snapshot of trading shines a light on "what we did", challenging ourselves, looking for improvements in preparation for the next major impact.

Skate.


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## Skate (28 March 2021)

*Why do I visit this forum every day?*
Well, for the obvious reason - the desire to help others, but more importantly to read the content provided by others. There are posts that resonate with me more than others & I tend to spend most of my time reading those.  

*"I'm weak" *(Habits are hard to break) 
I have a bad habit of spending too much time on the computer. To reduce the time spent on the forum I can use the "ignore" feature - while still retaining the ability to post. I'll try it for a week or so (as the feature can be turned on & off)

Skate.


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## pozindustrial (28 March 2021)

Has anyone used BEAR over a crash before? Looks too simple to be true if you know a correction is coming. I have not traded options or futures before and it is a little too complicated to get started when you are a newbie. I am very jittery at present, I will liquidate all holdings tomorrow and thinking of putting half the cash in BEAR as my defensive. The other half I need in accounts so I can buy back in when I see the opportunity I expect.


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## Skate (28 March 2021)

Skate.


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## Skate (28 March 2021)

Skate.


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## Skate (28 March 2021)

pozindustrial said:


> I am very jittery at present




*Starting a new strategy*
We all trade in the hope of profitability. The reason I keep posting new trading ideas & weekly results demonstrates that trading has its moments (good & bad). Trading results are secondary & not the point of the exercise. Taking the signals without hesitation or intervention is a hard lesson to learn. Keeping your emotions in check is even harder.

*Trading confidence is a skill to acquire*
Trading confidence comes from a few areas - trading results & ongoing experience also help. Confidence is something you must learn as it doesn't come naturally to traders.

*Trading at the moment is a tough gig*
Trading has really been tough this calendar year (2021)   

*Perseverance*
That's the name of the game.

Skate.


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## Roller_1 (28 March 2021)

pozindustrial said:


> Has anyone used BEAR over a crash before? Looks too simple to be true if you know a correction is coming. I have not traded options or futures before and it is a little too complicated to get started when you are a newbie. I am very jittery at present, I will liquidate all holdings tomorrow and thinking of putting half the cash in BEAR as my defensive. The other half I need in accounts so I can buy back in when I see the opportunity I expect.




i've tried to buy BEAR with IB before and it wouldn't allow me to, has anyone else had this?


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## frugal.rock (28 March 2021)

Loving the fear of doom and gloom and the volatility.



pozindustrial said:


> I am very jittery at present, I will liquidate all holdings tomorrow and thinking of putting half the cash in BEAR as my defensive.



Perhaps you are drinking to much coffee or have a condition?

Do you honestly think it's wise to put half of your eggs in one basket?
(For your info, I use BBOZ if I feel bearish, which I might for half a day or so...)

Anyway, moving along.
Had my best individual day ever on Tuesday this week...with 1 of 2 portfolios succeeding a 21.9% raise.
Same portfolio closing 16% up for the week.
A more than satisfactory result imo, however, it's just numbers and it's all open, until it's not.
The bar graph is a 12 week snapshot.




I trade/ invest full time and let the data tell me the facts rather than letting noise and rhetoric influence my opinion.
I don't ignore "sentiment", however I prefer to keep it objective, rather than majority subjective.
My


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## frugal.rock (28 March 2021)

I can't see any of @skates posts anymore ?
Maybe I'm on ignore?


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## ducati916 (28 March 2021)

frugal.rock said:


> I can't see any of @skates posts anymore ?
> Maybe I'm on ignore?





No I think after the 'spam' incident he simply deleted everything.

jog on
duc


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## frugal.rock (28 March 2021)

Skate said:


> *"I'm weak" *(Habits are hard to break)
> I have a bad habit of spending too much time on the computer. To reduce the time spent on the forum I can use the "ignore" feature - while still retaining the ability to post. I'll try it for a week or so (as the feature can be turned on & off)






Can see this and all other posts when not logged in.... so definitely won the ignore prize.

I guess the sanctum of the "Dump it here" is now null and void, for a week or forever, time will tell.

Cheers.


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## Newt (28 March 2021)

ducati916 said:


> No I think after the 'spam' incident he simply deleted everything.
> 
> jog on
> duc




What was the spam incident please Duc?


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## qldfrog (28 March 2021)

Newt said:


> What was the spam incident please Duc?



Same here, all this coming like a bomb, i had so much links to this thread that i use for my development it is pretty scary


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## qldfrog (28 March 2021)

After logging anonymously, indeed we have

*Why do I visit this forum every day?*
Well, for the obvious reason - the desire to help others, but more importantly to read the content provided by others. There are posts that resonate with me more than others & I tend to spend most of my time reading those.

*"I'm weak" *(Habits are hard to break)
I have a bad habit of spending too much time on the computer. To reduce the time spent on the forum I can use the "ignore" feature - while still retaining the ability to post. I'll try it for a week or so (as the feature can be turned on & off)

Skate.

So we are all on ignore?
Yeap do not understand..
What's the point of a blanket ignore?
If you do that:
You can still post sure but noone can read you as ignore is a 2way process as implemented on asf.
Still puzzled anyway, everyone is free but it would be a shame to loose that embedded knowledge


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## ducati916 (29 March 2021)

Newt said:


> What was the spam incident please Duc?





So this thread popped up yesterday (or that's when I first saw it) https://www.aussiestockforums.com/threads/recs-from-aussie-stock-forums.36146/#post-1116060

Mr Skate wanted an option to opt out. He considered it 'spam'.

Long story short: it seems whatever was agreed/not agreed, resulted in Mr Skate asking for his posts to be deleted and he has left the forum.

jog on
duc


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## CNHTractor (29 March 2021)

ducati916 said:


> Long story short: it seems whatever was agreed/not agreed, resulted in Mr Skate asking for his posts to be deleted and he has left the forum.



This is extremely sad. A very sad day for this community.

What can be done to repair this break!


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## MovingAverage (29 March 2021)

Skate is a great loss for this forum.
Personally, his dump it here thread was one of the main reasons I regularly checked into this forum.
I really hope we see him come back. Sad day indeed.


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## frugal.rock (29 March 2021)

MovingAverage said:


> Skate is a great loss for this forum.
> Personally, his dump it here thread was one of the main reasons I regularly checked into this forum.
> I really hope we see him come back. Sad day indeed.



I'm not sure we have lost him ?
I really don't think Skate would abandon his posse without saying farewell and reasoning as to why,
he's just not that sort of person.

By his posts in this thread it seems he wants/ needs a well deserved break from the computer/ forum?
The forum can become habitual, which Skate has stated.

If he has gone for good, yes, the situation is a loss for the forum.


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## MovingAverage (29 March 2021)

frugal.rock said:


> By his posts in this thread it seems he wants/ needs a well deserved break from the computer/ forum?
> The forum can become habitual, which Skate has stated.




It often blows me away the amount of time he must put into keeping this thread and others going. Fingers crossed


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## qldfrog (29 March 2021)

frugal.rock said:


> I'm not sure we have lost him ?
> I really don't think Skate would abandon his posse without saying farewell and reasoning as to why,
> he's just not that sort of person.
> 
> ...



As i understand it we can still see the posts if logged anonymously
That would mean that we are all in a blanket ignore.
We could test this by creating a new login and see if Skate is available then to be contacted.
I would NOT do this as I respect his decision whatever it is.
One of a maybe unwanted? @Joe Blow ? consequences of the blanket ignore is that every @Skate post has disappeared.
may not have been the intended results.
If Mr Skate at some stage wants to contact me to explain what is the issue/purpose, he is most welcome and i can be his mouthpiece, as would i am sure many of the other familiar members.
To make it short, i could not believe Mr Skate would wipe out such a gem of historical knowledge.
I owe him a lot and i as many would miss him dearly


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## Joe Blow (29 March 2021)

qldfrog said:


> One of a maybe unwanted? @Joe Blow ? consequences of the blanket ignore is that every @Skate post has disappeared.
> may not have been the intended results.




Anyone who cannot see Skate's posts in this thread has been added to his ignore list.


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## silent1a (29 March 2021)

Skate said:


> *"I'm weak" *(Habits are hard to break)
> I have a bad habit of spending too much time on the computer. To reduce the time spent on the forum I can use the "ignore" feature - while still retaining the ability to post. I'll try it for a week or so (as the feature can be turned on & off)



It may or may not be intentional but ignoring someone not only removes posts from someone you've ignored but also removes your own post from being seen by the person you ignored.
So ignoring applies both ways even if you were only trying to unsee the person's posts.


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## Skate (29 March 2021)

Skate said:


> *Time in the markets (Investing & trading)*
> Trading is "timing the market" - whereas investing is the "time in the markets".




*Trading*
Trading is about buying & selling for short-term profit, by capitalising on price movements. Traders jump in & out of the market within weeks, days, even minutes, with the aim of short-term profits. Traders buy & sell focusing on technical factors rather than a company’s long-term prospects. Trader's main focus is how they can profit from the price movement. Trading involves a lot of work, as it's constantly buying & selling positions in the hope of making a profit.

Skate.


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## Skate (29 March 2021)

silent1a said:


> It may or may not be intentional but ignoring someone not only removes posts from someone you've ignored but also removes your own post from being seen by the person you ignored.
> So ignoring applies both ways even if you were only trying to unsee the person's posts.




*Duly noted*
Being on the forum constantly consumes a lot of my time. Using a two-way ignore allows me to focus on more important things. I have only placed on ignore those members I like to read (who are seasoned traders). My educational posts are not directed at them & add no value to their trading. Beginners tend to read "lurking" in the background & rarely contribute (a win-win scenario for me at the moment)



Skate said:


> *"I'm weak" *(Habits are hard to break)
> I have a bad habit of spending too much time on the computer. To reduce the time spent on the forum I can use the "ignore" feature - while still retaining the ability to post. I'll try it for a week or so (as the feature can be turned on & off)




Skate.


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## Skate (29 March 2021)

*Investing*
Investing is about buying for long-term gains & associated dividends. Trading & investing both seek to profit from being in the markets for differing lengths of time, but their goal is the same "handled" in a different way. Investors have a longer-term outlook. Investors think in terms of years & often hold stocks through the market’s ups downs. Holding through tough periods has advantages by not crystallizing losses from knee-jerk reactions.

Skate.


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## Skate (29 March 2021)

*Summary – Trading versus investing*
Trading constantly buys & sells positions to keep a portfolio full, while an investor fills their portfolio with long-term positions. A trader buys & sells the fluctuations of the market while an investor holds through these fluctuations.

*Emotions of being in the markets*
Trading is more emotional & requires more effort as you a constantly seeking to ride the trends whilst timing the exit. I should also say - the workload depends on the trading periodicity of the strategy. Investing (for the long-haul) is more of a “buy & hold” & not a (set & forget) strategy. The gains from "actively trading" at times can be volatile with the performance returns of the strategy mimicking that volatility. Investing over an extended period smooths the equity curve that emotionally easier to handle. (Charts to follow to demonstrate the volatility)

Skate.


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## Skate (29 March 2021)

*Equity Chart*
Traders' equity curve compared to an Investor's equity curves can at time vary in performance & returns because of the Index selected. Investing can have a smoother equity curve as investing is not subject to the stress traders face. I'm posting two of my actual equity curves to differentiate between them. The historical trading performance is for a short period. (26 weeks & 40 weeks respectively)

*The "HappyCat Strategy" (Trading Portfolio)*
The "HappyCat Strategy" has been trading for 26 weeks & initially showed promise but of late it's been mimicking the fluctuations of the markets. Both @qldfrog & @peter2 have posted about their trading during this period & mostly with (negative comments). There is absolutely nothing wrong with the "HappyCat Strategy" - it's just struggling at-the-moment as most trend systems are. @ducati916 has mentioned more than once "why" they are struggling in his thread.






*The "Bee Strategy" (Investment Portfolio)*
It should be noted that the "Bee Strategy " started life back in March 2020 (just after the COVID flash crash). The equity curve below is this "financial" year - the results are from 1st July 2020 to the present (40 weeks). The "equity curve" of this portfolio is smoother, being less stressful to handle (as your emotions are not being "jerked" by the volatility of the markets) Also the difference between the portfolio is driven by the index selected. (ASX20 compared to the All Ordinaries)




Skate.


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## willoneau (29 March 2021)

Hi Skate , qldfrog is unable to read your posts, is he on your blocked list?


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## Skate (29 March 2021)

willoneau said:


> Hi Skate , qldfrog is unable to read your posts, is he on your blocked list?




@willoneau I have put only a small number of members on "ignore" - those who I enjoy reading. I'm drawn to their posts as "a moth is to a light bulb". 

*Being on the forum constantly consumes a lot of my time *
Using a two-way ignore allows me to focus on more important things. Those members on "ignore" are seasoned traders & my educational posts would have little value to them. Beginners tend to "lurk" in the background & rarely contribute (a win-win scenario for me at the moment) - BTW, they can still read my posts as usual.

*I'm still posting*
The ignore feature gives me more time to do other things. The "ignore feature" doesn't stop me from posting when I have something to contribute.

*The "ignore" is for my benefit only *
My "ignore" list "doesn't reflection of any individual member" but a tool that gives me a bit of respite from the forum. Those on my ignore list wouldn't miss my posts anyway.

Skate.


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## willoneau (29 March 2021)

I think qldfrog enjoys reading your posts.
he carn't read your posts.


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## qldfrog (29 March 2021)

all Mr Skate's  entries are now gone from threads, even this one:  I believe the same applies to @peter2 and @ducati916 
So as I noted before and as @silent1a mentioned:


silent1a said:


> It may or may not be intentional but ignoring someone not only removes posts from someone you've ignored but also removes your own post from being seen by the person you ignored.
> So ignoring applies both ways even if you were only trying to unsee the person's posts.



Damned..


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## Newt (29 March 2021)

ducati916 said:


> So this thread popped up yesterday (or that's when I first saw it) https://www.aussiestockforums.com/threads/recs-from-aussie-stock-forums.36146/#post-1116060
> 
> Mr Skate wanted an option to opt out. He considered it 'spam'.
> 
> ...




Thanks Duc, had missed all that.  Appreciate the heads up.

Qldfrog, Skate did say he'd try ignore for a week or so.  Agree with all, would be a shame to never get the chance to chat again.


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## MovingAverage (30 March 2021)

qldfrog said:


> all Mr Skate's  entries are now gone from threads, even this one:  I believe the same applies to @peter2 and @ducati916
> So as I noted before and as @silent1a mentioned:
> 
> Damned..



Don't take it personally, I must be on his ignore list too


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## MovingAverage (30 March 2021)

I just viewed this forum as a guest so I could view @Skate 's posts.

I was disappointed to read in one of his recent posts that he believes those on his ignore list (me included) are seasoned traders and he thinks his posts are of little value to those people anyway. Come on @Skate, you don't honestly believe that do you? Personally, I'm just a humble old retail hack and I'm a rank amateur at best and have learnt a lot from your posts.  #unblockyourfans


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## qldfrog (30 March 2021)

MovingAverage said:


> I was disappointed to read in one of his recent posts that he believes those on his ignore list (me included) are seasoned traders and he thinks his posts are of little value to those people anyway. Come on @Skate, you don't honestly believe that do you?



Same here, i am definitively not a seasoned or experienced trader.in my dream only.i churn buy/sell by the thousands and am happy if i get a few % positive return :-(
A win rate of 40% and i am on the moon and managed to wipe half of my profits in a 1 month period without crash last 2 months....
If this is being successful, i am better off buying the index and enjoying netflix in the evening.still in learning mode🙄


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## qldfrog (30 March 2021)

*Noted this:
"The "HappyCat Strategy" (Trading Portfolio)*
The "HappyCat Strategy" has been trading for 26 weeks & initially showed promise but of late it's been mimicking the fluctuations of the markets. Both @qldfrog & @peter2 have posted about their trading during this period & mostly with (negative comments)."

Juggling with anonymous access, I retrieved that part..
to clarify, I do not believe @peter2 or myself  have either made  comments on the happy cat or received negative views on our own fledging systems? We both had some negative weeks (mostly me....  ), but that's life and the only reason I stopped Happy Cat voluntarily was to try to fly on my own.
I actually benefited $ wise from the Happy Cat learning, which will refloat my own failures trials.
Being  a fiercely independent spirit and wanted to be sure I was not 'parasiting'  Mr Skate's system, it was time to stoponce I gathered enough learning, experience and data for future development.
Hoping there is no misunderstanding there


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## Skate (30 March 2021)

qldfrog said:


> Both @qldfrog & @peter2 have *posted about their trading *during this period & mostly with (negative comments).




@qldfrog, I was simply referring to posts made by yourself & @peter2 about the current lacklustre trading performance. The reason Peter gave - "the markets are going sideways"



qldfrog said:


> I do not believe @peter2 or myself have either *made *or received* negative comments on the happy cat*?




If you read my post again - that assertion was never made or implied.

Skate.


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## pozindustrial (30 March 2021)

Skate said:


> @qldfrog, I was simply referring to posts made by yourself & @peter2 about the current lacklustre trading performance. The reason Peter gave - "the markets are going sideways"
> 
> 
> 
> ...



Can we please give @Skate some peace for a bit? Being of similar age I know it can be energising to lighten the load occasionally. I want him around when I return to learning about trading. 😋


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## Skate (30 March 2021)

*I've recently made a post about my "Bee Strategy" a strategy that buys "mispriced securities"*
The parameters of the "Bee Strategy" combined with a "string" of stringent buy conditions (trading ASX20 Index) - the signals have been few & far between.

*A simple remark*
@ducati916 made an observation about the "Bee Strategy" recent purchase of (NCM) making the remark -_ "Ok, now you have me really nervous. I simply don't have time to go deeply into the financials"_






						Dump it Here
					

@qldfrog I've used both (TSI) indicators with success combing an "AND" & "OR" statement annexed to the buy condition. Using both indicators reduce false breakouts of forming trends.  A simple line of code Using the zero-line of the "True Strength Index" (TSI) oscillator has strong trading...




					www.aussiestockforums.com
				




*Duc's remark made me nervous*
I've checked each & every line of code of the "Bee Strategy" & I'm unable to fault the methodology behind the buy signal. The buy signal for (NCM) seems to be sound even if Duc financials didn't agree.



Skate said:


> @ducati916 has been active on the thread recently & passed on a few "gems". *"The Ducati blue bar strategy" has the uncanny ability to pick some great moves.* I've recently posted about "The Ducati blue bar strategy" & the "Duc Indicator" both brilliant ideas.




*How accurate is the "Bee Strategy"?*
I've posted a few times that "The Ducati blue bar strategy" has an uncanny ability to pick some great moves. Since Duc had reservations, I've dragged the "Ducati blue bar strategy" out of hibernation & checked for signal comparison. The weekly "Bee Strategy" generated a signal for (NCM) on Friday the 19th March 2021 for a "buy at the open" on Monday 22nd March 2021 - whereas "The Ducati blue bar strategy" generated the buy signal one week later - 26th March 2021. (the signals are close enough)

*Summary*
As "The Ducati blue bar strategy" first buy signal of (NCM) on 17th April 2020 was a profitable trade - I'm hoping for the same results this time around. I should say from the onset that the "Bee Strategy" didn't generate the same signals for the (17th April 2020) due to the parameter setting & buy conditions of the strategy - that I've previously mentioned.




*For the record (NCM)*
I have made 4 additional purchases of (NCM) since reporting the first buy on the 22nd March 2020, & I'm sure it won't be the last.

*FYI *
Any purchase when the lower ribbon is "Blue" is considered to be a good purchase.

*Time will tell*
As a systematic trader, we have "one job" & that job is - "to take the signals when they come".

Skate.


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## Skate (31 March 2021)

qldfrog said:


> When all sectors are falling inc bonds and PM, it is not a good sign - Time will tell if this was an alarm light switching on. The easiest way to handle this is either to be able to stomach it or just not reading intra week status




*In trading, frustration is a common emotional response*
Frustration leads to anger & you can be "annoyed & disappointed" at the same time. @qldfrog frustration has simply been caused by the current trading conditions outside of his control. Frustration & financial pain can at times have a positive effect by crystalizing our focus on the cause of frustration rather than the frustration itself.

*There are a few scenarios in play *
Temporary frustration is the easiest to handle by "accepting" it will soon pass. Built-up frustration needs a different approach by doubling down to find an effective response. Emotions have little value & at times they can be your worst enemy.

*AFAIC*
All the emotion you experience when trading is normally associated with losing money - attributed to factors beyond your control. Although, frustration can “bubble to the surface” due to laziness, or annoyance of not having a profitable strategy (who knows)

*What I do know*
Frustration left unchecked or uncorrected will fester out of control making you "react", rather than respond. In trading, reacting to a situation or an emotion usually is associated with a poor outcome.

Skate.


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## Skate (31 March 2021)

*What a difference a day makes*
Recently, I've been making comments about how frustration can creep into your trading - when we are on the losing side that is. It's a perfect time to remember that trading is not always a bed of roses, losing days/weeks & heaven forbid even a few losing years are inevitable. Even after you have managed to trade successfully, you will still take your hits no matter how smart you are, & frankly, there is nothing we can do at times to prevent it. Very few people really succeed at this game as the learning curve can be a stretch too far & hard to implement.

*Staying disciplined & frustration-free is hard*
To a great degree, our success or failure in the market is a function of our luck. We like to think that our results are a direct consequence of our insight and efforts, but the reality is that luck plays a big part in how we do. Even when you are skilled at trading at some stage you will experience financial pain & frustration. Pure & simple, good traders "are calculated risk-takers".

Skate.


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## Skate (31 March 2021)

*It's not easy*
Profiting from the stock market is exceedingly difficult to do consistently over a long period of time because the market is irrational and emotional. It moves in a manner that has little appreciation for what we might think is reasonable.

*Taking control*
Trading is about taking control, it's about being active & not passive. Our aim is to identify opportunities by anticipating a move in a direction we can take advantage of. If we are right stay & catch a good trend - it pays to stay on the ride as long as we can till the momentum slows or changes direction - maximising profit. If you exit a position too early or use a "take profit stop" in your strategy - you'll forego the right to the rewards for the risk you have taken.

*I'll leave the last word to* @peter2
_"It's all to easy to post when things are going well and stroke our own egos. When regular posters go quiet, we know they're having a bad run. I post when I'm frustrated and that helps me understand why. I post when my selections are "out of sync" with what's moving in the market because it helps me see what I need to correct. I post about the big losers because they're the trades that provide us with lessons to learn. They reinforce things I already know, but I hope others take note as well"._

Skate.


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## Skate (31 March 2021)

*Understanding the markets *
As we know all too well, any bad news in a jittery market will make traders rush into panic mode, causing huge selloffs only to find a buying opportunity the very next day. The markets are constantly doing things you don’t expect, it's the very reason to keep your emotions & frustration in check. Checking your emotions whilst trading allows you the peace of mind to hold good positions without panic selling with the heard.

*Perceptions*
Traders need to understand that markets are based on human behaviour & our "perception" creates value at any given moment. While the differences in our perceptions can be subtle, they do alert us when the markets are not performing as they should. As we have seen during the past several weeks, the markets are not based on fundamentals. The markets are a reflection of the overall belief system of all the traders in the market at any given time. Charts reflect the markets as explained by @over9k in his chart reading thread. I'm a firm believer in using "indicators" to indicate where the market is likely to be heading - then trying to capitalise on that movement.

Skate.


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## Skate (31 March 2021)

*System trading*
Often people think about all the technical information available but "fail to appreciate" one of the most important aspects of becoming a successful trader - "personality traits".

*Grasping new information*
Personality has a lot to do with new traders’ ability to grasp & properly execute new trading information. What seems natural to many long-term traders seems alien to a beginner. Those members who make educational posts try to explain what makes a stock move, then go on to explain why.

*Slow down the learning*
New traders who don’t expect too much too soon, those who understand learning the business of trading takes time, money, & experience tend to survive in this game.

*Being compulsive *
Many new traders make the mistake of bringing a gambling mindset to trading. However, this mindset can wipe out your trading account quick smart. If you are serious about trading, then changing this mindset is vital. You must never forget that the objective of trading is making a profit. Not only does that mean learning a winning trading methodology, but it also requires careful risk assessment, disciplined money management, emotional & behavioural discipline, with the ability to execute a trading plan flawlessly, as if they were an art form.

*In a nutshell*
Trading is predicting the value of a security sometime in the future.

Skate.


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## Skate (1 April 2021)

*Keywords*
I've just been reminded by a "private message" that some of my ideas have made a difference. The (GTFO) exit has saved my bacon "big time" on two occasions so far. The (GTFO) is a worthy tool in my trading toolbox. After reading the "pm" I thought I would take a short break & make a post. (carrying on with the "theme" of trading in tough times)

*Trading in an uptrend*
As traders, we have all experienced the joy of trading in an uptrend. Trend trading seemed to work well when the markets are trending up, but not so good in a downtrend. Trading during a prolonged downtrend has the ability to play with your emotions allowing frustration to set in.

*A good strategy takes time to develop*
Those new to trading are very concerned about finding a strategy that works quickly while at the same time quickly dismiss a good strategy that refuses to display early gains. When I post the weekly trading results of the "Sphere Strategy" please keep this in mind.

*The perfect entry*
As traders, we all want to hit the entry as close to the turning point of a trend as possible but it’s near impossible to achieve. A few simple trend indicators are all you need to enter a trade. Entries during an uptrend is a no-brainer - it's like a comparison of a monkey throwing dart achieves the same or better result. 

*Exits*
When it comes to the exit - there is no such thing as the perfect one. Exits need to work with your risk level (tolerance) & style of trading. Also, I would like to say having a (GTFO) compliments all exits strategies. When developing a strategy (IMHO) don't try to maximize everything. (Don't even try). Sometimes "Good enough is Good enough".

Skate.


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## MovingAverage (1 April 2021)

Skate said:


> When developing a strategy (IMHO) don't try to maximize everything. (Don't even try). Sometimes "Good enough is Good enough".




I think this is the mistake a lot of system traders make--they try to maximize things particularly with a singular focus on profit/CAGR. Sure profit is important (after all that is why we trade), but for me it is all about reliability and predictability of consistent future returns. In other words, does my system generate a profit across a range of different out of sample data. I'd much rather live trade a system that returns 10-15% CAGR consistently across a broad range of out of sample data than a system that generates a 45% CAGR with unknown certainty across out of sample data. In my experience, high tuned and maximized system tend to be very unreliable and unpredictable on out of sample data and those with a more "good enough" approach tend to be more predictable across out of sample data.


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## MovingAverage (1 April 2021)

Like a lot of folks that follow this thread I live trade a weekly system. At the end of each calendar quarter I usually make a review of the trades I've done during the past quarter and do a general review of my systems' performance. Given we are about a year on since the Covid crash I was just reviewing how my systems have recovered since then. I thought it might be worthwhile doing a dump of how my live weekly system as performed over the past 12 or so months. The chart below tracks the unit value of my live weekly system. In summary my system was 100% cash through to about mid May 2020 and since then it has gone from a unit value of approx. 1.4 through to close today of approx. 2.10. This equates to a gain of approx. 50%. The covid crash saw the system encounter a rough DD of around 10% so over all my system as put on around 40% of the unit price going into the covid crash.

As you can see there has been some notable declines in the unit price (end of Jan this year through to around end of Feb) but overall it remains in a good up trend since the system "switched back on" in mid May of last year.


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## qldfrog (1 April 2021)

MovingAverage said:


> Like a lot of folks that follow this thread I live trade a weekly system. At the end of each calendar quarter I usually make a review of the trades I've done during the past quarter and do a general review of my systems' performance. Given we are about a year on since the Covid crash I was just reviewing how my systems have recovered since then. I thought it might be worthwhile doing a dump of how my live weekly system as performed over the past 12 or so months. The chart below tracks the unit value of my live weekly system. In summary my system was 100% cash through to about mid May 2020 and since then it has gone from a unit value of approx. 1.4 through to close today of approx. 2.10. This equates to a gain of approx. 50%. The covid crash saw the system encounter a rough DD of around 10% so over all my system as put on around 40% of the unit price going into the covid crash.
> 
> As you can see there has been some notable declines in the unit price (end of Jan this year through to around end of Feb) but overall it remains in a good up trend since the system "switched back on" in mid May of last year.
> 
> View attachment 122242



Thanks a lot, I find such graph quite useful comparing my systems performances etc: obviously nowhere as successfull for me


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## qldfrog (1 April 2021)

MovingAverage said:


> Like a lot of folks that follow this thread I live trade a weekly system. At the end of each calendar quarter I usually make a review of the trades I've done during the past quarter and do a general review of my systems' performance. Given we are about a year on since the Covid crash I was just reviewing how my systems have recovered since then. I thought it might be worthwhile doing a dump of how my live weekly system as performed over the past 12 or so months. The chart below tracks the unit value of my live weekly system. In summary my system was 100% cash through to about mid May 2020 and since then it has gone from a unit value of approx. 1.4 through to close today of approx. 2.10. This equates to a gain of approx. 50%. The covid crash saw the system encounter a rough DD of around 10% so over all my system as put on around 40% of the unit price going into the covid crash.
> 
> As you can see there has been some notable declines in the unit price (end of Jan this year through to around end of Feb) but overall it remains in a good up trend since the system "switched back on" in mid May of last year.
> 
> View attachment 122242





	

		
			
		

		
	
 along similar period my daily system: broadly similar in shape but my system gave up all gains in the january drought whereas yours kept cruising.hopefully the slight tweaks along the months have improved futures performance.Hope it helps


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## julo (2 April 2021)

Hi guys, I have a question about placing of orders and their execution. 
I am almost fully invested (almost no free money) and need to update portfolio/rebalance. I place my (limit) orders before market opening hours. First of all I placed sell orders, but when placing buy orders I get error saying that I have not enough money on my account. Of course I don't, but money will be there after execution of selling orders. I cannot bypass this error. 
Is this normal behaviour or I just have crappy broker?
My question may be basic, but I have very little experience with this.
Thanks!


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## qldfrog (2 April 2021)

julo said:


> Hi guys, I have a question about placing of orders and their execution.
> I am almost fully invested (almost no free money) and need to update portfolio/rebalance. I place my (limit) orders before market opening hours. First of all I placed sell orders, but when placing buy orders I get error saying that I have not enough money on my account. Of course I don't, but money will be there after execution of selling orders. I cannot bypass this error.
> Is this normal behaviour or I just have crappy broker?
> My question may be basic, but I have very little experience with this.
> Thanks!



Normal behaviour with my broker: bell direct, it is an issue
With commsec (CBA), you can do it without problem as they just expect for you to have the money on settlement day


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## julo (2 April 2021)

qldfrog said:


> Normal behaviour with my broker: bell direct, it is an issue
> With comsec (CBA), you can do it without problem as they just expect for you to have the money on settlement day



I am trading US market, so cannot go through commsec. Thinking to switch to Interactive Brokers, but I don't know whether it will help.


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## silent1a (2 April 2021)

If you can get a small margin facility you can use it to temporary cover the buys without increasing risk by much.

Just don't be tempted to actually go over your cash balance to leverage as it may amplify your wins but it also brings you closer to zero.


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## Skate (2 April 2021)

MovingAverage said:


> Like a lot of folks that follow this thread I live trade a weekly system. At the end of each calendar quarter I usually make a review of the trades I've done during the past quarter and do a general review of my systems' performance. Given we are about a year on since the Covid crash I was just reviewing how my systems have recovered since then. I thought it might be worthwhile doing a dump of how my live weekly system as performed over the past 12 or so months. The chart below tracks the unit value of my live weekly system. In summary my system was 100% cash through to about mid May 2020 and since then it has gone from a unit value of approx. 1.4 through to close today of approx. 2.10. This equates to a gain of approx. 50%. The covid crash saw the system encounter a rough DD of around 10% so over all my system as put on around 40% of the unit price going into the covid crash.
> 
> As you can see there has been some notable declines in the unit price (end of Jan this year through to around end of Feb) but overall it remains in a good up trend since the system "switched back on" in mid May of last year.
> 
> View attachment 122242





qldfrog said:


> View attachment 122243
> 
> 
> 
> ...




*Trading is a solitary endeavour*
Without members posting graphical information about their actual trades or trading results it's hard to benchmark your own trading performance. We tend to trade in our own little bubble & at times (if you are like me) wonder if my trading results mirror the trading results of others. Basically, comparing my equity curve to others allows me to gauge if my results are in the normal range (if there is such a thing).

*Posting equity curves*
By sharing information, it allows a small glimpse of how others handle trading by displaying their actual results. Admittedly the trading results will vary but that's not the point. Looking at equity curves is an affirmation (a process) if your personal trading is within the ballpark of others.

Skate.


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## Skate (2 April 2021)

*Year in review*
As @MovingAverage posted his equity curve from April 2020 to the present (which looks amazing by the way) & @qldfrog from May 2020 to the present has motivated me to post my equity cure.

*Disclaimer*
The equity curve in the next post is my combined equity curve. The equity curve is a combination of 9 strategies that I trade (an equity curve average) rather than posting individual results for the last Calendar & Financial year. Because of the Covid-19 flash crash, skewing the equity curves & results I've included both the Calendar & Financial year.

*The Covid flash crash affected my trading in more ways than one*
Pain tends to focus me & the financial pain resulting from the Covid crash was excruciating - even though it's not that evident by the 2020 equity curve.

*Backtesting means JACK*
Without getting into another exchange, I want to re-stated that (IMHO), Amibroker backtest results mean "Jack" & hold little interest in assessing the true performance of a strategy. I'm first to admit that they do give an indication if the methodology behind the strategy being backtested is sound or not.

*Actual trading results*
Results from live trading are the "true measure" of your trading strategy as it confirms if your "trading plan" is solid.

Skate.


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## Skate (2 April 2021)

*Equity Curve*
The graphics below are an equity curve from a combination of 9 trading strategies (being my trading average)

*Trading results*
First off, I should point out that that the graph starts off halfway between the 2019/2020 financial year.  Going into the 2020 Calendar year I was in substantial profit. (The reason the equity curve doesn't start at zero)

*3 Equity curves *(incorporates the COVID-19 Flash Crash)
The graphic below represents the 2020 calendar equity curve that incorporates the COVID trading period. The 3-equity curves are for the same period displayed as Year/Month/Week format. The year curve quickly indicates my trading results where the other two represent the roller coaster ride to get there.

*(1) The 2020 Calendar year (Yearly - Equity Curve)*




*(2) The 2020 Calendar year (Monthly - Equity Curve)





(3) The 2020 Calendar year (Weekly - Equity Curve)


*


Skate.


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## Skate (2 April 2021)

*My 2020/2021 Equity Curve*
The graphics below (the equity curve) is the average from trading 9 strategies. The previous equity curve posted was for the 2020 Calendar year - that included the Covid-19 trading period.

*The 2020/2021 Financial year equity curve  *
Posting the equity curve for 2021 (the Covid trading period is excluded). I should note that the 2020/2021 financial year kicked off in profit. (it's the same reason the graph doesn't start at zero)

*(1) The 2020/2021 Financial year (Yearly - Equity Curve)*





*(2) The 2020/2021 Financial year (Monthly - Equity Curve)





(3) The 2020/2021 Financial year (Weekly - Equity Curve)


*


Skate.


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## Skate (2 April 2021)

Skate said:


> *Brains*
> 
> Brains are an overrated attribute when it comes to trading. Smart people tend to think logically and have a hard time dealing with a market that ignores what should be painfully obvious. The market is very emotional and illogical at times, and if you are too analytical, you will be surprised often. Using logic to argue with a lunatic is useless, and using logic to figure what the market might do on any given day is equally useless.
> 
> Skate.




*Brains*
I've posted that brains are overrated when it comes to trading but after listening to Mark trying to win a Harley Davidson, I might have to rethink that post.

*Brains (Update)*
I have to say - you do need a certain level of grey matter to play this game.

*Listen to the YouTube*
It will be the funniest 3 minutes you will ever hear & I can guarantee - you will never forget Mark from Greenacre. I like cheering for the underdogs - but in this case, I'm hoping Mark didn't win the Harley.

*Background*
About ten years ago, a radio station in Sydney (Triple M) had a contest in which callers could qualify to win a Harley-Davidson motorcycle. I've owned a few Harleys & it was a nice prize. So, caller #ten rings in, his name is Mark, and he’s from Greenacre, a few miles southwest of Sydney & for being caller #10, Mark can qualify to win the motorcycle. The question was to spell the name of a musical band. All Mark had to do (to go into the competition) was to spell the name of the Band’s ACDC. Yep. He just has to spell AC/DC.

*Can Mark do it?

*


* Brains are not overrated.

Skate.


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## Skate (2 April 2021)

*Drilling down* - (The Daily equity curve)
Drilling down a yearly equity curve to a weekly than onto a daily (equity curve) go some way in displaying how the volatility of returns can play with your emotions. 

*Portfolio *
Displaying the same equity curve & drilling down to a lower time frame goes some way in displaying the volatility of the securities in your portfolio.

*Drill down period (Yearly periodicity) *
The drill-down period is from 15th February 2021 to 1st April 2021 (totalling 34 days or about a month) The monthly equity curve belies the true volatility of trading.





*The same drill-down period (Weekly periodicity)*
Using a weekly view, the weekly volatility starts to display.





*The same drill-down period (Daily periodicity)*
Using a daily view, the daily volatility is clearly displayed. The jaggedness of the daily returns drives your emotions that can invoke a feeling of frustration. Viewing your returns over a longer time frame smooths the equity curve & your emotions - this was the point @qldfrog made in a recent post in his thread.  




Skate.


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## MovingAverage (2 April 2021)

Skate said:


> *Drilling down* - (The Daily equity curve)
> Drilling down a yearly equity curve to a weekly than onto a daily (equity curve) go some way in displaying how the volatility of returns can play with your emotions.
> 
> *Portfolio *
> ...



Thanks for sharing Skate. You’re weekly chart looks impressive as it doesn’t have any significant drawdown—I think this is the result of trading a bunch of different strategies, which I assume are reasonably uncorrelated. I’ll post up my equivalent for my three different systems.


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## Skate (2 April 2021)

MovingAverage said:


> Thanks for sharing Skate. You’re weekly chart looks impressive as it doesn’t have any significant drawdown—I think this is the result of trading a bunch of different strategies, which I assume are reasonably uncorrelated. I’ll post up my equivalent for my three different systems.




*A better description *
Trading a range of “strategies” smooths the consistency of returns.

Skate,


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## MovingAverage (2 April 2021)

No charts for me this Easter—sometimes I like it when the markets are closed. I’ll be focusing on this for next few days. Stay classy everyone 👍


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## Skate (2 April 2021)

Skate said:


> *A better description *
> Trading a range of “strategies” smooths the consistency of returns.
> 
> Skate,




*Overstatement*
Looking at the equity curve of my last two years of trading I'll have to change "consistency of returns" to "decent returns". It just goes to prove, even when you "believe" you trade a hand full of decent strategies you're not immune to the volatility of the markets.   





Skate.


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## silent1a (2 April 2021)

Here's how mine tracked. Started with Zebra and added a few more strategies at the start of the year which have been swung around hard in Feb/March.


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## qldfrog (2 April 2021)

silent1a said:


> Here's how mine tracked. Started with Zebra and added a few more strategies at the start of the year which have been swung around hard in Feb/March.
> View attachment 122316



if this can help you, you are not the only one to have suffered during that period


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## Skate (3 April 2021)

Skate said:


> *True happiness *(IMHO)
> My definition of true happiness is *‘desiring’ *what you have!!  --- not appreciating what you have.






Skate said:


> *Well what's the difference ?*
> 1. "Desire" is a deep feeling
> 2. "Appreciating" is acknowledging the worth of someone or something.




*Constantly striving for perfection*
Sometimes "good enough is good enough" but "good enough is not good enough" when better is expected. 

*Strategy improvements *
As traders, we are constantly seeking to improve our trading by "fiddling" with those strategies "disguised as improvements", otherwise, we wouldn't read a ton of books or cruise this forum for hours. In my strategy development days, I had 3 computers running 24/7 driven with the desire to find the "perfect" strategy. 

Skate.


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## Skate (3 April 2021)

*What did I achieve in 3 years looking for the perfect strategy?*
Sleep deprivation - I was sleep-deprived for most of that period, that's what I achieved. If I could go back in time - I would tell my younger self to "slow down the learning process" & "concentrate more on making money" - instead of trying to learn everything all at once.

*Strategy development*
After three years I started to actively trade those developed strategies. My actual trading results fell well short of my Backtests results. Don't get me wrong I was profitable but not to the level I was expecting. I was expecting the "fruits of my labour", to be a lot more than what I achieved.

*The penny dropped *
All the learning was for naught when it came to controlling the emotions I soon started to experience. Understanding the emotional side of trading was the motivation behind the "Dump it here" thread.

Skate.


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## Skate (3 April 2021)

*How do I get ideas?*
I'm still driven to develop new trading ideas & (post them) but now I take a more mellow approach (these days). This forum has given me the inspiration to code a lot of my current strategies. The "Sphere Strategy" being the most recent after reading one of @peter2 (2016) posts. The performance after a few weeks is a bit "lacklustre" but that's to be expected - as all trend trading strategies take time to do their magic. 

*I have a theory *
If I don't test what I've learned, how do I know if they have an application in my trading? 

*I'm truly happy*
My definition of true "trading" happiness is *‘desiring’ *to trade the strategies I have!!

Skate.


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## Skate (3 April 2021)

*Discarding a good strategy*
I personally find today "people in general" lack tolerance & patience. It's the same when it comes to trading. I spend an enormous amount of time developing a new strategy & if I'm not patient "allowing it to unfold" - what's the point.

*The Hybrid Strategy*
This 40-position strategy had its distractors - but heck, it made good money. This is why I posted the idea of combining strategies. Admittedly, some ideas resonate with some more than others but "when there is a lack of tolerance" for an idea it can only result in failing to understand the other side of the theory.

*The Action Strategy*
A simple & clean idea that I got from @ducati916 posts. When "smart bunnies" (Easter reference) talk - I have a habit of listening. At times it's not their words but the ideas behind the words. Duc's idea was so good I put my money behind it.

*The HappyCat Strategy*
Another forum idea - using volatility & momentum to enter & exit positions (simple & clean). There is a multitude of indicators that can help identify the direction, strength, momentum & volatility but the HappyCat uses "only" two indicators (ROC & ATR) keeping the strategy simple to implement. I should also say - the HappyCat Strategy is currently struggling because of the sideways trend of the markets.

Skate.


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## Skate (3 April 2021)

Skate.


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## Skate (3 April 2021)

*Long weekend viewing (1 of 4)*
I'm suggesting if you get any spare time over the long weekend break watch the 4 short videos that Martyn Tinsley has produced. Martyn embarks on a journey to challenge the "backtesting status quo" that prevails among system traders that are often discussed in this thread. (BTW, he is well-credentialed)

*The first video (3:6 minutes)*
In the first video (in the series of 4), Martyn highlights the pitfalls of herd-mentality with regards to "backtesting & optimization", which will prove to be extremely informative. The first of 4 videos introduce one of the major challenges that face system traders - the fact that "sub-optimal" parameter values.

*Optimising parameters*
Traders often struggle to optimise their systems in order to find parameters with the most effective edge. This often results in the systems losing money in practice, especially when traded on a live account. Without understanding this fully, traders are likely to continue choosing the wrong parameters to trade.

*Parameter values that provide no edge at all often appear to perform in optimisation as if they do*
Every trader needs to be very aware of this anomaly. Parameter values with little or no edge can often produce far better results in optimization than the parameters that offer the best edge, & the best chance of success in the long term. If you’re not careful, it will be these sub-optimal values that you choose to trade.

*1. Why a true trading edge is a scarce commodity?*




Skate.


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## Skate (3 April 2021)

*Long weekend viewing (2 of 4)*
If you found the first video informative, you'll be "eggcited" by the next "eggselent" 6-minute tutorial. I apologise for using a few "Easter puns".

*Understanding why some parameter values provide no edge*
Martyn Tinsley demonstrates how parameter values that provide no edge at all often appear to perform in an optimisation as if they do. Every system trader needs to be very aware of this anomaly if they are to obtain profitable parameter values. By watching these 4 YouTube videos you'll understand why traders are likely to continue choosing the wrong parameters to trade.

*2. Is your trading backtest a 'Stochastic Illusion' or a 'Real Edge'?*




Skate.


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## Skate (3 April 2021)

*Long weekend viewing (3 of 4)*
If you found the first two videos informative, the third video in this series will "knock your socks off". In this 8-minute tutorial Martyn demonstrates how parameter values with little or no edge can often produce far better results in "an optimisation" than the parameters that offer the best edge, & the best chance of success in the long term.

*Choosing ineffective parameter values*
If you are not aware of this phenomenon then you could be choosing ineffective parameter values from your optimisations. If you’re not careful, it will be these "sub-optimal values" that you choose to trade that will bring you undone when trading live. This short video is a "must watch".

*3. Random vs Long-Term Edge* 




Skate.


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## Skate (3 April 2021)

*Long weekend viewing (4 of 4)*
If you found the first three videos informative, the third video in this series will be just as captivating. In the last tutorial, Martyn shed light on where the edge sits on the probability spectrum, & what needs to be done to identify trading strategies that have it. 

*You need an Edge*
The most basic thing you need to be a successful (profitable) trader is an edge, an advantage in your trading that produces a positive net profit over the long-term. This edge is the culmination of all your research, planning, execution, & state of mind while managing your portfolio. The more you read & (watch), the more you will become interested in trading. We have all made dumb mistakes when starting out, that is just being a beginner.

*4. The Probability Distribution of your Trading Edge*




*To be a successful trader*
Trading is a marathon, not a sprint. If you are new to trading, please make an effort to read my ‘Dump it here’ thread from the very first post as it may save you many years of self-education. It's a big ask, but if you have the slightest interest in learning to trade (profitably) it may be just worth the effort. (at least grab a copy of my free eBook https://www.aussiestockforums.com/posts/1014728/)

Skate


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## Skate (4 April 2021)

*A good strategy takes time to develop*
Those new to trading are very concerned about finding a strategy that works quickly while at the same time quickly dismiss a good strategy that refuses to display early gains. At times, simple trading rules have often become the foundation of a good strategy.

*The Sphere Strategy*
This "Sphere Strategy" came from a post about back in 2016. With a small twist, I approached the idea from a different angle. Paper trading this (crazy) idea is important to determine if the idea will have an edge (over time).

Skate


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## Skate (4 April 2021)

*Traders always overcomplicate their trading*
As humans, we have a tendency to overcomplicate everything we touch & it's no different when it comes to our trading. But (IMHO) trading doesn't need to be complicated but, we have a habit of complicating something that should be simple. Every trading strategy will have losing trades but if the strategy is profitable in the long run - what does it matter.

*Follow your plan*
Mechanical Trading can be a simple endeavour if you are disciplined, follow the rules, & stick to the trading plan. Trading this way, allows you to place your order & go on about your life. When you have a fully tested strategy there is no need to second-guess or fiddle with the signals.

*The complexity of psychological forces at work in the market*
Panic, depression, euphoria, the entire emotional spectrum takes on a new intensity when "your money" is on the line. These emotions can generate similar strong feelings in you causing you to react unnecessarily at times - that is, to buy or sell because of emotions you are feeling.

Skate.


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## othmana86 (4 April 2021)

Hello all
I am reaching out to the pros here. how would one code the following:
if the price is = to or > than the buy price by 100 percent. i.e 100 percent profit. close the trade at next candle.

This is exactly the same as the applystop function:

amount = 100; // 100% profit
ApplyStop( stopTypeProfit, stopModePercent, amount, True );

I would like to do it without the applystop function; as the applystop doesnt spit out trades in explorer.
The reason i ask. i was in an open position and at the end of the week was %140 percent profit. Really nice. my system didn't trigger a sell for any reason, which is fine. However, come into this week, the prick came back to about 40 percent profit only. Triggered a sell this week, but i almost feel like it should of closed last week. "dont be greedy" type mentality. It could be a better system i think.

Using the apply stop function to test the methodology my CAR increased by 10%, so the idea is worth exploring.

any help is appreciated


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## qldfrog (4 April 2021)

Skate said:


> View attachment 122359
> 
> 
> View attachment 122360
> ...



I have a lot of similar tickers in my buys...


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## Skate (4 April 2021)

othmana86 said:


> Hello all
> I am reaching out to the pros here. how would one code the following:
> if the price is = to or > than the buy price by 100 percent. i.e 100 percent profit. close the trade at next candle.
> 
> ...




@othmana86 the way I handle additional exit conditions is to bundle them up & attach the additional exit condition to a looping trailing stop as a (Stale Stop). @Trav. is the man that can help you code your idea (if he has the time). 

*Ideas*
If I don't test ideas, you will never know if they have an application?

*Have a read here*




__





						Dump it Here
					

I have been and continue to be interested in what @Skate calls his "Stale" stop-loss.   I had no idea how to code such a thing, but the idea seems sound.  I currently have a few stocks that initially trended strongly higher, but currently are operating in a range.  They do seem stale.  I'm...




					www.aussiestockforums.com
				




Skate.


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## qldfrog (4 April 2021)

othmana86 said:


> Hello all
> I am reaching out to the pros here. how would one code the following:
> if the price is = to or > than the buy price by 100 percent. i.e 100 percent profit. close the trade at next candle.
> 
> ...



if you have a weekly system and want to exit within the week, a bit complicated 
But otherwise just add an EXIT:
Sell=Sell OR C>=BuyPrice*2;


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## qldfrog (4 April 2021)

qldfrog said:


> if you have a weekly system and want to exit within the week, a bit complicated
> But otherwise just add an EXIT:
> Sell=Sell OR C>=BuyPrice*2;



not tested..


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## silent1a (4 April 2021)

othmana86 said:


> This is exactly the same as the applystop function:



ApplyStop is actually a pretty tricky function to handle especially in a weekly system as it's assuming you are using a conditional order at your broker on a daily/intraday basis.





__





						AFL Function Reference - APPLYSTOP
					





					www.amibroker.com
				





> ApplyStop function is designed to be used to simulate
> stop orders placed at the exchange or simulated by the brokerage






> ExitAtStop = 1 - check High-Low prices and exit intraday on price equal to      stop level on the same bar when stop was triggered
> ExitAtStop = 2 - check High-Low prices but exit NEXT BAR on regular trade price.



If using ExitAtStop = 1 the order executes intraday.
In the case of ExitAtStop = 2 the NEXT BAR is actually indicating the next bar in your actual data. In the case of Norgate Data that would be the next day as Norgate is in a daily format. The ApplyStop will ignore your Weekly/Monthly settings.

It will also ignore any SetTradeDelays be it in the code or settings as ApplyStop is simulating a brokers conditional order.

In a backtest an ApplyStop used in a weekly setting may even seem to be looking at future data.
With ExitAtStop = 2 sell orders that were triggered between Mon-Thu(16/3-19/3 example dates) will be consolidated into the current weekly bar (16-20/3 -> 20/3 weekly bar) as the NEXT BAR is Tue-Fri (17-20/3).
An order triggered on Friday(20/3) will be in next weekly bar (22-26/3 -> 26/3 weekly bar) as Next Monday(22/3) is the NEXT BAR.

The issue is in the first instance where the trades are made in the current weekly bar.

```
BuyPrice = Open; //Buy the next day at open
SellPrice = Open; // Sell the next day at open
```
If you use this code to set the sell price to the Monday open auction price (16/3 in a 20/3 weekly bar) a sell triggered on say Thursday (19/3) will be using the price on Monday (16/3).
So a future trigger is selling at Monday's price.


```
SetOption( "MaxOpenPositions", PosQty); // Maximum number of open position
```
This also affects buy orders if it is limited by the number of positions. As the trade had exited on the current weekly bar a new position can be entered during the current week on Monday's price.
So a future trigger is initiating a buy order a week earlier.


```
ts1 = 20; // Trailing stop one = set at 20% when the Index Filter is TRUE
ts2 = 10; // Trailing stop two = reduces to 10% when the Index Filter is FALSE
ts = IIf( indexbuyfilter , ts1 , ts2 ); // If the Index Filter is TRUE use (ts1) set at 20%, if the Index Filter is FALSE use (ts2) settings reduce Trail Stop to 10%

ApplyStop( stopTypeTrailing , stopModePercent , ts , exitatstop = 2 );
```
Also if you use a tiered trailing stop as used by Skate it can't even be implemented using the broker's conditional order as the narrower trailing% needs an Index Filter as one of its conditions. (Or you need to change the trailing% every week depending on the Index Filter.)



othmana86 said:


> I would like to do it without the applystop function; as the applystop doesnt spit out trades in explorer.







__





						How to plot a trailing stop in the Price chart
					





					www.amibroker.com
				



The first instance uses a loop instead of ApplyStop. This is the best way to go for a weekly system.

The second example uses Equity(1) to output all the Sells from ApplyStop but still has all the issues I've stated above.


----------



## silent1a (4 April 2021)

__





						How to plot a trailing stop in the Price chart
					





					www.amibroker.com
				



Here's a quick modification of the trailing stop code to use for Profit Stops. (Not tested)

(It's AFL and not javascript but close enough.)

```
amount = 100; // 100% profit

Buy = Cross( MACD(), Signal() ); //Change to whatever
Sell = 0;
profitStop = 0;

for( i = 1; i < BarCount; i++ )
{
   if( profitStop == 0 AND Buy[ i ] )
   {
      profitStop = BuyPrice[i] * (1 + amount/100);
   }
   else Buy[ i ] = 0; // remove excess buy signals

   if( profitStop > 0 AND High[ i ] > profitStop )
   {
      Sell[ i ] = 1;
      SellPrice[ i ] = profitStop;
      profitStop = 0;
   }
}
```



qldfrog said:


> Sell=Sell OR C>=BuyPrice*2;



Use (H)igh instead of (C)lose depending on if you want to sell because it reached the price or to sell at the actual price.


----------



## silent1a (4 April 2021)

othmana86 said:


> The reason i ask. i was in an open position and at the end of the week was %140 percent profit. Really nice. my system didn't trigger a sell for any reason, which is fine. However, come into this week, the prick came back to about 40 percent profit only. Triggered a sell this week, but i almost feel like it should of closed last week. "dont be greedy" type mentality. It could be a better system i think.



If you've left all the backtest settings when using explore you may be getting last weeks buys and sells.
This is the likely culprit.
Change
SetTradeDelays( 1, 1, 1, 1 ); //Delays buys and sells to the next bar. Use for Backtesting only.
to
SetTradeDelays( 0, 0, 0, 0 );
When using Explore.


----------



## Skate (4 April 2021)

Skate said:


> *Traders always overcomplicate their trading*
> As humans, we have a tendency to overcomplicate everything we touch & it's no different when it comes to our trading. But (IMHO) trading doesn't need to be complicated but, we have a habit of complicating something that should be simple. Every trading strategy will have losing trades but if the strategy is profitable in the long run - what does it matter.




*Simple trading ideas *
Trading ideas need not be complicated as "simplicity" can win the day. I've had a look at some of my simpler strategies & found one to throw out there. Using Kaufman's Adaptive Moving Average (KAMA) for both signals (entry & exit) works rather effectively as a complete trading system. One handy indicator that's responsive to the trend & volatility.

*The (KAMA) indicator can even be used as an Index Filter*
Kaufman's Adaptive Moving Average (KAMA) can also be used as an effective Index Filter (as displayed below). The white line is the (KAMA) plot.

*Exit & Entry Signals*
If the close is below the (KAMA) line "exit on the next bar". Similarly, If the open is above the (KAMA) line "enter on the next bar". I'm suggesting that you try it out, to experience how amazing this (KAMA) low lag indicator is. (KAMA) works on all periodicities with only minor parameter changes.




*KAMA*
Kaufman's Adaptive Moving Average (KAMA) is an intelligent moving average that was developed by Perry Kaufman. The powerful trend-following indicator is based on the Exponential Moving Average (EMA) & is responsive to both "trend & volatility". The (KAMA) can often be used in combination with other indicators & parameters.

Skate.


----------



## MovingAverage (4 April 2021)

qldfrog said:


> if you have a weekly system and want to exit within the week, a bit complicated
> But otherwise just add an EXIT:
> Sell=Sell OR C>=BuyPrice*2;



This is why I use the daily timeframe to trade my weekly—it’s very easy to do if using daily bars to trade weekly. It’s easy in AB to select the start and end of the trading week in AB


----------



## othmana86 (5 April 2021)

@qldfrog @silent1
Thanks for the input. I should have been clearer.
1. my system is a weekly system trades Monday open. No intraday trading
2. I don’t actually use the ApplyStop function In my ; from my understanding ApplyStop was implemented to mimic the brokers “stop” function and was never really intended to be used for explorer. I use a trailing loop at the moment.
3. My current system is working fine and working as it’s designed but I’m always looking for improvements. It was never designed to exit = or > %100 profit. It really was just a thought bubble that I wanted to test out so I quickly used the ApplyStop function as an initial test. “ what if” sort of thing. The thought bubble came about as I saw a winning position with 140 percent profit in the first week dwindle to 40 percent  in the second week. Would I Have been better off closing it at the open of week2  and locking in the profit? That’s the hypothesis I’m testing.
4. @silent1 FYI even if you had trade delays set to 0 and equity (1) and you run explorer on the Sunday you actually won’t get any signals to enter for Monday’s open.I’ve tested this out before, hence the reason I went to a trailing loop. You only get signals at Monday’s close. You’ve given a deeper insight into it though so thank you. Always good to know.

I’ll try both your methods and see how it goes. I’ll let you guys know, I’ll put the results up in case anyone else has the same hypothesis.

I did some digging aswell and found this; not tested so not sure if it’ll work as intended


PcntProfit = 100 * ( h - ValueWhen( Buy, BuyPrice,1 ) )/ValueWhen( Buy, BuyPrice,1 );

profittaker= pcntprofit>=100;
Sell= Sell OR profittaker;

Thanks
OTA86


----------



## othmana86 (5 April 2021)

Skate said:


> @othmana86 the way I handle additional exit conditions is to bundle them up & attach the additional exit condition to a looping trailing stop as a (Stale Stop). @Trav. is the man that can help you code your idea (if he has the time).
> 
> *Ideas*
> If I don't test ideas, you will never know if they have an application?
> ...



Thank you skate! I’m not a great coder so always great to get a hand. I’m going to try a few methods and see how it goes!


----------



## Skate (5 April 2021)

othmana86 said:


> Thank you skate! I’m not a great coder so always great to get a hand. I’m going to try a few methods and see how it goes! - The thought bubble came about as I saw a winning position with 140 percent profit in the first week dwindle to 40 percent in the second week. Would I Have been better off closing it at the open of week2 and locking in the profit?




@othmana86, I've never had much joy using a "Take Profit Stop" as it seems to reduce the profitability. I have a "Take Profit Stop" coded into all my strategies (for evaluation) looking for an edge. I have the Take Profit Stop on a toggle so it can be "turned on" to evaluate the very scenario you highlighted. Whereas you're thinking in percentages, my preference is to use the Average True Range.

*Add this to your strategy for evaluation*
////////////////////////////////////////////////////////////////////////////////////
useTPStop = ParamToggle( "Use Take Profit Stop", "No|Yes", 0 );
MaxProfit = Param( "Take Profit ATR multiplier", 4, 1, 10, 1 );
////////////////////////////////////////////////////////////////////////////////////

Skate.


----------



## Skate (5 April 2021)

*Strategy evaluation*
I've been trading a strategy successfully for the last 18 months & I wondered if the strategy would trade the S&P 500 with similar success (the curiosity is killing me). Believing I had something special, the "Ducks Guts of strategies" I had the strategy recently evaluated.

*Realisation*
I was amazed to learn the strategy didn't produce the same results trading the (S&P500) as it did trading the (XAO). To tell you the truth, I couldn't believe the strategy performed so differently. For ease of understanding the evaluation report the strategy was a $100k portfolio (20 X $5k positions)

*Evaluation remarks*
_"I ran your code against the current SP500 over the past 5 years and it appears not to trade very frequently? I then changed some of your price filters as the North American stock prices tend to be much higher than the Australian exchange prices. I still did not get many trades but a very high % of winners! CAGR 15.6% and MaxDD -35.7%"_

*Results*




*How did it perform against the Russell 3000?*
Well, "blow me down" - didn't the next report bring me down to earth.

*Evaluation remarks*
_"I then tested against the Rusell 3000 a much larger universe of stocks, cagr 27.5% and MaxDD -51% - I am getting the feel for your approach, you want to buy-and-hold 20 stocks for a long period of time"


_

*Summary*
Apparently, it is a matter of "horses for courses". The realisation is slowly sinking in that not all "strategies" are universally adaptable to other markets (whereas the HYBRID Strategy when evaluated - performed well)

Skate.


----------



## qldfrog (5 April 2021)

Skate said:


> *Strategy evaluation*
> I've been trading a strategy successfully for the last 18 months & I wondered if the strategy would trade the S&P 500 with similar success (the curiosity is killing me). Believing I had something special, the "Ducks Guts of strategies" I had the strategy recently evaluated.
> 
> *Realisation*
> ...



What were the realm indexes return in the US during that period?


----------



## Knobby22 (5 April 2021)

Been looking at the recent posts as have a bit of time.

The Bee strategy has impressed me, Skate.

I like the wide breadth of your strategies...the flexibility to conditions. Well done.


----------



## Skate (5 April 2021)

qldfrog said:


> What were the *realm indexes* return in the US during that period?




@qldfrog I'm unsure of the term "realm indexes" but I can tell you that I have parked the strategy as of last Monday (even though it's been a terrific money earner).

*The engine of the "Rush Strategy"*
The weekly "Rush Strategy" marries an idea from Jim Berg & Guppy’s with a "twist" combining two strategies into one. (being subjected to filters & unique parameters of course) I use the “or” statement so the first signal from either is taken.

*Signal generator*
(a) Jim Berg's volatility-based trading system uses (ATR) volatility to identify a trade. How? - when the close is greater than Lowest Low Value (LLV) of the "Low" of the price bar of the last nPeriod "plus" 2 times the Average True Range of the last nPeriods. (I call this the JBRush)
(b) The other signal generation comes from the average of twelve "Multiple Moving Averages" by taking the average of the bottom 6 from the top 6 - then applying a smoothing factor to identify a trade. (I call this the GMMARush). Surprising both signals get into a trend very easily.
(c) I incorporate the negative (GMMARush) signal as another level to my Stale Stop.

Skate.


----------



## DaveDaGr8 (5 April 2021)

silent1a said:


> If you've left all the backtest settings when using explore you may be getting last weeks buys and sells.
> This is the likely culprit.
> Change
> SetTradeDelays( 1, 1, 1, 1 ); //Delays buys and sells to the next bar. Use for Backtesting only.
> ...




I think Tomasz invented daylight savings too.

Eveytime i start thinking about tradedelays ( or daylightsavings) it confuses the hell out of me and i get it wrong.


----------



## Skate (5 April 2021)

Knobby22 said:


> Been looking at the recent posts as have a bit of time.
> 
> The Bee strategy has impressed me, Skate.
> 
> I like the wide breadth of your strategies...the flexibility to conditions. Well done.




*The Bee Strategy was one of my original trading ideas *
The Bee Strategy had been parked for quite some time as it rarely produced any signals. The "Bee Strategy" is a trading strategy concentrating on the ASX20. I was never that keen on trading "large caps". The parameters of the "Bee Strategy" are unforgiving having more than a handful of stringent buying conditions. Trading the (ASX20 Index) the signals are always few & far between.

*The COVID flash crash*
The "Bee Strategy" was resurrected at the time of the massive sell-off of good companies during the Covid crash. Believing I could capitalise on an opportunity of the (panic) sell-off - I ran the strategy every day during that period. 

*On the 19th of March 2020*
The "Bee Strategy" started to produce signals on the 19th of March 2020. The strategy evaluation was conducted when I was a "beta tester" for Norgate Data having the full suite of products available to me at that time, including 20 years of historical data. Knowing how the strategy performed - the rest is now history.

*By-the-way*
I rarely trade large-caps, because of the low volatility "but the Covid period" produced volatility in spades. While I saw a buying opportunity of a lifetime, others saw the meltdown of the markets as we knew it.

Skate.


----------



## qldfrog (5 April 2021)

qldfrog said:


> What were the realm indexes return in the US during that period?



Was just wondering how much the exploration domain sp500, russel300 plus dividends would have compared along the same period.was it better or not.i do that type of check here on the asx : xnt etc but not familiar with US equivalent.
In a nutshell did it beat the matching index?


----------



## Skate (5 April 2021)

qldfrog said:


> Was just wondering how much the exploration domain sp500, russel300 plus dividends would have compared along the same period.was it better or not.i do that type of check here on the asx : xnt etc but not familiar with US equivalent.
> In a nutshell did it beat the matching index?



@qldfrog the "Rush Strategy" was extremely profitable trading the US markets but didn't perform as designed or expected. The holding period dramatically increased with a drawdown that most couldn't stomach. As far as beating an Index, any good strategy worth its salt (IMHO) does - otherwise, there is no edge.

*Beating an index*
@peter2 perfectly demonstrates how his trading methodology "beats the index" as his trading edge is derived from (discretionally) nailing the exit.

Skate.


----------



## MovingAverage (5 April 2021)

Skate said:


> *Long weekend viewing (4 of 4)*
> If you found the first three videos informative, the third video in this series will be just as captivating. In the last tutorial, Martyn shed light on where the edge sits on the probability spectrum, & what needs to be done to identify trading strategies that have it.
> 
> *You need an Edge*
> ...




Hi Skate,
Now that my time at the beach has come to an end I thought I watch these videos you've posted. I have to say these are great videos and do a very good job of explaining the importance of monte carlo testing and sample size. Anyone starting out in system trading would do very well to watch these video to understand the importance of this often ignored aspect of system analysis. 
MA


----------



## ducati916 (5 April 2021)

MovingAverage said:


> Hi Skate,
> Now that my time at the beach has come to an end I thought I watch these videos you've posted. I have to say these are great videos and do a very good job of explaining the importance of monte carlo testing and sample size. Anyone starting out in system trading would do very well to watch these video to understand the importance of this often ignored aspect of system analysis.
> MA





What becomes very clear, quite quickly, is that many systems traders do not have and/or do not understand what is an 'edge'.

jog on
duc


----------



## Skate (5 April 2021)

*Strategy Rotation*
With a suite of strategies, I've found strategy rotation to be a very "beneficial tool" when it comes to my trading. But the big question is when do you rotate from one strategy to another?

*Without giving too many secrets away *
A simple measure (as a rule of thumb) is the ratio of "buy signals" versus "sell signals". It's not the number of signals but the ratio between the two. This is not how I decide to rotate out of one strategy into another but it's a "quick & dirty" explanation.

*The HappyCat Strategy*
Trading this strategy in a trending market never fails to generate good returns. But in late 2020 "red flags started to appear", as the ratio of signals got out of whack. It's a fair indication that a strategy substitution was in order (similar to replacing an NRL player). Sometimes substituting a player "just at the right time" can have a positive impact on the game. Strategy rotation can have a similar effect on your trading performance.

*The "HappyCat Strategy" versus the "ConnorsRSI Strategy"*
I've made plenty of posts espousing the benefits of the "HappyCat Strategy" while at the same time remarking that the "HappyCat Strategy" will struggle in non-trending market.

*The "ConnorsRSI Strategy"*
My Trusty old "ConnorsRSI Strategy" is likened to an NRL forward, "trusty & dependable" & gets the job done (but lacks the speed in a roaring bull market).

*A short Backtest period (3-months)*
An example why a "strategy rotation" was required is displayed in the backtest results below. The direct comparison (shoot-out) between the "HappyCat Strategy" & the "ConnorsRSI Strategy" shows why the strategy rotation had to occur.

*The backtest period *
The backtest is from 1st January 2021 to end-of-close Thursday 1st April 2021 - perfectly displaying why the rotation of strategies can be beneficial. Don't get me wrong, the "HappyCat Strategy" is worth its weight in gold (in a bull market)




Skate.


----------



## Skate (5 April 2021)

*A simple explanation*
Put 4 traders in a room together & they will all have their reason why they "enter & exit" a position. Put 4 system traders in another room & their reasoning behind why they enter a trade can be just as dramatic & diverse.

*Signal comparisons*
I've just posted a simple comparison of "results" achieved over a short period from two of my trading strategies. It's only responsible for me to post the signals from two recent trades.



Skate.


----------



## MovingAverage (5 April 2021)

ducati916 said:


> What becomes very clear, quite quickly, is that many systems traders do not have and/or do not understand what is an 'edge'.
> 
> jog on
> duc



Yes, those that base their decision to go live following a few optimisations and a single run backtest I would definitely say you’re correct.


----------



## Skate (5 April 2021)

*The difference between a "running back" & a "front-row forward" (NRL pun)*
The "HappyCat Strategy" versus the "ConnorsRSI Strategy" exploration analysis signals. The two strategies are on the same team playing different positions to win the trading game. The two trading strategies demonstrate why we have a market.

*One Man’s Trash is Another Man’s Treasure *
This simply means that someone can find value in a position discarded by another.

*The "HappyCat" Exploration signals*




*The "Connors RSI Strategy" signals*



Skate.


----------



## qldfrog (6 April 2021)

May i start a subject:
We have talked here and else where a lot about the number of positions in a system
I usually target 20 or so for risk management purpose.
Played a bit yesterday with backtesting this number of max positions and in my systems at least, daily and weekly:
I consistently got much better results with lower max number of positions.
For MA : along 2000+ trades so definitively consistent and statistically relevant😊
And I'd like to know why!
One theory i have is with more positions, it might take longer to fill/refill after GTFO event or periods of mostly exits, or we just load with inferior trades then.
But on a 2 decades period..i would not expect that difference.
Obviously, the more positions, the nearer to the index we are but 20 positions in the XAO universe is not really index matching either..
You know my feelings about 2007 to now backtests, but to check these issues the difference in performance should be relevant...

So why would my systems perf be significantly and consistently better with let's say a max of 12 vs 20 positions.
Note: Some of these systems have a max number of new positions per bar
Looking forward to your views there


----------



## Country Lad (6 April 2021)

qldfrog said:


> So why would my systems perf be significantly and consistently better with let's say a max of 12 vs 20 positions.
> Note: Some of these systems have a max number of new positions per bar
> Looking forward to your views there



Maybe question of quality?  Your first choice of 12 having stronger potential than your last 8 making up the numbers?


----------



## qldfrog (6 April 2021)

Country Lad said:


> Maybe question of quality?  Your first choice of 12 having stronger potential than your last 8 making up the numbers?



true and if position score is right, this is expected but very quickly these worse choices would be exited and replaced by better entries?
or is it just that the profitable entry windows are small and so once missed are gone forever.
That would then point to a timing of entries more than actual stock selection? obviously not black and white
But along a huge period, I thought it would lessen the effect


----------



## MovingAverage (6 April 2021)

I recently posted the performance of my live weekly system so I thought I'd do a similar post on the performance of my live EOD system--the below is the unit price performance of my EOD system. This is a similar performance period to the post I made on my weekly system. My EOD system was pretty much turned off following the Covid crash until around mid-June, so it came back on later than my weekly but my EOD system is a more conservative system so this isn't surprising. As you can seen my EOD system went into DD after coming back on in June of 2020 and it went into a further DD of around 9%. However the system started to pick up around Oct 2020 and since then has been trending up. From the lows of the June 2020 DD my EOD as put on approximately around 23% to the end of last week. It hasn't had the gain that my live weekly system has (again not surprising as it is more conservative than my weekly) but it has still put on a reasonable recovery. My EOD has been been fully loaded with maximum open positions since around late Oct 2020 and has done only 3 trades since then. In contrast, my weekly system has made a lot more trades in the same period with around 20 trades.


----------



## Skate (6 April 2021)

qldfrog said:


> *May i start a subject:*
> We have talked here and else where a lot about the number of positions in a system. I usually target 20 or so for risk management purpose. Obviously, the more positions, the nearer to the index we are but 20 positions in the XAO universe is not really index matching either. So why would my systems perf be significantly and consistently better with let's say a max of 12 vs 20 positions. Looking forward to your views there




*Some posts do influence*
Over time I've made ongoing comments about my GTFO filter, Stale Stop filter. I've even made a ton of posts about my 40-position Hybrid Strategy. Most who read the ‘Dump it here’ thread know I trade a 40 position HYBRID portfolio with pleasing results. There is conjecture & (always will be) as to an optimal number of positions in a portfolio. After trading portfolios from 6 to 53 positions, it would be educational for others to read what difference the size of the portfolios makes in relationship to the profitability & emotional stress trading such a large portfolio. It's also pleasing when there is an interest in some of my posts that influence others to take a second look, from @qldfrog starting a "Skate-inspired thread" to @Warr87 showing interest in the MAP strategy, even @peter2 trading a 40-position portfolio.



peter2 said:


> I've been inspired by @Skate's generous contributions regarding some details of his ASX weekly hybrid system. I've been particularly intrigued by the number of open positions in his portfolios (40 - 53). That's a big number to manage and is normally too many for an active trader to manage effectively. I'm comfortable managing portfolios with 8 - 12 ASX positions and position size accordingly. Along comes Skate with his 40 position portfolio and what do I think about managing a 40 - 50 position portfolio as a research project?
> Very interesting.





peter2 said:


> One thing I noticed doing the 40 position portfolio was the abundance of opportunities. I tend to trade the same type of companies every year and trading the 40 position portfolio for six months showed me that I should be trading many more outside my favourites.





peter2 said:


> A portfolio of 40 positions reduces the influence of luck while the active management ensures the profitable edge and significant out performance against a benchmark in all market conditions. The reason I'm managing a 40 pos portfolio in this thread is to monitor the portfolio heat and see if I can consistently apply an active management style to a portfolio with a large number of positions. It appears from *skate's* comments that there are approx 6 buy/sells each week once a portfolio is established (more getting a portfolio started). Every one of us can handle that. So the main query is, will the extra effort (increased activity, slightly larger portfolio heat) consistently beat the benchmark and my own 8-12 position portfolios in all market conditions? I won't know unless I model it.





peter2 said:


> I saw @Skate's results in both bull and bear markets I assumed a 40 position portfolio would match the returns of the index. All the large position size portfolios that I've seen managed in real time struggle to beat the performance of their benchmarks.




*Peter remarked early on that a 40-position portfolio would not beat the index *
Peter recanted his remark "only to go on to acknowledge" that portfolio size does matter in "so many different ways" & it also matters "psychologically" in-stock selection.

*Kudos to Peter for shifting his opinion after testing a 40-position strategy*
Peter had some trepidation at first, but to his credit gave a 40 positions portfolio a go to confirm if trading such a large portfolio would beat the index average.

*After trading a 40-position portfolio I asked Peter the question *
"Has it performed to expectations"?

*A recap of what Peter posted*
_(a) "My knowledge and experience would say that a portfolio with 50 positions would not beat the market index"_

*To this *
_(b) "It has exceeded my expectations. I was/am pleasantly surprised by the results. There's no doubt that a 30+ portfolio, that is actively managed will thump any index"_

*Peter goes on to comment *
_"This (40-position) portfolio continues to impress me by the smooth equity curve"._

Skate.


----------



## MovingAverage (6 April 2021)

qldfrog said:


> May i start a subject:
> We have talked here and else where a lot about the number of positions in a system
> I usually target 20 or so for risk management purpose.
> Played a bit yesterday with backtesting this number of max positions and in my systems at least, daily and weekly:
> ...



Did you adjust your trade size when using the lower number of positions or keep it the same as for 20 positions?


----------



## qldfrog (6 April 2021)

MovingAverage said:


> Did you adjust your trade size when using the lower number of positions or keep it the same as for 20 positions?



It is adjusted so more cash per position for lower nb of positions
so $100k invested will go to 20 times $5k or if10 positions 10x $10k.
Then as the portfolio value increases decreases, i invest total equity divided by nb position per position.
It is managed automatically in the code


----------



## Skate (6 April 2021)

MovingAverage said:


> Like a lot of folks that follow this thread I live trade a weekly system. At the end of each calendar quarter I usually make a review of the trades I've done during the past quarter and do a general review of my systems' performance. Given we are about a year on since the Covid crash I was just reviewing how my systems have recovered since then. I thought it might be worthwhile doing a dump of how my live weekly system as performed over the past 12 or so months. The chart below tracks the unit value of my live weekly system. In summary my system was 100% cash through to about mid May 2020 and since then it has gone from a unit value of approx. 1.4 through to close today of approx. 2.10. This equates to a gain of approx. 50%. The covid crash saw the system encounter a rough DD of around 10% so over all my system as put on around 40% of the unit price going into the covid crash.
> 
> As you can see there has been some notable declines in the unit price (end of Jan this year through to around end of Feb) but overall it remains in a good up trend since the system "switched back on" in mid May of last year.
> 
> View attachment 122242






MovingAverage said:


> I recently posted the performance of my live weekly system so I thought I'd do a similar post on the performance of my live EOD system--the below is the unit price performance of my EOD system. This is a similar performance period to the post I made on my weekly system. My EOD system was pretty much turned off following the Covid crash until around mid-June, so it came back on later than my weekly but my EOD system is a more conservative system so this isn't surprising. As you can seen my EOD system went into DD after coming back on in June of 2020 and it went into a further DD of around 9%. However the system started to pick up around Oct 2020 and since then has been trending up. From the lows of the June 2020 DD my EOD as put on approximately around 23% to the end of last week. It hasn't had the gain that my live weekly system has (again not surprising as it is more conservative than my weekly) but it has still put on a reasonable recovery. My EOD has been been fully loaded with maximum open positions since around late Oct 2020 and has done only 3 trades since then. In contrast, my weekly system has made a lot more trades in the same period with around 20 trades.
> 
> View attachment 122426




@MovingAverage, two great posts, both with impressive results.


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## Skate (6 April 2021)

*If I may make one general comment*
Trading is a solitary endeavour & at times we all get into a “hamster wheel” when it comes to coding ideas - as those ideas come from the same pool of thoughts.

Skate.


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## qldfrog (6 April 2021)

If i follow my gutfeel, i would go with at least 20 positions: lower individual stock risk, more spread among sectors etc so my gutfeel would much prefer it.
But i can not yet understand the constant better outcome of much lower numbers of max entries.
Is it due to my style: fast exits so  a lot of trades.
Anyway not a clear understanding of the why.and this is disturbing..


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## MovingAverage (6 April 2021)

qldfrog said:


> It is adjusted so more cash per position for lower nb of positions
> so $100k invested will go to 20 times $5k or if10 positions 10x $10k.
> Then as the portfolio value increases decreases, i invest total equity divided by nb position per position.
> It is managed automatically in the code




Ok, so without specifics of your sim results it is hard to know what is driving the difference but the thing that jumps out at me is that it is possible to "overtrade a system". Or maybe your system is just not fully invested with 20 positions as it is with 12 positions. The old adage--more trades doesn't == more profit. Perhaps your system performs better with few trades? The common technique of 20 positions each 5% is in many cases not the best solution

This does highlight something that I think is also worth careful consideration for system traders--position sizing. How much of a systems performance is attributable to the position sizing technique. I think it is very important to test your system with a range of different position sizing techniques.


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## qldfrog (6 April 2021)

Thanks MA, it is definitely an under worked area in my case as i stuck to this standard technique for the last 2 y.thanks for challenging this👍


MovingAverage said:


> Ok, so without specifics of your sim results it is hard to know what is driving the difference but the thing that jumps out at me is that it is possible to "overtrade a system". Or maybe your system is just not fully invested with 20 positions as it is with 12 positions. The old adage--more trades doesn't == more profit. Perhaps your system performs better with few trades? The common technique of 20 positions each 5% is in many cases not the best solution
> 
> This does highlight something that I think is also worth careful consideration for system traders--position sizing. How much of a systems performance is attributable to the position sizing technique. I think it is very important to test your system with a range of different position sizing techniques.


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## MovingAverage (6 April 2021)

qldfrog said:


> Thanks MA, it is definitely an under worked area in my case as i stuck to this standard technique for the last 2 y.thanks for challenging this👍




I'll be honest--I've raised this before some time ago here, but when I'm in the early stages of evaluating a system I always use a fixed dollar position size (not a % of portfolio value) because I think this gives me a much better understanding of how a system performs over a period of time. Think about this--if you are testing your system with the old 20 positions each 5% of portfolio value as you back test over time you generally take increasing $ position sizes over time. You might start with $5000 per position at the start and end up with position sizes of $250,000. The problem is that using this approach you are varying your position size as time goes on and the question then becomes how much of the systems performance was influenced by larger trade positions. This influence can be mitigated to a large degree by using a constant fixed $ position size over your entire backtest period. Typically, I would use a a fixed trade size of $5000 (max of 20 open positions) across the entire backtest period. I can then safely say that the performance of my system in backtests is not being unduly influenced by changes in trade size. Try it--you will be very surprised at how your system looks in backtests.


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## qldfrog (6 April 2021)

MovingAverage said:


> I'll be honest--I've raised this before some time ago here, but when I'm in the early stages of evaluating a system I always use a fixed dollar position size (not a % of portfolio value) because I think this gives me a much better understanding of how a system performs over a period of time. Think about this--if you are testing your system with the old 20 positions each 5% of portfolio value as you back test over time you generally take increasing $ position sizes over time. You might start with $5000 per position at the start and end up with position sizes of $250,000. The problem is that using this approach you are varying your position size as time goes on and the question then becomes how much of the systems performance was influenced by larger trade positions. This influence can be mitigated to a large degree by using a constant fixed $ position size over your entire backtest period. Typically, I would use a a fixed trade size of $5000 (max of 20 open positions) across the entire backtest period. I can then safely say that the performance of my system in backtests is not being unduly influenced by changes in trade size. Try it--you will be very surprised at how your system looks in backtests.



True, and i never really expect to trade with 100k position in real world especially for penny stocks..AB gives warning in backtest when you start  virtual entries which are above traded volume.
But yes will check these .
More work ahead.learning is a never ending process😊


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## Wilham (6 April 2021)

qldfrog said:


> If i follow my gutfeel, i would go with at least 20 positions: lower individual stock risk, more spread among sectors etc so my gutfeel would much prefer it.
> But i can not yet understand the constant better outcome of much lower numbers of max entries.
> Is it due to my style: fast exits so  a lot of trades.
> Anyway not a clear understanding of the why.and this is disturbing..



I found comparing 20-40 positions in my recent backtesting gave similar results to you, higher annual returns with fewer positions. Not sure if you experienced the same, but I had larger max DDs with fewer positions which I didn't feel was a worthwhile trade off. 

My current thinking is that 40 positions gives a larger spread potentially across sectors and during a downtrend you'll have a higher proportion of stocks holding or even gaining during a downtrend. 

It's an interesting topic. One outstanding concern I have is going to cash and reinvesting on new buy signals. Should I be limiting to for example 5 new buys per bar or if the signals are there, take them all. The latter gave better results, but carries a higher timing risk imo


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## ducati916 (6 April 2021)

Chaps,

Come on! 

You are expressing perfectly the 'Law of Small Numbers'.

The correct number is the maximum number indicated by your 'edge'. The larger number will expose you to the edge that you have found. That is what you want: you want to expose the greatest number possible to your edge. 

jog on
duc


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## qldfrog (6 April 2021)

Wilham said:


> I found comparing 20-40 positions in my recent backtesting gave similar results to you, higher annual returns with fewer positions. Not sure if you experienced the same, but I had larger max DDs with fewer positions which I didn't feel was a worthwhile trade off.
> 
> My current thinking is that 40 positions gives a larger spread potentially across sectors and during a downtrend you'll have a higher proportion of stocks holding or even gaining during a downtrend.
> 
> It's an interesting topic. One outstanding concern I have is going to cash and reinvesting on new buy signals. Should I be limiting to for example 5 new buys per bar or if the signals are there, take them all. The latter gave better results, but carries a higher timing risk imo



I have a limit in number of entries per bar as a result of the same concerns


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## qldfrog (6 April 2021)

Nb of max positions:
To work with real systems and a concrete example with trades above 2500 ensuring so a statistical relevance:
my Guppy daily latest incarnation:
No limit on number of entries per bar in that test
01/01/2016 to now:
$100k start
XNT going from 46150 to 72380 during that period so a matching index increase of 57%
anything below we have no edge, anything above, we do.


*max open positions 11;*

Profit = 1914505.98 (1914.51%), CAR = 77.30%, MaxSysDD = -82083.71 (-12.62%), CAR/MDD = 6.13, # winners = 1001 (34.62%), # losers = 1890 (65.38%)


*max open positions 20;*

Profit = 971478.32 (971.48%), CAR = 57.19%, MaxSysDD = -44347.35 (-12.67%), CAR/MDD = 4.51, # winners = 1940 (36.39%), # losers = 3391 (63.61%)

*max open positions 40;*

Profit = -42384.70 (-42.38%), CAR = -9.98%, MaxSysDD = -82558.61 (-61.83%), CAR/MDD = -0.16, # winners = 3147 (29.75%), # losers = 7431 (70.25%)

Even entering losses at 40; in term of small numbers, we are at a minimum of 2891 trades(buy and Sell) for the 11 position so that should not explain it. I can start again at various periods etc but similar...

For 11 position: MC:



and for 40 positions:
MC:


So this system has an edge on 11 positions during that period otherwise I would not get that MC and is definitively a loser on 40 positions in nearly all of cases
So, I do not believe this is the law of low numbers here
These results do not fit with what I intuitively believe,
going to 40 entries might lower the return, reduce the DD but remain profitable. So why?
Anyway, this is my problem but I believe this platform and thread is a good place to discuss it.
Note : I DO NOT expect to make a 2M profit on 100k in 5 years..these are backtests but the delta should be relevant


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## Skate (6 April 2021)

qldfrog said:


> Note : I DO NOT expect to make a 2M profit on 100k in 5 years.




*Backtesting means JACK*
@qldfrog, well stated - without getting into another exchange, I want to re-stated that (IMHO), Amibroker backtest results mean "Jack" & hold little interest in assessing the true performance of a strategy. Live trading is the "true measure" as it confirms if your "trading plan" is solid.

Skate


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## Skate (6 April 2021)

*A little more about indicators*
I want to make a disclaimer - I'm a big fan of both Perry Kaufman & John Ehlers incorporating many of their ideas into my trading strategies. First, I'll post about John Ehlers (DSMA) indicator https://www.aussiestockforums.com/threads/dump-it-here.34425/post-1101319 & in the next post I'll discuss Kaufman's Adaptive Moving Average (KAMA)

*My best strategy going into 2020 was my "Weekly PANDA Strategy"*
I've made many posts about my best strategy "The Panda Strategy" it was a consistent performer that wasn't too shabby. When the strategy was stress-tested with the recent COVID-19 panic selling, the exit was slow to react. The exit strategy fell well short of my expectations. Recently I converted the strategy from Weekly to Daily & reported the trading results live.

*DSMA Hyperlinks below*





						Dump it Here
					

Very nice. The day strategy I am papertrading with python + IB is actually a modified CAM strategy. The CAM strategy is a solid strategy IMO. My version: daily, only trade PB and Trends (removed the CT condition), and modified the ranking to a purely momentum position score.




					www.aussiestockforums.com
				








						Dump it Here
					

Very nice. The day strategy I am papertrading with python + IB is actually a modified CAM strategy. The CAM strategy is a solid strategy IMO. My version: daily, only trade PB and Trends (removed the CT condition), and modified the ranking to a purely momentum position score.




					www.aussiestockforums.com
				




*What's so special about the DSMA?*
The DSMA is a data smoothing technique that acts as an exponential moving average (EMA) with a dynamic smoothing coefficient. The smoothing coefficient is automatically updated based on the magnitude of price changes. The resulting DSMA indicator provides substantial smoothing of the data even when price changes are small while quickly adapting to these changes, a win/win scenario.

*Trade with caution*
If you research the DSMA indicator, just be careful as John Ehlers's idea has been "mongrelised" beyond belief, getting the coding & parameter for the entry can be a challenge but rewarding.

Skate


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## Skate (6 April 2021)

*A little more about indicators*
Kaufman's Adaptive Moving Average (KAMA). The (KAMA) indicator I posted about recently is a handy indicator because of its unique characteristic of indicating the market trend & volatility. As traders, we all “make a decision” on the basis that future trends will continue to develop in the same direction as the past trends. 
*
DSMA & KAMA indicators*
Like all moving averages, the KAMA & DSMA indicators shine head & shoulders over all the others (IMHO) & can even be used for support & resistance levels.

*The KAMA indicator does a good job of filtering out market noise*
When market volatility is low, Kaufman’s Adaptive Moving Average remains near the current market price, but when volatility increases, it will lag behind. What the KAMA indicator aims to do is filter out “market noise” of temporary surges in price. One of the primary weaknesses of traditional moving averages is that when used for trading signals, they tend to generate many false signals. The KAMA indicator seeks to lessen this by generating fewer false signals "by not responding" to short-term, insignificant price movements.

Skate.


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## MovingAverage (6 April 2021)

ducati916 said:


> That is what you want: you want to expose the greatest number possible to your edge.
> 
> jog on
> duc



If by greatest number you mean active open positions then that proposition is just out and out wrong. There are so many system factors that you need to take into account before making that statement. For example, a system with a low % of winners will, in general, NOT benefit from a large number of open positions, but a system with a higher % of winners may well benefit from having exposure to a larger number of open positions. Unless you really understand several key properties of your system you cannot make blanket statements like that.


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## Skate (6 April 2021)

*Kaufman's Adaptive Moving Average (KAMA) is worthy of a few posts*
The (KAMA) indicator can be used to identify existing trends, & impending trend changes. Knowing when a trend is changing allows you to take advantage of the reversal points to enter or exit a position.

*How do we use the KAMA indicator?*
Basically, the uses of this indicator are "unlimited" or limited by your imagination & research. A simple way to use the KAMA is to plot it & look at a few charts to get a feel for how predictive the KAMA indicator can be. When the KAMA indicator line is moving lower, it indicates the existence of a downtrend & when it’s moving higher, it shows an uptrend. Compared to the Simple Moving Average, the KAMA indicator is less likely to generate false signals that may cause a trader to incur losses. It pays to remember that the KAMA is an adaptable indicator.

More to follow.

Skate.


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## MovingAverage (6 April 2021)

Skate said:


> *Backtesting means JACK*
> @qldfrog, well stated - without getting into another exchange, I want to re-stated that (IMHO), Amibroker backtest results mean "Jack" & hold little interest in assessing the true performance of a strategy. Live trading is the "true measure" as it confirms if your "trading plan" is solid.
> 
> Skate



I often think about this statement @Skate and while I think there is a great deal of merit in it I prefer to think that backtesting (the way I do it) is only a means for giving me a level of confidence that my systems have a good chance of making a profit in the future, but there is absolutely no way I will look at backtesting results and say over the next X period of time I should expect a CAGR of Y%...to do so is naïve at best.


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## Skate (6 April 2021)

*Alternative uses for the KAMA indicator*
The KAMA indicator can be used in a few different ways. One way is (as I posted before, "how I take advantage of the KAMA indicator") or alternatively, code two sets of KAMA parameters & use the cross of them to trigger signals. For example, when the faster KAMA line crosses above the slower KAMA line, this indicates a change from a downtrend to an uptrend. The KAMA signals are faster than both (SMA or EMA).

*The KAMA indicator can easily be applied to a chart*
One of the uses of Kaufman’s Adaptive Moving Average is to identify the general trend of current market price action by viewing a price chart. Basically, when the KAMA indicator line is moving lower, it indicates the existence of a downtrend. On the other hand, when the KAMA line is moving higher, it shows an uptrend. As compared to the Simple Moving Average, the KAMA indicator is less likely to generate false signals that may cause a trader to incur losses.

Skate.


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## Skate (6 April 2021)

*A must watch Video*
To round off my series of posts - I've found a short YouTube video where Martyn Tinsley explains the differences between a range of moving averages (SMA, EMA, KAMA) - it's well worth watching even if you are a seasoned trader.




Skate.


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## Skate (6 April 2021)

MovingAverage said:


> If by greatest number you mean active open positions then that proposition is just out and out wrong. There are so many system factors that you need to take into account before making that statement. For example, a system with a low % of winners will, in general, NOT benefit from a large number of open positions, but a system with a higher % of winners may well benefit from having exposure to a larger number of open positions. Unless you really understand several key properties of your system you cannot make blanket statements like that.




*I'm thinking *
This post will make for an exciting educational exchange. @ducati916 responded to a previous post in "general, concise terms". I'm sure the Duc will respond with an expanded explanation.

Skate.


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## peter2 (6 April 2021)

@Skate  Thank-you.

@qldfrog , regarding your post with the MC results of the 11pos vs 40 pos. 

The completely different equity curves indicate to me that there is a significant error in your system code. It will most likely be in the position sizing code (# trades, # shares). 
Other aspects that may influence your observation that 11 pos is better than 20+ positions.
- position score,
- market cap, sector preferencing
- influence of an index filter (small caps don't move the index)

I agree with @MovingAverage 's suggestion of using equal size positions throughout the testing period.

Pos size compounding will make the later results influence the P&L more than the early results.


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## qldfrog (6 April 2021)

peter2 said:


> @Skate  Thank-you.
> 
> @qldfrog , regarding your post with the MC results of the 11pos vs 40 pos.
> 
> ...



Thanks @peter2  and @MovingAverage , I will follow MA suggestions to try to debug this , I feel better not being alone thinking something is not right.So counter intuitive.Will keep you posted


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## MovingAverage (6 April 2021)

Skate said:


> *I'm thinking *
> This post will make for an exciting educational exchange. @ducati916 responded to a previous post in "general, concise terms". I'm sure the Duc will respond with an expanded explanation.
> 
> Skate.



You may wish to put both of us on ignore while we debate this issue 😜


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## Skate (6 April 2021)

MovingAverage said:


> You may wish to put both of us on ignore while we debate this issue 😜



*Debating the merits of an alternative view is how we learn*
I'm sure @ducati916 (if has the time or desire) will expand on his original post. Readers who have an open mind will take something from both sides, I'm sure of that.

*I apologise for the two-way ignore*
I didn't think I would get any flack for putting a few members on ignore for a week - why? because I believed my posts wouldn't hold any value to them being a thread for beginners.

*Also *
I would like to say that "I wouldn't intentionally do anything to undermine the friendly atmosphere of this thread"

*In my defence*
I was spending the majority of my days reading posts. Using the ignore feature was a circuit breaker (for me), that's all.

*If it's any consolation *
Those members on ignore were the ones I was addicted to reading.

Skate.


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## qldfrog (6 April 2021)

peter2 said:


> @Skate  Thank-you.
> 
> @qldfrog , regarding your post with the MC results of the 11pos vs 40 pos.
> 
> ...



just checked the code : pretty simple and I believe right:
SetPositionSize( 100 / maxOpenPositions, spsPercentOfEquity ); // Fixed Fractional Sizing
with maxOpenPositions :11, 20 or 40 for my previous  tests
I move to
SetPositionSize( 5000, spsValue ); It will obviously change the results but do we still see the degradation of results?
using AB optimise to run with a nb of positions between 10 and 50;

The results are a bit big for display:still 01/01/2016 to  today


but basically :
we do not see a degradation anymore.As expected the exposure increases with the number of positions
and the DD as well.
% winners is constant.
with only $100k to cut into 5k parcels, we obviously need to get some serious profit before being able to get the 50 positions
The sweet spot seems between 25 and 29 positions: 210% net profit, around 50% exposure and drawdown  below 20%
other test periods vary slightly  with 19 to 22 for some older test periods
obviously sticking to limited number of 5k parcels even after  massive wins is not realistic. 
Why would you not reinvest your gains?
  if we have unlimited fund(to be able to take the 50x5k parcels) from start which is probably the best way to check the optimal nb of positions, i get  a sweet spot of :drumroll surprise: 20; maybe due to previous optimisation? but that tend to indicate that my best returns should be with that number of positions.
Once profit comes, wemight want to increase the number of parcels:
i did this with one of my system starting at 16 positions and increasing toward twenty
And there is the issue of Risk Management.how much of your capital in a singlestock.
Anyway, I hope this little experience helps


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## peter2 (7 April 2021)

@qldfrog  Thanks for the extra work. I hope you got something from it.

I don't use AB and those results require lots more explanation before I could make any clear decisions about the trading system and the optimum number of positions for that system.

The only value in that chart that tells me anything about the system is the W% which is remarkably constant during the increasing number of trades (34%). In order for this system to be profitable the AW/AL must be >2.  To get an edge (expectancy) that I'd be comfortable with, the AW/AL would have to be >2.8. Include brokerage and some slippage the AW/AL would have to be >3.

----------------------------------

I totally agree with @ducati916 last two posts (low numbers, edge).  Like him, I'm going to jog on and maybe add to my open VIAC position.


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## ducati916 (7 April 2021)

MovingAverage said:


> If by greatest number you mean active open positions then that proposition is just out and out wrong. There are so many system factors that you need to take into account before making that statement. For example, a system with a low % of winners will, in general, NOT benefit from a large number of open positions, but a system with a higher % of winners may well benefit from having exposure to a larger number of open positions. Unless you really understand several key properties of your system you cannot make blanket statements like that.




To address this, we will have to start with an assumption.

Which is: that the system in question (A) does possess an edge; and
That a random system (B) (no edge) is compared against it.

If the system, A, that has a true edge is exposed to a low number of trades, the results could be (a) better than B, (b) worse than B, (c) equivalent to B.

The higher the number of trades taken, then the more system A will start to demonstrate its edge as compared to B.

So back to QF's issue:



> We have talked here and else where a lot about the number of positions in a system
> I usually target 20 or so for risk management purpose.
> Played a bit yesterday with backtesting this number of max positions and in my systems at least, daily and weekly:
> I consistently got much better results with lower max number of positions.
> For MA : along 2000+ trades so definitively consistent and statistically relevant




The 'thing' with small sample sizes is that there is greater variability in small sample sizes.

If you therefore have a system that (assuming a true edge) throws up 50 trades: you have to take all 50. You cannot take 20 and expect your results, over time, to replicate your edge.

If you do only take 20, then again, it is a small sample size and your results, due to pure chance, will be far higher both in profit and drawdown due to this increased variability.


Now of course none of this applies if the system in question does not have a true edge.

Glaringly absent on this thread is anyone building a system, actually stating what their edge is, in simple and concise terms. Now this may rightly be due to paranoia, that too many traders trying to trade the same edge will dissipate that edge, ie. the statistic that is watched loses its power to inform. This then raises the issue of longevity of systems: how robust is your edge? Is the system past its sell-by date?

Other types of edge are profitable: for eg. I am extremely disciplined, I can take my losses/profits clean. That sort of edge is in the domain of discretionary traders, as tech/a was trying to illustrate. Yes systems traders can code in SL that execute automatically, but, there are issues, too numerous to go into here.

However, the edge that everyone seeks is a market edge. I will give you 1 for free: Volatility cones. That is a market edge that has stood the test of time, well over 100yrs now. I can give it to you free because it is an intrinsic edge to the market and cannot be squashed. Can it be coded? I have no idea. I'm not a systems trader. However, that is a true edge.

What is also clear from this thread is that many systems consider an edge to be 'markets trend'. And it is. The thing about this edge is the timeframe. The timeframe is a critical component, as is the choice of market. So long trending markets: Bonds, Currencies and with the current QE, stocks (which have gone up since year dot, with a few bad breaks). Reversion to mean markets are Commodities and Currencies.

Anyway, far too long a post.


jog on
duc


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## qldfrog (7 April 2021)

peter2 said:


> @qldfrog  Thanks for the extra work. I hope you got something from it.
> 
> I don't use AB and those results require lots more explanation before I could make any clear decisions about the trading system and the optimum number of positions for that system.
> 
> ...



Thanks for stating the so obvious which often stares in my face, yet get ignored.
That's why it is good to have this  forum and put pen to paper: when with blurry head well past bedtime. with a 33% or so win rate,i indeed need twice the AW to AL to break evenand that should be one of the key column indeed.
Posted before reading mr ducati's post so more an answer to Peter.


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## MovingAverage (7 April 2021)

ducati916 said:


> To address this, we will have to start with an assumption.
> 
> Which is: that the system in question (A) does possess an edge; and
> That a random system (B) (no edge) is compared against it.
> ...




I'm sure it is just my pea brain not comprehending what you are saying, but if by "higher number of trades taken" you mean with reference to the total number of trades taken over a certain period of time (e.g., 5, 10, 20 plus) years then I completely agree with what you say. But if this is simply about saying: if your system has an edge then moving from say a max of 10 simultaneous open positions to a max of 20 simultaneous open positions then I don't agree with that. But I think you are referring to the former and not the latter?


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## qldfrog (7 April 2021)

MovingAverage said:


> I'm sure it is just my pea brain not comprehending what you are saying, but if by "higher number of trades taken" you mean with reference to the total number of trades taken over a certain period of time (e.g., 5, 10, 20 plus) years then I completely agree with what you say. But if this is simply about saying: if your system has an edge then moving from say a max of 10 simultaneous open positions to a max of 20 simultaneous open positions then I don't agree with that. But I think you are referring to the former and not the latter?



indeed, that's where I was a bit confused: I had 2000 or so trades min in the given example, we are not exactly talking about small numbers here?
One thing certain: I used that % of assets per trades in *all *my backtests development in the last 2 y and it certainly seems to twist things; especially the return per max number of positions but even win rate: why the hell would win rate drastically change
Not sure I fully understand why:  yes scoring is more important yes we speed or miss some rebound options but I would not expect that much change like win rate.I hate not understanding something, there must be a clear explanation but this is what it is and my aim is not to improve an hypothetic backtest but improve statistically the system performance
So based on the few runs I did , I believe testing and fine tuning with fixed amount  per trade is MUCH more useful.
I will so rerun/retune my systems in this new light..and will be quiet for a while.  
will give you a short summary of this experience when completed


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## MovingAverage (7 April 2021)

qldfrog said:


> indeed, that's where I was a bit confused: I had 2000 or so trades min in the given example, we are not exactly talking about small numbers here?



I don't want to distract you from your current endeavors, but you might want to put this on your list of things to research in the future. To determine whether your 2000 trades is statistically relevant you need to put it into context. For example, if the 2000 trades was in the context of a possible 2 million trades then I would say 2000 trades is not a large enough sample size, but if the 2000 trades was in the context of a possible 3000 trades then I would say that is a good sample size. So how do you find out how many possible trades there are? You can easily do that in AB. I use the scan function (with a little AFL) to do a dump of all possible trades. You can use the output of the scan to see if your back test has taken a statistically relevant number of trades.


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## steve2222 (7 April 2021)

ducati916 said:


> ...........................The timeframe is a critical component, as is the choice of market. So long trending markets: Bonds, Currencies and with the current QE, stocks (which have gone up since year dot, with a few bad breaks). Reversion to mean markets are Commodities and Currencies.
> 
> Anyway, far too long a post.
> 
> ...



Duc, you mention Currencies as both 'long trending' and 'mean reversion' in nature. Was that deliberate?


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## ducati916 (7 April 2021)

steve2222 said:


> Duc, you mention Currencies as both 'long trending' and 'mean reversion' in nature. Was that deliberate?





Steve,

Yes it was. Currencies typically trend for long periods. They also, for macro based reasons to do with the internal politics/economics of their home nation, tend to revert to the mean.

Some examples:







As opposed to SPY




jog on
duc


----------



## ducati916 (7 April 2021)

MovingAverage said:


> I'm sure it is just my pea brain not comprehending what you are saying, but if by "higher number of trades taken" you mean with reference to the total number of trades taken over a certain period of time (e.g., 5, 10, 20 plus) years then I completely agree with what you say.






MovingAverage said:


> But if this is simply about saying: if your system has an edge then moving from say a max of 10 simultaneous open positions to a max of 20 simultaneous open positions then I don't agree with that. But I think you are referring to the former and not the latter?





Mr MA,

Both, but possibly not quite how you have stated it. Let me clarify.

Since we agree on one, we only need discuss the one that we don't agree on.

Just to clarify my position re. proposition #2:

If a system with a true edge, throws up 100 trades in a week, all those trades ought to be taken. Now, due to the number of trades, our trader may not have the available capital to take all 100. He may only have the capital to take 50.

My assertion is: this could negatively impact the system (or conversely positively or not at all) because the 'edge' is only valid when you take all of the trades. In taking only 50, we are now subjecting the trades to the law of small numbers: ie. randomness/luck play a much larger role in the results.

A thought experiment:

If a system, with a true edge, throws up 100 trades then are:

(i) all trades winners? If yes, then only taking 50 will reduce the number of winning trades. If no, then;
(ii) which ones will lose? Do we know the answer, yes/no?
(iii) if we know the answer to (ii) as a yes, then we will only take the winning trades.

jog on
duc


----------



## MovingAverage (7 April 2021)

ducati916 said:


> If a system with a true edge, throws up 100 trades in a week, all those trades ought to be taken. Now, due to the number of trades, our trader may not have the available capital to take all 100. He may only have the capital to take 50.



I'm not sure what you're saying here. Are you saying your hypothetic system's edge is only there when you take up all buy signals it generates? As a general statement you absolutely do not need to take all positions a system throws up to have an edge. If your system throws up more buys than you have capital then a well thought out and tested ranking and selection of buy signals will absolutely remove a significant part of the randomness you reference. Sure if you don't employ a good technique for ranking and selecting buy sigs in situations where capital doesn't allow you to take all entries (and let's face it that is most people) then sure a degree of randomness will be present, but surely even simple retail system traders would employ the most rudimentary ranking mechanism for buy sigs which would address some of the randomness.


----------



## qldfrog (7 April 2021)

ducati916 said:


> Mr MA,
> 
> Both, but possibly not quite how you have stated it. Let me clarify.
> 
> ...



Can I add a bit of a twist from my view:
->100 trades proposed by the system:
 these trades have a higher probabilities of winning than randomly chosen ones-> " our edge"
not all will win, but we know that we also *select n of of these* based on another statistically favorable criteria : a preference order: the score
So we have another variable in our equation:the preference criteria, so not binary buy sell, more "in buy pool" or sell
And even based on its score, the 10th choice today may ( will) have a different probability of a win vs tomorrow's 10th  proposed entry
Basically we can see it that way: my system might offer a couple of trades per week ( I believe this is your vision)
or
 a pool of higher than average candidates that we will pick from (trying as well to put better odds in that selection) aiming an average win/loss ratio  >1;
[with all index twists, panic exits coded, etc]

I run both types of systems. 
One pretty selective with low number of entries (my weekly ) with maybe 4/5 entries suggested per week;
and some like  Guppy ->250 or so trades in less than 4 months.
36 entries offered this morning, 13 yesterday for 13 position max...

-> this school of mind in line with Mr Skate's view that in trend following,
 the entry is not critical, just exit if wrong and roll the dice again;
I obviously caricature a bit.

Market as a casino where you can exit at will, with limited loss and unlimited win potential...within limits
-> a number game.
Hope this explanation is not too blurry.
So yes I expect to have better results for limited number of position, but not to the extreme I saw 




:


----------



## MovingAverage (7 April 2021)

qldfrog said:


> So yes I expect to have better results for limited number of position, but not to the extreme I saw



I agree entirely with this.

Obviously I don't know your system, but I live trade a swing system. It has a theoretical high % of winners (65-70%) but those winners each only generate very slim net profits. I offset the slim winners with large position sizes and fewer positions because after all like most traders I'm capital constrained. Because 65-70% of all buys sig's are winners (albeit very slim profit) I have a high level of confidence that my small number of actual positions (much much less then potential buy sig's) doesn't introduce an artificial "edge" into my system.  The system generates lots of daily buys--way more than I have capital for so I use a ranking system that is probability based using historical behavior so I'm confident to say it's performance isn't just down to random selection of buys.


----------



## Skate (7 April 2021)

ducati916 said:


> Glaringly absent on this thread is anyone building a system, actually stating what their edge is, in simple and concise terms. (assuming there is a true edge)





MovingAverage said:


> a degree of randomness




*A traders edge*
@ducati916 & @MovingAverage may be onto something debating an edge. The question for me is - "when is an edge useful" when it comes to trading. The edge might be nothing more than the randomness of entries or the confidence to have a go. Randomness could be anything & everything from, the volatility of the markets, external influences, or world events - who knows!

*System trading*
This type of trading relies solely on exploiting a perceived edge rather than an edge. System trading is purely a vehicle to "timing the markets". But what if there is no "real edge" but fooled into thinking there is one. What if our trading results are purely down to "luck". Pure luck in "timing the entry/exit?" - it's food for thought.

*Thinking about trading on a deeper level*
I might be fooling myself, thinking I have an edge but in reality, I have no edge at all. My trading returns could be from being a lucky trader. I truly hope not as it means that I've wasted a chunk of my life.

*Trading results of approximately 600 trades (over the last two years)*
I could be mistaken but I believe the stats below are in line with trading a "trend following strategy" & nothing spectacular. The statistics are the "average returns" from trading a multitude of strategies (instead of just one). The performance of individual strategies varies but in combination they tend to even out my equity curve (my trading emotions).




Skate.


----------



## MovingAverage (7 April 2021)

Skate said:


> *A traders edge*
> @ducati916 & @MovingAverage may be onto something debating an edge. The question for me is - "when is an edge useful" when it comes to trading. The edge might be nothing more than the randomness of entries or the confidence to have a go. Randomness could be anything & everything from, the volatility of the markets, external influences, or world events - who knows!



I never understand what exactly "edge" is meant to reference....I see it thrown around a lot but the way I see it commonly used I assume it is with reference to the high level strategy underpinning your system--which might include entry/exit rules, risk management, position sizing, ranking etc etc.


----------



## qldfrog (7 April 2021)

ducati916 said:


> Mr MA,
> 
> Both, but possibly not quite how you have stated it. Let me clarify.
> 
> ...



Can I add a bit of a twist from my view:
->100 trades proposed by the system:
these trades have a higher probabilities of winning than randomly chosen ones-> " our edge"
not all will win, but we know that we also *select n of of these* based on another statistically favorable criteria : a preference order: the score
So we have another variable in our equation:the preference criteria, so not binary buy sell, more "in buy pool" or sell
And even based on its score, the 10th choice today may ( will) have a different probability of a win vs tomorrow's 10th  proposed entry
Basically we can see it that way: my system might offer a couple of trades per week ( I believe this is your vision)
or
a pool of higher than average candidates that we will pick from (trying as well to put better odds in that selection) aiming an average win/loss ratio  >1;
[with all index twists, panic exits coded, etc]

I run both types of systems.
One pretty selective with low number of entries (my weekly ) with maybe 4/5 entries suggested per week;
and some like  Guppy ->250 or so trades in less than 4 months.
36 entries offered this morning, 13 yesterday for 13 position max...

-> this school of mind in line with Mr Skate's view that in trend following,
the entry is not critical, just exit if wrong and roll the dice again;
I obviously caricature a bit.

Market as a casino where you can exit at will, with limited loss and unlimited win potential...within limits
-> a number game.
Hope this explanation is not too blurry.
So yes I expect to have better results for limited number of position, but not to the extreme I saw 




:


MovingAverage said:


> I never understand what exactly "edge" is meant to reference....I see it thrown around a lot but the way I see it commonly used I assume it is with reference to the high level strategy underpinning your system--which might include entry/exit rules, risk management, position sizing, ranking etc etc.



For me an edge.. positive edge is anything which will give you  higher returns than the matching index 
even just buying this index etf and exiting on a crash and reentering after.
So i think everyone has his own interpretation.


----------



## ducati916 (7 April 2021)

MovingAverage said:


> 1. I'm not sure what you're saying here. Are you saying your hypothetic system's edge is only there when you take up all buy signals it generates?






MovingAverage said:


> 2. As a general statement you absolutely do not need to take all positions a system throws up to have an edge.






MovingAverage said:


> 3. If your system throws up more buys than you have capital then a well thought out and tested ranking and selection of buy signals will absolutely remove a significant part of the randomness you reference.






MovingAverage said:


> 4. Sure if you don't employ a good technique for ranking and selecting buy sigs in situations where capital doesn't allow you to take all entries (and let's face it that is most people) then sure a degree of randomness will be present, but surely even simple retail system traders would employ the most rudimentary ranking mechanism for buy sigs which would address some of the randomness.





1. Essentially, yes. That is the purpose of defining an edge.

2. Well no you don't, but then you are trading something other than your edge.

3. Which is the law of small numbers writ large. You are selecting a sample from a sample. The only way this is false is if your edge as identified has a 100% win rate.

4. There is no 'good' technique. You are dealing with a too small sample to ascribe any statistical significance to it. It will be random/luck. 


Your position is essentially this:

(i) I have a system with an edge that delivers 20 trades/week to me; and
(ii) I can only assign capital to 5 of them each week; therefore
(iii) I will only take the winners and discard the rest.

Therefore, if 1 trade out of the 5 selected is actually a loser, then the above statement must be false, based upon Popper's falsifiability.


jog on
duc


----------



## ducati916 (7 April 2021)

qldfrog said:


> Can I add a bit of a twist from my view:
> ->100 trades proposed by the system:
> these trades have a higher probabilities of winning than randomly chosen ones-> " our edge"
> not all will win, but we know that we also *select n of of these* based on another statistically favorable criteria : a preference order: the score
> ...





The problem is that total randomness can also beat the index. 

jog on
duc


----------



## MovingAverage (7 April 2021)

ducati916 said:


> 1. Essentially, yes. That is the purpose of defining an edge.
> 
> 2. Well no you don't, but then you are trading something other than your edge.
> 
> ...



Really, you have to take all positions to define an edge? Come on...I'm curious, do you actively trade systems?

Anyway, I've been down this path with you before and I'm a grumpy old man who likes to argue ....so let's just agree to disagree  After all, the fact we all have differing approaches is what allows us to trade.


----------



## ducati916 (7 April 2021)

MovingAverage said:


> 1. I never understand what exactly "edge" is meant to reference....I see it thrown around a lot but the way I see it commonly used I assume it is with reference to the high level strategy underpinning your system--






MovingAverage said:


> 2. which might include entry/exit rules, risk management, position sizing, ranking etc etc.





Now we are getting somewhere. Yes, an edge can be include your list in [2]. However, that is not what I define an edge as. I define an edge as a strategy that has a positive expectation in any market conditions, including outliers (Black Swans). In fact, a true edge actually benefits from an outlier. 

I trade 3 strategies. 2/3 have the edge described above. The other, does also, but not to the added qualification of outliers. For that I need luck.

Some of these systems I doubt actually have an edge at all in terms of [1]. They seemingly derive their edge from [2].

jog on
duc


----------



## ducati916 (7 April 2021)

MovingAverage said:


> 1. Really, you have to take all positions to define an edge? Come on...I'm curious, do you actively trade systems?
> 
> 2. Anyway, I've been down this path with you before and I'm a grumpy old man who likes to argue ....so let's just agree to disagree  After all, the fact we all have differing approaches is what allows us to trade.





1. Do I trade a mechanical system(s): yes, although none of them resemble systems in this thread.

2. Ok, that's fine.

jog on
duc


----------



## MovingAverage (7 April 2021)

ducati916 said:


> Now we are getting somewhere. Yes, an edge can be include your list in [2]. However, that is not what I define an edge as. I define an edge as a strategy that has a positive expectation in any market conditions, including outliers (Black Swans). In fact, a true edge actually benefits from an outlier.
> 
> I trade 3 strategies. 2/3 have the edge described above. The other, does also, but not to the added qualification of outliers. For that I need luck.
> 
> ...




Not biting


----------



## qldfrog (7 April 2021)

ducati916 said:


> The problem is that total randomness can also beat the index.
> 
> jog on
> duc



Sometimes, but not consistently so the MC runs on top of long enough test perios to ensure enough trades.
Obviously to be qualified as index can be twisted
 with banks woolies coles and bhp rio enough to make a significant part of the index : they would be hard to hit randomly so we can have random beating the index should for example small caps beat asx20 etc


----------



## MovingAverage (7 April 2021)

qldfrog said:


> Sometimes, but not consistently so the MC runs on top of long enough test perios to ensure enough trades.



Yup, anyone that does proper analysis and understands systems would not seriously suggest that a random system CONSISTANTLY beats the index. That is just a naïve statement.


----------



## DaveDaGr8 (7 April 2021)

There's a great article by Andreas Clenow HERE on the subject of why randomness will beat the index / funds.


----------



## MovingAverage (7 April 2021)

DaveDaGr8 said:


> View attachment 122479
> 
> 
> There's a great article by Andreas Clenow HERE on the subject of why randomness will beat the index / funds.




Sorry, but these are hardly random. This article talks about a very clear organized system as a whole: it has a well defined stock universe (e.g., S&P 500), when to buy and when to sell (e.g., start of each month), a position sizing (e.g volatility based or random allocation), and how to pick stocks. As a system per se this is not random and has clear rules for entry and exit. Yes, it has some random elements (e.g., randomly pick fifty stock from the S&P 500), but to suggest this is just monkeys throwing darts at a stock list is wrong. A truly random system would just randomly buy and sell whenever and NOT pick buys and sells at the start of the month from only the S&P 500. Like I say, yes this system employs random elements but to suggest it is just a random system is wrong. This article is nothing more than a review of a very poor system IMHO.


----------



## ducati916 (8 April 2021)

Skate said:


> *1. A traders edge*
> @ducati916 & @MovingAverage may be onto something debating an edge. The question for me is - "when is an edge useful" when it comes to trading. The edge might be nothing more than the randomness of entries or the confidence to have a go. Randomness could be anything & everything from, the volatility of the markets, external influences, or world events - who knows!






Skate said:


> *2. System trading*
> This type of trading relies solely on exploiting a perceived edge rather than an edge. System trading is purely a vehicle to "timing the markets". But what if there is no "real edge" but fooled into thinking there is one. What if our trading results are purely down to "luck". Pure luck in "timing the entry/exit?" - it's food for thought.






Skate said:


> *3. Thinking about trading on a deeper level*
> I might be fooling myself, thinking I have an edge but in reality, I have no edge at all. My trading returns could be from being a lucky trader. I truly hope not as it means that I've wasted a chunk of my life.






Skate said:


> *Trading results of approximately 600 trades (over the last two years)*
> I could be mistaken but I believe the stats below are in line with trading a "trend following strategy" & nothing spectacular. The statistics are the "average returns" from trading a multitude of strategies (instead of just one). The performance of individual strategies varies but in combination they tend to even out my equity curve (my trading emotions).
> 
> View attachment 122474
> ...





1. I think that there is broad agreement that trading discipline can be considered an 'edge'. Trading discipline can be enforced through (blind) adherence to a systematic entry/exit signal. Your systems that you have made public certainly fall into this category, at least superficially.

2. Which moves us onto the second type of edge, which is a market truism or anomaly, that can be exploited through buying or selling financial instruments. This edge can be articulated in a sentence. If you cannot articulate your edge in a sentence, you probably have no edge. Now, as already stated, it can be a Type I edge (see above) or a Type II edge. A Type II edge is a stronger edge and will have a much higher win%. The issue can be ROI. (see below).

3. Your systems superficially (what we on the forum can see) is a Type I edge. That is not to say there isn't a Type II edge in there, simply not disclosed to the forum.

4. Based on the results: I would conclude a Type I edge.


From the above, some might conclude that I am 'negative' on a Type I edge. Untrue. Type I edges have a very important characteristic that a number of Type II edges do not possess: the ability to really let profits run. Type II edges (tend) to have definite profit targets or time-in-trade limits. You close the trade when the profit target is achieved and/or time expires.

An example of a Type II edge (this is an example: it is NOT A REAL EDGE) could be 'Seasonality': buy/sell at the start of the month, close at the end, based on seasonality data. The edge lasts 1 month. Profits cannot run past that 1 month period. However, if your success rate is 100%, you may be satisfied to trade that edge, in spite of the fact that your profits are capped.

I don't know this, but looking at a number of systems that appear on the forum, they all look like Type I systems. Now if that is true, then I can refute my previous argument re. the requirement to take 100% of all trades thrown up by the system.

A Type I edge is largely a discipline based edge. There is no Type II edge present, therefore, taking a sample from a sample is irrelevant, as the edge, discipline, is present in every trade taken. There is no Type II edge to be blunted through the trading of a smaller sample.

However, selecting trades based in some form of statistical hierarchy, is simply fooling yourself. If you are trading a Type I edge, all trades are equi-probable.


jog on
duc


----------



## qldfrog (8 April 2021)

MovingAverage said:


> Yup, anyone that does proper analysis and understands systems would not seriously suggest that a random system CONSISTANTLY beats the index. That is just a naïve statement.






DaveDaGr8 said:


> View attachment 122479
> 
> 
> There's a great article by Andreas Clenow HERE on the subject of why randomness will beat the index / funds.



I think people should read that article.it actually highlighted what i king of felt when commenting the fact i understood index beaten by random  if asx20 falling behing  small caps
Market weighted indexes will always consistently be beaten by a (selective) random system.
*This is big as this means we should compare our system not to index plus div but to a non market weighted index plus div.*
Is there even such a thing here in OZ?
I hope this will not be forgotten and lost.
On the other end, as opposed to financial advisors, i care less about beating the index than the actual number of $ on my account 
At the end of the month.i see no joy in only losing 40% if the ASX is down 50%😊.but we need benchmarks


----------



## qldfrog (8 April 2021)

ducati916 said:


> 1. I think that there is broad agreement that trading discipline can be considered an 'edge'. Trading discipline can be enforced through (blind) adherence to a systematic entry/exit signal. Your systems that you have made public certainly fall into this category, at least superficially.
> 
> 2. Which moves us onto the second type of edge, which is a market truism or anomaly, that can be exploited through buying or selling financial instruments. This edge can be articulated in a sentence. If you cannot articulate your edge in a sentence, you probably have no edge. Now, as already stated, it can be a Type I edge (see above) or a Type II edge. A Type II edge is a stronger edge and will have a much higher win%. The issue can be ROI. (see below).
> 
> ...



All the systems i trade have a cut loss, let profit run as their #1 principle 
I then try to tweak the entries and refine the exits to improve returns but all type 1 edge.
Who would i be to believe i could find a gem or forecast a black swan.😊 
Your type 2 edges are more complex and rely on market errors or lags, potentially exploiting human fear or greed twisting momentarily market behaviours.
a type 1 edge is based on human imperfections and our individual potential to improve
A type 2 on market imperfections.


----------



## DaveDaGr8 (8 April 2021)

Just out of curiosity i did a similar test on the xjo ( asx200 ).

TEST Conditions :
- All tests are random selection within asx200 universe.
- Trades occur on a weekly timeframe, so it will randomly buy and randomly sell Monday open only. ( i probably should have done daily )
- Tests from 2000 to present
- Norgate Constituents and survivorship bias friendly.
- There is no brokerage applied.

yellow =  xjo.
blue = random position size
green = volatility based position sizing
red = vola + filter c > 52W ma.

*A lot of funds don't make it into the red.*




Oh in case anyone is wondering ... there are 16 blue dots out of 150 that failed to beat the XJO index.



\


----------



## qldfrog (8 April 2021)

DaveDaGr8 said:


> Just out of curiosity i did a similar test on the xjo ( asx200 ).
> 
> TEST Conditions :
> - All tests are random selection within asx200 universe.
> ...



was actually thinking doing the same , thanks for sharing the results


----------



## MovingAverage (8 April 2021)

DaveDaGr8 said:


> Just out of curiosity i did a similar test on the xjo ( asx200 ).
> 
> TEST Conditions :
> - All tests are random selection within asx200 universe.
> ...



What do the X and Y axis represent?


----------



## DaveDaGr8 (8 April 2021)

x = MDD
Y = CAR

One final one just to get people thinking ..

This is what happens when we add a market filter. 

In this case i am only trading while XJO > 10Week XJO ( 64.74% exposure ) and am in cash for the rest.


----------



## qldfrog (8 April 2021)

DaveDaGr8 said:


> x = MDD
> Y = CAR
> 
> One final one just to get people thinking ..
> ...



you just need to narrow the range of your results and you have a decent system.interesting to see the behaviour on market going nowhere or down like japan  in last 20y or for specific periods here;
the tide raise all the boats


----------



## Skate (8 April 2021)

Skate said:


> *Trading results of approximately 600 trades (over the last two years)*
> I could be mistaken but I believe the stats below are in line with trading a "trend following strategy" & nothing spectacular.




*The dust has settled*
It appears the dust has settled on the differing opinions of what constitutes an edge, the definition of an edge & how a trading strategy is able to capitalises on an edge or "perceived edge". Randomness was also canvased as an edge. I'm first to admit, all stated positions had merit. Without an open mind, you forego the right to learn 

*Expressing an opinion*
When posting in the "Dump it here" thread, it's not about winners or losers but having the right to express your views in a friendly manner. I for one enjoyed the banter immensely. 

*Now changing tact *
I want to explore why "trend trading systems" have a low win rate.  

More to follow.

Skate.


----------



## Skate (8 April 2021)

*41%-win rate is highly frustrating*
Let me state the obvious, "trend trading systems have more losers than winners". The few positions that do win are the reason why this style of trading is successful & profitable. At times waiting for a trend trading strategy to develop into profits can be a hard ask - a step too far (for some).

*So, why do trend followers have a low win rate? *
I wish I had a definitive answer but I'm yet to find the main reason that is constantly causing me grief. It's really annoying at times when you enter a new position only to experience a quick pullback, which at times makes me want to take the "Lord's name in vain".

*Pullbacks at times are hard to handle*
Pullbacks could be one reason for a low win percentage of a trend trading strategy or it could be the "main reason", I just don't know. What I do know is @peter2 has capitalised on these pullbacks more than once. A pullback can happen right after a breakout or later in the trend, but these pullbacks cause all trend traders a lot of grief. Reducing pullbacks with this style of trading is not an easy issue to overcome.

More to follow.

Skate.


----------



## Skate (8 April 2021)

*A (2006) quote from the Duc*


ducati916 said:


> I am saying by setting a stoploss, you control risk.




*Stop-loss & pullbacks*
Following on from Duc's statement. A stop-loss is a handy tool to have in your toolbox having the ability to reduce losses whilst controlling your risk. A stop-loss exit works with any trend trading strategy.

*Stale stop exits*
A "stale stop" exits correctly implemented keeps all my strategies in rotation mode by disregarding the non-performers quickly that may be a contributing factor (in my case). Having a generous stop loss can eliminate much of these shallow pullbacks but at times leads to deeper losses. Trading is always a trade-off.

*Trend reversal*
In my case, trend reversals can be "more annoying" than the original pullback. We have all experienced a pullback far enough that triggered our stop-loss only to see it reverse back into the trending direction. I said it's "annoying" but I should have said it's "BLOODY ANNOYING" to reinforce the view from my perspective.

More to follow.

Skate.


----------



## Skate (8 April 2021)

*Pullbacks happen with such regularity it’s highly frustrating*
Most trend-following systems are very similar because of the breakout entry methodology. Jumping on breakouts might appear different with some strategies, but they all tend to "buy & sell" around the same time.

*To overcome the synchronisation of trend traders *
As trend traders tend to "buy & sell" around the same time I take the view it would be to my advantage if I entered before them. I achieve a quicker entry by using the mathematical brilliance of Perry Kaufman & John Ehlers. Both of these have developed low lagging indicators that I have recently posted about. Using low lag indicators gives me an "edge" when it comes to the competition (other traders). Simply, I want to get in & out of a trend "first" (my trading advantage).

*I'm not alone*
Most trend-following systems have experienced drawdowns over the last few months - that's quite evident from the posts of others. Trading in a sideway market can be beneficial at times but those times are far & few between.

*It's prudent*
I should point out at this stage that all trend-following systems need to trade when the markets are bullish to achieve good results. Conversely, trend trading systems will struggle to produce reasonable profits when markets are down-trending or going sideways.

More to follow

Skate.


----------



## Skate (8 April 2021)

*Here is the kicker*
Trend trading strategies have a habit of producing large drawdowns in bearish markets. It's just a (bummer) trading in all market conditions.

*Summary*
I've touched on one reason (maybe two) why my trend trading strategies all experience a low win percentage 

(a) pullback within a trend, or 
(b) by using a stale-stop exit as a rotational tool. 

*I'm more mellow these days*
I'm sure there are other circumstances that add to the low win rate percentage - like the failure of a trend continuation, poor timing, or a mirid of other things. It may be just a coding issue on my part that exacerbates my frustration. Being a more mellowed trader, I've learned to "roll with the punches" while fully accepting that "the market will give me what I deserve".

Skate.


----------



## ducati916 (8 April 2021)

Skate said:


> *1. 41%-win rate is highly frustrating*
> Let me state the obvious, "trend trading systems have more losers than winners". The few positions that do win are the reason why this style of trading is successful & profitable. At times waiting for a trend trading strategy to develop into profits can be a hard ask - a step too far (for some).







Skate said:


> *2. Pullbacks at times are hard to handle*
> Pullbacks could be one reason for a low win percentage of a trend trading strategy or it could be the "main reason", I just don't know. What I do know is @peter2 has capitalised on these pullbacks more than once. A pullback can happen right after a breakout or later in the trend, but these pullbacks cause all trend traders a lot of grief. Reducing pullbacks with this style of trading is not an easy issue to overcome.
> 
> More to follow.
> ...





1. Trend trading systems, need trending markets. Pretty obvious.

2. Stock markets (Coffee, Gold, Silver, Oil) amongst others are 'speculator' driven markets. Which simply means (generally) there is more chop. Fundamentally driven markets, Currencies, Bonds, are (generally) more driven by economic data and big players. Speculators have less influence, hence, less chop. Aggregated derivative markets have as their driving force speculation, but, in a diluted format due to the traded instruments being derivatives, eg. S&P500 eMini as opposed to the full S&P500 future.

By designing a trend following system to trade an inherently speculative market, which is prone to swings in, let's call it 'sentiment', but it actually encompasses a number of other issues, I think your systems have done a stellar job.

jog on
duc


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## qldfrog (8 April 2021)

Just a note:
 a 41% win rate is still a dream for me in most cases.
I do sometimes reach this but eith pathetic average exposure and so underwhelming results
I actually do not focus much on win rate.i still want to avoid depression


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## MovingAverage (8 April 2021)

Skate said:


> *41%-win rate is highly frustrating*
> Let me state the obvious, "trend trading systems have more losers than winners". The few positions that do win are the reason why this style of trading is successful & profitable. At times waiting for a trend trading strategy to develop into profits can be a hard ask - a step too far (for some).
> 
> *So, why do trend followers have a low win rate? *
> ...



My personal experience with trend trading systems (with long hold times) is they have low win % because many are based on breakout techniques...close reached a new high, close above a historical range blah blah blah. A key characteristic of this is that a lot of break outs turn out to be fake outs. Because of this it is extremely rare for breakout based trend systems to achieve win % of anything beyond 45-50%. For my live weekly I also employ a profit exit. This has pushed up the win rate to 50-55% but also improved DD. But this does come at the cost of a reduced overall net profit—but I’m ok with that. The win % doesn’t really bother me and I don’t necessary chase high win %, but what I do like for my live trading is a larger number of consecutive winners and my profit exit delivers a significantly better performance in this regard. For me, it is tough to trade long runs of consecutive losers


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## peter2 (8 April 2021)

@MovingAverage  That's a very good post.  

New traders attracted to the obvious break-out trading style become quickly disillusioned when their W% falls below 50%. They think they're doing something wrong. I've had people wonder why my long term W% isn't >50% if I'm a good trader. 

I was going to comment that one can increase the W% of a trend following system by taking smaller profits. Pleased to see that you realise this and you also know the cost of doing this (less profit).


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## qldfrog (8 April 2021)

peter2 said:


> @MovingAverage  That's a very good post.
> 
> New traders attracted to the obvious break-out trading style become quickly disillusioned when their W% falls below 50%. They think they're doing something wrong. I've had people wonder why my long term W% isn't >50% if I'm a good trader.
> 
> I was going to comment that one can increase the W% of a trend following system by taking smaller profits. Pleased to see that you realise this and you also know the cost of doing this (less profit).



so the obvious question:
why would anyone prefer win rate over profit?
I prefer money in the bank to boasting power ;-)
DD is another matter as I understand accepting lower profit for better DD: peace of mind has a $ value


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## MovingAverage (8 April 2021)

peter2 said:


> @MovingAverage  That's a very good post.
> 
> New traders attracted to the obvious break-out trading style become quickly disillusioned when their W% falls below 50%. They think they're doing something wrong. I've had people wonder why my long term W% isn't >50% if I'm a good trader.
> 
> I was going to comment that one can increase the W% of a trend following system by taking smaller profits. Pleased to see that you realise this and you also know the cost of doing this (less profit).



The really major difference for me with the profit exit in my breakout is that the smaller profits results in must less volatility in returns (much tighter SD) and for my trading style I’d gladly trade off higher returns and the inevitable volatility that goes with it for reduced returns with much less volatility. I like predictability


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## MovingAverage (8 April 2021)

qldfrog said:


> so the obvious question:
> why would anyone prefer win rate over profit?
> I prefer money in the bank to boasting power ;-)
> DD is another matter as I understand accepting lower profit for better DD: peace of mind has a $ value



Personally, I don’t care about win rate. It doesn’t mess with my head on a day to day basis when live trading and it is certainly not high on my list when accessing systems.


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## Skate (9 April 2021)

peter2 said:


> @Skate Very interesting that your testing shows 53 is optimal number of positions whereas most trend following systems indicate 15 - 17 with most people happy to use 20. I'm trying to understand the difference between 17 and 53. My knowledge and experience would say that a portfolio with 50 positions would not beat the market index. Clearly this has been challenged by skate's work.





peter2 said:


> 40 position portfolio has exceeded my expectations. One benefit and advantage of the 40 position size is that it forced me to include positions outside my normal stock universe. The 40 position target forced me to include more speculative companies. To my surprise it's these speculative companies that have provided most of the profits to the portfolio.





peter2 said:


> until I saw @Skate's results in both bull and bear markets I assumed a 40 position portfolio would match the returns of the index. So why has my initial opinion changed? The key reason is the trade management style. *Skate* is managing the trades ACTIVELY. He's managing the weekly trend trades like I managed the daily swing trades in the 3 year momentum thread.





qldfrog said:


> Note about nb position vs win rate: https://forum.amibroker.com/t/maxopenpositions-impact-on-win/23662




@qldfrog, thank you for raising the issue of the number of positions versus the win rate.

*Steve from the Amibroker forum posted: *
"_For the calendar year 2020 we see a different pattern -- increasing MaxOpenPositions also increases win%. I still find this puzzling. Why isn't the win% constant for all values of MaxOpenPositions?"

*

*_


*Trend following system rule of thumb (15 to 20 positions)*
Just because the majority share the view that (15-20 positions) are the accepted norm doesn't automatically make it correct for everyone. There is a saying "Wrong does not cease to be wrong because the majority share in it."

*Most traders are happy to use 20 positions*
That's okay, what suits one may not suit another, whereas I'm happy to use 40 positions. When it comes to trading (IMHO) there is no right or wrong way to trade - whereas the number of positions in your portfolio is subjective & personal.

Skate.


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## Skate (9 April 2021)

peter2 said:


> New traders attracted to the obvious break-out trading style become quickly disillusioned when their W% falls below 50%. They think they're doing something wrong. I've had people wonder why my long term W% isn't >50% if I'm a good trader. I was going to comment that one can* increase the W% of a trend following system by* *taking smaller profits*. Pleased to see that you realise this and you also know the cost of doing this (less profit).






qldfrog said:


> so, the obvious question:
> *why would anyone prefer win rate over profit?*







MovingAverage said:


> *Personally, I don’t care about win rate*. It doesn’t mess with my head on a day to day basis when live trading and it is certainly not high on my list when accessing systems.




*Low win percentage*
I made a series of posts about why "trend trading systems" have a low win rate. I also said that the "win percentage" of my combined trading results fell within acceptable limits for a trend trading strategy. I accept a low win rate for a trend system is just the nature of the beast.

*At the other end of the spectrum *
Trading a "mean reversion strategy" has a high win rate with lower returns. You can have it both ways.



Skate said:


> *I want to explore why "trend trading systems" have a low win rate.*




*To increase your win percentage, you have to accept lower profits*
I'm not a fan of that quote but for some, it makes perfect sense. We all need to trade a strategy we are comfortable with. The last few weeks have been tough "trading a breakout strategy" but this week's results (so far) make us look like trading geniuses.






ducati916 said:


> I think your systems have done a stellar job.




@ducati916, thank you for your kind appraisal.

Skate.


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## qldfrog (9 April 2021)

And just to add a common sense concept.with 40 positions, each position for people like me is half the size($)
So higher commissions fees ..true, but also much easier to be filled and less influence on price for low volume,high volatility shares.
And better risk management.
I personally start getting edgy with 7k positions in such companies


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## othmana86 (9 April 2021)

Received a befitting email with regards to position sizing from nick radge (if you're subscribed to his mailing list you would of too). if you haven't here it is. A very interesting concept about distribution of risk. Anyone ever tried it? This is a straight cut and paste

There are many different ways to grow an account. Using a linear method such as Fixed Fractional position sizing will do it, albeit slowly and surely. The key to growing the account is that you need to take on more risk, and taking on more risk means exposing oneself to a higher drawdown.

Drawdowns on paper are easy to digest, but in real life, there is a lot more emotional baggage to be carried. So first and foremost think long and hard about how much drawdown you can withstand.

What we have found that works with growing an account faster, is to divide capital into two pools, Initial Capital (IC) and Realised Profits (RP).

*Step 1:*
IC is the initial capital you decide to employ. With this capital, you will use a standard position sizing model, such as Fixed Fractional Fixed Percentage allocations.

*Step 2:*
Trade the strategy using the chosen position sizing model until you have a 10% realised profit. Assume $100,000 as IC which is now $110,000.

*Step 3:*
Move 50% of the profit into pool RP. IC is now $105,000 and will continue to be traded with your chosen position sizing method.

*Step 4:*
RP is now $5,000 and it's this pool that we'll be trading aggressively. Calculate the Kelly% (K%) across the last 100 trades. For this example we'll assume K% = 20%. In theory, and in the context of what K% was designed for, you would trade the RP with 20% risk per trade. However, in reality, we're going to trade 0.5*K%, or 10%.

At this point, assuming fixed fractional position sizing, the next trade risk will be:
IC = 0.02 * 105,000
RP = 0.10 * 5,000
Total risk = IC + RP = $2,600

*Step 5:*
Now we need to start re-balancing across both accounts. Therefore,
(a) When the balance of IC increases by another 10%, i.e.$115,500, move another 50% of those profits across to the RP account.
(b) When the RP account value is 50% of the IC account value move 50% back to the IC account and trade the new value with your chosen position sizing model.

If we continue to trade the RP account at the 0.5*K% level it will eventually make the IC account meaningless and the volatility starts growing exponentially. By redistributing the funds back we keep the broad volatility down, in other words, the aggressive RP account starts to feed the conservative IC account, and should a drawdown come along it won't set the total portfolio back too far.

Obviously, there are many ways to accommodate account growth but the bottom line is that more risk is required and ideally that risk should be calibrated to some extent so as not to blow the account out or cause irreversible psychological damage.


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## MovingAverage (9 April 2021)

othmana86 said:


> Received a befitting email with regards to position sizing from nick radge (if you're subscribed to his mailing list you would of too). if you haven't here it is. A very interesting concept about distribution of risk. Anyone ever tried it? This is a straight cut and paste
> 
> There are many different ways to grow an account. Using a linear method such as Fixed Fractional position sizing will do it, albeit slowly and surely. The key to growing the account is that you need to take on more risk, and taking on more risk means exposing oneself to a higher drawdown.
> 
> ...



I just got the email too. It’s very interesting and I’m curious to explore the outlined methodology 👍


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## othmana86 (9 April 2021)

Any keen coders out there


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## Skate (9 April 2021)

Skate.


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## MovingAverage (9 April 2021)

So I thought I'd do a rough and ready analysis of a true random system. Here are the results....not very pretty is it? Think I'll pass on taking tips from a monkey throwing darts at a list of stocks or give serious consideration to a random trading approach. Unlike other so called random systems, my simulations were across all ASX equities (not just carefully selected constituents of a major index). My buys and sells were not carefully timed to occur at the start/end of a particular period (start/end of month). The system just made a random decision at the end of every day whether to buy or sell. To keep things simple I started with $100k capital and traded fixed $ amounts of $5000 for a maximum number of consecutive positions of 20. Trade commission was $15. I also used position size shrinking where I didn't have enough capital to take a position. I ran the simulations from 1/1/2000 through to 9/4/2021.  Every single run outside of the 99 percentile lost money and that was for a 1000 runs--so 99% of the 1000 runs were losers. I'll pass on random systems.


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## MovingAverage (9 April 2021)

MovingAverage said:


> So I thought I'd do a rough and ready analysis of a true random system. Here are the results....not very pretty is it? Think I'll pass on taking tips from a monkey throwing darts at a list of stocks or give serious consideration to a random trading approach. Unlike other so called random systems, my simulations were across all ASX equities (not just carefully selected constituents of a major index). My buys and sells were not carefully timed to occur at the start/end of a particular period (start/end of month). The system just made a random decision at the end of every day whether to buy or sell. To keep things simple I started with $100k capital and traded fixed $ amounts of $5000 for a maximum number of consecutive positions of 20. Trade commission was $15. I also used position size shrinking where I didn't have enough capital to take a position. I ran the simulations from 1/1/2000 through to 9/4/2021.  Every single run outside of the 99 percentile lost money and that was for a 1000 runs--so 99% of the 1000 runs were losers. I'll pass on random systems.
> 
> 
> 
> View attachment 122607



Oh, and I included historically listed stocks to avoid survivorship bias.


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## qldfrog (9 April 2021)

MovingAverage said:


> Oh, and I included historically listed stocks to avoid survivorship bias.



MA,
I did same, whole of asx200,weekly system
 100k 5k position, 20 positionspure random buy sell is losing money  mostly due to brokerage costwas durprised how good it was

Then tweaked with:
random buy of any stock closing week higher than started, 
sold any position closing week lower than starting
add an index gtfo and you are making money...
I found that scary not to say moral saping vs years of trying to get an "edge.."..
Obviously, the fact markets always  go up helps...and yes they do due to inflation on any long term perod



i was able to


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## Newt (9 April 2021)

I thought Warr87 put it welll the other day - we don't always have to shoot the lights out to beat broader market or super fund returns.  Peter2 large cap thread has a similar theme.  Will be interested to see how both hold up long term as potentially this is another form of diversification for future capital and profits - move to  more conservative slower growing and hopefully low DD strategy.

Guess that's what the Bee investment strategy is too in a way.....




Warr87 said:


> *Month 8*
> 
> Beginning of month 8. Like my weekly system, and CFD trading, I lost half of my open profits recently. I am liking this strategy though. I look forward to the EOM to adjust the portfolio and see how it is going. While technically doing worse than the XKO now, I think it will be a short setback. Still at approx 10% returns. Talking to friends, they find this return to be amazing. It s nice to talk to non-traders and have it in perspective that with just a few trades at the end of the month I can do better than most. I am confident that my system will end the year closer to 20% return. All speculation but I genuinely think it is doing well.


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## DaveDaGr8 (10 April 2021)

MovingAverage said:


> So I thought I'd do a rough and ready analysis of a true random system. Here are the results....not very pretty is it? Think I'll pass on taking tips from a monkey throwing darts at a list of stocks or give serious consideration to a random trading approach. Unlike other so called random systems, my simulations were across all ASX equities (not just carefully selected constituents of a major index). My buys and sells were not carefully timed to occur at the start/end of a particular period (start/end of month). The system just made a random decision at the end of every day whether to buy or sell. To keep things simple I started with $100k capital and traded fixed $ amounts of $5000 for a maximum number of consecutive positions of 20. Trade commission was $15. I also used position size shrinking where I didn't have enough capital to take a position. I ran the simulations from 1/1/2000 through to 9/4/2021.  Every single run outside of the 99 percentile lost money and that was for a 1000 runs--so 99% of the 1000 runs were losers. I'll pass on random systems.
> 
> 
> 
> View attachment 122607





A few things to highlight 

Your commission is 0.33%, currently IB are 0.088%. incl GST

Trading 20 positions, you have roughly 100,000 random selection events ( not trades just potential events). 20 per day *250 per year *21 years.

I don't know your sell condition but If your sell condition is "Sell = random()>.5;" you are turning over 50% of trades, that's 10 buys and 10 sells per day, and giving up 0.33% of your account each day to commissions. Not saying that's what you do

Turning to the actual market. 

The XJO (asx200 index) made on average 3.62% PA over that 21 year period, that's an average growth of 0.014% per day.

To break even and overcome commission losses, you will need to limit trade frequency to 1/40 .... (1 trade in your 20 position portfolio per 2 days) your sell condition should be  "Sell = random()>.975;" 

If you change it to a weekly system, the average per week the index makes increases to .067% .... your trade frequency increases to 2.5/20 per week or "Sell = random()>0.9;"

This should get you to break even point using the XJO as a reference.

Now if you suddenly find that you are making money ( even 1% PA ), then the random market as a whole is beating the reference index. If you are losing money, then the random market is falling behind the reference index. ( If my maths is right ).


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## Skate (10 April 2021)

*Interesting topics have a habit of drawing in comments from the more experienced *
It's great to see topics (about all things trading) being discussed & the merits debated. To a beginner, this can be at times overwhelming & downright confusing but the more seasoned readers would be taking a greater interest in the topics being posted. 

*How to make money in the markets (trading or investing)*
Watch YouTube video's & you'll be bombarded with "100%" foolproof methods that will make you extremely wealthy (for a price). I've only found one method (for me) that constantly generates a positive return over the long run, that being "system" trading.

*System trading*
Mechanical trading systems are systems that generate trade signals for a trader to take. They are called mechanical because a trader will take the trade regardless of what is happening in the markets. My all-time favourite is "Trend trading" which is simply trading with the majority. 

*Trend trading*
It's a matter of finding a trend, riding it until it runs out of puff, & get off. Rinse & repeat - looking for the next ride.

*A recent question - "*I want to start trading where should I start?"
Well, the obvious is to read the "Dump it here" thread. My posts have also been condensed into an eBook. But for those who are time-poor, there are ways to "short sheet" the learning process. 

*How? *
By "buying a proven strategy" & trade it with small amounts at first until confidence allows you to trade the strategy with larger positions. If the strategy has positive returns over time, stay with it (as something is better than nothing). Those chasing higher returns will take on more risk but that comes much later in the trading process. 

*T.I.N.A*
The bar is set so low at the moment, a perfect time to have a go (at trading) as most other investments are returning next to nothing (real estate excluded)

Skate.


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## Skate (10 April 2021)

*Experience is not required*
Let's face it, trading is risky. The learning curve to develop a trading system is steep for the average trader but not impossible. The very first step towards success in any occupation is to become interested. For all the others who want to start trading straight away "buy a proven system" & accept what the market will give trading it. 

*Skill & experience*
Trading like @tech/a, @peter2 & @frugal.rock takes skill & experience, whereas mechanical system trading takes a deal of courage & commitment.

*Trading requires a great deal of detachment from money*
When starting to trade for the very "first time" take small positions so you can take losses without "flinching". Most new traders will start out undercapitalised & are unable to handle losses, that's the reason to start out small. Beginners tend to gyrate from one idea to another based on what they think is going on in the market or what they have read or heard. At times, emails & the media are not your friends, take whatever they say with a “grain of salt” until you have a solid handle on what they are saying & for whose benefit. Content disguised as information is nothing more than SPAM. 

*Trading is easy, making money is the difficult part *
Trading consistently & successfully is even harder, which is why the majority of people who try to make money from trading fail. Having a trading plan somewhat eliminates this, tilting the odds in your favour. I'm saying. if you have nothing else, have a "trading plan"- one to succeed rather than to fail.

Skate.


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## Skate (10 April 2021)

*The ratio of signals*
When there are more buy signals than sell signals, which indicates "to me", the markets are on the improve.

Skate.


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## Skate (10 April 2021)

*This is a new concept for me*
Over the years I've found great joy in combining strategies, the best of the best "as to say". Recently with all this talk about the "edge" & the randomness of returns, had me re-evaluating my current pool of thoughts. @ducati916 posts certainly got me thinking in a different direction. Duc's posts are always informative & motivational. Reading new ideas & different approaches is how we challenge ourselves to improve our trading.

*I prefer rock-solid returns*
Chasing higher returns always comes with a higher risk. When chasing respectable returns there has to be a trade-off. Accepting lower returns in a roaring market is the price you pay. On the flip side when trading gets tough it's a lot easier to handle the lower drawdowns. Aggressive strategies gyrate between eye-watering returns & large drawdowns. (you can't have it both ways)

*Combining two solid performers*
When I first thought of this scenario, I wasn't too fussed about the idea as I'm addicted to good returns. It was a simple marriage between my "BlueWren Strategy" (a simple breakout strategy) & my "ConnorRSI Strategy" - both solid performers in their own right. There are unique nuances between the strategies but the main difference is one uses an index "buy filter" where the other doesn't.  

*The "Cube Weekly Strategy"*
Trading a "rock-solid" strategy rather than a "rock-star" strategy has some merit as it balances out the emotional roller coaster of returns. The "Cube Strategy" is worthy of paper trading on its initial backtest results.

*Backtest Period (1st January 2021 to 9th April 2021)*
The backtest results below demonstrate how it handled a "poor trading period" from the start of this year.




Food for thought.

Skate.


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## MovingAverage (10 April 2021)

DaveDaGr8 said:


> A few things to highlight
> 
> Your commission is 0.33%, currently IB are 0.088%. incl GST
> 
> ...



I think you're comments are highlighting exactly the issue I have. You are making refinements to what I believe is a better indication of a true random system to improve it by address key issues with randomness and those improvements are introducing an edge. For example you're suggesting moving to a weekly time frame to reduce trade frequency and then using XJO as a reference. I understand what you're saying and I'm not disputing that it doesn't make sense but to move beyond that and say a random system can beat the index, well I have my reservations. The simulation results I posted clearly show that in about only 1% of cases can a random system even generate 0.5% profit over 20 years. Now we can certainly start discussing characteristics of that random system such as trade frequency, time frames etc etc to see if we can improve some of it's undesirable characteristics but to me that starts to move away from a true random system. And yes it may well be possible to approach Index returns, but as I say all that is being done there is to address some of the negative impacts randomness has to boost returns. BTW, I think you review is correct and I'm not disagreeing with it.


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## ducati916 (10 April 2021)

Skate said:


> *How to make money in the markets (trading or investing)*
> Watch YouTube video's & you'll be bombarded with "100%" foolproof methods that will make you extremely wealthy (for a price). I've only found one method (for me) that constantly generates a positive return over the long run, that being *"system" trading.*






Skate said:


> *System trading*
> Mechanical trading systems are systems that generate trade signals for a trader to take. They are called mechanical because a trader will take the trade regardless of what is happening in the markets. My all-time favourite is "Trend trading" which is simply trading with the majority.
> 
> 
> ...




I found this post interesting for the following reason: the words 'system' and 'mechanical' are used interchangeably for a single meaning. This, as I will explain is actually potentially very confusing to traders who divide the trading world into systems traders and discretionary traders as not everyone is on the same page with regards to what is actually being discussed.

Definitions: (a) system: a combination of things or parts forming a complex or unitary whole, correlated members and (b) mechanical: synonym 'automatic' from the root automatos or 'self-thinking'.

To my mind they are different. Certainly in the market, they are different. I trade 2 mechanical strategies. They are not systems. The market moves, numbers (market prices) go into the engine, the engine spits out buy or sell. No different to @Skate 'systems'. Well yes, actually very different. One @Skate buys and sells over a period of time possibly hundreds of stocks. I on the other hand deal with only 1 but more usually 2, which is (are) adjusted mechanically. 

The fundamental difference is one (the system) is directional, the other (mechanical) is market neutral. Trend trading, as pointed out, is trading with the majority. Mechanical trading is trading against the majority. The two methodologies/strategies, are completely mirror opposites.

Which returns me to one of my original observations re. systems traders and discretionary traders: as we have seen in this thread, @Skate and some others have recommended having different systems for different markets, the important point being that the transition from system A to system B seems to be driven by the systems themselves. 

The BIG difference, which we have now touched on re. 'an edge', 'random systems', changing nature of markets, loss of an edge, etc. is that a system is a design by a designer: ie. you. A mechanical strategy, is not a design by a designer, it is inherent to markets themselves, ie. it is self adjusting or 'self-thinking'. Which is not to say it is risk free. Nothing is risk free.


jog on
duc


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## Skate (10 April 2021)

*Inspiration from others*
I've watched a recording of "Pen & Teller" over lunch. Low & behold there was a magic trick using Rubik's cubes. As my "Cube Strategy" is a marriage of two strategies - what could be more fitting than joining two Rubik's cubes together. I get inspirations from others & the logo for my new strategy appears to be no different. 

Skate.


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## Skate (10 April 2021)

ducati916 said:


> 'an edge', 'random systems', changing nature of markets




*Changing nature of markets*
Having an "edge" might be an accepted "catchphrase" when trading is going gangbusters. When trading is performing badly, we readily accept that our strategy has lost its "edge" & we set about improving it. 

*How? *
By fiddling with a perfectly good strategy "without" knowing what the "edge" is or what having an "edge" really means. Luck, randomness, market timing, could be all tributers to my trading performance. 

*Perseverance*
One thing I do know that I possess in spades is "perseverance" - maybe that's my edge.

Skate.


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## peter2 (10 April 2021)

Skate said:


> *The ratio of signals*
> When there are more buy signals than sell signals, which indicates "to me", the markets are on the improve.




I couldn't let this observation go without posting my total agreement. Readers of my spec portfolio thread may remember that during the past month I've mentioned that I'm not seeing many "perfect" setups. The number of open trades dropped to a low number (10) and I wasn't seeing many good opportunities. 

This week I've added five new positions. I anticipate adding a few more next week. Lo, @Skate shows that his Sphere system has found more signals than normal this week.

Perhaps system traders may like to think about monitoring the number of signals their system generates each week as an indicator of current market conditions. When conditions are good there'll be lots of signals and when the number of signals falls below a threshold number this can be an indicator that market conditions have changed. 

I think this idea may be a better mechanism than an index filter because the index is so market cap heavy.

Allow me to roll on with this idea. . .   we know that market conditions change and that it's better to have a few systems that work in different market conditions. Lets' say we've a price momentum system (it could be a break-out system) and a reversal system. In bullish markets the break-out system is finding heaps of signals while the reversal system is finding few. We recognise this at the time and allocate most of our resources (capital) to the BO system. After a market selloff (eg. Covid Mar20) our BO system finds nothing but the reversal system is finding heaps. We allocate most of our resources to the reversal system until market conditions change. 

I think that monitoring the number of signals found by these two systems could be a valuable switching mechanism that may work much better than an index filter alone.


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## Skate (10 April 2021)

peter2 said:


> I think that monitoring the number of signals found by these two systems could be a *valuable switching mechanism* that may work much better than an index filter alone.






Skate said:


> *Without giving too many secrets away *
> A simple measure (as a rule of thumb) is the ratio of "buy signals" versus "sell signals". It's not the number of signals but the ratio between the two. This is not *how I decide to rotate out of one strategy into another* but it's a "quick & dirty" explanation.




*I'm glad* @peter2 *& I are on the same page*
I posted my "method of strategy rotation" last Monday. (as a switching mechanism)



peter2 said:


> I think this idea may be a better mechanism than an index filter *because the index is so market cap heavy.*




*In total agreement again *
I've found better ways to take advantage of an Index Filter. I've found using an index filter annexed to a buy condition counterproductive for the reason that has already been stated. (The Index is driven by a few companies)



Skate said:


> *Interesting topics have a habit of drawing in comments from the more experienced *
> It's great to see topics (about all things trading) being discussed




*Peter, thank you for making a great post*
Duc & yourself (IMHO) have posted great content today & I've marked both accordingly.

Skate.


----------



## Skate (11 April 2021)

*Generating Interest*
I'm posting the "Cube Strategy" signals as there may be some who would be interested in following how the "Cube Strategy" performs during the paper trading process. Updating the paper trading process of the strategy might help to keep the thread active. Other than that, the analysis signals may hold some interest for a variety of reasons.

Skate.


----------



## Warr87 (11 April 2021)

Newt said:


> I thought Warr87 put it welll the other day - we don't always have to shoot the lights out to beat broader market or super fund returns.  Peter2 large cap thread has a similar theme.  Will be interested to see how both hold up long term as potentially this is another form of diversification for future capital and profits - move to  more conservative slower growing and hopefully low DD strategy.
> 
> Guess that's what the Bee investment strategy is too in a way.....




It's certainly not as 'sexy' or 'exciting' as a more active system but I think it has its merits. It is a much more of a longer term kind of investment so I think it is paired well with my super.

Time will tell though.


----------



## Linus van Pelt (12 April 2021)

Roller_1 said:


> All of those things can be done easily in Realtest and probably can be done in AB.
> 
> It's pretty easy to test different allocation amounts, withdrawals etc.
> 
> I think Marsten is going to start a youTube channel to show what Realtest can do.




Here's a YouTube video of a recent Amibroker Canada user group meeting.

*Really great demo* of RT by the developer Marsten Parker.  Will consume 2 hours of your life .  Fast forward to 10:00.


----------



## Skate (12 April 2021)

Linus van Pelt said:


> Here's a YouTube video of a recent Amibroker Canada user group meeting.




*A graphic cut from the YouTube video posted above*
Sharing trading ideas is how I strive to be a better trader. Experimenting & posting new trading ideas (well, new ideas to some) may hold some improvements & at other times none. The graphic below reinforces my trading views by

(a) striving to improve my strategies even if the current results are good &
(b) Making a habit of learning from what others have posted.




*Why make changes to a strategy?*
The answer to Marsten Parker's "rhetorical question" can be found at the (31:36 minute) mark.

Skate.


----------



## Skate (12 April 2021)

Skate said:


> Sharing trading ideas is how I strive to be a better trader.




*For those interested in Nick Radge's day trading idea*
I've just finished coding the "Day Trading System" discussed in Marsten Parker's webinar posted by @Linus van Pelt. The web page with all the Amibroker parameter setting can be found here: https://www.thechartist.com.au/building-a-day-trading-system/

*Nick's idea*
In summary, Nick uses the ADX to measure the strength of a trend, not the direction (nothing new here). It’s commonly suggested when the ADX is above 30, the market is trending. When below 30 the market is range-bound or changing trend. Combining the ADX with a trend filter is how it’s generally used. 

*Moreover*
Nick calculates the ADX for the last 5-days & (a) if the reading today is greater than yesterday, & (b) the reading today is greater than 5-days ago & (c) the reading today is greater than 10 days ago, it generates a signal to buy a dip tomorrow at open. Pretty simple really.

*To calculate the dip*
Take the Average True Range (ATR) of the last 5-days & subtract it from today’s low, this is known as the ‘stretch’. Then the signals are "ranked" using the Rate of Change (ROC) over the last 5-days. Any positions opened during the day will be exited ‘market on close’. 

More to follow.

Skate.


----------



## Skate (12 April 2021)

Skate said:


> *To calculate the dip*
> Take the Average True Range (ATR) of the last 5-days & subtract it from today’s low, this is known as the ‘stretch’. Then the signals are "ranked" using the Rate of Change (ROC) over the last 5-days. Any positions opened during the day will be exited ‘market on close’.




*I'm not a fan of exiting the same day *
My twist on Nick's idea will be to leave the position open until I get an exit signal to close out of that position.

*Twisting it up*
The backtest results displayed on Nick Radge's website use the Russell-1000 Universe. The backtest results I'll post will be traded against the "All Ordinaries". The same basic setting, with a few minor filters, added.

*For those interested in "Day Trading"*
How Nick Radge manages his day trades can be found here: https://www.thechartist.com.au/how-i-manage-day-trading/

More to follow.

Skate.


----------



## ducati916 (12 April 2021)

Skate said:


> *1. Changing nature of markets*
> Having an "edge" might be an accepted "catchphrase" when trading is going gangbusters. When trading is performing badly, we readily accept that our strategy has lost its "edge" & we set about improving it.






Skate said:


> *2. How? *
> By fiddling with a perfectly good strategy "without" knowing what the "edge" is or what having an "edge" really means. Luck, randomness, market timing, could be all tributers to my trading performance.






Skate said:


> *3. Perseverance*
> One thing I do know that I possess in spades is "perseverance" - maybe that's my edge.
> 
> Skate.





1. To answer whether traders can possess an 'edge' is really analogous to asking whether markets are a random walk. To answer the latter question, you have to ask and answer the following: can traders predict the future?

Certainly 'fundamental analysis' whether macro or micro, attempts to do precisely this. Earnings and earnings growth trajectories will be calculated in any number of ways, which, is a prediction of the future. When undertaken for a stock, belief in the narrative combines with financial projections to create a trend. TSLA is currently the perfect example. In the past we had Enron etc. 

The 'trend' overcomes the random walk of the future, as long as the future does not seriously break the narrative. The trend will periodically be tested by profit taking, poor earnings (as long as the excuse is believed, the trend will likely continue) and any number of potential flies-in-the-ointment.

The trend ends when something serious breaks the narrative, the financial projections or a combination of both. In other words, the prediction of the future was proven to be incorrect as the future becomes the present. A random walk is usually presented on a daily basis. My proposition is that a random walk can extend across much larger time frames, thus giving the impression of less randomness than actually exists. This same basic principle is fractal: that is to say, top down or bottom up, it works the same way.

2. So your system will (should) have an articulated edge. This should really be no more than a single sentence. It should not exceed a single sentence because much more than that and you are creating too many qualifiers, which is basically overfitting your edge to the current market conditions. Your strategy or system is a collection of rules (hopefully less rather than more) that code your edge. If you are fiddling with your system, you do not actually (or probably) do know what your edge is. @Skate has identified his edge: trend following. An edge summarised in 2 words. All that remains are the entry rules and exit rules. When the system delivers poor results, the system is not broken: it is that the market being traded is no longer a strongly trending market (unless you have chronically overfit your rules to a very specific type of trend) in which case, yes, maybe the system is broken.

3. Perseverance as an edge must be linked to capital. You can only persevere if you are liquid, which rather raises a secondary topic.


jog on
duc


----------



## Skate (12 April 2021)

Skate said:


> *Twisting it up*
> The backtest results displayed on Nick Radge's website use the Russell-1000 Universe. The backtest results I'll post will be traded against the "All Ordinaries". The same basic setting, with a few minor filters, added.




*Skate's version of Nick Radge's "Day trading strategy"*
To be "as fair as possible" in keeping with Nick's original ideas of using just three indicators (ADR, ATR & ROC) to measure the strength of a trend & ranking of the signals using a Rate of Change (ROC) indicator over the last 5-days - I've added a few of my tricks to the concept.

*Russell-1000 Universe*
I have no way of running my version of Nick's idea against the "Russell-1000" Universe so I'll be using the "All Ordinaries". Also, I've used additional filters to align it to the parameter setting that I know works with the Aussie universe of stock.

*Backtest Results*
This calendar year (2021) versus the last financial year (1st July 2020 to 30th June 2021). The results aren't too shabby, the basic idea is effective & I'm sure spending more time on the strategy the results could be improved.




Skate.


----------



## Skate (12 April 2021)

Skate said:


> Interesting topics have a habit of drawing in comments from the more experienced




*Posts with "great content"*
@ducati916, I enjoy reading posts of "interest" that always motivate me to strive to be a better trader. It's a pity "knowledge & experience" takes time to gather & develop. I'm happiest when difficult topics are explained succinctly, easily understood by others. At times recalling the correct terminology sometimes escapes me. At times it can be confusing for others when I type what I'm thinking. Also, when I try to condense a post (to keep the reader interested) it can lose something in translation.

*Using the ideas of others*
Over time I've used the meaning of the words in posts to create indicators & trading systems. I try out every new idea to determine if there is an "edge" to improve my overall trading results. I spend all my day crunching numbers looking to ride off the "experience" of others. When @Linus van Pelt posted a 3-hr YouTube video, my initial thoughts were (WTF). I should "apologise" for thinking that.

*I assumed it would be 3-hrs of my life I'll never get back *
But on the contrary, it gave me the opportunity to make another few posts that I believe would have an educational value to some. There are members who are time poor so I've watched the video, coded the strategy & posted backtest results. If my posts strike a chord, I'm sure some will open the hyperlinks & take it to the next level.

Skate.


----------



## Skate (12 April 2021)

Skate said:


> *Backtest Results*
> This calendar year (2021) versus the last financial year (1st July 2020 to 30th June 2021). The results aren't too shabby, the basic idea is effective & I'm sure spending more time on the strategy the results could be improved.




*Before I finalise posting about Nick's Day Trading Strategy*
I should post a few comparison backtest reports. I have a few handy Daily Strategies so I'll do a shoot-off. I was wondering how Nick's idea would perform compared to a few of my trading strategies.

*#1. Backtest (1st July 2020 to the end of trade today 12th April 2020)*
The shoot-out contenders (1) Skates' Heavy Hitter Daily Strategy, (2) Skates Daily Panda Strategy & (3) Skate's Version of Nick's Day Trading strategy. The results indicate all 3 performed well.






*#2. Backtest (1st January 2021 to the end of trade today 12th April 2020)*
The shoot-out contenders (1) Skates' Heavy Hitter Daily Strategy, (2) Skates Daily Panda Strategy & (3) Skate's Version of Nick's Day Trading strategy. The backtest period is this calendar year.

*What an eye-opener*
This year has been a struggle with trading only picking up these last few weeks. The results all varied in performed but I was amazed that Nick's Day Trading Strategy handled this period as well as it did.

*Disclaimer*
It's been a while since trading a daily strategy. (personally, I don't enjoy the added work)





*Summary*
Nick's basic idea using 3 indicators to "Day Trade" has (IMO) merit.

Skate.


----------



## othmana86 (12 April 2021)

@Skate,
How do you physically trade 40 positions on your weekly system? 
Do you sit there and enter in 40 positions, surely theres an easier way?

I know Nick Radge has a custom built API, is this something you use as well?


----------



## Skate (12 April 2021)

othmana86 said:


> @Skate,
> How do you physically trade 40 positions on your weekly system?
> Do you sit there and enter in 40 positions, surely theres an easier way?
> 
> I know Nick Radge has a custom built API, is this something you use as well?




@othmana86 let me post a few comments @peter2 has made in trading a 40 position portfolio



peter2 said:


> I've been inspired by @Skate's generous contributions regarding some details of his ASX weekly hybrid system. I've been particularly intrigued by the number of open positions in his portfolios (40 - 53). *That's a big number to manage and is normally too many for an active trader to manage effectively*.





peter2 said:


> _Another observation_: I''ll always find plenty of opportunities to consider buying and I'll have a hard time selecting one or two. Now, with so many positions to fill I have been adding them all. Buy them all and cull the losers later.* It's quite liberating.*





peter2 said:


> The reason I'm managing a 40 pos portfolio in this thread is to monitor the portfolio heat and see if I can consistently apply an active management style to a portfolio with a large number of positions. It appears from *skate's* *comments that there are approx 6 buy/sells each week once a portfolio is established* (more getting a portfolio started). Every one of us can handle that.




*Establishing a 40-position portfolio*
Well, mathematically you would expect it to take twice as long to fill a 40-position portfolio as a 20-position portfolio - but that's not the case. 

*Why? *
Because there are normally more signals than funds available when trading 15-20 position portfolios.

*Once the strategy is full*
Trading a larger portfolio, the workload is minimal once the portfolio has been established. 

*I know Nick Radge has a custom-built API, is this something you use as well?*
No, I don't use an “Application Programming Interface” (API)

*Why? *
I have a need to be fully hands-on as I'm not a trusting person.

*Trading 9 weekly strategies*
The workload is not that great, it's rather boring most of the time. The Covid-19 flash crash was the only time I can remember scrambling to exit multiple positions all at once. (that's over a 6-year period) Most of my strategies have a long hold period & don't have a habit of jumping in & out of position with regularity.

Skate.


----------



## barney (12 April 2021)

Skate said:


> *Using the ideas of others*
> Over time I've used the meaning of the words in posts to create indicators & trading systems. I try out every new idea to determine if there is an "edge" to improve my overall trading results.




Enjoy your posts as always @Skate 

Given the above, and your reference to Nick Radge's ADX etc, I must confess I was surprised that you discounted in no uncertain terms, the possibilities of using the VWAP as an "indicator" a few posts back?

A moving average of the VWAP (in any time frame) relative to the moving average of the current price, (in my opinion), could potentially give a deeper insight into short term price action, and may "tighten" up the accuracy of entries/exits?

I don't trade systems, so maybe I'm missing something? 

Just a random thought I have no data other than gut feel to backup my suggestion.

Cheers.


----------



## Skate (12 April 2021)

barney said:


> Given the above, and your reference to Nick Radge's ADX etc, *I must confess I was surprised that you discounted in no uncertain terms*, the possibilities of using the VWAP as an "indicator" a few posts back?




@barney, I’m at a loss to “your reference” of the acronym (VWAP) - I take that to mean the “Value Weighted Average Price” a reference often made by Nick to signify “the opening price of the markets”. You may be referencing something entirely different. - so would you kindly expand on which one of my posts you are referring to.

Skate,


----------



## barney (12 April 2021)

Skate said:


> @barney, I’m at a loss to “your reference” of the acronym (VWAP) - I take that to mean the “Value Weighted Average Price” a reference often made by Nick to signify “the opening price of the markets”. You may be referencing something entirely different. - so would you kindly expand on which one of my posts you are referring to.
> 
> Skate,





Your Thread is so epic, it took me a while to even find the posts 

I mentioned the VWAP back in posts (4825 (27) ) in response to another poster (Moving Average I think)

Your post (4831)  indicated you would never consider using VWAP as an "indicator"

Not actually related to Nick Radge; just that you mentioned testing his system utilizing ADX etc.etc.

Given your deep study into systems, I just thought that VWAP may have some potential in tweaking a system's entry/exit parameters?

For eg.  VWAP and the moving average of VWAP relative to Price and the moving average of price

Could make for some very interesting statistics.

I can't code so I will never know, but I can certainly imagine some useful info would spring from the numbers generated.

Cheers.

ps Yes ... Volume Weighted Average Price.


----------



## Skate (12 April 2021)

barney said:


> barney said:
> 
> 
> > A filter which I often check on a Stock that has had *ultra high intra-day Volume. *Definitely not a red flag, but might be worth considering when sitting on large gains?? (pps)  I wonder if some kind of back test could be done to see the historic relationship between large moves relative to VWAP and where a Stock Closes in relation to said daily moves etc etc?? Mr. @Skate?
> ...





Skate said:


> @barney the issues you raised, frankly, I never think about (or want to). The issue @MovingAverage raised, those of trading by emotions - I've covered many times before in this thread.
> 
> *I keep my trading style simple & consistent*
> I get in - I get out & everything in between is out of my control. My energy is spent researching new trading ideas & sharpening the signals of the strategies that I already trade. When you get a series of trades under your belt (experience) you tend to roll with the punches rather than reacting to them.




Ok @barney, I've found your post in question & the answer I gave appears to be dismissive.

*Using the VWAP as a filter*
I use volume & price filters in all my strategies, turnover as well. Stock that has "ultra-high intra-day Volume" is not a measure I can use trading a weekly system. Ultra-high volume could be coded as an indicator of some value depending on the direction of the price movement.

*Anyone interested in the idea Barney raised*
Karthik Marar "Buying and Selling Pressure Indicator" has invoked a lot of interest & is actually a very simple indicator using the daily excursion of the price. Very simple Indicator, using the open, High, Low, Close, & volume. It obviously not a Holy Grail, but does give a very good picture of the buying & selling pressure that provides an easy visual presentation of the dominating pressure.

*Hyperlinks*
Read about it here:  https://karthikmarar.blogspot.com/2012/09/buying-and-selling-pressure-indicator.html
Download the indicators here: https://sites.google.com/site/karthikmarar/buying-and-selling-pressure-indicator
Visual of the indicator on a chart here: https://2.bp.blogspot.com/-vLytmc_Nv_8/UFTcaVRo6eI/AAAAAAAAAqI/hfo1RK4XpY8/s1600/BASP.png

Skate.


----------



## barney (13 April 2021)

Skate said:


> Stock that has "ultra-high intra-day Volume" is not a measure I can use trading a weekly system. Ultra-high volume could be coded as an indicator of some value depending on the direction of the price movement.




Cheers M8 and thanks for the links etc.

Just to clarify re VWAP;  It's not a measure of Ultra High Volume,

Rather just the price level at which the *majority* of Trading is/has been done at any given moment

Basically like a Moving Average of Price, but with Volume determining the "important"/*most traded levels*

As a quick example, VML Closed the other day at 078 but the daily VWAP was actually about 072-073

I noted on the VML Thread, that it didn't look quite right

Anyone who bought the spike high (well above the VWAP) were caught in a potentially weak position

Coincidentally, VML has dropped since the other day from 078 to 070 

Like I said, I have no coding ability, but I'm sure using VWAP as a Filter in some way could possibly keep punters out of "false" trades where Price/short term Momentum says, it's a Buy, whereas in reality, it could be a fake-out.

Don't want to bog down the thread too much, but I believe  

Someone with your coding ability might find a way to utilize it to your advantage 

Then you could teach me how to use it, lol

Cheers


From Investopedia below:


----------



## Skate (13 April 2021)

barney said:


> Just to clarify re VWAP; Rather just the price level at which the *majority* of Trading is/has been done at any given moment
> Basically like a Moving Average of Price, but with Volume determining the "important"/*most traded levels - *there might find a way to utilize it to your advantage







*Apologies to beginners *(this series of posts is going to be a bit involved)
@barney, I can think of a multitude of ways how to code a trading strategy using the VWAP. The simplest way comes from the logic of your graph above (the summary of differences between the VWAP & SMA). The VWAP represents the “fair value” of the displayed share price.

*Trade using the VWAP*
The VWAP is easy to calculate as its the average sum of the price multiplied by volume. But here is the kicker "over what period" do we calculate the VWAP - that need to be determined by optimisation.

*The simple way to use the VWAP*
I could make it a simple exercise & buy when the price is below the VWAP, & sell when the price is above the VWAP but that would be too easy without any consideration to the ultimate goal.

*What is the ultimate goal?*
Barney suggested using the VWAP as a Filter - keeping "punters out of false trades". Reduction of "fake-out" is the ultimate goal.

More to follow.

Skate.


----------



## barney (13 April 2021)

Thanks for having a look this @Skate  Hopefully there is something in there that can be useful


----------



## Skate (13 April 2021)

*My take on Barney's explanation*
The volume-weighted adjusted price (VWAP) is the true "average" price. Barney suggested the (VWAP) has more importance when deciding which positions to be entered rather than accepting the displayed price. The VWAP identifies the true average by factoring in the volume of transactions at a specific price point that's not based on the closing price. (In a nutshell, this is the idea)

*The logic behind the strategy*
I could have made a trading strategy using just the VWAP & taking those positions with a closing price above it. But as Barney wanted it as a filter, so that's how I have coded it. The VWAP Filter will be used as an additional confirmation annexed to the buy condition.

*For the more technical*
Using the closing price above or below the VWAP is just crazy. As the summary mentions the differences between (VWAP & SMA) I'll use both to determine the relationship between the two.

More to follow.

Skate.


----------



## Skate (13 April 2021)

*Using the VWAP & SMA*
First, I had to determine the VWAP optimised range (lookback period) for my calculations, then calculate the SMA optimised range to complete my calculations. I settled for a 50-period for the VWAP & 100-period for the SMA. 

*Dumbing it down*
This post would be excruciating to read following the logic I've used to calculate these parameters formulating the VWAP filter. In easy speak, the closing price must be greater than the average volume of the (VWAP range) & above the SMA of the (SMA range). 

*Barney's idea made a difference *
I've added Barney's idea of a VWAP filter to "Nick's Day Trading Strategy" for comparison "between the backtest reports". Nick's Day Trading idea performed well & using the VWAP as a filter did make an improvement. The improvement was slight but that was due to the robustness of Nick's methodology in his coding. To be fair to Barney, I've coded my idea from his explanation & examples, also the graph he posted.

More to follow.

Skate.


----------



## Skate (13 April 2021)

*Let's compare if Barney's idea can make a difference*
I've used the same backtest period as before (1st July 2020 to the end of trade 12th April 2020)

*The shoot-out contenders: *
(1) Skate's Version of Nick's Day Trading* "VWAP" *Strategy &
(2) Skate's Version of Nick's Day Trading strategy.

*The takeaway*
1. Using the VWAP indicator did the job nicely, keeping the strategy out of 8 fake-outs - with less exposure.
2. Another spin-off - the win% increased & the Drawdown decreased.
3. The idea is worthy of additional analysis but for me, I'm time-poor.




*Summary*
The results are indicative of "how I interpreted" Barney's idea. Being dismissive at first, I owed it to Barney to make an effort to explore if using a VWAP filter would be beneficial - trading systematically. I'm sure with more time I could better approach his original idea from other angles. Correctly coded & implemented - I'm sure the VWAP indicator would have an advantage in any trading strategy.

Skate.


----------



## barney (13 April 2021)

Skate said:


> 3. The idea is worthy of additional analysis but for me, *I'm time-poor.*




Thanks @Skate 

If you are able to come up with something that impressive and you are "time poor"

I'd love to see what happens when you are "time affluent"  

I have no idea how you code what you do, but I am suitably impressed with how you do it none the less!🤓

I have no doubt you will find other ways to play around with and tweak the VWAP and maybe incorporate it into other strategies?

If  it ends up being useful (hopefully valuable),  that would be fantastic!

Cheers


----------



## Linus van Pelt (13 April 2021)

Here is an excerpt from a system I'm working on...


```
#pragma nocache;

// Norgate Data Functions
#include_once <..\Norgate Data\Norgate Data Functions.afl>;

// Unadjusted (historic) Close
UnadjClose = NorgateOriginalCloseTimeSeries();

// Check for delisted securities
OnSecondLastBarOfDelistedSecurity = !IsNull(GetFnData("DelistingDate")) AND (BarIndex() == (LastValue(BarIndex()) -1) OR DateTime() >= GetFnData("DelistingDate") ) ;
OnLastTwoBarsOfDelistedSecurity = !IsNull(GetFnData("DelistingDate")) AND (BarIndex() >= (LastValue(BarIndex()) -1) OR DateTime() >= GetFnData("DelistingDate") );
```

Most of this code is straight from Norgate's documentation:  https://norgatedata.com/amibroker-faq.php#exitpriortodelisting

When I run Code Check & Profile on this code, Amibroker says I am referencing future data:




Any idea why using these Norgate functions as documented would generate that warning?

Thanks,
Scott


----------



## othmana86 (14 April 2021)

T


Skate said:


> *Let's compare if Barney's idea can make a difference*
> I've used the same backtest period as before (1st July 2020 to the end of trade 12th April 2020)
> 
> *The shoot-out contenders: *
> ...



This is so awesome!


----------



## qldfrog (14 April 2021)

Linus van Pelt said:


> Here is an excerpt from a system I'm working on...
> 
> 
> ```
> ...



You include a whole set of afl northgate data functions.
Even if not using them or all of them,it is a fair bet some may look ahead?
You should try the future check on this include alone,and check if the warning pops up


----------



## Linus van Pelt (14 April 2021)

qldfrog said:


> You include a whole set of afl northgate data functions.
> Even if not using them or all of them,it is a fair bet some may look ahead?
> You should try the future check on this include alone,and check if the warning pops up




With further testing, I've distilled it down to this section of the code.

Paste this into a new AFL editor (Formula ##.afl) and run the Code Check & Profiler:


```
foo=iif (BarIndex() >= (LastValue(BarIndex()) -1), 1, 0);
```

This modification also suppresses the Norgate warning:


```
OnSecondLastBarOfDelistedSecurity = !IsNull(GetFnData("DelistingDate")) AND (/*BarIndex() == (LastValue(BarIndex()) -1) OR */ DateTime() >= GetFnData("DelistingDate") ) ;
OnLastTwoBarsOfDelistedSecurity = !IsNull(GetFnData("DelistingDate")) AND (/*BarIndex() >= (LastValue(BarIndex()) -1)) OR */ DateTime() >= GetFnData("DelistingDate") );
```


As I said, the code is straight from the Norgate documentation.

I've sent a support ticket to Norgate.  I'll post the reply.


----------



## Linus van Pelt (14 April 2021)

From Norgate Support/Richard Dale:



> Hi Scott,
> 
> Those two lines of code are actually AmiBroker AFL code. They operate independently of our plugin.
> 
> ...




My only feedback to Norgate is to update https://norgatedata.com/amibroker-faq.php#exitpriortodelisting with this additional information.


----------



## enthused1 (14 April 2021)

Skate said:


> *To calculate the dip*
> Take the Average True Range (ATR) of the last 5-days & subtract it from today’s low, this is known as the ‘stretch’. Then the signals are "ranked" using the Rate of Change (ROC) over the last 5-days. Any positions opened during the day will be exited ‘market on close’.




First post so sorry if this is a stupid question or has already been answered elsewhere.

In order to generate a buy signal you need to detect an intraday price level lower than the stretch I believe?

If that's true you need intraday data to backtest this strategy (probably required to test exit strategy as well). Can I ask what the source of your historical intraday data is?


----------



## Skate (14 April 2021)

enthused1 said:


> First post so sorry if this is a stupid question or has already been answered elsewhere.
> 
> *In order to generate a buy signal you need to detect an intraday price level lower than the stretch I believe?*
> 
> If that's true you need intraday data to backtest this strategy (probably required to test exit strategy as well). Can I ask what the source of your historical intraday data is?




@enthused1, thank you for making your first post in the "Dump it here" thread. My previous post you are referring to was lifted from Nick's website. The "stretch" is the terminology he used that's "attached below in italics".

*To be blunt*
In answering Barney's question, I was working within the constraints that I have. (Norgate's EOD silver subscription). I coded my interpretation of the VWAP & added it to Nick's Daily Strategy.

*My methodology*
I've previously explained that I calculated the "Daily" volume-weighted adjusted/average price (VWAP) over 50 periods. I used the entry condition from the Chartist website (Building a Day Trading System) using the 5-period (ATR), (ADX) & (ROC) that formed the entry condition. I simply annexed my version of the (VWAP) to Nick's buy condition.

*The basics of (VWAP)*
The (VWAP) identifies the "true average" by factoring in the volume of transactions at a specific price point that's not based on the closing price that (@barney referenced). There is a multitude of ways to code a trading strategy using the VWAP, I gave one quick example.

*Deviations from what Nick posted *
1. Nick uses a 40-position portfolio - I used a 20-position portfolio (20 X5k positions).
2. Nick exits _‘_market on close’ - Doing it Nick's way, the $19.95 commission would be a killer.
3. I exit using the volatility of the Bollinger Bands in conjunction with a trailing stop.
4. I used a 100-period SMA as an additional confirming indicator. (new)

*From the Chartist website*








						Building A Day Trading System
					

Building A Day Trading System with The Chartist. Today we'll look at applying simple techniques to build an effective day trading system.




					www.thechartist.com.au
				




=================================================================
_So let’s go left field and try the following idea…

Calculate the ADX for the last 5-days. If the reading today is greater than yesterday, and the reading today is greater than 5-days ago and the reading today is greater than 10 days ago, we’ll buy a dip tomorrow.

To calculate the dip, take the Average True Range (ATR) of the last 5-days and subtract it from today’s low. This is known as the ‘stretch’.

We’ll then rank the signals using the Rate of Change (ROC) over the last 5-days. Then, using the Pattern Day Trader margin, we’ll use a maximum of 40 positions and allocate 10% capital to each.

Any positions opened during the day will be exited ‘market on close’._
=================================================================

Skate.


----------



## qldfrog (14 April 2021)

Linus van Pelt said:


> With further testing, I've distilled it down to this section of the code.
> 
> Paste this into a new AFL editor (Formula ##.afl) and run the Code Check & Profiler:
> 
> ...



More an amibroker subject but not all warnings and not all future looking code is bad, can be useful for display matter, etc..as long as your decision process /explore etc does not look forward, you are good.😁


----------



## Linus van Pelt (14 April 2021)

qldfrog said:


> More an amibroker subject but not all warnings and not all future looking code is bad, can be useful for display matter, etc..as long as your decision process /explore etc does not look forward, you are good.😁




Yeah I guess it's learning the discernment between the two.  But I'm not sure I'll ever outgrow the initial feeling of panic from:




Having Tomasz SCREAM at me has never been good for my psyche  

Anyway I've got the workaround from Richard Dale now.

P.S.:  Who ever reads the rest of that gibberish in this window anyway - what a load of useless information (to me anyway)


----------



## enthused1 (14 April 2021)

Skate said:


> @enthused1, thank you for making your first post in the "Dump it here" thread. My previous post you are referring to was lifted from Nick's website. The "stretch" is the terminology he used that's "attached below in italics".
> 
> *To be blunt*
> In answering Barney's question, I was working within the constraints that I have. (Norgate's EOD silver subscription). I coded my interpretation of the VWAP & added it to Nick's Daily Strategy.
> ...




Many thanks for your answer Skate. I really appreciate you taking the time.

Just so we are crystal clear you are doing the whole backtest, soup to nuts, using only Norgate EOD data?

[edit] Pretty sure I understand where I'm getting confused. Noob mistake, sorry [/edit]


----------



## Skate (14 April 2021)

enthused1 said:


> Many thanks for your answer Skate. I really appreciate you taking the time.
> 
> Just so we are crystal clear you are doing the whole backtest, soup to nuts, *using only Norgate EOD day data?*
> 
> [edit] Pretty sure I understand where I'm getting confused. Noob mistake, sorry [/edit]




@enthused1, at the moment I'm only using Norgate EOD data. The backtests "performance" should be taken with a grain of salt (even though my backtest results are restricted to the last 6-12 months). When I post comparisons, they do give an indication between results. (that's it in a nutshell)

*In the past*
I have made over 160 posts explaining that the backtest results I posts mean "Jack" for the very reason you have mentioned. Also trading in the pre-auction, the results vary from backtesting. (Also previously discussed & explained)



Skate said:


> *In my strategy development days,* I had Norgate Platinum subscription level using (NDU) 3 years before it was released to the public. My trading strategies have been fully tested & evaluated using the full set with historical constituents (25 years of data). They are now all mature trading systems.
> 
> *Having 3 Norgate subscriptions *
> These days I don't require the features of a Platinum subscription package (including historical constituents) as I considered my development days are over. Retaining 3 Platinum subscriptions is overkill in my opinion.






Skate said:


> *Backtesting means JACK*
> I've stated before, backtest results mean "Jack" to me but they do give an indication between test results using different parameters.






Skate said:


> *Backtesting means JACK*
> Without getting into another exchange, I want to re-stated that (IMHO), Amibroker backtest results mean "Jack" & hold little interest in assessing the true performance of a strategy. I'm first to admit that they do give an indication if the methodology behind the strategy being backtested is sound or not.
> 
> *Actual trading results*
> Results from live trading are the "true measure" of your trading strategy as it confirms if your "trading plan" is solid.




Skate.


----------



## DaveDaGr8 (14 April 2021)

Linus van Pelt said:


> Yeah I guess it's learning the discernment between the two.  But I'm not sure I'll ever outgrow the initial feeling of panic from:
> 
> View attachment 122790
> 
> ...




HAHAHA .. Anyone who hasn't been screamed at by Tomasz hasn't posted on the Amibroker forum.

As @qldfrog said not all future warnings are bad. Another commmon example is trading tomorrow at a pre determined price. You want to test if tomorrow it reaches that price for backtesting ... BANG future leak.

I think the really bad thing is that the code check doesn't point you directly to where the future looking references are. This could lead you to a situation where you THINK you know where that 1 future leak is, but have accidentally introduced a second which is masked by the first.

It would be good if amibroker had an #ignore parameter so you could turn off future leak warnings for lines you KNOW are future leaks.


----------



## enthused1 (14 April 2021)

Skate said:


> @enthused1, at the moment I'm only using Norgate EOD data. The backtests "performance" should be taken with a grain of salt (even though my backtest results are restricted to the last 6-12 months). When I post comparisons, they do give an indication between results. (that's it in a nutshell)




I'm quite skeptical and wouldn't act on anything I can't reliably confirm myself.



Skate said:


> *In the past*
> I have made over 160 posts explaining that the backtest results I posts mean "Jack" for the very reason you have mentioned. Also trading in the pre-auction, the results vary from backtesting. (Also previously discussed & explained)




I guess I need to read more of your historical posts. Apologies for the interruption, which was unnecessary as I should have thought about this more deeply before pulling the trigger. I'll try not to make the same mistake in the future.

Thanks again for your responses.


----------



## qldfrog (14 April 2021)

DaveDaGr8 said:


> HAHAHA .. Anyone who hasn't been screamed at by Tomasz hasn't posted on the Amibroker forum.
> 
> As @qldfrog said not all future warnings are bad. Another commmon example is trading tomorrow at a pre determined price. You want to test if tomorrow it reaches that price for backtesting ... BANG future leak.
> 
> ...



Definitively, i have some code i use with known future leak that i have to comment to check then uncomment.that would be a well needed feature


----------



## qldfrog (15 April 2021)

Not complaining vs today, but i noticed my systems have a tendency to do well/very well on days where the asx is actually slightly down.has anyone noticed the same and has a possible explanation?
I understand i am highly small caps etc.
On big asx200 falls, the systems follow..


----------



## MovingAverage (15 April 2021)

qldfrog said:


> Not complaining vs today, but i noticed my systems have a tendency to do well/very well on days where the asx is actually slightly down.has anyone noticed the same and has a possible explanation?
> I understand i am highly small caps etc.
> On big asx200 falls, the systems follow..



If you're highly small cap isn't XSO and not XJO more relevant?


----------



## Wilham (15 April 2021)

qldfrog said:


> Not complaining vs today, but i noticed my systems have a tendency to do well/very well on days where the asx is actually slightly down.has anyone noticed the same and has a possible explanation?
> I understand i am highly small caps etc.
> On big asx200 falls, the systems follow..



I have nothing concrete to back this up with. I wonder if slight down days in larger caps would see rotation into higher volatility stocks by day traders?


----------



## Skate (15 April 2021)

Wilham said:


> I have nothing concrete to back this up with. I wonder if slight down days in larger caps would see rotation into higher volatility stocks by day traders?






qldfrog said:


> Not complaining vs today, but i noticed my systems have a tendency to do well/very well on days where the asx is actually slightly down.has anyone noticed the same and has a possible explanation?
> I understand i am highly small caps etc.
> On big asx200 falls, the systems follow..




*Jumping at shadows*
When the markets are having a down day there are those who want to fix something that not broken. Trading has a natural ebb & flow that affects everyone emotionally when they persist in one way or the other. 

*The Index you trade dictates the risk you are willing to take*
When there are a few down days traders start clutching for straws trying to complicate trading. Nothing works perfectly so the next best thing is to accept that sometimes it works well & other times not so. I say just go with the flow & stop looking to answer a question that not being asked. (IMHO) It pays to keep trading simple.

Skate.


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## Skate (15 April 2021)

*It pays to keep trading simple*
I've recently posted about Nick Radge's simple "Day Trading Idea". The results are impressive because Nick keeps trading simple. In doing so, traders can understand that "trading need not be complicated". Nick also promotes his "Week-End Trend Trading Strategy" (WTT) which's is a simple 20-week breakout strategy. There is no easier trading than trading a trend.

*You can't buy experience - Chat with Traders EP 178*
For those interested in how to create a simple trend following system - this podcast may be for you. Nick goes on to explain his (WTT) 20-week breakout strategy (a simple trend following system). This podcast should be helpful for anyone interested in riding a trend. Even if trend following doesn’t overly appeal to you, then you’ll still pick up useful insight into trading systems.

*Details are disclosed for his 20-week Trend Trader (WTT)*
Nick details his strategic objectives & how he generations new trading ideas. What unique in this podcast Nick discusses the parameter setting for his (WTT) Strategy & goes on to discuss portfolio testing, how he analyses the results. Position sizing & risk management are also touched on.

*This podcast is (1:28-minutes long) - but well worth a listen*




Skate.


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## qldfrog (15 April 2021)

Skate said:


> *Jumping at shadows*
> When the markets are having a down day there are those who want to fix something that not broken. Trading has a natural ebb & flow that affects everyone emotionally when they persist in one way or the other.
> 
> *The Index you trade dictates the risk you are willing to take*
> ...



That's a very philosophical view 
why worry about unexpected gains indeed😊


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## Skate (15 April 2021)

qldfrog said:


> That's a very philosophical view
> why worry about unexpected gains indeed😊




*To make money trading*
Don't focus on making money - focus on protecting what you have. Trend followers react to price & never try to predict it. Trend trading revolves around rules of risk management  & position sizing.

*Chat with Traders EP 43 - with Jon Boorman*
This is one of my favourite episodes about trend following. Jon explains how all traders start their journey by making mistakes & explains how successful traders respond to those mistakes. He also tackles how trend following is easy but not for everyone.

*This podcast is (1:18-minutes long) - but well worth a listen

*



Skate.


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## Skate (15 April 2021)

*We all have been there *
I guess most new traders lose early on because of being too eager to earn big bucks but in doing so, end up losing money. Everyone wants trading to be fast & easy,  jumping right in without having a plan (a recipe for disaster)

*Listen & learn from the best*
This advice never gets old.

Skate.


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## Skate (15 April 2021)

*Trend following always looks easy*
That’s because the principles are very simple. When looking at a trend following chart the entries & exits can look impressive, but what that chart won’t show you is the "emotional toll" trading such a strategy can take. 

*Trend followers expect & accept losers*
The emotional effect can be enormous when dealing with a string of losers in a row.  it's very hard to take the next trade or series of trades with the same confidence as the first. Confidence is the key ingredient when it comes to trading.

*Confirmation of a trend can be a blessing & a curse*
By its very nature, trend trading demands that a confirmed trend be firmly established before a trade can be entered. All trends need time to unfold & as a result, this style of trading typically has more losers than winners. Thankfully, letting the winners run & cutting the loser early will be the "edge" when trading this way.

Skate.


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## Skate (15 April 2021)

*Trend trading is designed to capture price movements*
It's important to remember that trends move on "differing" levels of volatility. Because we are at mercy of this volatility - it's the main reason why trend trading is such an emotional ride.

*We are after the meat in the sandwich*
When trend trading you have to "accept" trading this way you will give back a "proportion of open profits" knowing you will never capture all of the price movement - but that's not what it's designed to do. Trend trading allows you to get into a potential new trend (determined by timeframe & parameters) then get out when the trend doesn't develop or has run its course. Nothing more, nothing less.




Skate.


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## Newt (15 April 2021)

I was pondering today if good trend trading has to be a bit like driving while having to look through your rear-vision mirror.  Presumably you would be doing this because the front windscreen is blackened, or damaged so badly you can barely see through it.   It obviously wouldn't be wise to travel too fast - perhaps another corny analogy there for how important it is to keep position size risk under control.  It should be possible to travel long distances like this once you master the rules of left/right (in reverse) and concentrating on where the road has been as your best hint of where to drive next.    

A quick Google shows arguments for and against this approach to investing, including the might Warren B:









						Rearviewmirrorquotes — Investment Masters Class
					






					mastersinvest.com
				








						Rearview Mirror - Another Value Investing Misquote | GrahamValue
					

This famous misquote is often used to justify the exact opposite of what Warren Buffett actually follows.




					www.serenitystocks.com
				




It might be possible to extend this idea further to explain why some people prefer to take an early contrarian view on the markets, antcipating a market reversal and getting on board a new trend early. Whatever that is, it isn't "capturing the meat of the move", and its not trend trading.....

The more I think about it there IS an analogy here, and the human brain is not wired to enjoy driving while looking out the back window.

End of dump.....


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## Skate (15 April 2021)

Newt said:


> It might be possible to extend this idea further to explain why some people prefer to take an early contrarian view on the markets, antcipating a market reversal and getting on board a new trend early. Whatever that is, it isn't "*capturing the meat of the move",* and *its not trend trading.....*




*Confirmation of a trend can be a blessing & a curse*
@Newt, I was with you right up to the paragraph above. Trend trading by its very nature means you will always get in a little late because of trend confirmation. Getting off the ride also requires confirmation that the trend has stalled or reversed. For this reason, the very best we can hope for is between the start & end of the trend, ( the meat of the trend). My terminology might not be sufficiently accurate in describing the area between the top & bottom of the trend, but I would believe most would get the analogy. Those who struggled to get the reference a picture was attached.



Skate said:


> trend following is easy but not for everyone.




*Newt, an expanded explanation from you would be helpful*
So I can understand what you don’t understand. I’ve made 6 posts to explain a trading Strategy that has served me well. I’m thinking if trend trading is good enough for Nick Radge & Jon Boorman, it good enough for me - while acknowledging this style of trading is not for everyone.

Skate.


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## MovingAverage (16 April 2021)

There was some recent discussion here about the relatively low win rate (<50%) associated with breakout based systems. If you don't like the low win rate with vanilla breakout systems I thought I'd give you something to investigate if you want an improved win rate for your breakout system.

This applies to breakout systems that employ a typical stop loss (which seems reasonably common among retail system traders) and for the purposes of this post the entry (breakout) condition is irrelevant. The first chart below shows why some of these breakout system have low win rates. They give up gains and are exited when the stop loss is hit. You may often hear let the phrase "let the winners run" and while this does have some merit it does have a downside. You can see from the chart below that this winner was left to run but is closed out in the red  Sure, we could employ more sophisticated stop loss mechanism, but this post is not about improving stop losses.




There is some statistical logic that suggests as prices move to extremes they will revert back to their mean. If this sounds familiar it is the basis of mean reversion systems. So, let's apply that logic to the above GWA chart and see if we can turn it into a winner. The trusty old Bollinger Bands are a good indicator of price extremities. The chart below has Bollinger Bands overlaid on the price and in this case the upper and lower bands represent 2 SD. This basically means that any close price above the upper BB is an outlier and assuming mean reversion holds true the price in the following bars is likely to pull back towards the lower average.  For the statisticians here let's argue another day whether close prices conform to a Gaussian distribution.

You can see in the chart below that the third bar before the stop loss "Sell" that the close of the day closed above the upper BB and sure enough the following bars pulled back. If only we closed out the GWA position following the break of the upper BB this position would have closed out a winner.




The above is all well and good in theory so let's see what it does on a more broader scale. I ran some simulation of a breakout system with and without the BB exit. Below are the initial results. Results on the left are for the system without the BB exit and the results on the right are the system with the BB exit. Headline observations include: improved net profit, slightly reduced exposure (makes sense given the significantly reduced hold time for winners), a lot more trades (again, makes sense given the significantly reduced hold time for winners), average profit per trade significantly reduced (makes sense since we are exiting earlier and probably giving up gains that come from longer hold times, but compensated my more trades), over 10% increase in winners, more consecutive losers, and not a lot of difference in system drawdown.



The below represents AB's MC analysis. Again, results on the left are for the system without the BB exit and the results on the right are the system with the BB exit. I think these MC results speak for themselves.



So in summary -- if you trade breakout systems and your only exit is a plain old vanilla stop loss why not look at augmenting your system with a "profit exit" because sometimes letting your winners run without a leash can turn them into losers. I'm not specifically advocating BBs but rather using it here for illustrative purposes.

Stay Classy ASF.


----------



## qldfrog (16 April 2021)

MovingAverage said:


> There was some recent discussion here about the relatively low win rate (<50%) associated with breakout based systems. If you don't like the low win rate with vanilla breakout systems I thought I'd give you something to investigate if you want an improved win rate for your breakout system.
> 
> This applies to breakout systems that employ a typical stop loss (which seems reasonably common among retail system traders) and for the purposes of this post the entry (breakout) condition is irrelevant. The first chart below shows why some of these breakout system have low win rates. They give up gains and are exited when the stop loss is hit. You may often hear let the phrase "let the winners run" and while this does have some merit it does have a downside. You can see from the chart below that this winner was left to run but is closed out in the red  Sure, we could employ more sophisticated stop loss mechanism, but this post is not about improving stop losses.
> 
> ...



Just to say thank you MA, short and consive, argumented, 5 stars😊


----------



## MovingAverage (16 April 2021)

qldfrog said:


> Just to say thank you MA, short and consive, argumented, 5 stars😊



 

I should probably add that I was able to easily push the win rate up to 60% by reducing the BB from 2 SD to around 1.5 SD. This closed out positions much sooner but did come at a reduction of around 30% of the net profit. Still very acceptable net profit and comfortable 60% win rate.


----------



## Newt (16 April 2021)

Skate said:


> *Confirmation of a trend can be a blessing & a curse*
> @Newt, I was with you right up to the paragraph above. Trend trading by its very nature means you will always get in a little late because of trend confirmation. Getting off the ride also requires confirmation that the trend has stalled or reversed. For this reason, the very best we can hope for is between the start & end of the trend, ( the meat of the trend). My terminology might not be sufficiently accurate in describing the area between the top & bottom of the trend, but I would believe most would get the analogy. Those who struggled to get the reference a picture was attached.
> 
> 
> ...





Hi Skate,

My last post was isolated "dump it here" musings, nothing specifically referenced against your recent posts and certainly no torpedos in there.  It was really just another way of looking at the challenges of trend trading - something we know has relatively straight-forward rules (or should have) but is not necessarily "easy" to trade.

I've always admired your ability to find trends early, but my last paragraph wasn't about that.  There are traders or macro-economic specialists that try to specialise in identifying market turning points before they occur.  There's no "wrong" approach to investing or trading if it has a demonstrable edge and works for that trader, but any attempt at forward prediction in this manner is not trend trading.  Perhaps we're drawn to try and predict patterns because our minds are programmed to identify risk and patterns from an evolutionary perspective (find the face hidden behind the leaves).  I'd have to go digging, but there was a Chat with Traders podcast some time in the last 12 months where the guest "had a go" at trend traders essentially being too passive and not willing to work harder to predict macro-economic turning points in advance of the market itself turning.  

Trend trading rules can however only act on historical data.  That data may be as fresh as the single last bar of your chosen timeframe, but it is still only visible "from the rear-vision mirror", and we have to accept that.  Kudos that you seem to be able to pick a turn in the road and respond a bit quicker to a new trend than most.

A favourtie quote on trend trading was from Brett Penfold's book "The Universal Principles of Successful Trading".  He warns in there that although trend trading is an important tool and one approach to trading, the less than 50% win rate will mean the trader is usually in drawdown and feeling somewhat "miserable".  He wasn't warning traders off, just doing what you've done here many times before Skate - try to warn new traders that the road ahead is long and winding and not easy.


With that low win rate in mind, I'll have to have a closer read of MovingAverage's last post now.....


----------



## Newt (16 April 2021)

qldfrog said:


> Just to say thank you MA, short and consive, argumented, 5 stars😊




Yes, more thanks from myself too MA for such a well written proposal on melding trend trading with a possible "take profit" exit based on Bollinger Bands.  You've rightly pointed out that the shorter trade with the more aggressive exit may end up with a steeper gradient (of price versus time), but ultimately less total profit versus a longer term less aggressive exit.  The best case scenario would presumably be using that earlier exit to quickly get into more "steeper gradient" short term trades.

Something I've noticed previously while playing with these sorts of exits is the potential to contain drawdown.  We tend to think DD's occur as a result of market pullback (and of course they do), but a significant pullback at the end of a long trend for a couple of multi-bagger holdings can also put a big dent in your equity curve.

Another way of visualising this is via the Max Favourable Excursion distribution curve.  Do you hold out for those infrequent but many-fold long term high winners (the >200% bar on the graph below) and in doing so risk giving back quite a bit of open profit at the exit, or be willing to give up some of those big winners and replace them with (hopefully) a few smaller winners.  This should then give a smoother curve in the <200% profit portion of the graph, and less nasty DD bumps in the equity curve.

Everyone has to find their own preferred compromise in the end.


----------



## MovingAverage (16 April 2021)

Newt said:


> Yes, more thanks from myself too MA for such a well written proposal on melding trend trading with a possible "take profit" exit based on Bollinger Bands.  You've rightly pointed out that the shorter trade with the more aggressive exit may end up with a steeper gradient (of price versus time), but ultimately less total profit versus a longer term less aggressive exit.  The best case scenario would presumably be using that earlier exit to quickly get into more "steeper gradient" short term trades.
> 
> Something I've noticed previously while playing with these sorts of exits is the potential to contain drawdown.  We tend to think DD's occur as a result of market pullback (and of course they do), but a significant pullback at the end of a long trend for a couple of multi-bagger holdings can also put a big dent in your equity curve.
> 
> ...



Thanks @Newt. I agree entirely with what you're saying about DD. For my trading style, I am definitely not chasing those infrequent many fold long term winners. As I mentioned before in this thread, I like to chase consistency of returns and this typically comes from taking a higher percentage of smaller (but consistent) per trade profits and forgoing those really big winners. Can't have your cake and eat it   I've found chasing those infrequent big winners tends to introduce more volatility in returns--and I guess this is your point regarding a smoother equity curve. Each to their own, but for me frequent smaller profits is what I want.


----------



## MovingAverage (16 April 2021)

@Newt here are the Excursion charts for my sims. One of the left is without BB and the right is with the BB. To your hypothesis (and unsurprisingly)--no outliers with the BB (not catching those big individual trades) and lots more smaller profits.


----------



## Newt (16 April 2021)

Thanks MA.  That shows the trade-offs and gains very clearly, and you're obviously much more comfortable trading "on the right hand side".

Part of what I love about trading are the lessons it teaches you about yourself.  Newt 3 years ago would have said "I want those big winners dammit".  Newt 2021 knows they have an uncanny habbit of being in backtests but escaping the net in real lfe - so now more inclined to aim somewhere between your two graphs. 

e.g.  Giving back a huge chunk of open profits on JIN in late 2019 in one week.  The market doesn't always reward those that hang in there for the long haul alas.....


----------



## MovingAverage (16 April 2021)

Newt said:


> Thanks MA.  That shows the trade-offs and gains very clearly, and you're obviously much more comfortable trading "on the right hand side".



While I'm not live trading the BB example I posted about I am live trading the system with a different profit exit. Yes, the righthand side is where I like to be, but the other thing about my trading style is that I'm not comfortable with the very long hold times that are typical with many trend trading system. The thing I like about the profit exit is that it does give me drastically reduced hold times. Ouch on JIN


----------



## Skate (16 April 2021)

Newt said:


> Giving back a huge chunk of open profits on JIN in late 2019 in one week.  The market doesn't always reward those that hang in there for the long haul
> 
> View attachment 122853




*Trading is a compromise*
Two strategies that I trade "visually displays" what @MovingAverage & @Newt has been describing. The charts below are the actual positions taken by the Sphere Strategy & The Switch Strategy.

*Entries are the same but the exit strategy differs*
Meaning, they both behave differently. Newt's example using (JIN) is perfect to show the difference between exits. (Stale & Trailing stops in action)

*# 1. Stale Stop*
A stale stop can be a blessing at times. The exit was from "volatility stalling". I should say, I use Bollinger Bands in a unique way as one of the indicators to confirm a position is stalling or has stalled. It's a time-driven Stale exit in this example





*# 2. The Sphere Strategy*
This Sphere Strategy exited the position by a trailing stop. The "Index driven" variable trailing stop saved a proportion of open profits. Huge down bars are just part of this game.





*Jon Boorman once said:*
"The worst thing an investor can find out during a bear market is that their strategy doesn’t suit their personality".

*Jon also said: *
"In essence, the #1 thing that is absolutely critical to a trader’s success are risk management, psychology, passion & discipline.

Skate.


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## Skate (16 April 2021)

*What’s right is whatever works for you*
Cutting losses has to be part of a solid trading plan, which includes applying a few different stop methodologies. I've never found "joy" in applying a "Take profit Stop" or by taking an early exit on profit targets, these limit your gains on a trade.

*Picking one example (JIN)*
Traders have a habit of picking one trade or individual trades rather than accepting that an "individual trade" is only one part of a system. It's important to find a suitable exit methodology for a system rather than individual positions. Applying an exit strategy because one or two positions "didn't play nice" is no reason to select one method over the other to drive the outcome.

*When developing a strategy*
Just having "sound risk management", & "position sizing" will be for naught if you don’t have the discipline to consistently execute your trading rules. Also, if you’re going to take one trade, take them all, a reference @ducati916 made recently. (In reference to trading your edge)

*Summary*
With "Trend Trading", you need to be able to accept trades that do not work. Find a strategy that’s right for you - then do your very best to stay disciplined, for better & for worse. Stay focused as trading is so uncertain. It’s a combination of doing the little things right that makes the difference between being consistently profitable or constantly losing over time.

Skate


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## MovingAverage (16 April 2021)

Skate said:


> *What’s right is whatever works for you*
> Cutting losses has to be part of a solid trading plan, which includes applying a few different stop methodologies. I've never found "joy" in applying a "Take profit Stop" or by taking an early exit on profit targets, these limit your gains on a trade.




Hi @Skate, I generally always agree with your observations, but don't my recent sim's suggest that taking an early exit does not necessarily result in limiting gains. If you're are talking an individual trade I'd agree with your proposition, but system traders tend not to think about individual trades (or should not think about individual trades) and should be focused more on overall system performance. My sims would suggest that there is potential to take early exits and yet come out in front overall.


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## Skate (16 April 2021)

MovingAverage said:


> Hi @Skate, I generally always agree with your observations, but don't my recent sim's suggest that taking an early exit does not necessarily result in limiting gains. If you're are talking an individual trade I'd agree with your proposition, but system traders tend not to think (or should not think about individual trades) about and should be focused more on overall system performance. My sims would suggest that there is potential to take early exits and yet come out in from front overall.




*Early exits*
I've spent endless hours trying to code a strategy to reduce the emotional stress of trading. Limiting drawdowns always come at a cost & I've never been able to successfully integrate & trade a "Take Profit Stop" with my style of trading. All my strategies have a "Take Profit Stop" & "90%" of my strategies includes a Bollinger Bands Volatility exit.

*I'm fumbling to say*
I'll exit a position early (before a trailing stop is hit) only when the ride is over on "reduced volatility". There is absolutely no way I would exit on a profit stop (% or $)



Skate said:


> *To make money trading*
> Don't focus on making money - *focus on protecting what you have.*




*How do we protect what we have? *
I don't believe our thinking or Newt's for that matter, is all that far apart. There might be different methodologies employed in protecting our capital. Trading should always be thinking about how to "protecting what we have". Espousing different views is how we learn - to experience a problem from another's perspective.

Skate.


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## Skate (16 April 2021)

*Activating a "Take Profit Stop"*
I can turn the "Take Profit Stop" on or off through the parameter dialogue. The "take profit stop" is simply an ATR (4) profit stop. I'll post the charts to display the effect a "Take Profit Stop" has on the exit.

*# 1. The Switch Strategy without a "Take Profit Stop"*
A picture says a thousand words.






*#2. The Switch Strategy with a "Take Profit Stop" turned ON*
A picture says a thousand words.









*# 3. The Sphere Strategy without a "Take Profit Stop"*
A picture says a thousand words.






*#4. The Sphere Strategy with a "Take Profit Stop" turned ON*
A picture says a thousand words.





Skate.


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## qldfrog (16 April 2021)

can I suggest another way to trade these and sort the issue? obviously a mater of loss endurance, and styel

It is not perfect but I have "sensitive" systems in, that they exit pretty quickly at the slightest scare:
imagine a wild deerin your garden, but being dumb they are as ready to jump on again.so the very same  holding in a few ticks , hold periods are very low shortthey jump in out and with a proper scoring, they just reenter the big winners;
sure there is a cost in term of fees (but 20$ for a return trip is not much) and of course no BIG winners to boast of but a series of small winners ...on the same ticker


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## Newt (16 April 2021)

I should add for anyone following - please don't take my recent posts as evidence that I changed my system on the basis of one trade (JIN).  The broader theme here that Skate and MA are teaching is that the exit(s) you choose for your system should ideally fit your personality and risk profile.  The exit methodology is what ultimately determines the shape and distribution of your returns.

MA has shown that nicely with his MFE graphs.

Skate has once again shown the benefit in running a number of systems to diversify your trade management and exit styles.   (and I love it when you show 2 or more graphs for a single stock too BTW Skate - always educational to see the differences and catch glimses of the underlying logic).


When it comes to "take profit" exits, my findings have been similar to what you describe Skate.  I have however had some success switching on an more aggressive trailing stop after a trade triggers a certain profit point.  This requires more complex (looping) code, and invariably becomes harder to validate in backtests due to the increased risk of curve fitting,.   I do however believe it has shown some benefit in one system containing DD very late in the trend, or on parabolic trending stocks with significant open profit where the traditional stop can struggle to keep up.


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## MovingAverage (16 April 2021)

Skate said:


> There is absolutely no way I would exit on a profit stop (% or $)
> 
> 
> Skate.



You seem very passionate about that...which I respect.


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## MovingAverage (16 April 2021)

MovingAverage said:


> You seem very passionate about that...which I respect.



Curious...do you consider the BB exit I outlined a profit exit?


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## Skate (16 April 2021)

MovingAverage said:


> Curious...do you consider the BB exit I outlined a profit exit?




@MovingAverage that could be debated both ways. Using the upper Bollinger Band is a well tested exit strategy. I personally would use it because when price attacks the upper Band (no matter what deviation is used) indicates strength.

Skate.


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## MovingAverage (16 April 2021)

Skate said:


> @MovingAverage that could be debated both ways. Using the upper Bollinger Band is a well tested exit strategy. I personally would use it because when price attacks the upper Band (no matter what deviation is used) indicates strength.
> 
> Skate.



We differ in opinion, because I don't see an attack on the upper BB as an indication of strength. My apologies if I have regurgitated what is a well tested exit strategy.


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## Skate (16 April 2021)

MovingAverage said:


> We differ in opinion, because I don't see an attack on the upper BB as an indication of strength. My apologies if I have regurgitated what is a well tested exit strategy.




*The Bollinger Band Breakout strategy*
The BBO Strategy uses the upper band to indicates the momentum & strength of the breakout.  

*Nick Radge BBO rules*
1. Set the upper Bollinger Band to 3-standard deviations and the lower band to 1-standard deviation.
2. Set the moving average period to 100-days.
3. When the market *closes above the upper band, buy on the following days open*.
4. When the price closes below the lower band, exit the position on the next days open.

*All it indicates*
(a) You have shown a way to take advantage when the price breaks the upper Bollinger Band & (b) Nick has shown another. (One man's trash is another man's treasure). I should point out the BB is an indicator, how you use that indicator in your strategy is up to you.

Skate.


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## qldfrog (16 April 2021)

Skate said:


> *The Bollinger Band Breakout strategy*
> The BBO Strategy uses the upper band to indicates the momentum & strength of the breakout.
> 
> *Nick Radge BBO rules*
> ...



Other school check breaking the 1 dev up  band as a buy, down as sell..seems indeed a all you can menu


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## willoneau (16 April 2021)

MovingAverage said:


> There was some recent discussion here about the relatively low win rate (<50%) associated with breakout based systems. If you don't like the low win rate with vanilla breakout systems I thought I'd give you something to investigate if you want an improved win rate for your breakout system.
> 
> This applies to breakout systems that employ a typical stop loss (which seems reasonably common among retail system traders) and for the purposes of this post the entry (breakout) condition is irrelevant. The first chart below shows why some of these breakout system have low win rates. They give up gains and are exited when the stop loss is hit. You may often hear let the phrase "let the winners run" and while this does have some merit it does have a downside. You can see from the chart below that this winner was left to run but is closed out in the red  Sure, we could employ more sophisticated stop loss mechanism, but this post is not about improving stop losses.
> 
> ...



Great thought ,
It would be interesting to see a backtest with using the BB as entry signal with your standard exit for comparision.


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## othmana86 (17 April 2021)

MovingAverage said:


> There was some recent discussion here about the relatively low win rate (<50%) associated with breakout based systems. If you don't like the low win rate with vanilla breakout systems I thought I'd give you something to investigate if you want an improved win rate for your breakout system.
> 
> This applies to breakout systems that employ a typical stop loss (which seems reasonably common among retail system traders) and for the purposes of this post the entry (breakout) condition is irrelevant. The first chart below shows why some of these breakout system have low win rates. They give up gains and are exited when the stop loss is hit. You may often hear let the phrase "let the winners run" and while this does have some merit it does have a downside. You can see from the chart below that this winner was left to run but is closed out in the red  Sure, we could employ more sophisticated stop loss mechanism, but this post is not about improving stop losses.
> 
> ...



Awesome post mate. I too have been contemplating this for some weeks. Great insight. Thanks


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## Skate (17 April 2021)

*Success in trading doesn't come easy*
For weekend viewing there are a series of videos, that will better equip you for the challenge. The tutorials cover topics such as:

1. Building trading strategies
2. Backtesting & optimization
3. Technical indicator
4. Trend and Volatility Filters
5. The dangers of over-fitting - Optimizing
6. Trade entries and exits
7. Strategy development methodologies
8. Managing risk
9. Portfolio diversification
10. Finding inspiration for new trading strategies
11. Trading Psychology
12. And much more...

*Seven & a half minute (7:35)*
That's all you need to spend to decide if watching a few YouTube videos can be beneficial to your trading.




Skate.


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## Skate (17 April 2021)

*The 10-Minute Talk That EVERY Trader Needs to Hear*
Watching this short "YouTube video" will be informative for new traders & a refresher for others. At times we all tend to forget the basic when it comes to trading. Keeping your trading plan simple really works.





*Watching is easier than reading*
I'm sure watching a few recommended videos will have a bigger impact on your trading than speed reading a bunch of my posts. The last series of posts remind me how healthy it is to get a perspective from others. Everyone posts from their perspective to give an alternative view.

Skate.


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## Skate (18 April 2021)

Newt said:


> Aug 3, 2015
> Trading reliably for profit is tough, but doing so for many years consistently requires drive with balance. We're fortunate to have so many mentors that share their time, experience and often very different trading/investing in this forum, but ultimately *you have to find what works for yourself so you can sleep at night*.




*Nothing has changed since 2015*
Newt nailed it when he said: _"ultimately you have to find what works for yourself so you can sleep at night". _

*A good read*
"Not being able to sleep at night" reminded me of an article where Jesse Livermore recants the trade-offs needed to reach your goals when trading.

*True story *
_An earnest young newsman went up to Jesse Livermore one day and asked if he felt it was worthwhile to become a millionaire, considering all the strife and struggle one had to go through to get there. 

Livermore responded that he liked money a lot, so it was certainly worthwhile to him. 

*But aren’t there nights when a stock trader can’t sleep? *the reporter pursued. Is life worth living when you’re worried all the time?

“Well now, kid, I’ll tell you,” Livermore said. “Every occupation has its aches and pains. If you keep bees, you get stung. Me, I get worried. It’s either that or stay poor. If I’ve got a choice between worried and poor, I’ll take worried anytime.”

Livermore admitted that he worried about his speculations all the time, even in his sleep. But then he said that was all right by him. “It’s the way I want it,” he said. “I don’t think I’d enjoy life half as much if I always knew how rich I was going to be tomorrow.”_

Skate.


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## Skate (18 April 2021)

*Money & Sex*
Money is like sex, you think of nothing else if you don’t have it & you think of other things when you do.

*Discipline*
The reason most people do not achieve their goals is that they lack discipline because they tend to give up "what they desire in the long term" for "what they desire now".

*Bruce Lee once said*
The successful warrior is the average man, with laser-like focus.

Skate.


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## Skate (18 April 2021)

*What does it take to create a good trading strategy?  *
There is a lot that goes into creating any trading strategy. The benefit of building your own strategy is the ability to make sure it fits your trading psychology.  To have a trading strategy that is successful you must be able to trade it with confidence, this is very important whether you build it or buy it.

*There are literally millions of ways to create a trading strategy  *
The type of trading you'll feel most comfortable with (that you understand) is the strategy you need to build/buy.  It is very important to spend a lot of time with this decision before you move to actually create a trading strategy.  If you get this part of the equation right it will save you a lot of money & a few headaches.

*It's trend trading for me*
There are very few traders that can handle different types of trading strategies - so I suggest you pick one & trade it. The important point is to learn what type of strategies would work best for you.  I suggest you read @peter2, @over9k, or @tech/a threads (also the "dump it here" thread) before you decide on the style that resonates most with you. Once you figure this part out then you are further along your trading journey than most.

Skate.


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## Skate (19 April 2021)

*Understanding how the trend really works*
Trends impact systems, so I thought I would share some information on how to get in & out of a trend.

*Finding a system that works *
Timing the entry as close to the turning point of a trend as possible is a hard task, so let’s not worry about doing this as it’s a complete waste of time. It really doesn't matter much what you are using for entries as long as you are entering in the direction of the trend. Any trend indicator will work as they mostly do the same job.

More to follow.

Skate.


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## Skate (19 April 2021)

*Trend Indicators*
A few simple trend indicators are all you need to see when to enter a position. Entries during trends require almost no brain cells. Once we have our entry, the problem becomes one of exit strategy & money management. A simple 10-period moving average is all you need on a chart to see a trend. 

*10-period SMA*
If the closing price is above the 10-period simple moving average it’s in an up-trend. When the close is below the 10-period moving average it’s in a down-trend. Indicators don't provide buy or sell signals - their primary function is to determine whether the timing for the entry or exit is optimal & they are essentially the main drivers in coordinating the trading strategy. 

*Some indicators*
(ATR) is a volatility indicator, combined with a momentum indicator (ROC) tells a powerful story. A Commodity Channel Index (CCI) is a momentum-based oscillator used to determine overbought or oversold conditions but this indicator is best used in conjunction with additional indicators. The Rate-of-Change (ROC) indicator is a simple Momentum indicator (my favourite indicator) & I use the ROC indicator in every strategy that I code to confirm the increasing momentum of a trend. The exponential moving average (EMA) is just one variety of moving averages to choose from. The (EMA) used by itself has no special powers but use it in combination with others turns the (EMA) into a superhero.

More to follow.

Skate.


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## Skate (19 April 2021)

*What drives a trend?*
"Volatility & Volume" are the real driver of a trend - meaning we enter a trend on volatility & volume - getting off when the trend turns. There are so many indicators that measure both of these. It pays to do your own research to find indicators that will work for you. Getting into a trend is not that difficult using an indicator, using two is sometimes better. Getting out of a trend & timing the exit is a little more complex.

*Exit strategy*
You should develop an exit strategy that works separately from the entry indicator. I use a stale exit & a trailing stop. A stale exit can be as simple as "if the position that hasn’t made a new high for 5-periods since the entry (exit)". Exit strategies are too numerous to discuss in a general post. However, there is no such thing as the "best" exit. There are exits that work for all styles of trading. (Finding them is the hard part)

More to follow.

Skate.


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## Skate (19 April 2021)

*Exits need to fit your personality more than entries*
I've rephrased that "exits are more important than the entry because it's a contentious issue". What I mean by "exits need to fit your personality" is that too many traders look at what makes the most money when backtesting. Doing it this way is "arse around". Why? because traders quickly realise that they can't trade the strategy because of the drawdowns, trade frequency, or other issues that cause them grief.

*It's all about picking an exit strategy that you are comfortable with*
Look at the exit on a chart. If you feel good about what you are seeing, you're in business. One of the first steps in becoming a good trader is understanding that you don't, shouldn't & can't maximise everything. So put that idea behind you.

*Doing things, the hard way*
When starting out most beginners will try everything & anything. The “Dump it here” thread tries to explain how trading works, while conditioning you "how to think" when you are experiencing mental stress (when a position or portfolio is under pressure). My advice is to keep every part of your trading strategy & plan as simple as it can be.

Skate.


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## Skate (20 April 2021)

*Possible versus Probable*
At times we have all said, “it’s possible but unlikely”. It’s another way of saying “it’s possible but not very probable”.

*Trend trading picks a lot of duds*
When taking a position, we tend to think in "probabilities", but rarely think of the "possibility" the trade will be another loser.

*As a trend follower, you get used to having a lot of losing trades*
Keeping those losers small so the less frequent winners outweigh them is the secret of trend trading. Every position we take it’s “possible” they become a big winner that pays for all the little losers, but it’s “probable” it will be just another loser. That’s a tough mindset for most people to deal with. Once you accept what's "possible", your success becomes more "probable".

Skate.


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## Skate (20 April 2021)

*Consecutive down days*
When there are a few consecutive down days, traders think in "possibilities" that what happens next can get ugly. Fear of losing money is what drives the market down. It's most "probable" that the markets will go back up. As humans, we are conditioned to think in terms of "doom & gloom" for survival. (That's not well suited for trading)

*There are always two sides when handling down days *
(1) Panic & sell or (2) hold & hope for the best.

*But there is a third option *
(3) Trade your plan. 

*Preserving capital*
New traders know little how to preserve profits as they watch their profits quickly disappear, hoping that prices go back up again.  Some can't sell because of how well the market has been going these last two weeks, so they hold on, & prices continue to fall selling at a substantial loss. This usually occurs right at the market bottom. To add insult to injury, this is when the market starts going back up again. (Trading is a cruel game)

Skate.


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## Skate (20 April 2021)

*It’s sad anytime someone loses money*
Sometimes new traders can lose more than they can afford - in such a small period of time. It can happen & it can happen to anyone lacking the knowledge of what drives the market. Most traders focus on the "possibility" of what the markets can do for them not the "possibility" of what the markets can do to them.  So, it’s only reasonable you must plan to lose & be the best loser you can possibly be.

*I'll have a go*
"Joe Average" always becomes excited when the markets are rising & they start to believe the hype, the media commentators, that everyone is making money but themselves. These new traders usually start investing without even trying to learn the rules of the game - a recipe for disaster!

Skate.


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## over9k (20 April 2021)

Skate said:


> *Consecutive down days*
> When there are a few consecutive down days, traders think in "possibilities" that what happens next can get ugly. Fear of losing money is what drives the market down. It's most "probable" that the markets will go back up. As humans, we are conditioned to think in terms of "doom & gloom" for survival. (That's not well suited for trading)
> 
> *There are always two sides when handling down days *
> ...



Also worth noting that this is precisely why hedges are so important and that the market can stay irrational longer than you can stay solvent. 

I spent considerable time explaining in the coronavirus thread that the plummet we saw after the snowstorm was only going to be temporary, but how long that temporary was going to be could have been anything. 

Hence why selling to bail out of a market that you know has gotten something wrong is a total gamble because for all you know it's going to figure out it's wrong on the very next day. 

Hence if you're confident that it's a temporary thing/the market is wrong about something, it's either gamble by selling, or just pucker & hold. 

However, if you have some kind of hedge, you can make a killing by selling A and buying B when A goes up and B goes down - as long as you're confident things are going to flip back in the other direction (the market has this particular move wrong) of course.


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## Skate (20 April 2021)

*Personality traits*
Trading doesn’t have to be super complicated or time-consuming. Personality has a lot to do with new traders’ ability to grasp & properly execute new trading information. What seems natural to many long-term traders seems alien to a beginner. You can’t control the market but you have full control over how you’ll react when trading becomes emotional.

*Luck in trading*
Those starting out, can "possibly" snag a lucky run but the "probabilities" of doing this is very low.

Skate.


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## ducati916 (20 April 2021)

Skate said:


> *1. Exits need to fit your personality more than entries*
> I've rephrased that "exits are more important than the entry because it's a contentious issue". What I mean by "exits need to fit your personality" is that too many traders look at what makes the most money when backtesting. Doing it this way is "arse around". Why? because traders quickly realise that they can't trade the strategy because of the drawdowns, trade frequency, or other issues that cause them grief.






Skate said:


> *2.It's all about picking an exit strategy that you are comfortable with*
> Look at the exit on a chart. If you feel good about what you are seeing, you're in business. One of the first steps in becoming a good trader is understanding that you don't, shouldn't & can't maximise everything. So put that idea behind you.






Skate said:


> *3. Doing things, the hard way*
> When starting out most beginners will try everything & anything. The “Dump it here” thread tries to explain how trading works, while conditioning you "how to think" when you are experiencing mental stress (when a position or portfolio is under pressure). My advice is to keep every part of your trading strategy & plan as simple as it can be.
> 
> Skate.





1. More than entries/exits, your entire approach to trading must sit easily with your personality/emotional make-up. If it does not, it is highly probable that you will fail.

2. Exits (as are entries) are more than just exiting a trade. They are ongoing information with regard to the market you are trading. For example (and to emphasise the point) if your selection process (entries) are selecting technology stocks and over time entries fade from Tech to Banks, that is important information. It is also what has recently happened in the US (last 4 months or so). This information will, in the longer term/greater scheme, drive strategy decisions re. Bull/Bear markets and the employment of systems or strategies that can best capitalise within the current environment.

3. Nothing wrong in that. Unless you experiment with different styles/strategies, it is unlikely that you will find the niche that suits your personality and emotional tolerance.

jog on
duc


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## IFocus (21 April 2021)

May I comment here, lots of comments much enters into the psychology of trading with or without recognition.

But the simplicity of trading successfully (IMHO experience) is having a method, testing it to death (training your psychology )and becoming an expert in what market it works.

Understand what the market you are trading.

Then applying, accepting we are all human.


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## Skate (21 April 2021)

IFocus said:


> But the simplicity of trading successfully (IMHO experience) is having a method, testing it to death (training your psychology) and becoming an expert in what market it works.




@IFocus, you nailed it in one sentence - where I have made over 2,800 posts to say the same thing.

Skate.


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## over9k (21 April 2021)

IFocus said:


> May I comment here, lots of comments much enters into the psychology of trading with or without recognition.
> 
> But the simplicity of trading successfully (IMHO experience) is having a method, testing it to death (training your psychology )and becoming an expert in what market it works.
> 
> ...



And if you don't know it well enough, don't trade it at all - just bet on it going up or down and then just hold.


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## Skate (23 April 2021)

peter2 said:


> I'm also aware we're near a weak time of the year (sell in May?).




*"Sell in May and Go Away"*
The theory suggests that a pattern exists trading in the month of May. Historically, the market declines around May but it could simply be a "Tax Strategy" to sell underperforming shares to secure an offset to capital gains. I'm only guessing here, but sell-offs do increase supply & depress prices.

*The month of May - gets a bum wrap*
The month of May could simply be referred to as a "month of lower returns" compared to the rest of the year. I should also say, underperformance can still have positive returns.

*If you" Sell in May and Go Away" *
It's likely you would miss the growth the market usually experiences during this month. I've looked at my monthly returns for the last 5 years & the months of May haven't been scary for me.

*Backtest result*
With my trading "Sell in *March *and Go Away" would work better for me.






Skate said:


> All my systems went to (100% cash) in the last quarter of 2018.




*Trading the last quarter of 2018 (calendar year) & trading the first quarter of 2020 (calendar year)*
Both periods caused real concerns with my trading. I was saved from additional losses both times because of my GTFO filter (albeit a little late). Both periods caused uncertainty that I hadn't experienced before. The drop in my portfolio was horrendous both times even though the cause of the loss was completely different. I realise trading is not always peaches & cream, but to my way of thinking, there must be a better way of protecting my capital when the next crash appears.

Skate.


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## IFocus (23 April 2021)

Skate said:


> @IFocus, you nailed it in one sentence - where I have made over 2,800 posts to say the same thing.
> 
> Skate.




Skate without over cooking the praise (but needs to be said).

Your thread "Dump it Here"  should be a must read for any trader along with Peter's with genuine high level / quality content,  that's not to take anything away from the other contributors to the forum of which are of also of exceptional high quality.


Cheers


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## Skate (23 April 2021)

@IFocus, thank you for the kind words.
*
Posting from my "point of view"*
Trading has been exceptionally kind to me. Every post I make is for others to understand the dangers of trading (a little better). 

*My way of trading is not for everyone but profitable*
I post true & accurate records from my actual trading to encourage others to read my thread.




Skate.


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## over9k (23 April 2021)

Always worth posting your numbers vs the market though skate - not to take anything away from you (at all!) but everyone's a genius in a bull market. 

You've obviously beaten the market but would be beneficial for the newbies to show how much by and maybe make a brief post about how so few traders beat the market, those who do beat it by X or Y or Z amount and you've beaten it for ABC reasons etc etc.


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## Skate (23 April 2021)

over9k said:


> Interested to hear your thoughts on DEG as I've held since 0.39.



@over9k, I realise this question was directed to @peter2 but as I'm a holder it's worthy of a post.

*Trend following always looks easy*
That’s because the principles are very simple. When looking at the chart for (DEG) perfectly displays "visually" trend trading in a "nutshell". The entries & exits can look impressive, but it's just a matter of jumping on a breakout & jumping off when it stalls.
Is just jumping on trends.

*4 positions taken in (DEG) with "one dud" so far*
The most recent breakout needs others to pile in to follow through. It's worth remembering all trends "come to an end".




Skate.


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## Skate (23 April 2021)

over9k said:


> Always worth posting your numbers vs the market




*Referencing returns "versus the market"*
Means Jack to me. I never reference my trading returns in dollars or compare my returns to an Index or (another trader) because it holds "no value" in doing so.

*The metrics *
When I post the metric of my trading, they are the combined average returns from all the strategies I trade.





*Cherry-picking returns*
I also resist displaying the individual performance of a strategy as this leads to cherry-picking returns.



over9k said:


> everyone's a *genius* in a bull market.




*Hint*
Trend trading works well in a bull market, that's a given.

*Any day you don't lose*
"Is a good day"

Skate.


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## Skate (23 April 2021)

*Trading a combination of strategies*
The most important thing is to keep trying various methods until you arrive at an approach that works as @ducati916 recently posted. Trading is all about trial & error. Unfortunately, the market often makes that quite difficult, because it is always changing, so the things that work best during one period may change. However, that doesn’t mean that you reinvent yourself every time you struggle a bit. After you develop a style, it is important to stick with it and not give up just because you don’t make immediate progress.

*We are all different*
We all have different levels of risk tolerance, patience, activity, & different approaches in handling the emotional ups & downs of the markets. What is comfortable for one will drive another to distraction & if you can appreciate that fact, arriving at a style that works for you is easier.

*The equity curve displays that it's rising over time*
The angle of the "overall rise" should paint a powerful picture for others.





Skate.


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## over9k (23 April 2021)

Skate said:


> *Referencing returns "versus the market"*
> Means Jack to me. I never reference my trading returns in dollars or compare my returns to an Index or (another trader) because it holds "no value" in doing so.



I don't follow, if the market rose by X% and you made X%, then your gains are no different to just sticking your cash in an ETF and walking away, i.e you've gone through all the time/effort/work to make a net difference of nothing?


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## qldfrog (24 April 2021)

Skate said:


> *Trading a combination of strategies*
> The most important thing is to keep trying various methods until you arrive at an approach that works as @ducati916 recently posted. Trading is all about trial & error. Unfortunately, the market often makes that quite difficult, because it is always changing, so the things that work best during one period may change. However, that doesn’t mean that you reinvent yourself every time you struggle a bit. After you develop a style, it is important to stick with it and not give up just because you don’t make immediate progress.
> 
> *We are all different*
> ...



Bar of profit? Do tou mean from 3 to 5 systems?


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## Skate (24 April 2021)

qldfrog said:


> Bar of profit? Do you mean from 3 to 5 systems?




@qldfrog, the number of strategies I trade at any one time varies to a degree.

*One $700k strategy*
In my personal trading (excluding my SMSF) $700k allows me to trade 7 different strategies at one time. Trading this way is effective & simple. It would be simpler if all the strategies had the same settings, parameters, filters & positionScore but that's not the case.

*Smoothing returns*
Reading your "thread" each week you reflect on the returns from each of your strategies, some are up, some are down, but you always finish with a combined tally. The combined tally is the measure of your trading. With me, it's no different.






Skate.


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## Skate (24 April 2021)

*What I do know about trading*
1. Trend Following works
2. $15k moves in & out of the markets with ease
3. Timing the exit - makes the money
4. Having a sound trading plan & sticking with it - pays
5. You can't eat percentages
6. Anytime your ROI is greater than 6% - indicates you are doing well
7. Daily/Weekly/Monthly "fluctuations" are part of the trading game
8. Simplicity works (overtime)
9. The bulk of new traders lack discipline, commitment & confidence
10. It requires money - to make money

Skate.


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## Skate (24 April 2021)

ducati916 said:


> April is 100% up. Yes 100% up. It is living to expectation so far. May however is a different story, not terrible, but less than April. June/July both 100%. Exit for the 3 worst months: Aug/Sept/Oct.* Re-enter Nov/Dec.*
> 
> I'd be interested to see a systems chap test it. It is supposed not to work.




*2020/2021 Monthly results*
1. July 2020 to the end of October 2020 cancelled themself out.
2. @ducati916 idea to enter in Nov/Dec "worked" for my Monthly Waterfall Chart of returns.
3. February 2021 to April 2021 - smooth consistent returns.






*The market gives what they want to give*
Those two down months (September 2020 & January 2021) really hurt.

*Market "fluctuations"*
#7. Daily/Weekly/Monthly "fluctuations" are part of the trading game





Skate.


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## Skate (24 April 2021)

*What I do know about trading*
#1. Trend Following works

*With the computer age*
I’m thinking times have changed.

*Excerpt from: The Intelligent Investor, Benjamin Graham*
“_In our own stock-market experience and observation, extending over 50 years, we have not known a single person who has consistently or lastingly made money by thus “following the market.” We do not hesitate to declare that this approach is as fallacious as it is popular._

Skate_._


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## ducati916 (25 April 2021)

Skate said:


> *1. What I do know about trading*
> #1. Trend Following works






Skate said:


> *2. With the computer age*
> I’m thinking times have changed.






Skate said:


> *3. Excerpt from: The Intelligent Investor, Benjamin Graham*
> “_In our own stock-market experience and observation, extending over 50 years, we have not known a single person who has consistently or lastingly made money by thus “following the market.” We do not hesitate to declare that this approach is as fallacious as it is popular._
> 
> Skate_._





1. Yes it does. However, stocks, etc. can trend in all directions, up, down, sideways. The key (obviously) is to be in the trend that you have identified as making a profit for your style. The thing with trends is that they have (a) start, (b) middle and (c) end. They are not linear. Unless you jump in at (a) there will be higher volatility around the position (b) which has to be differentiated from (c). This of course, is what all the variations of your systems trade on.


2. Times never change because people never change. Market prices fluctuate only because of people acting. The difference (in the short term) is the massive intervention of the Fed. Different Fed. Chairs have had quite different approaches to how the Fed. has intervened within financial markets. Volcker in the 1970 - 1984 markets, was a very different proposition to Greenspan et al. who followed. Obviously, in 1929, the Fed. did nothing overmuch (Chair Young then Meyer). In 1942 - 1950, (Eccles and McCabe) the Fed became as a result of the 1930's market, quite proactive during and after the war years and massive government debt, which is the current playbook. That era led into the highly inflationary period that eventually blew-up in the 1969-1982 markets. The difference, was the starting valuation of the market as compared to today.

3. My interpretation of this excerpt is that selection, entry and management have to be systemised, rather than following the market, which are the stocks displaying the highest price appreciation currently. Now Graham selected stocks in a number of different ways, the net-net method being available in the 1930 - 1949 period, but probably never since. He was also one of the early activist investors, loading the seats on Boards, arbitrage, long/short strategies using Convertibles, PIPEs, outright ownership, etc. This chap literally wrote the book on how to play the market. Buffett sat on his knee and learned from the master.

So the argument is for a principled, systematic and rational approach to selection, rather than simply some ad hoc approach based on narrative, popularity and particularly marketing from Wall St.. viz: SPACS etc.

A mechanical system, with entry/exit rules is a principled methodology. Here is the thing: so many market participants are just plain lazy. They do not want to do the necessary work. Whether that is building a systematic mechanical system, micro/macro analysis, theories around risk management, etc, etc, etc. They think it is easy money. Plonk it down on Dodgy Coin and become a millionaire almost overnight. That is the example Graham refers to: following the market. Many were millionaires from crypto last week. A lot fewer today. Possibly even fewer next week. Making it is one thing. Hanging onto to it is quite another thing.


jog on
duc


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## ducati916 (25 April 2021)

Skate said:


> *41%-win rate is highly frustrating*
> Let me state the obvious, "trend trading systems have more losers than winners". The few positions that do win are the reason why this style of trading is successful & profitable. At times waiting for a trend trading strategy to develop into profits can be a hard ask - a step too far (for some).






Skate said:


> *1. So, why do trend followers have a low win rate? *
> I wish I had a definitive answer but I'm yet to find the main reason that is constantly causing me grief. It's really annoying at times when you enter a new position only to experience a quick pullback, which at times makes me want to take the "Lord's name in vain".






Skate said:


> *2. Pullbacks at times are hard to handle*
> Pullbacks could be one reason for a low win percentage of a trend trading strategy or it could be the "main reason", I just don't know. What I do know is @peter2 has capitalised on these pullbacks more than once. A pullback can happen right after a breakout or later in the trend, but these pullbacks cause all trend traders a lot of grief. Reducing pullbacks with this style of trading is not an easy issue to overcome.
> 
> More to follow.
> ...





I was waiting to see how this developed and whether the 'edge' garnered further discussion/analysis. As it didn't really seem to garner overmuch attention, I thought on a Sunday afternoon, it merited a little further discussion.

2. First we need to define a trend. It is either a 'Win' one step up or a 'Loss' one step down. A trend would look something like, 'W,W,W,W,L,W,W,W.....and over time the series would move higher.

All manner of financial instruments have in the past demonstrated trends, either higher or lower. We have to somehow account for the 'W' outcome prevailing. The market, or stock, is exposed to 'Events' and 'Interpretation' of those 'E' by 'Traders'. If enough 'T', 'I' the 'E' in the same manner, then we see a consensus of either 'W' or 'L' developing into a trend.

Mechanical Systems traders have (it seems) tried to define 'what' defines an entry into a trend and an exit from a trend, as simply as possible. To define it exactly, is to overfit the data and invite disaster.

Now it seems, from following this thread, that reams of historical data are utilised and coded into a statistical analysis/testing package, which spits out its statistical analysis.

Somewhere in this thread, someone used the term: 'statistically significant'. That term, refers to a Gaussian distribution of observation errors. First error: Gaussian distributions are within the domain of 'Pure Mathematics', not 'Applied Mathematics'.

The issue with Gaussian mathematics being used in the financial markets is that variations face an exponential drop in the calculated probabilities. Clearly, this causes the problem: stuff happens in the markets every couple of years that should only happen once in the lifetime of the Universe or less, according to the statistics.

So unfortunately, systems traders have no edge other than a disciplined entry/exit. All the numbers generated are fantasy, if they are generated statistically, which I believe that they are. Hence, the low win rate.

3. Pullbacks.

Again a definition would be required. So using our initial definition of a trend, a pullback would be a series of 'L' outcomes that overwhelmed the 'W' outcome, resulting in the series moving lower.

Here we then have to somehow account for trader psychology in addition to the random nature of 'E' by 'T', requiring (again) a consensus of 'I' to re-establish the trend or continue the new trend 'L'.

Now of course 'E' (the future) is random. However the 'I' is in part driven by narrative/spin, in part by inherent biases held by 'T', etc.


jog on
duc


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## Skate (25 April 2021)

ducati916 said:


> Mechanical Systems traders have (it seems) tried to define 'what' defines an entry into a trend and an exit from a trend, as simply as possible.




*Landing a drone & flying it on Mars makes trading look simple*
With any trading system, you are buying in the hope of selling the position to someone else at a higher price than we brought it. 

*The basic*
Most traders just want to know 3 things. What to buy, when to buy & when to sell. If it was that simple, we all would be handsomely rewarded, but that's just not the case. The uncertainty of what someone will do next is the issue, market manipulation is the other. Once those questions are answered it gives us the privilege to ask the next series of questions.

*The main questions that require answering*
1. How do we decide what to buy?
2. How do we decide when to buy?
3. More importantly - How do we know when to sell?

*AFAIC*
The answers to these questions are embodied in this thread.

Skate.


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## ducati916 (25 April 2021)

Skate said:


> *Landing a drone & flying it on Mars makes trading look simple*
> With any trading system, you are buying in the hope of selling the position to someone else at a higher price than we brought it.






Skate said:


> *The basic*
> Most traders just want to know 3 things. What to buy, when to buy & when to sell. If it was that simple, we all would be handsomely rewarded, but that's just not the case. The uncertainty of what someone will do next is the issue, market manipulation is the other. Once those questions are answered it gives us the privilege to ask the next series of questions.






Skate said:


> *1. The main questions that require answering*
> 1. How do we decide what to buy?
> 2. How do we decide when to buy?
> 3. More importantly - How do we know when to sell?






Skate said:


> *AFAIC*
> The answers to these questions are embodied in this thread.
> 
> Skate.





1. (1) Clearly from Dodgy Coin on down, you can pretty much buy anything. (2) and (3):




Buy (extreme) fear.
Sell (extreme) greed.




I'm going to road-test this. I'll track it (hypothetically) on my thread.

jog on
duc


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## qldfrog (25 April 2021)

ducati916 said:


> 1. (1) Clearly from Dodgy Coin on down, you can pretty much buy anything. (2) and (3):
> 
> View attachment 123309
> 
> ...



What is then the fear greed index?
Volatility aka VIX? I initially thought so but does not seem to match ..anymore?


----------



## Skate (25 April 2021)

qldfrog said:


> *What is then the fear greed index?*
> Volatility aka VIX? I initially thought so but does not seem to match ..anymore?




*How the fear & greed index is calculated *
_Investors are driven by two emotions: fear and greed. Too much fear can sink stocks well below where they should be. When investors get greedy, they can bid up stock prices way too far._

*So what emotion is driving the market now? *
_CNNMoney's Fear & Greed index makes it clear._ _"7 indicators" are used to determine the Fear & Greed Index _
*1. Stock Price Momentum:*_ The S&P 500 (*SPX*) versus its 125-day moving average_
*2. Stock Price Strength:* _The number of stocks hitting 52-week highs and lows on the New York Stock Exchange_
*3. Stock Price Breadth:* _The volume of shares trading in stocks on the rise versus those declining._
*4. Junk Bond Demand:* _The spread between yields on investment-grade bonds and junk bonds_
*5. Market Volatility:* _The VIX (*VIX*), which measures volatility_
*6. Safe Haven Demand:* _The difference in returns for stocks versus Treasuries_
*7. Put and Call Options: *_The put/call ratio, which compares the trading volume of bullish call options relative to the trading volume of bearish put options_

*Calculations*
_For each indicator, we look at how far they've veered from their average relative to how far they normally veer. We look at each on a scale from 0 - 100. The higher the reading, the greedier investors are being, and 50 is neutral. Then we put all the indicators together - equally weighted - for a final index reading. When the S&P 500 (SPX) plummeted to a three-year low on Sept. 17, 2008 - the height of the financial crisis -- the Fear and Greed index sank to 12. The index gained some ground to 28 before stocks finally bottomed out on March 9, 2009 and the latest bull market began. Most recently, in the first quarter of 2012, stocks staged their best run-in decades, and the index showed pure greed._

*More information found here: *https://money.cnn.com/data/fear-and-greed/?iid=EL

Skate.


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## Skate (26 April 2021)

Skate said:


> *Landing a drone & flying it on Mars makes trading look simple*




*Focus*
I’ve just realised why @peter2 is such a good trader. The secret to his success is his “focus”.

*Peter knows when to hold them & know when to fold them*
Peter simply knows when to buy them & knows when to sell them. Unfortunately, this takes “acquired experience”.

*Acquired Experience*
Most would realise it takes a long time to accumulate “acquired experience”, a luxury not afforded to those starting out on their trading journey.

*So, what's our next best option?*
I'll explain "one option" in the next post.

Skate.


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## Skate (26 April 2021)

*One option is to short cut the process*
Trend following helps to shortcut the process because from the beginning the three most important questions (issues) can be answered by trading a “trend following strategy”. 

1. Deciding what to buy.
2. Deciding when to buy.
3. Deciding when to sell.

*Trend Trading*
Trading this way creates their own unique set of "problems". 

*"Problems" is not the correct terminology to use *
Using the word "problems" gets the message across but it implies - "there are problems to solve". With trend trading, there aren’t any problems to solve but rather a need for "acceptance" of the "nuances" that this style of trading brings. 

Skate.


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## Skate (26 April 2021)

*Patchy results*
Also, trend trading is "patchy" as it's more likely there will be more losers than winners (I, for one, have accepted this fact). Once you accept this nuance, you'll be required to let the winners run & be ruthless with the losers. (There are no “take profit stops” whilst trend trading)

*I don’t like losing money any more than the next guy*
It’s hard for anyone to "sit & watch" a position go against you "trend trading" waiting for an exit signal but, "holding firm" is the right thing to do & it works for me. Sitting tight helps to keep you in many of the moves that can result in far greater profit than anyone could have imagined.

Skate.


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## Skate (26 April 2021)

*Sticking with your trading plan*
I think trend following helps with the process because after a while it becomes clear that loser become less relevant "as" there are so many more losers compared to the percentage of winners.

*Two things*
1. First, expect to have losing trades & get used to them.
2. Second, recognise when the winners are no longer trending & G.T.F.O.

*Losers should be irrelevant*
If you can train your mind to accept that sometimes "things just happen" - you'll care less about "how or why" they happened. 

*Focus*
With a "focus" of accepting that sometimes "things just happen" allows you to follow your trading plan & process.

Skate.


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## ducati916 (26 April 2021)

Skate said:


> *One option is to short cut the process*
> Trend following helps to shortcut the process because from the beginning the three most important questions (issues) can be answered by trading a “trend following strategy”.
> 
> 1. Deciding what to buy.
> ...






Skate said:


> *Trend Trading*
> Trading this way creates their own unique set of "problems".






Skate said:


> *"Problems" is not the correct terminology to use *
> Using the word "problems" gets the message across but it implies - "there are problems to solve". With trend trading, there aren’t any problems to solve but rather a need for "acceptance" of the "nuances" that this style of trading brings.
> 
> Skate.





So when to buy. This is the VWAP squeeze or pinch. A good way to determine the trend, as of course you can have shorter term trends within longer term trends.








jog on
duc


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## Skate (26 April 2021)

ducati916 said:


> *So when to buy.*
> This is the VWAP squeeze or pinch. A good way to determine the trend, as of course you can have shorter term trends within longer term trends.




*I'm confused*
@ducati916, I would be interested in how to trade the "VWAP Squeeze or Pinch". Usually, a picture paints a thousand words but, in my case, it explained "very little".

*With further explanation*
I may be able to code & backtest the "VWAP Squeeze or Pinch" idea if you explain this method in plain English.

*From the "Equilibrium chart" above*
1. Is the entry above the upper band & a sell below the lower band?
2. Is the upper red band the (AVWAP) & the lower band the (VWAP)?
3. Are the two bands a short period (AVWAP) versus a longer period (AVWAP)?
4. What is the standard anchor (AVWAP) for a weekly strategy?
5. What calculations are used to calculate the upper band of the squeeze?
6. What calculations are used to calculate the lower band of the squeeze?
7. How is the "VWAP" pinch calculated?

*VWAP, VWAP/SMA & AVWAP*
I've made 15 posts on how I take advantage of the (VWAP), also how to trade the (VWAP in conjunction with an SMA). I also explain how to anchor the (VWAP) to a defined period (AVWAP). The Anchored VWAP is a modified version of VWAP. It ties the calculations to a specific price bar decided by the trader. It is similar to the traditional VWAP, as it incorporates price & trading volume in a weighted average. 

*Anchoring ties the calculations to a specific price bar*
It's similar to the traditional VWAP, as it incorporates price & trading volume in a weighted average. In other words, the anchored VWAP allows traders to apply the calculation method to any starting point. A defined period of time calculates the "Anchored Volume Weighted Average Price" (AVWAP). Anchoring is what traders do without even thinking. Meaning, we “anchored” our calculations from the price we paid to calculate the risk of the trade.

*More information *




__





						Dump it Here
					

I think that monitoring the number of signals found by these two systems could be a valuable switching mechanism that may work much better than an index filter alone.    Without giving too many secrets away  A simple measure (as a rule of thumb) is the ratio of "buy signals" versus "sell...




					www.aussiestockforums.com
				







__





						Dump it Here
					

I think that monitoring the number of signals found by these two systems could be a valuable switching mechanism that may work much better than an index filter alone.    Without giving too many secrets away  A simple measure (as a rule of thumb) is the ratio of "buy signals" versus "sell...




					www.aussiestockforums.com
				







__





						Dump it Here
					

My take on Barney's explanation The volume-weighted adjusted price (VWAP) is the true "average" price. Barney suggested the (VWAP) has more importance when deciding which positions to be entered rather than accepting the displayed price. The VWAP identifies the true average by factoring in the...




					www.aussiestockforums.com
				




Skate.


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## ducati916 (27 April 2021)

Skate said:


> *From the "Equilibrium chart" above*
> 1. Is the entry above the upper band & a sell below the lower band?
> 2. Is the upper red band the (AVWAP) & the lower band the (VWAP)?
> 3. Are the two bands a short period (AVWAP) versus a longer period (AVWAP)?
> ...





1. Yes.
2. Yes.
3. Yes.
4. The lowest bar at the start of an uptrend.
5. As you have already stated.
6. Same as [5].
7. The pinch is simply where the 2 bands, in 2 different time frames, create a Bollinger Band type of effect on the chart.

The advantage (fundamentally) of the VWAP is that many Mutual Funds/Pension Funds, when making purchases or sales of large blocks of stock, want (insist upon) being executed at the VWAP price. The Specialists responsible for working these huge orders, obviously use all manner of tricks to bring price back into range to execute these orders.

You could argue that your bog standard EMA/whatever, will reasonably closely track the VWAP anyway. If you plot them together, they are pretty similar. 

However, the 'Pinch" by anchoring on selected Bars, is slightly different. I think you could use it as an entry trigger and something different as an exit trigger. It is used as displayed above as a Swing Trading strategy, with a holding period of about 3 weeks.


jog on
duc


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## Skate (29 April 2021)

*The importance of money*
_“When I was young, I used to think that money was the most important thing in life, now that I’m old I know it is.”_

*The markets are constantly doing things you don’t expect*
Most traders have a habit of overcomplicating their trading & spend an enormous amount of time trying to work out why the price moved. 
There will be times when you will think (WTF), but that's ok. As trend traders, we don't need to know why a position is "trending" - but "we need to be on it".

*Trading makes me religious*
From my experience, those who trade big, pray a lot, they also wish & hope for better times ahead. It's important to develop a strategy that you know works & one that you’ll follow under any circumstance. When you have such a strategy you may never need to pray, wish or hope again. Don't forget when you lose money, 'suck-it-up' & "don't panic". Confidence in this game is essential.

Skate.


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## Skate (2 May 2021)

*(BOE) stands for "built on enthusiasm"*
Enthusiasm drives the market up & the lack of enthusiasm can drive it in the other direction. Bitcoin is the perfect example of "enthusiasm" as bitcoin is entirely built around that principle. This post is not about bitcoin but how enthusiasm influences the markets.

*Bitcoin is built on the enthusiasm of others *
Bitcoin has no intrinsic value but the adoption & investment in bitcoin shows no signs of letting up anytime soon. Bitcoin is currently in unchartered territory & nobody knows where the current bull run is going to stop or take a pause. Institutional interest has skyrocketed this year, even Elon Musk is taking a keen interest. The European Union has recently stepped in to capture & regulate all crypto assets to provide legal certainty but flexible enough to allow for future developments. Most major countries have similar plans "so it appears" crypto's are here to stay - in one form or another.

*"Sell in May" has gained cult status as a strategy *
The "Sell in May" strategy simply avoids holding positions during the month of May. Now that the "ground rules" of enthusiasm have been established let's focus on the "Sell in May & go away" theory.



ducati916 said:


> So we move into May. We know April followed the pattern. I have seen so many blogoland posts re. 'Sell in May'. *Possibly I'm looking for it (confirmation bias)* or it just seems that *it is a real thing* atm.




More to follow.

Skate.


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## Skate (2 May 2021)

*"Sell in May & Go Away"*
@ducati916 suggests a pattern of "Sell in May" might be the "real thing" or it simply could be "confirmation bias" of traders. To his credit Duc will be putting this theory to the test, trading his "Swing System" in May. Historically, the market declines around May but it could simply be a "lack of enthusiasm" as historically (May) has shown lacklustre performances in the past.



ducati916 said:


> Whether or not May is a clanger, just beware, this is now very much a shoot first ask questions later market.




*The month of May gets a bum rap *
Market "fluctuations" happen in all times frames but in this game, you need to be "in it to win it". 

*Doom & gloom is always lurking*
Combine that with the month of May & it could be a recipe for disaster, but who really knows?

*What I do know*
The likes of @ducati916, @peter2, @qldfrog, & @Warr87 to name just a few, won't be on the side lines in cash during the month of May, neither will I.



pozindustrial said:


> There are whackos talking doom and gloom all over the internet competing with their opposite numbers spruiking fortune, but there are some very respectable people issuing warnings with good fundamental reasons and I believe them. *I regard the present as 'High Fire Danger' times*, that is my gut feeling.





basilio said:


> *I too feel exceptionally uneasy about the "strength" of the current market.* IMV far too many people swimming naked. I suspect the triggers will be the economic fallout from COVID in India, Brazil and some other countries currently under siege. I suspect a collapse will be very, very quick. I think the widespread speculation in crypto currencies and the risk of most of them imploding is also underestimated.




*Hickety-Pickety trading just doesn't cut it for me*
Picking just one time period (May) paints a picture to suit the narrative whereas trading results should be the cumulations of the entire "yearly" period. 

*Farting around can be the undoing of a good strategy*
As system traders, we have one job to do & that is to take the signals irrespectively of what you "think" might transpire in a certain month. (May)

Skate.


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## Skate (2 May 2021)

*The month of May gets a bum rap (AFAIC)*
Market "fluctuations" are all part of trading. The results from my trading in the month of May of 2019 & 2020 - the weekly waterfall chart displays that not all weeks were profitable, but the month was extremely profitable. 

*One week out of five*
The week of the 10th May 2019 was a loser - but the cumulative results for May 2019 were pleasing.




*One week out of five (again)*
The week of the 15th May 2020 was a slight loss & the 22nd May had a slight win. But in a larger "monthly" timeframe the cumulative results for May 2020 weren't too shabby at all.




*Studying the charts above*
The second week in May appears not to be a lucky week. In hindsight everything is crystal clear but with trading no-one knows what tomorrow will bring, let alone May 2021.

*If you" Sell in May & Go Away"*
It's likely you'll miss out. I've looked at my monthly returns for the last 5 years & the months of May haven't been scary for me "at all".

Skate.


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## qldfrog (2 May 2021)

Skate said:


> *The month of May gets a bum rap (AFAIC)*
> Market "fluctuations" are all part of trading. The results from my trading in the month of May of 2019 & 2020 - the weekly waterfall chart displays that not all weeks were profitable, but the month was extremely profitable.
> 
> *One week out of five*
> ...



As per a few backtests posted a few days ago, getting out in may is not statistically profitable.if going out of the market for the next few months, you might get a smoother ride, true but overall profit will be lower.


----------



## Skate (2 May 2021)

*April was a great month*
I received a "private message" remarking that Friday spoilt the party: _"Steep fall on Friday breaking the triple gain streak". _

*Friday & every other day is out of our control*
I'm first to agree Friday was not one of my better days but in the scheme of things, April 2021 was a great month for me.

*8 down days - 12 up days*
Using Friday's results suit the narrative that "trading is unpredictable".



peter2 said:


> How often have @Skate and I mentioned that when trend trading we collect losers initially. We realise losses long before we see the profits included in our account. Winners need more time than the losers.




*April trading - "Weekly Results"*
April was rocketing along quite nicely until the last week. One losing week spoilt a clean run. The capture below displays how the week unfolded.

*




April trading - "Daily Results"*
The capture below displays each trading day results for the month of April 2012. April turned out to be a good month overall but still - Friday was hard to stomach.




*Trading the last few days hasn't been all peaches & cream *
I'm posting the waterfall capture so others can understand what I've had to endure this last week. Even when you think you have a strong portfolio of stock "good weeks" are never guaranteed.

*Friday's trading results really hurt *
Up until Friday I was in good profits only to "give it all back" & then some - to finish the month on a down week. I realise trading is not always lemonade as some days are just lemons. I've also come to realise that “Persistence, Hard-work & Determination” (PhD) is a definite requirement in this game.

*

*

Skate.


----------



## Warr87 (2 May 2021)

Skate said:


> *"Sell in May & Go Away"*
> @ducati916 suggests a pattern of "Sell in May" might be the "real thing" or it simply could be "confirmation bias" of traders. To his credit Duc will be putting this theory to the test, trading his "Swing System" in May. Historically, the market declines around May but it could simply be a "lack of enthusiasm" as historically (May) has shown lacklustre performances in the past.
> 
> 
> ...




fully loaded. my system decided to go from 50% invested to now 100% over the last few weeks. Open profits aren't bad, but I'm excited to see how much further things will go.


----------



## ducati916 (2 May 2021)

Skate said:


> *The month of May gets a bum rap (AFAIC)*
> Market "fluctuations" are all part of trading. The results from my trading in the month of May of 2019 & 2020 - the weekly waterfall chart displays that not all weeks were profitable, but the month was extremely profitable.
> 
> *One week out of five*
> ...




Last May was month 2 off of the bottom. This May is month 13 of a hyper-bull, with everything stretched and extended. Last year, I don't actually remember the 'Sell in May' being promulgated that much through blogoland. This last week, EVERYWHERE. Now, either it will happen, hard sell-off or completely the opposite, through the roof higher.

I guess we are about to find out. Pay your money, take your chances. My gut says its going to be a sell-off early. First week to 10 days. Then, straight back up.


jog on
duc


----------



## Skate (3 May 2021)

bigdog said:


> *3/5/2021 - ASX 200 futures pointing lower*





ducati916 said:


> This May is month 13 of a hyper-bull, with everything stretched and extended. Now, it will be a hard sell-off or completely the opposite, go through the roof.
> I guess we are about to find out. Pay your money, take your chances. *My gut says it's going to be a sell-off early*. First week to 10 days. *Then, straight back up.*




*Pay your money, take your chances*
I've stated previously that the month of May has been kind to me in the "past". @ducati916 gut estimate (guesstimate) is that the markets will sell-off early over the next 10 days & then go straight back up (give or take a few days either side of the first week). Duc's "gut feelings" carry more weight knowing that it comes from a position of experience. I appreciate that Duc has made reference to "blog-o-land chatter" to form his opinion which is good enough for me. (Using the analogy - "Where there's smoke - there's fire")



ducati916 said:


> Whether or not May is a clanger, just beware, this is now very much a shoot first ask questions later market. The old Wall St adage may me apt this year: Sell in May and go away. The start of May next week. Would you expect a sell-off into tomorrow's close? Psychological guessing games. The takeaway: no-one actually knows what will happen.






waterbottle said:


> All-in-all, it's a fragile market that's easily spooked with declining stimulus.... IMO the next leg will be down.




*"Sell in May & Go Away"*
@ducati916 suggests a pattern of "Sell in May" might be the "real thing" or it simply could be "confirmation bias" of traders. To his credit Duc will be putting this theory to the test & "so will I".

*Historically*
The market declines around May but it could simply be a "lack of enthusiasm" as historically the month of May has shown lacklustre performances in the past.

*Tracking*
Each day after the close I'll track the XAO Index & compare it to my actual trading results to (a) confirm if the Duc's gut feelings are somewhere near the money & (b) if my trading can ward-off all the "scary comments" that I've recently read on this forum.

Skate.


----------



## Skate (3 May 2021)

*"Sell in May & Go Away"*
One day down & nineteen to go.

*My trading in May 2021 is not off to a great start *
I trust the chart will be easy to read. I'll update the chart daily for the month of May 2021.

*The "Skate" column *
This column indicates that today wasn't a good day as I've drop (-0.22%) of my trading funds, whereas the Index (XAO) dropped only (-0.05%). After one day & already @ducati916 is bang on the money.

*"One swallow doesn't make a summer"*
What's the meaning of the phrase 'One swallow doesn't make a summer'?
A single instance of something is just that - it doesn't indicate anything meaningful (yet).

*Trading results - May 2021

*

Let's hope for a better tomorrow.

Skate.


----------



## AussieStockDawg (3 May 2021)

Skate said:


> *The "Skate" column *
> This column indicates that today wasn't a good day as I've drop (-0.22%) of my trading funds, whereas the Index (XAO) dropped only (-0.05%). After one day & already @ducati916 is bang on the money.
> 
> *"One swallow doesn't make a summer"*
> ...




@Skate; Out of interest - could you add some columns to track the daily total number of equities held (tickers), and number of buy and sells ?


----------



## Skate (3 May 2021)

AussieStockDawg said:


> @Skate; Out of interest - could you add some columns to track the daily total number of equities held (tickers), and number of buy and sells ?




*"Sell in May & Go Away"*
@AussieStockDawg the point of posting my "actual" daily trading results is to compare & contrast this year's results to the previous two years so others can visualise how choppy trading can be when viewed in small timeframes.

*Request*
The additional request you have suggested adds no value to this exercise of "Sell in May & go away". The results posted are from a series of strategies being traded & individual strategies can fluctuate beyond belief.

*Looking at percentages*
If you view trading results in percentages, you quickly become conditioned & accepting. Dollars create a series of "emotions" because you tend to relate the value to something that it can buy. Losing 20% of $2,000 is acceptable, losing 20% of $2m becomes another kettle of fish.

*Converting percentages to dollars*
When you convert percentages to dollars your results take on a new meaning, so don't let percentages fool you into a false sense of security. My trading results today seems small as a percentage (-0.22%) but in dollar terms it's quite a sizeable amount.

*Crash & burn*
There is interest if May (this year) will be profitable or disastrous. I believe I hold a strong portfolio of stock & I'm under "no illusion" that there will be no "bad days".

*With any style of trading success is never guaranteed *
There will be good days & bad days, good weeks & bad weeks, good months & bad months but hopefully no bad years!

*End of day updates*
After the close of each trading day, I'll compare my actual trading results to the movement of the "All Ordinaries Index". By posting an Excel "waterfall chart" allows others to track my performance & contrast my results too their own.

Skate.


----------



## Skate (4 May 2021)

bigdog said:


> *4/5/2021 - ASX 200 expected to rise*




*It was a good day today*
Down one day, up the next. @bigdog's daily prediction has been "spot on" so far (nailing two from two). The rapid rebound from yesterday raises a question for all of us whether to be "in the market" or "sit on the sideline" until May is over, only time will tell or as @ducati916 put it: _"I guess we are about to find out"_

*Uncertainty*
At the moment uncertainty is driving the markets in one direction than in the other with little rhyme or reason. It would be handy to know if the enthusiasm can finally stabilise the markets for the month of May.

*I've been thinking*
The markets are constantly rebounding one day only to retrace the next. Markets that are "all over the shop" is a market hard to trade, but at the moment that's all we have.

*In the month of May*
There will be good & bad trading days yet to come, that's a given, being mentally prepared for this situation will certainly help. To predict the markets perfectly, you have to realise that the markets are "perfectly unpredictable".

*Meaning*
You have to be in it, to win it.




*I've hit the front*
So far so good. Two days down, eighteen trading days to go.




Skate.


----------



## ducati916 (5 May 2021)

Skate said:


> *It was a good day today*
> Down one day, up the next. @bigdog's daily prediction has been "spot on" so far (nailing two from two). The rapid rebound from yesterday raises a question for all of us whether to be "in the market" or "sit on the sideline" until May is over, only time will tell or as @ducati916 put it: _"I guess we are about to find out"_
> 
> *Uncertainty*
> ...





Good morning Mr @Skate, so I have been following your posts over the last couple of days, I have just had a very heavy workload this week, necessitating some early starts. The result, a lack of time to comment. Today, I have a little more time.

Some background facts.


(a). Currently the US markets have a higher participation rate than at anytime since the 1990's Bull market. There is extremely high retail participation.
(b) There is high margin debt.
(c) There is a low cumulative experience level of financial markets.
(d) The data demonstrates that recently, May has been pretty good.
(e) The 'Sell in May' meme this year I feel has been more pervasive and pronounced than it has been in quite some time.
(f) Market makers exert a high short term influence.

Markets are a sum total of their participants. If enough money (as opposed to # participants) believes that something is so, it is so. This belief can be triggered by the MM in the shorter time frames through their manipulation of prices. This is done, usually, because they require stock, or have too much stock: they are balancing inventory. This can sometimes backfire, as they light the fuse that causes an explosion. 

Currently we have a (short term) toppy market. A toppy market is a nervous market. A nervous market is a market easily spooked by any form of selling pressure.

Add to that the constant repetition of the 'Sell in May' meme and you amplify that nervousness. We have an example already of a person, nervous, going to 100% cash. This is normal. What it does however is spread and communicate that nervousness until it is a contagion as trends, even strong trends, start to break down, which really puts the cat-in-with-the-pigeons.

That nervousness is now starting to manifest itself. We will likely see a further attempt at BTD. If it fails, so fails confidence and we will see the panic set in a little deeper, with a slightly deeper correction. At this point, the MM need to step in a steady the ship. Will they? I would say yes (the Fed will also at some point) but if they hesitate too long, they lose it and we'll have to wait on the Fed (again).

So this week will be real cat and mouse of who blinks first as to where we go.


jog on
duc


----------



## Skate (5 May 2021)

ducati916 said:


> So, this week will be real cat and mouse of who blinks first as to where we go. Markets are a sum total of their participants. If enough money (as opposed to # participants) believes that something is so, it is so.




*Today's trading was another up day*


ducati916 said:


> Mr flippe-floppe-flye: started off innocent with* large morning pops, followed by harrowing reversals*




Mr flippe-floppe-flye from @ducati916's "Bull Market May 2021" thread was "todays winner" for forecasting how's today's trading would unravel. Mr flippe-floppe-flye said that he experienced "large morning pops, followed by harrowing reversals". This was exactly how my trading unravelled today.

*Good early gains that turned into a fizzer by the end of trade*
I was counting on a large win today as historically "Thursdays & Fridays" have a habit off ripping my heart out at times.

*For a recap*
I was sitting on a very large open profit last week only to give it all back on Friday (& then some).

*Trader's love profits it's the dopamine that keeps us trading*
It's a timely reminder to remember there are "Closed" profits & there are "Open" profits.

*Note to self*
Skate, repeat after me, "Open Profits" belong to the markets whereas "Closed Profits" belongs to you & don't conflate the two.




*Michael Marcus, a trader who turned $700 into $80 million once said:*
_“Every trader has strengths and weakness. Some are good holders of winners, but may hold their losers a little too long. Others may cut their winners a little short, but are quick to take their losses. As long as you stick to your own style, you get the good and bad in your own approach.”_

*Wish me luck*
I'll need it tomorrow & the next day.

Skate.


----------



## qldfrog (5 May 2021)

Skate said:


> *Today's trading was another up day*
> 
> 
> Mr flippe-floppe-flye from @ducati916's "Bull Market May 2021" thread was "todays winner" for forecasting how's today's trading would unravel. Mr flippe-floppe-flye said that he experienced "large morning pops, followed by harrowing reversals". This was exactly how my trading unravelled today.
> ...



Mr Skate,
I was basically even system wise yesterday  while they  lost 1.3% today, your falls are quite relative not to say benign.
As for Monday your horrendous .22 fall was matched by a 2% one here  : so  even in dollars term, i am probably worse off.
I would bet  most if not all readers would happily switch with your positions ;-)


----------



## Skate (5 May 2021)

*Be done with it*
We all do it but it’s a bad habit to get into. 

*What habit do you ask?*
Looking at the trade after you’ve exited. We tend to keep looking at the trade to see what it does next, so how long should we keep looking at it? 

*We can’t help ourselves*
We’ll keep checking continuously, wanting to see if we made the right decision to exit. Doing so, consumes valuable time & energy instead of moving on to the next trade. Letting a position go can be liberation "but on the flip side" it can make you feel annoyed as hell when you get it wrong.

*It’s feels good to exit at times & lousy the next*
Checking a position after exiting & it keeps going down "making me feel good". But when the position goes straight back up after I exit, it makes me feel lousy. 

*With Harry Hindsight *
Trading has a habit of making me look "good & bad" when it comes to exits, they aren’t all perfect but, in my defence, they are 100% consistent.

Skate.


----------



## Skate (5 May 2021)

*Judging my exit*
Revisiting my closed trades, I sometimes say to myself that’s one of my better exits & in the very next breath, viewing the next exit I start to berate myself. We have all experienced that sinking feeling being hijacked by our emotions encouraging us to do the wrong thing at the wrong time.

*This post & the last - is not about exits *
It's about how emotionally “tied” we are to every trading decision we make. When under the influence of emotions, we surrender our emotional intelligence & this is why trading is such a difficult endeavour. 

*After trading for a few years*
You start to accept “it is what it is” until it isn’t.

Skate.


----------



## Skate (5 May 2021)

qldfrog said:


> Mr Skate,
> I was basically even system wise yesterday  while they  lost 1.3% today, your falls are quite relative not to say benign.
> As for Monday your horrendous .22 fall was matched by a 2% one here  : so  even in dollars term, i am probably worse off.
> I would bet  most if not all readers would happily switch with your positions ;-)




*The importance of money*
When I was young, I used to think that money was the "most important thing" in life, "now that I’m old - I know it is.”

*Losing Money*
No one likes to lose money, but it is an inescapable part of the trading. There is no method that has ever been developed that doesn’t lose money some of the time. The simple reason for this is, trading is probabilistic endeavour. This means that for any given trade, there is a probability that it will be a winner & on the flip-side there is also a probability that it will turn out to be a loser. Losing money is a significant psychological hurdle for traders to overcome even though loss is a natural part of the trading.

*I'm a good winner & a poor loser*
Trading is easier when we all have an attitude that losses are unavoidable. Above all else, "when a trade is on", we are in the lap of the trading gods. The only thing that we can control after we buy a position is "when to exit".

*The problem as I see it *
Trading against rational people, constantly making irrational decisions, is one reason why I have a (41%) win rate.

Skate.


----------



## Gunnerguy (5 May 2021)

Great post !!
You have read my exact emotions and personal questions for the last 5 days.
I closed out my very large (and long) holding in QOZ on Thursday/Friday and since watched it go up (a bit), and the ‘new’ purchases gone down.
Gunnerguy.


Skate said:


> *Be done with it*
> We all do it but it’s a bad habit to get into.
> 
> *What habit do you ask?*
> ...


----------



## ducati916 (6 May 2021)

Skate said:


> *Judging my exit*
> Revisiting my closed trades, I sometimes say to myself that’s one of my better exits & in the very next breath, viewing the next exit I start to berate myself. We have all experienced that sinking feeling being hijacked by our emotions encouraging us to do the wrong thing at the wrong time.
> 
> *This post & the last - is not about exits *
> ...





The other risk that isn't discussed a great deal is: missing the Bull. This is a massive risk. For all manner of structural reasons, markets have moved higher over time. Now that may change, but for the moment, that is the ongoing trend and it is a MASSIVE one. To go to 100% cash is a really significant risk.

You can protect yourself from the bear. You can't protect yourself from 100% cash.

jog on
duc


----------



## martyjames (6 May 2021)

Hi Skate

Slightly off topic - many people who trade systems (and probably discretionary traders too) have had less than spectacular returns in April compared to the earlier months of the year. The XAO is at record highs just about. What indicator (eg sentiment, Adv/Decline, VIX, momentum etc etc) can pinpoint the change in the market? Any thoughts or ideas appreciated

Cheers
Marty


----------



## Skate (6 May 2021)

martyjames said:


> Slightly off topic - many people who trade systems (and probably discretionary traders too) have had less than spectacular returns in April compared to the earlier months of the year. The XAO is at record highs just about. What indicator (eg sentiment, Adv/Decline, VIX, momentum etc etc) can pinpoint the change in the market? Any thoughts or ideas appreciated




*What indicator can pinpoint the change in the market?*
@martyjames I've made over 34 separate posts just on the indicators that I use in my trading. The search feature is you friend but as a refresher, most of my strategies uses volatility & momentum indicators to enter & exit positions. There is a multitude of indicators that can help identify the direction, strength, momentum & volatility but there are two indicators (ROC & ATR) to keep it simple. Typically, most strategies gauge momentum & volatility during price consolidation & retracements which could be something new to try.

*Trend Indicators*
A few simple trend indicators are all you need to see when to enter a position. Entries during trends require almost no brain cells. (ATR) is a volatility indicator, combined with a momentum indicator (ROC) tells a powerful story. A Commodity Channel Index (CCI) is a momentum-based oscillator used to determine overbought or oversold conditions but this indicator is best used in conjunction with additional indicators. The Rate-of-Change (ROC) is another handy indicator & I use the ROC indicator in every strategy that I code to confirm the increasing momentum of a trend. 

*What drives a trend?*
"Volatility & Volume" are the real driver of a trend - meaning we enter a trend on volatility & volume - getting off when the trend turns. It pays to do your own research to find indicators that will work for you. Getting into a trend is not that difficult using an indicator, using two is sometimes better. Getting out of a trend & timing the exit is a little more complex.

*More here*





						Dump it Here
					

Skate.




					www.aussiestockforums.com
				




Skate.


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## Skate (6 May 2021)

*Today*
If you can't say anything nice, say nothing at all.




Skate.


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## qldfrog (6 May 2021)

martyjames said:


> Hi Skate
> 
> Slightly off topic - many people who trade systems (and probably discretionary traders too) have had less than spectacular returns in April compared to the earlier months of the year. The XAO is at record highs just about. What indicator (eg sentiment, Adv/Decline, VIX, momentum etc etc) can pinpoint the change in the market? Any thoughts or ideas appreciated
> 
> ...



We discussed april performance a bit in the last weeks, i believe both Skate and I had a pretty good month, even if erratic.
For me: much better than the first 3 months of this year which saw me loosing around 2/3 of the FY gains.now stabilised and recovered a bit..for the syatems..but have not checked today yet😊


----------



## qldfrog (6 May 2021)

Skate said:


> View attachment 123845
> 
> *Today*
> If you can't say anything nice, say nothing at all.
> ...



I will just say that anything below 1% is not too bad, i get used to much much worse.
Does this help?


----------



## qldfrog (6 May 2021)

Ok a lot of red today here too but kind of ok and getting more and more into cash as my guppy system has been selling and not buying for quite a few days.both volatility into full cash and only daily qfduc nearly fully invested. In my systems i trust😊


----------



## ducati916 (7 May 2021)

Skate said:


> View attachment 123845
> 
> *Today*
> If you can't say anything nice, say nothing at all.
> ...





The following chart illustrates the ASX/SPY:




Currently you chaps are tracking the US pretty tightly. If your stops/exits do not trigger today, I think next week you recover. While the US is very choppy, most of the sectors are holding the line, with the exception of Tech. There is a narrative however (rumour) that Wall St. is attacking Cathy Wood and ARK. There could be a short squeeze hiding in there. If Tech. can generate a squeeze and the w/e is the perfect opportunity, SPY moves higher in a hurry, which, relieves the pressure on the ASX.

jog on
duc


----------



## Skate (7 May 2021)

*I'm wishing for better luck next week*
No matter which chart I use, this was a down week. 









Skate.


----------



## over9k (7 May 2021)

Is this now a loss pr0n thread? 




Do I rebuy after the trend break? 

Did I? 

F**K.



Probably going to top up some more tonight like the total degenerate that I am.


----------



## Skate (7 May 2021)

over9k said:


> *Is this now a loss pr0n thread?*




@over9k no it's not. 

I'm puzzled why you would say this.

Skate.


----------



## over9k (7 May 2021)

I was having a joke to try & make you feel a bit better...


----------



## Skate (7 May 2021)

PinguPingu said:


> *I got absolutely ass-f***ed so far*.





over9k said:


> *I was having a joke *to try & make you feel a bit better...




*Ok, now I see the reference*
Looking at your chart & buy points @PinguPingu nailed your predicament on this trade.

*"Bloody Thursday" *
Thursday was the undoing of my trading this week & looking at your recent trading decisions - didn't make me feel any better at all.



over9k said:


> Probably *going to top up some more tonight* like the total degenerate that I am.




*Shouldn’t we seek out “bargains” when we buy a stock?*
Unfortunately, whether or not a stock actually is a bargain has little to do with how the current price relates to past prices. In fact, the best bargain may actually be a stock that is trading at its highest price & the "worst bargain" may be the one trading at its lowest price.

Skate.


----------



## soren_lorensen (7 May 2021)

barney said:


> Thanks @Skate
> 
> If you are able to come up with something that impressive and you are "time poor"
> 
> ...




haven't come in here in a while but just reading through these notes on vwap and backtesting.

Skate has developed a system using Nick Radge comments on his daytrading system and getting good results.
Barney added - hey use Vwap as an indicator.

Vwap or volume weighted average price is mostly used by intraday traders, typically the 1day vwap or the average price. Some traders will use a 2day vwap as well

Nick system is daily right?, it uses daily prices not intrad-day,

I've never come across anyone using Vwap on the daily systems as an indicator.


----------



## ducati916 (8 May 2021)

Skate said:


> View attachment 123894
> 
> 
> *I'm wishing for better luck next week*
> ...





So the 'UP' day on Friday indicates that you have weathered the storm, a torn sail or two, but enough to still make headway. The US is having a good day today:




I would therefore anticipate calmer waters come Monday and the portfolio to jump higher. Volatility in individual names is mostly higher than an index or sector ETF. The wild swings, while not conducive to stress free living are nonetheless the game that we play.

So I have noticed a significant drop-off in the 'Sell in May' meme. I think the Bears have now missed their opportunity to pour on and push prices lower. Tech. as a sector, was where they had some success, now however with yields falling again, Tech. I suspect will rally. That strength coming back in will obviously boost indices and stocks as a whole, take a cue from indices.

Here however is some further data (that actually sort of corresponds with my gut):






This one I think you will appreciate:





jog on
duc


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## qldfrog (8 May 2021)

ducati916 said:


> So the 'UP' day on Friday indicates that you have weathered the storm, a torn sail or two, but enough to still make headway. The US is having a good day today:
> 
> View attachment 123922
> 
> ...



Love that quote, and true for more than the financial market


----------



## Skate (10 May 2021)

*Back in front*
Good day today, @ducati916 prediction was spot on.




Skate.


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## Skate (11 May 2021)

*Let's talk about the brilliance of John Ehlers*
I should say from the get-go, I a big fan of John Ehlers & his work on low lag indicators. In the context of technical analysis, we are all looking for an indicator that could give us an edge (a slight advantage) when trading & it's usually achieved by our use of indicators or a combination of indicators.

*How to predict the future*
Using any indicator can't really predict the future but they can give us clues or signs or a small piece of information that something is happening slightly in advance to other indicators. Using any of John Ehlers indicators can be somewhat complicated because of the mathematical calculation based on price, volume, or a combination of both.

*A Peek into the Future*
John Ehlers describes the calculation of the “A Peek into the Future” filter could help signal cyclical turning points in the markets. Disclaimer: John Ehlers filters can't actually see into the future, but it may provide signals in advance of other indicators. The "Voss Predictor" is an interesting predictive tool that can identify early turning points of the market. Ehlers suggests that simple crossovers of the forward-looking Voss predictor may become the basis of a trading system but goes on to say that it needs to be used with "an additional trend detector"

*If interested*
More information on the “A Peek into the Future” filter can be found here: https://www.mesasoftware.com/papers/A PEEK INTO THE FUTURE.pdf

*If you are really interested in his work*
His papers can be found here: https://www.mesasoftware.com/papers/

Skate.


----------



## Skate (11 May 2021)

*Bloodbath*
The Cambridge Dictionary describes a bloodbath as* "*a very bad situation in which a lot of harm or damage is caused". Yep, today was a bloodbath.







Skate.


----------



## barney (11 May 2021)

Skate said:


> Yep, today was a bloodbath.    Skate.




I mentioned on the VML Thread that I thought the Market was potentially "nasty" at the moment @Skate 

If chaps like yourself (with excellent coded systems) are suggesting similar

Then I feel I am likely close to the pulse, even though I am 110% discretionary  in my approach, LOL


Being correct, or close to the pulse however gives little solace when the Trading A/C is being* "tested"*  

It's been a difficult period recently, no question.


No "advice" is warranted/required from me, *but,* if I were asked to offer some, 


I would suggest that Punters ... (at this point in time/currently)


Pick their (BUY) Stocks on their *short term* merit, and,

*Cull *(SELL) the under-performers ....  *until* things stabilize!


I'm sure that's a BIG HELP *(Not)* to everyone bleeding cash at the moment


Basically, the above advice in a nut shell would be .... 


*Play the Long Game*


i.e.  Protect your capital to the best of your abilities, so you can come back *throwing punches when things have "improved"*


----------



## Skate (11 May 2021)

Skate said:


> Ehlers suggests that simple crossovers of the forward-looking Voss predictor may become the basis of a trading system but goes on to say that it needs to be *used with "an additional trend detector"*




*The Voss Strategy*
I've just finished coding the "Voss Strategy" & after running a series of backtests it appears to capture an early trend nicely. The buy would have been much earlier if my parameter & filters weren't so harsh.

*The hard work to make the strategy perform (undisclosed)*
1. StaleStopPeriod (undisclosed)
2. Filters (undisclosed)

*For the technical minded (Amibroker)*
Below is a "heads-up" with a few of the arrays that drives the "Voss Strategy" for those who want to have a play. The arrays are self-explanatory. It's vital that the market is bullish & I've used a SMA to handle that aspect. The ROC Filter needs to be positive as well - which means no signal can be taken when the Ribbon displays a yellow bar. 

*It's important to note*
1. The markets need to be bullish (Also, an INDEX Filter is required)
2. The ROC Filter needs to be positive.
3. A Buy is when the Close of the Voss Indicator (BLUE line) is above ZERO & all Weekly Filter parameters & conditions are met.
4. I've used the standard parameters as indicated by John Ehlers (period 20, predict 3)

StaleROCPositive = ROC( Close, staleStopPeriod ) >= 0; //StaleStopPeriod (undisclosed)
Bullish = C > MA( C, 50 );
Voss = Voss AND Bullish AND Filters; //Filters (undisclosed)
BuySetUp = (C > Voss AND INDFilter) AND StaleROCPositive;

*Recent Backtests*
I've completed two recent backtests to display that the "Voss Strategy" is worthy of future development as the initial results aren't too shabby at all.
*
Backtest periods*
(a) 1st January 2021 to "end of close today" 
(b) 1st March 2021 to "end of close today" 





*#1. Charts*
(ASX:NEC) Displays that the position is still in play. The lower part of the chart displays the Voss Indicator (BLUE Line) that precedes the Filter (RED Line). The yellow line is the "ZERO" line. No position can be executed when there is a yellow ribbon displayed.





*#2. Charts*
(ASX:ABR) Displays that the position (ABR) is still in play "BUT" it's marked as a sell today (actionable on Monday). The lower part of the chart displays the Voss Indicator (BLUE Line) that precedes the Filter (RED Line). The yellow line is the "ZERO" line.





*The Voss Strategy*
Using the Voss indicator & bullish indicators makes for a simple trading strategy, ideal for those just starting out.

Skate.


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## Skate (11 May 2021)

barney said:


> #1 Pick their (BUY) Stocks on their *short term* merit, and, *Cull *(SELL) the under-performers .... *until* things stabilize!
> #2. Play the Long Game




@barney, as usual your posts are spot on. 

*I'm suggesting*
For those who are new to trading or feeling nervous in the markets at the moment heed Barney's #1 advice - for all others go for option #2.

*Tomorrow*
Is another day.

Skate.


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## Skate (11 May 2021)

*Sad day for most*
@CNHTractor, I appreciate the sad emoji as it a true indication of today's trading. I'm fully invested & dropping 1.27% of my trading capital hurts like a bitch even though the small bend of the equity curve doesn't represent it.







Skate.


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## barney (11 May 2021)

Skate said:


> @barney, as usual your posts are spot on.
> *I'm suggesting*
> For those who are new to trading or feeling nervous in the markets at the moment heed Barney's #1 advice - for all others go for option #2.




Thanks for the vote @Skate 

We obviously work in different areas of the Trading spectrum, but currently see a similar "pattern"

I'm a Muso and "play by feel"  At the moment, the rhythm is;  Very syncopated , LOL



a)  Macro:   I think the overall Bull Market is still well in control (My opinion, but may be proven incorrect in time!) 

b)   The Spec end (where I live) is the first "end" to become *fragmented* when the "worm turns"  

c)    Short term (now till end of June etc), I think there will be plenty of pushing and shoving in many Stocks

d)    The Spec end is *definitely showing fragmentation* /slash bugger/damn and other moderate expletives to suit, lol

e)     We are at a *difficult time of the year *(in general) to assess the future  


f)    Systems Traders should perhaps, "*tighten" *their parameters!

g)    Discretionary Traders should perhaps, make sure they "*know their stuff*" (personally speaking)


Times are currently not easy ... but they could easily become a lot more difficult

Apologies for my  ranting ... It's been a difficult couple of weeks


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## Skate (12 May 2021)

Skate said:


> *Let's talk about the brilliance of John Ehlers*
> I should say from the get-go, I a big fan of John Ehlers & his work on low lag indicators. In the context of technical analysis, we are all looking for an indicator that could give us an edge (a slight advantage) when trading & it's usually achieved by our use of indicators or a combination of indicators.
> 
> *How to predict the future*
> ...




*What is the difference between “real trends” and random price fluctuations?*
The difference is anyway determined in hindsight. Trading with the trend is touted without anyone completely explaining how to go about capturing it. Trends exist in all time frames & I for one believe a "part of the trend" can be exploited but not the full trend. What traders fail to realise is that for a trend to continue it needs momentum once the movement has started. (That should be rule #1)

*I try hard to promote new ideas*
Exploiting a trend is becoming harder & harder to do these days because we all try to buy as close to the start of a trend & selling once the momentum has ended. The problem is that we all assume that the trend begins at the bottom of a price curve & ends at a peak, unfortunately capturing that "description of a trend" is just not possible.

*The brilliance of John Ehlers shouldn't be underestimated*
This mathematician explains his methodology in plain English. (Even his code is supplied). His main concern is establishing a trend & then refining the entry to grab an advantage over most other traders. I believe my previous post about the "Voss Predictor" fell on deaf ears just as my posts on the DSMA Indicator back some time ago. Both indicators are worthy of a second & third look. (Use the search feature if interested)

Skate.


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## qldfrog (12 May 2021)

Skate said:


> *What is the difference between “real trends” and random price fluctuations?*
> The difference is anyway determined in hindsight. Trading with the trend is touted without anyone completely explaining how to go about capturing it. Trends exist in all time frames & I for one believe a "part of the trend" can be exploited but not the full trend. What traders fail to realise is that for a trend to continue it needs momentum once the movement has started. (That should be rule #1)
> 
> *I try hard to promote new ideas*
> ...



Mr Skate,
It takes time to trial this so while i did not answer i built a dsma system.not bad but not beating existing systems yet.
Will be part of a syatem i would already have launched were we not in May😊


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## Skate (12 May 2021)

@qldfrog, *it's hard to have an edge trading these days*
But on many occasions John Ehlers have freely given us the tools but unfortunately not many traders other than yourself take up the challenge to test out his ideas. Over the years trading his indicators have proven to be profitable for me & I also believe they can be profitable for you as well. All of his indicators seek to give you the advantage of "time" allowing you to entry into a position before the herd.

*DSMA Indicator*
I have a compete trading system built around his DSMA indicator & performance is respectable & it’s pleasing to see that you have taken the effort to investigate it further. John Ehlers “A Peek into the Future” filter isn't new as I've had the filter in the "to do" basket since 2019. As there is less chatter in the "Dump it here" thread it was the perfect time to make a post about John Ehlers & his indicators . Up until yesterday his "Voss Filter" was collecting dust. I now believe I should give it the same respect as I've given his DSMA Indicator.

*Read more about the DSMA indicator here*


			https://www.mesasoftware.com/papers/DEVIATION%20SCALED%20MOVING%20AVERAGE.pdf
		


Skate,


----------



## peter2 (12 May 2021)

@Skate 's posts are always read with interest. 

You said it yourself, the start of trends can only be identified in hindsight. All attempts to identify them at the time will be an exercise in probability. We may be correct at the time or we may not. 

All your back tests have conclusively shown that it doesn't matter if we can't identify the exact start of the trend. If we manage the exits well we can create a positive edge. This is the most important aspect of a profitable trading system. 

All attempts at identifying the start of a trend and you've posted heaps of indicators that do the job, look for the same thing, price moving off a swing low. Of all the indicators mentioned in this thread, what does the best job? 

Does ROC beat Supertrend, DSMA, VOSS, etc. ?  The circular game, rock, paper, scissors comes to mind. 
I don't think we'll get an answer to this question as the statistical analysis would need to be extremely rigorous. 

I use the supertrend profitably as it fits my beliefs about market behaviour. This belief states that all price movement within 1x ATR is noise on every time frame that is examined. I want to look at price when it moves out of the noise for the first time. Especially when price moves out of a consolidation or a volatility squeeze or after a higher low on multiple timeframes. Include a pinch of high volume and that's my recipe for an entry tactic.

@Skate uses the ROC very profitably. I've no doubt that he could use the DSMA or VOSS just as profitably.


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## Skate (12 May 2021)

*I'm over reacting*
In the scheme of this year's trading, it's just a slight blip on the equity curve. The month of May could be referred to as a "correction month" to get the house in order for the end of the financial year.

*8 Days down & 12 Days to go*
My trading has not changed "one iota" & neither has any of the positions that I own in my portfolio - but the equity chart doesn't reflect these comments.





Skate.


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## qldfrog (12 May 2021)

Skate said:


> View attachment 124162
> 
> 
> *I'm over reacting*
> ...



For my systems, this is more of a cash all situation, a slight reinvest on monday but 72% cash tonight, and no discretionary decision here, nor trailing exit engaged.it shows how conservative my systems are following covid crash
You will probably end well ahead as i am not sure we are in crash situation yet


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## Skate (12 May 2021)

qldfrog said:


> For my systems, this is more of a cash all situation, a slight reinvest on monday but 72% cash tonight, and no discretionary decision here, nor trailing exit engaged.it shows how conservative my systems are following covid crash
> You will probably end well ahead as i am not sure we are in crash situation yet



@qldfrog that a good point. Traders do get muddled using terminology & how it applies to a trading system versus a trading plan & trading strategy.

*I tend to focus on being consistent*
We are both widely travelled & know that McDonalds is a profitable company because of consistency of their menu (worldwide). Consistency & profits fit hand in glove. I aim to be a profitable trader & I achieve this (IMHO) by being a consistent trader. I'm fully accept that my trading results are going to be patchy at best.

*Plain speaking*
The video below explains in minutes what it takes me over multiple posts about the important step towards becoming a consistently profitable trader. If you don't know how to break down your system properly, it makes the task of becoming consistent with your trading even more difficult. This video features diagrams and a practical task to help you build your trading system. A very important lesson for all traders.



Skate.


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## peter2 (12 May 2021)

Skate said:


> *I'm over reacting*
> In the scheme of this year's trading, it's just a slight blip on the equity curve. The month of May could be referred to as a "correction month" to get the house in order for the end of the financial year.




I'm so glad you posted that. Phew!  
I've been strongly resisting posting similar comments. Trading weekly charts allows you to ignore the daily gyrations. 

I was getting some sadistic pleasure from seeing you post like a day trader. @Flipp-Floppe-Skate


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## Skate (12 May 2021)

peter2 said:


> I'm so glad you posted that. Phew!
> I've been strongly resisting posting similar comments. Trading weekly charts allows you to ignore the daily gyrations.
> 
> I was getting some sadistic pleasure from seeing you post like a day trader. @Flipp-Floppe-Skate




@peter2, I post in a way that encourages others to read the thread. I'm going to use the word "consistently" till others understand the importance of the word & how it relates to profitability.

*flippe-floppe-Skate*
The "Dump it here" thread has been very sedate of late & I'm trying to be emotive so others can feel what live trading is really like. Posting my live trading results for the month of May indicates how difficult it is to be "consistent", thus displaying how difficult it is to be "consistently profitable". One look at my Equity curve & my results are all over the shop but it demonstrates I'm "consistently profitable" & that's the reason I made the last post.

*The month of May*
So far, the month of May is displaying "red" but really the monthly results are still "swinging in the balance" & at this stage it's too early to call.




Skate.


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## peter2 (12 May 2021)

Yes, I understand that the recent daily posts provide constant interest in the thread. It also provides time for us to fully digest and research the important aspects that you mention so well.  

I know you've been a little tongue in cheek with your daily emotional comments. I chuckle at the "fish out of water" flip flopping but it happens to us all. I've flipped and flopped a few times over the past months. 

My recent example,  *AIS* (my current monthly comp selection). I sold after the reduced production report and I'm happy with the sell at the time. My error was not re-buying after the 1st blue bar with above average volume. I flopped then like a stunned mullet I didn't flip into the next trade. 




The thin red line below price is the weekly exit indicator.  No sell triggered yet. The weekly chart keeps us out of the daily gyrations.


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## qldfrog (12 May 2021)

Skate said:


> at this stage it's too early to call.



everything can change within a few days, 
but being mostly cash for example  as I am, also ensure my weekly systems have low chance to go into significant profit before the end of the month, whereas it is a clear possibility for Mr Skate fully engaged portfolios.
So please keep us posted with the overall gyration this month!! And it feels better not to hurt alone


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## Skate (12 May 2021)

qldfrog said:


> And it feels better not to hurt alone




*Boxing analogy*
I try very hard not to relate boxing with trading these days but the two disciplines are so similar in application. Trading & boxing both require extreme concentration so you can execute with precision. I can tell you from experience, even when you win your body doesn't feel like it has. Even with good (boxing or trading) skills, you'll still get hit, it's just the nature of the game.

Skate.


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## Newt (12 May 2021)

Think you've been putting some excellent thought provoking ideas up lately Skate.  Also confident there are many listening and learning.

Last 2 years have been extremely educational for many including myself.  Bit disappointed still not reliably generating profits as large as hoped, but finding your running commentary for May extremely close to figures here.  Would rather continue to learn and improve profits than be too aggressive and "crash and burn".

p.s.  my primary system currently incorporates DSMA.  as Qldfrog has said, can take quite some time to:
- read up 
- try to incorpoarte
- debug
- backtest and trial in real life trading
- trust and implement


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## ducati916 (12 May 2021)

Skate said:


> View attachment 124162
> 
> 
> *I'm over reacting*
> ...







jog on
duc


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## AussieStockDawg (13 May 2021)

Will today be a green day 🤔


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## qldfrog (13 May 2021)

AussieStockDawg said:


> Will today be a green day 🤔



Aussies are forever optimistic even in the face of facts so i would not be surprised.she'll be right mate, btd


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## Skate (13 May 2021)

*Today was an up-day *(pep talk to myself)
Any day I don't lose is considered a good day. When we think about trading, we often imagine how good it feels to achieve a big win or how good it feels to experience a series of winning days or weeks. These big wins are great, but they are relatively rare. The good news is that even small wins can boost the overall profits tremendously. (Little fish are sweet)



qldfrog said:


> Aussies are forever optimistic




*What is the best way to motivate yourself?*
By being optimistic, a way of staying positive knowing that tomorrow can be a better trading day than today. The win today might be the start of the recovery process (who knows). Down days have a habit of grounding you as a trader. Compounding a string of losses is not unusual when "trend trading" so don't feel all is lost. In reality, trading can turn around on a dime these days.

*Is there sufficient time to turn May around?*
Yes, even small wins can boost the portfolio into profits.

*On the flip side*
Additional small losses can drive my portfolio so low that a recovery will not be possible.

*Being realistic *
I'm not saying all members are average traders but in reality, "most of us are". Being average is "quite ok". Sometimes "luck" is all you need to be a profitable trader.





Skate.


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## Skate (14 May 2021)

cynic said:


> how free will can coexist with causal determinism?





ducati916 said:


> I hold that free will is the true position





cynic said:


> How can you rightly claim to have successfully proven the existence of "free will" without first disproving "causal determinism"?




*Off topic*
This post appears to be off topic but there is a purpose that will be canvassed in my next post.

*I've been thinking about "Deep thinkers" & "Free will"*
After reading a variety of post back in May 2018 between @cynic & @ducati916 - I've come to the conclusion that having an open mind allows you to enjoy both sides of a position.

*Do we really have free will?*
Our belief system is so deeply ingrained in us, most people will have a closed mind when we raise the idea that "Free will" doesn't exit. It’s only human nature to reject information contrary to what we want to believe. Meaning, a person will believe what they want to believe & reject an idea put to them that is contrary to their thinking. (But academically it's not the case)

*A long read but worthy of your time*
@ducati916 recently raised the idea about "free will" & referenced an article to read. I have my own view when it comes to the question of free will & personally believe "free will" is due to causation. Meaning, every choice you have ever made has been determined in advance & you wouldn’t have made a different selection if given the choice over again. In essence your actions belonged to an unbroken chain of causes.

*If interested - please have a read*
https://www.theguardian.com/news/2021/apr/27/the-clockwork-universe-is-free-will-an-illusion

*In my opinion*
"Free will" or "acting freely" is nothing more than causation of our conscious choices ultimately linked to our belief processes.

Skate.


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## Skate (14 May 2021)

*We all enjoy a new hobby*
Recently I made a post that "I quickly deleted" asking for advice on how to get my enthusiasm back when it comes to trading. I enjoyed the thrill of trading & to be honest initially it was fun, but like a golf game, it became an obsession.

*I received a private message last week *
A member suggested a couple of good "system" trading books that he was currently reading & thought I might like to read them as well. Another suggestion was to investigate a different trading system "software" as an alternative to Amibroker.

*Building Reliable Trading Systems* (Keith Fitschen)
One of the trading books he is reading did give me the inspiration to become more involved, getting me out of a slight slump reinvigorating my mojo as trading had become boring for me. Initially I was drawn to the book because of its title "Building Reliable Trading Systems". After reading it I realised the book aligned with my belief "how to trade profitably". The similarities with my trading methodology & the words expressed by Keith Fitschen were simply amazing.

Skate.


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## Skate (14 May 2021)

*Building Reliable Trading Systems* (Keith Fitschen)
Keith Fitschen book explains how to create, test & implement a profitable trading system. While successful trading systems work in most cases, they work very well in "trending" market, but perform less satisfactorily at other times. Clear examples are displayed in his book to reinforce the point of view. Keith Fitschen book was interesting & educational.

*Why did I enjoy reading the book?*
Mainly because it aligned with my way of trading. Confirmation bias at times can be difficult to spot because we all have the tendency to embrace information we believe. Of the many forms of faulty thinking that have been identified, confirmation bias is amongst the worst.

*"Free will" is due to causation*
If we believe we have "free will" to make our decisions it's only reasonable to assume we will make that decision from sound judgment. But what if we don't have "free will" or our "decision making" process is flawed on that assumption. In essence those decisions are made not from "free will" but from an unbroken chain of causes leading up to making that decision. It’s hard to conceive of a more serious design flaw than "confirmation bias & free will" banded together when it comes to our trading decision process.

*The way I see it *
We don't have "free will" because all of our decisions are made from the same pool of thoughts. Until we are challenged, we won't experience the alternative. I'm hoping that this post challenges "the way you think" rather than "what you think".

*Summary*
I cast aside "free will" & "confirmation bias" knowing that "perception" & "emotions" drives all of our trading decisions & not sound judgement. "Perception" & "emotions" are two feelings that are more important to get "under control" before "they control you".

Skate.


----------



## qldfrog (14 May 2021)

Skate said:


> *Off topic*
> This post appears to be off topic but there is a purpose that will be canvassed in my next post.
> 
> *I've been thinking about "Deep thinkers" & "Free will"*
> ...



My own belief is it is indeed linked to previous events etc, and indeed probably does not exist as fully free will but what is dangerous is the notion of " there is no free will"
For the lesser mind..can i say that?
This new certitude will have consequences:
I raped her, murdered him, bombed the place but had no choice.so i can go scotch free...
And actually society does already act like that: he is insane so not guilty of...
Religions are a good example of denial of free will: the war cry before exploding the bomb vest or crashing the plane,etc
Denying free will is in my opinion denial of society as we know it with its rules laws etc etc
whether real free  exists or not, does not matter.individuals have to be responsible of their acts, and stating free will exists ensure this...
Ok..i am not a philosopher, a science guy, so definitively deterministic approach, and decision is results of firing neurones in brain which see no free will in play, just brain previous training and synapses as a results of life so far, plus random colision with various radiations.cosmic, xray, too much tv when young or sunbaking.
Ok back to shares


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## Skate (14 May 2021)

*Missed it by that much*








*Summary*
After two weeks of May, I'm close enough to being square.

Skate.


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## qldfrog (14 May 2021)

Skate said:


> View attachment 124273
> 
> 
> *Missed it by that much*
> ...




vs the frog who lost 3.8% while hardly invested...That's why it is hard to believe Mt Skate being  scared by a 1% fall in his portfolio


----------



## Skate (14 May 2021)

qldfrog said:


> vs the frog who lost 3.8% while hardly invested...That's why it is hard to believe Mt Skate being  scared by a 1% fall in his portfolio




*Being scare is the wrong terminology *
@qldfrog, FYI, I’m fully invested “all the time” as every soldier is “put in the battle” to fight the good fight.

*1% seems insignificant but dollar wise it’s enormous*
I recently made a post how talking about percentages you quickly become desensitized to its real value. Relating a loss in percentage & converting it to dollars is sobering.

Skate.


----------



## qldfrog (14 May 2021)

Skate said:


> *Being scare is the wrong terminology *
> @qldfrog, FYI, I’m fully invested “all the time” as every soldier is “put in the battle” to fight the good fight.
> 
> *1% seems insignificant but dollar wise it’s enormous*
> ...



To be clear
The "hardly invested" relates to the current mostly cash position of most of my systems.
Not a deliberate position but the result of systems many sells  but no buy.


----------



## peter2 (14 May 2021)

@Skate  Thanks for the recommendation to read the *Keith Fitschen* book. I read it this afternoon and I also enjoyed it. It's disappointing that he didn't attempt to create a trend following system on stocks. I understand why he chose to use commodity markets for that. The system created for stocks was a mean reversion model. 

There were lots of interesting comments throughout the book and he debunked many misleading trading statements. 
eg "The exit is more important than the entry".  How did you like his argument there?

One interesting point was that his Nasdaq-100 equity MR back-testing revealed that 45 positions was the optimum number for the best "gain for pain". 

I liked his distinction between Max DD and Average Annual Max DD (AADD). The aim for the trader is to have a system where the AAR is many times the AADD but must also be prepared for the MaxDD to appear again. 

The most interesting note for me was the effect of the addition of hedging into the long only portfolios. Including only two short positions ( long inverse ETFs) in a 45 position portfolio significantly reduced the DD without significantly reducing the overall profit. That is worth more research I think. 

The _pièce de résistance _was seeing how the two systems together (commodity trend system, equity MR system) massively reduced the DD.




Thank-you and the member who suggested it to you.


----------



## Skate (14 May 2021)

peter2 said:


> @Skate  Thanks for the recommendation to read the *Keith Fitschen* book. I read it this afternoon and I also enjoyed it. It's disappointing that he didn't attempt to create a trend following system on stocks. I understand why he chose to use commodity markets for that. The system created for stocks was a mean reversion model.
> 
> There were lots of interesting comments throughout the book and he debunked many misleading trading statements.
> eg "The exit is more important than the entry".  How did you like his argument there?
> ...




@peter2 the other book that was recommended for me to read was  - “The Ultimate Trading Guide” by Pruitt Hill. The private message was from an experienced well respected member that heightened my interest in both books. There were additional articles referenced for me to read that I’m working my way through. It never ceases to amaze me the generosity of others.

Skate.


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## jats (14 May 2021)

Extract of Peter2's commentary directed at Skate, focusing on the importance of exits. 


peter2 said:


> There were lots of interesting comments throughout the book and he debunked many misleading trading statements.
> eg "*The exit is more important than the entry".*  How did you like his argument there?



Having watched this forum for a while before registering I've recognised that Skate appears to have crafted a  brilliant combination of exits within his strategies, I've been wondering for a while if Skate would humour us using a random function or something equally unintelligent as an entry criteria just to highlight the importance of a well controlled exit.

J


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## Skate (15 May 2021)

peter2 said:


> There were lots of interesting comments throughout the book and he debunked many misleading trading statements.
> eg "The exit is more important than the entry". *How did you like his argument there?*





jats said:


> I've been wondering for a while if Skate would humour us using a random function or something equally unintelligent as an (1) entry criteria just to highlight the importance of (2) a well controlled exit.




@jats, I'm unsure if I understand your question. @peter2 referenced Keith Fitschen book that debunks what I've been preaching for many years. I believe "exits are more important than the entry". I now admit that the "entry" is "significant" but still not as significant as timing the exit correctly. The exit "determines" the profitability of the trade "not" the entry.

*The jury is still out*
There are many who support my view that "the exits are more important than the entry" & there are many who express the alternative view. I gave a fleeting second to the idea of making this post "long & boring" as a reference when I'm asked this question again but I have decided to spread my answer over a series of posts.

*Let me summarise *
Summaries are normally at the end of my posts but I know from experience readers will either (a) skim the post or (b) become exhausted before getting to the end. 

*So here it is*
The fear of loss is greater than the desire to win. Cut your losses, let your winners run "that is the exit talking". With that in mind the exit becomes more important, whether in profit or loss. 

*Here is the fallacy*
1. Good entries can work with "ok exits", but "ok entries" will require "great exits". We are only average traders applying "ok entries" making the exit so much more important.

More to follow.

Skate.


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## Skate (15 May 2021)

*Before going any further*
@jats you spoke about the entry as well as the exit & the relationship between the two. If I've deciphered your question correctly this post might help.

*I want to pose a question to you *
Would it be an advantage "having only two colours displayed on a chart" to indicate when to be on a position & when to be off it?

*Simple & clean *
All charts are hindsight charts but as every trader knows our decision is made on the right-hand side of the chart (the very last bar) not knowing what the next bar holds. Well, trading the "Ducati Weekly Blue Bar Strategy" you don't need to worry about that as the colours guide you in what to do next.

*"The Ducati Weekly Blue Bar Strategy" *
As you have referenced @peter2 I would like to take the opportunity to display (4) of his current positions (1) VMY, (2) ASO, (3) MLX, & (4) PAN to make my point for you to understand when to get on & off a trade. Using Peters signals means the positions haven't been "cherry picked".

*Why do we enter a trade & why do we exit? *
The reason you get on & off the trade has already been discussed many times before in this thread. The charts below are easy to understand as it comprises only red & blue bars. The colour of the bar indicates what you should do next. If you follow the colour coding you would be rolling in money trading this strategy.

*Buy Bar versus the red bars*
If you only traded the "Ducati Weekly Blue Bar Strategy" signals you would be handsomely rewarded. There is no simpler strategy to understand & follow because the first "Blue Bar" is the signal bar, meaning we enter the position on the next day at the open. We sell the position on the 2nd red bar as the first "red" bar is the signal bar.

*In a nutshell*
We buy on the 2nd "Blue" bar & sell on the 2nd "Red Bar"



peter2 said:


> Lots of big down bars and consecutive down bars this week indicating time to sell.
> 
> *Open positions:* *(1)* *VMY, (2) ASO, (3) MLX, (4) PAN*




*# (1)* *VMY*





* # (2) ASO*






*# (3) MLX






# (4) PAN*





*Recent posts*
I've recently posted about "The Ducati Blue Bar Strategy" & the "Duc Indicator" both brilliant ideas. Since Duc has dropped those gems, I've been hard at work trying to develop them further but I'll bet you pounds-to-peanuts not one reader is running with @ducati916 ideas.

*Turning points of a trend*
I displayed "The Ducati Blue Bar Strategy" to demonstrate that it picks turning points within a trend, whether it be a trend continuation or a start of a new uptrend. "The Ducati blue bar strategy" is definitely not a "Mean Reversion" system.

*Use the search feature *(it's your friend)
I've also mentioned "Ducati Stop & Go Indicator" that is just as simple to use & it worthy of a search or two. "The Ducati Stop & Go Indicator" displays red & green bars indicating when it's safe to trade & when it's not. (Knowing this one fact can be rewarding)

*Rule number #2 *
If you want to be a consistently profitable trader "keep your trading simple"

*Summary*
@peter2 has acquired skills to determine when to exit a position where I have "Red Bars"

Skate.


----------



## Skate (15 May 2021)

*"The exit is more important than the entry"*
@peter2 remarked that there were lots of interesting comments throughout Keith Fitschen book & going on to say that the book debunks many misleading trading statements. As an example, "The exit is more important than the entry" & wondered how did I like his argument. All I can say I have my opinion & he has his.

*I've elevated the "entry" to "significant"*
Most traders concentrate on the entry believing if the "right" stock is bought at the "right" time all will work out in the end.

*In my experience, the correct timing of the exit is where the money is ultimately made *
Cutting losing trades early & holding better positions is the secret of being a profitable trader. Alternative views have already been expressed in this thread that "buying" is most important to successful trading. Recently I've changed my thinking & now have elevated the entry to "significant" however, with mechanical trading, timing the "exit" is still the hardest part to get right & the most important.

*Case for the affirmative* (exits are more important)
1. The most important part of any trading system is capital preservation.
2. Preserving capital in the way of taking a profit when it is given & taking your loss according to your trading plan.
3. Picking where a trend might end is difficult but not impossible
4. Momentum is easy to spot so entry is pretty straight forward but an exit isn't.
5. The list goes on & on..

@jats, *your question*
Merely re-opened a tired old debate as to which is the most important (entries or exits) is a futile exercise as most traders have a "closed mind" when either is mentioned. I truly believe there won't be a flood of responses as to which is more important as it's been canvassed to death many times before. The views I hold when it comes to trading is not the views that's held by many. The "Dump it here" thread is the perfect platform to express an alternative view rather than debating which is correct.  Expressing your view is the point of this thread.

Skate.


----------



## Skate (15 May 2021)

*Holding on to a trade too long*
I've heard too many tales of traders hanging on to a position too long to make a few extra bucks. Also, traders get into the habit of watching their accumulated profits vanish because they were hoping that prices would go back up.

*Don't focus all your energy on entries *
Traders want the best entry possible but studies have shown that it is the exits from your trade that really matter. It's hard to comprehend that performance of a random entry strategy can be improved by a proper well-defined exit strategy. I've recently posted a YouTube video where Martyn Tinsley explains this very scenario. Many professional traders often comment that one area that they have "never mastered" is of exiting their trade at the right time. Nonetheless, exiting from a trade makes all the difference to a trader’s profit.

Skate.


----------



## Newt (15 May 2021)

As enjoyable as it is to debate the importance of entry, exit, money management, psychology the real answer might be in the 2nd post of Skate's thread:
	

		
			
		

		
	



The table isn't going to work too well without all of them, so perhaps what we're really debating is the height and shape of the table???  i.e. every trade may have their own preference on system rules, and equity curve.


On market filters and taking positions, could I quiz you for a moment please Skate?  Many of us have incorporate market regime and "GTFO" filters to some  degree.  Just listening to Qldfrom and youself discuss this a few posts ago, it sounds like you have few (no?) filters that stop you taking your general entry positions.  Rather, diffiicult regimes (e.g. XAO down, VIX up) trigger a tightening of trailing stops (e.g. % trailing stop) which is more likely to tip you out weak positions.  However you continue to but replacement positions until every dollar is invested presumably unless market is in a full blow COVID GTFO situation?


Just occured to me, comparing the way systems handle the number of positions held and those purchased may end up like another table discussion too.   No one right way way to do it obviously.  In Sat afternoon detective mode and curious, that's all.......


----------



## Skate (15 May 2021)

*Trade exit strategies form the part of your trading plan* (that help you profit)
Buying the correct position & the correct number of shares is all to "no avail" if you do not know when to exit a position. In fact, having a definitive exit strategy is as important as defining your entry. 

*Watch this short 3:49 minute YouTube video from Nov 2009*
It perfectly demonstrates why exits were important back in 2009 & just as important in today's trading 

(7) Perfecting Trade Exit Strategies - YouTube

@Newt, Ill break my concentrated to answer your question in my next post as it requires a metered response.

Skate.


----------



## Skate (15 May 2021)

Newt said:


> could I quiz you for a moment please Skate? - Many of us have incorporate market regime and "GTFO" filters to some degree. Just listening to Qldfrog and yourself discuss this a few posts ago, *it sounds like you have few (no?) filters that stop you taking your general entry positions*.




@Newt *that's a great question*
Let me start off - you have used the terminology "market regime filters" where others use the term "Index Filters". If I understand your question correctly, they are one & the same.

*First off *
I want to say I use "heaps of filters" with my trading.

*I've changed my thinking*
When I first started out trading in July 2015, I followed the recipe of Money management, Index Filters, Position sizing & all the crap touted at the time. Using what I'd read got me started as I knew nothing about trading back then. Strictly staying with what I'd read ended with me making a few bucks but nothing to write home about.

*Being an average trader was not my ambition*
There is nothing wrong with being average but I strive for perfection in everything I do. Let me qualify "perfection" as it relates to my trading. Perfection, means doing everything right to the best of my ability & anything short of that is not acceptable. (AFAIC)

*Index filter*
Everyone has heard the expressing that a "tide lifts all boats" well that to me is like saying "buy low & sell high" both expressions mean very little until it's been explained in more detail.

*Let's examine an Index Filter a little closer*
The Aussie market is driven by a handful of companies (banks & miners) so should that really dictate when I should buy a position? "Absolutely not". I want to buy positions that display momentum & volume. When the "Index Filter" is off doesn't mean there are no other opportunities, that's just silly.

*No Index Filter for me on the buy side*
So, it's correct to say my trading is not reliant on an Index Filter to enter a position.

*I have a multitude of filters*
Basically, an "entry condition" changes into a "buy condition" when all filter parameters have been met to "time the entry". @peter2 explained one of those filters that I use a few posts back being the ROC. How I use the ROC varies between strategies but it's the main decider if the trend is worthy to enter. (The Index Filter plays no part)

*With boxing*
You can't win a fight without constantly throwing punches, not all land but that's not the point of the exercise. You don't win fights by "sitting on your hands" in the corner. Every punch needs to be executed with precision while protecting yourself. It's this combination that ultimately decides if you will be successful in the end. I hope you can see the similarities between the two sports (boxing & trading)

*T.I.N.A.*
Let's say there is no alternative other than "Term Deposits" how much would you commit to this endeavour? I don't know about you or @qldfrog but rest assured I'd invest "it all" & that's how I handle my trading. Having soldiers in the barracks doesn't win a war. If I had to fight a battle, I would employ every soldier to get the job done, leaving "some" back in the barracks just don't cut it for me.

*Long posts*
No one likes to read long posts, so I'll conclude it here.

Skate.


----------



## Newt (15 May 2021)

Thanks Skate and sorry if disturbed you being "in the groove" with something.

I should have mentioned in my question that even with  no index filter (yes, agree, same thig as market regime filter) in strong bear markets the opportunities for breakouts on price and volume will dry up and obviously then your number of positions will fall. 

Appreciate the measured response.   As background to the question, I've recently been trying to get away from limiting my trading to the XAO universe where possible.  While trying this, some systems perform better with an index filter buy condition, whereas I almost never did so in the past.  

One might expect the All Ords (XAO) universe to be a little more predictable, so it might be that in this case additional Buy filters around market regime have more value than in the "limited to XAO" situation.


----------



## Skate (15 May 2021)

Newt said:


> Thanks Skate and sorry if disturbed you being "in the groove" with something.
> 
> I should have mentioned in my question that even with  no index filter (yes, agree, same thig as market regime filter) in strong bear markets the opportunities for breakouts on price and volume will dry up and obviously then your number of positions will fall.
> 
> ...




*A simple explanation*
Put four traders in a room together & they will all have their reason why they "enter & exit" a position. Put four "system traders" in another room & their reasoning behind why they enter a trade can be just as dramatic & diverse.

*Trading is a basic process*
We all tend to over think trading but when you strip back trading to the bare basics it's all about trading the price differential, catching trends, knowing when to get in & more importantly when to get out. Money management takes care of the rest.

*Price differential*
I'm not a fancy trader, I jump on confirmed trends & hop off in a timely manner looking for the next ride. Trends are happening in all timeframes & market conditions. Picking the strong movers is the secret. Knowing when to hop-on & hop-off is the tricky part & the purchase "needs to be timed". Timing is everything in this game & boxing.

Skate.


----------



## Newt (15 May 2021)

Skate said:


> *# (1)* *VMY*
> View attachment 124305
> 
> 
> ...




Just on the subject of caution around trading stock index universes, some of these stocks were in the All Ords at various times, but if I'm correct none of the 4 were in the XAO at the point of Buy for the nice trend trades shown.

Survivorship bias is tricky where something like platinum Norgate isn't available.  Another option of course is selecting suitable buy and sell conditions on all listed ASX stocks regardless of index universe.

This doesn't mean the Ducati Blue Bar strategy isn't a powerful system - I'm only suggesting people be careful that by using the XAO universe you may think you're finding entries in backtests for a stock that has moved up quite a lot, but might not have actually appeared as a buy in the past (before entry to XAO) or possibly after removal from XOA (e.g. MLX left XAO around June 2020).

PAN left XAO June 2020, re-entered March 2021, and so might appear in a backtest using current XAO.


----------



## Joe90 (15 May 2021)

Skate said:


> I've recently posted about "The Ducati Blue Bar Strategy" & the "Duc Indicator" both brilliant ideas. Since Duc has dropped those gems, I've been hard at work trying to develop them further but I'll bet you pounds-to-peanuts not one reader is running with @ducati916 ideas.



VIX and Supertrend combined? Not for a lack of trying. 

Some more clues or some sample code would be helpful as...
1. I lack a PhD in cryptography; and
2. I am not yet fully literate in the reading of Chalcatongo Mixtec or Egyptian hieroglyphics.


----------



## peter2 (15 May 2021)

@Newt  Good point about stock universes. I'd hope by now that readers of this thread would not be limiting their trading to an index universe. The stocks with the biggest growth always start outside the XAO list and grow their way into it. 

@Skate selected four open positions in my spec (low traded volume) portfolio to showcase a trading strategy. I must say his charts showed  the potential of trading these lower volume stocks on the weekly time frame. This is something I'll include in my thread. Here are my weekly charts of the same four stocks. My blue/red bars are based on price volatility (1.5*ATR(10)). 




If we can tolerate the few bumpy starts (losses), the potential is huge if we can hang on properly. The spec portfolio has been taking small chunks out of huge trends. We have to remind ourselves that very few stocks go on to form these huge trends.


----------



## Newt (15 May 2021)

Thanks for reminder on why Skate put those 4 up too Peter2.  Very interesting post.  Enjoying the synergies bewteen mechanical and discretionary Skate/peter threads a great deal.


----------



## Newt (15 May 2021)

peter2 said:


> My blue/red bars are based on price volatility (1.5*ATR(10)).
> 
> View attachment 124318
> 
> ...




Can you explain this bit further when you have time please Peter2?  Is the red trailing stop based on 1.5xATR(10) or are you changing colour to red if volatility increases above a threshold?


----------



## peter2 (15 May 2021)

The Supertrend indicator is a price based volatility indicator. Think of it as a line above and below current price. There are two parameters, an ATR(10) and a multiplier (1.5). These parameters can be modified to suit your trading style. They can be either tight or loose.  




(1) When price closes above the upper band the bars turn blue and this activates the line below price. 
(2) Price closes below the lower trailing line, so the bar turns red and the upper trailing line is activated. 
(3) Price closes above the upper line, so the bars turn blue and the lower line is activated.
(4) The huge red down bar closes below the rising lower line, turning the bars red and activating the upper trailing line.

I use this indicator because I can scan for occurrences of the 1st blue bar. I do this every afternoon on the daily charts and each week-end for the weekly charts. 

In this chart example (*FMG*) both 1st blue bars identified good times to buy. 

As usual with all indicators they're not buy/sell signals on their own. I use them in context with the prior price action and volume.


----------



## peter2 (15 May 2021)

Now if I change the multiplier to 2.8 (from 1.5) the lines are wider and stay blue through the mid section of the chart.
The 1stBB near (1) is now later and the exit near (4) is also later. This parameter setting has produced one trade instead of two and the one trade is open for much longer.




Which setting is better?  This depends on your trading style and tolerance for portfolio heat.

The parameters (2.8, ATR(10)) produced one trade for +2R (wider initial SL and later exit)
The parameters (1.5, ATR(10)) produced two trades for +2.1R, +1.1R.


----------



## Newt (15 May 2021)

Many thanks - hadn't researched supertrend, so appreciate the explanation.  Close to a chandalier trailing stop, but "always in", either short or long.


----------



## Skate (15 May 2021)

Newt said:


> Many thanks - hadn't researched supertrend, so appreciate the explanation.  Close to a chandalier trailing stop, but "always in", either short or long.




@Newt i have posted extensively on the Supertrend Strategy & have made over 10 posts on the strategy.

*With permission*
Matt Radtke from “Quantforhire” recently wrote an article on how to “Beat the Market with a Simple SuperTrend Strategy” & with his kind permission Matt has allowed me to reference his work & hyperlink to his webinar presentation where he describes the process of creating and validating a simple trading strategy using the SuperTrend indicator.

*Respectable results*
The performance results of his strategy are quite respectable but the real purpose of his webinar was to introduce traders to the tools and methodologies that can be used to develop effective strategies of their own.

*Well worth a watch*
I have downloaded & watched Matt’s webinar a few times. The slides for the webinar can also be downloaded separately. Matt, in my opinion is the real deal & has done a great job coding the SuperTrend Indicator & presenting his webinar on the subject. For a better understanding of how his simple indicator can be applied to all time frames & all markets with an explanation on the correct application of the indicator for trading.

*The AmiBroker AFL code is also kindly supplied.*
https://quantforhire.com/2018/08/19/supertrend-indicator/

*Robustness of a strategy*
At the 39:50 minute mark - Matt explains how to test a strategy robustness using "Parameter Sensitivity" & then goes on to explain the procedure to refine a strategy using the "In Sample" (IS) & "Out Of Sample" (OOS) testing to avoid curve fitting was priceless. I have posted many times that backtesting alone means Jack. The only true test of a strategy is using the results from the “In Sample” (IS) & “Out Of Sample” (OOS) testing that is explained succinctly in the webinar presentation.

*Beat the Market *
With a Simple SuperTrend Strategy by Matt Radtke

*Website reference*
https://quantforhire.com/2019/03/16/beat-the-market-with-a-simple-supertrend-strategy/

*Webinar download*
https://videos.files.wordpress.com/AF3ZeUuc/quantact-1_dvd.mp4

*Presentation Slides download*
https://quantforhire.files.wordpress.com/2019/03/quantact-amibroker-nifty.pdf

*Disclaimer*
I have not used Matt’s code in formulating my "SuperTrend Strategy" nor do I use the SuperTrend Indicator as intended or described in the webinar.

Skate.


----------



## Skate (15 May 2021)

*Now some facts & figures of the SuperTrend Strategy*
@Newt, my “SuperTrend Strategy” is based loosely on @peter2 1st Blue Bar setup that has been discussed in his thread. The performance results of the SuperTrend Strategy are quite respectable. I wasn't trying to emulate @peter2 results but my post was merely an exercise in explaining to others how a simple strategy Peter applies in his trading can be very profitable.

*My previous discussion can be found here: *




__





						Dump it Here
					

Hi SKate , is your total position size 30?     Skate.




					www.aussiestockforums.com
				




*Make sure you read the next few posts *
@Lone Wolf makes a great post on the "Supertrend" here:




__





						Dump it Here
					

Hi SKate , is your total position size 30?     Skate.




					www.aussiestockforums.com
				




*My reply to *@Lone Wolf 




__





						Dump it Here
					

Hi SKate , is your total position size 30?     Skate.




					www.aussiestockforums.com
				




*Posting excessive information*
Is a real turn-off & exhausting to read.

Skate.


----------



## qldfrog (16 May 2021)

Skate said:


> @Newt i have posted extensively on the Supertrend Strategy & have made over 10 posts on the strategy.
> 
> *With permission*
> Matt Radtke from “Quantforhire” recently wrote an article on how to “Beat the Market with a Simple SuperTrend Strategy” & with his kind permission Matt has allowed me to reference his work & hyperlink to his webinar presentation where he describes the process of creating and validating a simple trading strategy using the SuperTrend indicator.
> ...



Amibroker link is dead i am afraid


----------



## Skate (16 May 2021)

*What am I missing?*
_To gain exposure to the American market "The Motley Fool "website suggested 2 fantastic ETFs for ASX growth investors to buy posted by James Mickleboro  1 hour ago._



			2 fantastic ETFs for ASX growth investors to buy
		


*2 high-quality ASX 200 shares to buy*
_If you’re a fan of growth shares, then you might want to take a look at the exchange traded funds (ETFs) listed below. These ETFs give investors access to a collection of some of the highest quality growth shares in the world. Here’s why they could be fantastic additions to most portfolios:_

*#1. BetaShares NASDAQ 100 ETF (ASX: NDQ)*
_The first ETF to look at is the BetaShares NASDAQ 100 ETF. This fund gives investors exposure to some of the highest quality growth shares in the world._






*VanEck Vectors Video Gaming and eSports ETF (ASX: ESPO)*
_Another ETF filled with growth shares to consider is the VanEck Vectors Video Gaming and eSports ETF. As its name indicates, the ETF gives investors exposure to a portfolio of the largest companies involved in video game development, hardware, and esports._




*The Motley Fool*
(a) Are these guys making stuff up or (b) just making content to stay relevant or (c) suggesting that you buy the dip (BTD)?

Skate.


----------



## debtfree (16 May 2021)

qldfrog said:


> Amibroker link is dead i am afraid





			http://quantforhire.com/wp-content/uploads/2020/05/MRadtke-QuantactPresentationMaterials-190314.zip
		


Hopefully the link will be what your are after.


----------



## Skate (16 May 2021)

qldfrog said:


> Amibroker link is dead i am afraid



@qldfrog you are correct the link to the Amibroker afl is dead but the "Supertrend" afl can be sourced from the pdf file found below.



			https://quantforhire.files.wordpress.com/2019/03/quantact-amibroker-nifty.pdf
		


@debtfree provided a better response as the Zip file contains everything you need.

Skate.


----------



## Warr87 (16 May 2021)

Skate said:


> *The Motley Fool*
> (a) Are these guys making stuff up or (b) just making content to stay relevant or (c) suggesting that you buy the dip (BTD)?
> 
> Skate.




I'm pretty sure they just make stuff up. I regularly see them acting under the 'cherry-picking fallacy': "if you had only put $10,000 when we told you 3 years ago, you would have made $xxxxx much!" ..... classic scam-like behaviour IMO. They never mention the constant recommendations that fail.

get a random trade generator, you'll have better luck succeeding .


----------



## Gunnerguy (16 May 2021)

Warr87 said:


> I'm pretty sure they just make stuff up. I regularly see them acting under the 'cherry-picking fallacy': "if you had only put $10,000 when we told you 3 years ago, you would have made $xxxxx much!" ..... classic scam-like behaviour IMO. They never mention the constant recommendations that fail.
> 
> get a random trade generator, you'll have better luck succeeding .



When I started in shares almost 30 years ago in the UK I read Investors Chronicle  magazine weekly. Later I came upon Motley Fool. They both seemed good to new as a newbie learning but after some months and a year or two, and my knowledge was increased,  it became all too apparent that they just rotated their recommendations.
I constantly see MF promoting stuff and roll my eyes every time thinking to myself, been there, seen that, the same old sh$te again from these guys.
Purely aimed at the absorbent, uninitiated suckers.
GG


----------



## Warr87 (16 May 2021)

Gunnerguy said:


> When I started in shares almost 30 years ago in the UK I read Investors Chronicle  magazine weekly. Later I came upon Motley Fool. They both seemed good to new as a newbie learning but after some months and a year or two, and my knowledge was increased,  it became all too apparent that they just rotated their recommendations.
> I constantly see MF promoting stuff and roll my eyes every time thinking to myself, been there, seen that, the same old sh$te again from these guys.
> Purely aimed at the absorbent, uninitiated suckers.
> GG




yea, agree. its sad to look back (before I started to research, learn, and even knew of the kind of investing that happens on here) and remember how i used to eagerly read them. they definitely have a target audience. i'm lucky i didnt have the money at the time to follow them.


----------



## qldfrog (16 May 2021)

Skate said:


> *What am I missing?*
> _To gain exposure to the American market "The Motley Fool "website suggested 2 fantastic ETFs for ASX growth investors to buy posted by James Mickleboro  1 hour ago._
> 
> 
> ...



B


----------



## qldfrog (16 May 2021)

Warr87 said:


> yea, agree. its sad to look back (before I started to research, learn, and even knew of the kind of investing that happens on here) and remember how i used to eagerly read them. they definitely have a target audience. i'm lucky i didnt have the money at the time to follow them.



Yep
Even went to some of their face to face presentations.but really looked like a scam and indeed so many recommendations, obviously some went well or fell less than others


----------



## Skate (16 May 2021)

qldfrog said:


> Yep
> Even went to some of their face to face presentations.but really looked like a scam and indeed so many recommendations, obviously some went well or fell less than others




*I wish to make a few comments*
#1. There is nothing wrong investing in the two positions suggested by "The Motley Fool" (NDQ & ESPO) other than to say that their timing leaves a lot to be desired.

#2. The two charts (NDQ & ESPO) that I posted previously confirms (a) Technical Analysis can "time the markets" (contrary to popular beliefs) & (b) "time in the markets" has its place when it comes to investing.

#3. One of @ducati916's post allowed me to develop not only an indicator but also two complete trading strategies (a) "The Ducati Daily Blue Bar Strategy" & (b) "The Ducati Weekly Blue Bar Strategy". Meaning, Duc's idea works in all time frames.

#4. The media is not always correct.

Skate.


----------



## ducati916 (16 May 2021)

Skate said:


> *I wish to make a few comments*
> #1. There is nothing wrong investing in the two positions suggested by "The Motley Fool" (NDQ & ESPO) other than to say that their timing leaves a lot to be desired.
> 
> #2. The two charts (NDQ & ESPO) that I posted previously confirms (a) Technical Analysis can "time the markets" (contrary to popular beliefs) & (b) "time in the markets" has its place when it comes to investing.
> ...





just looking at ESPO, this is close to a bottom. I would't be buying it tomorrow, it needs to build some technical structure, but this is potentially close to an excellent entry point. It's now on my watch list.

jog on
duc


----------



## Skate (16 May 2021)

ducati916 said:


> just looking at ESPO, this is close to a bottom. I would't be buying it tomorrow, it needs to build some technical structure, but this is potentially close to an excellent entry point. It's now on my watch list.
> 
> jog on
> duc




*The 2nd blue bar*
When the first daily bar turns blue that would be the signal bar. The 2nd blue would be the entry for me.

Skate


----------



## ducati916 (16 May 2021)

Skate said:


> *The 2nd blue bar*
> When the first daily bar turns blue that would be the signal bar. The 2nd blue would be the entry for me.
> 
> Skate





See if my entry, if and when it happens, correlates to some blue bars!

jog on
duc


----------



## Skate (16 May 2021)

ducati916 said:


> just looking at ESPO, needs to build some technical structure
> 
> jog on
> duc




*Requirement to enter*
Hi Duc, what technical structure is required for you to enter this position?

*I'm waiting for a blue bar*
For me it's easy - I'm waiting for the first blue bar (the signal bar) before placing an order in the pre-auction to snag the next day's opening price.

*When will the next bar turn blue?*
Frankly, I've got no idea. A single daily scan adds little to no extra work for me. For a system trader using Amibroker - the "Exploration Analysis" handles this with ease.

*Micro managing positions*
After @peter2 explained the work required to manage a hand full of positions, I'm sure it won't be too long before Peter rethinks system trading, changing the way his signal & position are generate. If I had to micro manage my trades it would drive me to drink. (Err, that should be "DRINK MORE")

Skate.


----------



## Gunnerguy (16 May 2021)

Skate said:


> *I wish to make a few comments*
> #1. There is nothing wrong investing in the two positions suggested by "The Motley Fool" (NDQ & ESPO) other than to say that their timing leaves a lot to be desired.
> 
> #2. The two charts (NDQ & ESPO) that I posted previously confirms (a) Technical Analysis can "time the markets" (contrary to popular beliefs) & (b) "time in the markets" has its place when it comes to investing.
> ...



I agree to ALL your points @Skate . I already have NDQ, from early last year, and have watched ESPO for a while and I like it, just never pulled the trigger. More money is spent by sponsors on advertising at ‘Gamers competitions’ than on the NFL, NBA, and BPL combined.’ 
My point was simply relating to the ‘churning of tips’ by these ‘to$$ers’.
When I was younger and greener I avidly read and believed in these publications, exactly as @Warr87  stated.
GG


----------



## Skate (16 May 2021)

Gunnerguy said:


> I agree to ALL your points @Skate . I already have NDQ, from early last year, and have watched ESPO for a while and I like it, just never pulled the trigger. More money is spent by sponsors on advertising at ‘Gamers competitions’ than on the NFL, NBA, and BPL combined.’
> My point was simply relating to the ‘churning of tips’ by these ‘to$$ers’.
> When I was younger and greener I avidly read and believed in these publications, exactly as @Warr87  stated.
> GG




@Gunnerguy, *journalists do make stuff up & sometimes they just rehash old stories *
The media doesn't even care if the story is factual but they fail to realise that their readers will sometimes invest on "what they read" thinking its "gospel". Stories circulated by the media are either "doom & gloom" or the markets are going "gangbusters". There is never a dull moment in the markets. 

*When there isn't a story*
They make one up & sensationalize it to the max. 

*The dangers of trading*
(a) Can you ever recall any media outlets ever doing a story on the dangers associated with investing or trading? - I can’t. (b) Can you ever recall a humdrum story about the markets? - I can't. (The markets are always exciting)

*Don't trust them*
The media & advertisers (including the spam you get from this forum) only 'spruik' what’s in their best interest & not yours. Investing is worse than a zero-sum game & it’s well worth remembering that. For every winner in this game there is a corresponding loser & that loser could be you. (Trusting what you read can be dangerous to your wealth)

Skate.


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## over9k (16 May 2021)

Skate said:


> *What am I missing?*
> _To gain exposure to the American market "The Motley Fool "website suggested 2 fantastic ETFs for ASX growth investors to buy posted by James Mickleboro  1 hour ago._
> 
> 
> ...



The constant run is over - it's still a bull market, but it's choppy and will remain so for quite some time yet. When there's swing trades on both sides of what's causing the chop (inflation fears) that are following the previous post-feb-snowstorm-pattern almost perfectly and are very clearly going to be transitory/short term (which I've spent quite some time explaining in the coronavirus thread):

Before:







After:





Then yeah, you buy the dip


----------



## Skate (16 May 2021)

over9k said:


> Then yeah, you *buy the dip*




@over9k, that was an excellent post.

*Buy the dip*
Buy low & sell high, buy the dip, I hear these phrases touted all the time but no one ever tells you how to do it. It’s the same with “it’s bread & butter stuff” sound great but it’s not easy for those who don’t know.

*There are plenty of trading opportunities*
At any given time, there are plenty of opportunities in the share market as there are some excellent quality companies performing well at the moment. The trick when trading is finding them but what we must do is stay away from "tips, rumours & the media".

*Traders buy when they think the price of the stock will increase *
Trading is all about buying at one price hoping someone will buy it "off them" at a higher price in the future (simple). Trading is easy, making money when trading is the difficult part. Trading consistently & successfully is even harder, which is why the majority of people who try to make money from trading fail.

*No one knows if a price is high or low*
With trading no one knows if a price is high or low, picking the top or the bottom even eludes the best professional so we have no chance picking the top or the bottom of any market. Buying stock that is fundamentally "cheap” is logically indisputable & on the surface sounds like a good idea but most traders really have "no idea" how to apply such principles in a manner that will make them money.

*"The Dump it here" thread*
I had this grand idea when starting this thread to educate those who wanted to listen about the dangers of trading. My trading was motoring along just fine & if others could replicate what I have done - I believed they could be profitable in time. I've consistently posted what has helped me with my trading & encouraged others to post in the same vein. Trading gurus are respected but practical application of their trading experience is hard to decipher & harder to put into action let alone copy.

*Simple practical trading *
This thread encourages others to take a sharp interest in their trading & financial future. I've shown practical ways to enter into a confirm trend & the importance of a timely exit. All one needs is to possess a (P.H.D) to be a successful trader.

*P.H. D.
P*ersistence, *H*ard-work & *D*etermination (PHD)



Joe90 said:


> 1. I lack a PhD in cryptography; and
> 2. I am not yet fully literate in the reading of Chalcatongo Mixtec or Egyptian hieroglyphics.




*Egyptian maths*
I guess we all know about how computers & Egyptians handle mathematical equations but for those who don't know about this fundamental way of "simple calculations" might find some interest in this short YouTube video. This is a must watch. (6:28 minutes)




Skate.


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## over9k (16 May 2021)

Skate said:


> @over9k, that was an excellent post.



Thanks man. It'd be great to see you over in the virus thread as systems/technicals certainly aren't my strong suit  

But yeah. If you know something like inflation fears exist, and you know there are stocks that move in pretty serious opposite directions to one another on it, then a peak sell-dip buy can make you a mint. 

I posted this image over in the virus thread showing just how many opportunities (and how obvious the inverse correlation is) there were last time: 




But I always like to have a bit for newbies and pointed out that even if you aren't sure what you're doing reference how to time some of this stuff, the S&P has been on a net bull run even after the 16th of feb drop despite the smashing that tech has seen: 




And so you can still make some solid money just sitting on an S&P ETF until you're confident enough to have a dabble actually trading.


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## Newt (17 May 2021)

On the media and the need to explain and have a catchy headline - I have a great deal of admiration for Alan Kohler's approach on the ABC news.  The commercial TV channels will explain every up or down, and tell you markets lost $1 billion or some other catchy phrase.

Alan puts up a couple of graphs to challenge your mindset, and if the markets move unexpectedly he isn't afraid to say no-one expected it, or no-one knows exactly what drove price on the day.


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## Skate (17 May 2021)

Newt said:


> On the media and the need to explain and have a catchy headline - I have a great deal of admiration for Alan Kohler's approach on the ABC news.  The commercial TV channels will explain every up or down, and tell you markets lost $1 billion or some other catchy phrase.
> 
> Alan puts up a couple of graphs to challenge your mindset, and if the markets move unexpectedly he isn't afraid to say no-one expected it, or no-one knows exactly what drove price on the day.




*I’m just saying*
When the media knows, everyone knows & it’s too late to capitalize on the information.

Skate.


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## over9k (17 May 2021)

Oh yeah. The general public are the last to get in & the last to get out. By the time you've heard about it on the normie news, it's all over. That's basically my #1 thing I say whenever ANY of my friends hit me up with some "Hey I heard about X and I'm thinking about investing in it" type question - by the time you've heard about it on the evening news, it's already finished.


----------



## ducati916 (17 May 2021)

Skate said:


> *2. Requirement to enter*
> Hi Duc, what technical structure is required for you to enter this position?






Skate said:


> *1. I'm waiting for a blue bar*
> For me it's easy - I'm waiting for the first blue bar (the signal bar) before placing an order in the pre-auction to snag the next day's opening price.
> 
> 
> ...




Speaking generally first, if (anyone) reads various threads @tech/a , @peter2 , @Skate, you will see varying entry criteria for taking trades. They are all slightly different, but do share a number of common characteristics, which are weighted to each individual's preferences.

In no particular order:

(i) Volume,
(ii) Volatility,
(iii) Time,
(iv) Open/Close,
(v) Previous High/Low,
(vi) Momentum,
(vii) News,
(viii) Fundamentals.

From that list and personal preferences, will be built an entry system. There are a variety of entries possible. Some like to pick stocks already trading in an established trend at what ever point and others like to try to trade the change of trend.

The ETF under discussion, ESPO, has been in a short term down trend, mid Feb. 2021. after a longer term uptrend, March 2020. We have therefore 2 trends in operation, which provides quantitative information. Which is: this has been in the examined total time frame (18 months) an ETF that has gone higher than it has gone lower. That information would seem prima facie, so obvious as to be worthless. But it is quantitatively different to an ETF that has gone lower over the 18 months, but is in the last 4 months moving higher. Again, obvious.

But when looking to time an entry into a trade, you have to know the parametres of your expectation of that trade. An entry into a pullback is quite different to an entry into a bounce, although both are a 'bottoming process'.

To cut this post short to a readable length, all of the listed considerations, variables or factors above, need to be thought through and built to purpose.

I'll take 1 more, fundamentals: so one might say, this is an ETF composed of many stocks. Indeed. How many stocks and what are they?




So an industrious chap will just flick through those charts and just take a quick squizzie. It has to be quick as over analysis leads to paralysis. The decision will be made on the ETF chart.

Next, you think about the industry. Growth, Value? Long term viability or a dying industry, possibly something like pet.com. Given that it is an ETF, that risk is mitigated to some extent. Popular or not? Bias: so I think computer game players are dimwits. This is potentially a bias that could keep me out of the trade. Certain industries, biotech, I simply cannot buy individual stocks. The ETF is the only way that I can participate. Cryptos. A no-go area for me. For the purpose of brevity, when you are satisfied, you move onto your technical structure.

You build your technical structure on all of the variables listed. Here you need to be a little creative. Sticking with the classics means that you will see what the general herd (those trading on a technical basis) will see. How you design this structure will (or can) emphasise whether you try to be early or late. The difference is your SL. Early it is far tighter, late and it has to be looser. Personal preference. But very different expectations.

I am always experimenting with the structure, scans, etc. to find anything that stays in sync. with the markets. Therefore there is always that tension between time frames, which will never fully resolve. What I do try to do however is keep the structure consistent across all time frames, hourly, daily, weekly, monthly. 

I do not however in entering or exiting a trade, manage the trade on the same time frame. I like, where possible, to enter a trade where both the daily and weekly suggest an entry. I'll always enter on a daily, but I may well exit on a weekly. Because the only variable that is different in the structure is time, this can provide a very different trade. A current example is XLB and XLE in the trades thread. My daily entry trade has to prove itself and grow into the weekly system. If it fails early, it's managed on the daily.

My system is the polar opposite to Mr Skate. I am all about the entry, less concerned about the exit. I 'think' a great entry almost guarantees a good exit.


jog on
duc


----------



## ducati916 (17 May 2021)

Newt said:


> On the media and the need to explain and have a catchy headline - I have a great deal of admiration for Alan Kohler's approach on the ABC news.  The commercial TV channels will explain every up or down, and tell you markets lost $1 billion or some other catchy phrase.
> 
> Alan puts up a couple of graphs to challenge your mindset, and if the markets move unexpectedly he isn't afraid to say no-one expected it, or no-one knows exactly what drove price on the day.





Mr Newt, have you heard the expression that the market makes the news? The news is always post hoc. The news seeks to assign a causative explanation, which ties into the philosophy of 'determinism'.

Without carrying this discussion into the realm of philosophy (however attractive that might be) and 'determinism', market participants (exercising free will) buy or sell financial instruments to satisfy their ordinal desires. Determinism or luck, (randomness) will eventually separate the winners and losers, which will be reflected in the price charts, on which the media will report, creating post hoc explanations.

The question is: can an analysis of the news, economic data, history (other than price history) or any other variable outside of price, predict winners and losers? I never say never, but the results have been pretty woeful to date taken in aggregate.

jog on
duc


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## Skate (17 May 2021)

Skate.


----------



## qldfrog (17 May 2021)

Skate said:


> View attachment 124401
> 
> 
> View attachment 124402
> ...



I share the pain, that is my usual scenario this year:
asx down .4% the frog +0.3%;
asx up 0.35, the frog down 1.4%
overall: asx 1; the frog 0 (when not -1) 
tomorrow is another day


----------



## Newt (17 May 2021)

Skate said:


> View attachment 124401
> 
> 
> View attachment 124402
> ...




I know I shouldn't let it affect me - probably just letting the feel wash over me then pass - after glancing at quite a bit of red in my holdings today, really wasn't looking forward to seeing you, QF or anyone else had a strong day today Skate. 

Embarrased, but somewhat relieved (and probably shallow human being ) to see that wasn't the case.


----------



## Newt (17 May 2021)

ducati916 said:


> Mr Newt, have you heard the expression that the market makes the news? The news is always post hoc. The news seeks to assign a causative explanation, which ties into the philosophy of 'determinism'.
> 
> Without carrying this discussion into the realm of philosophy (however attractive that might be) and 'determinism', market participants (exercising free will) buy or sell financial instruments to satisfy their ordinal desires. Determinism or luck, (randomness) will eventually separate the winners and losers, which will be reflected in the price charts, on which the media will report, creating post hoc explanations.
> 
> ...




Great thoughts and a lot of truth in there to my mind Duc.

My younger self just accepted the news and all its strengths and weaknesses to a large extent.  Do find the quantitative aspects of trading (i.e. if one profits or has losses) provides a yardstick into not just our trading, but judging/measuring other aspects of life - in this case the news media.  

But know I'm getting philisophical - about the intalligible benefits of trading.....


----------



## Skate (17 May 2021)

Newt said:


> I know I shouldn't let it affect me - probably just letting the feel wash over me then pass - after glancing at quite a bit of red in my holdings today, *really wasn't looking forward to seeing you, QF or anyone else had a strong day today Skate.*
> 
> Embarrased, but *somewhat relieved (and probably shallow human being ) to see that wasn't the case.*





peter2 said:


> *(Schadenfreude)* I was getting some sadistic pleasure from seeing you post like a day trader. @Flipp-Floppe-Skate




*It's a pity we don't have an equivalent word for Schadenfreude*
Schadenfreude is a German word that means (pain & pleasure). Schadenfreude means we derive pleasure from another's misfortune. Sometimes it's self-satisfaction that comes from learning of failures or humiliation of another.

*Schadenfreude is a complex emotion  *
The lack of "sympathy or empathy" & taking pleasure from watching someone's misfortune is an emotion displayed more in children than adults. However, adults also experience schadenfreude, although generally they conceal it.

*Let's look forward to tomorrow*


qldfrog said:


> tomorrow is another day




Skate.


----------



## Skate (18 May 2021)

*Today was an up day*
I nearly got back what I lost yesterday (still slightly down for the month)






qldfrog said:


> *tomorrow is another day*




Skate,


----------



## Skate (18 May 2021)

peter2 said:


> I'm just thinking out aloud here for something to grab my interest enough to continue posting.




*Peter is always thinking of new ways to trade*
Peter has got me thinking. I'm not posting as often as I should because over time, I tend to lose enthusiasm for most things I do. Just when you think you are going stale or irrelevant along comes @ducati916 talking about the "blog-a-sphere chatter" about the phrase "Sell in May & go away". 

*The month of May*
Up until this year, the month of May has been good to me. It's still early days but as I post I'm fractionally in the red for the month. 
*
"Sell in May"*
Being disillusioned with trading I set about developing a few simple strategies that I could trade straight away to try & get my mojo back. I had two good "Parked Strategies" (HappyCat & BlueWren) & decided to bring them out of retirement & trade "two new strategies" alongside of the them. 

*Two new strategies*
(1) The "FreeBalling" & (2) the "RubikCube" strategies were primed, ready to go. Thinking to myself, wouldn't it be good to trade them altogether. The excitement of not knowing how they would perform over the month May so I threw caution to the wind & put them straight to work. 

*Chart*
The equity chart below displays two winning strategies & two losing strategies so far. It pays to remember that all new strategies take time to accumulate the full 20 positions. ($100k X 20 - $5k bets) & more time to develop ultimately into profit. 




*But they are not the strategy I wish to discuss today*
I want to make a few comments about a simple strategy that I have just started to trade. It's Skate's "Simple Strategy".

More to follow.

Skate.


----------



## Skate (18 May 2021)

*Skate's "Simple Strategy"*
This exercise was to develop a strategy, but not any strategy but a strategy that is built on the entire premise of buying into the strength of a confirmed trend. The name of the strategy is unremarkable but at least it fully explains what the strategy is all about, "Simplicity". I'm over reading all the gurus telling me "ways to trade" but over the years I've found keeping a trading strategy simple is the way to go. I wanted to code the simplest strategy I could using only a few moving parts. The strategy uses the (ADX & ROC) buying into strength.

*The "Simple Strategy" - "simply" buys into strength*
When it comes to evaluating the "strength of a trend" the average directional index (ADX) is good as any to determine it. It's a simple idea of making sure that the (ADX) is greater than the previous 3 consecutive periods. The "Volume" over an "nPeriod" needs to be increasing as well. A stand-alone (ROC) filter is a primary guide kicking the (ADX) into gear. The PositionScore is entirely dependent on the ROC.

*New ideas*
The exercise was to throw a new trading idea out there so I could make a series of posts but to my surprise this simple idea isn't too shabby at all. So "what the heck" I'll live trade it instead.

*Instead of posting*
I greedily started to trade the "Simple Strategy" with the other 4 strategies. Trading the Simple strategy came after I had made the equity Chart for the combined 4 strategies so I placed it on its own worksheet.

*Trading the Simple Strategy is motoring along*
It's early days but I can't wait till the strategy is full. Being very selective with what it buys it will take a few weeks to fill the strategy. (Only 9 positions in the portfolio so far)




*Keeping it simple*
No more than a few indicators & a handful of filters & "Bob's your uncle" a simple strategy to add to my trading stable.

Skate.


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## Skate (18 May 2021)

*Market Index Marketing email (NOT SPAM)*
I subscribe to receive emails from "Market Index" (meaning the email is not spam). I've just received a marketing email that includes a Whitepaper Available for Download in (PDF). The PDF discusses how their "Top 5 Portfolio" is constructed & their methodology how they rotate those positions on a monthly basis. The ROC indicator is their primary source for entry selection that would be interesting to a few.

*Click here to read the Whitepaper (PDF)*


			https://files.marketindex.com.au/files/asx-top-5/asx-top-5-whitepaper.pdf?utm_source=Market+Index+-+Master+List&utm_campaign=54dc9ca7de-EMAIL_CAMPAIGN_2021_05_18_03_26-NonASXWhitepaper&utm_medium=email&utm_term=0_de21e9d29c-54dc9ca7de-451576225
		


*ASX Top 5 Methodology Revealed*
The ASX Top 5 Portfolio’s success has generated a flood of emails, so they say. So, Market Index has released a Whitepaper revealing the stock selection methodology. It similar to advertisers saying the sale had been extended "DUE TO POLAR DEMAND" - it's just a spiel & to be taken with a grain of salt.

*The PDF outlines behind the scenes look at the ASX Top 5's: *
•    Strategy design
•    Stock selection process
•    Testing methodology

*Think this email might interest someone you know?*
Feel free to forward it on...

*Their methodology*
IMHO, it leaves a lot to be desired & the drawdown would be "un-stomachable" for most. But in their defence their "Amibroker code" is propriety & not subject to scrutiny.

Skate.


----------



## Skate (18 May 2021)

*Proof reading*
I apologise for not proof reading my post. No wonder @AussieStockDawg had a laugh.

*ASX Top 5 Methodology Revealed*
The ASX Top 5 Portfolio’s success has generated a flood of emails, so they say. So, Market Index has released a Whitepaper revealing the stock selection methodology. It’s similar to advertisers saying the sale had been extended "*DUE TO POPULAR DEMAND"* - it's just a spiel & to be taken with a grain of salt.

Skate.


----------



## ducati916 (19 May 2021)

Skate said:


> *I’m just saying*
> When the media knows, everyone knows & it’s too late to capitalize on the information.
> 
> Skate.




A couple of magazine covers. The first February 2020, the second October 2002.






jog on
duc


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## Skate (19 May 2021)

Skate.


----------



## AussieStockDawg (19 May 2021)

Skate said:


> *Their methodology*
> IMHO, it leaves a lot to be desired & the drawdown would be "un-stomachable" for most. *But in their defence their "Amibroker code" is propriety & not subject to scrutiny.*





The bit about not subject to scrutiny was a giggle 🤣


----------



## over9k (19 May 2021)

U.S futures suggest another red day tomorrow too.


----------



## Skate (20 May 2021)

Skate.


----------



## TechnoCap (20 May 2021)

Skate said:


> View attachment 124583
> 
> 
> 
> ...



what are you using as a tracking software program for trades and data @Skate ?


----------



## Skate (20 May 2021)

TechnoCap said:


> what are you using as a tracking software program for trades and data @Skate ?




@TechnoCap there are 3 pieces of software I couldn't live without as a trader:

(1) AmiBroker
(2) Norgate data
(3) Share Trade Tracker.

*Share Trade Tracker*
I use "Share Trade Tracker" as my portfolio manager & have so for many, many years. The reports displayed in the "Dump it here" thread are generated using "Share Trade Tracker".

*Share Trade Tracker update*
It's a real shame that the development of STT has been halted. If anyone is interested in obtaining a copy of STT - I suggest you send a request to support@xlautomation.com.au & mention you are a member of the Aussie Stock Forum.

*XLAutomation consulting services*
XLAutomation still provides consulting services to supply a copy of the Share Trade Tracker workbook. Their minimum consulting charge is 2 hours @ $140/hr (ex GST) & for that cost, you would receive a copy of the STT workbook & one serial key to activate the product. There is "No Support" offered as part of this charge. If in the future you do require support to enhance or fix an issue then this would incur further consulting service costs.

*So here is the deal*
Contact the email address support@xlautomation.com.au if you want to purchase this consulting service & receive a copy of Share Trade Tracker. (The total cost is $280 excluding GST)

Skate.


----------



## over9k (21 May 2021)

Hey skate, we were talking about swing trading before and I've actually managed to get one right for a change so I thought I'd post it over here too as it seems the right thread for it:


And here's your scalp:




Sold 50/175 at the resistance level, sold 25 more earlier today at about +6% for the day (so about +15% from the buy), it topped out at about +9% for the day but I'm going to continue holding.

You'll see that NRGU (and there's been plenty of others, DPST, BNKU et al, no need to post 30 different graphs) clipped resistance (and thus sold) the afternoon of the day before SOXL's plummet to support too, marking the high of one corresponding with the low of the other beautifully (just like through the madness we saw in march):




Considering the week this has been and fridays generally see profits taken even when things are more certain I wouldn't be surprised to see a big flip tomorrow again.

Plenty of swing plays yet!


----------



## Skate (21 May 2021)

over9k said:


> Plenty of swing plays yet!




@over9k, would you like to explain (a) how you find swing trade candidates & (b) how you go about exiting a swing position.

*ASX*
Also, would it possible to post charts using the Australian market so I test your methodology. Using the ASX would be easier to understand & follow for most of the readers of this thread.

Skate.


----------



## Skate (21 May 2021)

*Two "up days" in a row*
May is being unkind. I have 5 trading days to pull a rabbit out of a hat.




Skate.


----------



## ducati916 (22 May 2021)

Morning Mr Skate. I have been monitoring this thread along with Mr @peter2 thread through this very choppy May, which has been pretty rough due to the absence of a market trend which has broken or interrupted sector trends. In a word: messy.

A trend will re-establish itself, whether in sectors or the over-all market. It could well be lower, although it looks as if we may scrape higher and re-establish the Bull trend for a while longer. Either way some (obvious) lessons.

(i) Established trends are easy to see.
(ii) Beginning trends are hard to see.
(iii) Ending trends take time to see.

2 versions require you to give up something on the entry, or exit. Only (i) pays you nicely. So nicely that it more than compensates you for (ii) and (iii).

Of my 3 new positions today: IHF is a (ii), PJP is a (ii) and GOOG is not even a (ii). GOOG is an outright speculation, a crossed fingers and hope for the best trade. The point being, spotting the trend emerging lays the probabilities slightly in your favour.

So what is the point of this post?

The point is in hindsight, I would have not even bothered trading the last 3 weeks had I known in advance what was coming. Starting a new strategy in May would and has been a challenge. The lessons are contained in (i) - (iii) above, as the market at the beginning of May gave us (iii), reversed into (ii) back into (iii) and is again sitting at (ii). Alternatively, we could have recognised (iii) exited and still be waiting for an easy (i) to appear.

Given that we did not actually do that, far too boring, then we must act quickly and cut the losses fast, reverse long to short back to long again without overthinking things. The chop costs money, for sure. The trick, is to know when to stop churning and let a new trend that establishes itself to ruuuuuuuuuuuuuun. If you have issues with that, then you must give up returns while you wait for (i). Net-net it probably works out about the same in $. What the impact on your nerves are might be a different story.

So congratulations on posting the red days. Many, when looking at losses just stop looking. No-one likes looking at red. Red is a market reality. There are periods where red is all that you see. Obviously, ignoring it is not the answer. Red is information. Red may well sit within the plan/strategy. When it sits outside the plan is when action needs to be taken, which again, necessitates an understanding of where you sit in terms of (i) - (iii).

Just FYI June looks much better!




jog on
duc


----------



## Skate (22 May 2021)

ducati916 said:


> The point is in hindsight, I would have not even bothered trading the last 3 weeks had I known in advance what was coming. Starting a new strategy in May would and has been a challenge.




*Summary*
My trading results for the month of May have been horrendous dollar-wise as trading is always relevant to the size of your portfolio. In the scheme of yearly results "down months" are to be expected but not welcomed.

*Being positive*
This means I believe there are better days ahead. I have one week left in May to redeem myself.






*Strategies*
Trading a variety of strategies helps in a small way to smooth my trading results. Like every other trader, I'm at the mercy of volatility.

Skate.


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## Skate (22 May 2021)

ducati916 said:


> *Starting a new strategy in May would and has been a challenge.*




*The "Simple Strategy"*
@ducati916, your statement above is absolutely correct. I'm fully accepting that there is never a good time to start a new strategy but I have a theory. Buying into a depressed market "buys value" knowing the stringent requirements needed to be a buy candidate in not only this strategy but all my strategies. (FYI - I don't use an index filter in the buy statement)

*Starting date*
Luck & timing plays a significant role when starting a new strategy. The starting date can have a big bearing on the performance of the strategy in the short term but should settle over the longer term. As they say "there is never a good time to start trading" & traders need to be aware of the significance of "luck" when deciding to take the plunge.

*Early days*
I started the "Simple Strategy" in the last week of April so I would have positions to trade in the first week of May. Looking at the early results from 9 positions is heartening.

*Monday*
There is only one buy for Monday & at this rate, it will take weeks to fill this portfolio.






Skate.


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## Skate (22 May 2021)

ducati916 said:


> The point is in hindsight, I would have not even bothered trading the last 3 weeks had I known in advance what was coming.




*Playing the pokies*
Those who play the pokies have a habit of only telling you about their wins & never what they have lost. I started 5 new strategies in the last week of April so there would be positions to trade in the month of May. 

*3 Strategies are doing okay *
The other two are struggling but recovering. Overall, my trading in May is underwater "at the moment" but I'm expecting something to happen next week. I just don't know if it will be good or bad. 

*If I have a good week*
I might be able to break square for May but a bad week will drive me further into the red. 

*My "FreeBalling Strategy"*
This strategy started a bit slow with two up weeks & two down weeks - but now the strategy is in minor profit. It's early days with 13 open positions with four new positions to be entered on Monday.




Skate.


----------



## Skate (22 May 2021)

ducati916 said:


> Sunday at 4:32 PM
> just looking at ESPO, this is close to a bottom. *I wouldn't be buying it tomorrow, (17th MAY 2021) it needs to build some technical structure*, but this is potentially close to an excellent entry point. It's now on my watch list.




*Quick Update (ESPO)*
As @ducati916 had displayed an interest in (ASX:ESPO) it's worthy of a weekend update. The Duc remarked that _"I wouldn't be buying it tomorrow, (17th MAY 2021) it needs to build some technical structure".  _Good call.

*The "Ducati Daily Blue Bar Strategy"*
Duc was correct in not to calling a buy on Monday (17th April 2021) as the "Ducati Daily Blue Bar Strategy" generated a signal on the (20th May 2021) with an entry on the open the very next day (21st May 2021). I'm not saying that this entry will be a winner but taking each & every signal gives the best chance of profitability overall. The "Ducati Daily Blue Bar Strategy" gets it right more often than not.






Skate.


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## Skate (22 May 2021)

Skate said:


> *The other two are struggling but recovering.* Overall, my trading in May is underwater "at the moment" but I'm expecting something to happen next week. I just don't know if it will be good or bad.




*For transparency (losers)*
The resurrected "HappyCat" & "BlueWren" strategies are starting to turn around which is pleasing & expected. 

*Performers so far (winners)*
The "Simple Strategy", the "RubikCube Strategy" & the "FreeBalling Strategy" are all "currently" kicking into gear.



Skate.


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## Skate (22 May 2021)

*The Bee Strategy*
This strategy is a solid performer & was named as it has a "sting in its tail" but the graphic looks ordinary. The naming of the strategy is important to me (not that it describes the inner working of the strategy) but as a way of differentiating between them - a picture paints a thousand words. 

*I should rename the "Bee Strategy" *
@qldfrog has a new strategy "The Flying Bat Strategy" - what a great name. Living on the coast we have the nightly migration of Bats & the logo looks fiercer than my "Flying Pelican Strategy" & the "Bee Strategy". 

*"The Flying Bat Strategy" *
The "Flying Bat" logo is much, much better than the "Bee & Pelican" put together.




Skate.


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## Skate (22 May 2021)

*It's plagiarising*
I know @qldfrog reads my thread so it's unlikely that I can get away with renaming my "Bee Strategy". Damn you frog for taking all the good names!!!!

Skate.


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## qldfrog (22 May 2021)

Skate said:


> View attachment 124680
> 
> 
> *It's plagiarising*
> ...



I am all good with "Skate's flying bat" strategy name
The only worry is that we will have an urge to compate and that will not be flattering for me
Had some time to think about your words of wisdom, and i should listen to them.i should continue my testing refining my parameters and restraining jumping in.
For the new comers, in feb 2019, i paper traded for a month, procrastinating and lost a sizeable amount of profit, nice paper virtual profit :-(
, more than this whole year seems to be heading for.. .
So kind of trying to avoid repeat but i also rushed too early later on with a code bug..and substantial loss before exiting.
Lets try to give the frog flying bat a rest for a fortnight and listen to wisdom


----------



## Skate (23 May 2021)

peter2 said:


> How can I reduce the number of opportunities to a manageable level?
> (i) Prioritise the stocks with the lowest price (like @Skate)
> (ii) Prioritise the positions that use the lowest amount of capital ==> more trades
> (iii) Historical volatility, trade stocks that really move
> ...




*Trading questions *
When someone knows that you trade it raises some silly questions, questions from not understanding. Imagine knowing a person is a doctor & ask "what pill should I take as I don't feel well"? - What about asking a car salesman "what's the best car to buy" or a real estate agent "how much does a home cost"? - I'm sure everyone has a relatable story.

*It's not that simple*
Trading is more complex than I believe it should be. It's complex because of so many variables that can't be captured because of the fluidity of the markets that are driven in one direction or the other. At other times positions are simply manipulated.

Skate.


----------



## Skate (23 May 2021)

*Negativity leads to negative thinking*
Without a doubt, having a positive outlook is important. To that end, believing that your trading strategy will be profitable is certainly valuable. However, mismanagement of your trading is another thing. Trading by its very nature is risky, but there are ways to manage & minimise the risks.

*Overstaying your welcome*
Staying too long in a trade is a recipe for disaster. As traders, we must focus most of our time & attention on the mental side of trading. If you get that right, everything falls into place for you. The good news is, profitable trading is simpler than you might think but far from easy. When the markets are having a down day there are those who want to fix something that not broken. Trading has a natural ebb & flow that affects everyone emotionally when they persist.

Skate.


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## Skate (23 May 2021)

*Trading ideas*
Some of the best ideas are simple to construct & simple to execute. There are those who want to squeeze every dollar out of the markets & this is when trading gets complicated. There will never be a time when you can make a splash in the markets as that's the "big boy's domain" but what you can do is place yourself in such a position to be splashed. Catching those splashes is what makes you the money.

*Catching splashes*
The "Dump it here" thread is chock full of trading ideas that allow you to catch some splashes. The first goal when starting out is to be "profitable" & this can be achieved with a bit of hard work & education. Being "consistently profitable" lifts you to a whole new level. 

*In the next few posts*
I'll recap some of those trading ideas. If you relate to any of them "do a search" to understand them a little bit better.

Skate.


----------



## Skate (23 May 2021)

*Trading ideas - The "HappyCat Strategy"*
# The "HappyCat Strategy" is one of my simple trading ideas that uses volatility & momentum to enter & exit positions. By using just two indicators (ROC & ATR) is what keeps this strategy simple. Typically, the “HappyCat Strategy” analyses momentum & volatility near the top & bottom of a price range helping to identify where to enter & exit a trade. The two indicators  (ROC & ATR) focus on the volatility & momentum during price consolidation & retracements in an uptrend. Unfortunately, the "HappyCat" will struggle if the markets decide to trend lower after the position is taken.

Skate.


----------



## Skate (23 May 2021)

*Trading ideas - The "High5 Strategy"*
# The High5 Strategy is another simple strategy that enters on the higher high of the previous 5 periods & exits when there have been 5 lower highs since the entry. The strategy is so simple it’s hard to believe something so simple could have legs.

Skate.


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## Skate (23 May 2021)

*Trading ideas - The "MAP Strategy" *
# The "MAP Strategy" is another simple plain envelope trading strategy that is worthy to understand. The MAP strategy has two different buy conditions for entry. The first ‘Buys Signal’ is when the closing price is above a moving average period & the second signal is where there is a 10% increase in the closing price compared to the previous week's close.

Skate.


----------



## Skate (23 May 2021)

*Trading ideas - The "CAM Strategy"*
# The CAM strategy is a little more complex as it buys pullbacks in existing trends and buys countertrends when the rally continues. To better explain the CAM - pullback (CAM-PB), is when both the 10-period (ADX) and (MACD) are declining but the 14-period (CCI) is above zero. The CAM countertrend (CAM-CT), is when the 10-period (ADX) is declining but (MACD) is rising] and today’s close crosses above the 13-period EMA. Using a combination of entries catches more than just one.

Skate.


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## Skate (23 May 2021)

*Trading ideas - "The Box Strategy"*
# The Box Strategy is a trend continuation strategy & buys after a new high is reached after a pullback within the trend & sells the position when the Rate of Change filter (ROC) drops below zero or when the closing price is below a variable trailing stop. Buying pullback is a favourite to many traders.

Skate.


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## Skate (23 May 2021)

*Trading ideas - The "Panda Strategy"*
# The "Panda Strategy" uses an extensive amount of mathematical gymnastics to arrive at an entry point. The mathematical trick modifies a section of an EMA that automatically smooths the magnitude of price changes. In summary, it turns the EMA into an adaptive moving average that features rapid adaptation to volatility in price movement.

Skate.


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## Skate (23 May 2021)

*Recent Trading ideas*
I'm trading a combination of strategies & recently discussed five of them. The strategies are not that correlated making the best of each trading opportunity. The ideas of how to enter a position are only limited by your imagination. This thread is littered with trading ideas & admittedly some are more successful than others but that's not the point. The point is that you need to be able to have "confidence" in the system you elect to trade or it won't reach its full potential.

Skate.


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## Skate (23 May 2021)

*Ranking positions*
PositionScore is a ranking system used by Amibroker. There are other important aspects to coding a "half-decent" strategy. @ducati916 nominated the entry as the most important. It's the reason I've concentrated on discussing this part of the strategies (entries). While @qldfrog & @peter2 as well as others are grappling with other aspects of their trading.

*Let's not forgets exits*
I maintain the entry is important but the money is banked when you exit a position. The "exit" simply decides the profitability of the trade. Getting out too early or a little bit too late can have severe consequences to the profitability of any strategy, that's why it's so important to get it right.

Skate.


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## Skate (23 May 2021)

*Filters are so important*
I want to use a real estate agent analogy when buying a home. The first thing he will do is to ask you a series of questions (filters) to make sure he only shows you homes that meet your criteria. Trading is no different. The parameters of those filters give you the best "bang-for-buck".

*There is so much more to a shirt than just the buttons*
Constructing a strategy is similar to making a shirt. Buttons or no buttons, collar or no collar, short or long sleeves, what material to be used & so on. The first question should have been "why do you need the shirt"? 

*I've used a shirt as an example *
Imagine if I had used a house or an airplane instead of a shirt, could you imagine the complexity. 

Skate.


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## ducati916 (23 May 2021)

Skate said:


> *Trading ideas - The "CAM Strategy"*
> # The CAM strategy is a little more complex as it buys pullbacks in existing trends and buys countertrends when the rally continues. To better explain the CAM - pullback (CAM-PB), is when both the 10-period (ADX) and (MACD) are declining but the 14-period (CCI) is above zero. The CAM countertrend (CAM-CT), is when the 10-period (ADX) is declining but (MACD) is rising] and today’s close crosses above the 13-period EMA. Using a combination of entries catches more than just one.
> 
> Skate.




This is the one that I would seek to replicate in the following way using the finviz scan: https://finviz.com/







There is only 1 stock, WTS over the page.

You can quickly get the thumbnail of the chart by hovering over the symbol. If it is in a trend, you'll see it in 2 seconds. If you have to think about it, it's not trending.

Of the above scan I like:

HCA (Healthcare)
NWL (Personal goods)
OC (Building)
WTS (Water)

Whole exercise takes about 15 mins.


jog on
duc


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## Skate (24 May 2021)

Skate.


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## Skate (25 May 2021)

BlindSquirrel said:


> *Giving back profit sucks and I would not recommend it.*



*What a great quote*
I have to agree with @BlindSquirrel "giving back profits - sucks"

*Let's talk about up days & down days*
Looking at the daily gyrations of my trading account over the month of May can be unsettling, to say the least, but volatility is a godsend for the markets.

*It can be difficult to stay the course during periods of extreme volatility *
I'm saying, embrace uncertainty, without uncertainty, there would be no opportunity. Control what you can control, staying the course requires discipline in "spades". Discipline requires paying attention to detail & these details can have a powerful impact on your overall trading results.

*It’s not about what you "know" but "what you do" that's important*
As a system trading, doing nothing is doing something, sitting on your hands & following your system is the best course of action even when it doesn't seem like it is. "What you do" is just as important as "what not to do".

Skate.


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## Skate (25 May 2021)

Skate.


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## Skate (25 May 2021)

ducati916 said:


> *BTC isn't an 'asset'.* How is it an asset, other than as a *speculative instrument*?





Garpal Gumnut said:


> *I'm interested in BTC* but unwilling to enter atm.




*Is crypto a bubble?*
I'm amazed at the amount of enthusiasm about cryptocurrencies. If enough believe crypto has value, I guess that's all it takes. I have trouble wrapping my head around that "the nothing" has a tradable value.

*Cryptos - Hamish Douglass*
# CIO Hamish Douglass at Magellan remarked that crypto is not an asset but is an illusion, imaginary & absolutely nothing. (Fair description)

*Cryptos - Charlie Munger*
# Berkshire Hathaway Vice Chairman Charlie Munger called bitcoin “disgusting & contrary to the interests of civilization.” that's been "invented out of thin air”.

*Bitcoin is built on the enthusiasm of others*
Bitcoin has no intrinsic value but the adoption & investment in bitcoin shows no signs of letting up anytime soon. Bitcoin is currently in unchartered territory taking a pause before the next big move.

*European Union*
The European Union has recently stepped in to capture & regulate all crypto. Most major countries have similar plans "so it appears" in one form or another. China has taken it one step further.

*China Ban*
China has banned crypto exchanges & initial coin offerings but has not barred individuals from holding cryptocurrencies. The institutions must not provide savings or services of cryptocurrency, nor issue financial products related to cryptocurrency.

*HSBC Bank*
HSBC chief Noel Quinn said that the bank has no plans of offering crypto to clients nor will it expand its businesses into bitcoin, citing the volatility & lack of transparency for its decision.

Skate.


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## Garpal Gumnut (25 May 2021)

Skate said:


> *Is crypto a bubble?*
> I'm amazed at the amount of enthusiasm about cryptocurrencies. If enough believe crypto has value, I guess that's all it takes. I have trouble wrapping my head around that "the nothing" has a tradable value.
> 
> *Cryptos - Hamish Douglass*
> ...



Thanks @Skate. I should have clarified. I am interested in crypto, much as I am in Forex, Shorting and Options but have never had the balls to give it a go. I probably never will. 

My gut agrees very much with you. 

But, Tulips are more expensive in the UK on Mothers Day than any other day of the year.

gg


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## Skate (26 May 2021)

ducati916 said:


> On the coins:




*Succinctly put*
@ducati916 post great screenshots in his threads & there are none better than this one on crypto.




Skate.


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## WilsonFisk (26 May 2021)

Skate said:


> *Is crypto a bubble?*
> I'm amazed at the amount of enthusiasm about cryptocurrencies. If enough believe crypto has value, I guess that's all it takes. I have trouble wrapping my head around that "the nothing" has a tradable value.
> 
> *Cryptos - Hamish Douglass*
> ...




Interesting comments in regards to cryptocurrencies there.  Just some other food for thoughts and these are just my ideas/reasonings.

Cryptocurrencies are hardly the first synthetic digital product for trading or investing that has no value attached to it.  There are numerous instruments that have been created without any sort of asset backing it (CFD's, CDO's & other derivatives).


Lack of transparency would indicate their isn't an understanding of how blockchain on a distributed ledger actually works.  Every single transaction can be inspected by anyone.  Not sure how much more transparent you can get.  Sure wallet addresses may be anonymous, but in regulated countries (ie Australia, US, Canada, UK etc) all exchanges have a KYC requirement meaning that for you to purchase, sell, or withdraw crypto your identity is flagged to that transaction.


A cryptocurrency is backed by the $$$ being poured into it via transactions, or as a store of wealth.  FIAT currency is being backed by the $$$ being poured into it via tax payers (just another way of saying transactions or a store of wealth).  One is regulated via government, one is not.  This then becomes do you trust the government vs a bunch of randoms and Elon Musk.


I believe a lot of people think of Cryptocurrency's as an investment rather than a medium to conduct transactions (just like FIAT dollars), and neglect the underlying technology and utility of the blockchain.  This is where the 'value' sits.  
The utility that Ether has brought to Smart Contracts and Shipping saves real FIAT $$$ in conducting transactions.  
XRP and XLM can transmit value from one FIAT to another across the world in seconds without interruption or manipulation which is vastly cheaper, quicker and superior to the current SWIFT system in place.  The $$$ value here is in time savings, and elimination of FX movement whilst funds are moving (see what it costs to send money offshore and how long it will take)
 The ASX will use blockchain (utilising it's own proprietary cryptocurrency or derivative of another) to move to real time trades rather than t+2 or even t+1, will also eliminate naked short selling.



There are many cryptocurrency's that have good utility and value, but there are thousands more that are rubbish though - good luck to all the DOGE holders.


Gold does nothing for you other than look good, and has a 'value' attached to it as it is deemed a rare commodity.  BTC does nothing other than looking good as a wallet balance.  Many people including fundies (Fidelity, JP Morgan, Pendal to just name a few) use it as a store of 'value' as it too has a limited amount of resource available.  


At the end of the day there is some $$$ to be made from it scalping, arbitrage and short term trend following as there are people that don't understand the risks and follow the herd.  

*Wilsons View*

Does it suit a long term investment - no/yes/maybe only time will tell and we will only see the answer in hindsight.  

Some people have done well out of it and got out so there is opportunity, the same could be said for GME (Gamestop) and what happened there.  

Cryptocurrency is just that, a "Currency" used to facilitate trade for most of its utility purposes, and should only be treated as such.  

The trick is to know what you are doing, understand the product/strategy/instrument, know when to get in, and when to get out.  It is no different to other forms of _trading_.

Dump over... flame suit on...


----------



## WilsonFisk (26 May 2021)

Garpal Gumnut said:


> Thanks @Skate. I should have clarified. I am interested in crypto, much as I am in Forex, Shorting and Options but have never had the balls to give it a go. I probably never will.
> 
> My gut agrees very much with you.
> 
> ...




GG

It is a crazy world.  I think of it, as trading leveraged forex OTC directly with an unlicensed casino running inside of a McDonalds which is itself run by another unlicensed Casino, owned by a betting company run out of Nigeria whilst playing musical chairs.

You can do ok, trading/betting, but you want it to be a quick game and have cashed your chips in before the music stops.

Or you just setup a demo account with an exchange and experience that scenario without spending a sent - it is quite the rabbit hole


----------



## Skate (26 May 2021)

WilsonFisk said:


> understand the product




*Just to be clear*
With cryptocurrencies there is no product. 

*The value of cryptocurrencies *
The valuation of crypto is an illusion built on the enthusiasm of traders.



WilsonFisk said:


> Dump over... flame suit on...




*The “Dump it here” thread*
The beauty of this thread is that it allows others to post an alternative view without being challenged or ridiculed.

Skate.


----------



## qldfrog (26 May 2021)

Skate said:


> *The value of cryptocurrencies *
> The valuation of crypto is an illusion built on the enthusiasm of traders.




As are fiat currencies.just a matter of perspectives.
The fall of royalty in France was preceded by a financial scandal based on the first bank notes and their collapse 
https://www.citeco.fr/10000-years-h...coveries/first-paper-money-issuance-in-france
trust is all there is as backing behing a usd and an aud.
Trust that there will ever be a limited issuance.
So that the QE will one day stop ?
Do you have that trust?


----------



## investtrader (26 May 2021)

The beauty of this thread is that it allows others to post an alternative view without being challenged or ridiculed

Exactly ... unlike Hot Copper.


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## Skate (26 May 2021)

*The next two days are critical*
So close, but so far away. Two days to pull a rabbit out of the hat. I can't believe I'm so excited "hoping to break even" & knowing that I can even be up a fraction for the month, fingers crossed. Let's see what tomorrow brings.




Skate.


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## investtrader (26 May 2021)

Skate said:


> View attachment 124911
> 
> *The next two days are critical*
> So close, but so far away. Two days to pull a rabbit out of the hat. I can't believe I'm so excited "hoping to break even" & knowing that I can even be up a fraction for the month, fingers crossed. Let's see what tomorrow brings.
> ...



Hey Skate,
Is this across all of your trading systems? How many systems? How many open positions? Apologies if you have already mentioned this.
Cheers
Gary
PS I am just ahead MTD. I only track my equity curve weekly. Too lazy to worry about daily.


----------



## Skate (26 May 2021)

investtrader said:


> Hey Skate,
> Is this across all of your trading systems? How many systems? How many open positions? Apologies if you have already mentioned this.
> Cheers
> Gary
> PS I am just ahead MTD. I only track my equity curve weekly. Too lazy to worry about daily.




@investtrader what you ask is personal & it depends on a lot of factors that I won't go into. What I can say is that the trading results I'm posting are a combination of all my trading accounts.

*Posting daily results*
The reason to post my daily updates was two-fold
(1) To simply show (in real-time) how my trading handled the month of May.
(2) So others can see what I have endured trying to making a few dollars out of this game.

*Trading is not always peaches & cream*
Last year's trading results were huge & this year is on target to be my best year ever.

*COVID19 presented the gift of uncertainty *
By embracing the uncertainty created by COVID presented me with an opportunity of a lifetime that I have taken full advantage of.

Skate.


----------



## Skate (27 May 2021)

*Hanging in the balance*
The month of May is hanging in the balance. Who would have thought that the last day of trading would be the decider? 

*Having a nose in front*
Being a little in front with one day to go means little at this stage. Fridays have been notoriously bad for me in the past, let's hope for a better tomorrow. This ending couldn't have been scripted any better.




Skate.


----------



## rnr (27 May 2021)

Skate said:


> View attachment 124972
> 
> 
> *Hanging in the balance*
> ...



Hi Skate,

Have you declared Monday May 31st a Public Holiday in Australia by any chance?

Cheers, Rob


----------



## Skate (27 May 2021)

rnr said:


> Hi Skate,
> 
> Have you declared Monday May 31st a Public Holiday in Australia by any chance?
> 
> Cheers, Rob




Hi Rob, for simplicity all my records are weekly orientated, meaning each month will contain 4 or 5 weeks ending on a Friday & not strictly a calendar month. Tomorrow ends the week as well as the month of May for my record keeping.

Skate.


----------



## Skate (28 May 2021)

*Summary*
The month of May turned out to be a very profitable month.




*Year to date*
2020/2021 is still on track to be my biggest year yet.




Skate.


----------



## barney (28 May 2021)

Skate said:


> *Summary*
> The month of May turned out to be a very profitable.




Brilliant .... and confirmation of your systems/resilience Mr. Skate  

I have not had time to read this and many other great Threads of late, but, well done @Skate 

Your contribution to ASF (and for punters in general) is/has been nothing short of prolific


----------



## Skate (28 May 2021)

barney said:


> Your contribution to ASF (and for punters in general) is/has been nothing short of prolific




@barney, thank you for your kind words. They are appreciated.

Skate.


----------



## qldfrog (28 May 2021)

Skate said:


> View attachment 125047
> 
> *Summary*
> The month of May turned out to be a very profitable month.
> ...



Well done mr Skate,
Amazingly and sadly for me, i have an inverse curve, great return in first 6 month then down down down.
The fact i moved in october and just had time to work seriously on my system last week..might be a cause


----------



## Aggitta (28 May 2021)

Hi Skate, I am starting to code in Amibroker and I was wondering if you have published any of your Amibroker systems? I have tried looking through the posts, but there are a LOT of posts. 
Cheers, Aggitta


----------



## Skate (28 May 2021)

Aggitta said:


> Hi Skate, I am starting to code in Amibroker and I was wondering if you have published any of your Amibroker systems? I have tried looking through the posts, but there are a LOT of posts.
> Cheers, Aggitta



@Aggitta the "Dump it here" thread is a combination of my posts & over that time I have supplied the code for a few systems. To get you started you can check out one of them. (The WWT Strategy)

*WTT Strategy*




__





						Dump it Here
					

The order of construction 5. Add a sell condition    Skate.  Great posts @Skate . Quick question:- am I correct to assume there are two sell conditions in this system? A) when the stop is triggered; and B) the other being when the close crosses below the 25 period ma of the close?




					www.aussiestockforums.com
				




Skate.


----------



## ducati916 (29 May 2021)

So Paul Samuelson (the economist) offered a bet to a fellow economist:

On the toss of a coin: lose $100 or win $200. The bet was refused. His fellow economist however countered with, if you allow me to take the same bet x100, I'll take the bet.

With 'independence', obviously the expectancy calculation is very different and strongly favours the x100 tosses as each of the coin tosses is an independent event.

Individual stocks. Clearly variable as far as independence goes. Stocks lean far closer to 1 than 0 as far as correlation and thus independence. However it is not a 1. It can (pretty much) reach a 1 at times but it can drop far lower. Even stocks in the same sector don't display a 1.

So of our asset classes: Stocks, Bonds, Commodities, Currencies, Gold, BTC, RE., working out the correlations can really provide some diversification, raising your overall expectancy, which is a broad framing of risk rather than a narrow framing of risk.

Risk management (I argue) has more to do with a broad framing than a narrow framing of risk. What you will find is a far tighter correlation even across different asset classes than you might have supposed. As an example FXA, FXC, FXE correlate to commodities closer to a 1 while DXY trades closer to 0. If you trade multiple assets, some of the less obvious correlations can catch you out in high vol. events.

Just recently BTC and all other coins = 1.

Just recently we have had in stocks, Growth v Value, which is possibly unwinding to an extent. Now even though in a crisis all stocks rush to 1, in a more sedate market concentrating into more highly correlated sectors can be a strategy or the opposite, depending on your risk management style.

There was a post a day or two ago re. risk management. I was sort of waiting for a discussion to develop around the SL. To my thinking discussing SL smacks of amateur hour. At this level if you cannot implement basic processes necessary to engage in financial markets, you are going to have a rough ride until you can.

Risk management is more about total (broad) exposure, correlations and hedging techniques to prevent issues when correlations go to 1 which they always do at some point.

I mention this because: (a) weekends are a factor and the inverse (b) markets that never close, but you need to sleep. I also saw Mr @aus_trader had a stock gap down recently. There will ALWAYS be negative events that cannot be managed by the overworked SL. I dispensed with the SL years ago as a waste of time. That is not to say that I won't cut a stock/whatever in an instant, I will, but the SL is a risk management tool that is overhyped. It is a risk management tool that is employed on a narrow frame risk management style, when your exposures should be broad and managed as such.

So I have placed this post in this thread mostly because the system's chaps think about these things a little harder (generally).


jog on
duc


----------



## Skate (29 May 2021)

ducati916 said:


> I dispensed with the SL years ago as a waste of time but the SL is a risk management tool that is overhyped.




*Getting in & getting out*
As a system trader that is the essence of what we do, a place to get in & a place to get out. Getting "in" is always the easiest part of the equation. Getting out requires a tremendous amount of effort to find the "best of the worst" exit. With any trend trading strategy, it's inevitable that you have to surrender some of your open profits before a decision to exit is made for you.

*Gap-downs are hard to deal with*
When a price gaps-down without notice can be devastating, to say the least. But what normally happens is that the price is subjected to three variables that give a slight warning & these can be interwoven into a "StaleStop" exit strategy.

Skate.


----------



## Skate (29 May 2021)

*Using a StaleStop as a predictor*
Interweaving a "bar-by-bar" StaleStop can have predictive powers. How? - combining the RSI, StochD & MACD are all solid indicators of strength & if the strength ceases to increase over an nPeriod from the entry we will politely exit the position.

*I'm needing a new project*
To illustrate the StaleStop exit strategy, I will trade two strategies to demonstrate this method. @Aggitta was interested in a strategy & I suggested the WTT strategy. That will be my first strategy.

*Strategy number #1*
The WTT Strategy is a robust strategy but can be improved with a few modifications. Adding a StaleStop predictor to exit sharpens the returns. 

*Strategy number #2*
@qldfrog generously allowed me to use his Flying Bat logo that I made for him so that will be the second strategy. I'll use "Skate's Flying Bat Strategy" to demonstrate the use of the StaleStop predictor.

*Why post two strategies*
For one simple reason, each strategy is completely different in most ways but they will both exercise the same "StaleStop" predictor to exit. By displaying the signals before the opening will keep me honest. The weekly results will be posted on a Friday evening.

Skate.


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## Skate (29 May 2021)

*The WTT Strategy - overview*
Some traders "but not all" are fluent with the working of the WTT Strategy. As a recap, the WTT Strategy is a simple 20-period breakout trend following system. The idea behind this strategy is solid but returns are unimpressive. With all sound strategies, improvements are difficult to find but with perseverance, it's not impossible to find some. There are those who trade a version of the WTT Strategy & my version "buy & sell" signals may hold some interest to them. The predictive "StaleStop" exit strategy is a new addition that incorporates a "strength predictor". 

*The Flying Bat Strategy - overview*
It's a simple strategy that uses a few indicators to sharpen both the entry & exit signals. As the strength of a trend is so important in filtering out false signals, I've decided to use the "RSI, StochD & MACD" indicators in "combination" to return the best bang-for-buck. Those three indicators are at the very heart of everything this strategy hopes to achieve. The premise behind the idea is simple. Enter on a confirmed trend with strength & get out when strength fails to keep building.

Skate.


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## Aggitta (29 May 2021)

Skate said:


> @Aggitta the "Dump it here" thread is a combination of my posts & over that time I have supplied the code for a few systems. To get you started you can check out one of them. (The WWT Strategy)
> 
> *WTT Strategy*
> 
> ...



Hi Skate, thanks for that. I'll have a play and see if I can understand it. Much appreciated.


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## Skate (29 May 2021)

*For those interested *
The Simple Strategy has performed well during the month of May 2021 & is continuing to build with 10 open positions currently.




Skate.


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## Skate (29 May 2021)

*Skate's WTT Strategy signals*
The strategy is designed to be traded in the pre-auction & the signals will be displayed before Monday's open.

*Strategy construction*
Portfolio size $100k
Positions 20
Bet size $5k




Skate.


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## Skate (29 May 2021)

*I've changed my mind*
For simplicity, I'll concentrate on one strategy only, "Skate's WTT Weekly Strategy" - by doing so it allows others to compare & contrast to the original.

*Skate's Flying Bat Strategy *
I'll start "Skate's Flying Bat Strategy" as a new project for July 2021



moXJO said:


> discussion round here have been rather bland lately




@moXJO, yes, I tend to agree. Without a few regular posters, there would be nothing of value to read.

Skate.


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## Aggitta (29 May 2021)

Hi Skate, 

Since my last post I've looking at your WTT code and figuring out what it is doing. This is really helpful, so thanks very much. I really like that you have commented on the all the code so it is easy to follow. I had to change the input from Norton as I have Oracle (I did by trial and error, but got there eventually!) and I had to rem out a few lines near the bottom, but all good.

Tomorrow I'll play with some of the settings to see how it affects backtesting. Again, I really appreciate that you have let me have the code. I'll be interested to see how the Stale Stop goes.

Cheers, Aggitta


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## Skate (29 May 2021)

Aggitta said:


> Tomorrow I'll play with some of the settings to see how it affects backtesting.




*For your information*
@Aggitta, the WTT Strategy I posted was for "educational purposes ONLY" & bears no resemblance to the strategy I'll be trading. 

*Just so we are clear *
I want to point out "no one is going to give you a good racehorse" & it's the same for strategies.

*Do not trade*
Under no circumstances should you trade the uploaded "WTT Strategy" - it was an exercise to explain how a strategy is constructed. 

*I'm just saying*
If anyone wants to trade the WTT signal, they will be trading alongside me. I should also point out "I tend to lose interest over time" with all that I do. Meaning, if it's no longer challenging "I'll stop doing it"

Skate.


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## Aggitta (29 May 2021)

Skate said:


> *For your information*
> @Aggitta, the WTT Strategy I posted was for "educational purposes ONLY" & bears no resemblance to the strategy I'll be trading.
> 
> *Just so we are clear *
> ...



Ha, ha don't worry Skate, I'm only using it to figure out coding and ideas. I need a lot more understanding of Amibroker coding  before I will be putting any money down


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## bsnews (29 May 2021)

You know what really drives my a bit crazy these days TAX. Why do we all have to pay more tax for being successful? At times and yes one of the times is now it actually holds you back. If I was to sell the rest of my shares that I want ATM to take the profit and reinvest I would lose so much to tax. So I am left hanging onto what has ran its race.

I can wait for the new FY and sell but same problem I would then be holding another set of shares that I would not want to hold after the race has been run Catch 22!

I am happy to pay tax as not to pay would mean I have not made any profit but always managing it drives me nuts. 

As I have aged and built wealth I start to wonder if I should go back to my parents parents and just put it under a mattress and still reap the benefits though a age pension. 

Frustration lol

Well I suppose its a good problem to have.


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## Skate (29 May 2021)

bux2000 said:


> are we looking at CVV ?
> Of particular interest to me I hold.




*Periodicity*
If you trade a daily strategy versus a weekly strategy the signals reflect how often you trade. As @bux2000 recently made a comment that he had an interest in the position (CVV) it's a good time to visually display the entry & exit positions of both periodicities.



peter2 said:


> There is less noise on the weekly charts when compared to the daily




*Don't be fooled*
The periodicity that allows you to sleep at night is the "time frame" you should be trading. If you think there is more profit trading a Daily versus a Weekly strategy from my experience the returns are about the same - only the workload & commission cost increase.

*# Daily Strategy*






*# Weekly Strategy


*


Skate.


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## Skate (29 May 2021)

*Quick Update (ESPO)*
As @ducati916 had displayed an interest in (ESPO) it's worthy of a weekend update.

*(ESPO) is currently still a hold*
I post the "Ducati Daily Blue Bar Strategy" because visually the strategy is easy to read & understand. When the bar turns red (the signal bar) the very next bar will be the sell bar. Buy the second buy bar & sell the second red bar. The first blue & red bars are the signal bars.

*Trading the colour of price bars*
There is nothing as simple a strategy that simply trades on the colour change of the price bar.




Skate.


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## bux2000 (29 May 2021)

Hi Skate,

 I follow your posts with much interest.

 I recently tried my hand at short term trading but found I was spending too much time in front of my computer, my day job was suffering.  It was so compelling, but realised for me, the small gains I was making were more than offset by larger loss's so reverted back to the more end of day decision making.

My experience taught me alot ....about myself, my decision making and how I can talk myself into doing things that in retrospect is in no way logical. 

I am not saying I will not return to more intense trading in the future but at the moment I need to keep things in perspective.

I am not saying either that I am not making gains on my capital (my portfolio) , and finding a way that works for me is constant. At this stage losing the losers and keeping the winners is working.

As I touch my wooden desk  CVV and HYM have been my best performers. As my portfolio grows I am constantly reminded of what my eldest brother instilled  "When it appears to too good to be true it usually is."

I have been self employed for over 45 years so I am a firm believer in the "Harder I work, the luckier I get"  principle but have learnt to always be extremely open to other perspectives and views.

 I will have a go at posting a chart (not as good as yours) to help show how I have approached CVV and still hold.


And thanks again for your time, I appreciate your thoughts

bux


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## ducati916 (30 May 2021)

Skate said:


> *Quick Update (ESPO)*
> As @ducati916 had displayed an interest in (ESPO) it's worthy of a weekend update.
> 
> *(ESPO) is currently still a hold*
> ...




My signal came on 20 May. Which might have been 1 day prior to your signal. I didn't take the trade. The reason I didn't take the trade was that the NASDAQ was still looking a little weak at that point. So essentially I won't take a trade in an ETF if the overall index looks sketchy. As it turned out, NASDAQ was only about 1 day behind.

Now that NASDAQ has bounced, the entry point for ESPO is not really what I want currently. I would need a bit of a pullback for the entry, which will happen at some point.


jog on
duc


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## ducati916 (30 May 2021)

Skate said:


> *Using a StaleStop as a predictor*
> Interweaving a "bar-by-bar" StaleStop can have predictive powers. How? - combining the RSI, StochD & MACD are all solid indicators of strength & if the strength ceases to increase over an nPeriod from the entry we will politely exit the position.
> 
> 
> ...




Actually I have something very similar, although arrived at by a different means. Now the relevant stock that I exited on Friday (US time) on this basis was GOOG. Had I not already been in GOOG I would be looking at this as a potential entry point. I may well re-enter. At the moment however, it was an exit, based on essentially a weakening trend.

If you have time, run GOOG through your (above) filter and see if it would have also triggered an exit. It would not (I think) have triggered an exit in your 'Blue Bar' strategy (but I'd be interested in that one also).

jog on
duc


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## ducati916 (30 May 2021)

Skate said:


> *The WTT Strategy - overview*
> Some traders "but not all" are fluent with the working of the WTT Strategy. As a recap, the WTT Strategy is a simple 20-period breakout trend following system. The idea behind this strategy is solid but returns are unimpressive. With all sound strategies, improvements are difficult to find but with perseverance, it's not impossible to find some. There are those who trade a version of the WTT Strategy & my version "buy & sell" signals may hold some interest to them. The predictive "StaleStop" exit strategy is a new addition that incorporates a "strength predictor".
> 
> *The Flying Bat Strategy - overview*
> ...




Again, seems very similar to my current swing trade strategy. I had entries on Friday (US time) of LPX, OPY and NFLX. Would either (any) of your systems have selected these stocks? Very curious.

jog on
duc


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## qldfrog (30 May 2021)

ducati916 said:


> Again, seems very similar to my current swing trade strategy. I had entries on Friday (US time) of LPX, OPY and NFLX. Would either (any) of your systems have selected these stocks? Very curious.
> 
> jog on
> duc



Interesting, not sure Mr Skate has access/ is using US data


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## ducati916 (30 May 2021)

This screenshot is from Mr @peter2 




I think we have both taken inspiration for the weekly time frame from your systems.

I have been thinking about this a little, amongst numerous other things. The issue (for me) entering a swing trade system on a weekly is that the SL point has to be wider. This is an ENTRY issue, which concerns you less, but me far more.

So the possible solution is: (a) enter on a daily time frame, hold the trade until an exit is triggered. If (b) the trade is still live after 1 week, look at the weekly chart. Is the trade valid on the weekly? If it is, switch the trade to the weekly.

So an example currently: GOOG. Triggered an EXIT on the daily, but an ENTRY on the weekly. Now as already stated, that exit on the daily could also have been, if confirmed, an entry on the daily, which marries up with the weekly.

Therefore, what I am expecting to happen is: a re-entry to GOOG next week on the daily. The trade will not trigger an exit on the daily for the week and I will switch it over to the weekly from that point.

This should work better with ETFs than individual stocks as a basket is going to be less volatile than an individual name. GOOG, being so massive could work well also.

The 'good' entry on the daily, gives breathing space and reduces losses if stopped out on the weekly.


jog on
duc


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## ducati916 (30 May 2021)

qldfrog said:


> Interesting, not sure Mr Skate has access/ is using US data




Indeed. But as he posted ESPO, maybe he does. Unless ESPO is also listed on the ASX with the same ticker?

jog on
duc


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## qldfrog (30 May 2021)

ducati916 said:


> Indeed. But as he posted ESPO, maybe he does. Unless ESPO is also listed on the ASX with the same ticker?
> 
> jog on
> duc



Or completely different stock here.😁
To be honest, if not looking at real time it is possible..but not easy to feed some historical us data into AB from yahoo finance, etc.so doable
I remember gme on the asx got a boost from the GameStop story in the US


----------



## Newt (30 May 2021)

Mr Duc, I'm guessing you wouldn't swing trade ASX or NZ - preference for US is higher liquidity and much lower commissions?


----------



## ducati916 (30 May 2021)

Newt said:


> Mr Duc, I'm guessing you wouldn't swing trade ASX or NZ - preference for US is higher liquidity and much lower commissions?




Those are some of the reasons. Additionally there is no Options market to speak of. I use Options a lot. And last but not least, I work full time, so the US time zone actually works better for me.

Jog on
duc


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## Skate (31 May 2021)

*The starting date of a new strategy*
"Skate's WTT Strategy" is a strategy that I haven't traded before. The crystal ball logo is to denote that I use predictive indicators as my trading edge. Today's starting date will have a big bearing on the performance outcome going forward. Those who have not traded before need to know all strategies take time to develop & need significant "luck" starting out.

*Uncertainty*
None of us knows what's going to happen next when trading but what I do know is that "it's vital that we follow our trading rules consistently" otherwise it can destroy the strategy's edge.

*Trading at the moment is a tough gig*
Posting my trading results for May 2021 demonstrated that trading has its moments (good & bad). Trading results are secondary & not the point of the exercise. The reason for posting is to demonstrate what one has to endure to be profitable over the longer term.

*Doing it again*
This new strategy, starting from scratch, would be another example of how a new strategy performs over the month of June 2021 with daily & weekly updates. I'm wishing (fingers crossed) that this strategy will be profitable at the end of June 2021 & anything less will be a failure. With all-new strategies, it's normal to dip into the red early as profitability comes later once positions start to build.

Skate.


----------



## Aggitta (31 May 2021)

I've been having a bit of a fiddle around backtesting to stop 'stale stock syndrome', but with limited success. I've been trying various MA crossovers.
I know Jim Berg exits after 30 or 60 days if the stock hasn't reached its profit target and another group I'm in exits a stock after 10 days so this may be my next set of tests. Or perhaps MACD crossovers. Any other suggestions?


----------



## Roller_1 (31 May 2021)

Skate said:


> . I'm wishing (fingers crossed) that this strategy will be profitable at the end of June 2021 & anything less will be a failure.




What happens if this weekly strategy "fails" after 4 weeks? is it tossed? Harsh critic!


----------



## Skate (31 May 2021)

Roller_1 said:


> What happens *if this weekly strategy "fails" after 4 weeks? is it tossed?* Harsh critic!




@Roller_1, I never throw away good strategies. I've put an enormous amount of effort & time into this strategy & frankly, each time I trade a strategy live on this thread I'm not only putting my reputation on the line but my hard earnt funds. I'm confident this strategy will go on to make some serious coin for me, well that's the plan.



Skate said:


> this strategy will be profitable at the end of June 2021 & anything less will be a failure.




*The measure of success*
I'm giving this project till the end of June to be in profit as the "measure of success" of this exercise. When new traders start out, they expect to go into profit sooner rather than later. Sometimes they'll quit after a few down days or after a losing week or two before. Heaven forbid they want to start "changing something" by fiddling "disguised as improvements". At times with beginners, if there is no quick profit, they could stop trading or exit the game entirely.

Skate.


----------



## Skate (31 May 2021)

Aggitta said:


> I've been having a bit of a fiddle around backtesting to stop 'stale stock syndrome', but with limited success. I've been trying various MA crossovers.
> I know Jim Berg exits after 30 or 60 days if the stock hasn't reached its profit target and another group I'm in exits a stock after 10 days so this may be my next set of tests. Or perhaps MACD crossovers. Any other suggestions?




@Aggitta there are many posts about my StaleStop strategy. The search feature should be your best friend. 

*StaleStop*
I add my "StaleStop array" in a loop so it measures bar-by-bar. Other traders simply exit a position that has not made a new high over a nPeriod of days to weeks. Personally, doing it that way is highly ineffective (IMHO).

Skate.


----------



## Aggitta (31 May 2021)

Thanks Skate, I'll do a search (my bad). 
I haven't figured out loops yet (never programmed before) so another thing to learn. Plenty of time in lockdown, anyway.


----------



## Skate (31 May 2021)

*It's not the ideal start*
With all-new strategies, it's normal to dip into the red early as profitability comes later once positions start to build. The 5 positions entered today will have to carry the load until more positions are entered next Monday.




Skate.


----------



## Skate (31 May 2021)

*I couldn't help myself*
I had the funds set aside & decided yesterday not to run two projects at the same time. I believed it might be confusing for those who wanted to follow the buy & sell positions as it would be easier to concentrate on one set of signals. I just couldn't let those funds sit around till next month's new project. Besides, there is a possibility to earn a few dollars in the meantime.

*To keep it simple*
I'll post the daily progress of "Skate's Flying Bat Strategy" (without signals) at the same time as I post "Skate's WTT Strategy" progress.

*"Skate's Flying Bat Strategy" has also started in the red*
At least both strategies are in there fighting the good fight. I'm thinking out loud here "If Skate's Flying Bat Strategy fails to perform in June - let's blame @qldfrog as it's his idea"




Skate.


----------



## Skate (31 May 2021)

*I was looking for an example & this is the perfect one*
I started trading 4 new strategies in the month of May 2021. Two were retired strategies (The HappyCat Strategy & The BlueWren Strategy). The other two were newly coded strategies "itching to have a go". (The FreeBalling Strategy & The Rubik Cube Strategy). In each of these strategies the portfolio size $100k X 20 positions ($5k bets)

*Here's the example*
1. The HappyCat Strategy (red line) is struggling to gets its head above water.
2. The BlueWren Strategy (blue line) has taken 4 weeks to move into profit.
3. The FreeBalling Strategy (green line) fluctuated before going into profit.
4. The Rubik Cube Strategy (purple line) kicked into profits from the get-go.




*Summary*
As I mentioned to @Roller_1 - "I don't throw away a good strategy because of the results of a small sample size. Meaning, "Don't throw the baby out with the bathwater". Three of those strategies are currently in profit & one laggard. (3 out of 4 is not too bad)

Skate.


----------



## AussieStockDawg (31 May 2021)

Skate said:


> @Aggitta there are many posts about my StaleStop strategy. The search feature should be your best friend.
> 
> *StaleStop*
> I add my "StaleStop array" in a loop so it measures bar-by-bar. Other traders simply exit a position that has not made a new high over a nPeriod of days to weeks. Personally, doing it that way is highly ineffective (IMHO).
> ...



Hi @Skate 
Does your AFL code manage your open position stale stops / trailing stops, or do you manage this in Share Trade Tracker or elsewhere? 

Thanks


----------



## Skate (31 May 2021)

AussieStockDawg said:


> Hi @Skate
> Does your AFL code manage your open position stale stops / trailing stops, or do you manage this in Share Trade Tracker or elsewhere?
> 
> Thanks




*#1. Norgate*
Data supplier.

*#2. Amibroker *
Manages all my trading strategies. (Yes, Amibroker manages the open positions, stale stops/trailing stops & much, much more)

*#3. Share Trade Tracker *
Share Trade Tracker is my portfolio manager, keeping the record of all trades. Share Trade Tracker is also an analysis program to boot.

Skate.


----------



## AussieStockDawg (31 May 2021)

Skate said:


> *#1. Norgate*
> Data supplier.
> 
> *#2. Amibroker *
> ...



@Skate 
Thanks for the heads up. 

I use 1 and 3. Will investigate implementing 2 in my AFL.


----------



## WilsonFisk (31 May 2021)

ducati916 said:


> Indeed. But as he posted ESPO, maybe he does. Unless ESPO is also listed on the ASX with the same ticker?
> 
> jog on
> duc



Hey duc

 They are both the same etf run by Van Eck.  Exact same underlying holdings. 

I beleive they have established it as a seperate fund here for tax efficiency instead of it just being a fund where it buys units in the US espo fund (like a lot of international equity etfs here)


----------



## Skate (31 May 2021)

ducati916 said:


> If you have time, run GOOG through your (above) filter and see if it would have also triggered an exit. It would not (I think) have triggered an exit in your 'Blue Bar' strategy (but I'd be interested in that one also).





ducati916 said:


> Again, seems very similar to my current swing trade strategy. I had entries on Friday (US time) of LPX, OPY and NFLX. Would either (any) of your systems have selected these stocks? Very curious.





qldfrog said:


> *Interesting, not sure Mr Skate has access/ is using US data*




*I've been busy & missed a few posts*
I don't have access to US Data. ESPO is listed on the ASX as @WilsonFisk alluded to.

Skate.


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## Skate (1 June 2021)

*New trading ideas*
Going into its 6th week & with 15 positions filled I'm now wishing I had used "The Simple Strategy" to make a series of posts instead of going live straight away. The "Simple Strategy" has proven to be a real workhorse. Today is a down day for most of my strategies but after today's first update it's still powering ahead.

*More on the strategy can be found here*




__





						Dump it Here
					

Skate's "Simple Strategy" This exercise was to develop a strategy, but not any strategy but a strategy that is built on the entire premise of buying into the strength of a confirmed trend. The name of the strategy is unremarkable but at least it fully explains what the strategy is all about...




					www.aussiestockforums.com
				




Skate.


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## Skate (1 June 2021)

Skate.


----------



## Skate (1 June 2021)

Skate.


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## qldfrog (1 June 2021)

the frog's bat was more like: 
	

		
			
		

		
	



today 
Great result for your system Mr Skate, mine were all in red today


----------



## ducati916 (2 June 2021)

Skate said:


> View attachment 125246
> 
> 
> *The starting date of a new strategy*
> ...




Given that the market for the last month (May) has been chop and pretty frustrating, is the new strategy predicated on more chop or are you hoping for a trend to develop?

If predicting chop, then I would guess that this strategy would be some form of reversion to the mean: buy the bounce type of deal. Now a buy the bounce strategy is very ENTRY dependant.

If a trend based strategy, then we need this current chop to abate and a trend again to emerge.

I'm guessing a form of trend based strategy, knowing the low(er) value that you place on entries, although your Blue Bar strategy I note is absolutely on the money as far as entries go.

When the Fed. and Mr Powell speak about inflation, what they actually mean is ASSET price inflation, which they have in spades. Asset price deflation is a problem that they simply cannot have. They will throw DXY under the bus in the short term, hoping that its status as the #1 Reserve Currency keeps it afloat for the next few years.

Therefore, eventually, a trend will re-emerge higher in the US for stocks, which bodes well for the ASX.


jog on
duc


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## Skate (2 June 2021)

ducati916 said:


> your Blue Bar strategy I note is absolutely on the money as far as entries go.



@ducati916 has given me a few ideas over time "when to jump on trends". It's only human to skim-read posts without understanding what has been written. Many fail to realise the effort posters take to pass on information to help others to become better traders.

*"The Ducati Daily Blue Bar strategy"*
The blue & red price bars guide when it's optimal to buy & sell. I have a simple trading method of riding trends & exiting when it deemed to be over. As traders, we buy a position in the hope that "sometime in the future" we will be able to offload the position to someone at a "higher price" than when we brought it. That's trading in a nutshell. The "Ducati Blue Bar Strategy" allows me to do this. The strategy was quick to code because when you stripped trading back to the bare basics "volatility & volume" driver a trend. Once again it proves "simple" works.

*Explanation*
I've used @peter2 idea of colour coding the trend with "Blue Bars" so it's simple to follow along by looking at the charts. The first "blue bar" is the signal bar & we buy on the "next daily blue bar" no matter what periodicity. The first "red bar" is the signal bar & sell on the next "red bar". It's a simple strategy I have to admit.

*These previous posts hold the key to profitable trading*




__





						Dump it Here
					

So here we have the systems traders v the discretionary chaps: this pretty much mirrors the ASF community atm.    And we have 'insiders' buying their own stocks heavily:    I monitor the various systematic based strategies here on ASF, particularly Mr Skate's thread and systems, (although there...




					www.aussiestockforums.com
				







__





						Dump it Here
					

So here we have the systems traders v the discretionary chaps: this pretty much mirrors the ASF community atm.    And we have 'insiders' buying their own stocks heavily:    I monitor the various systematic based strategies here on ASF, particularly Mr Skate's thread and systems, (although there...




					www.aussiestockforums.com
				







__





						Dump it Here
					

1st off "The Ducati Blue Bar Strategy" bears no resemblance to any strategy that I have previously posted & in no way mimics or uses any part of the "SuperTrend Strategy" or infact any of the ideas @peter2 has posted about. The idea has been coded from Duc's previous post. The two indicators are...




					www.aussiestockforums.com
				







__





						Dump it Here
					

1st off "The Ducati Blue Bar Strategy" bears no resemblance to any strategy that I have previously posted & in no way mimics or uses any part of the "SuperTrend Strategy" or infact any of the ideas @peter2 has posted about. The idea has been coded from Duc's previous post. The two indicators are...




					www.aussiestockforums.com
				







__





						Dump it Here
					

1st off "The Ducati Blue Bar Strategy" bears no resemblance to any strategy that I have previously posted & in no way mimics or uses any part of the "SuperTrend Strategy" or infact any of the ideas @peter2 has posted about. The idea has been coded from Duc's previous post. The two indicators are...




					www.aussiestockforums.com
				







__





						Dump it Here
					

Or the systems, backtested on multiple market phases does not sell buy yet, why would someone take a discretionary position then? Do not let either fear or FOMO control a systematic trading




					www.aussiestockforums.com
				







__





						Dump it Here
					

If trading a purely weekly system, you can have up to 5 down sessions A DD of 20/25% would still be reasonably possible even if you trigger the gtfo on that friday night And an average fall of 4 or 5 pc per session is not exactly unrealistic coming from our highs The only way to reduce the risk...




					www.aussiestockforums.com
				







__





						Dump it Here
					

If trading a purely weekly system, you can have up to 5 down sessions A DD of 20/25% would still be reasonably possible even if you trigger the gtfo on that friday night And an average fall of 4 or 5 pc per session is not exactly unrealistic coming from our highs The only way to reduce the risk...




					www.aussiestockforums.com
				




*Summary*
No one likes to read yesterday's news (old posts) but when they hold the key to trading profitable "it's worth the effort". (IMHO) Being realistic, not many will take the time to revisit & read the hyperlinks because that would involve effort.

Skate.


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## Skate (2 June 2021)

Skate.


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## Skate (2 June 2021)

Skate.


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## rnr (2 June 2021)

Skate said:


> @ducati916 has given me a few ideas over time "when to jump on trends". It's only human to skim-read posts without understanding what has been written. Many fail to realise the effort posters take to pass on information to help others to become better traders.
> 
> *"The Ducati Daily Blue Bar strategy"*
> The blue & red price bars guide when it's optimal to buy & sell. I have a simple trading method of riding trends & exiting when it deemed to be over. As traders, we buy a position in the hope that "sometime in the future" we will be able to offload the position to someone at a "higher price" than when we brought it. That's trading in a nutshell. The "Ducati Blue Bar Strategy" allows me to do this. The strategy was quick to code because when you stripped trading back to the bare basics "volatility & volume" driver a trend. Once again it proves "simple" works.
> ...



Hi @Skate,

Is this statement (Blue/Bold) totally accurate?
The problem being, if it is accurate and you buy & sell at the "OPEN" as per your charts, then the code must be looking forward to determine the colour of a bar.

Cheers,
Rob


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## Skate (2 June 2021)

rnr said:


> Hi @Skate,
> 
> Is this statement (Blue/Bold) totally accurate?
> The problem being, if it is accurate and you buy & sell at the "OPEN" as per your charts, then the code must be looking forward to determine the colour of a bar.
> ...




*Rob, let me clarify*
The "Ducati Daily Blue Bar Strategy" is not forward-looking. The (ESPO) chart below is easy to follow that explains the strategy a little better. As it only has two different coloured bars, the first blue & red bars are the signal bars. When you get a signal, you buy in the preauction on the next bar. At this stage the colour of the bar is unknown.

1. The first "blue bar" is the signal bar & we buy at the open of the next bar.
2. The first "red bar" is the signal bar & we sell at the open of the next bar.  

*After the first signal bar*
The next bar colour after the signal bar is not determined until the close of that bar.

*Trading the colour of price bars*
There is nothing simpler than trading on the colour change of a price bar.

*(ESPO) - Weekly signal*
At the end of trade, today (ESPO) has a buy "signal" but as this is a "weekly chart", we won't know the colour of the price bar until the end of trade Friday. If the bar is still blue it's a buy in the "preauction" Monday.




I hope this explanation adds clarity that the strategy is not forward-looking.

Skate.


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## Skate (2 June 2021)

*Quick Update (ESPO)*
The previous chart for (ESPO) was weekly & it's worthy of a daily update.

*FYI*
The "Ducati Blue Bar Strategy" works with all periodicities.

*DAILY CHART*
On the daily chart (ESPO) is currently a "hold". The first red bar will be a signal bar & to be sold on the next open in the pre-auction.

*Confirmation*
The "Ducati Blur Bar Strategy" is not forward-looking




Skate.


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## rnr (2 June 2021)

Skate said:


> *Rob, let me clarify*
> The "Ducati Daily Blue Bar Strategy" is not forward-looking. The (ESPO) chart below is easy to follow that explains the strategy a little better. As it only has two different coloured bars, the first blue & red bars are the signal bars. When you get a signal, you buy in the preauction on the next bar. At this stage the colour of the bar is unknown.
> 
> 1. The first "blue bar" is the signal bar & we buy at the open of the next bar.
> ...




Hi Skate,

Below is the statement that you made in your post [ref: 5422] which caused me to ask the question:-Is this statement (Blue/Bold) totally accurate?

*"Explanation*
I've used @peter2 idea of colour coding the trend with "Blue Bars" so it's simple to follow along by looking at the charts. *The first "blue bar" is the signal bar & we buy on the "next daily blue bar" no matter what periodicity. The first "red bar" is the signal bar & sell on the next "red bar". It's a simple strategy I have to admit."*

Obviously the simple answer is *no*, *it is not accurate.*

Cheers,
Rob


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## Cam019 (2 June 2021)

I see what you're saying Rob, but I think you're over thinking it. Please correct me if I'm wrong but I think you're asking how would the system know that the entry bar (bar after signal) is going to be blue before the days trading finishes.

I'm assuming the answer is, Skate wouldn't know and ultimately it is irrelevant because we won't know if the bar is red or blue until the close of that particular trading day. I think the entry is still valid regardless of what colour the 'entry' bar ends up being.


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## Skate (2 June 2021)

rnr said:


> Hi Skate,
> 
> Below is the statement that you made in your post [ref: 5422] which caused me to ask the question:-Is this statement (Blue/Bold) totally accurate?
> 
> ...



Hi Rob

*Rephrased*
The first "blue bar" is the signal bar & we buy on the "*next bar*". The first "red bar" is the signal bar & sell on the next "*bar*".

*The corrections* 
The bolding is the correction that clarifies my explanation of how the strategy works.

Skate.


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## Skate (2 June 2021)

Cam019 said:


> I'm assuming the answer is, *Skate wouldn't know and ultimately it is irrelevant because we won't know if the bar is red or blue until the close of that particular trading day*. I think the entry is an entry regardless of what colour the bar ends up being.



@Cam019, you are absolutely correct. The strategy buys the next bar after the signal bar & the colour of the next bar is unknown at this stage.

*This is important *
When the position is taken the next bar colour is unknown BUT the colour of that entry bar dictates whether to hold or sell.

Skate.


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## Skate (2 June 2021)

rnr said:


> Obviously the simple answer is *no*, *it is not accurate.*




Rob, I concede the wording could be misinterpreted & misleading. I trust @Cam019 explanation overcomes the issue you have. I accept the initial description I used could have been better worded.

Skate.


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## Skate (3 June 2021)

aus_trader said:


> problem is finding stocks that have some substance




@aus_trader has pointed out that his trading results (which are impressive by the way) rely on finding a stock that has substance. The method in finding that substance differs greatly between the two of us. Systemic traders don't have to rely on skill but tend to rely on indicators.

*Indicators are clues, signs or piece of information that indicates something*
Reading an indicator can be somewhat complicated because of the many pieces of information that it provides. In the context of technical analysis, an indicator is a mathematical calculation based on a security's price & volume. The result is used to predict future prices. Predictive indicators provide a guide when it's optimal to buy & sell.

Skate.


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## Skate (3 June 2021)

*Filters & parameters*
In contrast, the concept around filters adds complexity to coding a strategy. The filters & parameters of the code are a constant struggle as it becomes a trade-off.  Pushing for higher returns increases the risk & drawdowns. Also, the exit strategy adds further complexities. Using appropriate combinations of stops helps find the "sweet spot" to exit. 

*Stops*
The placement of effective extra stops can make the difference between a quick, relatively painless loss or something more excruciating. Typically, most strategies gauge momentum & volatility in "certain ways" using indicators. Trend traders have their favourites to get the job done. Finding them & making them work together is a challenge but well worth the exercise.

Skate.


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## Skate (3 June 2021)

*Traders live on hope*
Develop a system that you know works, that you’ll follow under any circumstances & you'll never need hope again. Indicators are a small & often inconsequential component of a complete trading strategy. The ‘performance’ of any indicator will ultimately depend upon the markets that you apply it to & more importantly the risk management & exit strategy of the final model.

*In trading, your goal is to be consistent*
So, the more consistent you "do what you do", the more consistent your results will be. Concentrate on the execution of your strategy & not on the money-making side of the equation as one follows the other. Every trading system has certain performance aspects to it. These aspects have a direct impact on its profitability & most of all predictability.

*Awareness*
Tracking the performance of your trading system is absolutely essential to truly maximise your profits. It's also handy to visualise if your trading is on track & within a range of the backtesting results. Awareness gives you the knowledge that can help you get to the next level in your trading education.

Skate.


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## aus_trader (3 June 2021)

Skate said:


> @aus_trader has pointed out that his trading results (which are impressive by the way) rely on finding a stock that has substance. The method in finding that substance differs greatly between the two of us. Systemic traders don't have to rely on skill but tend to rely on indicators.
> 
> *Indicators are clues, signs or piece of information that indicates something*
> Reading an indicator can be somewhat complicated because of the many pieces of information that it provides. In the context of technical analysis, an indicator is a mathematical calculation based on a security's price & volume. The result is used to predict future prices. Predictive indicators provide a guide when it's optimal to buy & sell.
> ...



Thanks Skate, I am also impressed by your trading methods some of which I've traded alongside you.

In my spec portfolio I just try to find stocks that has some differentiation from it's peers. So in the Gold stock example, there's that many Gold stocks heading higher swept up by the rise in Gold price, so which one do I pick.

So digging a bit deeper into some of the popular Gold stocks, I found that ALK has a very good Gold operation at Tomingley with nearly a decade of production left (see today's announcement by the company), which could further be extended with the discovery of 'Boda' deposit which is still being defined.


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## Skate (3 June 2021)

*Off-Topic*
Well, you live & learn.

*How do you pronounce Dogecoin?*
The cryptocurrency’s co-founder Mr Markus says the correct pronunciation is “dohj coin”, despite its logo including a dog. Dogecoin is a cryptocurrency that was created as a "joke" also made out of "fairy dust" that is now worth billions.

*I've been pronouncing it Dog-eCoin. *
Dog - E - Coin or saying it quickly "doggie coin" or "Doggy Coin". The dog meme simply confused the heck out of me, thus the incorrect pronunciation.

*“Dohj coin”*
Pronounced phonetically is "DougeCoin" as the founder suggests if you are in any doubt.




Skate.


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## Skate (3 June 2021)

aus_trader said:


> *I've taken a position in a familiar stock to this portfolio, Alkane Resources Limited (ALK).*




*When others post*
It's exciting to experience how other traders make their stock selection & the methodology that decides when a position is to be entered. Admittedly I don't have the time or unique skills-set to evaluate positions in this manner. My go-to is either the weekly or daily "Ducati Blue Bar Strategy" to understand the reasoning a little better.

*Unless it's in my scans it's never considered*
@aus_trader has recently taken a position in (ALK) & by all accounts, I have to agree (ALK) has potential. Viewing the "Ducati Daily Blue Bar Strategy" or the "Ducati Weekly Blue Bar Strategy" they are both in agreement. 



ducati916 said:


> your Blue Bar strategy I note is absolutely on the money as far as entries go.




*The entry is important*
I should also point out @ducati916 adds more importance to the entry. @aus_trader timing may be slightly lagging on Duc's methodology but in @aus_trader defence, delaying the entry (timing) can increase the accuracy when it comes to winning percentages.

*"Ducati Daily Blue Bar Strategy" *
Entry & exit signals





*"Ducati Weekly Blue Bar Strategy" *
Entry & exit signals.





*Summary*
You don't require chart reading skills looking at either chart. Buy blue bars & sell the red ones. (Easy peezy)

Skate.


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## aus_trader (3 June 2021)

Skate said:


> *When others post*
> It's exciting to experience how other traders make their stock selection & the methodology that decides when a position is to be entered. Admittedly I don't have the time or unique skills-set to evaluate positions in this manner. My go-to is either the weekly or daily "Ducati Blue Bar Strategy" to understand the reasoning a little better.
> 
> *Unless it's in my scans it's never considered*
> ...



Agree, I would have liked to have the entry slightly earlier, but as your Ducati blue bar suggests, I am buying into the right side of the trend or into strength, so that's comforting to know. Cheers for embedding the Ducati Blue Bar strategy over the bar chart Skate.


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## Skate (3 June 2021)

*Removal of my last post*
I requested the removal of SPAM posted in this thread & in another which resulted in "my last post" being removed as well. I reiterated in a message to @Joe Blow that SPAM is one of my pet hates.

*Without agreeing to the forum's terms & conditions my account will be disabled*
This means if I don't keep accepting email SPAM from this forum my account will be disabled. As there is no unsubscribe feature from advertising material (SPAM) that allows you to keep access to the forum - I'll be quiet.

*Terms*
_You agree to maintain a valid and functioning contact email address at all times and to make that email address available for Aussie Stock Forums to send you occasional email communications, some of which may be advertising. If you do not maintain a valid and functioning email address or refuse to accept email communications from Aussie Stock Forums your account will be disabled._

Skate.


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## Joe Blow (3 June 2021)

Some of you may be aware that between December 2013 and October 2017, ASF was involved in litigation in Queensland’s Supreme Court. Some of you may also be aware that a company cannot be represented in legal proceedings by anyone other than a licensed legal practitioner. Unlike a natural person, who has the right to represent him or herself in court, a company must be represented by a legal practitioner at all times. ASF is operated by a company that I established in 2007 and for that reason it required a lawyer to represent it during those legal proceedings.

Over the course of that almost four year litigation, and in the subsequent three and a half years since then, approximately $400,000 was expended on legal fees. I’m sure that you’d agree that’s a fairly substantial sum of money. The case was successfully defended, but not one dollar of those costs has yet been recovered. Related costs are still being expended to this day as insolvency proceedings continue against those who commenced the litigation.

As everyone is aware, ASF is a website that is entirely free to use. There has never been any membership fees payable to make use of the website. However there are many expenses that go along with providing the service that ASF provides; web hosting, off site backups, software, custom coding and design work, and compensation for the person who organizes all of that, and who oversees and manages the website and community. All of those expenses are separate to the legal expenses mentioned above.

So it is clear that ASF must generate revenue in order to survive, and continue to provide the service. With no membership revenue it does this via advertising, both display advertising and email advertising. Both are necessary in order to generate the revenue required to cover all the costs outlined above. That is just to break even.

The reason that you just can’t unsubscribe from email advertising is because that would make the service ASF provides unviable. Unfortunately I am not able to fund ASF from my own resources. The fact that there is email advertising and this cannot be unsubscribed from unless you unsubscribe from the service entirely is outlined in the website Terms of Use. This Terms of Use is agreed to upon registration by checking a box. Unless this box is checked registration is not possible.

I would hope that those who come here to spend time, and hopefully learn and benefit from ASF understand and appreciate the costs involved and the necessity of revenue generation. It’s just a fact of life that cannot be avoided. I hope that you will remember that when you see display ads or receive an email advertisement. Don’t feel annoyed, feel glad that ASF is generating the revenue it needs to stay online. Every day more than a thousand people find ASF from various search engines. Some of them come looking for an answer to a question they have, others for information on a particular topic. ASF provides a service to them also. Some of them occasionally choose to register and stick around and contribute too. I’m sure that’s how most of those reading this ended up here.

Every month I pay a small donation to Michael West, a former Fairfax journalist who was given the boot years ago for ruffling too many rich and powerful feathers. He now runs his own independent journalism website where he does the same thing he did at Fairfax, exposing tax cheats, scams and corporate skullduggery. He relies – at least partially - on donations to fund his journalism and he used to have on his website, “Don’t donate so you can read it, donate so everyone can.” I agreed with that sentiment and that is part of the reason I donate. If you visit his website you will see that he doesn’t pull punches. Australia needs the likes of Michael West. It needs as much independent media as we can fund because one of the great things the internet gave us is the decentralisation of information. The Murdochs and those like them no longer get to own and completely control the airwaves like they used to. These days any old Joe Blow off the street can start a website and build an audience, or a community. ASF is just another part of that independent media landscape. Any support (or even understanding) you can offer is appreciated; even if that’s as simple as putting up with some advertising so ASF can continue to provide the service that it has for the last seventeen years.

That’s my dump for tonight. Thanks for listening.


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## DaveDaGr8 (3 June 2021)

Thankyou Joe,

For everything  ......

There is a great program out there on netflix called the Social Dillemma. There is a quote in there that says 

*if you are not paying for a product then you ARE the product.*

While it all sounds nefarious, understanding what the big corportations goals and motivations are is the biggest step into arming yourself with defenses against them.

As a society the attacks on your personal information, liberties and freedoms are going to become more commonplace. They have no jurisdictions that they need to follow, so everyone is fair game, no matter what website you log into, phone calls you make, texts, sms's or any other form of communication, It's all being recorded ( multiple times ) so you may as well get used to it ( and mitigate against it ).

Anyway the bottom line is that i trust the site you have set up and value the contributions made by the members of this community.

Spam is just something to deal with now on an everyday basis ... whether it's emails, phone calls, snail mail ..... Be educated and just throw it away.


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## Gunnerguy (3 June 2021)

DaveDaGr8 said:


> Thankyou Joe,
> 
> For everything  ......
> 
> ...



Joe
Please remind us of the bank account to make contributions to your legal case and support of this great community.
Stay strong.
There’s nothing wrong with a little bit of advertising to support the cause.
Gunnerguy.


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## Joe Blow (4 June 2021)

Thanks all. I only posted that dump to give everyone a bit of an insight into how much of a slog it can be running a website like this and how necessary it is for it to generate revenue. If ASF hadn't been able to generate revenue for the last eight years, the website either wouldn't be here any more or it would be owned by those who sued. I simply wouldn't have been able to defend the litigation.

Everything in life is fragile and tentative and money equals power. Those with money run over those without, especially in the world of litigation. I have seen first hand how it all works, and it is horrifying. I was told by a partner in a legal firm, "it's a legal system, not a justice system" and that is bang on. Lots of legal, not a lot of justice.

For anyone who would like to donate and help support ASF, I have made it easy. Just go to your user menu and click "Donate" and then select your preferred payment method. All donations are sincerely appreciated and *will* go towards legal costs. Thanks.


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## Gunnerguy (4 June 2021)

Joe Blow said:


> Thanks all. I only posted that dump to give everyone a bit of an insight into how much of a slog it can be running a website like this and how necessary it is for it to generate revenue. If ASF hadn't been able to generate revenue for the last eight years, the website either wouldn't be here any more or it would be owned by those who sued. I simply wouldn't have been able to defend the litigation.
> 
> Everything in life is fragile and tentative and money equals power. Those with money run over those without, especially in the world of litigation. I have seen first hand how it all works, and it is horrifying. I was told by a partner in a legal firm, "it's a legal system, not a justice system" and that is bang on. Lots of legal, not a lot of justice.
> 
> ...



Purchase button doesn’t seem to work.


Joe Blow said:


> Thanks all. I only posted that dump to give everyone a bit of an insight into how much of a slog it can be running a website like this and how necessary it is for it to generate revenue. If ASF hadn't been able to generate revenue for the last eight years, the website either wouldn't be here any more or it would be owned by those who sued. I simply wouldn't have been able to defend the litigation.
> 
> Everything in life is fragile and tentative and money equals power. Those with money run over those without, especially in the world of litigation. I have seen first hand how it all works, and it is horrifying. I was told by a partner in a legal firm, "it's a legal system, not a justice system" and that is bang on. Lots of legal, not a lot of justice.
> 
> ...



purchase button doesn’t seem to work


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## Joe Blow (4 June 2021)

Gunnerguy said:


> Purchase button doesn’t seem to work.
> 
> purchase button doesn’t seem to work




OK, that's weird. It's working for me. Bummer. 

You can also find the bank account details here: https://www.aussiestockforums.com/threads/asf-legal-defence-fund.30232/#post-882638


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## pozindustrial (6 June 2021)

Is there a way to follow the asx200 more closely than the 20min delay of most graphs?


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## MovingAverage (6 June 2021)

Joe Blow said:


> Some of you may be aware that between December 2013 and October 2017, ASF was involved in litigation in Queensland’s Supreme Court. Some of you may also be aware that a company cannot be represented in legal proceedings by anyone other than a licensed legal practitioner. Unlike a natural person, who has the right to represent him or herself in court, a company must be represented by a legal practitioner at all times. ASF is operated by a company that I established in 2007 and for that reason it required a lawyer to represent it during those legal proceedings.
> 
> Over the course of that almost four year litigation, and in the subsequent three and a half years since then, approximately $400,000 was expended on legal fees. I’m sure that you’d agree that’s a fairly substantial sum of money. The case was successfully defended, but not one dollar of those costs has yet been recovered. Related costs are still being expended to this day as insolvency proceedings continue against those who commenced the litigation.
> 
> ...



Appreciate everything you do to keep this forum running, Joe. Thanks.


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## Joe Blow (6 June 2021)

MovingAverage said:


> Appreciate everything you do to keep this forum running, Joe. Thanks.




You're welcome. Thank you for the support.


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## bux2000 (6 June 2021)

Joe Blow said:


> I was told by a partner in a legal firm, "it's a legal system, not a justice system" and that is bang on. Lots of legal, not a lot of justice.



Hi Joe, 
I hope this is not inappropriate, but could I tell you a little story, one that one might only fully appreciate after experiencing what you have.

There was a Kiwi who travelled to Sydney for the first time and while his wife went shopping he went for a bit of an adventure and found himself in China town. He stumbled upon an old shop and as he opened the door entered through the dark doorway a bell rung above his head. An old Chinese gentleman appeared seamlessly from behind a dark velvet curtain. As he browsed the grimey curios something at the back off a shelf took his attention. It was unexplainable but something told him he just had to buy it. 
Now for the first time the old Chinese  gentleman looked up as the Kiwi asked for a price. The old Chinese gentleman replied "$1500 for the statue and $3500 for the story that goes with it." 
The Kiwi looked again at the statue,  a little taken back as to how life like it was, a rat standing on its hind legs. 
He said "I'll take the statue but I don't need the story." The Chinese man smiled as he took the $1500, roughly dusted off the grime  and loosely wrapped the statue in brown paper tying it up with brown string and quipped "you be back for story." 
As the Kiwi left the shop and was walking down the road looking at the other interesting shops he had a sense of something following him and glanced behind to see a rat, followed by another and another. As he picked up his pace so did the rats now seeing rats coming from under buildings jumping of rooves to the road, out of windows, out of drains the noise was becoming deafening. He stripped off the brown paper thinking this might help but only made the numbers greater.
Luckily he was running toward Circular Quay and by the time he saw the wharf was absolutely sprinting for his life. Now with the aid of momentum and the weight in his hand cast the statue as far as he could out into the harbour.  All the rats started disappearing over edge of the wharf into the water. It became a sea of rats, rat on rat, on rat and after what seemed a lifetime started drowning, The noise subsided with the movement until finally all was quiet with the rats bobbing lifeless with the movement of the water.
 After watching the scene in disbelief the Kiwi slumped onto a bollard. 
With his heartbeat and breathing slowly returning to normal and serious contemplation he made the decision to make his way  back to the shop.
As he walked through the door, again the Old Chinese Gentleman appeared from behind the curtain and said " So you come back for story?"

To which the Kiwi replied "You can stick your story.. all I want to know is.... Do you have another statue that looks like a lawyer."

All the best
bux


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## MovingAverage (7 June 2021)

Skate said:


> *Removal of my last post*
> I requested the removal of SPAM posted in this thread & in another which resulted in "my last post" being removed as well. I reiterated in a message to @Joe Blow that SPAM is one of my pet hates.
> 
> *Without agreeing to the forum's terms & conditions my account will be disabled*
> ...




I hear what you're saying re spam email. 

Not wanting to teach you how to suck eggs, but have you thought about creating a separate ASF email folder in your mail client and then setting up an auto filter which automatically places ASF emails into that folder so they don't appear in your inbox? I do that--it keeps my inbox for only stuff I want to appear there and other stuff in their respective folders. That way I can check the folders separately at a later date and when I want to--importantly I'm not constantly cleaning up my inbox. Sometimes it's far simpler and easier to workaround the problem instead of trying to eradicate the problem. Just my 2 cents


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## aus_trader (7 June 2021)

MovingAverage said:


> I hear what you're saying re spam email.
> 
> Not wanting to teach you how to suck eggs, but have you thought about creating a separate ASF email folder in your mail client and then setting up an auto filter which automatically places ASF emails into that folder so they don't appear in your inbox? I do that--it keeps my inbox for only stuff I want to appear there and other stuff in their respective folders. That way I can check the folders separately at a later date and when I want to--importantly I'm not constantly cleaning up my inbox. Sometimes it's far simpler and easier to workaround the problem instead of trying to eradicate the problem. Just my 2 cents



Great idea.

Nothing to do with ASF emails, but I have a separate email address that collects a few advertising and spam type emails. I will try and use this method to separate the *wheat* from the *chaff.*


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## debtfree (7 June 2021)




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## MovingAverage (7 June 2021)

aus_trader said:


> Great idea.
> 
> Nothing to do with ASF emails, but I have a separate email address that collects a few advertising and spam type emails. I will try and use this method to separate the *wheat* from the *chaff.*



If you're using a client like Outlook (I use Thunderbird) you can use the rules function to direct emails away from your inbox and direct to a folder. It's very useful


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## pozindustrial (9 June 2021)

Can anyone help with how I can see the price of an index continually changing? I don't mean a graph, I wish to be able to see the immediate movements in the price of a share, particularly an index. If I go into "buy" or "sell" in my trading platform I get the immediate market price. Is there a way to see this change continually without going into that mode? I am trying to get a live feed of an index price which I can do by refreshing my browser continually, but that is a pain.


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## peter2 (9 June 2021)

If you want to see live data you have to pay for it, especially ASX data. Prices are viewed through a trading platform like Iress, Spark or IB. There are many other providers. The ASX makes everyone pay a monthly fee for access to their live data. If you don't need a chart then you can view the data through a table (watchlist) in the trading platform. The trading platform may include live international data for the main indices.


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## Joules MM1 (9 June 2021)

pozindustrial said:


> Can anyone help with how I can see the price of an index continually changing? I don't mean a graph, I wish to be able to see the immediate movements in the price of a share, particularly an index. If I go into "buy" or "sell" in my trading platform I get the immediate market price. Is there a way to see this change continually without going into that mode? I am trying to get a live feed of an index price which I can do by refreshing my browser continually, but that is a pain.



 seeing an index price movement (a futures contract) and seeing a stock (within that index) move are two completely different things, usually you can purchase or rental feeds separately 

be clear tho what viewing a DOM and decision making thru the DOM entail especially the emotive traps that lay within that presentation
suggest you track down any work by FuturesTrade71 and or NOBS Trading videos ....FT71 also employs volume analysis
suggest you consider that volume is as vital when going down this road


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## pozindustrial (9 June 2021)

Cheers, thanks, I worked out how by viewing the sell/buy price which is current. Just a pain refreshing it. Spent the day trying it out and I am quite happy now.  Hopefully I will get time to check out FuturesTrade or Nobs.


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## frugal.rock (9 June 2021)

Can get indices live from investing dot com phone app, not stocks. (maybe if you pay)
Indices are shown live and changing automatically using the phone app. 
Don't know about website.
Stocks are delayed standard 20'


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## pozindustrial (9 June 2021)

frugal.rock said:


> Can get indices live from investing dot com phone app, not stocks. (maybe if you pay)
> Indices are shown live and changing automatically using the phone app.
> Don't know about website.
> Stocks are delayed standard 20'



Great, I will check it out.


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## frugal.rock (9 June 2021)

If you want access to the app without signing in, send me a message and will let you know to bypass the crap...


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## pozindustrial (9 June 2021)

Cheers, I prefer a desktop and the website looks brilliant so far. Many thanks. I will play with it tomorrow, but it will be a great resource. How do you find them, do you trade with them?


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## Newt (9 June 2021)

Just be aware with very fresh data (within 20mins of live) you're essentially narrowing your focus to competing against the most well resourced and experienced traders out there.  Its unlikely to be a panacea to any easy trading edge, and might actually be much riskier than trading longer timeframes strategies that are not sufficiently scaleable to interest aggressive professional traders.


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## aus_trader (10 June 2021)

Hi Skate, I just purchased shares in another junior Gold mining company for the speculative stock portfolio. Hopefully with better timing with respect to ducati blue bar indicator...


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## qldfrog (10 June 2021)

aus_trader said:


> Hi Skate, I just purchased shares in another junior Gold mining company for the speculative stock portfolio. Hopefully with better timing with respect to ducati blue bar indicator...
> View attachment 125782



Please see my comments and get out before investors realise something called the real world...dyor of course and in a meme workd, all is possible


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## aus_trader (10 June 2021)

qldfrog said:


> Please see my comments and get out before investors realise something called the real world...dyor of course and in a meme workd, all is possible



Yes that's entirely possible and can end up losing the lot. That's a risk I have considered when I put that trade on.

I have read your comments and replied back, thanks for posting as I like to look at positions from every angle.

As I said I am comfortable with leaving the current position on as I won't be in a financial mess if things go wrong as I haven't gone all in or bet the house/farm on it. It'll be a write off in my trading account and although I'll be upset, will have to move on... 

I'll actually be really upset if it goes belly up, because it's one of the more riskier plays (high risk / high reward possibly) I've put on the spec portfolio after a lot of deliberation on my part and I hope it works out well. So far thankfully no trades have gone bankrupt in the spec portfolio (touch wood) as I put time and effort to research up investments/trades prior to purchase in the spec portfolio. I can disclose that I have had several bankruptcies of stocks that I have purchased personally over the years and they were bitter experiences in each case.


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## MovingAverage (13 June 2021)

Where are you @Skate ? Missing your posts


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## Skate (13 June 2021)

After discussions with @Joe Blow about email spamming, I have decided not to post as a way of a silent protest.

*Without agreeing to the forum's terms & conditions my account will be disabled*
This means if I don't keep accepting email SPAM from this forum my account will be disabled. As there is no unsubscribe feature from advertising material (SPAM) that allows you to keep access to the forum - I've decided to be quiet.

*Forum terms*
_You agree to maintain a valid and functioning contact email address at all times and to make that email address available for Aussie Stock Forums to send you occasional email communications, some of which may be advertising. *If you do not maintain a valid and functioning email address or refuse to accept email communications from Aussie Stock Forums your account will be disabled.*_

Skate.


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## MovingAverage (13 June 2021)

Skate said:


> View attachment 125998
> 
> 
> After discussions with @Joe Blow about email spamming, I have decided not to post as a way of a silent protest.
> ...



That’s sad, but respect your position.

if I may, set up the rules in you email client to send the emails to an ASF folder. Problem solved, maybe.

on a serious note, hope you get some resolution soon so we can all benefit from your posts again.

If you don’t start posting again soon I may just take over the dump it here thread—and that will not be good for anyone 😂


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## Gunnerguy (14 June 2021)

Skate said:


> View attachment 125998
> 
> 
> After discussions with @Joe Blow about email spamming, I have decided not to post as a way of a silent protest.
> ...



I didnt think you were a pussy Skate
What’s wrong with a couple of emails now and then for the benefit of the community?
Grow up and acccept the World.
I your not going to post anymore  then .... don’t post !!
Come on mate chill, you contribute so much to the community.
Move forward
Well all miss you !!
Gunnergut


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## Sir Burr (14 June 2021)

Déjà vu, TechA 👜 joke since StockCentral


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## MovingAverage (14 June 2021)

So the end of the financial year is almost upon us. It's around this time I start looking at the past trades for the FY to see how my systems have been operating and generally how performance is tracking. Thought I'd share some of the high level performance of my three main systems. These are all live results. The following charts report the unit price of my portfolios (this is not the absolute $ value of the portfolios) and shows the overall increase (or decrease) of the portfolios' value, which is derived from the value of open and closed positions, but is not impacted by the movement of cash in and out of these systems so does not factor in dividends etc. This is for FY21 so is from 1 July 2020 to close of Friday.

First up is my weekly system (no this is not NR's WTT). Over all I'm very happy with this portfolio's performance. It has gained approximately 40% in value. H1 of the FY was where most of my gains were made with that period putting on around 36%. H2 saw my system enter a more volatile period with some good gain in Jan only to give most of that up and some through March. Over all H2 to date has only delivered around 4% gain.




Next, looking at my EOD system so far it has delivered a gain of around 17%. Not as good as my weekly, but I'm still happy with that. It had a terrible start to the FY with H1 going into further drawdown having switched back on post Covid crash. However, since coming out of that drawdown in around Oct of '20 it has remained in a pretty consistent up trend. Unlike my weekly which has been actively generating buys and sells my EOD has been reasonably stable with only a few trades. Most of it's open positions are in the green and in contrast to this my weekly is struggling to have 50% of it's open positions in the green.




Finally, my EOD swing system. The performance of this system is the most disappointing to me. It has only delivered a gain of a little over 3%--at least it's more than I'd get from a bank interest rate. To be honest I was expecting this system to deliver around 10-15%. This is the system I intend to spend more time reviewing trades to make sure things are ok with the system. In the past this system has delivered some good results so this FY is a bit of a surprise to me. Hey, at least its 3% gain isn't a loss.


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## qldfrog (14 June 2021)

I will try to do a eofy  status by 30/06.
Not before, as much can happenwhen a 60k system jump by 5.5k one week and lose 5.3k the next, i need to stick to the date.
Nice to see dome wins, H2 has been a disaster overall for all running system, all in DD.doubt it will change in the next fortnight


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## barney (15 June 2021)

Skate said:


> I have decided not to post as a way of a silent protest. *Without agreeing to the forum's terms & conditions my account will be disabled   *This means if I don't keep accepting email SPAM from this forum my account will be disabled.




I think we need to get to the bottom of the problem here @Skate 

1) Are you talking about email SPAM (from 3rd parties) you receive on your "designated" email address which is synced to ASF?

If that is the case,

*How much* SPAM are you receiving?

I ask this because, I do not receive any inordinate amount of ASF related emails from 3rd parties on my designated email address 

ie. *Do you suspect* you are being targeted differently to others on ASF?

If it is just the "on site advertising"  which is a problem for you, I assume that cannot be fixed (but I personally have no problem with that anyway)

If you are receiving "over and above" a reasonable amount of 3rd party SPAM emails in the "name" of ASF,  

That seems unusual to me, and I have no doubt, to @Joe Blow  would as well?? 

Dare I suggest that you may have been targeted by 3rd party SPAM operators (outside ASF control)

Simply because of your high volume input on the site??


With the above issues in mind, could I suggest that you *liaise *with @Joe Blow  to simply change/add a new email address regarding your ASF contact, on a semi regular basis, so that if you are being targeted due to your high Volume input on the site, the "attackers" will be foiled as a matter of course!

Alias emails are not difficult to register .... That *may* be a simple solution??

Hope you and Joe can work it out

Cheers M8.


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## Warr87 (15 June 2021)

I've decided to stop trading HappyCat as I'm going to try a different strategy that I've made. Thought I'd post some charts since I worked out how to import live trades into RealTest for examination.







I felt it wasn't doing as well as I thought, but looking at the overall stats and picture it's done well. Though the negative expectancy was surprising and I don't think I actually made quiet $2400, thought it was closer to $1800, either way this would be around 15% return so not bad.


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## MovingAverage (15 June 2021)

Warr87 said:


> I've decided to stop trading HappyCat as I'm going to try a different strategy that I've made. Thought I'd post some charts since I worked out how to import live trades into RealTest for examination.
> 
> View attachment 126102
> 
> ...



That’s ok performance...don’t get caught in the cycle of switching out of a system and into another in search of something better. Good luck with the new system 👍


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## Warr87 (15 June 2021)

MovingAverage said:


> That’s ok performance...don’t get caught in the cycle of switching out of a system and into another in search of something better. Good luck with the new system 👍




It was always my intention to stop HappyCat when I had worked out my own. Was going to do futures but not enough capital right now to qualify on IB. I had been working on a daily trade solution for a while so I think I'm not falling into that trap. 

Glad you pointed it out though. It's a good point as many people tinker and swap in and out of strats. I'm still trading my MAP strategy despite some doubts every now and then .


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## MovingAverage (15 June 2021)

Warr87 said:


> It was always my intention to stop HappyCat when I had worked out my own. Was going to do futures but not enough capital right now to qualify on IB. I had been working on a daily trade solution for a while so I think I'm not falling into that trap.
> 
> Glad you pointed it out though. It's a good point as many people tinker and swap in and out of strats. I'm still trading my MAP strategy despite some doubts every now and then .



You’ll do well 👍


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## Newt (15 June 2021)

Warr87 said:


> I've decided to stop trading HappyCat as I'm going to try a different strategy that I've made. Thought I'd post some charts since I worked out how to import live trades into RealTest for examination.
> 
> 
> 
> ...




Thanks for putting this up Warr87.  Just out of interest, this is a system I worked up around Happy Cat principles based on observations of Skate's trading style and the Ducati principles of buying BOs on (price and volume) volatility starting from $20k, trading only All Ords, over same period.   This system took over trading funds I had previously allocated to HC around March this year and has yet to make any new equity highs.  Interesting how similar the two equity curves are - which seems promising against the original goal of implementing a weekly volatility based BO system capable of "jumping in early" on new BOs/Trends.

(note:   unfortunately I clipped the X axis scale - period below is 1/10/20 to 15/6/21)


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## Trendnomics (18 June 2021)

Still seeing all these statistically insignificant back-tests....

Remember the Hasard Cat Daily Strategy kicked similar goals....


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## qldfrog (18 June 2021)

Trendnomics said:


> Still seeing all these statistically insignificant back-tests....
> 
> Remember the Hasard Cat Daily Strategy kicked similar goals....



These statistically insignificant backtests are sadly spot-on, both for the rises, and in my case this week for the carnage in small cap explorers and miners but we had a long exchangen.
Proper backtest need random check,bias removal via historical data,realm choice and proper optimisation but is doable.just be cautious


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## aus_trader (18 June 2021)

qldfrog said:


> and in my case this week for the carnage in small cap explorers and miners



Spot on @qldfrog , precious metals have taken a dive and dragged any stocks with exposure with it...  😧


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## MovingAverage (18 June 2021)

aus_trader said:


> Spot on @qldfrog , precious metals have taken a dive and dragged any stocks with exposure with it...  😧
> 
> View attachment 126262
> 
> ...



Got to be some pullback long opportunities in there  Silver worth looking at a bit more


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## aus_trader (18 June 2021)

BTW we miss @Skate's commentary of the markets, charts and insights of late... 😢


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## Trendnomics (18 June 2021)

qldfrog said:


> These statistically insignificant backtests are sadly spot-on, both for the rises, and in my case this week for the carnage in small cap explorers and miners but we had a long exchangen.
> Proper backtest need random check,bias removal via historical data,realm choice and proper optimisation but is doable.just be cautious




By "*statistically insignificant back-tests*" I'm inferring that most of the back-tests posted are over short periods (mostly a year), *thus *_*statistically insignificant*_ - Hasard Cat did well over similar periods (i.e. tests being posted are over a very very favorable period).

I've tested most of the strategies (_renditions off_) posted in this thread over much longer periods - none are worth the risk (compared to my current system).

From this thread, I was hoping to discover ways to improve my current system - disappointingly I found none.


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## MovingAverage (18 June 2021)

Trendnomics said:


> By "*statistically insignificant back-tests*" I'm inferring that most of the back-tests posted are over short periods (mostly a year), *thus *_*statistically insignificant*_ - Hasard Cat did well over similar periods (i.e. tests being posted are over a very very favorable period).
> 
> I've tested most of the strategies (_renditions off_) posted in this thread over much longer periods - none are worth the risk (compared to my current system).
> 
> From this thread, I was hoping to discover ways to improve my current system - disappointingly I found none.




Technically it's not really about the period of time to be statistically relevant--it is more about whether the number of trades is enough to be statistically relevant. For example, a system with much longer hold time and higher general exposure may only take a few trades during a particular period of time but for that same particular time period a much shorter hold time system such a swing system may generate thousands of trades which could well be a statistically relevant number. Just pointing this out as people often assume a longer test timeframe some how equals statistical significance when the focus should be on the number of trades taken. Depending on the system 12 months might be right but for other system 12 months might not provide enough trades. Pretty certain this issue was debated earlier on in this thread.


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## MovingAverage (18 June 2021)

Trendnomics said:


> From this thread, I was hoping to discover ways to improve my current system - disappointingly I found none.



I never understand the motivation behind these types of posts. Scroll on by if you're disappointed or maybe make a meaningful contribution and post stuff that you think will lift the bar on this thread


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## qldfrog (18 June 2021)

"From this thread, I was hoping to discover ways to improve my current system - disappointingly I found none. "
can not be a clearer way to say: 
_I am vastly superior to all of you guys, what a shame, you are not worth my humble presence here and I let you go back to your kids' play_
what a constructive entry! or did the  (arrogant?) Frog miss anything in the translation?


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## Newt (18 June 2021)

Trendnomics said:


> Still seeing all these statistically insignificant back-tests....
> 
> Remember the Hasard Cat Daily Strategy kicked similar goals....




C'mon TN.   If your comment related to posts by Warr87 and myself recently, Warr87 clearly stated he was sharing his actual Happy Cat equity curve over the period from Skate sharing trade signals, through to the time he recently stopped trading it.  I merely showed backtest results for a similar BO strategy over the same period.

No representations were made as to statistical validity or merits of HC.  For those of us trading alongside however it was a period we were both emotionally and financially invested in HC.


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## MovingAverage (20 June 2021)

Come on @Skate, you need to start posting again. In the absence of serious posts I've been drawn into a debate on salads with @Humid over on the Australian properties prices thread. Save me skate, I need some meaningful posts to read.


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## Gunnerguy (20 June 2021)

MovingAverage said:


> Come on @Skate, you need to start posting again. In the absence of serious posts I've been drawn into a debate on salads with @Humid over on the Australian properties prices thread. Save me skate, I need some meaningful posts to read.



I have exchanged some messages with Skate over the past week / 10 days. He is very busy with some personal matters. Please be patient for his significantly effective future posts. Yes I know his posts are like Endorphine, but please be patient.
Gunnerguy


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## MovingAverage (20 June 2021)

Gunnerguy said:


> I have exchanged some messages with Skate over the past week / 10 days. He is very busy with some personal matters. Please be patient for his significantly effective future posts. Yes I know his posts are like Endorphine, but please be patient.
> Gunnerguy



Well I hope we see him posting again soon…I’m not sure my discussion with @Humid over the finer points of salads is to anyone’s benefit 😂


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## Gunnerguy (20 June 2021)

MovingAverage said:


> Well I hope we see him posting again soon…I’m not sure my discussion with @Humid over the finer points of salads is to anyone’s benefit 😂



I can highly recommend home grown Rocket, Parsley,Basil and radish. Does me well.
Gunnerguy


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## MovingAverage (20 June 2021)

Gunnerguy said:


> I can highly recommend home grown Rocket, Parsley,Basil and radish. Does me well.
> Gunnerguy



Planted my radish a few weeks ago so I’ll be sure to let you know how I get on with them. My Parsley and Basil are going great guns so my radish better not let me down


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## qldfrog (21 June 2021)

Perpetual spinash is a favorite for us early retirees with on going dividend and a decent but constant return.
You guys tell me if you want me to ask Joe to rename that thread "Till it here"


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## Humid (21 June 2021)

MovingAverage said:


> Well I hope we see him posting again soon…I’m not sure my discussion with @Humid over the finer points of salads is to anyone’s benefit 😂



Yeah I think that you use Paul Newmans dressing sums you up pretty well......average


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## investtrader (26 June 2021)

Skate said:


> View attachment 125998
> 
> 
> After discussions with @Joe Blow about email spamming, I have decided not to post as a way of a silent protest.
> ...



Not surprised


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## Joules MM1 (30 June 2021)

there are two ways to protest
the first is somewhat ambivalent 
the second is to speak, inspite-of

a disgruntled disquiet, an internal indifference, this is an Australian trait, not unique to Aussies, practised worldwide, pretty sure....

the difference you make when you speak so far-outweightways the difference you make when _not_ speaking offers the idea,
that, _*you speaking*_, outweighs the need for silent protest, that you speaking, places guidance in the hands of someone's quiet
need for guidance, filling a void they cannot fill themselves, even it merely shifts their focus enough _*so they can*_ have confidence to make calls

that quiet need is not unique to Aussies, however, you should feel fulfilled and satisfied, that by speaking, you alone fill that need

..and ...pretty sure, it is genuinely appreciated


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## barney (30 June 2021)

Joules MM1 said:


> a disgruntled disquiet, an internal indifference, this is an Australian trait




Agree with your summation @Joules MM1 

(I debated whether to post the following, as often online postings can be taken out of context. Hopefully my intentions are clear enough) 


Mr. @Skate knows I have great respect for his abilities and previous ASF input on many levels.  (Understatement)

However, I must confess, I am slightly bemused that you (@Skate ) have dispensed your disapproval of the "spam" content received,

To the point of no longer posting on ASF, yet, 

You are still rewarding others with encouragement/ slash "likes" etc etc.  (That shows generosity of course and is admirable )


Your generosity aside, I am a little confused however, in that, 

I assume you still hold your normal/previous ASF account?  


If that is so, are you still not receiving the aforementioned "spam" which was the catalyst for your posting abstinence?

If so, is there any real advantage in "not posting"??  (genuine question)


As I say, no judgement on my behalf regarding the above.

Rather, simply trying to see if there is a simple solution to whatever the "annoyance" was   

Cheers M8.


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## Beaches (13 July 2021)

This post is aimed more at the newer traders that may be on the site. If you or your systems have been struggling lately to be profitable, don't be discouraged. It takes  time and experience to remain profitable in markets like the present. This is all part of the learning process.




.


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## MovingAverage (13 July 2021)

Beaches said:


> This post is aimed more at the newer traders that may be on the site. If you or your systems have been struggling lately to be profitable, don't be discouraged. It takes  time and experience to remain profitable in markets like the present. This is all part of the learning process.
> 
> View attachment 127282
> 
> ...




I feel the pain--H1 of this year has certainly been a grind for two of my systems. Both had a great H2 last year, but boy it's been tough so far this year. I guess it isn't all bad, one system might be down 1.27% but the other is up 6.62%. Let's hope H2 of this year brings home a better result.


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## qldfrog (13 July 2021)

MovingAverage said:


> I feel the pain--H1 of this year has certainly been a grind for two of my systems. Both had a great H2 last year, but boy it's been tough so far this year. I guess it isn't all bad, one system might be down 1.27% but the other is up 6.62%. Let's hope H2 of this year brings home a better result.
> 
> View attachment 127299
> View attachment 127300



If a bad half year is just -1.27%
Can i get your bad returns?


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## aus_trader (13 July 2021)

Beaches said:


> This post is aimed more at the newer traders that may be on the site. If you or your systems have been struggling lately to be profitable, don't be discouraged. It takes  time and experience to remain profitable in markets like the present. This is all part of the learning process.
> 
> View attachment 127282
> 
> ...



Certainly been a bit choppy in the main indices as shown in the 1hr chart posted.

When you look at the main constituents though it looks logical. Big end of banking (big4 Inc.), BHP, TLS etc have run hard  and could be taking a breather or in technical terms having a consolidation period.


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## MovingAverage (14 July 2021)

I'm generally not one to watch charts, but have recently been watching with interest XJO. Since early June it's just been floating around the support of around 7330. Waiting for something to kick it along


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## Beaches (17 July 2021)

Just because you make money in a strong bull market does not mean you can trade profitably for the next 10 years. Honest appraisal of trading skills is harder than some think.

_Michael Norton, a Harvard Business School professor, has done experiments in which he gives study participants general trivia tests, and some of the papers have the answers at the bottom. So the participants first take that test, and then they’re given another one — this one with no answers at the bottom. They’re also asked to predict how well they think they’ll do on this second test, and most of them predict they’ll get an excellent score on this test, as well. “They just think that they’re amazing test-takers now,” Norton said. Even when he’s tried to get them to think more realistically by promising them more money if their predictions are more accurate, people still overestimate their ability. “This process of deceiving ourselves is so strong, and it happens to us so quickly, where we have a twinge of, Maybe I cheated, and then, No, I didn’t, I’m a genius,” Norton said._​This article originally appeared on Science of Us: The Truth About the Ways People Lie. © 2014 All Rights Reserved. Distributed by Tribune Content Agency.​
The research above applies equally to traders. The real test of your trading skills will be in flat, choppy markets, or bear markets and based on results over a significant period of time.

Thanks to @No Trust for the above article.


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## qldfrog (17 July 2021)

Beaches said:


> Just because you make money in a strong bull market does not mean you can trade profitably for the next 10 years. Honest appraisal of trading skills is harder than some think.
> 
> _Michael Norton, a Harvard Business School professor, has done experiments in which he gives study participants general trivia tests, and some of the papers have the answers at the bottom. So the participants first take that test, and then they’re given another one — this one with no answers at the bottom. They’re also asked to predict how well they think they’ll do on this second test, and most of them predict they’ll get an excellent score on this test, as well. “They just think that they’re amazing test-takers now,” Norton said. Even when he’s tried to get them to think more realistically by promising them more money if their predictions are more accurate, people still overestimate their ability. “This process of deceiving ourselves is so strong, and it happens to us so quickly, where we have a twinge of, Maybe I cheated, and then, No, I didn’t, I’m a genius,” Norton said._​This article originally appeared on Science of Us: The Truth About the Ways People Lie. © 2014 All Rights Reserved. Distributed by Tribune Content Agency.​
> The research above applies equally to traders. The real test of your trading skills will be in flat, choppy markets, or bear markets and based on results over a significant period of time.
> ...



Fully aware.
I likealso the latest nick radge video where he favor diversification of strategies.
Some strategy are woeful in choppy market so e outperform in bull market etc
You want to stay exposed as a systematic trader but to be ready to cop it in the chin, you have to be able to reassure yourself by a less catastrophic outcome .
A conservative portfolio for me, and trying system diversification..but if you are long, a crash is a crash nevertheless.
I do not consider myself a good systematic trader but better than a year ago, i started systems got smashed.. in covid crash , did well till end of last year then slow grinding loss till now.hopefully ready for further boom or crash now


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## MovingAverage (17 July 2021)

Beaches said:


> Just because you make money in a strong bull market does not mean you can trade profitably for the next 10 years. Honest appraisal of trading skills is harder than some think.
> 
> _Michael Norton, a Harvard Business School professor, has done experiments in which he gives study participants general trivia tests, and some of the papers have the answers at the bottom. So the participants first take that test, and then they’re given another one — this one with no answers at the bottom. They’re also asked to predict how well they think they’ll do on this second test, and most of them predict they’ll get an excellent score on this test, as well. “They just think that they’re amazing test-takers now,” Norton said. Even when he’s tried to get them to think more realistically by promising them more money if their predictions are more accurate, people still overestimate their ability. “This process of deceiving ourselves is so strong, and it happens to us so quickly, where we have a twinge of, Maybe I cheated, and then, No, I didn’t, I’m a genius,” Norton said._​This article originally appeared on Science of Us: The Truth About the Ways People Lie. © 2014 All Rights Reserved. Distributed by Tribune Content Agency.​
> The research above applies equally to traders. The real test of your trading skills will be in flat, choppy markets, or bear markets and based on results over a significant period of time.
> ...



Nice article. IMHO the biggest mistake a lot of newer system traders make is to trade a single system. It is very unlikely that a single system will do well across all market conditions. It’s one of the main reasons I trade 3 very different systems—each does well in a particular and different market condition


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## Warr87 (17 July 2021)

MovingAverage said:


> Nice article. IMHO the biggest mistake a lot of newer system traders make is to trade a single system. It is very unlikely that a single system will do well across all market conditions. It’s one of the main reasons I trade 3 very different systems—each does well in a particular and different market condition



well that's true, but how many new traders have money to immediately begin with 3 different systems?

also, most trend following systems tend to be correlated, even on different timeframes. Ideally MR and trend, but they are different mindsets. Not necessarily good for a beginning trader.


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## MovingAverage (17 July 2021)

Warr87 said:


> well that's true, but how many new traders have money to immediately begin with 3 different systems?
> 
> also, most trend following systems tend to be correlated, even on different timeframes. Ideally MR and trend, but they are different mindsets. Not necessarily good for a beginning trader.



Understand, and yes capital constraint is an issue. Have to disagree, just because systems are trend following does not automatically mean they have a high degree of correlation, different time frames, different entry conditions, different stock universes, different positioning sizing techniques all have a major impact on reducing correlation. Two of my systems are long trend following and the degree of statistical correlation between the two is very low and have deliberately engineered so. Just look at some of my prior live trading posts


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## Beaches (17 July 2021)

For anyone just starting out with their first system, or with capital constraints that don't allow for multiple systems. When the market moves into a phase that is not suitable for that system, the key thing to learn is when to reduce the capital exposure, or stand out of the market until conditions improve.


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## Warr87 (17 July 2021)

MovingAverage said:


> Understand, and yes capital constraint is an issue. Have to disagree, just because systems are trend following does not automatically mean they have a high degree of correlation, different time frames, different entry conditions, different stock universes, different positioning sizing techniques all have a major impact on reducing correlation. Two of my systems are long trend following and the degree of statistical correlation between the two is very low and have deliberately engineered so. Just look at some of my prior live trading posts



The statistical correlation tends to be strong in a strong downward market. It's either Clenow or Davey who explore this in their books. And it is at that time, when markets are going down, that you want the least correlation possible. My weekly and monthly system are somewhat correlated, though no entirely so. Even my trend following crypto and commodoties that trades mostly on 1H timefarme, become somewhat correlated. so while different timeframes, entries, and universes help with the correlation there is still some there. adding in something like a shorting component is very helpful when it comes to the correlation.


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## Warr87 (17 July 2021)

Beaches said:


> For anyone just starting out with their first system, or with capital constraints that don't allow for multiple systems. When the market moves into a phase that is not suitable for that system, the key thing to learn is when to reduce the capital exposure, or stand out of the market until conditions improve.




well that comes with a filter of some kind. but a systematic trading should just be trading their system. trying to pick and choose when the market isn't good kind of runs contrary to a systematic approach. and trying to do so usually ends in missing the full extent of the rebound.


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## MovingAverage (17 July 2021)

Warr87 said:


> The statistical correlation tends to be strong in a strong downward market. It's either Clenow or Davey who explore this in their books. And it is at that time, when markets are going down, that you want the least correlation possible. My weekly and monthly system are somewhat correlated, though no entirely so. Even my trend following crypto and commodoties that trades mostly on 1H timefarme, become somewhat correlated. so while different timeframes, entries, and universes help with the correlation there is still some there. adding in something like a shorting component is very helpful when it comes to the correlation.



Agree. Not suggesting I’m chasing zero correlation (that is just not possible) but it is possible to reduce to a point where it delivers the desired result of having a good degree of independence between systems—they don’t go up or down in sync


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## Beaches (17 July 2021)

Generally, the when I post in this thread, it is aimed at the very new traders (whether system or otherwise). Sometimes a simple reminder may be enough for the newly minted traders to prevent an account from being blown up. Apologies to those experienced traders (which abound on the site) that may find the posts simplistic.

The hardest thing for experienced traders to realise is how much they have learned and the depth of their knowledge. Things that seem obvious and simple common sense to an experienced trader, is not simple or obvious at all to the new trader.


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## MovingAverage (17 July 2021)

Warr87 said:


> well that comes with a filter of some kind. but a systematic trading should just be trading their system. trying to pick and choose when the market isn't good kind of runs contrary to a systematic approach. and trying to do so usually ends in missing the full extent of the rebound.




something to think about—depending on how you approach trading you might have a different perspective  on that. For me I’m all about focusing on managing risk so whether I miss a rebound is not something I factor in. I mean no criticism, but it is often a lazy approach to just trade a system and say I just keep trading through no matter what the conditions are. However, I think someone more focused on risk (like me) can also legitimately say I want to know under what general market conditions my system performs well and if the market is not behaving like that to just turn the system off completely until the appropriate market conditions return. A system is more than just buy/sell signals and part of a system can include factors that are external such as position sizing or should I just turn my system off. I don’t think it is right to say a system trader must trade their system through all market conditions. It may well be appropriate to completely turn of a system. This approach while relevant to single system is also applied across multiple system dependant on market conditions where systems are turned off and all available capital piles on the on system(s). Anyway, just my 2 cents


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## aus_trader (17 July 2021)

MovingAverage said:


> something to think about—depending on how you approach trading you might have a different perspective  on that. For me I’m all about focusing on managing risk so whether I miss a rebound is not something I factor in. I mean no criticism, but it is often a lazy approach to just trade a system and say I just keep trading through no matter what the conditions are. However, I think someone more focused on risk (like me) can also legitimately say I want to know under what general market conditions my system performs well and if the market is not behaving like that to just turn the system off completely until the appropriate market conditions return. A system is more than just buy/sell signals and part of a system can include factors that are external such as position sizing or should I just turn my system off. I don’t think it is right to say a system trader must trade their system through all market conditions. It may well be appropriate to completely turn of a system. This approach while relevant to single system is also applied across multiple system dependant on market conditions where systems are turned off and all available capital piles on the on system(s). Anyway, just my 2 cents



mmm... Lots of things to think about and great contribution to this thread MA 

Great new Logo/Avatar as well compared to the nasty one... 

I don't have a full systems approach, but my defense mechanism is to stop buying during major downturns. So didn't buy during the Covid crash until there was some recovery after huge volatility near the bottom. Then we made hay playing the pandemic recovery stocks as we can see from my portfolio.


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## MovingAverage (17 July 2021)

aus_trader said:


> mmm... Lots of things to think about and great contribution to this thread MA
> 
> Great new Logo/Avatar as well compared to the nasty one...



But I’m a fan of Red Dwarf and Ace Rimmer is my favourite character 😂


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## Warr87 (17 July 2021)

MovingAverage said:


> something to think about—depending on how you approach trading you might have a different perspective  on that. For me I’m all about focusing on managing risk so whether I miss a rebound is not something I factor in. I mean no criticism, but it is often a lazy approach to just trade a system and say I just keep trading through no matter what the conditions are. However, I think someone more focused on risk (like me) can also legitimately say I want to know under what general market conditions my system performs well and if the market is not behaving like that to just turn the system off completely until the appropriate market conditions return. A system is more than just buy/sell signals and part of a system can include factors that are external such as position sizing or should I just turn my system off. I don’t think it is right to say a system trader must trade their system through all market conditions. It may well be appropriate to completely turn of a system. This approach while relevant to single system is also applied across multiple system dependant on market conditions where systems are turned off and all available capital piles on the on system(s). Anyway, just my 2 cents




i'm concerned with managing risk too. it's why i like systematic. if you just trade a system but have nothing that will take it out of the market when conditions are the worst, then you have a problem. as soon as you interact with your system outside of the rules you invalidate the backtesting results, which would then muddle the risk metrics as well. thinking you know the market better than you system would also be considered folly. whether a market is sideways, bear or bull, is often done so from hindsight. so if you are so focused on risk and that is your prime concern, I think I would be a bit worried about the mentality of thinking you know better. though i doubt you meant it that strong. as i've mentioned in my thread on my monthly system, I retain the right to stop my system at any point. one general rule used by system traders is either 1 or 2 standard deviations away from the backtested results.

also, if I pull my system out of the market because I don't think it's the 'right' market conditions, then I have likely pulled out when it is towards the bottom of the market. Then, after it has recovered and is rebounding I decide to go back in, because these are now the 'market conditions' i now consider to be perfect for my system, then I have already lost a lot of the profit that makes the drawdowns tolerable for my own CAGR/MDD metric. if you meant don't trade 'all market conditions', i.e. a trend following system that is in the market as the market is trending downwards (and you're long only), well duh. but almost all robust trend system that are long only wouldn't be in the market in a down trending market.


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## MovingAverage (17 July 2021)

Warr87 said:


> i'm concerned with managing risk too. it's why i like systematic. if you just trade a system but have nothing that will take it out of the market when conditions are the worst, then you have a problem. as soon as you interact with your system outside of the rules you invalidate the backtesting results, which would then muddle the risk metrics as well. thinking you know the market better than you system would also be considered folly. whether a market is sideways, bear or bull, is often done so from hindsight. so if you are so focused on risk and that is your prime concern, I think I would be a bit worried about the mentality of thinking you know better. though i doubt you meant it that strong. as i've mentioned in my thread on my monthly system, I retain the right to stop my system at any point. one general rule used by system traders is either 1 or 2 standard deviations away from the backtested results.





Warr87 said:


> also, if I pull my system out of the market because I don't think it's the 'right' market conditions, then I have likely pulled out when it is towards the bottom of the market. Then, after it has recovered and is rebounding I decide to go back in, because these are now the 'market conditions' i now consider to be perfect for my system, then I have already lost a lot of the profit that makes the drawdowns tolerable for my own CAGR/MDD metric. if you meant don't trade 'all market conditions', i.e. a trend following system that is in the market as the market is trending downwards (and you're long only), well duh. but almost all robust trend system that are long only wouldn't be in the market in a down trending market.



I’m not advocating that turning a system on/off be done on a personal discretionary basis. I agree this would to a degree defeat some of the objectives of systematic trading, but you can certainly apply a systematic approach to turning on/off systems or switching between systems—and that can be back tested and validated.


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## Warr87 (17 July 2021)

MovingAverage said:


> I’m not advocating that turning a system on/off be done on a personal discretionary basis. I agree this would to a degree defeat some of the objectives of systematic trading, but you can certainly apply a systematic approach to turning on/off systems or switching between systems—and that can be back tested and validated.



definitely agree with you there. you need to define system rules in that respect as to what constitutes a reason to turn it off. there are some fantastic discretionary traders here who do the same thing as well, and if you follow there thread they perform amazingly. the point being that the decisions are still based on rules. i think new traders should be careful and have some rules about what would constitute certain market conditions.

not sure about the others here, but if i'm exploring some ideas i code up some ideas and see if the basic premise works. thats easy. the hard part is determine filters (market condition statements) to turn it on/off and striking a balance between being in the market to take advantage of any rebound and avoid being in a potentially downward market (or being exposed to unnecessary risk). you will sacrifice some profit to reduce your DD. it then becomes a balancing act of finding a level of risk you are comfortable with, but also having a profit that makes your time (and capital) worth it.

let me know if any of you perfect this balance. i'm still trying to figure it out, haha.


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## aus_trader (17 July 2021)

Warr87 said:


> definitely agree with you there. you need to define system rules in that respect as to what constitutes a reason to turn it off. there are some fantastic discretionary traders here who do the same thing as well, and if you follow there thread they perform amazingly. the point being that the decisions are still based on rules. i think new traders should be careful and have some rules about what would constitute certain market conditions.
> 
> not sure about the others here, but if i'm exploring some ideas i code up some ideas and see if the basic premise works. thats easy. the hard part is determine filters (market condition statements) to turn it on/off and striking a balance between being in the market to take advantage of any rebound and avoid being in a potentially downward market (or being exposed to unnecessary risk). you will sacrifice some profit to reduce your DD. it then becomes a balancing act of finding a level of risk you are comfortable with, but also having a profit that makes your time (and capital) worth it.
> 
> let me know if any of you perfect this balance. i'm still trying to figure it out, haha.



There is no perfect balance or a magic indicator that pinpoints the exact top to sell out of the market and exact bottom to get back in.

I personally don't use anything complicated. A longer term moving average or the crossover of shorter term moving averages is about as complex as I get to gauge the market direction.

During downturns, although there are no new buy trades placed on the market, company research doesn't stop. In fact I find it a productive time to spend time researching great companies as you'll be able to buy in at bargain prices once the bear market has discounted them.


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## MovingAverage (17 July 2021)

Warr87 said:


> definitely agree with you there. you need to define system rules in that respect as to what constitutes a reason to turn it off. there are some fantastic discretionary traders here who do the same thing as well, and if you follow there thread they perform amazingly. the point being that the decisions are still based on rules. i think new traders should be careful and have some rules about what would constitute certain market conditions.
> 
> not sure about the others here, but if i'm exploring some ideas i code up some ideas and see if the basic premise works. thats easy. the hard part is determine filters (market condition statements) to turn it on/off and striking a balance between being in the market to take advantage of any rebound and avoid being in a potentially downward market (or being exposed to unnecessary risk). you will sacrifice some profit to reduce your DD. it then becomes a balancing act of finding a level of risk you are comfortable with, but also having a profit that makes your time (and capital) worth it.
> 
> let me know if any of you perfect this balance. i'm still trying to figure it out, haha.



I’m not one for discretionary trading approaches—I don’t trust my discretion (and that isn’t a joke). There are some really smart ways of determining market conditions—a well known quant that I follow has a pretty cool approach that works very well. He basically has a long system and a short system (both of which have high W/L trade ratios. To determine market conditions he runs these systems and looks at the ratio of buy sells that are being generated by each system—he then basically turns systems on/off and directs capital based on the ratio between the two systems. It is important to note that the long and short systems in this cases are not being used for trades but instead used to select different underlying systems to trade and direct his capital. The point I’m trying to make is that you need to think a little different from just using a traditional market filter when it comes to a systematic approach to managing systems. There’s a whole body of research on system management and it certainly is food for thought.

 I fully appreciate the link between profit and DD and that is very much one of personal acceptance—you and I (as with most other traders) probably have a different view on what is acceptable and that is ok because our investment outlooks and risk tolerances are probably very different.


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## MovingAverage (17 July 2021)

aus_trader said:


> There is no perfect balance or a magic indicator that pinpoints the exact top to sell out of the market and exact bottom to get back in.
> 
> I personally don't use anything complicated. A longer term moving average or the crossover of shorter term moving averages is about as complex as I get to gauge the market direction.
> 
> During downturns, although there are no new buy trades placed on the market, company research doesn't stop. In fact I find it a productive time to spend time researching great companies as you'll be able to buy in at bargain prices once the bear market has discounted them.



I think it was @Skate that made a post here not so long ago that was very simple but very important—basically, his post reminded us that close enough is good enough. So many times system traders get hung up searching for perfection and complete optimisation in their systems (hey, I’ve fallen into that trap). Sometimes, the simple things, while not perfect, get the job done.


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## Warr87 (17 July 2021)

MovingAverage said:


> I think it was @Skate that made a post here not so long ago that was very simple but very important—basically, his post reminded us that close enough is good enough. So many times system traders get hung up searching for perfection and complete optimisation in their systems (hey, I’ve fallen into that trap). Sometimes, the simple things, while not perfect, get the job done.




yea its a good point really. good enough is close enough. there is no perfect system, and searching for perfection will only make things worse. in trading, this is the over-optimisation, and/or meddling with your system constantly. both are horrible things to be doing.

I like simplicity in things. All of my trading systems have turned out to be very simple, and I hope relatively robust.


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## qldfrog (17 July 2021)

MovingAverage said:


> I think it was @Skate that made a post here not so long ago that was very simple but very important—basically, his post reminded us that close enough is good enough. So many times system traders get hung up searching for perfection and complete optimisation in their systems (hey, I’ve fallen into that trap). Sometimes, the simple things, while not perfect, get the job done.



Guilty as well...


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## aus_trader (17 July 2021)

Yeah simple is great.

Chances are if the system is too complex and has too many variations the trader will not follow through sooner or later.


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## MovingAverage (18 July 2021)

Breakout systems are generally known for having a pretty average % of winning trades. This is often the result of breakouts turning into fake-outs. I live trade a breakout system so I am always looking at ways to improve the % of winning trades--the logic being that an increase in % winners will improve the top line results (this isn't always the case), but my experience shows that in some cases even a modest increase in % winning trades can yield a worthwhile increase in the topline performance. One of the system traders I follow was recently discussing general approaches to improving the % of winners in breakout systems and one of the indicators he mentioned in passing was the Volume Positive Negative (VPN). Some of his preliminary simulations were showing some interesting results so I thought I'd explore the VPN to see if it had potential to improve my live breakout system.

*The Volume Positive Negative (VPN) Indicator*

I'm not going to discuss the VPN in detail here, except to say that it is an oscillator that swings between -100 and +100 and in summary looks at the volume on up days and volume on down days and uses those volumes to crunch some numbers to arrive at a value for the oscillator. Want to know more about the VPN then check out this year's April edition of Technical Analysis of Stocks & Commodities.

*How Did I Use the VPN in my System*

For the purposes of testing the VPN I simply added it as one of my buy conditions. I maintained the normal entry conditions for my breakout system but the VPN was added as an additional condition and that was the VPN had to be above a certain threshold for the standard entry positions to be taken.

Buy = [normal system entry conditions] AND [VPN > Threshold Value]

I did some preliminary sims to evaluate 2 settings for the VPN, which were the VPN period and the VPN threshold. After running some sims I arrived at a VPN period of 2 and a VPN threshold of 40. Note: the period value of 2 and the threshold value of 40 were not chosen because they gave the best % profit on a single run, but instead chosen because they provided the most constant system returns on a range of out of sample data.

*What Impact Did VPN Have on my System*

After running some sims of my system with and without the VPN I have to say the VPN left me a little ambivalent about this indicator's benefits and I'm probably unlikely to invest much more time researching this indicator, but having said that I am going to run a few more sims to adjust other aspects of my system to see if they are holding back the potential of the VPN.

Anyway, here is the high level results of the system with and without the VPN (first chart below). The results below on the left are my system without the VPN and the results on the right are the system with the VPN. Overall, the VPN did improve the topline results with around a 43% increase in net profit. AB's MC analysis (second chart below) shows a bit more spread in the system's returns with the VPN, but not what I'd consider a really bad spread. Overall the MC shows that the VPN can deliver reasonable topline results. One of the main attractions to me initially with this indicator was to hopefully achieve an increase in winners, but the VPN only delivered a very marginal increase (almost nothing) of about 0.5%--no where enough to get me excited. The increase in net profit did seem to come with an increase in system DD (see third chart below) but that really only came about during the March Covid crash. Drawdowns prior to the Covid crash did seem to be slightly less in the system with the VPN.

*Would I Use the VPN *

While it was interesting to experiment with the VPN I will unlikely go much further with it. One of my primary objectives was to increase the % winners and the VPN doesn't deliver on that. The fact that the system with the VPN delivers less consecutive winners is also a bit of a turnoff for me. Anyway, if you're only chasing an improvement in topline returns then it might be wise for you to explore the VPN.

*                                             WITHOUT VPN (LEFT)                                                                                    WITH VPN(RIGHT)*




*   MC WITHOUT VPN (LEFT)                                                                          MC WITH VPN (RIGHT)*




*                                          DD WITHOUT VPN (LEFT)                                                                               DD WITH VPN (RIGHT)*


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## Linus van Pelt (18 July 2021)

aus_trader said:


> Yeah simple is great.
> 
> Chances are if the system is too complex and has too many variations the trader will not follow through sooner or later.




I think that depends.  I have a "complex" (but not to me) system that I believe in, so I follow it.  I could create a "simple" system, but if I didn't believe in it I wouldn't trade it.

"the trader will not follow through sooner or later."  I think that's more a statement about the trader than the system.


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## aus_trader (18 July 2021)

Linus van Pelt said:


> I think that depends.  I have a "complex" (but not to me) system that I believe in, so I follow it.  I could create a "simple" system, but if I didn't believe in it I wouldn't trade it.
> 
> "the trader will not follow through sooner or later."  I think that's more a statement about the trader than the system.



Complex systems require ironclad dedication and great discipline to stick to. If that can be done, the results could be quite rewarding.

I know if I too much pressure on myself, it's more likely I'll look for shortcuts and bypassing some key checkpoints in a system when things get hectic such as when there is a lot of work on or while I am taking a vacation. So I try to stick to trading that I can cope with and go into "monitoring existing trades" only mode when I can't dedicate the time and effort.


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## Go Figure (21 July 2021)

What’s the point of small trades of as low as 1 unit across a variety of stocks that could be valued from as little as .05c and upward.

I understand some maybe completing orders, however some sit or are initiated as next day opening bids at highest price seen for a stock in eons. 

If again clearing orders is the reason why are they not cleared by the previous days end?

Any insights would be appreciated…..


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## Cam019 (21 July 2021)

MovingAverage said:


> Breakout systems are generally known for having a pretty average % of winning trades. This is often the result of breakouts turning into fake-outs. I live trade a breakout system so I am always looking at ways to improve the % of winning trades--the logic being that an increase in % winners will improve the top line results (this isn't always the case), but my experience shows that in some cases even a modest increase in % winning trades can yield a worthwhile increase in the topline performance. One of the system traders I follow was recently discussing general approaches to improving the % of winners in breakout systems and one of the indicators he mentioned in passing was the Volume Positive Negative (VPN). Some of his preliminary simulations were showing some interesting results so I thought I'd explore the VPN to see if it had potential to improve my live breakout system.
> 
> *The Volume Positive Negative (VPN) Indicator*
> 
> ...




Hey @MovingAverage, thanks for putting this test up. It really gives me some time to think critically about system robustness, sample size, standard error, etc. I have been doing some research on statistical significance of backtest sample size and the effect of standard error on system expectancy and I have a few questions I am hoping we can dicuss regarding charts you attached.

1. I can see your Average Profit/Loss % (expectancy per trade) with the addition of the VPN has increased by 7.84%. I was hoping you might be able to post the Standard Error $ values for both backtests as they have been cut off by the screenshot.

2. I am having a look at the both the Monte Carlo simulations and from them I believe I understand the following:

In 75% of simulations, both systems will see drawdowns greater than or equal to -100% and annual returns less than or equal to -100%. This means that over 21 years, there is a 75% chance that both systems won't even break even. Am I undertanding this correctly? I ask because I have had the same sort of thing happen in my long term backtests and if I am right, that is more than concerning.


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## MovingAverage (21 July 2021)

Cam019 said:


> Hey @MovingAverage, thanks for putting this test up. It really gives me some time to think critically about system robustness, sample size, standard error, etc. I have been doing some research on statistical significance of backtest sample size and the effect of standard error on system expectancy and I have a few questions I am hoping we can dicuss regarding charts you attached.
> 
> 1. I can see your Average Profit/Loss % (expectancy per trade) with the addition of the VPN has increased by 7.84%. I was hoping you might be able to post the Standard Error $ values for both backtests as they have been cut off by the screenshot.
> 
> ...



Hi @Cam019,
Complete results below--which is for no VPN and second is with VPN.
Your second question is a very good question and it is the very reason I really dislike the way in which AB does MC testing. I have been meaning to do a post on this for a long time and now that you have prompted me I will do that over the weekend--stay tuned for that. But getting back to your question--your point is not an incorrect conclusion based on AB's MC analysis. Having said that, however, the way AB does MC testing is flawed and is very misleading and the MC results do not really reflect a systems behavior. I've posted on this before, but I wouldn't put any faith in AB's MC results and the best way to get more meaningful MC insight is to add a random element to your buy condition (using mtRandom()) then insert a dummy param into your AFL and optimize that over a 1000 or so (this will depend on your system). Export the optimization results into a CSV and import into Excel. Use Excel's statistic package plug in and then do a distribution analysis of your results for a better MC analysis. I also commonly do a AB scan on my system, which will dump out all possible trades, I then export that into CSV and import into TradeSim, which does a really good statistical and MC analysis of your system.
Using either Excel or TradeSim you will quickly realize AB MC is very poor, but more important the way it does MC is just wrong IMHO and I would never trust it. Hope this helps

*WITHOUT VPN*




*WITH VPN*


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## MovingAverage (21 July 2021)

Go Figure said:


> What’s the point of small trades of as low as 1 unit across a variety of stocks that could be valued from as little as .05c and upward.
> 
> I understand some maybe completing orders, however some sit or are initiated as next day opening bids at highest price seen for a stock in eons.
> 
> ...



This really gets up my nose--see it all the time during pre-open and it always smells of someone trying to price hunt to push the IAP in one direction or another.


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## MovingAverage (21 July 2021)

*The Importance of Monte Carlo Analysis and the Way you Do It.*

At @Cam019 recently responded to my VPN post and it spurred me into action about sharing my thoughts on the way Amibroker does Monte Carlo (MC) analysis. I'll explain to you why I believe Amibroker doesn't provide accurate insight into a system's performance using its built in MC analysis. I'm not going to explain what MC analysis is (Google is your friend for that) other than to say in simple terms that it provides a much clearer picture on the range of your system's performance (worse case through to best case) on just about any metric you care to judge your system by. I mean no offence to anyone by saying this, but anyone who moves from developing and testing a system to live trading that system based on single back-testing results without regard to MC analysis is just asking for trouble.

*Amibroker and its Built In Monte Carlo Analysis*

I am a massive fan of Amibroker and nothing comes closes to its capabilities for rapidly developing, testing, refining and executing trading systems. Personally. I struggle to fault Amibroker....but. Yes there is a but....and for me that is its built in MC analysis--it is terrible and to me it seems very much like a quick and dirty add on. I'd never say that to Thomaz because as those that frequent the Amibroker forum know all too well, hell have no fury like a Thomaz scorned 

Anyway, what is it I don't like. Well in summary, the way Amibroker does MC is that it simply uses the executed trades (taken) during a single back-test and merely shuffles those around in time. What's the big deal about that I hear you say, well to me understanding the system performance and the extremes of how that system will perform is not provided by simply re-shuffling in time a set of executed trades. I struggle to understand what insight that actually provides in terms of broader system performance.

In my opinion the best way to understand how a system performs is to use an MC approach in which each of the runs executes a different set of trades. There may be some overlaps between the different trade sets, but what is important is that there are different trades in each distinct set. Amibroker's internal MC testing does not approach it this way so how do you achieve that? Well as I mentioned in my response to @Cam019 the best way to get there is through adding a randomness element to your buy conditions. In Amibroker this can be done using the mtRandom() function. Using a dummy parameter and optimizing that over say 1000 runs (this value needs to be considered carefully in the context of how many signals your system generates) you will end up with 1000 different backtests from your system over different trade sets. You can export those optimization results from Amibroker into Excel and do some great statistical (MC) analysis. This in my opinion is the easiest and best way to do MC analysis of your system and will provide far superior insight to your system's performance. The other big advantage of this approach is that you can do MC analysis on just about any system metric you can think of--Amibroker only does MC analysis on the equity curve and to me there are other aspects of a system I'm more interested in doing MC on other than just the equity curve.

MC analysis can be an extremely complex subject and so the above simplifies a lot of important points that you would need to consider. For example, my above comments assume your system generates far more signals than you can take. If you have a system that only generates a few signals and your system takes all of them then my suggested approach is probably not applicable.

*Summary *

Please tread carefully when looking at Amibroker's inbuild MC analysis. All it does is shuffle around a set of executed trades from a single back-test, which to me doesn't really provide any meaningful insight into a systems broader performance. For better MC analysis and realistic insight consider adding randomness to your buy condition and doing analysis with an external tool such as Excel.


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## Linus van Pelt (24 July 2021)

MovingAverage said:


> hell have no fury like a Thomaz scorned



I describe Tomasz as the Donald Trump of programming...pompous, full of himself, doesn't listen to others (i.e. his end users), an idea is useless unless he thought of it, arrogant, abusive, instantly defensive if someone challenges his ideas, etc. 

I too think Amibroker is great, but I could probably cite 20-50 bugs/design bugs.  

I'm enjoying comparing RealTest with Amibroker (probably sacrilegious in this thread, but one should always be open to new ideas).

Re: MC, I was told to tick "Simulate using portfolio equity changes", esp. when using compounded position sizing.


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## MovingAverage (24 July 2021)

Linus van Pelt said:


> I describe Tomasz as the Donald Trump of programming...pompous, full of himself, doesn't listen to others (i.e. his end users), an idea is useless unless he thought of it, arrogant, abusive, instantly defensive if someone challenges his ideas, etc.
> 
> I too think Amibroker is great, but I could probably cite 20-50 bugs/design bugs.
> 
> ...



Not saying AB is perfect, but hey show me any software that doesn’t have bugs. I’ve not spent any real time looking at RealTest, but have heard mixed heresay, but need to check it out for myself at some stage—nothing wrong about mentioning alternatives here. Equity changes in AB MC testing is just as bad…no matter what mode you use in AB MC it is all bad and I personally don’t place any faith in it.


----------



## Newt (24 July 2021)

MovingAverage said:


> *The Importance of Monte Carlo Analysis and the Way you Do It.*
> 
> At @Cam019 recently responded to my VPN post and it spurred me into action about sharing my thoughts on the way Amibroker does Monte Carlo (MC) analysis. I'll explain to you why I believe Amibroker doesn't provide accurate insight into a system's performance using its built in MC analysis. I'm not going to explain what MC analysis is (Google is your friend for that) other than to say in simple terms that it provides a much clearer picture on the range of your system's performance (worse case through to best case) on just about any metric you care to judge your system by. I mean no offence to anyone by saying this, but anyone who moves from developing and testing a system to live trading that system based on single back-testing results without regard to MC analysis is just asking for trouble.
> 
> ...



MA, I think you're doing great things presenting these concerns and a logical alternative to those developing systematic systems.  I'd be very interested to know more about how you analyse datasets in Excel.  Over the last 6 months I've tried various approaches along these lines to try and really "stress test" key parameters in strategies without over-optimisation.  Plotting up key KPIs (e.g. MaxDD, CAR, Profit F, % winners) across these runs seems a valuable technique for assessing robustness as well as looking for broad peaks to base optimized parameters on.

I gather you're looking to produce frequency distributions in Excel among others things, like below.  From memory that graphic is from a post by past ASF member "stevo" (apologies if I've got that wrong and was you or anyone else from ASF) - who incidently used to post some marvellous analytical work.  Would love to corner him for a day in a quiet spot with beer and a laptop!


----------



## MovingAverage (24 July 2021)

Newt said:


> MA, I think you're doing great things presenting these concerns and a logical alternative to those developing systematic systems.  I'd be very interested to know more about how you analyse datasets in Excel.  Over the last 6 months I've tried various approaches along these lines to try and really "stress test" key parameters in strategies without over-optimisation.  Plotting up key KPIs (e.g. MaxDD, CAR, Profit F, % winners) across these runs seems a valuable technique for assessing robustness as well as looking for broad peaks to base optimized parameters on.
> 
> I gather you're looking to produce frequency distributions in Excel among others things, like below.  From memory that graphic is from a post by past ASF member "stevo" (apologies if I've got that wrong and was you or anyone else from ASF) - who incidently used to post some marvellous analytical work.  Would love to corner him for a day in a quiet spot with beer and a laptop!
> 
> View attachment 127810




Hey @Newt, those frequency distribution charts in your post are exactly the type of analysis I'm suggesting for Excel. I've just finished running some AB sims this afternoon for a follow-up post to describe the steps I use in Excel for this type of statistical analysis. I'll be making that post tomorrow so stay tuned for that. Using those distributions the overall objective then becomes one of moving those frequency distributions up, down, narrowing it or widening it depending on your objective. I will say that using AB and Excel for this process can at times be a little tedious and that's why I prefer TradeSim as I find the latter a bit more efficient. Either way, Excel is an amazing tool for doing a more comprehensive analysis of your system and is a great place to start.


----------



## Newt (24 July 2021)

Yes, it might be helpful to have some sort of Excel template for this.  In the past I've tended to just past backtest runs into Excel and do formulae to pull it together for something worth graphing.  Can't find the spreadsheet where I experimenting with Stevo style output frequency histograms, but here is a fairly primitve set set of bar graphs when I was trying 10 runs with small % randomness built in to Buy while various Buy conditions where turned on or off (or optimized).  This is for a single 10 run backtest.  You'd need to run around 200 to get something approaching the steve plots in my post above of course.

Looking forward to future posts MA when you have time.

Agree there is value not only in increasing key parameters, but considering spread of possible values in your backtest universe - in real life you always tend to end up closer to the min value than max


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## qldfrog (24 July 2021)

Linus van Pelt said:


> I describe Tomasz as the Donald Trump of programming...pompous, full of himself, doesn't listen to others (i.e. his end users), an idea is useless unless he thought of it, arrogant, abusive, instantly defensive if someone challenges his ideas, etc.
> 
> I too think Amibroker is great, but I could probably cite 20-50 bugs/design bugs.
> 
> ...



Sadly true, working in IT, i have seen many like him.it is sad to show such arrogance preventing meaningful improvement in the software.which is looking a bit outdated by now and also has some bugs left after more than a decade


----------



## MovingAverage (24 July 2021)

Newt said:


> Yes, it might be helpful to have some sort of Excel template for this.  In the past I've tended to just past backtest runs into Excel and do formulae to pull it together for something worth graphing.  Can't find the spreadsheet where I experimenting with Stevo style output frequency histograms, but here is a fairly primitve set set of bar graphs when I was trying 10 runs with small % randomness built in to Buy while various Buy conditions where turned on or off (or optimized).  This is for a single 10 run backtest.  You'd need to run around 200 to get something approaching the steve plots in my post above of course.
> 
> Looking forward to future posts MA when you have time.
> 
> ...




If you're using the latest version of Excel it has a great statistics plugin that has a lot of easy to use functions and analysis including histograms and important statistical analysis of those histograms. I have a colleague that uses it to generate some generalized models of his system (from the back test analysis) and then uses those generalized models in conjunction with his live trades to make sure the system is behaving itself. It's a great way to make alert yourself to system behavior that is out of the ordinary. I haven't got that far yet, but it is something I seriously want to do.


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## MovingAverage (24 July 2021)

@Newt Here's a quick and dirty example for you. This assumes you are using the latest version of Excel. Also assumed you know how to export the results out of AB into a CSV (which you do).

Referring to the pic below, all you do is open the CSV file (from AB) in Excel and then you will see in the top right hand corner there is an "Analyze Data" button. Click it and you will be presented with the Analyze Data options on the righthand size. You can see it is even showing a pre-packaged histogram option (frequency). You just click on that and hey presto a histogram is automatically generated for you--don't need to worry about formulas etc. See the second image below.  You can do this analysis on whatever column of data you want. The Analyze Data option is a fantastic tool and allows you to do a lot of statistic analysis on your data--it's an invaluable tool. More on that tomorrow.

As a related but side issue--a very important aspect of any system is positive expectancy. You can see from the second picture below that based on the 1000 runs shown in the first figure that this system has a positive expectancy, that is none of the 1000 runs returned a negative net profit. However, if you look at the third image below AB's MC analysis certainly does not show that the same system has a positive expectancy with only around 10% of the 1000 runs returning a positive return--according to AB 90% resulted in complete capital loss. This is not because AB has some amazing way of doing MC--as I mentioned previously it is flawed.


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## Warr87 (24 July 2021)

qldfrog said:


> Sadly true, working in IT, i have seen many like him.it is sad to show such arrogance preventing meaningful improvement in the software.which is looking a bit outdated by now and also has some bugs left after more than a decade




i agree with both of you. i enjoy the RT community and the creator of RT is very quick, welcoming, and helpful with the software or strategies. pretty quick to fix issues too. if he keeps the momentum up, then i see RT eventually outpacing AB. 

there are also a bunch of sample strategies that come with RT. most of which are really helpful and actually pretty good. real advice is given on the forum too. definitely something which AB lacks, which seems more about asking why you're so stupid and just didn't know lol.


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## MovingAverage (24 July 2021)

@Warr87 @Linus van Pelt Do you consider RealTest as being the closest competitor to AB?


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## Warr87 (24 July 2021)

I would think so. it's pretty versitale software IMO. it doesn't have all the bells and whistles of tones of indicators that AB has. i coded up a supertrend indicator (and marsten helped!), and if its not available you can ask marsten. he'll even help with some code to include in your script, or add it to his to-do list in the next update. i find RT to be more intuitive as well. it handles multiple strategy testing better too. even testing things like futures is much much easier in RT than AB.


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## Warr87 (24 July 2021)

custom charts would be one area that is difficult to compete with AB. the charts are much more simplisitic. but since i'm running algo's more than taking indepth look at charts (i still look at charts to see a visual of what i'm trying to code), if custom layouts and custom charts is important than AB would be better IMHO.


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## qldfrog (24 July 2021)

MovingAverage said:


> @Warr87 @Linus van Pelt Do you consider RealTest as being the closest competitor to AB?





Warr87 said:


> I would think so. it's pretty versitale software IMO. it doesn't have all the bells and whistles of tones of indicators that AB has. i coded up a supertrend indicator (and marsten helped!), and if its not available you can ask marsten. he'll even help with some code to include in your script, or add it to his to-do list in the next update. i find RT to be more intuitive as well. it handles multiple strategy testing better too. even testing things like futures is much much easier in RT than AB.



I should maybe give a try,?


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## MovingAverage (24 July 2021)

Warr87 said:


> I would think so. it's pretty versitale software IMO. it doesn't have all the bells and whistles of tones of indicators that AB has. i coded up a supertrend indicator (and marsten helped!), and if its not available you can ask marsten. he'll even help with some code to include in your script, or add it to his to-do list in the next update. i find RT to be more intuitive as well. it handles multiple strategy testing better too. even testing things like futures is much much easier in RT than AB.



What scripting language do they use? Please tell me Python ?


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## Linus van Pelt (24 July 2021)

I agree with everything @Warr87 said.

Random, stream of consciousness thoughts...

I describe the difference between RT and AB this way (it's just an analogy, it's not perfect):

AB is analogous to Python:  it's big, can do a lot, requires strong programming skills, will likely take you longer to code, you can shoot yourself in the foot if you're not careful.

RT is analogous to Excel:  it can't do as much as Python, requires less programming skills, you can likely code it faster, harder to shoot yourself in the foot, there are many things it does better than Python.

If all you needed was a financial spreadsheet, would you code it up in Python?  You probably could, but why would you?

AB is more a programming environment, RT is more a scripting environment.

You're not going to suck in a web page, or read and write to external files (except built in functionality), create fancy charts that are beautiful eye candy (but do they make you money or just impress your friends?).

RT makes if very hard to code a future leak...you have to really try, almost do it on purpose.  It's possible, just much harder than with AB.

RT makes "sense" in places that AB doesn't.  One example:  if you are using weekly bars, it will show your buy date as Monday, not Friday.  I mean, WTF Amibroker?  It's just software - can't you work out what day Monday is on a weekly bar?

In RT, you import your data from Norgate (or other providers) into a binary format.  Think of it like your hiberfil.sys file when you hibernate to disk.  It a memory image saved to disk.  It can take a long(ish) time to do the download (like 5 mins, sometimes longer if you're importing the entire NYSE from 1990-today), but once you've done so, RT is really really fast.  I actually did a walkforward in RT, something that would have taken days in AB using my laptop.  But for live trading you would just import the data you need (shorter time frames).  Sometimes I can run a backtest in 1-2 seconds, especially when run repeatedly - the first time caches the data formulas in memory.  Think of it like static variables for the first run, then subsequent runs only update those formulas when required.  In many ways it's faster than AB.

It has built in rolling backtests via optimization, so I don't need my Powershell script to do that.

You can easily combine multiple strategies in one, say a long/short hedging strategy, where the two strategies are "self contained" (hard to describe - I'd show you the samples but that probably violates the RT license, esp. if I posted it here).  As Warr said, the examples are really good, not just to illustrate the many capabilities of RT but as trading systems themselves.

The documentation is clear, written by a native English speaker, and not full of typos, grammar errors, and incomplete or inconsistent examples.

One thing that is really cool is the strategy can use it's own equity curve as input.  I like to describe it as being "self aware".  I read in a Bandy book that you should use daily mark to market performance to make trading decisions (position size, whether to switch off, etc).  With RT this is easy.

RT is written by a very successful trader, and is built for traders.  AFAIK Tomasz is not a trader.

Things you have to use the CBT for you can just easily code in RT.  A quote from Marsten:



> I think the key "shift" that people need to make is that whereas in AB you have to define some specific arrays in advance (mainly buy and sell) and maybe declare some "applystop" rules, in RT all of the strategy element formulas are like callback functions in an event-driven model. So for each bar, it is calling your EntrySetup to find out if this stock is an entry on this date, and for each position it's calling ExitRule, ExitLimit and ExitStop to see if there's an exit condition and/or a target or stop price in play as of this bar. Your formulas for these callbacks can then access the context via all of the relevant syntax elements. You might say this is like CBT without CBT.




RT is much "younger" than AB, so it doesn't have all of AB's bells and whistles.  For now, I will still use both, esp. AB's charting capabilities to visualize price patterns that I can try to code into a system.  Hopefully, when my license for AB expires (AFAIK it will still work, I just won't get updates), I will have completely transitioned to RT.

I won't miss the the toxic culture of the AB forums.  The culture in the forums, like the culture in many organisations (or even recent US Presidencies) is toxic because it flows down from its leader.  Its members follow the example set by its leader.


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## Linus van Pelt (24 July 2021)

MovingAverage said:


> What scripting language do they use? Please tell me Python ?




Python-like, not Python.

Most of these are by an enthusiastic end user.  I think the presentation to Cesar Alvarez is by Marsten.



			https://www.youtube.com/channel/UC3gI2Vxi8g6q52s9LNXw5Ew


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## Linus van Pelt (24 July 2021)

Warr87 said:


> I would think so. it's pretty versitale software IMO. it doesn't have all the bells and whistles of tones of indicators that AB has. i coded up a supertrend indicator (and marsten helped!), and if its not available you can ask marsten. he'll even help with some code to include in your script, or add it to his to-do list in the next update. i find RT to be more intuitive as well. it handles multiple strategy testing better too. even testing things like futures is much much easier in RT than AB.




I'll leave that to Warr as he's a more experienced trader than me.  AB is certainly more well known, while RT is just gaining traction.  But I don't know about other packages, such as TradingBlox, Metastock, etc.


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## MovingAverage (24 July 2021)

Linus van Pelt said:


> Python-like, not Python.
> 
> Most of these are by an enthusiastic end user.  I think the presentation to Cesar Alvarez is by Marsten.
> 
> ...



Thanks. This comment also goes to AB…but I wish these guys would stick to a native language and avoid using a “like” language.


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## Linus van Pelt (24 July 2021)

MovingAverage said:


> Thanks. This comment also goes to AB…but I wish these guys would stick to a native language and avoid using a “like” language.



Check out the videos.  Most are short (~10 mins).  You'll see the scripting language.  You can decide for yourself.


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## MovingAverage (24 July 2021)

Linus van Pelt said:


> I agree with everything @Warr87 said.
> 
> Random, stream of consciousness thoughts...
> 
> ...



Nice review, thanks. Certainly some of the issues you raise about AB are very true. BTW, there is an easy resolution to the weekly buy day showing as Monday not Friday. Have you looked at the “Intraday” tab (yes strange this is under intraday) in the Preferences settings? I’ve just downloaded the software so will be interesting to look at—I’m very keen to see what it’s backtesting and optimisation speed is like.


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## qldfrog (25 July 2021)

MovingAverage said:


> *The Importance of Monte Carlo Analysis and the Way you Do It.*
> 
> At @Cam019 recently responded to my VPN post and it spurred me into action about sharing my thoughts on the way Amibroker does Monte Carlo (MC) analysis. I'll explain to you why I believe Amibroker doesn't provide accurate insight into a system's performance using its built in MC analysis. I'm not going to explain what MC analysis is (Google is your friend for that) other than to say in simple terms that it provides a much clearer picture on the range of your system's performance (worse case through to best case) on just about any metric you care to judge your system by. I mean no offence to anyone by saying this, but anyone who moves from developing and testing a system to live trading that system based on single back-testing results without regard to MC analysis is just asking for trouble.
> 
> ...



I am biting the bullet and going your way.some of my systems have plenty of buys and i can not fault the logic /process of doing a proper MC vs what MA showed was dummy MC on AB
It is actually difficult as i might discover some unpleasant truth.
Isn't it funny how we are wired?.i am scared finding something wrong,yet my rationale side agrees that the earlier the better.
A bit like people postponing cancer check.. because it could work and detect one...
Just to say: how could i ever do discretionary trading with a brain like that😁


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## Warr87 (25 July 2021)

I think @Linus van Pelt covered everything pretty well. One downside of RT though is that it is a one-man band. If marsten was to stop, get sick and take some time off, etc., then RT wouldn't progress any further. All one person development teams are obviously prone to this. Marsten doesn't appear to be slowing down any time soon and has many improvements (and additional software) in the works.

i was hesitant with RT but i most definitely prefer RT over AB.


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## Newt (25 July 2021)

@Linus van Pelt, thanks for sharing the info on RT.  Very interesting.  

@MovingAverage - thanks for showing what the latest Excel can do.  I'm behind the times there, but the good old Data Analysis module in older Excel versions doesn't make it too hard to knock up graphs for columns in a spreadsheet and whack on some formatting.  Below are frequency histograms for 200 runs of a TF system over many years, in "Stevo format".  The only element of randomness in these 200 runs was a 1/13 chance any particular set of Buy signals would NOT be taken.

Obviously this is yet another decision to make, as to how you "randomise".  Have read about people introducing noise into price itself, BUY signals (or components of the overall signal).


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## Newt (25 July 2021)

*On Amibroker:*


Its another tool, but what an amazing tool
Every different technique or alternative tool we employ is likely to emphase an aspect of the process that may not have been clear in AB - we should probably focus less on "what's best" and more on "what else can I learn from this tool"?
There are definitely pitfalls with any tool, and AB has plenty of ways to blow your foot off, along with all the other design decisions developing systems (universe, win rate, max acceptable DD, etc, etc)
AB MC graphs has fascinated me every since figuring out how to do broom plots.  Any given run involving "randomisation" may be over-optimistic or over-pessimistic.  For me a huge benefit of multiple runs (either exported to Excel or simply eye-balled equity curves in AB) is the likelihood of showing up overfitting/over-optimisation.

Here are a couple of AB MC backtest runs from the pessimistic and optimistic ends of the runs for same system in previous post for the pretty graphs.  I do worry MA if there are too many "failed/neg" runs in a MC - could be suggestive of too high a risk of ruin?  (a whole new realm to explore....).

Believe there are still useful aspects worth review in this plots (e.g. spread, equity curves, main page statistics), but agree caution is required not to accept as gospel.


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## MovingAverage (25 July 2021)

Newt said:


> @MovingAverage - thanks for showing what the latest Excel can do.  I'm behind the times there, but the good old Data Analysis module in older Excel versions doesn't make it too hard to knock up graphs for columns in a spreadsheet and whack on some formatting.  Below are frequency histograms for 200 runs of a TF system over many years, in "Stevo format".  The only element of randomness in these 200 runs was a 1/13 chance any particular set of Buy signals would NOT be taken.
> 
> Obviously this is yet another decision to make, as to how you "randomise".  Have read about people introducing noise into price itself, BUY signals (or components of the overall signal).
> 
> View attachment 127840



That’s a great set of charts @Newt -- well done. That's exactly what I do. These charts provide some real insight into what you can expect out of your system and of course you can apply this technique to any of the metrics AB spits out.

I've read about folks adding randomness to buy and sell prices but to be honest I do not see any value in that for my personal style of trading--all my systems buy/sell on open/close, but could see some merit in that if you are an intra-day trader. While I haven't done this yet but see advantage in it, is to add an element of randomness to your buy/sell key parameters to better understand how sensitive your system is to those parameter settings. As a simple example assume you buy on a simple short MA crossing over a slow MA. Your short MA is 5 and your long MA is 20. You could add a constrained amount of randomness to the 5 and 20 values (not wide changes in the values) just to see how sensitive your system is to those parameters. The logic being that a good system should not be too sensitive to limited changes to the 5 and 20 values. You would want to see a very tight standard deviation on that.


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## MovingAverage (25 July 2021)

Newt said:


> I do worry MA if there are too many "failed/neg" runs in a MC - could be suggestive of too high a risk of ruin?  (a whole new realm to explore....).



@Newt - If you are talking generally about MC results (regardless of the tool) then absolutely you are on the money--no way I'd live trade any system that shows even 1 negative run. However, I wouldn't make that decision based solely on the MC results shown in AB for the reasons I've previously described. If MC analysis in Excel or TradeSim are showing any negative returns then no way I'd live trade it.


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## qldfrog (25 July 2021)

MovingAverage said:


> @Newt Here's a quick and dirty example for you. This assumes you are using the latest version of Excel. Also assumed you know how to export the results out of AB into a CSV (which you do).
> 
> Referring to the pic below, all you do is open the CSV file (from AB) in Excel and then you will see in the top right hand corner there is an "Analyze Data" button. Click it and you will be presented with the Analyze Data options on the righthand size. You can see it is even showing a pre-packaged histogram option (frequency). You just click on that and hey presto a histogram is automatically generated for you--don't need to worry about formulas etc. See the second image below.  You can do this analysis on whatever column of data you want. The Analyze Data option is a fantastic tool and allows you to do a lot of statistic analysis on your data--it's an invaluable tool. More on that tomorrow.
> 
> ...



This is crazy MA, usually i develop a system, test on a few time periods and then look at AB MC.
On results like that,i would back off.
AB is not only wrong but also very misleading.
So far after running 2h on Guppy and FB, seems ok just looking thru results but still have to go thru excel.
I did a miss of 20% of buys, via random function.will put the result of the experience on my thread.
Social life awaits before we get in lockdown too


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## MovingAverage (25 July 2021)

qldfrog said:


> This is crazy MA, usually i develop a system, test on a few time periods and then look at AB MC.
> On results like that,i would back off.
> AB is not only wrong but also very misleading.
> So far after running 2h on Guppy and FB, seems ok just looking thru results but still have to go thru excel.
> ...



Good stuff Frog. Very keen to read about your experience. 

One of the things I mentioned in one of my prior posts on this, is that you can (to a degree) use your Excel analysis to keep a "real time" check on your systems performance with regard to live trades. Two of the key distributions I use from Excel for "real time" live trade checking is: a) the profit/loss of each live trade; and b) the consecutive number of winning/losing trades. I compare the values of these from live trades to the Excel models and anything outside 2SD gives me cause for concern and to double check my system. There is a bunch of other parameters you can use for this depending on what you consider important.


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## MovingAverage (25 July 2021)

Warr87 said:


> I think @Linus van Pelt covered everything pretty well. One downside of RT though is that it is a one-man band. If marsten was to stop, get sick and take some time off, etc., then RT wouldn't progress any further.




I know very little about the development team behind AB, but isn't AB development pretty much a one-man band as well? It is certainly not open source so I don't believe there's a true development community.


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## Warr87 (25 July 2021)

MovingAverage said:


> I know very little about the development team behind AB, but isn't AB development pretty much a one-man band as well? It is certainly not open source so I don't believe there's a true development community.




i'm actually not too sure, though I assumed there were other members of the development team. either way, AB is much more mature than RT. Though martsen has been using RT for a long time, it's only recently that he's made his software available to others for purchase.

as its been noted, AB or RT is a tool. not all tools are suited for everyone. I am still using AB, though I'm just running scripts that have been running live systems (MAP and my super strat). I will eventually port them over to RT completely. Though I find RT easier for strategy development (running a daily BO systems live from RT, and developing a futures strategy within RT as well).


----------



## MovingAverage (26 July 2021)

Hi All,

This is a bit more of a follow up to my recent posts about using Excel to analyze your systems and how I use Excel.
This assumes you are using the current version of Excel. Previous versions of Excel may support the following approach but I'm not 100% whether earlier versions are as straightforward. The first Excel chart below gives me all the essential information I need to know about my system in "dashboard" view and this can be easily created with a few mouse clicks and no need to manually type in complex formulas.

The the sake of this example the chart below is only showing four system metrics, but you can apply this to any system metric you like. From left to right and top to bottom the chart below shows some common system metrics: average % loss of each trade, system % drawdown, average % profit of each trade and CAR. As you can see, the Excel below contains a visual frequency distribution chart for each metric, but importantly each frequency distribution contains a statistical analysis on the left of each histogram. For me the statistical analysis contains the most important information about the associated frequency distribution. The statistical metrics I am most interested in include: mean, std error, std deviation, sample variance, min and max values, and the confidence level. I won't discuss in this post why they are important to me, but I will do that in a later post. The purpose of this post is to show you how I quickly get the below chart with a few clicks.




First thing is first--let's generate the statistical analysis. You need to open your raw data (this is the CSV imported from AB). Click in the "Data" menu in the top left of Excel. At this point you will see "Data Analysis" function in the top righthand corner of Excel. Click on that and you will see a detail Analysis Tool pop-up (see middle of the image below). At this stage click on the "Descriptive Statistics" option.




When you click on the Descriptive Statistics option you will be presented with the image below. At this point you need to select the column of data you're interested in, which in the case of this example I'm interested in column C which is the % net profit. When you select the column this should automatically transfer across to the Input Range of the Descriptive Statistics box. Make sure you tick the four options at the bottom: Summary Statistics, Confidence Level for Mean, Kth Largest and Kth Smallest. You are now all done so just click the OK button and hey presto you will get all of the statistical information shown in the first chart above. The statistical information will be placed in a new worksheet and will be in the exact same format as the first image above. Pretty easy, hey?




Creating the histogram chart is just as easy. Select your column of data of interest and select the home menu. As shown below, in the top right hand corner of Excel there is an Analyze Data option. Click it and in the right hand side of Excel you will be give a bunch of options, one of which is to generate a histogram. Click it and hey presto you will get a histogram chart like that show in the original diagram above.




So that is it...you can get some really insightful information about your system with just a few clicks of a mouse in Excel.

Stay classy ASF.


----------



## qldfrog (26 July 2021)

MovingAverage said:


> Hi All,
> 
> This is a bit more of a follow up to my recent posts about using Excel to analyze your systems and how I use Excel.
> This assumes you are using the current version of Excel. Previous versions of Excel may support the following approach but I'm not 100% whether earlier versions are as straightforward. The first Excel chart below gives me all the essential information I need to know about my system in "dashboard" view and this can be easily created with a few mouse clicks and no need to manually type in complex formulas.
> ...



Sadly no easy way with excel2010...


----------



## MovingAverage (26 July 2021)

qldfrog said:


> Sadly no easy way with excel2010...



booo


----------



## Newt (26 July 2021)

Nice work Moving Average, and thanks again for sharing details of how you achieve and value assessing key parameters.

Qldfrog, don't panic - this stuff improves across versions but has been there for yonks - you should be able to activate the descriptive stats "Add-in" in Excel 2010 - hardest part may be just finding where the option is:









						Descriptive Statistics in Excel
					

You can use the Excel Analysis Toolpak add-in to generate descriptive statistics. For example, you may have the scores of 14 participants for a test.



					www.excel-easy.com


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## qldfrog (26 July 2021)

Newt said:


> Nice work Moving Average, and thanks again for sharing details of how you achieve and value assessing key parameters.
> 
> Qldfrog, don't panic - this stuff improves across versions but has been there for yonks - you should be able to activate the descriptive stats "Add-in" in Excel 2010 - hardest part may be just finding where the option is:
> 
> ...



Thanks Newt, I implemented the code via formula etc but not as easy so you stick to basics, thanks for telling me about the addin


----------



## qldfrog (26 July 2021)

qldfrog said:


> Thanks Newt, I implemented the code via formula etc but not as easy so you stick to basics, thanks for telling me about the addin



and yes, in excel 2010:



without a formula entered by hand, so easy to create with the add in, should refine the bins but basically, got what i need in a few click;
:


----------



## Newt (26 July 2021)

Glad you got it going.
Further down the list from Descriptive Statistics is "Histogram" which is what I used to create the graphics couple of days ago.  

Later Excel versions do seem to make this stuff faster and more intuitive as MA has shown, but definitely still largely possible in older versions with bit of determination too.


----------



## MovingAverage (30 July 2021)

Happy to see FY22 got off to a reasonable start for me. Two of my three live systems had a respectable July.

First up, my weekly put on 6.27% 




My EOD swing system put on 3.93%




Finally, my EOD breakout gets this month's dog award having given up 0.41%




Hopefully July is setting this scene for the run into the end of the year.

Stay classy ASF.


----------



## qldfrog (30 July 2021)

MovingAverage said:


> Happy to see FY22 got off to a reasonable start for me. Two of my three live systems had a respectable July.
> 
> First up, my weekly put on 6.27%
> 
> ...



No clue how you can do this MA well done.every single day has been+xxx at 11/12 -xxx or more by the eod


----------



## MovingAverage (30 July 2021)

qldfrog said:


> No clue how you can do this MA well done.every single day has been+xxx at 11/12 -xxx or more by the eod



Haha...Thanks for the complement. I could simplify my effort by saying "I simply trade the system", but we all know system trading is not that simple and a lot of effort goes on in the background. I've said this before, I'm more concerned about keeping things simple and setting up my systems for consistency (ironing out the volatility) but that comes at the cost of not capturing those massive random big trades.


----------



## Newt (30 July 2021)

Yep, well done MA.

I'm down 0.5% so far this new FY.  Playing defense with minimal positions currently - up 0.28% this week at least.....


----------



## MovingAverage (30 July 2021)

Newt said:


> Yep, well done MA.
> 
> I'm down 0.5% so far this new FY.  Playing defense with minimal positions currently - up 0.28% this week at least.....



Playing defensive—do you use an index filter?


----------



## Newt (30 July 2021)

Yes - but mixture of VIX, Cum New Highs/Lows, % Stocks above MA150
No red alerts, but tighter stops for now in bumpy markets essentially for my trend following.

Glad your disversified systems are still paying.


----------



## MovingAverage (30 July 2021)

Newt said:


> Yes - but mixture of VIX, Cum New Highs/Lows, % Stocks above MA150
> No red alerts, but tighter stops for now in bumpy markets essentially for my trend following.
> 
> Glad your disversified systems are still paying.



Despite the recent sideways movement my index filter has remained on. My weekly and EOD breakout have been fully invested for some time. July didn’t see too many exits or new positions so systems have been pretty steady


----------



## Gunnerguy (31 July 2021)

Does anyone know which are the lowest 2 correlated stocks in the ASX200 ?
Gunnerguy


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## qldfrog (31 July 2021)

Gunnerguy said:


> Does anyone know which are the lowest 2 correlated stocks in the ASX200 ?
> Gunnerguy



what do you mean?lowest in price ? or lowest correlated, in that case something like GEAR VS BEAR,, should always move opposite?
as you play in the ASX


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## KevinBB (31 July 2021)

Have a look at asxcorrelations.com.

For the ASX20, it looks like NCM and MQG have the closest correlation to zero.

But, be aware, the Aussie stock market is a funny beast mainly because of the large dividend payouts. I'm not sure if this web site back adjusts prices for past dividends.

KH


----------



## MovingAverage (1 August 2021)

qldfrog said:


> what do you mean?lowest in price ? or lowest correlated, in that case something like GEAR VS BEAR,, should always move opposite?
> as you play in the ASX



Not being a smart arse here frog....but GEAR and BEAR are highly correlated. The fact they move in different directions doesn't really factor into the question of correlation. The reality is when one of those move in one direction the other will absolutely move in the opposite direction and so their movement is "joined at the hip"--highly correlated.


----------



## Warr87 (1 August 2021)

MovingAverage said:


> Despite the recent sideways movement my index filter has remained on. My weekly and EOD breakout have been fully invested for some time. July didn’t see too many exits or new positions so systems have been pretty steady




me too! i've been surprised that my systems are still turned on. both for weekly and daily. PL pretty steady or stagnant. a little frustrating right now actually. monthly is the only one doing really well.


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## MovingAverage (1 August 2021)

KevinBB said:


> Have a look at asxcorrelations.com.
> 
> For the ASX20, it looks like NCM and MQG have the closest correlation to zero.
> 
> ...



Interesting site. Do you have any association with the website? Only ask as I'd like to know a little more about what's "under the hood"


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## Gunnerguy (1 August 2021)

Thanks @KevinBB 

I’ll take a look.

I’m just looking for some shares with the highest negative correlations (nothing to do with share prices). Maybe a way to hedge an options strategy between different negatively correlated shares.

Gunnerguy


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## KevinBB (1 August 2021)

MovingAverage said:


> Interesting site. Do you have any association with the website? Only ask as I'd like to know a little more about what's "under the hood"



Hi.

No association at all. I'm just a retired bloke, private investor, with a reasonable knowledge of mathematics and the markets. I didn't know about that site until Google told me.

That's why the caveat about prices and dividend adjustments. I doubt very much that the site adjusts prices for dividends, because no other analysis site I've seen does that. Its something that most people don't realise when running standard tests on prices of ASX stocks.

Edit: I should have added that its possible to calculate those correlations relatively easily using Python and Pandas. My interests are mainly in automated trading of the US Futures markets, and part of my software does those calculations. I haven't yet tried it on ASX stocks, mainly because of the costs of trading Au as opposed to the US.

KH


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## qldfrog (1 August 2021)

MovingAverage said:


> Not being a smart arse here frog....but GEAR and BEAR are highly correlated. The fact they move in different directions doesn't really factor into the question of correlation. The reality is when one of those move in one direction the other will absolutely move in the opposite direction and so their movement is "joined at the hip"--highly correlated.



Ok, yes. But i thought the idea was opposite, not going in the same way?
So yes gear and bear are inversely correlated by design 😁


----------



## cynic (1 August 2021)

MovingAverage said:


> Not being a smart arse here frog....but GEAR and BEAR are highly correlated. The fact they move in different directions doesn't really factor into the question of correlation. The reality is when one of those move in one direction the other will absolutely move in the opposite direction and so their movement is "joined at the hip"--highly correlated.



I think that might be what is meant by inverse correlation as opposed to correlation.

Edit: Just realised the frog has already  pointed this out. Please forgive my hasty intrusion.


----------



## MovingAverage (2 August 2021)

cynic said:


> I think that might be what is meant by inverse correlation as opposed to correlation.
> 
> Edit: Just realised the frog has already  pointed this out. Please forgive my hasty intrusion.




It's negative correlation (prices move in opposite directions but are correlated) as apposed to positive correlation where the prices move in the same direction. I use correlation in the general sense in which a move in one stock will influence a move in another stock.


----------



## qldfrog (3 August 2021)

PM:
as you will remember from among others Mr Ducati (@ducati916 ), not all paper gold and PM are born equal;
And many do not actually match any owned PM.
Mr Duc recommends the US listed PSLV (physical silver)
here in Australia, we have a valuable access to supposedly real PM backed codes:
obviously the local PMGold
but also:


https://cdn-api.markitdigital.com/a...access_token=83ff96335c2d45a094df02a206a39ff4

If anyone knows otherwise, please tell us, but I believe PMGOLD and the 5 above listed tickers are physically backed.
Hope it helps avoiding too much overniht  digging in Mrs Frogette garden, and save the neighbours sleep as well, as I am switching the hand shovel for the 4in1 bucket lately


----------



## DaveTrade (15 August 2021)

Charting the Markets: 11 August
					

Charting the Markets: 11 August




					www.ig.com


----------



## JM12 (26 August 2021)

Just a quick shout out to you guys on what a worthwhile thread this is.   I do pop in every few weeks to see whats happening, see anything of interest and do pick the odd thing/idea up.  I think skate started the thread and deserves to be commended for it.

off the top of my head I've picked up an idea on pocket pivots which I've since developed and deployed, its doing great.  also obtained some comfort in hearing of the struggles in june/july that I can certainly relate to.  My portfolio of systems had a great fy21 but june, july were much tougher, down 0.8 and 0.2%, so not disastrous by any means but below indices/benchmarks.  as someone commented, its the choppy and bear markets that tests a traders mettle.  As always in times of underperformance, one questions why.  I like to track the rolling 20, 40 ,60 trade win% as an indicator of system performance and I could certainly see drops in these measures during this period but within expectation.  So that, market assessment of choppy conditions and trade reviews provided reassurance just to keep ploughing on.  also enjoyed the discussion on mc and excel, rt, etc, things I might look into.

so again thankyou for a great thread.  you have a great community here.


----------



## noirua (26 September 2021)




----------



## MovingAverage (1 October 2021)

Couldn't help but notice the tumble weed blowing through the Dump It Here thread, so thought I might post something.

Well the first quarter of the financial year is done and dusted so just thought I'd dump this quarter's performance of my live systems, which is for 1 July thought to 30 Sept.

First up is my weekly system. The Sept quarter certainly was volatile for my weekly system. It was up and down through July and Aug and the overall unit price of my weekly just moved sideways. However, September saw my weekly really get moving upwardly. Over all my weekly system put on 10.67% for the July-Sept quarter, which I'm reasonably happy about. September delivered about half of the quarters 10.67% gain. Going into July my weekly was pretty much 100% invested, but as we hit the end of August a number of the positions were closed out so the system ended up around 60% invested at 30 September.




As for my EOD system, it certainly didn't encounter the volatility that my weekly experienced. July was a bit of a flat month, but it certainly found traction through August seeing some good gains. Unfortunately, September wasn't so good for my EOD as it wiped out some of July's gains. Overall, my EOD system delivered a gain of 3.35% for the July - September quarter. My EOD system remained fully invested through the quarter.




Finally, my swing system had a reasonable start to the quarter putting on some okay gains from July to around mid-August. Unfortunately it was all downhill from then to end of September. For the quarter my swing system delivered a gain of around 2%.




Stay classy ASF.


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## qldfrog (1 October 2021)

MovingAverage said:


> Couldn't help but notice the tumble weed blowing through the Dump It Here thread, so thought I might post something.
> 
> Well the first quarter of the financial year is done and dusted so just thought I'd dump this quarter's performance of my live systems, which is for 1 July thought to 30 Sept.
> 
> ...



Well done for your weekly systems especially in the 2 last weesk where mine got hammered.
I noticed you ended 60% invested so must have entered an entry freeze earlier .Good strategy


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## MovingAverage (3 October 2021)

qldfrog said:


> Well done for your weekly systems especially in the 2 last weesk where mine got hammered.
> I noticed you ended 60% invested so must have entered an entry freeze earlier .Good strategy



It did @qldfrog. It started closing out positions from around 2nd week of Sept and no new entries generated


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## Skate (23 October 2021)

*I've been itching to start another strategy*
After reading @peter2 & @qldfrog weekly trading results (which vary considerably, I must say) have prompted me to "throw my hat into the ring" to display another way of trading or to be "more accurate" my way of trading. As of Monday, I'll start trading a new strategy. I'll be posting my signals & ongoing weekly results with a few previous backtest results thrown in for those who want to follow along. 

*The Platinum Weekly Strategy *
This strategy will be a $100k, 10 position portfolio. 

*Parameter Settings*
Also for full disclosure, I'll post the parameter setting of "The Platinum Strategy". The strategy is nothing fancy but it's certainly robust.

*Norgate's “Platinum subscription” *
I've bitten the bullet & subscribed to Norgate's  "Platinum Subscription" that makes use of Historical Index Constituents checking that the security was in the relevant index at the time the trade was entered. (Posted Backtests should now accurately reflect trading results) 

Skate.


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## Skate (23 October 2021)

*Trading is a hard slog (at the moment)*
Because of this, it raises a few questions:
(a) What's been happening with trading lately?
(b) What is the measure to accurately evaluate how effective a strategy is?
(c) What style of trading will generate the most effective return for the least amount of risk?

*These are very important questions*
Statistics are one thing but as a trader, you should be more interested in what will help you improve the consistency of your trading. "Hickle pickle" trading just won't cut it "trading in these times".

Skate.


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## Skate (23 October 2021)

*Robust trading systems*
As a system trader, it's all about building a robust (as opposed to optimal) trading strategy that can withstand multiple outcomes. Since "COVID-19" trading has somewhat changed in as much that profits can “dissolve” so quickly that has to be addressed. Without adapting I'm positive "frustration" will eventually lead to faulty thinking & poor results.

*There are so many metrics*
There is a multitude of metrics that can evaluate the performance of any trading system just goes to prove how swamped we are with an information overload. Even though you can use these metrics to select the best trading system for you, the criteria for selecting a system tends to be arbitrary. Metrics give an indication but don’t indicate which system is the best in terms of consistency with performance. (Trading is certainly a trade-off between the two)

Skate.


----------



## qldfrog (23 October 2021)

Skate said:


> *Robust trading systems*
> As a system trader, it's all about building a robust (as opposed to optimal) trading strategy that can withstand multiple outcomes. Since "COVID-19" trading has somewhat changed in as much that profits can “dissolve” so quickly that has to be addressed. Without adapting I'm positive "frustration" will eventually lead to faulty thinking & poor results.
> 
> *There are so many metrics*
> ...



Nice to see you back Mr Skate.system trading is now a faily roller coster up down 6k a day quite often aka 2% up or down in a day. Heart attack stuff


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## Skate (23 October 2021)

*The Platinum Strategy *
Let me explain the inner working of this strategy as it relies heavily upon an ADX indicator for a buy signal which measures the strength of a trend. It's a handy indicator that works perfectly in both trending & range-bound markets. As well as the ADX indicator buy signal "The Platinum Strategy" use a confirming indication of a "Volume Weighted Moving Average" over two different time periods to indicate when a price is trending higher. Both these are conditional on the "Ulcer index indicator" is "Down".

*Summary of the Ulcer Index*
The Ulcer Index’s real strength is its focus on downside risk only. A gap-up would be viewed with joy, while a gap-down would be viewed with horror. The Ulcer Index focuses on downside risk rather than the upside. The downside risk causes "stress" when trading. The main idea behind the Ulcer Index Indicator is to measure downward volatility & alert when the trade reaches a level of “stress”. The "Stress" indicator is either UP or DOWN.

*Thinking outside the box*
Nobody that I know uses the "Ulcer Index" to their advantage & this indicator forms part of "The Platinum Strategy". The Ulcer Indicator's sole purpose is to control the drawdown risk (not eliminate the risk) without reducing the profit potential of a strategy. 

Skate.


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## Skate (23 October 2021)

qldfrog said:


> Nice to see you back Mr Skate.system trading is now a faily roller coster up down 6k a day quite often aka 2% up or down in a day. Heart attack stuff



@qldfrog that's why I've been prompted to display my style of trading & post how I manage to achieve the results I do. Consistency is the name of the game. By being fully transparent with "The Platinum Strategy" hopefully is the catalysis for new traders to think more deeply about their trading & how simple changes can make an improvement. 

Skate.


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## Skate (23 October 2021)

*Mechanical System Trading*
As traders, I say each to their own. Trading can be cruel at times just because of the ebb & flow nature of stock prices. The semantics of trading has been extensively canvassed not only in this thread but quite a few others as well. The weekly results being posted by other members benchmarks a certain style of trading & it's interesting to see the results each week warts & all.

*Trading Styles*
Buying when the price is going up & selling it when it doesn't is a simple analogy of my style of trading. You should approach the market in a way that allows you to capitalize on your speed, cunning & flexibility.

Skate.


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## Skate (23 October 2021)

*Technical analysis*
Technical analysis is often portrayed as a complex set of tools, composed of intricate calculations - combine this with a simple money management technique & I'm sure over time it will dramatically increase your returns. 

*How? *
By simply avoiding substantial losses.
* 
Grasping new information*
Personality has a lot to do with new traders’ ability to grasp & properly execute new trading information. What seems natural to many long-term traders seems alien to a beginner. Many new traders make the mistake of bringing a gambling mindset to trading. However, this mindset can wipe out your trading account quickly. If you are serious about trading, then changing this mindset is vital.

Skate.


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## Skate (23 October 2021)

*System trading in a nutshell*
Trading is predicting the value of a security sometime in the future. You must never forget that the objective of trading is making a profit. Not only does that mean learning a winning trading methodology, but it also requires careful risk assessment, disciplined money management, emotional & behavioural discipline, with the ability to execute a trading plan flawlessly, as if they were an art form.

Skate.


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## Skate (23 October 2021)

*The Platinum Strategy*
Below are the backtest results of (a) the last 365 days & (b) the last two financial years' backtest results. I should also say that the "Strategy" derives its name from Norgate's *"Platinum"* Data Subscription package.




Skate.


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## Skate (23 October 2021)

*A description of "The Platinum Strategy"*
This strategy is a "breakout strategy" that incorporates an "ADX indicator", a "Volume weighted Moving Average" over two different time periods conditional on the "Ulcer index indicator" being down to generate a buy signal.

*Ranking signals*
The ranking (PositionScore) is more in line (tuned) with the results we are trying to achieve with this strategy. The ranking just takes the lowest price security first, crude but robust with a breakout strategy.

*Backtest results*
The backtest results displayed above for "The Platinum Strategy" are well within the metrics for a trend following strategy. The metrics aren't pretty on face value but "all in all" they are quite acceptable.

*There are no right or wrong signals *
There are just trades that work & trades that don't!

Skate.


----------



## Skate (23 October 2021)

*The Platinum Strategy*
For full disclosure - for those who are more technical or those who just want to follow along "the parameter setting" of this strategy are on full display. (The parameters should be self-explanatory)  

*Main parameter settings*
(1) It should be noted that each position will be $10k & a maximum number of positions will be capped at 10. 
(2) Securities must be in the range of $0.05 to a maximum of $15 to execute.
(3) The breakout lookback period is over the last 20 weeks
(4) This strategy also incorporates a "Take Profit Stop" with a wide 40% Trailing Stop
(5) The "Stale Stop" incorporates a short 3 week grace period to allow for ongoing momentum. 




Skate.


----------



## MovingAverage (23 October 2021)

Welcome back @Skate


----------



## MovingAverage (23 October 2021)

Skate said:


> *Norgate's “Platinum subscription” *
> I've bitten the bullet & subscribed to Norgate's  "Platinum Subscription" that makes use of Historical Index Constituents checking that the security was in the relevant index at the time the trade was entered. (Posted Backtests should now accurately reflect trading results)
> 
> Skate.



Well worth the investment when developing and evaluating systems--not including historical constituents can have a massive impact (good or bad) on system performance.


----------



## Skate (23 October 2021)

*It's confusing*
When something doesn't make sense an explanation is in order. Previously I've displayed an Exploration Analysis Report to display the signal with the number of shares to buy at a pre-set offer to snag the opening price of Monday's auction.

*Exploration Analysis Results*
These are "The Platinum Strategy" buy signals using the "Exploration Analysis". It's important to limit an "Exploration Analysis" to one recent bar(s) to generate this week's signals.




*Exploration Analysis is not equal to a Backtest Report*
Exploration outputs (raw) signals & a Backtest outputs trading simulation results.

*Backtest Analysis Results*
The symbols in backtest output & exploration output may be the same ones or not. Backtester has several features that are not available in exploration. Obviously then, exploration & backtest would produce different (shifted) signals between each other. (it's important to use the date range when running a "Backtest Report" to ensure the trade simulation stays in a defined range - this is important)




*Why use an Exploration Analysis for signals*
It's easy for me to do some mathematics to achieve the OFFER price & the AMOUNT of SHARE to buy (so my $10k limit is not exceeded) it is another thing to get the PositionScore (the RANKING method) to align. When we were BUYING the lowest price security first it's simple to achieve this by using the "Set SortColumn" feature.

*l want to make an additional remark*
Amibroker uses the last open to calculate the share price & the number of shares to buy in the "Backtest Report" is "irrelevant" & "an inaccurate assumption" at this stage. 

*Amibroker recalculates after the open*
After Monday's open "Amibroker will recalculate" those numbers (price & shares) once the opening price is known. The reason why I use the "Exploration Analysis" for my calculations is that NO-ONE knows the opening price before the opening & I certainly don't want to be caught buying more shares than my $10k will allow.

Skate.


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## MovingAverage (23 October 2021)

Skate said:


> *The Platinum Strategy *
> Let me explain the inner working of this strategy as it relies heavily upon an ADX indicator for a buy signal which measures the strength of a trend. It's a handy indicator that works perfectly in both trending & range-bound markets. As well as the ADX indicator buy signal "The Platinum Strategy" use a confirming indication of a "Volume Weighted Moving Average" over two different time periods to indicate when a price is trending higher. Both these are conditional on the "Ulcer index indicator" is "Down".
> 
> 
> Skate.



I'm looking forward to seeing how this system performs. Everything I read about ADX makes it seem like a great indicator. I've tried on countless occasions to integrate it into my live systems predominantly as a filter. But my backtest results are what they are and I've never experienced any positive upside to using the ADX. So really looking forward to following the platinum strategy


----------



## Skate (23 October 2021)

MovingAverage said:


> I'm looking forward to seeing how this system performs. Everything I read about ADX makes it seem like a great indicator. I've tried on countless occasions to integrate it into my live systems predominantly as a filter. But my backtest results are what they are and I've never experienced any positive upside to using the ADX. So really looking forward to following the platinum strategy




*A bit about the ADX indicator*
The "Average Directional Index" (ADX) shows the "strength" but "not the direction of the price that is trending". Trading in the direction of a strong trend reduces risk and increases profit potential. The ADX rises as the price strengthens into an identifiable trend & falls when the price weakens or consolidates.

*Taking advantage of the ADX Indicator*
Using the ADX Indicator in isolation limits its usefulness. Stacking & comparing the results of the ADX Indicator from one period to the previous periods ensures strength. In other words, the ADX needs to be higher than the previous bar & that bar needs to be higher than the previous bar before that & so on. Match the increasing ADX with an ATR & ROC filter over the same period & false breakouts are somewhat lessened. (Fake outs are the scourge of a good breakout strategy)

*I'll be back shortly*
Let me code up an ADX Strategy & I'll run a backtest for you. I'll let you decide if the ADX Indicator used in this fashion can be used as a complete trading strategy. 

Skate.


----------



## Skate (23 October 2021)

*The ADX Weekly Strategy*
I'm glad I don't have "egg on my face" as the backtest results are reasonable. 

*Using the ADX Indicator multiple times*
Stacking an ADX Indicator on top of each other with an increase over a 10 week period is a key to ensuring there is good strength in the move. I'm sure with more work the ADX could be used successfully as a breakout strategy.

*Backtest Results*
I've used the previous 365 days for the backtest run to indicate the usefulness of using multiple ADX's.




*Summary*
I find using multiple indicators enhances a strategy. Using the same indicator multiple times has a similar effect. 

Skate.


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## qldfrog (23 October 2021)

I added matching BT periods for my weekly systems in my thread (not to pollute dump it here);
you will see indeed more exposure, and a more risky trading attitude.
With storms roaring around ..This is qld for you, I will stop there but thanks Mr skate especially opening your parameters to the readers.
Have all a great week trading.personally worried by the markets and situation but following my systems..


----------



## Skate (24 October 2021)

qldfrog said:


> personally worried by the markets




*Scary times*
And just when I've decided to trade a new strategy, you tell me you're personally worried about the markets. I don't want to crash & burn on a public forum, that's the last thing I want. It's now Sunday, so I better try & find my "Rosary Beads" so I can start praying for divine intervention.

*Testing times*
Thinking about it a little more, a tough trading environment might be the perfect time to test the robustness of "The Platinum Strategy".

Skate.


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## Roller_1 (24 October 2021)

Skate said:


> *The Platinum Strategy*
> Below are the backtest results of (a) the last 365 days & (b) the last two financial years' backtest results. I should also say that the "Strategy" derives its name from Norgate's *"Platinum"* Data Subscription package.




Great, now it will be more accurate with the historical constituents. How about throwing up a 15 year backtest now that you have the data?


----------



## Trendnomics (24 October 2021)

Roller_1 said:


> Great, now it will be more accurate with the historical constituents. How about throwing up a 15 year backtest now that you have the data?



He wont (my main issue with this thread is the short isolated back-test periods posted).



Trendnomics said:


> In terms of back-test validity and potential future viability, the Hasard Cat Daily Strategy may just be as valid as any of the other back-tested systems in this thread - the truth lies in applying an actual statistically significant period to the back-tests.


----------



## qldfrog (24 October 2021)

Trendnomics said:


> He wont (my main issue with this thread is the short isolated back-test periods posted).



indeed, I think you should backtest the system on TA of the medieval price of wheat...
We had a long discussion in the past, I believe a backtest more than 4 or 5 y old is rubbish, due to market changes: prorata of qant, exposure to O/S money and electronic trading/super funds weight;
If you think your buy tomorrow will be in any way similar to one in 2008, good luck;
even simple items like inflation;; your lower/higher limit ? do you take cpi into account in your backtest?
It can be done,I am sure but  I will not and i somewhat suspect you do not?
let's respectfully agree to disagree.I am sure you can get good results and be happy with 15y backtests; I will not bother anything more than 10y at the very max and testing against 10 or more years of a mega bull market may not be the wisest?


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## qldfrog (24 October 2021)

qldfrog said:


> indeed, I think you should backtest the system on TA of the medieval price of wheat...
> We had a long discussion in the past, I believe a backtest more than 4 or 5 y old is rubbish, due to market changes: prorata of qant, exposure to O/S money and electronic trading/super funds weight;
> If you think your buy tomorrow will be in any way similar to one in 2008, good luck;
> even simple items like inflation;; your lower/higher limit ? do you take cpi into account in your backtest?
> ...



basically I prefer BT against market conditions than duration for the sake of it


----------



## Trendnomics (24 October 2021)

qldfrog said:


> indeed, I think you should backtest the system on TA of the medieval price of wheat...
> We had a long discussion in the past, I believe a backtest more than 4 or 5 y old is rubbish, due to market changes: prorata of qant, exposure to O/S money and electronic trading/super funds weight;
> If you think your buy tomorrow will be in any way similar to one in 2008, good luck;
> even simple items like inflation;; your lower/higher limit ? do you take cpi into account in your backtest?
> ...



Is there any harm in posting back-tests that at least cover the GFC? Doesn't take that much more time or computing power.

But I know over longer periods (+15 years), almost all of the systems presented here under perform (PLEASE prove me wrong).

Long term trends in equities are long term trends in equities - they haven't changed much since the 1980's (I know, as my system that I've traded day in day out, for over 8 years, still performs similar to backtests from the 1980's).

Anyways, good luck to all the cherry-pickers and connect-the-dot champions of this thread.


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## qldfrog (25 October 2021)

Trendnomics said:


> Is there any harm in posting back-tests that at least cover the GFC? Doesn't take that much more time or computing power.
> 
> But I know over longer periods (+15 years), almost all of the systems presented here under perform (PLEASE prove me wrong).
> 
> ...



then yes, we need the historical data, i do not have them so any 15y BT would be biased to the point of irrelevance.we can agree there?
as for long term trend in equities remaining the same, sure but i am not trading these with a weekly system, monthly maybe or multiple weeks sure


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## qldfrog (25 October 2021)

Trendnomics said:


> Is there any harm in posting back-tests that at least cover the GFC? Doesn't take that much more time or computing power.
> 
> But I know over longer periods (+15 years), almost all of the systems presented here under perform (PLEASE prove me wrong).
> 
> ...



To please Mr @Trendnomics , a lollypop and fairy floss BT:
since 1/01/2007 which should cover GFC, wo historical data and completely irrelevant IMHO:
QFDuc v23 corrected:


	

		
			
		

		
	
 and for a bit of pr0n trading:


 Yeahhh
for the new members arriving here, there is as much probability for this to happen, as there are for me to become the next supermodel ;-)


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## peter2 (25 October 2021)

. . . Frogs are pretty cute.


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## qldfrog (25 October 2021)

peter2 said:


> View attachment 131874
> 
> 
> 
> ...



Some but Joe would have a heart attack if i start posting selfies😊


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## Skate (25 October 2021)

Roller_1 said:


> Great, now it will be more accurate with the historical constituents. How about throwing up a 15 year backtest now that you have the data?




*Explanation*
First off, yesterday was a busy day for me that delayed my reply. Contrary to the view posted by @Trendnomics I make it a point to answer all posts directed to me. I've also read @qldfrog valid points about lengthy backtest periods & how they become less relevant as time passes.

*Times have changed*
The markets are completely chaotic since Covid. They have become unpredictable due to the vast influx of new traders resulting in an infinite amount of information pouring into the markets second-by-second, let alone "year-after-year-after-year". 

*I also remarked *
That _"as a system trader, it's all about building a robust (as opposed to optimal) trading strategy that can withstand multiple outcomes. Since "COVID-19" trading has somewhat changed in as much that profits can “dissolve” so quickly that has to be addressed. Without adapting I'm positive "frustration" will eventually lead to faulty thinking & poor results" _in my previous post.

*The Platinum Project*
As there was confusion why the markets have thrown system traders a curveball since "COVID". It's this very reason that has prompted me to make a few posts explaining why there is a need to build robust trading strategies as opposed to "optimal" systems. Adapting to these current "irrational" markets is the key to ongoing profitability. The Platinum Strategy is trying to address this.

*Full disclosure*
I posted my parameter setting with a condensed explanation about what drives the signals (the engine) of the strategy with the indicators I am using.

*Horses for courses*
Also, I wish to make a large DISCLAIMER - "The Platinum Strategy" has been developed to withstand the riggers of trading since the "Covid period". Before this period there was not a need to use a "Take Profit Stop" (that stifles profitability) or the use of the "Ulcer Index Indicator" as a prerequisite for a buy condition. In saying all this the 15-year backtest report posted below should be viewed in this light. It's all about "dancing to the music being played". I'm sure Olympic competitors use different shoes for different events. As an example, the shoes worn by a 100-meter sprinter are certainly different from the shoes used by a marathon runner"

*15 Year Backtest*
As requested a 15 year backtest of "The Platinum Strategy". All I'm saying is that this strategy has not been developed to trade before COVID.




*Red Boxing on the Backtest Report*
I've marked two areas on the backtest report (a) Low Exposure (17.46%) that directly contributes to the annual return. A low exposure also results in a low drawdown of (-7.87%). This proves trading is a trade-off between the amount of risk you are prepared to accept for the corresponding reward.

*Summary*
"The Platinum Strategy" has been built around the premise of what I've learned about trading since Covid. The Platinum Strategy has morphed into a defensive rather than an aggressive strategy.

Skate.


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## Skate (25 October 2021)

Trendnomics said:


> He wont (my main issue with this thread is the short isolated back-test periods posted).




@Trendnomics that's a fair enough comment. In the past, I've not had the data set (Norgate's Platinum Data) to post an accurate backtest of which I have acknowledged many times. But each backtest was to compare & contrast using the same data set I had at the time.

*Bloody COVID*
The "virus" has affected so many lives as well as the markets. The COVID-19 flash crash came so swiftly most would not have experienced trading like it. The drop in my portfolio was horrendous. Giving back open profits wasn’t fun. I was luckier than most as I was in a position of holding large profits. The loss at the time "hurt" nevertheless. I've made over 80 posts on Covid & a couple of posts how I adapted since.

*Norgate's “Platinum subscription”*
@Roller_1 asked if I would post a longer period backtest for "The Platinum Strategy" as I've recently resubscribed to Norgate's "Platinum Subscription". You for one should know that I answer all questions directed to me whether they are seeking further clarification or questions relating to my methodology.

*Robust trading systems*
Since Covid, all things have changed & trading is no exception. I posted a strategy (my interpretation) on how to trade during these uncertain times. I made full disclosure of the indicators & parameters of  "The Platinum Strategy" giving my rationale behind building a robust (as opposed to optimal) trading strategy. "The Platinum Strategy" has been systematically designed to withstand multiple outcomes.

*Since "COVID-19" *
Trading has changed somewhat as "profits" can “dissolve” quickly, a problem I'm trying to address. Without adapting I'm sure most traders would be experiencing poor results. Posting about a new strategy starting today was my way of explaining how I adapted that's all. By nature, I over share but without sharing private details the information I post would be vague at best.

*The 'Dump it here' thread is about ideas*
I'm creating strategies (for my own personal use) & "over the time" @Roller_1 & yourself have always made valid points relating to backtesting. The way I handle my own analysis "gives me the confidence" to take a strategy to the next level. All I'm saying is that "we are not immune to losses" just because we have the "comfort" of a great backtest.

*Ideas to stimulate thinking*
I corral my ideas & comments in this thread, ideas that I've found helpful in my trading experience. I'm constantly promoting ideas to stimulate a different way of thinking. Thinking about what is posted is a "valuable part" of this thread & it's a perfect platform for others to express an alternative view or offer a helpful hint. All comments are welcomed, whether the comments are related to system or discretionary trading.

*Accurate or inaccurate backtesting results*
There are times when trading can go south for no good reason that will be unavoidable no matter how good our backtesting results are. Trading has no regard as to how smart we are, or how hard we work as we'll regularly be hit by something unforeseen. To quote @qldfrog the next big dip might be just around the corner (who knows).

*I value those who post*
It has not been lost on me that roller has made 29 valuable posts & you have made 16. That amount of posts indicates an interest in the thread even though our trading ideas or views sometimes don't align.

Skate.


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## MovingAverage (25 October 2021)

Skate said:


> @Trendnomics that's a fair enough comment. In the past, I've not had the data set (Norgate's Platinum Data) to post an accurate backtest of which I have acknowledged many times. But each backtest was to compare & contrast using the same data set I had at the time.
> 
> *Bloody COVID*
> The "virus" has affected so many lives as well as the markets. The COVID-19 flash crash came so swiftly most would not have experienced trading like it. The drop in my portfolio was horrendous. Giving back open profits wasn’t fun. I was luckier than most as I was in a position of holding large profits. The loss at the time "hurt" nevertheless. I've made over 80 posts on Covid & a couple of posts how I adapted since.
> ...




There is no way I would have responded in the same considered manner as you @Skate. My response would have been confined to two pointed words: one starting with G and the other with F  

I like your posts and they always spur on some interesting thoughts for me to explore as I am sure they do with others. The fact that you don't back-test over 50 billion years of data doesn't bother me. What is important is that your posts continue to highlight interesting topics and cause folks (at least me) to stop, think and see if I can take bits and pieces from your system and research them further in my own context to see if I can improve and expand my current approach to trading.

There's a saying about criticizing, complaining and condemning...any fool can do it.


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## DaveTrade (25 October 2021)

Skate said:


> It's all about "dancing to the music being played".




First of all Skate I'd like to thank you for your writings, they are intelligent and thoughtful, I will even say caring. The part of your system that most traders would find hard to cope with is the consecutive losses and although I can see that you have addressed this to a degree in your one year test result we all know that anything can happen going forward. This may be an area to tighten up on if possible. I know very well, in trading, every decision or setting involves some sort of a trade off.


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## Skate (25 October 2021)

DaveTrade said:


> First of all Skate I'd like to thank you for your writings, they are intelligent and thoughtful, I will even say caring. The part of your system that most traders would find *hard to cope with is the consecutive losses* and although I can see that you have addressed this to a degree in your one year test result we all know that anything can happen going forward. This may be an area to tighten up on if possible. I know very well, in trading, every decision or setting involves some sort of a trade off.




*It's hard to pick winners*
@DaveTrade trading is tough at the moment & most are affected. I developed an Indicator a few years ago at the end of 2018 (a time that fooled some of my systems) I've overcome the issue using the "Ulcer Index" to my advantage turning it into an indicator. I'm a risk-averse trader & wouldn't be as profitable without it annexed to my buy condition & "StaleStop" exit strategy.

*Getting out is when you make the money*
I want to avoid another discussion on the importance of the entry versus the exit but comparing positions using the Ulcer Index Indicator (that only measures the downside risk) is very important.

*I've never discussed the working of my "StaleStop" exit strategy*
My trading portfolio is large to me (over $2.6m) & drawdown percentages become "irrelevant" when handling large sums. A 20% drawdown on a $20k is acceptable but not on $2.6m. The drawdown needs to be controlled at all costs without reducing the profit potential of any of my strategies.

*Summary*
The Ulcer Index’s real strength is its focus on downside risk only. A gap-up would be viewed with joy, while a gap-down would be viewed with horror. The Ulcer Index focuses on downside risk rather than the upside. The downside risk causes "stress".

*How do I use the Ulcer Index indicator?*
Generally, when the price of a position goes up, the Ulcer Index goes down & when the price goes down, the level of the index goes up. The main idea behind the Ulcer Index Indicator is to measure downward volatility & alert when the trade reaches a level of “stress”.

*The Ulcer Index Indicator manages my "StaleStop" exit strategy*
The methods of implementing the Ulcer Index Indicator are simple & "more than just an idea" to me. The indicator is an early warning that there's a chance of retracement. The Ulcer Index Indicator calculates the downward risk the (bad risk) that really matters.

*How does it work?*
It’s simple really when the price of a position goes up, the Ulcer Index goes down & when the price goes down, the level of the index goes up. I only place an order when the Ulcer Index Indicator is lower than (5) & sell when the Ulcer Index goes above (5).

*What is the Ulcer Index Indicator?*
The Ulcer Index Indicator attempts to estimate the “stress” of a position by estimating price retracements. The indicator is based on the notion that downward volatility is bad, but upward volatility is quite good. It increases in value as the price moves farther away from a recent high price & also falls as the price rises to new highs. The indicator is calculated over (8) weeks for a weekly strategy. FYI - I have not coded a daily indicator. (all posted in my parameter setting of "The Platinum Strategy")

*How to Calculate the Ulcer Index?*
The indicator is all about calculating the level of risk by estimating how far a stock price has fallen from current highs. The maths is simple as the Ulcer Index can be calculated in a few steps. I won't bore you with the mathematics but maybe it's "food for thought".

Skate.


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## Skate (25 October 2021)

*Have you ever wondered why some traders are luckier than others?*
I hope my explanation of how I use the "Ulcer Indicator" helps you better understand why some traders are luckier than others. Indicators play a big part in my trading & they have certainly helped me. As a footnote, @MovingAverage made a great post recently in the "Dump it here" thread explaining how to analyse the results of your system. Personally, it was a great read.

*Metrics*
I've highlighted two areas of a backtest that carry more weight for me in deciding whether to keep developing a system, a system that you could trust trading live. (1) "Maximum System Drawdown percentage" & (2) the "Ulcer Index". Both should be low. A low drawdown & low Ulcer index should go hand in glove to give you the confidence to trade the strategy.

*Think like a trader*
Unfortunately, I think like a businessman, not a trader. When you strip back trading, it's all about trading the price differential, knowing when to get in & when to get out (that's the tricky part). They say you can't time the markets but in my opinion, timing is everything in this game. As a coder, (more of a fiddler to be honest) I'm always looking for indicators that get me in & out of a position with the most degree of safety. False breakouts are a pain for trend traders & there are indicators that go some way of addressing this.

*Not again*
I've been taken to task each time I explain why the exit is more important than the entry as I'm a firm believer that the exit determines the profitability of the position. The "Ulcer Indicator" that I have created allows me to exit a position sooner rather than later. Using a variety of exit conditions allows me to get as close as possible to the goldilocks exit period. Timing the exit has become so critical to be profitable these days.

*I should also say*
There is nobody I know who uses the "Ulcer Index" to their advantage let alone turn the "Ulcer Index" into a stress indicator.

Skate.


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## Trendnomics (25 October 2021)

qldfrog said:


> To please Mr @Trendnomics , a lollypop and fairy floss BT:
> since 1/01/2007 which should cover GFC, wo historical data and completely irrelevant IMHO:
> QFDuc v23 corrected:
> View attachment 131871
> ...




Thanks, I appreciate. Given that this is classed almost as a day trading strategy (5574 trades over ~15 years = ~372 trades/year = ~1.4 trades/day), the validity and accuracy of back-tests are reduced significantly (with OR without delisted historical data), due to: slippage, minor data anomalies, liquidity, evolution of HFT, etc.

One has to be brave to be day trading as a retail investor - far too many apex predators in the day trading ecosystem.

SO we are actually in agreement on this back-test.


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## qldfrog (25 October 2021)

Skate said:


> *Explanation*
> First off, yesterday was a busy day for me that delayed my reply. Contrary to the view posted by @Trendnomics I make it a point to answer all posts directed to me. I've also read @qldfrog valid points about lengthy backtest periods & how they become less relevant as time passes.
> 
> *Times have changed*
> ...



Further to mr @Skate insights, I have to say i have recently reduced the volatility on one of my systemS, trade off  ..just by increasing the min SP.
Not by that much but a share bought at 4.8c will happily jump up and down 10% or more daily..you do not have this with bhp😊
And if you have a daily system but do not day trade hour by hour,vit can wreck havoc in current conditions
So my view is that we should have dynamic systems, especially nowadays..and this is where @Trendnomics and i are world apart..
Obviously, this is different if you buy 1 parcel a month and go back to your golf or beach lounge.
And i acknowledge dynamic means being one war behind..always..
But hey, i live in a country buying submarines to be delivered in 20y😂
To each his own..


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## cynic (25 October 2021)

Happy to be corrected here, but, I was of the impression that "day trading" was a term applied, strictly speaking, to the practice of only holding market exposure intraday.


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## MovingAverage (25 October 2021)

Skate said:


> *Think like a trader*
> Unfortunately, I think like a businessman, not a trader. When you strip back trading, it's all about trading the price differential, knowing when to get in & when to get out (that's the tricky part). They say you can't time the markets but in my opinion, timing is everything in this game. As a coder, (more of a fiddler to be honest) I'm always looking for indicators that get me in & out of a position with the most degree of safety. False breakouts are a pain for trend traders & there are indicators that go some way of addressing this.



This is something I often think about @Skate. It all depends on how you define a trader, but to me a trader is someone that has a strong focus on individual trades. As a system trader I make a concerted effort not to--as a general rule--get too bogged down in specific trades. I make a specific effort to focus on the bigger picture in the overall systems' performance and for that I probably try to think a bit more like a businessman than trader. Businessman in the sense I keep focusing on the bigger picture as to how my systems are performing instead of specific trades.


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## MovingAverage (25 October 2021)

cynic said:


> Happy to be corrected here, but, I was of the impression that "day trading" was a term applied, strictly speaking, to the practice of only holding market exposure intraday.



that seems to be the general definition--don't hold positions overnight


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## MovingAverage (25 October 2021)

qldfrog said:


> So my view is that we should have dynamic systems



Absolutely agree on this. This is something I've been experimenting with a bit lately.

What seems to be the widely accepted common approach to system trading is backtest and refine over a period of time...then set and forget your system parameters. A dynamic system can just be as simple as, for example, adjusting a parameter at the end of every six months then forward trading based on that and then repeat every six months. This would certainly fit with your "recent data" approach.

I've taken one of my live systems and done just that using walk-forward. While it needs more analysis initial results look promising, significant corrections in the market (such as we experienced in March) can make things more challenging for the systems.

I


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## qldfrog (25 October 2021)

MovingAverage said:


> that seems to be the general definition--don't hold positions overnight



I have a daily system, so have buy sell at every open.
Daily system different indeed from day trading but this is semantics


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## MovingAverage (25 October 2021)

Skate said:


> *Norgate's “Platinum subscription” *
> I've bitten the bullet & subscribed to Norgate's  "Platinum Subscription" that makes use of Historical Index Constituents checking that the security was in the relevant index at the time the trade was entered. (Posted Backtests should now accurately reflect trading results)
> 
> Skate.




G'day @Skate, one of the things that I'm really interested in investigating is understanding the impact that certain company fundamental data has on the performance of my systems. This interest was spiked by a post made by @Trav. sometime ago where he used AB to look into analyzing certain fundamental data of companies. This fundamental data comes with Norgate's premium data and is extremely interesting and I think has some potential opportunities for us system traders. As we all know it is very common for system traders to adopt a simplistic approach of applying their systems to a particular index (e.g., ASX200), which is nothing more than targeting your system to stocks of a certain market cap. However, I've often wondered about focusing my systems on stocks that meet other criteria aside from market cap--maybe apply a system to stocks with certain EPS, PE ratios, div. yield, EBITDA and so on and so on. Just flagging this in case you might have an interest now that you've got Norgate's premium. Oh, and just in case you're not already aware, AB's info window contains all of this fundamental data and you can access it directly via AFL in AB.


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## Skate (25 October 2021)

MovingAverage said:


> G'day @Skate, one of the things that I'm really interested in investigating is understanding the impact that certain company fundamental data has on the performance of my systems. This interest was spiked by a post made by @Trav. sometime ago where he used AB to look into analyzing certain fundamental data of companies. This fundamental data comes with Norgate's premium data and is extremely interesting and I think has some potential opportunities for us system traders. As we all know it is very common for system traders to adopt a simplistic approach of applying their systems to a particular index (e.g., ASX200), which is nothing more than targeting your system to stocks of a certain market cap. However, I've often wondered about focusing my systems on stocks that meet other criteria aside from market cap--maybe apply a system to stocks with certain EPS, PE ratios, div. yield, EBITDA and so on and so on. Just flagging this in case you might have an interest now that you've got Norgate's premium. Oh, and just in case you're now already aware, AB's info window contains all of this fundamental data and you can access it directly via AFL in AB.




@MovingAverage over the years I have looked into most ways to understand what drives the price of a stock higher & how to capitalize on this price differential "sometime in the future". I nearly went crazy in the early years trying to figure out all this stuff. The intention of the 'Dump it here' thread was to help new traders understand the perils of trading & hopefully help them shortcut their educational journey. A journey without knowledge has severe financial & emotional consequences. I hope the contents of this thread give them a fighting chance of success.

*I had planned to make a lengthy post as it might be of interest to other*
But these days members like to read short snappy posts with concise information. My previous post on "The Platinum Strategy" unfortunately didn't fall into this category as I want to supply enough information so my reasoning & methodology could be understood.

*When it's all said & done*
I just trade with the herd using a trend trading strategy. I don't know of any better "bang-for-buck" or a simpler "time-efficient" way to trade.

*Question time*
I'll ask a few questions & answer them myself. Once you read the answer it will become evident my trading style is bare-bones & sometimes I believe - "Good enough is good enough"

*What am I buying?*
No idea & frankly I don't really care. As long as the security is not under a takeover offer or under a deed of arrangement "it's a buy".

*Why are you buying it?*
Simply because the strategy (Amibroker) generated a buy signal.

*Are you worried about buying a DUD?*
Nope, I know 50% will be losers, that's Trend trading (the average win rate for this type of strategy is around 40-45%)

*When will you sell the position?*
When the strategy (Amibroker) generates a sell signal & not before - it's as simple as that.

*Summary*
I've never found "fundamental analysis" to be all that helpful, but that's just me. Also, I wouldn't have the time or skill to trade like @peter2 or @frugal.rock. that's for sure.

Skate.


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## MovingAverage (25 October 2021)

Skate said:


> *Summary*
> I've never found "fundamental analysis" to be all that helpful, but that's just me. Also, I wouldn't have the time or skill to trade like @peter2 or @frugal.rock. that's for sure.
> 
> Skate.



See @Skate I'm not suggesting to trade on fundamentals....that's not me either. What I am suggesting is that instead of using market cap as the basis for defining the universe of stocks to trade your system....maybe apply other criteria such as EPS, PE or the others I mentioned to define your system's universe. Most system traders are using market cap to trade their systems so why not use some other metric to define your system's universe. Trading on fundamentals and defining a universe based on fundamentals are two very different things and should not be confused.


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## KevinBB (25 October 2021)

MovingAverage said:


> See @Skate I'm not suggesting to trade on fundamentals....that's not me either. What I am suggesting is that instead of using market cap as the basis for defining the universe of stocks to trade your system....maybe apply other criteria such as EPS, PE or the others I mentioned to define your system's universe. Most system traders are using market cap to trade their systems so why not use some other metric to define your system's universe. Trading on fundamentals and defining a universe based on fundamentals are two very different things and should not be confused.



Interesting. For a while now I've been of the belief that in order to make a difference, or get that extra edge, you have to be different.

The way I've gone with my systems is using the Chi-X 200 index as my base. Even though most stocks are the same as the S&P 200 index, the Chi-X version contains more Australian stocks. That's how I'm implementing this 'difference' to try to get an extra edge.

Creating a universe based on something other than prices is certainly one way of being different. Maybe if @Skate doesn't implement this, then hopefully it will give someone else the idea of doing the same thing.

KH


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## qldfrog (25 October 2021)

KevinBB said:


> Interesting. For a while now I've been of the belief that in order to make a difference, or get that extra edge, you have to be different.
> 
> The way I've gone with my systems is using the Chi-X 200 index as my base. Even though most stocks are the same as the S&P 200 index, the Chi-X version contains more Australian stocks. That's how I'm implementing this 'difference' to try to get an extra edge.
> 
> ...



Fully agree, having a different realm distinguish you from the pack and can be an advantage.2 of my systems are indeed not using asx  or all ord.and are kind of ok


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## qldfrog (25 October 2021)

KevinBB said:


> Interesting. For a while now I've been of the belief that in order to make a difference, or get that extra edge, you have to be different.
> 
> The way I've gone with my systems is using the Chi-X 200 index as my base. Even though most stocks are the same as the S&P 200 index, the Chi-X version contains more Australian stocks. That's how I'm implementing this 'difference' to try to get an extra edge.
> 
> ...



What is the chix index code? I am lazy..😊


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## qldfrog (25 October 2021)

qldfrog said:


> What is the chix index code? I am lazy..😊



X2c and x2cn


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## KevinBB (25 October 2021)

or ... you could go direct to the Chi-X web site and look at the index information.
Link to: Information about the index
Link to: Index bulletins with constituents

KH


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## qldfrog (25 October 2021)

KevinBB said:


> or ... you could go direct to the Chi-X web site and look at the index information.
> Link to: Information about the index
> Link to: Index bulletins with constituents
> 
> KH



I just googled😊


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## MovingAverage (26 October 2021)

KevinBB said:


> Interesting. For a while now I've been of the belief that in order to make a difference, or get that extra edge, you have to be different.
> 
> The way I've gone with my systems is using the Chi-X 200 index as my base. Even though most stocks are the same as the S&P 200 index, the Chi-X version contains more Australian stocks. That's how I'm implementing this 'difference' to try to get an extra edge.
> 
> ...



Agree, need to think differently to improve your edge.

Wasn't suggesting @Skate do the coding for us (he has enough of his own research going on)--was only mentioning it in case it was of interest. It's actually very easy to code in AB so going to do some sims myself. Plan to initially look into applying my systems to a universe of stocks that have a PE within a certain band and as another approach create a universe based on EPS being above a certain threshold. Will post up first cut of sim results over the weekend.


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## KevinBB (26 October 2021)

MovingAverage said:


> Agree, need to think differently to improve your edge.
> 
> Wasn't suggesting @Skate do the coding for us (he has enough of his own research going on)--was only mentioning it in case it was of interest. It's actually very easy to code in AB so going to do some sims myself. Plan to initially look into applying my systems to a universe of stocks that have a PE within a certain band and as another approach create a universe based on EPS being above a certain threshold. Will post up first cut of sim results over the weekend.



Yes, sorry if I implied that @Skate should be coding this. The interesting bit would be to see how various universes (say, for example, low debt, high dividends, or your two examples, and the like) would perform against each other.

As a confirmed "price watcher" and avid reader of such things, I would like to think that the same system using any of those universes would perform substantially the same, but somehow, I think not. It would be an interesting read.

KH


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## Skate (26 October 2021)

KevinBB said:


> Yes, sorry if I implied that @Skate should be coding this. The interesting bit would be to see how various universes (say, for example, low debt, high dividends, or your two examples, and the like) would perform against each other.
> 
> As a confirmed "price watcher" and avid reader of such things, I would like to think that the same system using any of those universes would perform substantially the same, but somehow, I think not. It would be an interesting read.
> 
> KH




@KevinBB I hate to be the bearer of bad news but Norgate's fundamental data doesn't include historical data. Historical data would be a definite requirement for your research.

*Norgate does not provide Historical Fundamental data*
But in saying this it should be noted that their fundamental data has the most current reporting quarter. To obtain usable or relevant backtesting results you would need a "historical source" for your fundamental inputs of which Norgate, unfortunately, doesn't supply.



MovingAverage said:


> It's actually very easy to code in AB so going to do some sims myself. Plan to initially look into applying my systems to a universe of stocks that have a PE within a certain band and as another approach create a universe based on EPS being above a certain threshold.




@MovingAverage before you spend time on this project you'll need a different data source other than "Norgate Fundamental Data Set" as Norgate's historical data set is restricted to the current reporting quarter only. The ideas being promoted have merit but even with historical data, the evaluation would produce clunky results without achieving a solid metric to use. (IMHO)

*Have a read here*




__





						Norgate Data - Data Content Tables
					





					norgatedata.com
				




*Summary*
The fundamental values from Norgate are current snapshots, & they are not a "time series" of historical data points that you'll require to do any type of research or evaluation.

Skate.


----------



## MovingAverage (26 October 2021)

Skate said:


> @KevinBB I hate to be the bearer of bad news but Norgate's fundamental data doesn't include historical data. Historical data would be a definite requirement for your research.
> 
> *Norgate does not provide Historical Fundamental data*
> But in saying this it should be noted that their fundamental data has the most current reporting quarter. To obtain usable or relevant backtesting results you would need a "historical source" for your fundamental inputs of which Norgate, unfortunately, doesn't supply.
> ...



Agree, for some fundamental data. But if memory serves me correctly some of the fundamental data can be found (calculated) for historical data. I need to dig up Trav's original posts on this but I pretty certain he graphed some of the historical data over time in AB. I'll dig up Trav's post on this and post a link here.


----------



## MovingAverage (26 October 2021)

Skate said:


> @KevinBB I hate to be the bearer of bad news but Norgate's fundamental data doesn't include historical data. Historical data would be a definite requirement for your research.



Well accessing historical fundamental data via Norgate seemed like such a good idea, but alas you were right as usual  

Here is the link to Trav's historical data I mentioned, just in case it's of interest: https://www.aussiestockforums.com/threads/amibroker-and-fundamental-scan.35746/


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## Linus van Pelt (26 October 2021)

MovingAverage said:


> This fundamental data comes with Norgate's premium data and is extremely interesting and I think has some potential opportunities for us system traders. As we all know it is very common for system traders to adopt a simplistic approach of applying their systems to a particular index (e.g., ASX200), which is nothing more than targeting your system to stocks of a certain market cap.



My review of the Norgate fundamental data is that much of it is current data, not historic time series data.  You could possibly use it for live trading, but without the time series data you couldn't backtest the system.  If you investigate the Norgate fundamental data yourself be sure to differentiate between current only vs. time series data.  I'm happy to be proven wrong here.

One exception is dividend data, which is time series, but of course not continuous data.

*Edit*:  I posted before reading the entire thread.


----------



## MovingAverage (27 October 2021)

Linus van Pelt said:


> My review of the Norgate fundamental data is that much of it is current data, not historic time series data.  You could possibly use it for live trading, but without the time series data you couldn't backtest the system.  If you investigate the Norgate fundamental data yourself be sure to differentiate between current only vs. time series data.  I'm happy to be proven wrong here.
> 
> One exception is dividend data, which is time series, but of course not continuous data.
> 
> *Edit*:  I posted before reading the entire thread.




You're spot on @Linus van Pelt


----------



## Skate (27 October 2021)

Skate said:


> Amibroker is a programmable scientific calculator nothing more & nothing less.




*Irritating example*
"The Platinum Strategy" Backtest "buy signals" before Monday's open is listed below. You will notice that the signals at this stage are "irrelevant" & "inaccurate" because the signals are taken using the last bar open to do the maths.






Skate said:


> *Amibroker recalculates after the open*
> After Monday's open "Amibroker will recalculate" those numbers (price & shares) once the opening price is known. Amibroker uses the last open to calculate the share price & the number of shares to buy in the "Backtest Report" is "irrelevant" & "an inaccurate assumption" at this stage.




*Recalculations after Monday's open*
"The Platinum Strategy" Backtest buy signals are recalculated "after" Monday's open because now it uses the last bar (Monday's bar). Because Amibroker is a programmable scientific calculator the (Pad & Align) feature fills missing data so the recalculations can be made.






Skate said:


> *Exploration Analysis is not equal to a Backtest Report*
> Exploration outputs (raw) signals & a Backtest outputs trading simulation results.




*BTW*
IPD has been in a "trading halt" before Monday's open yet Amibroker Backtest includes the position as a member of the portfolio. 

*Why is this important? *
Because using the Backtest to generate buy signals instead of the Exploration Analysis, the Backtest will not generate another buy position to compensate for the position (IPD) not taken because of the trading halt. If anyone has a coding idea to rectify this, "I'm all ears"

*The only alternative*
In the future, I'll output all the raw signals using an Exploration Analysis & select from the top-down "as they are ranked" only the number of positions required to fill the 10 position portfolio.  

Skate.


----------



## MovingAverage (27 October 2021)

Skate said:


> *I've never discussed the working of my "StaleStop" exit strategy*
> My trading portfolio is large to me (over $2.6m) & drawdown percentages become "irrelevant" when handling large sums. A 20% drawdown on a $20k is acceptable but not on $2.6m. The drawdown needs to be controlled at all costs without reducing the profit potential of any of my strategies.



This is a major peeve of mine--people often say "it's only a 20% drawdown, not a big issue...i can deal with that". In my experience when folks are live trading they generally don't think in terms of %...they think in terms of absolute $$$$ amount. So as you say 20% on 20k is 4k not a big deal, but 20% on 2.6 mill...$520,000....that's a lot of money. The reality of trading, however, is that you cannot reduce drawdown without also reducing profit....risk/reward. drawdown = risk


----------



## Linus van Pelt (27 October 2021)

Skate said:


> If anyone has a coding idea to rectify this, "I'm all ears"




I'm just throwing this idea out - you'll have to further research it.  I don't know all the details of your strategy, so this may not apply.

IIRC, you have Norgate data.

My understanding is that, when Amibroker pads and aligns, it just copies the last OHLCV data "wholus-bolus" to the missing bar.  I've heard some folks consider this stupid, since of course there was no volume on the days it didn't trade.  Although of course volume may need to be carried forward for certain derivations such as liquidity.  Then again, I would argue that this would distort a liquidity derivation, since it most certainly wasn't liquid on days it didn't trade.

Norgate pads differently, copying C to OHLC of the missing bar, but leaves V empty.  Furthermore, it provides a time series function letting you know when the bar was padded.

Here is a screenshot with No Padding in Norgate:







The green bar is Friday, the next bar is Weds.

Here is a screenshot with padding turned on in Norgate:







If you select IPD as your active chart, open a new AFL window, enter this code:



> // Norgate Data Functions
> #include_once <..\Norgate Data\Norgate Data Functions.afl>;
> 
> Padding=NorgatePaddingStatusTimeSeries();
> ...




Put a breakpoint on x=0 (it has to be an executable line), and add O, H, L, C, V, and Padding as watched variables.  Execute up to the breakpoint, and click the Arrays tab 

(I'm sure you know all this, this is for those who read this post later and may be new to Amibroker).

Here is a screenshot:




So, in summary, compare Amibroker's Pad and Align vs. Norgate's padding, and check your strategy's performance using both approaches.  If it still performs well using Norgate's padding, then you can add a condition to your buy rule "... AND NorgatePaddingStatusTimeSeries() == 0" so your system doesn't try to buy on padded days.  Then, when the symbol is no longer padded and meets the rest of your buy conditions (including PositionScore etc), the backtest should buy it since it was not already an open position.

Finally, see https://norgatedata.com/amibroker-faq.php, search on "My trading system gives anomalous results when using AmiBroker's Pad & Align setting. How do I fix this?"

Hope this helps...


----------



## Skate (27 October 2021)

@Linus van Pelt thank you for your detailed explanation. It’s given me an idea.

Skate.


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## Skate (28 October 2021)

Linus van Pelt said:


> (I'm sure you know all this, this is for those who read this post later and may be new to Amibroker).



*For those following along*
@Linus van Pelt is absolutely correct with his description of how Norgate pads differently to Amibroker. Using Norgate custom "pad" feature the empty bar is "padded" with the "Closing price" only, whereas Amibroker pads the data using "OHLC" from the previous bar.



Skate said:


> *Sample [ASX - IPD] placed in the pre-auction *(CommSec)
> 1. The position is only "Good for a Day" & will automatically be "cancel" if the position is not executed on the day.



*Unfortunately, it's not a fix *
Why? because when the next bar receives current data, Amibroker simply recalculates the "buy position" using the most recent bar that has the "opening price" for its recalculations. Trading Halts always last longer than a day & my buy positions are only "good for a day".

Skate.


----------



## qldfrog (28 October 2021)

Skate said:


> *For those following along*
> @Linus van Pelt is absolutely correct with his description of how Norgate pads differently to Amibroker. Using Norgate custom "pad" feature the empty bar is "padded" with the "Closing price" only, whereas Amibroker pads the data using "OHLC" from the previous bar.
> 
> 
> ...



getting ready for volatility and trading halts is not easy, I ramped up a minimum SP  lately on one system, but daily systems do not like this environment indeed with huge paper swings and frequent stop buys


----------



## Skate (29 October 2021)

Trendnomics said:


> It is mind boggling how much money you can extract from the market as a retail trader, with the right amount of discipline, fortitude and conviction.



@Trendnomics makes a valid but with all-new strategies, they take time to develop.



qldfrog said:


> personally worried by the markets and situation but following my systems..



*There is never a good time to start trading*
Luck & timing plays a significant role in the performance of any portfolio & as they say "there is never a good time to start trading". Traders need to be aware of the significance "luck & timing" will have when trading a new strategy.

*Things may not go well for this strategy in the short-term*
The starting date can have a big bearing on the performance of a strategy in the short term but hopefully, things will settle over the longer term. "The Platinum Strategy" will take time to develop as the markets are in turmoil at the moment, so let's be patient with the performance of my new project & hope for the best.

*Follow the signals without thinking*
As @qldfrog pointed out in recent posts, following your buy & sell signals consistently will be the key to the profitability of a strategy (even when you are not in agreeance with the signals).

Skate.


----------



## KevinBB (29 October 2021)

Skate said:


> *Follow the signals without thinking*
> As @qldfrog pointed out in recent posts, following your buy & sell signals consistently will be the key to the profitability of a strategy (even when you are not in agreeance with the signals).



The number one rule for a systematic trader.


----------



## qldfrog (29 October 2021)

KevinBB said:


> The number one rule for a systematic trader.



And this is a challenge every day.last night great on NYSE..my systems still saying this morning caution, bear mode....
I  think arrrgh will lose the rebound..
But no new purchase ,bear mode and Right now systems up 1.2% ,with increase cash percentage, while market down .8%
Stick to your systems indeed


----------



## MovingAverage (29 October 2021)

Skate said:


> View attachment 132075
> 
> 
> @Trendnomics makes a valid but with all-new strategies, they take time to develop.
> ...




Spot on @Skate.

Chart below is of one of my live systems. Top green chart is the system's P&L, which includes open and closed positions.

Started trading the system in early 2015. It basically did nothing for the first 2.5 years, but really found it's momentum around mid 2017 and has really got some good traction since then. It was a real test of my patience to keep trading that system for 2.5 years and make little progress.


----------



## lindsayf (29 October 2021)

Not many could do what you have done there - great patience no doubt underpinned by well founded belief in the system


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## MovingAverage (29 October 2021)

lindsayf said:


> Not many could do what you have done there - great patience no doubt underpinned by well founded belief in the system



Wasn't easy that's for sure--came close to pulling the pin on many occasions. The thing that kept me in there was the fact the system didn't go into serious drawdown.

If I run backtests now over that period ( Jan 2015 to Aug 2017) the real performance you see above is inline with the backtest


----------



## Linus van Pelt (29 October 2021)

Skate said:


> *Unfortunately, it's not a fix *
> Why? because when the next bar receives current data, Amibroker simply recalculates the "buy position" using the most recent bar that has the "opening price" for its recalculations. Trading Halts always last longer than a day & my buy positions are only "good for a day".



I admit I didn't follow all that.  If you have a weekly system that trades on Monday, and you used Norgate's padding, you would have trapped for the padded bar on Monday and not taken the buy signal.  So I don't see where "my buy positions are only "good for a day". " fits in, if you didn't place a buy order?

Anyway, that's not the main reason for this post. 

I saw a "trick" in another forum just last night.  So this isn't my original idea (not that I have that many), I'm just passing this on.

If you are using Amibroker's Pad and Align, then you can use the fact that it copies Volume to the next bar as a means of detecting a padded bar.

For example:



> Padded = V==Ref(V,-1);




The chances of today's Volume being *exactly* equal to yesterday's (last bar's) Volume is statistically insignificant.

You could also say:



> Padded = (V != 0) AND (V==Ref(V,-1));




to differentiate "padded" from not "traded for 2 or more days", assuming that differentiation is important to you.

This still may not address the issue you've raised, but it could be used as a proxy for Norgate's NorgatePaddingStatusTimeSeries() if you're using Amibroker's Pad and Align instead.


----------



## DaveTrade (29 October 2021)

MovingAverage said:


> Wasn't easy that's for sure--came close to pulling the pin on many occasions. The thing that kept me in there was the fact the system didn't go into serious drawdown.
> 
> If I run backtests now over that period ( Jan 2015 to Aug 2017) the real performance you see above is inline with the backtest



Hello MovingAverage,

I curious about the 'Max Consecutive Losses' of your system and if a good figure on this metric helped you stick with your system through this period.


----------



## Skate (29 October 2021)

*Further update*
@Linus van Pelt thank you for your ongoing interest. The issue that I raised was that Friday's backtest buy signals are accurate but the "additional information displayed" (shares & price) is irrelevant as it uses the previous open for its calculations. On a weekly system that's the previous Mondays open. (one week ago)

*Amibroker uses the previous open for its calculations*
After "Mondays open" Amibroker updates this additional information but not the buy signals. Why? because backtesting uses the most current open, the recent open is used to calculate the additional information (shares & price) being the number of shares to buy using the simple calculation: Investment $10k / share price (the opening price) equals the number of shares purchased. (after the fact)



Skate said:


> *Recalculations after Monday's open*
> "The Platinum Strategy" Backtest buy signals are recalculated "after" Monday's open because now it uses the last bar (Monday's bar). Because Amibroker is a programmable scientific calculator the (Pad & Align) feature fills missing data so the recalculations can be made.




*Recalculations of the additional information of a buy signal*
Amibroker uses one formula for this additional (number of shares & the buy price) before Mondays open & another after Mondays open. With time-shifting of time-related data, the information displayed becomes irrelevant & unusable information before the open. After Mondays open & with the positions already in the markets the additional information is also inaccurate as those calculations can only be completed when the opening price is known. All I'm saying is it's easy to come to a conclusion of the number of shares to buy after the opening price has been established.

*Non-trading days*
Amibrokers backtest report is a stand-alone portfolio manager. The "Portfolio Backtest Manager" buys the required number of position (in this case 10 positions) & stops generating new buy signals until one of those positions are sold. If the portfolio manager reports a buy that for one reason or another was not physically taken there is no way to delete that position. (that's my dilemma). Using the Exploration Analysis it displays all raw signals. (something that can be manipulated)

*Using padding or "Buy on Monday array" isn't a fix*
Whether you use Norgate's padding (that buys & recalculates the additional data using on the most recent bar with data, being Wednesday the 27th opening price) or if you stay with using the padding feature of Amibrokers it simply uses the previous Mondays data. Both of which become irrelevant when the position is not purchased). My buy condition is good only for Monday, meaning if my conditional order is not taken - the buy is purged at the end of Monday's trading.

*In summary*
Amibroker includes the position as a buy (using either padding system) whereas in reality the position was never purchased in the first place. Amibroker doesn't allow adjustments to be made to the Portfolio Manager to accurately display only the physical positions in the portfolio. Using my custom Exploration Analysis solves this dilemma (for me) as those signals can be manipulated.

Skate.


----------



## MovingAverage (29 October 2021)

DaveTrade said:


> Hello MovingAverage,
> 
> I curious about the 'Max Consecutive Losses' of your system and if a good figure on this metric helped you stick with your system through this period.



Very good question. For me that is a very important metric and one that drives my decision to go live or not go live with a system--even more so than % winners. It is seriously tough trading through a lot of consecutive losers and for me that messes with my head so is something I'm very sensitive to.

My backtests over 4000 historic trades have this particular system sitting at max consecutive winners of around 36 and max consecutive losers at around 20. The current figures on the live version of the system (which is shown in the graphs above) has consecutive winners at 10 and consecutive losers at 9, but that is after around 351 live trades, which is clearly far less than the 4000 trades executed in my backtests.

Definitely the max of 9 consecutive losers helped me stick to the system.


----------



## Skate (29 October 2021)

*Start Date:* 25th October 2021
*Portfolio Capital:* $100,000
*Positions in the portfolio:* 10
*Position Size:* $10,000 (no rebalancing)

*Information overload*
For the first week, I'll supply the relevant information & for the ongoing weekly report, I'll post only my "Equity Curve" to make the reporting simple to read & understand.

*Praying didn't do me any favours*
@qldfrog warning came to fruition & the strategy has started with headwinds.  

*"One swallow doesn't make a summer"*
Meaning, a single instance of something is just that; it doesn't indicate a trend. 

*Weekly Report*

















Skate.


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## qldfrog (29 October 2021)

Mr @Skate , as you know and repeat often, my crystal ball warning or not, one needs to stick to a well design system, and these theoretical DD could randomly arrive from the system start, a bit of luck or bad chance can influence the best of plans, and the best systems do experience DD unless they are insider trading 
So i am sure your apprentices are well aware of the tumultuous times ahead;
It takes some balls (figure of style) to start a system now: kudos


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## Skate (30 October 2021)

*No one wants to live on struggle street*
My aspiration is to generate more income than I would normally spend. To me, trading isn’t about getting rich, but more about having the financial independence of being able to support myself without an income. Financial freedom has been at the very heart of all my decisions & if I could pass on one word of advice to the younger readers it would be this: "there is no better time to start creating that financial freedom than right now". If you understand the principle of paying yourself first it will set you up to achieve this freedom. Financial freedom allows you to live your life on your terms.



qldfrog said:


> It takes some balls (figure of style) to start a system now: kudos




*Procrastination*
Many people never start trading because they’re worried about losing their money. It feels like you have to spend a lot of time & energy to get it right & if you don’t, then you might lose all of your money. This fear & self-doubt keep new traders from getting started. The very act of getting started is much more important than getting it right.

Skate.


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## Skate (30 October 2021)

*What to believe*
Everybody talks about technical or fundamental analysis as they know it intimately & feed it to others with the best of intentions (most of the time). Like all skills, if you are trading for financial freedom you better make yourself comfortable as it takes an extraordinary length of time to be good at it. My point is, "there are different trading methods" that work & all you need to do is to find something that suits your lifestyle, schedule, & most of all is your personality. Your personality will ultimately decide if you can stick to a plan even when the going gets tough.

*Traders who make money*
Those who make money at this game all display the same trait of "always following their trading plan". They will always enter & exit a position with conviction whilst managing the trade at all times. They always keep records of every single trade & the really, really good ones, will review their trades on a regular basis.

*This will be hard to imagine *
Good traders are always open to new ideas as they never stop learning & even find ways to improve their trading performance. Most importantly good trader accepts there will be good times & bad times (swings & roundabouts) & how they handle themselves in difficult times will ultimately determine how successful they will be.

Skate.


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## KevinBB (30 October 2021)

qldfrog said:


> It takes some balls (figure of style) to start a system now: kudos



There is another side to this, too.

When I trade a system, I am not trying to predict in which direction a market is going. I am merely reacting to something that has happened in the past. It is an important distinction to remember.

If a trade goes against me, then the system should get me out when it is ready to get me out. Minimising losses should be part of any good system. If a trade goes in my direction, then I'll have an extra ice cream that weekend.

KH


----------



## Skate (30 October 2021)

KevinBB said:


> When I trade a system, I am not trying to predict in which direction a market is going




*Really what is Technical analysis?*
Technical analysis is based on the psychology of buyers & sellers, it's a game of probability where chances of success lean in your favour relying on the premise that winning trades are held longer than the losing ones as @KevinBB has just rightly pointed out.

*Pattern formation & breakouts*
Technical analysis is purely based on pattern formation & breakouts, as well as resistance & support levels. Traders are entering & exiting positions at different times as their analyst has a different view on the same price pattern. This is the reason why trading is so exciting.

Skate.


----------



## Skate (30 October 2021)

*It's worth remembering*
Trading is not easy & what makes sense is usually wrong in trading. The simple truth is "markets are not logical or reasonable" they are emotional, volatile & downright unstable most of the time. Why? because the market is nothing more than a reflection of crowd behaviour - a crowd of people that has absolutely no regard for what anyone thinks. Sometimes it's just a bunch of 'rational' people who make 'irrational' decisions.

*The markets screw us*
The market has the uncanny tendency to screw the most number of people "most of the time" in the shortest amount of time. One of the reasons why trading is so difficult is because "there are no rules" when it comes to trading. Anyone can buy, sell at any time for as much money as they like. It's for this very reason how others prosper by taking advantage of this. Profits are built off the back of unsuccessful traders "exiting this game" vowing never to return. Also, I should point out, losing is easy in this game.

Skate.


----------



## Skate (30 October 2021)

qldfrog said:


> My current dilemma is why am I so disconnected from other traders. Market up, I go down




*Self-doubt *
@qldfrog at times your posts are difficult to read but it's worth remembering every dog or "frog" has its day in the sun. If your strategy has worked in the past, I'm sure it will work sometime in the future, hanging in there will be the difficult part. Until trading aligns with your methodology you could (a) pull back on the amount of position you open, (b) lower your bet size (to keep skin in the game), or (c) simply add a "Take Profit Stop" & analyse if it achieves the desired result.  

Skate.


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## qldfrog (30 October 2021)

Skate said:


> *Self-doubt *
> @qldfrog at times your posts are difficult to read but it's worth remembering every dog or "frog" has its day in the sun. If your strategy has worked in the past, I'm sure it will work sometime in the future, hanging in there will be the difficult part. Until trading aligns with your methodology you could (a) pull back on the amount of position you open, (b) lower your bet size (to keep skin in the game), or (c) simply add a "Take Profit Stop" & analyse if it achieves the desired result.
> 
> Skate.



Apologies for the posts confusion.a reflection of a confused mind i am sure🥴.
Later option cf trading system is something i am keen to have a look..will i be statistically ahead if i lock some of these profits.  Anyway.never ending pursuit,limited time


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## Skate (30 October 2021)

*Thinking revolves around problem-solving*
Happiness is really about creating an extraordinary quality of life & living life on our terms. Living revolves around money & financial independence can have a significant effect on everything from our mental health to even our relationships. It’s so important to remember that it’s impossible to live an extraordinary life if you don’t master the game of relationships & fulfillment.

*What is the point of the posts today?*
Simply to condition. Everybody "knows" but few put it into practice.

*What does everyone know?*
How to create wealth. It's as simple as "paying yourself first" putting that money aside to trade or invest - then living off the rest.









Skate.


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## Skate (30 October 2021)

*Let's now talk about consistent, effective trading*
The above short video explains how wealth can be created with a little discipline.

*My current project*
I have a high conviction that "The Platinum Strategy" is the correct strategy to trade at the moment under these "trying conditions". The Platinum Strategy has been systematically coded to be responsive to the "current" market conditions. Trading the strategy as a "weekly" has its advantages by allowing for the natural ebb & flow of the markets, but in saying this the strategy is ultra-conservative in its approach. The buy condition is strict in selecting positions but also exits at the first sign of a confirmed change of conditions. Trading this way is the safe as I can possibly make it.

Skate.


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## Skate (30 October 2021)

*Why is "The Platinum Strategy" a $100k, 10 position portfolio?*
The premise behind the idea was simple. $100k rounds nicely with scalability that's easy to understand & implement. I also have those who are following along on the journey. The "offer price" of the Exploration Analysis is constant allowing others to scale the number of shares to buy in relation to the investment they wish to make. I also have to admit I'm not restricting my bets to $10k nor limiting my portfolio to 10 positions. That's another unique feature of trading this strategy, its scalability. 

*What's the point of the exercise?*
Others have made it clear that they wanted to trade a system that I'm prepared to trade myself. The exercise is to post the signals in advance of trading whilst recording the ongoing results on a weekly basis - that of a $100k, 10 position portfolio. Doing this allows others to contrast & compare their own trading results, making sure they are on the right track.

*As a weekly strategy*
The "Exploration Analysis" displays all raw signals allowing flexibility to trade along. The signals being constant & the "offer price" being constant as well makes it easy to make the "adjustment" in relation to their investment. In essence, the signals are displayed before the market open on Monday. Displaying the signals leaves it in the hands of others to make their own decision when it comes to following along.

*With $50k*
My son has decided to trade along with $50k & in doing so will simply buy half the number of shares listed in the "Exploration Analysis" capture. When it's time to sell, he sells all his shares when indicated to do so. For him, there will be nothing easier than trading this way.

Skate.


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## Skate (30 October 2021)

*No buy signals this week only sells*




Skate.


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## Skate (30 October 2021)

*Follow-up explanation*
The ongoing issue that I have with trading the "Backtest Signals" is that positions have been taken when in fact they were passed over because of the trading halt.

*Reaching out*
I've read most of the contributions @Lone Wolf has made relating to Amibroker but have yet to find any previous posts on the subject matter of how to adjust backtest trade signals.  If I was chasing information on "Covid-19" or "Music" I'm sure @cynic would be the man. @Linus van Pelt has already made a few great suggestions but I'm sure if the other two members have a hint or a reference to read, I'm sure they will post them. (or anyone else who can help, I'm still all ears)

*This is the irritation*
Amibroker's Trade Portfolio records a trade without a way to "delete" or "alter" the buy position that has not been exercised at all.




Skate.


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## KevinBB (30 October 2021)

I'm not familiar with AmiBroker, but can you put in a trade entry condition volume > 0, then run the script again ?
KH


----------



## Skate (30 October 2021)

KevinBB said:


> I'm not familiar with AmiBroker, but can you put in a trade entry condition volume > 0, then run the script again ?
> KH




*My buy condition* 
@KevinBB my buy condition requires volume at a level determined by my "Volume Filter". Amibroker native padding uses the previous bar to fill. Using @Linus van Pelt suggestion of Norgate's padding fills the bar with the "Closing price" of the previous bar & no-buy will be executed on Mondays. By using the Norgate pad feature "all this does" is to delay the purchase until the bar is populated with the most current data, that being the new (data) with the opening price being (Wednesday) for ASX:IPD. Using either padding method or your suggestion (Re: Volume) unfortunately doesn't rectify the issue I have.

*Trading rules*
I follow trading rules (my trading plan) when trading any of my strategies. There are advantages of which I'll list. Rule #3 is an important one as the "buy" is only good for a day. Coding rule #3 has eluded me so far & this is why I need to amend the buy position in Amibroker backtest analysis.

*Rules*
1. There will be no thinking involved when trading one of my strategies
2. Signals are taken in the order they are listed
*3. Buy orders placed in the pre-auction will be "good for the day" only*
4. Never alter the (a) Buy Offer or (b) the QTY of shares to buy
5. On a sell signal, sell the whole position at the "Offer Price" in the pre-auction
6. If the position has not sold by 10:30 am – “sell at the market”

Skate.


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## Skate (30 October 2021)

*Amibrokers' padding*
Just to be clear, Amibroker uses the previous bar "data" to fill the missing data of Monday's trading halt. (ASX:IPD) as indicated below.




*Norgate's padding*
Norgate adds only the "closing price" to populate the bar thus fooling Amibroker in delaying the re-calculations until Wednesday being the first trading day since the trading halt. Amibroker requires an "opening price" in the data for its re-calculation. It would be preferable to miss the buy altogether or allow the user to delete that position. With (ASX:IPD) still in the portfolio (using either method) another position can't be substituted until a sell signal for that position is generated.




Skate.


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## Sir Burr (30 October 2021)

Skate said:


> It would be preferable to miss the buy altogether



Yes, there's a few reasons missing some trades.
Backtesting, I add to the Buy signal *randomly *missing X% of trades. (Probability of Ignoring any Entry Signal)




Skate said:


> position can't be substituted until a sell signal for that position is generated.



Running backtests long term I also found trades open for a long time blocking new buys. These trades did not exit for whatever reason. Ended up adding code to close trades after X periods. (Non Trading Stock Exit)


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## Linus van Pelt (30 October 2021)

Skate said:


> *Norgate's padding*
> Norgate adds only the "closing price" to populate the bar thus fooling Amibroker in delaying the re-calculations until Wednesday being the first trading day since the trading halt. Amibroker requires an "opening price" in the data for its re-calculation. *It would be preferable to miss the buy altogether or allow the user to delete that position. With (ASX:IPD) still in the portfolio (using either method) another position can't be substituted until a sell signal for that position is generated.*




In my previous message I wasn't connecting the dots since I had a bias for how I code my rotational strategies.

I use daily periodicity, whether my rotational strategy is weekly or monthly, then some fiddling with the PositionScore to get it to work.

Some code excerpts:



> // https://forum.amibroker.com/t/simple-buy-certain-day-and-sell-few-days-later/16621/3 and
> // https://forum.amibroker.com/t/how-to-identify-and-define-trading-days/23630/3?u=linusvanpelt
> 
> // "Your condition is True only on bars where the current bar's Month is not equal to the most recent previous bar's Month,
> ...




So, something to try...

* Change to daily periodicity in Analysis settings
* Use time compression for your system rules.  Once you wrap your head around this (it took me a while) and you have some boilerplate code it's not hard.
* Use IsEOW as a condition for buy (i.e. a positive PositionScore)
* Trap for the padded bar on the buy day itself, something like Iif(V==0 OR NorgatePaddedTimeSeries != 0,0,  IIf(OnSecondLastBar,...)
* Perhaps SetTradeDelays=0 and build the trade delay via your AFL?  I've seen you code this before.
* Would Ref(1) be a future leak here?  Usually it would be, but the fact is that, if the bar was padded (not traded) the code would match the actual trading - you could not have bought the symbol that day.  Perhaps your backtest is in fact detecting something you wouldn't know - that it didn't trade on Monday - but the end result in live trading is the trade would have been rejected by the exchange.  You would of course really want to test this thoroughly so that it didn't cause a future leak or other issues - the effect of Ref(1) would need to be limited to this very specific issue only.

I'm just lobbing this out there - I haven't tested this, nor do I have time to mock up something to test this scenario.

The gist of this is, if you're using Weekly periodicity, your IPD.au bar will collapse to a weekly bar, and you'll lose the granularity of data needed to detect that the symbol did not trade on Monday or Tuesday.  This was what I missed in my first post (and perhaps other things).

You need code that will:

Generate a weekly signal;
But override that signal on the buy day if the bar was padded.  You may just need to check the buy day only, i.e. Monday.  I wouldn't buy on Weds, but rather check if the symbol met the system rules the following week.  So any days other than EOW and FOW would be scoreNoRotate days as far as the backtest is concerned.

I'm sure you know this already, but for those who don't (and I have to continually reference this page myself), this is a good page to bookmark:



			Portfolio-level back testing
		


Read the various scenarios under Rotational Trading.  Scenario 3 might be helpful.

Then there's always the CBT, although TBH I don't know how it works with Rotational systems.  You probably have to do all the work in the CBT that you get for free with backtestRotational.  I think it should be possible with StaticVarGenerateRanks, where you pre-derive each symbol's weekly rank in a Status("stocknum")==0 block, then pass that to the CBT to do the Phase 2 processing and execute the equivalent of your rotational strategy.

Hope some of this was useful 

P.S.:  I have a monthly rotational strategy that is not coded with backtestRotational, but is actually a "roll your own" rotational strategy with both buy and sell on EOM.  I tried both backtestRotational and this approach, and this approach got better returns.  My analysis is it gives the strategy a chance to rebalance each month, taking larger (or smaller) position sizes each month depending on current equity.  I doubt this would be the case with a weekly strategy, with lower expectancy and higher commission costs.  But I believe it would be easier to code this scenario, since you have separate Buy and Sell variables instead of it all wrapped up in PositionScore.  

I'm sure Tomasz could have coded Rotational strategies in many ways - he chose the most obtuse


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## Skate (1 November 2021)

*Update*
I previously remarked that there were a few (three) following along with this strategy & with the confusion of last week two of them couldn't follow the plan (the trading rules). Because of this, all open positions will be sold "at the open" sucking up the first week's losses. In fairness, all are first-time traders & it's not the start we anticipated.

*For this strategy to succeed*
The trading plan needs to be followed religiously if we are to have the same relative results. It's a hard lesson but so important. There is nothing we can do other than accept the starting hiccup & move on. 

*Trading results & signals*
These will be posted as usual on Friday after 6 pm. Doing it this way at least gives the group a fresh start by actioning the trading plan correctly.

Skate.


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## Skate (2 November 2021)

Lone Wolf said:


> The confidence to actually trade a system comes from understanding the system. The backtested results are only relevant if you actually follow the systems rules. Some people can be more successful by applying a bit of discretion to their system, while others manage to ruin it completely.




https://www.aussiestockforums.com/threads/how-to-trade-the-unholy-grails-system.26473/post-761345

*Some old posts are great to read*
@Lone Wolf made a great post back in March 2013 that is still relevant today as it was back then. For those just starting out on their journey, this post sets the road map of what is required to start trading. (successfully I hope)

*Let’s talk about expectations of system trading*
Most fail to realise that you are trading against people who devote their entire life to this endeavour. Those who have better skills & tools than most of us put together. Some new traders become quickly disillusioned & downright disappointed when their account takes a setback "early on". New traders have trouble accepting that it takes time to circulate bad positions seeking better ones. As with most trend trading, the average win rate is low around 35-45%. The truth of the matter is that the win rate of a strategy is largely irrelevant as the strategy is driven more by trade expectancy.

Skate.


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## Skate (2 November 2021)

*Common traits (loss aversion)*
There are those who can’t stomach losing & go on to making a habit of quickly selling (overriding their strategy) or as @Lone Wolf says they "ruin it completely". By selling quickly they believe it will avoid further losses instead of allowing the position extra time to establish & settle.

*Crystalising losses*
There are just those who want to book a quick loss rather than give the position ample time to turn things around. Pullbacks are simply the natural ebb & flow of the markets. @peter2 enjoys buying pullbacks as he knows there is a high probability for some positions to punch higher that can go on to make "all-time highs". Buying pullbacks is simply buying low & selling higher whereas trend trading is buying high & selling higher. Both methods rely on a certain amount of luck.

Skate.


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## peter2 (2 November 2021)

Further to @Skate 's comments on buying pull-backs.  I started my trading career by restricting my buy options to break-outs only. I bought new highs and only new highs. An underlying bull market at the time helped me accumulate profit and confidence. There were still plenty of losers but when the profits are accumulating it's so very easy to sell the losers when they're small. 

The discipline that I executed by selling those small losses helped me more when the market turned down. Suddenly the profits weren't accumulating as quickly and keeping the losses small allowed me to stay in front. Down markets don't provide many break-out opportunities and the few that trigger, well it's 50:50 whether they failed. I learned that buying BOs in down markets gets very frustrating. I felt that I needed to learn another strategy that works in trickier markets. 

Price pull-backs are very seductive. We see them bouncing off prior BO levels, longer term moving averages and of course the "magic" fibonacci 50-62% pull-back buy zone. They look so easy to trade when we see them in a chart. In reality they're tough because we're buying when prices are falling. We're never sure that the pull-back is complete. It's taken me many years, probably 5 - 10, to grow the confidence to trade pull-backs consistently. I tend to trade pull-backs when the BOs start failing more often and the underlying market is not going up. 

Trend traders have to learn how to tolerate pull-backs. Shorter term swing traders have to learn how to trade them.


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## bux2000 (3 November 2021)

Hi Skate,

Thank you for taking the time to start posting again I have always appreciated your thoughts and trading tips. I know once before I asked you about your portfolio software, Norgate data and Amibroker.
Because I have a brain like a sieve, could I just ask again which version of Norgate you might recommend I thought Gold may be adequate perhaps. . Amibroker not sure standard or professional and are you still happy with your XLAutomation portfolio software? 
Just making sure one Norgate licence  would run both Amibroker and XLAutomation.

I am not looking for for running systems testing at this stage maybe in the future  but just a good charting package.

Thanks for your time

bux


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## Skate (3 November 2021)

bux2000 said:


> Hi Skate,
> 
> Thank you for taking the time to start posting again I have always appreciated your thoughts and trading tips. I know once before I asked you about your portfolio software, Norgate data and Amibroker.
> Because I have a brain like a sieve, could I just ask again which version of Norgate you might recommend I thought Gold may be adequate perhaps. . Amibroker not sure standard or professional and are you still happy with your XLAutomation portfolio software?
> ...




Hi @bux2000 

To be a serious trader you will need three pieces of software & if I may add a word of advice "don't skimp" as your financial future is at stake.

*Needed*
1. Amibroker 64bit Professional 
2. Norgate Platinum Subscription 
3. Share Trade Tracker (XLAutomation)

Yes, Norgate Data integrates into Amibroker using their propriety data plug-in whilst Share Trade Tracker has the Norgate API to take advantage of Pricing & Dividend updates.

Hope this helps you make the correct decision. (on needs not cost)






						Looking for the grand unifying theory...
					

Hi all, the frustration is coming to a head for me...  i'm hoping that there's someone in the world who has found some way to unify all our program and platform requirements?...  currently i am charting on trading view, executing through MT4, using a position size calculator on my android phone...




					www.aussiestockforums.com
				








						Dump it Here
					

Skate.




					www.aussiestockforums.com
				




Skate.


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## bux2000 (3 November 2021)

Skate said:


> Hope this helps you make the correct decision. (on needs not cost)




Thanks again for you time and yes it does 👍

bux


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## Skate (4 November 2021)

*Trading isn't easy but it doesn't have to be complicated *
Simplicity works just fine & it can be effective. At times simple trading techniques can encourage curiosity without being heavy on detail. Complex trading ideas have a habit of putting off the casual reader. I'm just saying successful trading requires a degree of understanding of how the markets move. Look at any bar chart & the first thing you'll notice is how the price bars are jumping all over the place. 

*The ebb & flow of the price bars are simply a consensus of the traders at a point in time*
With any group of people getting a consensus or an agreement is near impossible but with trading, the consensus on the price of a security is always 100% accurate. (but changing from one minute to the next)  

Skate.


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## Skate (4 November 2021)

*It doesn't matter how long you have been trading, there are always new ideas to evaluate*
To start off on your "trading or investing" journey requires nothing more than copying a process that has already proven to be profitable. There are members on this forum "trading their way" displaying a variety of methods that can be replicated. It's just applying a method of trading that resonates with you. Successful traders do follow proven methods but normally think more independently about how to cultivate a slight edge.

*What you might be unsure of is how to incorporate those methods into a repeatable process*
It's for this very reason education plus experience is required. Even when you make your first trade you need to realise that it's now in the hands of the market & the market will decide what your return will be. Trading at times comes down to pure luck & mathematical probabilities.

Skate.


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## MovingAverage (4 November 2021)

Skate said:


> *It doesn't matter how long you have been trading, there are always new ideas to evaluate*
> To start off on your "trading or investing" journey requires nothing more than copying a process that has already proven to be profitable. There are members on this forum "trading their way" displaying a variety of methods that can be replicated. It's just applying a method of trading that resonates with you. Successful traders do follow proven methods but normally think more independently about how to cultivate a slight edge.
> 
> *What you might be unsure of is how to incorporate those methods into a repeatable process*
> ...



Repeatability is everything (at least it is to me). With repeatability comes system predictability and with predictability comes confidence in your system's behavior and that allows me to sleep at night--which is important to me.


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## Skate (4 November 2021)

MovingAverage said:


> With repeatability comes system predictability and with predictability comes confidence



*Confidence is the key*
Without confidence, you will not keep pulling the trigger when you trading funds suffer from a string of consecutive losses. @tech/a believes "being wrong isn't a choice, but staying wrong is" or something similar (I'm paraphrasing from memory) & to be fair, tech is all about managing the downside risk & beyond that, it's all comes down to money management. 

*Putting it bluntly to trade successfully you have to develop a level of skill*
Unfortunately, it takes effort & time to develop these skills but if you are an excellent risk manager you have a high probability of trading successfully. Forget about the upside as it will take care of its self.

Skate.


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## Skate (4 November 2021)

*As traders, we always have a tendency of fooling ourselves*
In hindsight, we all learn how to make up a story of just went wrong & then foolishly believe it. I'm yet to find a trader who can successfully predict what the market is going to do next. But that's ok we don't need to predict what the market will do next to make money. 

*Trend following*
Money can be made by just following the herd by jumping on a trend & riding that trend right till the end. Finding those trends becomes the mission. When others talk about what they believe the market will do next is simply a matter of guesswork & at times this guesswork can come from experience but even so, it holds little value to a system trader. One look at the monthly stock picking competition proves my point.

Skate.


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## Skate (4 November 2021)

*The markets are unpredictable & irrational*
When you can accept this unpredictability you'll suddenly find sticking with your trading plan is so much easier. Accepting losses will also allow you to let your winning trades run. Fiddling with your strategy by overriding it "believing" what is going to happen next will inevitably "white ant" you every turn. For a position to go up it needs breathing room & trading with a "gut feeling" is really trading in such a way that's unquantifiable.

*Chart patterns need rules*
Chart patterns are meaningless without a set of rules to take advantage of those patterns. Rules decide when to trade, how much to trade 
& where to take profits, or where to crystalise a loss. Once you have your rules in place you need to be able to test them against a sample of historical data, allowing evaluation & validation of those rules.

Skate.


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## Skate (4 November 2021)

*The benefits of having a defined set of rules should not be underestimated *
The peace of mind @MovingAverage indicated in a previous post is also not to be underestimated. Knowing when to trade, the price to enter & exit will be the key driver in determining how quickly you will improve as a trader. If you don't have rules you can't test the validity of your strategy. It's also prudent for me to mention at this stage "you are trading against the smartest minds around".

Skate.


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## Skate (4 November 2021)

*Gut trading*
The problem with overriding a trading strategy is that you'll never be sure if it's the rules or the overriding of the rules was the driver of a losing streak. Poor trading can be attributed to poor execution. The more "inexperienced" traders will bend the rules to suit their mood & wonder why live trading fails to replicate their backtest results.

*Jumping ship*
The last few posts go somewhat in explaining why new traders constantly jump from one strategy to another. Jumping ship is normally an emotional decision rather than simple logic that all strategies take time to develop.

*I'll leave the summary up to *@peter2
I've made a series of posts when one would have sufficed.



peter2 said:


> You first goal is to learn as much as you can about the markets you prefer to trade. Your second goal is to formulate a trading plan that will allow you to trade consistently and more importantly to keep your starting capital intact for as long as it takes for you to develop the skills to trade profitably.




Skate.


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## ducati916 (5 November 2021)

Morning Mr Skate,

Traders in Aus. should probably have been paying attention to US Small Caps. The good news, obviously, is that the chop seems to have resolved to the upside.




If you are not already, stocks should be trading higher soon.

jog on
duc


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## Greynomad99 (5 November 2021)

Skate said:


> *Gut trading*
> The problem with overriding a trading strategy is that you'll never be sure if it's the rules or the overriding of the rules was the driver of a losing streak. Poor trading can be attributed to poor execution. The more "inexperienced" traders will bend the rules to suit their mood & wonder why live trading fails to replicate their backtest results.
> 
> *Jumping ship*
> ...



Well said Skate. 
For the first few years of trading I was overtrading and the bank was making more in brokerage than I was earning from trading. 
Second, I was following the trading text book and baling out when prices broke my stop losses only to find the next day they recovered and yet again I'd sold at the bottom. This when to hold and when to fold is the single hardest thing to get right for short/medium term traders and while I get it right much more often than wrong these days, there isn't any formula I've found that tells me how far to hold past a stop loss. And holding past a stop loss is something I and the text books tell new traders to never, ever do - it is the single most dangerous thing to do as a trader. If you don't adhere strictly to a stop loss then you are not trading, you are gambling. So, yes, a bit of gambling on my part by fudging stop losses - and certainly a case of do as I say, not do as I do for anyone without say 3 - 5 years of high level T/A and active trading under their belt. 
What do I do these days? Well if my T/A says price is going to turn up about now (bearing in mind that T/A is only right about 75% of the time at best) and I get to the point of thinking ' that's it, had enough I'll close this one out', I'll hold another day or two (subject to said stock price not acting wierdly). I figure Mr Murphy is waiting in the wings for me to sell and if I decide to, but then don't, I might beat him at his own game! Not great logic, but it seems to work more often than it doesn't.
IFM is one where I got caught on its plummet in price when its CEO walked. Based on T/A I expected price to recover and with little to lose, I held rather than bail (my stop loss was lying bleeding on the floor after the price fall). Price rose but then fell back to retest the lows and actually made a lower low (another signal to get out of town). It has jumped about 5% in the last 2 days and while it lost a bit off its highs yesterday, I'm hoping I've beaten Murphy again. IFM might take a long time to get back to its previous value but I'll be happy to take a small loss rather than a big loss if it proves the recovery is too drawn out for me.
PS: IFM stopped 2 cents shy of where I thought it would thereafter be a truly lost cause, so I won't be suprised if the price yet again tests its lows. So far thise week price has made a candle that looks like one that suggests reversal (as in higher prices after reversing the prior downtrend). Still a work in progess that could see my plans dashed and broken on the jagged rocks at the bottom of the abyss I'm peering over the edge at.


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## Greynomad99 (5 November 2021)

ducati916 said:


> Morning Mr Skate,
> 
> Traders in Aus. should probably have been paying attention to US Small Caps. The good news, obviously, is that the chop seems to have resolved to the upside.
> 
> ...



I hope you are right. While I don't follow the US market apart from a morning summary of the major indicies (and I don't trade small caps unless I've had too much to drink - and at my age that's something I try to avoid these days!), that parabolic curve suggests to me that price could be rolling over and more falls are ahead. All markets are at all-time highs and while I feel some (like the XAO) may return to their all-time highs in the next few weeks, I can't see sustained new all-time highs - so I am really cautious about potential 'sucker rallies'. However, as traders, while the sun is shining need to see what we can ring out of the currently rising prices (while constantly looking overo ur shoulder).


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## MovingAverage (5 November 2021)

Greynomad99 said:


> I hope you are right. While I don't follow the US market apart from a morning summary of the major indicies (and I don't trade small caps unless I've had too much to drink - and at my age that's something I try to avoid these days!),




That's why I like trading the ASX--it is closed when I do my drinking


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## Lone Wolf (5 November 2021)

Skate said:


> *In summary*
> Amibroker includes the position as a buy (using either padding system) whereas in reality the position was never purchased in the first place. Amibroker doesn't allow adjustments to be made to the Portfolio Manager to accurately display only the physical positions in the portfolio. Using my custom Exploration Analysis solves this dilemma (for me) as those signals can be manipulated.




Hi Skate,

I thought about your issue but I don't have much to add. If it's the backtest validity you're concerned about, the only way I can see of fixing it would be to identify weeks where the first day of the week is a padded day and include that as a forward looking condition in your backtest. I'm sure this could be done, but you already have a similar issue where price opens above your buy limit and runs higher. Your backtest still buys on open when in reality you miss the trade. Last I saw you weren't interested in correcting for this as backtests don't mean jack anyway.

I suspect the percentage of trades that are incorrectly shown in the backtester due to the stock being in a trading halt on Monday would be quite few. For a robust system you can check that the performance isn't bing carried by a very small number of outliers. Or, if by design the system is carried by a small number of outliers, at least manually check that those outliers are valid entries.

I am a big fan of having the backtest match reality wherever possible. But it's worth reminding ourselves occasionally that our objective here is to make money, not write code. Sometimes you need to choose your battles and decide how much extra value you get out of writing more code.


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## Skate (5 November 2021)

ducati916 said:


> If you are not already, stocks *should be trading higher soon*






Greynomad99 said:


> All markets are at all-time highs and while I feel some (like the XAO) *may return to their all-time highs in the next few weeks*




*On the same page*
@ducati916 & @Greynomad99 respective posts on the first reading seem to be at odds with each other whereas, in reality, they hold the same overall view. Both respective views come from experience. When seasons traders speak it is our job to listen & digest the information being presented. Skim reading without critical thinking could very well lead us down the wrong path into making a poor decision. Why? because our "perception" of the information consumed drives our reaction.

*When is it safe to trade, that's the question*
Well, that's the dilemma we all face. There is a strong consensus on the "safest time" to trade is when the market is going up. What metric you decide to use is up to you. The most common metric is an Index Filter. A crude "Index Filter" often discussed in this forum is a "Simple Moving Average" of an Index. If the close of the Index is above a "Simple Moving Average" the market is deemed to be up as a "Buy Filter". 

Skate.


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## qldfrog (5 November 2021)

Lone Wolf said:


> Hi Skate,
> 
> I thought about your issue but I don't have much to add. If it's the backtest validity you're concerned about, the only way I can see of fixing it would be to identify weeks where the first day of the week is a padded day and include that as a forward looking condition in your backtest. I'm sure this could be done, but you already have a similar issue where price opens above your buy limit and runs higher. Your backtest still buys on open when in reality you miss the trade. Last I saw you weren't interested in correcting for this as backtests don't mean jack anyway.
> 
> ...



For green feets like me:
we had a whole set of exchanges about this issue;
 my trader bell Direct limits the % above close that I can set in my orders before Open;
And i miss a lot of ,probably the best, entries
One way I do check my strategy is add the following:

//Random entries    
rd = Random();    
buySignal=IIf (rd>0.2,True,False); 
Buy=Buy AND buySignal AND Optimize("Run",1,1,1000,1);

Note: I do not own the idea:thanks to numerous mentors here,


backtests miss a percentage of entries at random(here 20% are missed); similar to what happens when my buy orders  are missed:
Perform 1 thousand run if you do an optimise run on AB;
I then take these 1000 runs into excel and do a very crude distribution of these results;
as long as it is heavily concentrated and not too far from my expected single run backtest without random misses; it should be fair to say it will be robust enough;
I do not do the same on sale, but could probably add a reducing factor on sale price
Yes real trade will NOT match the backtest but should be near enough...not always...and you should be able to trace back the missed buy or lower sell price (should always).
A bit of work but worthwhile after a first few ticks of real trades


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## Skate (5 November 2021)

Lone Wolf said:


> If it's the backtest validity you're concerned about




@Lone Wolf the validity of the backtest reports is not the concern it's more to do with Amibroker Portfolio Manager using the Backtest feature. "Detail Log" in the Analysis Setting generates these buy positions. The issue I have is the signals in the "Detailed Log" report can't be adjusted or modified. Meaning if a position is not taken that's displayed in the "Detail Log" (for whatever reason) can't be corrected.



Skate said:


> Amibroker handles your strategy - you handle your trading plan, it's up to you to execute your plan, there is a distinction.




*Backtest results "mean jack" (to me) *
Backtesting a strategy is straight forward but backtesting a "trading plan" with all its variables becomes another kettle of fish. But in saying this Backtesting a strategy allows you to compare & contrast between conditions, filters & parameters to take the strategy to the next level.

Skate.


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## Skate (5 November 2021)

*What's the procedure to get buy & sell signals in Amibroker*
There are a few ways, the first is using the Backtest "Detail Log" to generate a report. The other way is to use the "Exploration Analysis" to generate an alternative report. the "Detail Log" is a portfolio manager whereas the exploration analysis simply displays all the raw signals.

*Which method should I use?*
I prefer using the "exploration analysis" as the raw signal can be manipulated within the strategy to display other trade information. Using the "Detail Log" of a backtest report doesn't allow "user" intervention.

*Trade Signals *
If you prefer to generate buy & sell using the backtest report the analysis settings should have the "Detail Log" radio button selected. The "Portfolio" analysis setting should have "Add artificial future bar" ticked to allow you to see tomorrow's trades.





*This is the report style when the "Detail Log" is selected *
The example below displays the backtest signals of the portfolio manager. The date selection is critical to the signals being displayed. As the report is for a 10 position strategy - the report will only show the buy & sell signals to this PositionSize.




Skate.


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## Skate (5 November 2021)

*I often get asked: "are my Analysis Settings" correct?*
The analysis setting seems easy to understand but at times selecting the correct setting can be a nightmare. Most of these settings can be hardcoded into your strategy where others can't. I'll have attached an afl file to display which settings can & can't be programmed into a strategy.
* 
Boiler Plate*
The "Boiler Plate" attached is old but still relevant. All credit must go to "BruceR" for the original afl with additional thanks to @trash for additional comments & options. The purpose of this afl file is to initialize all backtesting/optimization "factors" to a default value. It also serves as a "reference check" to make sure that all of the factors have been accounted for.

*These factors fall into 3 categories *
1. Factors that are in the Amibroker Analysis Backtest Settings.
2. Factors that are NOT in Settings
3. Factors that are in settings but can NOT be set programmatically

*The bottom line*
There is no way to guarantee in one place that all factors are accounted for. Theoretically, to cover all options, a combination of the "Analysis Settings" & "AFL Settings" should be used. At times Amibroker users are reluctant to fiddle with the original settings for the fear of messing it up.

*But there is an alternative *
Select as many settings as possible & code them into your strategy. The afl attached explains the settings that can "only" be set in the analysis settings. The Boiler Plate lists the settings that can & can't be programmed into the strategy.

*For those who don't have Amibroker*
All afl's can be viewed in Microsoft's "Note Pad" for those who don't have Amibroker. The list below can't be set "programmatically" set & should be carried out manually.

1. Pad and align
2. Reference symbol
3. Risk-free rate Sharpe
4. Risk-free rate UPI
5. Add artificial future bar
6. Limit trade size %
7. Disable trade size limit
8. Walk forward mode and data parameters
9. Optimization target

Skate.


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## Lone Wolf (5 November 2021)

qldfrog said:


> For green feets like me:
> we had a whole set of exchanges about this issue;
> my trader bell Direct limits the % above close that I can set in my orders before Open;
> And i miss a lot of ,probably the best, entries
> ...




I thought I remember you implementing a buy condition that looks froward a day and rejects the signal if the low on entry day is above the previous close plus %3 (or whatever your limit is). Does this not achieve what you want, or do you dislike that Amibroker will forever complain that your code has a future leak? 

A couple of things to consider (which you probably already have, but for anyone newer who might be following along) - You are simulating missing some trades by randomly missing 20% of entry signals. Something to be careful of is that in reality you aren't missing random trades, you are missing a very specific type of trade. The trades that gap up on open and don't look back. It's worth checking how many of your winners start this way. 

Another slight difference is that when you miss a trade in reality you are a position short and not fully invested. In your simulation that randomly skips signals you will still get allocated the full number of positions, just not the ones you ideally wanted (assuming you have enough remaining signals that is). I've never used the custom backtester, I have no idea if it's possible to leave positions unfilled if a signal is skipped.


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## Lone Wolf (5 November 2021)

Skate said:


> @Lone Wolf the validity of the backtest reports is not the concern it's more to do with Amibroker Portfolio Manager using the Backtest feature. "Detail Log" in the Analysis Setting generates these buy positions. The issue I have is the signals in the "Detailed Log" report can't be adjusted or modified. Meaning if a position is not taken that's displayed in the "Detail Log" (for whatever reason) can't be corrected.




I see, but still can't help. For me backtest is for backtesting only. Explore is for finding signals. I don't make good use of the portfolio manager.


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## Skate (5 November 2021)

Lone Wolf said:


> I don't make good use of the portfolio manager.




@Lone Wolf there are advantages & disadvantages to using either method to generate signals.

*The "advantage" of using a backtest "Detail Log" for signals*
Only the signals to be actioned are displayed in the portfolio. Guesswork or "additional checks" are not required.

*The "disadvantage" of using a backtest "Detail Log" for signals*
Amibroker has full control over which signals make it into the portfolio & fudges (re-calculates) the buy price as well as the number of shares purchased after the market has opened. Once a position is in the portfolio (Detailed Log) it "restricts user intervention" to correct the records. Positions may not have been taken for a variety of reasons being the opening price exceeded my buy price limit (gap ups) or because the position didn't trade on Monday because of a "Trading Halt" or the position fell fowl of the Trading Plan. It should be noted that a trading plan overrides a trading strategy.

*Backtest Detail Log (today at 1 pm)*
This report displays "only the signals" for inclusion into the 10-position portfolio. At this stage, the share price & the number of shares to buy are sourced from the opening of the previous bar (one week old). The price for the calculations is not reflective of the closing price at 2 pm today.




*The "advantage" of using the Exploration Analysis for signals*
The Exploration Analysis can produce any display of your choice as your exploration can be coded making metric more "visual" thus making trading easier. The analysis can be colour coded & sorted into columns making the process a breeze.

*The "disadvantage" of using the Exploration Analysis for signals (today at 1 pm)*
Unfortunately, it displays all raw signals & "user intervention" is required when it comes to selecting only the required number of buy positions to fill the "PositionSize" of your portfolio. Also, the explorational analysis displays all the raw sell signals that need to be manually evaluated in relation to their inclusion in the portfolio. Using the exploration Analysis for signals is similar to being at a cafeteria - it's up to you to pick & choose the signals that are applicable to the holding in your portfolio.




Skate.


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## Skate (5 November 2021)

*Moreover*
Using the "Exploration Analysis" as @Lone Wolf has indicated allows you to code additional information to make trading decisions much easier. The format of the report is only limited by your imagination. I've captured the same exploration analysis but using updated data at (2 pm).


*Report format #1*





*Report format #2*





*Report format #3*




Skate.


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## qldfrog (5 November 2021)

Lone Wolf said:


> I thought I remember you implementing a buy condition that looks froward a day and rejects the signal if the low on entry day is above the previous close plus %3 (or whatever your limit is). Does this not achieve what you want, or do you dislike that Amibroker will forever complain that your code has a future leak?
> 
> A couple of things to consider (which you probably already have, but for anyone newer who might be following along) - You are simulating missing some trades by randomly missing 20% of entry signals. Something to be careful of is that in reality you aren't missing random trades, you are missing a very specific type of trade. The trades that gap up on open and don't look back. It's worth checking how many of your winners start this way.
> 
> Another slight difference is that when you miss a trade in reality you are a position short and not fully invested. In your simulation that randomly skips signals you will still get allocated the full number of positions, just not the ones you ideally wanted (assuming you have enough remaining signals that is). I've never used the custom backtester, I have no idea if it's possible to leave positions unfilled if a signal is skipped.



All true, and i replace these up gaping  good trades by some at the end of my ranking
I did try indeed to emulate the reality but gave up as the rejected trades are not following a given rule i can code, so why bother going into a code design war if i will ultimately not be matching anyway:
This rough element of random i introduce is enough for me to label my results as robust enough or not.
The next step is a live vs backtest forensic search to confirm any difference is expected and explained..
Basically you record buy sell as they come on paper daily/weekly and compare vs a backtest after a decent time period
That works for me..meaning i am confident enough to run my systems.

Does not guarantee profit


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## qldfrog (5 November 2021)

Skate said:


> @Lone Wolf there are advantages & disadvantages to using either method to generate signals.
> 
> *The "advantage" of using a backtest "Detail Log" for signals*
> Only the signals to be actioned are displayed in the portfolio. Guesswork or "additional checks" are not required.
> ...



As an exploration user, it is true that you can sometimes miss a sell order...
Human error
And that sell instruction will not popup anymore
as a result i do an explore, enter the trade then check graphically that none of the remaining portfolio has a buy attached
Not ideal, time consuming


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## Skate (5 November 2021)

*Strategy update*
As "The Platinum Strategy" had a rocky start with a few members buying outside the trading plan. By group consensus, we have called the first week a false start absorbing the small losses (outside of the strategy). The ongoing weekly reports will still use the original portfolio size ($100k) with 10-positions for others to follow along.

*Disclaimer*
There is not one member of the group trading with the same investment level & their bet size will be reflective of this. The only issue with varying bet sizes is the calculation of the number of shares to buy as the "offer price" that is fixed & not negotiable. They have all confirmed the calculation of the number of shares to buy at the "offer price" will be simple to calculate.

Skate.


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## Lone Wolf (5 November 2021)

qldfrog said:


> As an exploration user, it is true that you can sometimes miss a sell order...
> Human error
> And that sell instruction will not popup anymore
> as a result i do an explore, enter the trade then check graphically that none of the remaining portfolio has a buy attached
> Not ideal, time consuming




I keep a watchlist of active trades. Each week (I only trade weekly / monthly) I update the watchlist and manually step through the chart for every open position to confirm everything I hold is something I expect to still be holding. I'd do this regardless of how much faith I had in computer generated lists. Obviously this would be more time intensive if you have more systems and/or lower time-frames.


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## qldfrog (5 November 2021)

Lone Wolf said:


> I keep a watchlist of active trades. Each week (I only trade weekly / monthly) I update the watchlist and manually step through the chart for every open position to confirm everything I hold is something I expect to still be holding. I'd do this regardless of how much faith I had in computer generated lists. Obviously this would be more time intensive if you have more systems and/or lower time-frames.



yes it was getting intense with many daily systems but I caught many mistakes in the past year, and better fix these asap


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## Linus van Pelt (5 November 2021)

qldfrog said:


> As an exploration user, it is true that you can sometimes miss a sell order...
> Human error
> And that sell instruction will not popup anymore



I'm not sure what you meant by "And that sell instruction will not popup anymore.  Is it a glitch in your explore that didn't generate a sell signal, or just you missed it, so it won't show up in following runs?  I'm thinking it's the latter.

For the most part I'm using "backtest to trade" with the future bar vs. explore.  Both approaches have their pros and cons.

But what I do in my explore-based trading:

* When I create a new system, I create a dedicated watchlist for that system to contain all open positions.  Say @My System - Open Positions
* When my explore generates buy signals, I RMB the buy rows and choose Add selected results to watchlist
* It's much better to have symbols in the watchlist that are not in your portfolio (say it gapped above the buy price or you didn't get in for some other reason) than to have a symbol in your portfolio that you forgot to add to your watchlist.  Keeping that watchlist up to date is key, but not *that* hard.
* Then, in your explore code, use the InWatchlistName function to return 1 or 0 depending on if the given symbol is in your watchlist
* You can then either highlight sells that you actually own - say red background, or an AddTextColumn that says "<<< YOU OWN THIS", or even filter the sell signals to only those in the watchlist (but this is dangerous unless you're meticulous about updating the watchlist

Anyway, using that watchlist to help flag the sells you actually own, instead of the 10's of bogus sell signals that you don't own, can help to cut down the human error.  That watchlist is also useful to quickly cycle through the charts for your open positions.

It is good to delete the sells from the watchlist once they are sold, but it's better to have too many than too few in the watchlist.  You can occasionally run an extract from your broker and then compare that to your watchlist(s) to clean up any stragglers.

Don't use Symbol -> Categories -> Watchlists -> Move Up/Move Down to re-order your watchlists, or you'll break every saved APX on your file system.  Apparently Tomasz doesn't think this is a bug. 

Instead, edit C:\Program Files\AmiBroker\Databases\NorgateData\WatchLists\index.txt to reorder your watchlists.  Get an editor with a sort lines function.  I like to put all my open positions watchlists at the top of the list of watchlists, another reason why I prefix them with @.

Hope this helps, and apologies if you knew this already...

*Edit:  *D'oh, how did I miss Lone Wolf's post before composing this reply?  Oh well, I put too much time into writing this to delete it now


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## Greynomad99 (5 November 2021)

Man - there are a lot of posts here today with Skate leading the push.
Just for the record as a lot of these posts mention what sounds like algorithmic trading and indicators (like moving averages) I don't use any of these tools as most tell you what has happened, not what might happen (none tell you what will happen unfortunately). I stick to the tried and true theories like Gann and Elliott Wave which have been around for decades. If it was good enough for Mr Gann it is good enough for me but whatever works for you is the way to go - all (most) systems have some value. 
My educational portfolio I set up last November and only look at once a week is up 28% for the year - which shows what a logical no frills trading plan can do for you. You don't really need more than a basic understanding of T/A to trade that system.
Anyway, I'm having a break doing some travel photography for a couple of weeks, so hope the market is kind to you.


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## qldfrog (5 November 2021)

Linus van Pelt said:


> I'm not sure what you meant by "And that sell instruction will not popup anymore.  Is it a glitch in your explore that didn't generate a sell signal, or just you missed it, so it won't show up in following runs?  I'm thinking it's the latter.
> 
> For the most part I'm using "backtest to trade" with the future bar vs. explore.  Both approaches have their pros and cons.
> 
> ...





Linus van Pelt said:


> I'm not sure what you meant by "And that sell instruction will not popup anymore.  Is it a glitch in your explore that didn't generate a sell signal, or just you missed it, so it won't show up in following runs?  I'm thinking it's the latter.
> 
> For the most part I'm using "backtest to trade" with the future bar vs. explore.  Both approaches have their pros and cons.
> 
> ...



Thanks @Linus van Pelt ,yes, that is a nice way to double check the explore output.thanks for the hint


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## Skate (5 November 2021)

Greynomad99 said:


> whatever works for you is the way to go




Nailed it.

Skate.


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## othmana86 (6 November 2021)

MovingAverage said:


> Spot on @Skate.
> 
> Chart below is of one of my live systems. Top green chart is the system's P&L, which includes open and closed positions.
> 
> ...



This makes me feel a whole lot better. I started my system back in feb, the same week we had a serious market crash. I dropped about 15 percent of my starting capital. I had the confidence to keep running knowing that the drawdown was within my systems limits. I tested the system quite significantly. Multiple MC runs and all. While it did recover some of it it’s been super choppy and not yet profitable. If you stayed strong for  two years… I think I can do the same . In saying that it’s so hard not to doubt your system and constantly think “WTF is wrong with this thing”. So thank you for sharing 

@Skate! I concur firing up your system at a particular time could have significant effect on the system. Will just have to wait so it smoothens out


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## DaveTrade (6 November 2021)

I'm finding all these posts about systems very interesting, it's got me thinking that a purely mechanical system would be the way to go for me as my main income and then my discretionary trading can be an interest on which I can vary the work load to fit in with my other interests in life. I'd like to try and build a 100% mechanical and robust system of minimums. Minimum time to operate, minimum drawdown, minimum consecutive losses and minimum stress. Can it be done? can I do it? I don't know. I think I can but I'm not so sure if the system I end up with will be as perfect as I now hope. The markets are like that, they can be perfect for a short while but then everything changes. This is the big advantage of discretionary trading, you can vary how you trade depending on the market conditions.
Anyway thanks for listening and keep talking systems.


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## cynic (6 November 2021)

A minimum drawdown, minimum consecutive losses, minimum time to operate, and minimum stress, system, is very easy to envisage, but not at all desirable to those seeking to profit from participation in the markets.

Perhaps one might derive more benefit from entertaining softer, less minimal, parameters.


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## DaveTrade (6 November 2021)

cynic said:


> A minimum drawdown, minimum consecutive losses, minimum time to operate, and minimum stress, system, is very easy to envisage, but not at all desirable to those seeking to profit from participation in the markets.
> 
> Perhaps one might derive more benefit from entertaining softer, less minimal, parameters.



Thanks for your response Cynic. As has been mentioned in a previous post by Skate, your brief message has a much broader and wide spread impact than it may seem on the surface to some readers. From my readings in this thread I think that my biggest challenge may be with the stop-loss and drawdown.  I knew that a trade off between return and risk would have to happen, what I don't know at this point in time is if I can find the balance that will give me my peace of mind in both. Obviously my leaning with this system would be towards lower risk and I'd be willing to pay for that. Each person should own and drive the car that makes them happy, a young guy goes for the sporty car and the older guy may choose the the more practical or more comfortable one.


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## MovingAverage (6 November 2021)

othmana86 said:


> In saying that it’s so hard not to doubt your system and constantly think “WTF is wrong with this thing”. So thank you for sharing



Agree...it is one thing to run backtests and think "results look good I can trade this" but it is a whole other thing when it comes to live trading that system.

One of the things that helps me with live trading my systems on a day-to-day basis (particularly when it is not performing) is to also have a good understanding of specific trade characteristics that can be obtained from your backtests. By that I mean many people are very focused on the big picture performance metrics of their systems such as CAGR, DD etc (which is all well and good and very important) but to understand the profile of specific trades is also important and certainly helps me on a day-to-day basis. More specifically, what I like to have a good handle on is the distribution of individual trade profit ($ or %) and the distribution of individual trade loss ($ or %). By this I mean I know that backtests show the average profit per trade might be 23% + or - 10% and the average loss per trade might be 15% + or - 5%. This is what you tend to focus on a day to day basis (how much did that trade make or lose) when live trading so to ensure the profit or loss of each live trade is within system backtest expectations gives me a level of comfort my live trades are in line with system backtests.

The other thing I find very useful in terms of tracking my live trades is to do some general short, medium and long terms backtests. For example short might be 100 trades, medium might be 2000 trades and long might be 4000 plus trades. When starting to live trading you might focus on your short term backtests to see how your live trading is going and as you get more live trades under your belt start focusing on the medium term backtest and over time switch to the longer term backtests. Problem is many people will run backtests over an extended period of time (many thousands of trades) and when they start to live trade wonder why their live trades aren't meeting the longer term trends and behavior. I think this is a very important point that a lot of folks overlook. Systems behave very differently over different time frames so having some insight into that also re-enforces my confidence in the system.

I think it is also important to maintain a healthy level of doubt about your systems. IMHO systems need to be constantly watched to ensure things are going as expected so you can react if something is not right. Systems can and do go haywire so being on top of things will add to your level of confidence to stick with it during its tougher times, which happens with all systems.


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## MovingAverage (6 November 2021)

DaveTrade said:


> I'd like to try and build a 100% mechanical and robust system of minimums. Minimum time to operate, minimum drawdown, minimum consecutive losses and minimum stress. Can it be done?



All those minimums will equal minimum profit. That is a very de-risked system (which is fine) but with minimal risk there is minimal profit.


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## Skate (6 November 2021)

othmana86 said:


> @Skate! I concur *firing up your system at a particular time could have significant effect on the system*. Will just have to wait so it smoothens out




*Wishing has no effect when it comes to trading*
When it comes to system trading we all start out thinking we have something special. At times we believe we may just have the "Ducks Guts" of strategies believing the returns will start flowing in from the get-go. But live trading has a way of grounding you in reality. As @othmana86 said, "timing can have a significant effect". The market doesn't care what you believe, or what you think, the market will decide what you deserve.



MovingAverage said:


> Agree...it is one thing to run backtests and think "results look good I can trade this" but it is a whole other thing when it comes to live trading that system.




*The Platinum Strategy*
With each new strategy, you code it in such a way trying to garner an edge. Markets are constantly changing & boy have they changed in the last few years. I'm just saying before Covid, trading was like shooting "Wood Ducks" in a barrel some of the time & wondering what's going wrong the other times. Being "sucker-punched" always hurts but now it feels like a common occurrence & most of us are sick of it.

Skate.


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## Skate (6 November 2021)

MovingAverage said:


> I think it is also important to maintain a healthy level of doubt about your systems.




*How good is "The Platinum Strategy"*
As Scott Morrison famously said in his address winning the last Federal Election, "I believe in miracles". So do I, that's why I pray a lot, or at least I do when everything goes pear shape. 

*It takes time for a strategy to develop*
If you think you are going to hit the jackpot trading a new strategy straight away you will be sadly disappointed. 

*Let's have a look*
"The Platinum Strategy" might turn out to be my best strategy so far. When I first started trading back in 2015, I waited to start off at the start of the financial year making the assessment must easier having a full year under my belt. I'm now wondering how my new Platinum Strategy would have gone if I started trading it at the start of this financial year?

*Backtest period (July 2021)*
Well, that's disappointing & not what I was expecting.





Skate.


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## Skate (6 November 2021)

*The Platinum Strategy*
July trading results didn't live up to my expectations at all. But hey, the strategy has backtested & paper traded with pleasing results so let's give it another month. The strategy can't perform any worse, can it?

*Backtest period (July & August 2021)*
WTF, is going on? Well, that's embarrassing - I certainly wasn't expecting this. This is the point where "indecision" starts to creep in.  Questioning if the results you achieved in backtesing & paper trading might have been down to luck. Let's persevere, give it another month, it's only money.




Skate.


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## Skate (6 November 2021)

*The Platinum Strategy*
I'm now wishing I didn't start posting accurate results - I should have "cherry-picked" the date range to show the strategy in a better light. I'm sure you would need "balls-of-steel" to keep trading it after two months of dismal performance. Well, I've gone this far, I'll keep going.

*Backtest period (July & August & September 2021)*
Now, that's more like it. For some strange & unexplainable reason, the system seems to be back on track. Let's give it another month as it's starting to pick up a bit of steam as expected.

*

*

Skate.


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## Skate (6 November 2021)

*The Platinum Strategy*
After 3 months we are making headways, I'm now in two minds if the momentum can keep going, or is it going to fizzle & burn?

*Backtest period (July & August & September & October 2021)*
There's been a slight knockback, similar to what is being reported in other threads, so there is no need for concern.

*



What is concerning*
I have to start it all again on Monday. Accepting early setbacks when starting a new strategy is a hard pill to swallow.

Skate.


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## qldfrog (6 November 2021)

MovingAverage said:


> All those minimums will equal minimum profit. That is a very de-risked system (which is fine) but with minimal risk there is minimal profit.



Indeed a term deposit would fit the bill😉and not too bad long term...


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## Newt (6 November 2021)

Not suprised at the lumpiness this financial year TBH Skate.  And sideways is better than down  

Would be interested to see the odd weekly equity curve on some of your longer backtests.  Fantastic extra info in how these strategies hold through difficult periods, defend in market pullbacks, surge in the goodtimes.  We're all tempted to go for the nice smooth 45 degree equity curve but of course its not realistic when trading weekly.

Know what you mean about sucker punches.  Plenty of opportunities to learn from school of hard knocks in recent years!


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## Skate (6 November 2021)

*Start date:  *8th November 2021
*Portfolio Capital: * $100,000
*Positions in the portfolio: * 10
*Position Size:*  $10,000 (no rebalancing)




Skate.


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## Skate (6 November 2021)

Newt said:


> Would be interested to see the odd weekly equity curve on some of your longer backtests




*Longer backtest*
I'll post a few backtest for some of my trading strategies. I've used exactly 3 years for them all. Why? because the first quarter of 2020  covers the period of the Covid Flash Crash. My mature strategies were at that stage well in profit but still managed to give back a portion of that profit, unfortunately.

*Carrying on the theme of starting a new strategy at the worst possible time*
In my opinion, starting a new strategy on the 6th November would have tested the best of traders. These 4 strategies are solid performers & snuggle into my stable of trading strategies just nicely.

*Disclaimer*
1. The portfolio size is a standard $100k for ease of comparison.
2. I don't trade $100k portfolios.
3. I use rebalancing whereas the backtest don't.
4. I normally don't restrict my PositionSize to 10-positions or 20-positions.
5. The backtest reports are to demonstrate the returns with $100k invested over the previous 3 years

*The BlueWren Strategy*
This strategy is as old as me & over time it just won't die, it manages to hold its own even when the going gets tough.
*Portfolio size:* $100k
*Positions in the Portfolio:* 20
*Bet size:* $5k





*The FreeBalling Strategy*
This strategy is rather new & has been trading since April of this year & the performance is solid.
*Portfolio size:* $100k
*Positions in the Portfolio:* 20
*Bet size:* $5k





*The PocketPivot Strategy*
I have @peter2 to thank for making me look at trading this type of strategy. It's amazing that it performs as well as it does. The idea behind this strategy is robust & outside my comfort of trading. I've been trading this strategy for some time now & I have a mindset that the performance of this strategy won't last - but to my surprise it has.
*Portfolio size:* $100k
*Positions in the Portfolio:* 20
*Bet size:* $5k





*The Simple Strategy*
I like the concept behind this strategy, I like the methodology of entry. Let's cut to the chase "I love this strategy"
*Portfolio size:* $100k
*Positions in the Portfolio:* 10
*Bet size:* $10k




*Summary*
The returns for four of my strategies are not over the top but they are consistent rock-solid performers. Displaying some of my other strategies would just be puffing.

Skate.


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## peter2 (6 November 2021)

How about my favourite Skate system - "*The Hybrid Strategy*", whose multiple entry strategies miss nothing.


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## Skate (6 November 2021)

peter2 said:


> How about my favourite Skate system - "*The Hybrid Strategy*", whose multiple entry strategies miss nothing.




*The Hybrid Strategy*
This strategy is currently a $650k portfolio with 40-positions. To compare & contrast the portfolio to the others I've posted the strategy has been adjusted.

*Portfolio size:* $100k
*Positions in the Portfolio:* 20
*Bet size:* $5k




*The Panda Strategy*
I'm very proud of this strategy & have been trading it for years. This strategy holds a very special place because it was the first strategy to get my eldest son involved in trading. I'm so relieved it kicked him off into profit from the get-go.

*Portfolio size:* $100k
*Positions in the Portfolio:* 10
*Bet size:* $10k




Skate.


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## MovingAverage (6 November 2021)

othmana86 said:


> @Skate! I concur firing up your system at a particular time could have significant effect on the system. Will just have to wait so it smoothens out



Over the long term (and I mean in terms of having executed many thousands of trades) when you start should have marginal impact over the long term. Yes, when you start will impact the short term, but not long term


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## DaveTrade (7 November 2021)

qldfrog said:


> Indeed a term deposit would fit the bill😉and not too bad long term...



If a term deposit would fit the bill, I would use a term deposit. You sound like you may doubt my ability to know what I'm doing and why I'm doing it.


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## Skate (7 November 2021)

DaveTrade said:


> You sound like you may doubt my ability to know what I'm doing




*Before it escalates*
The response wasn't directed at me but I must say I didn't take that from the response @qldfrog gave to you. Terms deposits are those who want to invest in the safest way possible. 

*The "Dump it here' thread is a little bit different from most threads *
The "Dump it here" thread is conducted in a friendly & polite manner that I find refreshing. Being "nice" is a gift to others. I'm just saying "minor comments" can get out of hand quickly.

*Reaction*
A person's "reaction" is driven by their "perception". We are all emotional critters & sometimes our response is motivated by it.

Skate.


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## qldfrog (7 November 2021)

DaveTrade said:


> If a term deposit would fit the bill, I would use a term deposit. You sound like you may doubt my ability to know what I'm doing and why I'm doing it.



Not at all, we are not on FB here and conversations are generally honest .
I just pointed TD to show that you will need to take risks to have above index performance.
In no way an attack.


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## Skate (7 November 2021)

*Timely reminder*
At times there have been snide remarks made that are "unacceptable" in the "Dump it here' thread but none have been made in the last few days (IMHO). Emotional responses tend to undermine the friendly atmosphere of any thread, just not this one. It also pays to remember that everyone is entitled to their opinion. The "Dump it here" thread by design is to "pass on knowledge" to others (chewing the fat, is how we learn).

*Being right or wrong*
Whether your view is right or wrong isn't important, what's more important, this thread gives you the ability to express your views without being "ridiculed or challenged". Every member enjoys a different level of experience & expertise, so there is never a reason to display your level of knowledge by making others feel inferior. If you disagree with someone rather than argue the merits of their points, post an alternative view, you don't have to belittle members to get your point across. Play the "the point" not the "person". 

*Summary*
Ridiculing or challenging others serves no purpose, it just makes the other person work harder to find ways to disagree with you. Offending a member is hard to detect, however, some members post comments or questions to invoke an emotional response. (let's not do that)

Skate.


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## DaveTrade (7 November 2021)

qldfrog said:


> Not at all, we are not on FB here and conversations are generally honest .
> I just pointed TD to show that you will need to take risks to have above index performance.
> In no way an attack.




Every investment has it's risk even a savings account, people seem to have read the word 'minimum' as being a predetermined value that I have already specified before I start. It's meaning here is simply to wind down the profit to what I find acceptable thereby reducing the risk side to the minimum in order to obtain this amount of profit.



Skate said:


> Before it escalates




When I was in the workforce I was the guy that was called to a problem when nobody else could fix it, so maybe I still have some adjustment to retirement to do. This is the first time I've been on a forum and sometimes posts can be too brief thereby lending themselves to an incorrect interpretation by the emotional reader.


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## MovingAverage (7 November 2021)

Skate said:


> *Summary*
> Ridiculing or challenging others serves no purpose, it just makes the other person work harder to find ways to disagree with you. Offending a member is hard to detect, however, some members post comments or questions to invoke an emotional response. (let's not do that)
> 
> Skate.




The regular contributors in this thread are always super helpful and their posts are always well intentioned. I honestly don't think the regulars engage in any ridiculing. Part of the issue is that sometimes the "tone" of posts can be misinterpreted by the reader if the reader is not familiar with a particular poster's style. Whole heartedly agree ridiculing serves no purpose, but challenging (when done right) is a great thing as it can cause us to stop and question our approaches.

Anyhow, stay classy ASF


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## Skate (7 November 2021)

MovingAverage said:


> but challenging (when done right) is a great thing




Yes, the best challenge is to post an "alternative" view. 

*We all deserve a measured response, not the alternative*
The best posts are the ones you "think" about before posting or replying to.

*T* - is it *true*?
*H* - is it *helpful*?
*I* - is it *inspiring*?
*N* - is it *necessary*?
*K* - is it *kind*?

Skate.


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## Skate (7 November 2021)

*Changing the current direction of the thread*
I want to make a few comments on trend-following. I trade a few weekly trend-following strategies, placing my orders before the market opens hoping to be settled at the opening price of the day. Trading this way simulations my backtest results.

*Your ability to understand*
The ability to understand what your strategy will go through beforehand is probably the best way to deal emotionally with your trading. Backtesting a strategy measures how likely a drawdown will be, how deep it will be & what the worst-case is likely to be when using historical data. As long as your portfolio’s drawdown is within these statistical measures, you know the system is working as planned. Knowing these metrics can help you understand why trading at times can be a roller coaster ride.

Skate.


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## Skate (7 November 2021)

*Some posts resonate more than others*
_"Maths, Science, Psychology, Emotions, Computers, Programming - you had me here"_

*Older posts*
I've been reminded recently by a private message that the "Dump it here" thread has a trail of information that they have found very useful. Members contributing their point of view to me is the most "valuable" part of this thread as I'm only repeating stuff that I already know.

*To a great degree, our success or failure in the market is a function of our luck *
We all like to think that our trading results are a direct consequence of our effort in selecting a position to enter, but to me, it's all about the ability to effectively manage luck. Small traders know that sometimes they will have streaks of bad luck, & other times everything they touch is golden. The key to surviving your run of bad luck is by minimising the amount of damage being inflicted. (how to minimise the damage, is for another discussion). 

*The other side of the equation is to capitalize when your luck is good*
Designing good money management principles to a degree helps but our "success or failure" is having an aggressive approach toward selling but that isn’t enough. In designing a money management system, your first consideration should be how well it protects your capital should your run of bad luck continues. This should be the topic of the conversation.

Skate.


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## qldfrog (7 November 2021)

Skate said:


> Yes, the best challenge is to post an "alternative" view.
> 
> *We all deserve a measured response, not the alternative*
> The best posts are the ones you "think" about before posting or replying to.
> ...



While obviously i f.u. a big way a few posts ago🥴on that thread,
Will need to pass that filter here as well
I found this is a very useful guide on FB and i deleted heaps of posts before clicking send.
The only negative is that it leaves no place to humour.
Mine being bad and more Dad's jokes leve, it is probably a plus but makes the world a more boring place


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## Skate (7 November 2021)

qldfrog said:


> leaves no place to humour




Humor is always welcomed.

*Praying*
Do you really think I pray when trading turns south? Where in reality I just go & “kick my dog” (only joking, I don’t have a dog, lucky him)

*Another* 
I fell into a trap, ordering a “penis enlarger” off eBay whilst in lockdown. I was disappointed to receive a “magnifying glass”

Skate.


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## othmana86 (9 November 2021)

MovingAverage said:


> Over the long term (and I mean in terms of having executed many thousands of trades) when you start should have marginal impact over the long term. Yes, when you start will impact the short term, but not long term



You are right. However in terms of the “mental and emotional “ state for that initial period it is tougher. I did a backtest and had I started the system just 1 or 2 weeks later today it would have been up approx 20 percent. Just knowing that makes me feel better about the strength of the system. Doubt will always seep in though until I see that system back in the green. It’s just human nature haha!


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## MovingAverage (9 November 2021)

othmana86 said:


> You are right. However in terms of the “mental and emotional “ state for that initial period it is tougher. I did a backtest and had I started the system just 1 or 2 weeks later today it would have been up approx 20 percent. Just knowing that makes me feel better about the strength of the system. Doubt will always seep in though until I see that system back in the green. It’s just human nature haha!



For sure, absolutely agree. Sometime system trading is portrayed as being easy—computer just spits out buys and sells and you just execute. But as you point out there is still a very big emotional aspect to system trading that can be very challenging to master and no doubt has been the undoing of many a good system if only folks didn’t let the emotions get in the way (which is far easier said than done)


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## qldfrog (9 November 2021)

MovingAverage said:


> For sure, absolutely agree. Sometime system trading is portrayed as being easy—computer just spits out buys and sells and you just execute. But as you point out there is still a very big emotional aspect to system trading that can be very challenging to master and no doubt has been the undoing of many a good system if only folks didn’t let the emotions get in the way (which is far easy said than done)



However good and backtested, whether you built your system or bought it,are using a black box,you are always facing a doubt.
Is the algorithm bug free, is the algorithm right for the current condition , worse the future?
As the future changes,..
Is that DD a drawdown or the start of a slide to zero.
Even if you are statistically right now and in the future, stats are stats so this also means you can be "unlucky" to have a max DD today ,and next week,and the week after
Basically it is possible to have a perfectly good system,suited to prevalent market conditions and yet see your capital hit again and again.anihilated
My way to counter both? Probability and changing environments: so
Diversification (multiple systems on different algorithms)
Diversification (of system realms)
Diversification ( of assets: real estates, currencies, precious metals,cryptos discretionary and system trading)

This means i should get a relatively safer overall outcome,but it ALSO means that you NEVER make a killing and double your wealth in 6 months.
That allows me (more) serenity and make it easier to push the buy and sell as per system "instructions"
For what it is worth...
I think one of Mr Skate's motto/rule is of the kind of
"Do not 'play' what you can not afford to lose"
Rule number 1 indeed


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## MovingAverage (9 November 2021)

qldfrog said:


> However good and backtested, whether you built your system or bought it,are using a black box,you are always facing a doubt.



There's never a perfect time to start trading. One thing is absolutely certain about trading--you will always encounter periods where you results are crap.


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## DaveTrade (9 November 2021)

qldfrog said:


> I think one of Mr Skate's motto/rule is of the kind of
> "Do not 'play' what you can not afford to lose"
> Rule number 1 indeed



One of the ideas I have for my new system (still in design phase) is to also have an eject lever in the the aircraft. To set a point below all drawdown levels obtained from backtesting that defines that something has failed to such a point that the integrity of the system has failed.


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## MovingAverage (9 November 2021)

DaveTrade said:


> One of the ideas I have for my new system (still in design phase) is to also have an eject lever in the the aircraft. To set a point below all drawdown levels obtained from backtesting that defines that something has failed to such a point that the integrity of the system has failed.



Haven't thought this through too much but I'm not sure setting a point below backtest drawdown levels is an accurate indicator of system integrity failure. Think about the Covid crash. Certainly many systems (particularly those based on longer time frames such as weekly or monthly) would have experienced much larger drawdown than previously shown by backtests prior to that crash. I know my weekly did--look at my recent post of my weekly's P&L through the crash. Reality is the integrity of my system wasn't broken we just had not seen the market crash before so quickly so my backtests on historical data gave no insight into the system's behavior in such market conditions. I've since tweaked my weekly to better handle similar rapid crashes. This is the problem with backtesting on historic behavior--it gives you no insight into new market behaviors that may emerge in the future. One of the things I think would immensely help system testers is the ability to generate random market data to augment your system testing with actual historical market data.


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## DaveTrade (9 November 2021)

MovingAverage said:


> Haven't thought this through too much but I'm not sure setting a point below backtest drawdown levels is an accurate indicator of system integrity failure. Think about the Covid crash. Certainly many systems (particularly those based on longer time frames such as weekly or monthly) would have experienced much larger drawdown than previously shown by backtests prior to that crash. I know my weekly did--look at my recent post of my weekly's P&L through the crash. Reality is the integrity of my system wasn't broken we just had not seen the market crash before so quickly so my backtests on historical data gave no insight into the system's behavior in such market conditions. I've since tweaked my weekly to better handle similar rapid crashes. This is the problem with backtesting on historic behavior--it gives you no insight into new market behaviors that may emerge in the future. One of the things I think would immensely help system testers is the ability to generate random market data to augment your system testing with actual historical market data.



Thank you for your post, it shows me that this feature does need more depth of thought. The eject from the system feature may still be useful depending on the type of system a person is using. I'm planning on a system that trades both long and short so it will have a built in characteristic to be out of longs and looking for shorts when a market turns down. This characteristic will limit losses in itself from a market crash situation, but the area where it may be useful is from consecutive losses. So it's not the market crash that I'm most concerned about it's the change in the characteristics of the market that can shoot me down in flames.

The point you made about crashes is not one to dismiss, I will test through previous crashes and then give some thought to how the system would react to a much steeper and faster crash if it happened. Thanks for your feedback.


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## DaveTrade (9 November 2021)

MovingAverage said:


> Think about the Covid crash. Certainly many systems (particularly those based on longer time frames such as weekly or monthly) would have experienced much larger drawdown than previously shown by backtests prior to that crash.



My system is planned to be based on weekly price bars as you have mentioned above and as you may have seen from my previous postings, I am very focused on managing risk. I don't think that I could do what you have done when you held to your system through such a long period. I would make sure I knew my system inside out as you did but I would also have my wife looking over my shoulder questioning me. So what I've got on the drawing board is limiting each trade to a 5% account exposure. I also plan to eliminate gap down risk by using options, this means that my 5% max risk per trade will be unbreakable.


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## MovingAverage (9 November 2021)

DaveTrade said:


> My system is planned to be based on weekly price bars as you have mentioned above and as you may have seen from my previous postings, I am very focused on managing risk. I don't think that I could do what you have done when you held to your system through such a long period. I would make sure I knew my system inside out as you did but I would also have my wife looking over my shoulder questioning me. So what I've got on the drawing board is limiting each trade to a 5% account exposure. I also plan to eliminate gap down risk by using options, this means that my 5% max risk per trade will be unbreakable.



Having a wife looking over your shoulder is a good thing…keeps you accountable 😂


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## DaveTrade (10 November 2021)

I came to this thread to have a casual interesting read, ‘a drink at the bar’ so to speak, and found a group of people immersed into system trading. I’ve always loved systems, in my day to day life I create systems to do most things and not just a way to do it but the most efficient way. My wife’s systems of doing things use to drive me crazy and I’d try to show her a better way but I grew up and realised that you can’t move a mountain, I also found a warming richness that came from seeing things from another person’s eyes, she’s taught me a lot. My mind has been impregnated with the idea of building a system of my own, a new baby, he or she is only an embryo at the moment but I’ve already been thinking about names. I’ve come with the NTW system. It stands for Not The Worst system, and I hope it won’t be, we all want our kids to have a good and successful life don’t we. I’m not sure how useful or interesting this post would be to anyone reading it but like any new dad, you just want to go and tell everyone.


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## MovingAverage (10 November 2021)

DaveTrade said:


> I came to this thread to have a casual interesting read, ‘a drink at the bar’ so to speak, and found a group of people immersed into system trading. I’ve always loved systems, in my day to day life I create systems to do most things and not just a way to do it but the most efficient way. My wife’s systems of doing things use to drive me crazy and I’d try to show her a better way but I grew up and realised that you can’t move a mountain, I also found a warming richness that came from seeing things from another person’s eyes, she’s taught me a lot. My mind has been impregnated with the idea of building a system of my own, a new baby, he or she is only an embryo at the moment but I’ve already been thinking about names. I’ve come with the NTW system. It stands for Not The Worst system, and I hope it won’t be, we all want our kids to have a good and successful life don’t we. I’m not sure how useful or interesting this post would be to anyone reading it but like any new dad, you just want to go and tell everyone.



Without giving away your secret sauce it would be great to hear a little more about how you envisage NTW operating. Also, are you planning to use AB or something else for system evaluation?


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## qldfrog (10 November 2021)

DaveTrade said:


> I came to this thread to have a casual interesting read, ‘a drink at the bar’ so to speak, and found a group of people immersed into system trading. I’ve always loved systems, in my day to day life I create systems to do most things and not just a way to do it but the most efficient way. My wife’s systems of doing things use to drive me crazy and I’d try to show her a better way but I grew up and realised that you can’t move a mountain, I also found a warming richness that came from seeing things from another person’s eyes, she’s taught me a lot. My mind has been impregnated with the idea of building a system of my own, a new baby, he or she is only an embryo at the moment but I’ve already been thinking about names. I’ve come with the NTW system. It stands for Not The Worst system, and I hope it won’t be, we all want our kids to have a good and successful life don’t we. I’m not sure how useful or interesting this post would be to anyone reading it but like any new dad, you just want to go and tell everyone.



Go and create a thread based on your process.
It is interesting for others, and a way to record your process, your thought at a time , a journal.
I would encourage you if you are dedicated to a long term involvment


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## qldfrog (10 November 2021)

qldfrog said:


> Go and create a thread based on your process.
> It is interesting for others, and a way to record your process, your thought at a time , a journal.
> I would encourage you if you are dedicated to a long term involvment



It has helped me greatly in my own voyage


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## Skate (10 November 2021)

DaveTrade said:


> I’ve come with the NTW system. It stands for *Not The Worst system*




*Acronym*
@DaveTrade, good on you for having a go. 

*Coding the WTT Strategy in 12 easy steps*
For those with Amibroker I posted my version of how to code Nick Radge's WTT Strategy in 12 easy steps with each line "commented" so others could follow along. The series of posts may or may not spark interest for you but I'm sure there will be extreme interest in the progress of constructing your "NTW Strategy". I'll be following your progress as I'm sure @MovingAverage & @qldfrog will be as well.  

*The Chartist TurnKey Trading System*








						WEEKEND TREND TRADER STRATEGY
					

The Weekend Trend Trader Strategy is the code for the system defined in the Weekend Trend Trader eBook. Trades once a week.




					www.thechartist.com.au
				




*The "WTT Strategy" construction explanation starts here*




__





						Dump it Here
					

Amibroker & Norgate Data This is a match made in heaven. I'll be using Amibroker to code the "Weekend Trend Trader Strategy" & using Norgate as the data supplier. Amibroke & Norgate data are both programs that are needed to develop a trading strategy as one program without the other is less than...




					www.aussiestockforums.com
				




*Start of the construction*




__





						Dump it Here
					

Hi @MovingAverage  Many thanks for the detailed reply. I will try adding in you Amibroker code to delve further into Monte Carlo testing in Amibroker with my system and see what i come up with. Totally agree re including 'fixed dollar position sizes' when testing. So far my system is tracking...




					www.aussiestockforums.com
				




*WTT Code (downloadable)*




__





						Dump it Here
					

The order of construction 5. Add a sell condition    Skate.  Great posts @Skate . Quick question:- am I correct to assume there are two sell conditions in this system? A) when the stop is triggered; and B) the other being when the close crosses below the 25 period ma of the close?




					www.aussiestockforums.com
				




Skate.


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## Skate (10 November 2021)

*The Chartist "Large Cap Momentum Strategy" *
There are a few members trading this strategy from the Chartist as it suits their needs for the simple reason it specifically targets "Large Cap stocks" that are outperforming their peers & trading only once a month.

*I'm following with interest*
@Cam019 has bitten the bullet purchasing Nick Radge Large Cap Momentum turnkey strategy because coding is so hard deciding to outsource the job as it is much easier & less time-consuming. The Chartist "Large Cap Momentum Strategy" is one of a few "TurnKey" strategies that can be purchased knowing full well they have all been professionally coded with backtest results for all to see.



			https://www.aussiestockforums.com/threads/cam019-asx-weekly-superannuation-portfolio.34599/post-1145724
		


*Customizable turnkey system*
@Warr87 has purchased the same "Large Cap Momentum Strategy" from the Chartist & has been trading the strategy with pleasing results for a few months now. It should be noted that Warr has chosen to trade it somewhat differently choosing to run his system on the ASX300 & not the ASX100 as Radge suggests with 10 positions, not 5 & electing not to run an Index Buy filter (I assume). Warr to his credit has made the strategy his own whilst remarking that his custom setting in comparison may be riskier than Radge's but in his opinion, it's worth taking the extra risk.





__





						Monthly Momentum - ASX300 Super
					

This thread will be for my new monthly momentum system that will be traded on the ASX300 universe within a super account.  A few things:  This system is based off code bought from Nick Radge. It is, however, not the original parameters and has been modified to suit my needs. It is not a...




					www.aussiestockforums.com
				




Skate.


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## ducati916 (10 November 2021)

Skate said:


> *To a great degree, our success or failure in the market is a function of our luck *
> We all like to think that our trading results are a direct consequence of our effort in selecting a position to enter, but to me, it's all about the ability to effectively manage luck. Small traders know that sometimes they will have streaks of bad luck, & other times everything they touch is golden. The key to surviving your run of bad luck is by minimising the amount of damage being inflicted. (how to minimise the damage, is for another discussion).
> 
> *The other side of the equation is to capitalize when your luck is good*
> ...




This rather important point didn't seem to garner much interest.

Risk, what we all trade is defined as the 'unknown future'. 

As such, that is equivalent to 100% unknown or 100% luck (good or bad).

A system or methodology seeks to (as Mr Skate stated) capitalise good luck and either capitalise or minimise bad luck. The system's traders on this thread, as far as I can see, essentially follow the model of (a) minimise through exit of position(s) if bad luck is an outcome and (b) holding a position (long) for as long as good luck holds.

Of course, pure luck, you would expect to follow a 50/50 type distribution, balancing out over time. Clearly again, the lack of long/short systems on this thread and others, there is an upward bias to (stock) markets vis-a-vis Central Bank interventions and arguably any number of other macro-economic variables.

The issue therefore is that trading that bias makes sense, but, increasingly, when bad luck intervenes, the break, due to a number of reasons, has increased in its speed and % decline.

Therefore 'exits' need (i) accuracy, (ii) speed of recognition, (iii) management of liquidity issues, (iv) whether the entire portfolio is exited and whether there is a hedged type of position or portfolio that runs concurrently.

I know that Mr Skate has emphasised exits far more than entries. I'm just curious to know whether the systems run, run a hedged system alongside/part of, the long system?

jog on
duc


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## qldfrog (10 November 2021)

ducati916 said:


> This rather important point didn't seem to garner much interest.
> 
> Risk, what we all trade is defined as the 'unknown future'.
> 
> ...



without disclosing too much (actually disclosing MUCH), one way is to be long on bears..
What i mean here is some ETFs are bear and so a long only system including them allows for short play, 
you can also see Gold miners positions as "short" etc;
So my hope is that in a crash, my long only systems will go long into the "artificial" shorts and allow gain in crash
Works in BT..but backtests...


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## ducati916 (10 November 2021)

qldfrog said:


> without disclosing too much (actually disclosing MUCH), one way is to be long on bears..
> What i mean here is some ETFs are bear and so a long only system including them allows for short play,
> you can also see Gold miners positions as "short" etc;
> So my hope is that in a crash, my long only systems will go long into the "artificial" shorts and allow gain in crash
> Works in BT..but backtests...




Absolutely. So 2 chart examples. 

The first is BTC. The trouble is does the correlation hold or break?






So an inverse ETF




Far better. The issue of course is creating position size and rebalancing.

jog on
duc


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## Skate (10 November 2021)

ducati916 said:


> I know that Mr Skate has emphasised exits far more than entries. I'm just curious to know whether the systems run, run a hedged system alongside/part of, the long system?




*I'm a trend trader*
I trade mainly one type of strategy that has been proven to be profitable over the long run. I'm only interested in making the most money with the least amount of time & for these reasons I'm drawn to Mechanical System Trading.

*Hindsight*
We are chart "experts in hindsight" but system trading picks the moves in real-time. Also using a "Take Profit Stop" these days is certainly a sign of the times by adopting this feature in your strategy allows you to advantage of the shift in trading since COVID.

*A recent trade*
This is one of my recent trades that indicates the use of a take-profit stop.

*With a "Take Profit Stop" activated*
The security is (VUL)






*With no "Take Profit Stop"*
You can argue that holding (VUL) a little longer (an additional 5 weeks) was fractionally advantageous but after the "Take Profit" exit & with the profits locked in we can "immediately" look for the next ride.

This is the point I want to get across (in Hindsight) the move eventually went higher but when we "Took Profits" we had "NO IDEA" how the next series of bars would have played out. (better safe than sorry)





Skate.


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## MovingAverage (10 November 2021)

Skate said:


> *I'm a trend trader*
> I trade mainly one type of strategy that has been proven to be profitable over the long run. I'm only interested in making the most money with the least amount of time & for these reasons I'm drawn to Mechanical System Trading.
> 
> *Hindsight*
> ...



I’m a big fan of profit based exits. I introduced one into my weekly some time ago. The reason I have a profit exit is that it suits my style of trading—I don’t like having large unrealised profit open for too long. Works for me. I’ve also introduced a swing system which exit intraday. Being a swing system I don’t have the same concern that I have with my weekly. In the case of my swing system it is just there to realise larger than expected profit from big intraday moves.


----------



## peter2 (10 November 2021)

*To a great degree, our success or failure in the market is a function of our luck*
_We all like to think that our trading results are a direct consequence of our effort in selecting a position to enter, but to me, it's all about the ability to effectively manage luck. Small traders know that sometimes they will have streaks of bad luck, & other times everything they touch is golden. The key to surviving your run of bad luck is by minimising the amount of damage being inflicted. (how to minimise the damage, is for another discussion)._

@ducati916  Nice to see that you occasionally "jog by". 

OK, luck. I totally reject the assumption that my trading outcome is due to luck. So, I disagree with the quoted statement. For me, trading luck is a random, spontaneous movement in price. Luck doesn't start a trend nor does it sustain one. 

As a discretionary trader I experience lots of lucky moments. Buying *CHN* the day before their resource upgrade, that's lucky. Buying *WBC* just before prices tanked, that's unlucky. The long term outcome of a trading system or methodology isn't the result of luck but the existence of an edge. In order to profit the edge must be positive, like the edge in a casino. Trading in an undisciplined manner (gambling) generally has a negative edge. A gambler can be lucky for a short period of time but over the longer term it's the gamblers edge that determines the outcome. 

The system traders in this thread have recently discussed the issue of timing risk. They incorrectly attribute their early results to "luck". Timing risk is merely one of the many risks to be addressed in a trading plan.


----------



## ducati916 (10 November 2021)

peter2 said:


> OK, luck. I totally reject the assumption that my trading outcome is due to luck. So, I disagree with the quoted statement. For me, trading luck is a random, spontaneous movement in price. Luck doesn't start a trend nor does it sustain one.




By your definition above, luck is a 'random spontaneous move in price'. 

Why does it not start or sustain a trend?

For example, we have a company (bio-tech) developing a new drug/treatment. It has no earnings. It has an upward sloping trend. The future brings either success or failure, or even something non-determinative and has invested significant amounts of capital during the process. There are to date, no positive fundamentals, which is what, a reliance on hope or analysis/knowledge? Tomorrows price bar is a function of what?





peter2 said:


> As a discretionary trader I experience lots of lucky moments. Buying *CHN* the day before their resource upgrade, that's lucky. Buying *WBC* just before prices tanked, that's unlucky.




Exactly.



peter2 said:


> The long term outcome of a trading system or methodology isn't the result of luck but the existence of an edge.




And what exactly is an edge but a systemised management of the unknown future or 'luck'?




peter2 said:


> In order to profit the edge must be positive, like the edge in a casino. Trading in an undisciplined manner (gambling) generally has a negative edge. A gambler can be lucky for a short period of time but over the longer term it's the gamblers edge that determines the outcome.




Gambling has its variations of risk management, card counting, martingale systems, probabilities, reading your opponents, etc. Ultimately, they can all come to nought if you are 'unlucky'!




peter2 said:


> The system traders in this thread have recently discussed the issue of timing risk. They incorrectly attribute their early results to "luck". Timing risk is merely one of the many risks to be addressed in a trading plan.





Probably beyond the scope of this immediate conversation.

jog on
duc


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## peter2 (10 November 2021)

ducati916 said:


> And what exactly is an edge but a systemised management of the unknown future or 'luck'?



LOL, try managing the unknown future, no way, too many possible outcomes. Managing luck, more LOL.

A system trader manages the results, known in real time, in such a way to create a positive future outcome.


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## Skate (10 November 2021)

*Wikipedia*
Luck is the phenomenon that defines the experience of notably positive, negative, or improbable events. That's trading in a nutshell.



Skate said:


> *Right or wrong it doesn't matter*
> The 'Dump it here' thread is not about right or wrong or whether you’re right & they're wrong that's not what is important. What is important is the choice of words members use to express an alternative point of view & expressing an opinion from experience in a respectful manner.






peter2 said:


> OK, luck. I totally reject the assumption that my trading outcome is due to luck. So, I disagree with the quoted statement.






ducati916 said:


> And what exactly is an edge but a systemised management of the unknown future or 'luck'?




*The "Dump it here" thread at its best*
Expressing an alternative point of view or an opinion in a respectful manner differentiate this thread from most.

Skate.


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## MovingAverage (10 November 2021)

I actually don't understand this debate about luck.

For those with a rigorous, disciplined and clear strategy to trading (whether it be trading based on fundamentals, charts, systems or discretionary) luck has nothing to do with their good fortune. Someone who blindly throws money at a stock with no basis for that decision and the stock price moves in a positive direction then that someone is lucky.

But as I said, those that have a rigorous, disciplined and clear strategy to trading are not relying or generally benefiting from luck. Their approach has a repeatable and consistent edge that is being exploited to be profitable; that is absolutely not luck. Sure the markets have a random element to it, but the market is not entirely random because if it was you would not be able to develop an edge and therefore no one would make money.


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## qldfrog (10 November 2021)

MovingAverage said:


> I actually don't understand this debate about luck.
> 
> For those with a rigorous, disciplined and clear strategy to trading (whether it be trading based on fundamentals, charts, systems or discretionary) luck has nothing to do with their good fortune. Someone who blindly throws money at a stock with no basis for that decision and the stock price moves in a positive direction then that someone is lucky.
> 
> But as I said, those that have a rigorous, disciplined and clear strategy to trading are not relying or generally benefiting from luck. Their approach has a repeatable and consistent edge that is being exploited to be profitable; that is absolutely not luck. Sure the markets have a random element to it, but the market is not entirely random because if it was you would not be able to develop an edge and therefore no one would make money.



statistically, the markets are linked to economic growth + currency/FIAT inflation which insured so far (last 2 centuries) that markets do trend higher.
As such, random investing means money making anyway on average;
So a majority of random traders will be winners;
When "luck" strucks repetitively one way, then yes you are good/bad and you have an edge, or not;
you make your luck, but that is life, same with building business, a startup, property investment;
few people are lucky, they just dare to play their odds again and again and learn from their mistakes;


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## MovingAverage (10 November 2021)

qldfrog said:


> As such, random investing means money making anyway on average;



I'm not sure about that--have to think this through a bit more but for random investing (that is, literally picking stocks out of a hat) to work that would imply a consistent 50/50 split between advancers and decliners (which I'm pretty certain isn't the case) and the advancers would, on average, move up at a level that is greater than the move down for decliners. Like I say, need to think that through some more but I'm pretty certain the market doesn't exhibit that behavior over a reasonable period of time which is why picking stocks out of a hat is not profitable


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## Warr87 (10 November 2021)

Skate said:


> *The Chartist "Large Cap Momentum Strategy" *
> There are a few members trading this strategy from the Chartist as it suits their needs for the simple reason it specifically targets "Large Cap stocks" that are outperforming their peers & trading only once a month.
> 
> *I'm following with interest*
> ...




There is certainly some safety in purchasing Radge's code. He's the only one I ever suggest to people to actually spend money on for code (I'm sure there are others who are trustworthy but there are a lot of scammers out there). Radge's code is also good 'right out of the box'. I find for the universe it was on, it had great default parametrics. Wasn't over fitted, seemed robust, so I was pretty surprised. But as mentioned I did change it to suit my risk profile a bit more. Some traders don't even like handling 10% DD, so it makes sense that Radge would make his more risk adverse. I'm fine with 20-25% DD so I was comfortable to adjust and reap the benefits that come with it.

Buying the code also served another purpose. I get to see how it was coded, how it was ranking buys, and these things helped with my other coding. I had to pay for the priviledge, but seeing a professional piece of code and its mechanics was helpful to me.

Best of luck to Cam and his trading this strategy. I'm curious to see how they match up.


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## DaveTrade (10 November 2021)

MovingAverage said:


> Without giving away your secret sauce it would be great to hear a little more about how you envisage NTW operating. Also, are you planning to use AB or something else for system evaluation?



A bit about what I’m planning with the NTW system.

My first concern with this new system is managing risk, it’s the reason why I decided to learn options when I came back to trading after temporarily losing all my trading funds in the ManFinancial collapse. I’ve come to realize that managing risk is the most important aspect of trading the markets. Options are the only thing I know of that can give me a hard stop-loss in the market.

Options will give other benefits though, they will also increase my return on investment (ROI) if I want them too. I have a choice, I can go for a similar return that I would have made if I had purchased an ETF or share but I could do it putting a much lower amount of money at risk, or, I could have the same amount of money at risk on the trade but enjoy a much larger return. I will probably end up using options in a way that will give me a bit of both as I am also managing my risk at the account level with my maximum 5% of the account exposure on a single trade.

I’m also thinking that the system will have a maximum of six trades active at the same time resulting in a maximum system exposure to risk of 30%. I know that this is very different to other systems being traded by people on this forum. These are risk parameters that I got from Larry Williams, the famous trader. He is of the opinion that a trader cannot handle more than six trades at the same time effectively. I had the pleasure of meeting him when he came to Sydney years ago. I couldn’t resist doing a bit of name dropping for fun but the truth is I don’t know him personally; I did a course with him in Sydney.

I will tell more about my system plans in a later post.


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## DaveTrade (10 November 2021)

DaveTrade said:


> I will tell more about my system plans in a later post.




I’m planning on doing manual backtesting for this system. I think that manually backtesting a system gets you closer to the experience of actually trading it, especially if you are stepping the market through bar by bar. I want to know the system, I want be familiar with what I may be seeing when trading it for real. When I’m trading with real money looking at the far right edge of the screen I want my minds dialogue to be saying to itself “yes I’ve seen this before”.

In the first backtest I’m planning to use two markets, I know I said the system can trade six but at this point I’m not sure if I will ever have six trades open or if I’ll need to have that many to obtain a good return. I think it will come down to how many markets will be required to find trading opportunities without having long gaps in time between trades.

In the initial backtest the first market that I chose is the SPY ETF. Because I’m planning to use options I need to trade markets that have good option liquidity and the SPY is one of the best. I won’t be using volume as an indicator so an ETF works fine, volume is more useful when trading stock. When looking for a second market to add, I wanted a market that may be trending when equities were not, a case in point was the year 2015 when the SPY basically went sideways for the entire year. Maybe if you were trading a smaller time frame then you would be OK but my system is based on weekly time periods. My first thought was a Bond market but I really wanted a market that trends well so I thought of Commodities. The second market I picked to test is the DBC ETF. Testing these two markets will tell me a lot about the system and with this information more decisions and adjustments can be made.


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## ducati916 (11 November 2021)

MovingAverage said:


> I actually don't understand this debate about luck.






MovingAverage said:


> For those with a rigorous, disciplined and clear strategy to trading (whether it be trading based on fundamentals, charts, systems or discretionary) luck has nothing to do with their good fortune.



The words used, are all words that I would agree, should provide a profit. All of the same words can be employed when flipping a coin. In other words, these qualities do not establish whether luck or (pure) skill are responsible for those returns.




MovingAverage said:


> Someone who blindly throws money at a stock with no basis for that decision and the stock price moves in a positive direction then that someone is lucky.




Agreed.





MovingAverage said:


> But as I said, those that have a rigorous, disciplined and clear strategy to trading are not relying or generally benefiting from luck. Their approach has a repeatable and consistent edge that is being exploited to be profitable; that is absolutely not luck.




Is that 'edge' truly (a) consistent and (b) repeatable?

I would argue that all edges lack consistency. They (your edge) do not perform 100% of the time. If they are not 100% consistent, then something else is a variable. If you don't have (a) how can you have (b)?



MovingAverage said:


> Sure the markets have a random element to it,




If there is an element of 'randomness', how do you define what that random variable is?




MovingAverage said:


> but the market is not entirely random




I assume because trends exist. My question is: can a trend be intact on Monday and break on Tuesday, 1 day later? The answer is yes. Why? Because something in the future changed. Surprise bad earnings, fraud, etc. The list is endless.

That future is unknown. It can be good, bad, indifferent. Whatever you want to call it, luck, uncertainty, probability: they all have the same effect, which is potentially a break from yesterday's, historical, result.



MovingAverage said:


> because if it was you would not be able to develop an edge and therefore no one would make money.




Actually that is incorrect. Totally random movement can be traded very profitably. Essentially what you are trading is a coin toss or luck. For good luck to exist, there must also be bad luck, where you lose. There is. In other words, there is not a risk-less trade. But in trading in this manner, you accept and embrace that luck or randomness as a methodology.

I think the issue around 'luck' is that using this word implies a lack of skill, intelligence or some other positive quality that separates the successful trader from the wannabe. This is ego. Ego can be a very dangerous quality in financial markets as it can lead you into error.

Isn't the very undertaking of a mechanical system an exercise in trying to remove as much subjectivity from trading decisions as possible and to replace it with objectivity?

jog on
duc


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## MovingAverage (11 November 2021)

ducati916 said:


> The words used, are all words that I would agree, should provide a profit. All of the same words can be employed when flipping a coin. In other words, these qualities do not establish whether luck or (pure) skill are responsible for those returns.
> 
> 
> 
> ...



Duc: you and I have had a debate in the past on a similar randomness discussion so think we will always have differing opinions. But I will make the following comments -

No, you cannot use my same words for a coin flip--this is a completely incorrect and misleading statement. Over time a coin flip has a 50/50 chance of being heads or tails. There is absolute no bias in this outcome--there is absolutely no system or method you can use to predict the outcome of a coin flip over time to a point where you can beat the 50/50 split. So over time you will never be right more than 50% of the time when it comes to predicting the outcome of a coin flip.

Now let's look at just two of my systems--my swing system is right at predicting the outcome (I will make a profit) around 70% of the time. My weekly breakout system is right at predicting the outcome around 60% of the time.

Of course whether you are profitable is not just down to being right more than wrong--it also depends on your return or loss for each outcome. So again to your coin flip analogy. The question is how much do I get when I pick the right outcome and how much do I lose when I'm wrong. Let's keep it simple and with your coin flip reference so let's assume when you are right you get back 2* your stake and zero if you lose. Guess what, you'll only ever break even unless of course the "house" pays you back greater than 2* for picking the outcome and that will never happen. You coin flip analogy is nothing more than betting on black or red on the roulette table at the casino, but have you any idea why the 0 is on the wheel--it's gives the house a skew in their favour so that there is not a 50/50 chance of picking red or black.

Bringing this back to my systems that 2* payback on the coin flip is nothing more than the profit factor of my systems. Both my swing system and my weekly both have profit factors in excess of 1. So in the case of my swing system when it picks a winner 70% of the time I make money and when my weekly picks a winner 60% of the time I make money.

If after the above explanation you still think a coin flip analogy is suitable for the market...then???

I am absolutely not "essentially trading a coin toss". Anyone that is profitable is exploiting an edge. Some may do that knowingly and other may do that by pure lucky guess. But me personally, I am absolutely not trading a coin toss...I am exploiting an edge in my favour


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## Skate (11 November 2021)

Skate said:


> With trading you create your own luck by doing all the right things.




*Flipping 5 heads in a row*
Tossing five heads in a row comes down to luck, not skill. Luck can have all connotations & can mean something different to everyone. Sometimes luck comes down to timing. Skill is required when entering the markets but from that point on, it's in the hands of the "trading gods". 

*Trading gods*
I don't believe there are "trading gods" even though there is a god for everything these days, it's my way of expressing a "feeling" using certain words. Randomness, probabilities, luck, timing, convictions are just expressive words, nothing more or nothing less.



Skate said:


> *Another reference*
> In a conversation I'll drop the word "you know that sort" they can relate the story to whatever "that sort" means to them.




*"That sort"*
The expression "that sort" conjures up many flavours to express a point of view or a feeling I'm wishing to get across. If we were having a conversation & at the end of the conversation I say: "you know that sort" you would know "exactly" what I mean because we can all relate to "that sort". As with the word luck, "that sort" is an expressive word & not intended to diminish the skills required to be profitable at this game. 

*The Bradbury effect*
Australian Steve Bradbury was a former short track speed skater & four-time Olympian. He won the 1,000 metres event at the 2002 Winter Olympics after all of his opponents were involved in a last corner pile-up. Steve was a very skilled speed skater but "I believe" his win can be attributed to "luck" rather than "skill". Admittedly, Steve had to have "skill" to qualify for the Olympics & have the "skill" to make the finals but run that race five times over & the winner might have been different each time as the "luck" of your position on the last corner can ultimately decide the final result.

Skate.


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## MovingAverage (11 November 2021)

Skate said:


> *Flipping 5 heads in a row*
> Tossing five heads in a row comes down to luck, not skill. Luck can have all connotations & can mean something different to everyone. Sometimes luck comes down to timing. Skill is required when entering the markets but from that point on, it's in the hands of the "trading gods".



This is a great reference and is exactly why statistical significance is very important when it comes to understanding your system from backtests.

Picking the correct outcome of five successive coin tosses is very possible, but as the outcome is a pure random event for which NO technique or system will allow you to pick an outcome correctly so if you do it is very much down to absolute luck. It's a whole different ball game when it comes to picking the correct outcome for 1000 successive coin flips and even luck will not help you with that.

This is the very reason I gave up exploring a monthly system--I just could not get enough trades even over 20 years to give me a level of confidence that by backtests were reliable. No different to me picking 5 coin tosses and thinking "great I've got a system that will allow me to pick the outcome of a coin toss so I'm off to the casino to make my fortunes betting on red/black. That is exactly what someone is doing when they don't backtest a statistically relevant number of trades.


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## MovingAverage (11 November 2021)

I think a lot of traders (at least system traders) would benefit if they broke down trading into two very basic concepts used by professional gamblers and that includes asking themselves two very simple questions: a) what are the odds of me being right; and b) what is the payback. I am always asking myself that question. I find these basic principles very useful for thinking about my system expectations--look at your win % and your average profit and average loss. 

Coin flip analogy: I will be right 50% of the time (the odds) and what do I get paid if I pick the right outcome? Let's assume I just get my bet back (stake + bet) then over time I will only break even because 0.5 * (2 wager) = wager. Won't make money in the long term. So if I want to make money over the long term from a coin flip I have to find someone will to pay greater than 2x my wager. Only a fool would offer a pay greater than 2x my wager as they will lose money.

Same principles should be applied to trading. If I have low "odds" of picking a winner (stock going up if I'm long) then I have to look for trades with a bigger payback if I'm to be profitable. Profit Factor is effectively the payback in my coin flip example


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## DaveTrade (11 November 2021)

All I can say about luck is that I’m lucky I’m not involved in that conversation. Continuing the talk about systems, I’d like to say that although my approach is different to other systems that are being used by members of the forum I’m not inferring that it will be better. The value of any system depends on if it works or not, and, if it suits the mentality of it’s user.

Some people may think that I’m too focussed on having minimum risk but I look at it in a slightly different way. What I mean is that I look at risk as a variable that I manage depending on the situation. An example from my life experience; I started surfing in my early 50’s, at first I avoided larger surf conditions because I didn’t have the knowledge or skill to handle them, so the risk was high for me to be hurt or to hurt someone else or worse. Now I’ve gained more knowledge and skill to handle larger surf safely, so the risk is less than it was before even though the surf is the same size. Another way to look at it is that the risk is the same in the larger surf as it was before but now I’m able to manage the risk better resulting in a safer surf experience now than it would have been before.

When I try to explain myself I start to feel like I’m rambling, apologies to anyone that hasn’t stopped reading at this point.

Anyway, I have incorporated another element of risk management into my system. The system will have a trailing stop which I have coded to have a maximum distance from the current market of a certain percentage. I’ve coded the stop-loss indicator to have an input for this value so I can set it to whatever I wish. The stop-loss indicator does not trail the market by this value, the percent value merely provides a limit. For example, in a long trade if the trail stop calculates a value that is 8% below the current close and the percent limit is set to 7.5% then the stop-loss indicator will print on the chart at 7.5% below the market for that period. This feature will give me good risk management at the trade level so that a single horrific trade can’t over influence the system effectiveness.


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## Skate (11 November 2021)

Skate said:


> As a registered bookmaker for over 14 years & my brother a professional gambler for the past 47 years I want to say that most commentator sometimes gets some of the story correct but most times they don't understand. As with trading, bookmaking isn't gambling it's a numbers game, it mathematics '101'. Its fast, it furious, with complicated mental mathematical multiplications all done in the blink of an eye whilst calling out the calculations to a clerk to be pencilled in to the ledger. (The adrenalin rush was exciting). The mental gymnastics correlating the entire book was demanding but it was a required "skill" to evaluate the risk/reward & how each runner affected the outcome.




*Skill versus Luck*
When you are betting on anything whether it's racing or the markets there is always a degree of "skill" required but at times the outcome is a matter of "luck". Also, let's not get fooled by "randomness".

Skate.


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## MovingAverage (11 November 2021)

Skate said:


> *Skill versus Luck*
> When you are betting on anything whether it's racing or the markets there is always a degree of "skill" required but at times the outcome is a matter of "luck". Also, let's not get fooled by "randomness".
> 
> Skate.




Games of pure chance are very easy for casino to skew the house edge in their favour--there is no skill so input variables that are used to determine odds and payback can be set and forget. Horse racing etc etc have lots of real-time variables that must be factored in to adjust odds and paybacks otherwise the house could drop its edge


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## Skate (11 November 2021)

DaveTrade said:


> Continuing the talk about systems, I’d like to say that although my approach is different to other systems that are being used by members of the forum I’m not inferring that it will be better.




@DaveTrade when we start coding a new strategy we are being directed from the interpretation of what we have read. Most of our reading centres around trading-related material but at times we "focus" too narrowly & at times fail to understand the bigger picture.

*The One Thing *
"The One Thing" by Gary W. Keller & Jay Papasan.
The book discusses the value of simplifying one's workload by focusing on the one most important task in any given project. The book discusses the general business principle of choosing a single task to work on to theoretically maximize the efficiency of that task & the "extraordinary results", that can be achieved by actioning those principles.

Skate.


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## Skate (11 November 2021)

MovingAverage said:


> Games of pure chance are very easy for casino to skew the house edge in their favour--there is no skill so input variables that are used to determine odds and payback can be set and forget. Horse racing etc etc have lots of real-time variables that must be factored in to adjust odds and paybacks otherwise the house could drop its edge




@MovingAverage all the discussions so far have centred around the expressive word "luck". Others may think we are on different pages when it comes to "our view" let alone @peter2 views on the use of the word when it is related to his trading. But in reality, we are saying the "same thing" with more emphasis slated from a certain perspective or prominence. The two words "Skill" & "Luck" are both subjective & at times intertwines expressing the same meaning. We are flawed creatures & easy fooled by the randomness of events as well as the random outcome of those events.

*Fooled by Randomness*
"Fooled by Randomness" by Nassim Nicholas Taleb
This book explains why some people are successful where others aren't so lucky. It's a great read & highly recommended.

Skate.


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## qldfrog (11 November 2021)

MovingAverage said:


> I think a lot of traders (at least system traders) would benefit if they broke down trading into two very basic concepts used by professional gamblers and that includes asking themselves two very simple questions: a) what are the odds of me being right; and b) what is the payback. I am always asking myself that question. I find these basic principles very useful for thinking about my system expectations--look at your win % and your average profit and average loss.
> 
> Coin flip analogy: I will be right 50% of the time (the odds) and what do I get paid if I pick the right outcome? Let's assume I just get my bet back (stake + bet) then over time I will only break even because 0.5 * (2 wager) = wager. Won't make money in the long term. So if I want to make money over the long term from a coin flip I have to find someone will to pay greater than 2x my wager. Only a fool would offer a pay greater than 2x my wager as they will lose money.
> 
> Same principles should be applied to trading. If I have low "odds" of picking a winner (stock going up if I'm long) then I have to look for trades with a bigger payback if I'm to be profitable. Profit Factor is effectively the payback in my coin flip example



Yes, for once i agree with @MovingAverage  😊 win rate plus profit factor on significant statistically or/and  otherwise data determine profitability.
Please please please. Statistically relevant data is different in stock market from your random generator in std stats.
You want big enough numbers sure but also relevant data.
Having 100 or even 1000 trades in the june to september post covid market boom is not relevant.

 MA and I disagree :-( but i also consider too old data as irrelevant.
You do not look at highway incidents stats including carriage crashes in the 1800's to determine road improvement today.
Well same with your trading system design..


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## othmana86 (11 November 2021)

qldfrog said:


> without disclosing too much (actually disclosing MUCH), one way is to be long on bears..
> What i mean here is some ETFs are bear and so a long only system including them allows for short play,
> you can also see Gold miners positions as "short" etc;
> So my hope is that in a crash, my long only systems will go long into the "artificial" shorts and allow gain in crash
> Works in BT..but backtests...



nice idea!


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## MovingAverage (11 November 2021)

qldfrog said:


> Please please please. Statistically relevant data is different in stock market from your random generator in std stats.



Why is it different?

Isn't conventual wisdom that the market is random--smarter people than I think so:  https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3708927/


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## othmana86 (11 November 2021)

Skate said:


> *I'm a trend trader*
> I trade mainly one type of strategy that has been proven to be profitable over the long run. I'm only interested in making the most money with the least amount of time & for these reasons I'm drawn to Mechanical System Trading.
> 
> *Hindsight*
> ...



Yep. Sold on the profit taker. My system CAR increased by 10% once I implemented it. I will say though it was discovered by complete accident (so was penicillin). The intention of the code wasn't to be a profit taker, ill put that down to good luck  .


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## Skate (11 November 2021)

othmana86 said:


> The intention of the code wasn't to be a profit taker, ill put that down to* good luck*  .




@othmana86 let's not mention the word "luck" again as it flames a different range of opinions. Let's use the words "good fortune" instead of "luck" as it might be more palatable to some. In hindsight, I should have selected a more appropriate word to express my opinion. I'm glad you & @DaveTrade have shifted the conversation to trading & trading ideas as it gives me a segue to change the conversation.

*Trading ideas*
Profiting from the stock market is exceedingly difficult to do consistently over a long period of time. We all have opinions of what works & what doesn't when it comes to trading but always find it difficult to have the confidence in putting our money on the line trading our own idea(s). Very few people succeed in this process as the learning curve is too steep, time-consuming & at times hard to implement with confidence. Outsourcing the process as @Cam019 & @Warr87 have done is an alternative to going it alone.

*You need a certain amount of "Good Fortune"*
No matter how smart we are, or how hard we work, we will regularly be hit by unforeseen, unknowable new information. No matter the amount of backtesting can foresee unpredictable & unpreventable events as @qldfrog often refers to. Skilled traders are nothing more than calculated risk-takers.

*Timing is critical at each stage of trading  *
Your trading ability comes from within by executing your trading plan consistently with confidence. Getting the entry & exit timing correct is the bread & butter of a mechanical system trader. It also pays to remember with system trading there are no "good trades" or "bad trades". There are only trades that "work" & trades that "don't".

Skate.


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## MovingAverage (11 November 2021)

Skate said:


> @othmana86 let's not mention the word "luck" again as it flames a different range of opinions. Let's use the words "good fortune" instead of "luck" as it might be more palatable to some. In hindsight, I should have selected a more appropriate word to express my opinion. I'm glad you & @DaveTrade have shifted the conversation to trading & trading ideas as it gives me a segue to change the conversation.




Come on--doesn't trigger me does it 

Can you tell there isn't much going on in the market for me today


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## Skate (11 November 2021)

*Cutting trades early is the secret of being a profitable trader*
It's a perfect time to remember that trading is not always a bed of roses, losing streaks are inevitable. Even after you have learned to trade successfully, you will still take your hits. @peter2 is the master of "cutting trades" where @othmana86 recently found out by accident that cutting trades using a "Take Profit" stop has benefits. Grabbing profits before they dissolve is certainly a skill.

*Trading is a very emotional experience *
At times these emotions can sometimes sabotage the best of plans, even when trading is traveling nicely we fail to capitalise by not grabbing profits on offer. Most losses can be attributed to not "taking profits" or not "cutting your losses" at the appropriate time. There are other times when losses can be attributed to your inability to follow your trading plan. Trading is simply buying a position in the hope of offloading it to someone else at a higher price than it was brought. Sometimes it works, sometimes times it doesn't.

Skate.


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## Sir Burr (11 November 2021)

Skate said:


> Grabbing profits before they dissolve is certainly a skill




Crossing an upper bollinger band or X times ATR.


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## Sir Burr (11 November 2021)

Skate said:


> strategies that can be purchased knowing full well they have all been professionally coded with backtest results for all to see.




Hi Skate, not all may be sunshine and roses.

Once bought, there was no guarantee of any updates if errors are found.

After purchase, maybe a year later found issues trading live and the code had been updated without my knowledge. This happened twice with the same code over a few years. If I had said nothing I would not have received the updated code. Having knowledge of Amibroker coding and being able to pick up problems is still something required as far as I'm concerned.

I believe that code (think I paid $660) has been removed.


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## barney (11 November 2021)

Skate said:


> *You need a certain amount of "Good Fortune"
> Timing is critical at each stage of trading  *




Been off the air for a while, but just bounced in on your last post @Skate  (sorry no time to read the bulk of the last few pages unfortunately)

As always, good advice for a bearded bush-ranger 

I'm 100% discretionary, so my two bobs worth is possibly not often applicable for this thread, however,

Your two short statements above are important whether we trade with tea leaves or with a science degree.

Luck is definitely underrated (tick)

And timing (which is and should be also directly related to your *position size and trading style*)

Is, as you say, very important  (tick)

Cheers M8 ... and I'll disappear into my rabbit hole again now


----------



## Skate (11 November 2021)

Sir Burr said:


> After purchase, maybe a year later found issues trading live and the code had been updated without my knowledge. This happened twice with the same code over a few years. If I had said nothing I would not have received the updated code.




@Sir Burr by posting your statement again (in which I'm in total agreement BTW) I hope gives added validity to an issue that purchases may not be aware of. I'm going from memory but I'm sure you have raised this issue years ago (without doing a search, I going from memory). 

*Caveat emptor*
Yes, you are left vulnerable trading (with your money, I should say) when a strategy that you have purchased in good faith has been found with errors or omissions. Take it from me, you are contactable & it's should be done automatically as a matter of good faith.  

*I hope code sellers are reading this*
I very much doubt they are reading this post but their "in-action" is their modus operandi. Amibroker afl code is "open source" & necessitates signing a non-disclosure statement. With all agreements, there is a history of purchase. All I'm saying is "if sellers want to hold credibility" they have a responsibility & ongoing commitment to the purchaser for error & omissions. Updating the strategy with "improvements" is another "kettle of fish" altogether. By keeping in touch with customers it facilitates another revenue stream for them to take advantage of.

Skate.


----------



## Sir Burr (11 November 2021)

Skate said:


> I'm going from memory but I'm sure you have raised this issue years ago (without doing a search, I going from memory).




Hi Skate, fairly sure it was after Interstellar


----------



## Skate (11 November 2021)

*From my first post*
@Sir Burr I wasn't going to do a follow-up post but until I do I can't clear the image.



Skate said:


> *Let it go*
> Sometimes you can't let somethings go till you dump it on paper




*Memorizing important information*
I take pride in having a good memory & have a habit of posting information from a memory snapshot. Since your last post, it's been bugging me that something didn't quite gel. I've just now worked it out. It didn't gel because your avatar was different at the time you posted back in March 2019.

*Avatar *
Back then your avatar was of an "Elephant" playing in tropical green crystal clear waters with tropical hills in the background with a hint of beach sand at the side. After saying this it's only the "head of an Elephant poking out of the water". The older I get my recall can at times be a bit fuzzy.

*Here is the post*





						Nick Radge's Weekend Trend Trader
					

Quick bump to this thread. Is anyone still trading the WTT and how has the performance been? Planning to do on the US universe, like the extremely simple rules and the logic behind the system makes a lot of sense. I’ve reached out to Nick the last few weeks and he’s been very helpful with...




					www.aussiestockforums.com
				




*20% Flipper*
I remember reading your post at the time "assuming" you had purchased the 20% Flipper. This is a perfect example of "how our minds" make up stories to suit a narrative. 

# I can now let this matter go.

Skate.


----------



## qldfrog (12 November 2021)

Skate said:


> *From my first post*
> @Sir Burr I wasn't going to do a follow-up post but until I do I can't clear the image.
> 
> 
> ...



Our mind processes can be indeed tricky , weird. And to be back in the subject, can deeply influence our trading.
Ro the point where the market is first and foremost the product of a collective mind process.
System traders, quants are just piggy backing on this collective mind .
Nice post Mr Skate😊


----------



## MovingAverage (12 November 2021)

This really cheeses me off...


----------



## ducati916 (12 November 2021)

MovingAverage said:


> Duc: you and I have had a debate in the past on a similar randomness discussion so think we will always have differing opinions. But I will make the following comments -
> 
> No, you cannot use my same words for a coin flip--this is a completely incorrect and misleading statement. Over time a coin flip has a 50/50 chance of being heads or tails. There is absolute no bias in this outcome--there is absolutely no system or method you can use to predict the outcome of a coin flip over time to a point where you can beat the 50/50 split. So over time you will never be right more than 50% of the time when it comes to predicting the outcome of a coin flip.




Incorrect. A profitable system (martingale) can be profitable without any 'prediction' required. If you read my original post in response to your post, it should be clear that 'profitability' is what we  were discussing.




MovingAverage said:


> Now let's look at just two of my systems--my swing system is right at predicting the outcome (I will make a profit) around 70% of the time. My weekly breakout system is right at predicting the outcome around 60% of the time.




Is it 'prediction' or simply risk acceptance and risk management?




MovingAverage said:


> Of course whether you are profitable is not just down to being right more than wrong--it also depends on your return or loss for each outcome. So again to your coin flip analogy. The question is how much do I get when I pick the right outcome and how much do I lose when I'm wrong. Let's keep it simple and with your coin flip reference so let's assume when you are right you get back 2* your stake and zero if you lose. Guess what, you'll only ever break even unless of course the "house" pays you back greater than 2* for picking the outcome and that will never happen. You coin flip analogy is nothing more than betting on black or red on the roulette table at the casino, but have you any idea why the 0 is on the wheel--it's gives the house a skew in their favour so that there is not a 50/50 chance of picking red or black.




Or you get a really good run of luck.




MovingAverage said:


> Bringing this back to my systems that 2* payback on the coin flip is nothing more than the profit factor of my systems. Both my swing system and my weekly both have profit factors in excess of 1. So in the case of my swing system when it picks a winner 70% of the time I make money and when my weekly picks a winner 60% of the time I make money.




Accepted.



MovingAverage said:


> If after the above explanation you still think a coin flip analogy is suitable for the market...then???




The coin flip analogy is an example to illustrate the function of pure randomness (luck).  Are markets subject to randomness or luck? Yes they are.



MovingAverage said:


> I am absolutely not "essentially trading a coin toss". Anyone that is profitable is exploiting an edge. Some may do that knowingly and other may do that by pure lucky guess. But me personally, I am absolutely not trading a coin toss...I am exploiting an edge in my favour




Until your edge fails.

jog on
duc


----------



## MovingAverage (12 November 2021)

ducati916 said:


> Incorrect. A profitable system (martingale) can be profitable without any 'prediction' required. If you read my original post in response to your post, it should be clear that 'profitability' is what we  were discussing.



I was doing my best to ignore this but it is just wrong so can't.

If the outcome is 50/50 and the payoff is 2* your wager--martingale (or any other position sizing approach) will absolutely still be break even. The maths is very simple--so show me a worked example of how it works?

Martingale is a very simple and well documented "strategy"....why then do casinos keep making money off their roulette tables and why aren't they 50 deep with people busting to make their fortunes?

It is rubbish.


----------



## ducati916 (12 November 2021)

MovingAverage said:


> I was doing my best to ignore this but it is just wrong so can't.




I guess I'm just lucky!



MovingAverage said:


> If the outcome is 50/50 and the payoff is 2* your wager--martingale (or any other position sizing approach) will absolutely still be break even. The maths is very simple--so show me a worked example of how it works?




2* is your calculation not mine.




MovingAverage said:


> Martingale is a very simple and well documented "strategy"....why then do casinos keep making money off their roulette tables and why aren't they 50 deep with people busting to make their fortunes?
> 
> It is rubbish.




Because generally your money runs out before your luck changes.

jog on
duc


----------



## MovingAverage (12 November 2021)

ducati916 said:


> I guess I'm just lucky!
> 
> 
> 
> ...




The only way Martingdale works is if you literally have infinite money and the pay on a win is unlimited. Hardly realistic. It is a little disingenuous to suggest it can work. Show me a real 50/50 system where the payoff is greater than 2* my stake--because you'll be showing me the path to financial freedom


----------



## ducati916 (12 November 2021)

MovingAverage said:


> The only way Martingdale works is if you literally have infinite money and the pay on a win is unlimited. Hardly realistic. It is a little disingenuous to suggest it can work.




Correct.

But if you get lucky, it can work. 

jog on
duc


----------



## cynic (12 November 2021)

MovingAverage said:


> I was doing my best to ignore this but it is just wrong so can't.
> 
> If the outcome is 50/50 and the payoff is 2* your wager--martingale (or any other position sizing approach) will absolutely still be break even. The maths is very simple--so show me a worked example of how it works?
> 
> ...



Perhaps the casino's edge is more heavily founded upon something other than probability theory?!

Have you ever been the only player on a table,and suddenly noticed that half a dozen security personnel have materialised behind you?


----------



## DaveTrade (12 November 2021)

*A problem to solve*

I’ve been trading in a discretionary manner, looking at and evaluating each market individually. I have a number of tools that allow me to view a market in various ways and then decide if and how to trade it. This is a problem for a purely mechanical system because the mechanical system wants take the ‘one size fits all’ approach but in reality, markets are different and therefore do respond a bit differently. Maybe two different equity markets would respond in a similar manner but I found a problem between the first two markets that I selected due to the fact that one is equities and the other commodities. They have different personalities. I need to adjust how I’m trading these markets to find a compromised approach that will be good enough for both.

I know what you system traders are thinking right now, ‘and he thought it would be easy’. Well I wasn’t thinking that, maybe a little, I thought I could slap this this together in the background while I was doing other things. OK may I was thing that.


----------



## Skate (12 November 2021)

*I'm just putting it out there*
Strategy construction consumes so much of my time it's downright annoying when I hit a stumbling block nearing the final hurdle. Having a break & discussing one of the projects might clear my mind. The project is worth the effort even though I've been working on the idea for quite some time. To explain my current project it necessitates a lengthy post but in all fairness, the post is mainly taken up with backtest reports for those who are interested.

*Marrying two ideas*
Since COVID my sole focus has been on capital protection. With this in mind, it necessitated a rethink on how to construct & code a trading system that has the ability to capitalise on (a) breakouts (my preferred method of trading) & (b) pullbacks (a trading method @peter2 often posts about) marrying them within the same strategy.

*The idea is simple enough*
Recent turbulent times have required me to rethink & re-evaluate a new trading methodology. Trading breakouts with an "Index Buy Filter" helps with the downside risk to some extent but at times you can be sitting on the sideline for an extended period. Buying pullbacks, but only when the "Index Filter" is turned off allows me to have the best of both worlds.

*Trading rules*
1. Buy breakouts when the "Index Filter is on" &
2. Buy Pullbacks when the "Index Filter is off"

*Summary*
Trading has its compromises & this strategy is no different. The backtest results are within tradable limits for those wishing to have the extra comfort profiting from the markets no matter the prevailing conditions but the metrics indicate I've more work to do.

*Backtest*
The backtest results are from Norgate Platinum Data with "historical constituents" spanning from 1st July 2015 to now (the year & month I first started trading) & each year after that so a fuller picture of how this strategy would have handled a variety of starting dates.

*1st July 2015 to now*





*1st July 2016 to now





1st July 2017 to now*





*1st July 2018 to now





1st July 2019 to now*





*1st July 2020 to now





1st July 2021 to now*




Just keep in mind that this strategy is a "work in progress"

Skate.


----------



## MovingAverage (12 November 2021)

cynic said:


> Have you ever been the only player on a table,and suddenly noticed that half a dozen security personnel have materialised behind you?



Actually, yes, but it was only 2 security and not half a dozen. When Crown first opened in Melbourne they were stupid enough to open with single deck blackjack and allowed $1000 per hand max wager. You didn't have to be the sharpest tool in the shed to go in there and realise some reasonable money could be had even if you were a mediocre card counter. I managed to do it for 4 weeks before 2 security staff escorted me out and asked me never to come back--kill joys.

In the early days of Crown there were a few card counting groups doing well out of Crown. I even know of one European syndicate that took them for a lot over a two week session.

8 deck auto shufflers put an end to all of that  Argh, the good old days when Crown were stupid.


----------



## KevinBB (12 November 2021)

The charts above just show us how good that period coming out of the COVID crash really was for breakout type systems.

I am at the stage now that when I look at back tests that cover the few months commencing February / March 2020, that I look at individual trades, and discount the back test results for the couple of outliers that usually appear.

KH


----------



## Skate (12 November 2021)

KevinBB said:


> The charts above just show us how good that period coming out of the COVID crash really was for breakout type systems.
> 
> I am at the stage now that when I look at back tests that cover the few months commencing February / March 2020, that I look at individual trades, and discount the back test results for the couple of outliers that usually appear.
> 
> KH




@KevinBB your backtest logic is sound. I've done something similar but have used a "6 month trading period" to capture the downside & evaluate how it responded in bouncing back over the next 3 months. (1st Feb 2020 to 30th June 2020). For the amount of time spent on this project, the efforts have not borne fruit "yet". 

Yikes, a 40% drawdown - where's my spew bucket.

*Backtest  (1st February 2020 to 30th June 2020)*
At this stage of its development, the results are not as expected even though I believe the idea has merit.




Skate.


----------



## MovingAverage (12 November 2021)

Skate said:


> Yikes, a 40% drawdown - where's my spew bucket.
> 
> *Backtest  (1st February 2020 to 30th June 2020)*
> At this stage of its development, the results are not as expected even though I believe the idea has merit.
> ...




I might be misinterpreting your results, but if the above includes trading pullback when your index filer is off (index price is below the MA) I'm not surprised with that drawdown. My experience with pullbacks (which I assume is a reference to a mean reversion style) is that pullbacks are better traded when the market is trending up (your index filter is on). Intuitively when a market is trending down (your filter is off) stock will keep sliding south and less inclined to pullback. My swing system trades pullbacks and I only ever take positions when the index is trending up--it gets smashed when the market is declining. Do you believe there is a link between pullbacks and a declining market?


----------



## Skate (12 November 2021)

MovingAverage said:


> My experience with pullbacks (I assume is a reference to a mean reversion style)




*Trading pullbacks*
@MovingAverage your interpretation has given me food for thought.  Let's not confuse trading "Pullbacks" with trading a "Mean Reversion System". Whether the "Index Filter" is "on or off" makes no difference to me. At times trading pullback can be hamstrung by an "index buy filter" & can lessen its effectiveness. With this strategy, "pullback" signals are "only generated" when the "Index Filter" is "off". I work on the theory that if the CCI is greater than zero with the ADX & MACD both falling & the close is above a nPeriod EMA, I'm good to go.

*It's worth repeating  *
The Core Strategy only "Buy breakouts" when the "Index Filter is ON" & only buy "Pullbacks" when the "Index Filter is OFF" meaning they are never taking signals at the same time.

*A picture paints a thousand words*
The COVID crash period. The yellow rectangular box is the period the "Pullback Strategy" generated buy signals. The aqua rectangle box is the period that the "Breakout Strategy" generated buy signals. The ribbon at the bottom of the chart indicates when the "Index Filter" was on or off. (red = off, Green = on)




Skate.


----------



## MovingAverage (12 November 2021)

Skate said:


> *Trading pullbacks*
> @MovingAverage your interpretation has given me food for thought.  Let's not confuse trading "Pullbacks" with trading a "Mean Reversion System". Whether the "Index Filter" is "on or off" makes no difference to me. At times being hamstrung by an index buy filter can less this style of trading effectiveness. With this strategy, "pullback" signals are "only generated" when the "Index Filter" is "off". I work on the theory that if the CCI is greater than zero with the ADX & MACD both falling with the close above a nPeriod EMA, I'm good to go.



Got it. 

I should probably add that by "pullback" I assumed the common reference of a retreat in price (pullback) and hoping to profit from the resulting rebound in price (reverting back to the mean). The typical pullback that results in short term profit taking in a strong up trending stock


----------



## Skate (12 November 2021)

Skate.


----------



## Cam019 (12 November 2021)

Skate said:


> View attachment 132768
> 
> 
> *I'm just putting it out there*
> ...



Hey @Skate, can you run a 20 year backtest for me on the historical constituent data and put up all the stats and graphs? If yes, can you also put up all the stats below max DD that have been cut off too. Thanks!


----------



## Skate (12 November 2021)

Cam019 said:


> Hey @Skate, can you run a 20 year backtest for me on the historical constituent data and put up all the stats and graphs? If yes, can you also put up all the stats below max DD that have been cut off too. Thanks!




@Cam019 thanks for showing interest in one of my ongoing projects being my "Core Logic Strategy". I'm sorry but I won't be posting additional information at this stage as it serves no purpose as the strategy has been systematically designed to take advantage of "changed" trading conditions since COVID hit in early 2020.



Skate said:


> *Recent turbulent times* have required me to rethink & re-evaluate a new trading methodology.




Also, the strategy is a work in progress with untradeable metrics "at this stage". I periodically post trading ideas "not for others to follow" but to stimulate thinking. By doing so explains that there is "more than one way" to skin a cat.

Skate.


----------



## MovingAverage (12 November 2021)

Sir Burr said:


> Hi Skate, not all may be sunshine and roses.
> 
> Once bought, there was no guarantee of any updates if errors are found.
> 
> ...




Okey dokey boys and girls. Thing about the dump it here thread is that it "keeps things real". So I'm keeping it real.

After reading this post I thought why not raise this with Nick. I know the guy that codes Nick's systems and was surprised to read about this as he is very experienced and it didn't sound right. After reading @Skate follow up post to @Sir Burr quoted post I thought "this isn't right". I was talking with Nick today and put this to him...."hey some folks on ASF reckon your WTT code has future leaks". You can imagine his response so I'll spare you the detail, but to cut a long story short here is the truth. The original WTT code was designed and offered for sale prior to Norgate offering their historic constituents. Once this became available the WTT was updated to exploit historical constituents. This was NOT a bug fix but an update to access something not previously available via the old Premium data service.

As for future leaks, here is the detail in short. The WTT code only looks ahead to determine if a stock is being delisted and if so will exit the position at the relevant close price. The way this has been coded is such that it does not in anyway exploit future insight for current benefit. Backtests are not inflated. 

So before anyone wants to jump on this as the code being bad perhaps we can have some more detail.


----------



## Skate (12 November 2021)

MovingAverage said:


> Okey dokey boys and girls. Thing about the dump it here thread is that it* "keeps things real".* So I'm keeping it real. (*NO YOU ARE NOT)*




Misleading others is not "keeping it real"



MovingAverage said:


> I was talking with Nick today and put this to him....*"hey some folks on ASF reckon your WTT code has future leaks"*. *(WRONG - NO ONE SAID THIS)* You can imagine his response so I'll spare you the detail.
> 
> *So before anyone wants to jump on this as the code being bad perhaps we can have some more detail. (YOU SUPPLIED THE WRONG INFORMATION)*




*So I'm keeping it real*
@MovingAverage you have misinterpreted & misrepresented the issue @Sir Burr posted about. He had a genuine issue & rightly reported it to Nick & he received an update after complaining that the code had a "future leak", *not once but twice*. (TWICE)

*Let's set the record straight*
There has never been any mention that the issue of a *("future leak") *related to Nicks's "WTT Strategy". To be fair you should have not jumped to a conclusion without first reading & understanding @Sir Burr issue.

*Read here (my bolding)*


Sir Burr said:


> After purchase, maybe a year later found issues trading live and the code "*had been updated without my knowledge"*. This "*happened twice"* with the same code over a few years. If I had said nothing "*I would not have received the updated code".*




*Also, read here*


Sir Burr said:


> I'm trading one of his sold Amibroker systems *("similar to WTT")*, tweaked version and is doing OK. A long shot better than his subscription service where I lost money hand over fist not to mention the opportunity cost. Leason learnt to do it yourself. *"By the way, as far as Nicks sold Amibroker systems go. I bought the system with a "future leak".* I didn't pick up until many months later, maybe a year. *He had already fixed it (had a few iterations)* but unless you pick up on problems yourself "*he does not freely update/send/advise of any corrected code". *If I didn't complain about it I would still be using his wrong coding.
> 
> *I think WTT would be OK but check it well.*




*Moreover*
I'm now wondering if my assumption was correct?


Skate said:


> *20% Flipper*
> I remember reading your post at the time* "assuming" you had purchased the 20% Flipper*. This is a perfect example of "how our minds" make up stories to suit a narrative.




*My response to resellers*


Skate said:


> *I hope code sellers are reading this*
> I very much doubt they are reading this post but their *"in-action"* is their modus operandi.  All I'm saying is *"if sellers want to hold credibility"* they have a responsibility & ongoing commitment to the purchaser *for error & omissions*. Updating the strategy with "improvements" is another "kettle of fish" altogether.* By keeping in touch with customers it facilitates another revenue stream for them to take advantage of.*




*Summary*


Skate said:


> If you read one of my posts, read it slowly, don't fall into the trap of "speed reading" as it doesn't give you time to fully understand it.




Skate.


----------



## MovingAverage (12 November 2021)

Skate said:


> Misleading others is not "keeping it real"
> 
> 
> 
> ...



The original post that you posted up referred to a bug being a future leak. This is NOT correct! There is no future leak in the code. Call Nick and he will explain it to you.


----------



## Skate (12 November 2021)

MovingAverage said:


> *The original post that you posted up referred to a bug being a future leak.** (WRONG)* This is NOT correct! There is no future leak in the code. *(WHAT CODE?) - it can't be Nicks WTT Strategy as there was "never ever" a reference made with Nick's "WTT strategy". I'll say it again the "WTT Strategy" has NEVER BEEN MENTIONED - let alone anyone saying that the "WTT Strategy" had a "future leak"*




*No, that is not correct, you need to read my posts again "slowly"*
Please read my original post where "I was going from memory" - that didn't fail me by the way.

*Read this again*





						Dump it Here
					

The intention of the code wasn't to be a profit taker, ill put that down to good luck :p .   @othmana86 let's not mention the word "luck" again as it flames a different range of opinions. Let's use the words "good fortune" instead of "luck" as it might be more palatable to some. In hindsight, I...




					www.aussiestockforums.com
				




*Read This*





						Nick Radge's Weekend Trend Trader
					

Quick bump to this thread. Is anyone still trading the WTT and how has the performance been? Planning to do on the US universe, like the extremely simple rules and the logic behind the system makes a lot of sense. I’ve reached out to Nick the last few weeks and he’s been very helpful with...




					www.aussiestockforums.com
				




The confusion may be that @Sir Burr posted his comments (NOT ABOUT Nick's "WTT" strategy) but made his comment in the "WTT thread".

Skate.


----------



## Sir Burr (12 November 2021)

Skate said:


> *Avatar *




Wow Skate you have an amazing memory. Nothing to do with WTT (sorry for any confusion).


----------



## Skate (12 November 2021)

Sir Burr said:


> Wow Skate you have an amazing memory and yes it was 20% Flipper. *Nothing to do with WTT* (sorry for any confusion).




@Sir Burr thanks for clearing this matter up.

Skate.


----------



## Sir Burr (12 November 2021)

Skate said:


> @Sir Burr thanks for clearing this matter up.
> 
> Skate.




No problem, now there is the matter of the avatar.
Been trying to find it the past hour. To see how close your memory is but I can't remember where it is!


----------



## Skate (12 November 2021)

Sir Burr said:


> No problem, now there is the matter of the avatar.
> Been trying to find it the past hour. To see how close your memory is but I can't remember where it is!




Yes, I’ll be interested as well.

Skate.


----------



## Skate (13 November 2021)

Skate.


----------



## Newt (13 November 2021)

Skate said:


> View attachment 132768
> 
> 
> *I'm just putting it out there*
> ...



Late to the party, but many many thanks for showing such graphical detail in these recent thought-provoking work in progress backtests Skate.


----------



## Skate (13 November 2021)

Newt said:


> thanks for showing such graphical detail in these recent thought-provoking work






Skate said:


> I work on the theory that if the CCI is greater than zero with the ADX & MACD both falling & the close is above a nPeriod EMA, I'm good to go.




*Trading a pure Pullback Strategy*
Trading a "Pullback Strategy" constrained by an "Index Buy Filter" admittedly gives confidence but (IMHO) it's safe to trade a "Pullback Strategy" no matter how the overall market is travelling. Just for the record, whether the Index you are trading is below a "Simple Moving Average" doesn't mean there aren't positions ripping higher after a pullback. 

*This is important*
If the Commodity Channel Index (CCI) is greater than zero & the close is above a nPeriod (EMA) there is momentum in the move. I'm just saying "don't" buy pullbacks until upward momentum is re-established.

*A bit of info on the Commodity Channel Index (CCI)*
The (CCI) momentum oscillator identifies cyclical trends, that's a given. The issue that most traders have using the CCI momentum oscillator is that they believe it displays "excessive lag" making it an unreliable generator of buy & sell signals. Well, that's true to a certain extent but using another confirming indicator can alleviate false signals to some degree. This is where an (EMA) indicator attached to a buy condition comes in handy. I'm a believer if the "Close" is above a nPeriod (EMA) & the (CCI) is greater than zero, there is nothing stopping me from executing a "pullback trade".

*There are three backtests*
The backtest period is from 1st January 2020 to EOT Friday

# 1. The "left" backtest is a pure "Pullback Strategy" with no "Index Buy Filter" (meaning it buys at will, Index Filter On & OFF)
# 2. The "middle" backtest is a pure "Pullback Strategy" at the mercy of an "Index Buy Filter" (only buys new positions when the Index Filter is ON)
# 3. The "right" backtest is a "Mean Reversion Daily Strategy" that has no "Index Buy Filter" (meaning it buys at will, Index Filter On & OFF)

*Side by side backtest results for easy comparison*





*Side by side Equity Curve for comparison*





*Individual expanded view *
"Pullback Strategy" with no "Index Buy Filter" (meaning it buys at will, whether the Index Filter is On & OFF)





*Individual expanded view *
"Pullback Strategy" with an "Index Buy Filter" (meaning it buys only when the Index Filter On)





*Individual expanded view *
As @MovingAverage mentioned a "Mean Reversion Strategy" it was only fitting that I throw up a daily backtest over the same period for comparison. The "Mean Reversion Daily Strategy" trades without an "Index Buy Filter" (meaning it buys daily at will, whether the Index Filter On & OFF)





Skate.


----------



## peter2 (13 November 2021)

It doesn't matter what recipe you use to "cook this goose". Regardless of how we buy, break-outs, pull-backs or reversals, a long only system will always be susceptible to a sharp dip in the general market. The consensus drawdown (DD) in all trend following systems is approx 20%. The GTFO exit will exit around this level also. If we try to reduce the GTFO DD we run the risk of a premature and unnecessary exit when the market dips are only 15-20%. 

One way long only system traders attempt to reduce the DD is to have systems running across two time frames eg Monthly/Weekly, Weekly/Daily, Daily/Hourly. The system operating in the shorter timeframe will exit before the longer TF system. The normal 20% DD of the LT system will be only 10% when considered with the total trading capital.


----------



## Skate (13 November 2021)

Skate said:


> *Wimps*
> In fact, I’ll go so far as to claim that a smart wimp who runs and hides when the going gets tough generally produces better results than brave souls who are proud of their ability to suffer great monetary pains while they wait for their convictions to be rewarded. The problem with the “macho” approach to the markets is that the consequences of being wrong are so onerous. The stronger your convictions and beliefs, the more invested and braver you are, the greater the chance for a backbreaking loss. The wimpy trader knows that the key to success is staying in the game for the very long term.




@peter2 it's those with the experience that make the most sense. The secret in this game (since COVID) is to grab profits & cut your losses quickly. By cutting those losses quickly results in a lower drawdown with increased profits. (of which you are an expert BTW).

*Weekly system traders don't enjoy the luxury of exiting early during midstream*
Systematic trend traders need to have this added layer of protection coded within their buy condition & sell strategy (so you don't buy false breakouts whilst ensuring you exit quickly as possible). With a low 36-45% strike rate the exit strategy has to be sharp & responsive. Any stalling of momentum is good enough for me to pull the pin. Relying on a two-stage trailing stop just won't cut it these days. Also, drawdowns don't hurt as much when you are playing with their money. Getting deep into profits is the tricky part of trading.

Skate.


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## peter2 (13 November 2021)

Skate said:


> Getting deep into profits is the tricky part of trading.




Yes, and buying as early as possible is so important for two reasons. An earlier entry provides a better R:R outcome and an earlier entry allows price to wobble a bit after the start. 

Thank you for juxtaposing my name with your wimp quote. LOL. I'll take it as a compliment. 

I am a trading wimp. If my trades don't start well almost immediately, I cull them. I had a close call with the *BRN* trade last week. My entry was 0.495 with the iSL at 0.445. The iSL could have been placed at 0.46, just below the HVBB that got me interested. Being a wimp, I placed it below 0.45 (extra cautious). 

When *BRN* closed 0.475, I'm thinking _oh no_ looks like I'm going to sell this one soon. Considered selling at 0.46 (to reduce loss) and re-buy > 0.52. Luckily (was it luck or did I correctly assess the probability of the opportunity presented by the price, volume data ?)  price bounded higher soon after. 



	

		
			
		

		
	
  Long may the trading wimps last.


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## Skate (13 November 2021)

peter2 said:


> When *BRN* closed 0.475, I'm thinking _oh no_ looks like I'm going to sell this one soon. Considered selling at 0.46 (to reduce loss) and re-buy > 0.52. *"Luckily"* (was it *"luck"* or did I correctly assess the probability of the opportunity presented by the price, volume data ?) price bounded higher soon after.





Skate said:


> *let's not mention the word "luck" again* as it flames a different range of opinions.* Let's use the words "good fortune" instead of "luck" *as it might be more *palatable to some*.



*
Was it Luck?*
@peter2 we try very hard to refrain from using the word "luck" in the "Dump it here" these days. So there is no "further debate" around this word, let's just say you were blessed with "good fortune" in holding (BRN) enjoying a bounce that was not predicted.

Skate.


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## Cam019 (13 November 2021)

Skate said:


> The secret in this game (since COVID) is to grab profits & cut your losses quickly cut your losses short and let your winners run.



Perfect.


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## Skate (13 November 2021)

Cam019 said:


> The secret in this game (since COVID) is to grab profits & cut your losses quickly. cut your losses quickly and let your winners run.




@Cam019, I do agree with the premise & hear it quoted so often it makes my ears bleed. It's similar to someone saying "buy low & sell higher" without telling others how to do it.

*The "Dump it here" thread is the perfect platform *
This thread is perfect for you to explain "so others can understand" how you go about "cutting your losses quickly and letting your winners run".



Skate said:


> *The markets have changed*
> I often hear that markets have changed and new rules are needed for the new game, well the markets do change but the underlying fundamental rules for success don’t seem to.




*With changed trading conditions since COVID*
I, personally had to change the filters & parameters of many of my trading strategies "to adapt to the increased volatility". To my surprise, a "Take Profit Stop" generated larger returns since early 2020 & I attribute this to "changing" trading conditions. Also, including an "Ulcer Index Indicator" to my (entry & exit condition) has paid off handsomely.

*Getting out is when you make the money*
These days I've learned to be a wimpy trader & using the Ulcer Index Indicator (that only measures the downside risk) is important to the risk-averse trader like @peter2 & myself. I'm sure it will be invaluable if adopted in any trading strategy & "be blown away" with the improvements it makes.

*The Ulcer Index focuses on downside risk rather than the upside*
Traders care about the downside risk because of the stress it causes. The Ulcer Index Indicator focuses on the "bearish volatility" that compares the highest point reached with the current price. All I'm saying, if you want to be a great mechanic - have the necessary tools to do the job.

Skate.


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## Cam019 (13 November 2021)

Skate said:


> @Cam019, I do agree with the premise & hear it quoted so often it makes my ears bleed. It's similar to someone saying "buy low & sell higher" without telling others how to do it.
> 
> *The "Dump it here" thread is the perfect platform *
> This thread is perfect for you to explain "so others can understand" how you go about "cutting your losses quickly and letting your winners run".
> ...



@Skate, first and foremost - I hope you get something to fix your bleeding ears.

Moving right along.

This is where you and I are going to disagree, which is fine. To each their own.

Now, I am not sure over how many years you backtest with all the systems you design and build. Most of the backtest results for the systems of yours I have seen are from memory, 5 years or less. Most of them also seem to have very good metrics and quite good CAGR/MaxDD ratios. Sometimes it seems like they are a little too good to be true. Which brings me to my next point.

I agree that markets and market volatility do change over time, however I would be very skeptical about someone modifying system parameters just because they didn't like or couldn't handle the drawdown of the system due to one, two month black swan event.

In my opinion, if the system design was robust, and a long enough backtest with a large enough sample size was run before the systems implementation, the backtest would have shown that there was the potential for a drawdown of such a magnitude within the systems expected results.

However, if the system/s have been curve-fitted or market regime fitted, *(and to me that sounds like what you might be doing if you're changing your systems parameters due a drawdown you'd prefer to avoid and only back testing your system changes from early 2020),* and a backtest had only been run over a smaller window of time, e.g. 3-7 years then the system might have had a drawdown that the system designer was not aware could happen.

You said that



Skate said:


> To my surprise, a "Take Profit Stop" generated larger returns since early 2020 & I attribute this to "changing" trading conditions.




however my question to you would be; add in that change and run a backtest over 20-28 years of historical data free of suvivorship bias and see what effect the change has on the system.

If you're only making changes to your systems and testing over the period of which you want to reduce that uncomfortable drawdown - in my opinion, your system is not robust.


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## Skate (13 November 2021)

Cam019 said:


> I agree that markets and market volatility do change over time




@Cam019 what a great post. Well constructed comments with a variety of personal views are welcomed, alternative views even more so. When others post it's refreshing than reading information slanted from my experience & views I hold. When members respond in such a detailed way as yourself, @peter2,  @ducati916, @qldfrog, @Newt, @cynic, @MovingAverage, @KevinBB, @othmana86 & @DaveTrade just to name a few off the tip of my tongue adds tremendous value to this thread.

*Everyone is entitled to express their view*
Whether a poster is right or wrong has never been the underlining reason for encouraging others to make a post. Placing yourself in another person's shoes is how we learn to understand a different point of view. The only thing I would suggest, don't explain why you think others are wrong but rather express an alternative.

*Is this still on the cards?*
I for one would be very interested in reading how you would suggest to others how they should go about accomplishing "cutting your losses quickly and letting your winners run". My ears only bleed when hearing catchphrases. Explanations rather than catchphrases go further in educating others. Education is the main "purpose" of this thread.


Skate said:


> This thread is perfect for you to explain "so others can understand" how you go about "cutting your losses quickly and letting your winners run".




Skate.


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## qldfrog (13 November 2021)

Cam019 said:


> @Skate, first and foremost - I hope you get something to fix your bleeding ears.
> 
> Moving right along.
> 
> ...



Really? let's put that into context:
You have a system doing great for the 20 years backtest 1, what do you think will be the results in the attached picture, same backtest in 2
	

		
			
		

		
	



I can somehow bet you a lot that if you have a good system for bt period 1 or 2, you will get pathetic results on ongoing live systems 1 and 2..
Conditions change, markets change..
And your systems should IMHO remember that whatever you do if you use backtests as part of your system design, you assume that the past will somewhat repeat in the future..
That is the assumption number one of system trading..
So we will disagree😊
Nikkei index....


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## Cam019 (13 November 2021)

qldfrog said:


> Really? let's put that into context:
> You have a system doing great for the 20 years backtest 1, what do you think will be the results in the attached picture, same backtest in 2
> 
> 
> ...



@qldfrog, I didn't say it was bulletproof. We can never know how the markets are going to perform in the future. However in my opinion, backtesting your systems parameters over a backtest period that gives you a large enough sample size to ensure robustness and longevity of the system is very important. The larger the sample size of trades the better.

Why not backtest between 1980 - 2000 or 2010? Oh yeah, because that's not beneficial to your point of view.

You have also just shown us perfect examples of confirmation and hindsight biases.

We will continue to disagree. 😊


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## Sir Burr (13 November 2021)

qldfrog said:


> let's put that into context




OK, are you guys backtesting a daily, weekly or monthly. Less data for daily, significantly more for a monthly system. Also, what's your average trade length to consider a fair backtest period.

Middle of the road weekly having an average trade length of 40 weeks. I guess no less than 5 years be OK and when do you test it, on latest data or during multiple market types?

Many ways and you probably already know but how about running an auto walkforward? Optimise for a few years then backtest, repeat etc etc. Then there's Monte Carlo plus that nice 3D optimiser image AB has. Try find yourself a flat plateau 

I think trying all, so the confidence to place the cash is there.

Survivorship mentioned, don’t even bother without Norgates expensive top priced data, especially for the longer-term systems where you need plenty of data to test.


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## qldfrog (13 November 2021)

Sir Burr said:


> OK, are you guys backtesting a daily, weekly or monthly. Less data for daily, significantly more for a monthly system. Also, what's your average trade length to consider a fair backtest period.
> 
> Middle of the road weekly having an average trade length of 40 weeks. I guess no less than 5 years be OK and when do you test it, on latest data or during multiple market types?
> 
> ...



Sure, daily and weekly with short holding period as i do make systems less susceptible to flash crash..a bit, increase sample size on short period and should make system performing on the short term, with need to be dynamic on changed conditions
And no need for 20y of backtest


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## othmana86 (13 November 2021)

Great conversations, so I think this is a good opportunity for me to showcase my system, for the start I will highlight the system over a 20 year period, 10 year period and a 5 year period, this is to satisfy both schools of thought. The first set will be w/out a 'take profit' and the second set will be with 'take profit'. You make the judgement. lets go..

w/out TP 20 year                                                       w/out TP 10 year                                                    w/out TP 5 years





now lets introduce the accidently discovered "Take profit" .. take note of 4 things 1. CAR 2. MDD 3. No. of trades 4. Win rate %

w/TP 20 years                                                          w/TP 10 years                                                          w/TP 5 years            





Before i post my thoughts..id like to hear yours. have at it


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## Skate (13 November 2021)

othmana86 said:


> Great conversations, so I think this is a good opportunity for me to showcase my system, for the start I will highlight the system over a 20 year period, 10 year period and a 5 year period, this is to satisfy both schools of thought. The first set will be w/out a 'take profit' and the second set will be with 'take profit'. You make the judgement. lets go..
> 
> w/out TP 20 year                                                       w/out TP 10 year                                                    w/out TP 5 years
> View attachment 132855
> ...



@othmana86, gee those are impressive results, thanks for sharing. There is a lot of information to digest & personally, I would like time to compare the metrics over the three-time periods.

Also, so much generated from so little. The commission of $6.60 should have killed this strategy over time but it didn’t. Nah, something not right.

*Just a few questions if I may*
Is this a strategy that you are currently trading?
Has historical data been used for the Backtest?

Skate.


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## othmana86 (13 November 2021)

Hi Skate
Why do you somethings not right?

Answers
Yes, currently live.
Not sure what you mean by historical data? But I’m using norgate..


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## Skate (13 November 2021)

othmana86 said:


> Why do you think somethings is not right?




*Think about this*
In the last 5 years, your backest reports that you have made $800,091 or $176,018 each & every year from a $20k investment (from the last report). Nah, something not right.






othmana86 said:


> Not sure what you mean by historical data?




It appears you need to do some research. This matter of (historical constituents) has been canvassed to death in this thread alone. 

Skate.


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## othmana86 (13 November 2021)

oh, yes i have used historical constituents. ive got a platinum membership with norgate 

ok, i should explain. So all profits are reinvested with NO limits on position size. This is somewhat unrealistic and there is no way i will trade that way. eventually position size will be max @ 10k.


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## Cam019 (14 November 2021)

Skate said:


> I for one would be very interested in reading how you would suggest to others how they should go about accomplishing "cutting your losses quickly and letting your winners run".



@Skate, I think we are getting lost in translation here are little, so let me try and clarify my alternative point of view. My view of the world is that if I am trading a classic trend following strategy I want to "cut my losses short and let my winners run", apologies for the ear bleeding again.

That would mean using some sort of initial stop loss and then a trailing stop that follows price once the trailing stop is greater than the initial stop, as an example. I'm a simple man, I like simple trading systems.

I am not saying that a "cut your losses short and grab your profits" trading system cannot be profitable or have an edge in the markets. I am certain a system like this can be profitable - mean reversion strategies come to mind. My alternative view comes in the form of how strategies are backtested.



Skate said:


> *Everyone is entitled to express their view*
> Whether a poster is right or wrong has never been the underlining reason for encouraging others to make a post. Placing yourself in another person's shoes is how we learn to understand a different point of view. The only thing I would suggest, don't explain why you think others are wrong but rather express an alternative.



My alternative view is this:

When backtesting, I want to run the backtest over the longest period of historical constituent, suvivorship bias free data that I have (June 1993). I also want to make sure that all the backtest parameters in the system reflect the realistic trading of the strategy as closely as possible. Entries, exits, position sizing, position shinking, next day exits, etc.

Why?

Because I like to look back and see what has happened in the past, even though we all know that past performance is no indication of future performance - as system traders, it's all we have. It gives me confidence in what range of results I can expect when I am trading a system in the future.

Let me show you what I mean with an example based on the COVID-19 sell off. If I based my system expectations on a 7 year backtest, I get the following underwater equity curve prior to the COVID-19 sell off:

*01/01/2013 to 31/12/2019*



So my system expectation is that my maxDD is 17% and my avDD over that same period is 4.1%. Great, right? Not in my view. Because, and we are using hindsight bias here, what happens if we push the backtest finish date out to the 12/11/2021? Well we get this:

*01/01/2013 to 12/11/2021

*

Now all of a sudden we are concerned because we have seen a drawdown that was outside of our backtested expected results. Most likely we are now tinkering with the system to try and reduce that heinous drawdown that we weren't expecting. However, if we actually tested our system parameters over as much historical data as we can get, we get the following:

*01/06/1993 - 12/11/2021*



So when the COVID-19 sell off happens _(and don't get me wrong - it's not ideal, but drawdowns are a part of trading), _I'm not shocked at the 38% drawdown because the system had a 44% drawdown during the GFC and the 38% COVID-19 drawdown is within the systems expected results.

This is why I backtest this way. I hope my alternative view has been helpful to some.


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## qldfrog (14 November 2021)

Cam019 said:


> @Skate, I think we are getting lost in translation here are little, so let me try and clarify my alternative point of view. My view of the world is that if I am trading a classic trend following strategy I want to "cut my losses short and let my winners run", apologies for the ear bleeding again.
> 
> That would mean using some sort of initial stop loss and then a trailing stop that follows price once the trailing stop is greater than the initial stop, as an example. I'm a simple man, I like simple trading systems.
> 
> ...



We will agree to disagree.
my view is that
-if you have enough trades to be statistically relevant in your backtest,(we agree here);
 Covid crash allows you a unique opportunity to create backtests from a few months before that event to present and so capture a condensed timeline of market conditions which do reflect current fundamental changes: qant and robot trading, super funds and overseas traders and money, retail internet trading and social media impacts.
Up to you to get that opportunity or discard it.
But i agree on monthly or low rotation/ long holding period, it will not be possible to get statistically relevant numbers and you will so be constrainted to either change that characteristic, or rely on obsolete to my view market pasts .
Note that I see the market covid crash as a blessing in that context as otherwise, i would have to follow your thought process.
I nevertheless will move to full..kind of...historical data and will run my systems thru.
Hope this explains clearly the 2 sides of the argument for whoever is new to this debate


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## Skate (14 November 2021)

Cam019 said:


> @Skate, I think we are getting lost in translation here are little, so let me try and clarify my alternative point of view. My view of the world is that if I am trading a classic trend following strategy I want to "cut my losses short and let my winners run", apologies for the ear bleeding again.




@Cam019, I know what "cut my losses short and let my winners run" means & the process. Your post explained it for those who didn't. Also, you did a mighty fine job in doing so.

*When you don't know you don't know*
Recently I was explaining to a seasoned trader that we were buying a position that was under a scheme of arrangement _*"because the proposal does not reflect the significant valuation upside & is currently at a discount to industry peers based on EV/revenue or EV/FUA multiples". *_If I was talking to someone new to trading I would have used language they "would better understand".

*My posts & post format*
Sometimes my posts can be lengthy & exhausting to read but they are written for those who are on the lower level of experience. Even the format of my posts has been "ridiculed" many times publicly & privately. But in my defence, a bold heading with a short snappy passage in "my opinion" tends to hold a reader's interest over a short novel. 

Skate.


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## Newt (14 November 2021)

othmana86 said:


> oh, yes i have used historical constituents. ive got a platinum membership with norgate
> 
> ok, i should explain. So all profits are reinvested with NO limits on position size. This is somewhat unrealistic and there is no way i will trade that way. eventually position size will be max @ 10k.



Please forgive my backseat driving othmana86, but are you trading the All Ords (top 500) universe, and if so, do you have something along the lines of these 2 statements in your BUY conditions to ensure stocks are actually in the XAO at time of purchase?


NorgateIndexConstituentTimeSeries("$XAO.au") AND
NOT OnLastTwoBarsOfDelistedSecurity;


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## Newt (14 November 2021)

Really enjoying the discourse on backtesting periods here recently.  Frankly I feel both approaches are wise and have their benefits.  Longer backtests tend to be best for finding robust parameters and ruthlessly simplifying complexity - i.e. minimise the number of parameters that _might _be cuve-fit at all costs - or the "degrees of freedom".  You do your best to avoid steep spikes in backtest optimiziation graphs. 

But don't be afraid to monitor short and medium term performance against backtests as market regimes will change.  There is no perfect system, so likewise it may be that long term (super/retirement fund) strategies should be more robust over longer periods, but there could also be value running additional systems where the style is more aggressive entry/exit over shorter time frame with benefit re-optimizing parameters very 6-12 months.


A large part of the problem too is how you optimize.  For breakout or pullback trend following systems, there is invariably a very unbalanced effect from a small number of trades with huge outperformance compared to the bulk of trades with small to medium profits, or (hopefully) contained losses.  Here are 2 plots of %profit versus weeks in the market for 2 very different weekly trend following systems.  The first is much more aggressive, the second stubbonly holds on for profit where it can.








Optimizing these 2 systems is a completely different ball game.  The first will live and die by commissions and slippage but offers hope of a smoother upward equity curve if set up correctly.  The second is at HUGE risk of over-optimistic curve-fitting.  You could change filter conditions, buy and sell logic just a little and have a huge effect on overall profit and returns.

I'm usually trading the second style of system, and becoming more interested in the compromise and trade off for performance versus risk.  As such, have recently started to monitor MEDIAN % profit and loss during backtest work as the average values in Amibroker must be biased for system 2 - just one more trade appearing in that top right corner will skew average stats massively.

Only early days with this idea, but so far median % profit seems to nicely reflect parameter changes that increase profit, whilst median % loss tends to show a conflicting reversed optimal value for the same parameter to contain DD and open risk.  The optimial point for each trader will vary depending on whether you wish to maximise returns, minimise risk, or balance the 2 at your comfort point somewhere in the middle.


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## Newt (14 November 2021)

To explain further, here are examples of plots for Median % profit per trade and Median % loss per trade - for optimisation runs on the value of a tight % trailing stop parameter.






From the perspective of minimising loss, a 7% trailing stop looks very nice thank you!
Obviously such a stop does choke off profit potential.

This isn't a great example as this tight trailing stop only cuts in during volatile market regimes and thus the upward slope of the profit curve has many other things affecting it.  

But the point is, the choice/compromise that best balances risk and profit will depend on the individual, and that individual could be wildly mislead by over-optimistic blips in the % Profit graph if not very careful.


----------



## ducati916 (14 November 2021)

So this article (Brett Steenbarger) came out in May 2008, just prior to JPM purchasing Bear Stearns for $10/share.






> The chart above displays the relentless decline in option-related volatility ($VIX) from the March stock market lows to the present. But how does this decline in volatility affect traders and their psychology?
> 
> I ask the question because three observations have struck me in the past week:
> 
> ...




Written just prior to the start of the GFC.

jog on
duc


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## Newt (14 November 2021)

Wow - that's a pretty amazing discourse on how wildy varying market conditions can affect real and perceived risk, reward and psychology.

Also shows how 2 people arguing if psychology is more important than strategy probably have 2 completely different sets of experience, style, expectation etc in their heads!


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## othmana86 (14 November 2021)

Newt said:


> Please forgive my backseat driving othmana86, but are you trading the All Ords (top 500) universe, and if so, do you have something along the lines of these 2 statements in your BUY conditions to ensure stocks are actually in the XAO at time of purchase?
> 
> 
> NorgateIndexConstituentTimeSeries("$XAO.au") AND
> NOT OnLastTwoBarsOfDelistedSecurity;



Hi Newt.
any comment is ok man. no need for forgiveness..
I trade the whole ASX with a few exclusions. (ethical reasons). My system is setup to buy anything above 5c and below $1000, that meets buy conditions.

I only use the XAO as an index regime filter.

As for the " NOT OnLastTwoBarsOfDelistedSecurity", that's definitely in my buy condition and also Sell=  Sell OR OnLastTwoBarsOfDelistedSecurity


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## DaveTrade (14 November 2021)

*Initial testing of the NTW system*

In starting to put things together and testing how the planned components of the system worked with each other, a few problems were highlighted. Problems are always expected but usually the ones that you get are not the ones that you originally expected. I’ve had to do a lot of fine tuning to basically align the elements of the system with each other and some major changes to the system as a whole.

I’m now doing the initial backtest using only one market, the SPY. If this works out well then I may be satisfied with leaving the system as a one market system. I have made changes to produce more trades, I hope it’s enough. If it’s a one market system I can increase my 5% per trade rule without exceeding my previous 30% account exposure for the system. If I increased my position size four times bigger I will still only have a system wide risk of 20%.

Another advantage of using the one market (SPY) is that this is a market that I follow on a day to day basis anyway, so it’s a very familiar market and I don’t even have to log onto my computer because the market is reported in the news every day on the radio and TV.

There has a lot of talk on the forum about making a system robust and not over tuning a system to a particular market or particular conditions. As with a lot of things in life, I think that both sides of the argument can be right and both can be wrong. What I mean in saying that is that I think a particular situation would need to be defined before determining which side of the argument would best apply to it.

I am planning to possibly use only one market for my system and I have tuned it to a degree to this type of market. What I’ve done is not something that won’t work in another market but something that may not get as many trades in another market as it would in this one. That will reduce profit in another market but won’t increase my risk. As I have said before, the most important factor is managing risk and in reading the forum posts, people are only making each side of the argument because they are of the opinion that their side of the argument is less risky.

When I do my backtest I won’t be testing 20 or 30 years and I won’t be testing from after the covid crash until now, I’ll just use a period that includes at least one market crash, a down turn and a sideways section of market.


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## Cam019 (14 November 2021)

@DaveTrade, if you're happy to put up your backtest results - please do. I'm sure you will get some constructive input from members on the forum regarding system design, market selection and backtesting results.


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## Newt (14 November 2021)

othmana86 said:


> Hi Newt.
> any comment is ok man. no need for forgiveness..
> I trade the whole ASX with a few exclusions. (ethical reasons). My system is setup to buy anything above 5c and below $1000, that meets buy conditions.
> 
> ...




Great.  So essentially you're trading close to the full "Fully Paid Ordinary" share universe of the ASX, not limiting to index participants.  

Only put up the previous post as I've been badly burned optimizing XAO-only systems that would take wonderful trades on multi-baggers BEFORE they were even in the XAO universe


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## qldfrog (14 November 2021)

DaveTrade said:


> I’ll just use a period that includes at least one market crash, a down turn and a sideways section of market.



If i may suggest..before covid crash and my current short term optimisation, i used to do as you mention but in 3 different  backtests one for each situation more than a single period encompassing the three phase.
this will imho give you a better understanding of various expected real life outcomes based on the timing of your system start within one of the 3 basic situations.
Hope i am clear enough
And this could point to parameter really well suited to some of the situations, more than a fit for all options


----------



## DaveTrade (14 November 2021)

qldfrog said:


> If i may suggest..before covid crash and my current short term optimisation, i used to do as you mention but in 3 different  backtests one for each situation more than a single period encompassing the three phase.
> this will imho give you a better understanding of various expected real life outcomes based on the timing of your system start within one of the 3 basic situations.
> Hope i am clear enough
> And this could point to parameter really well suited to some of the situations, more than a fit for all options



Yes I can do this when I finish the full period because I'm manually doing the backtest and I have written a spreadsheet to record the data and calculate the metrics, so when I finish I can simply extract sections of the spreadsheet into individual spreadsheets.

As long as I can get my required yearly minimum from the system I'll be happy, if some years it gives me a higher return then that's just a bonus year. That's the way I'm looking at this project. Thanks for your feedback.

PS:  And Cam019 yes I will post my results


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## AussieStockDawg (14 November 2021)

Skate said:


> *A description of "The Platinum Strategy"*
> This strategy is a "breakout strategy" that incorporates ..... "Volume weighted Moving Average" over two different time periods...."



Hi @Skate great to see that you are back and active.

Are you calculating the VWAP based on the EOD turnover amount divided by the daily volume ?

eg, VWAP = AUX1 / V; 
      Where AUX1 is Norgate data daily turnover in dollars.

Thanks


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## Skate (14 November 2021)

AussieStockDawg said:


> Hi @Skate great to see that you are back and active.
> 
> Are you calculating the VWAP based on the EOD turnover amount divided by the daily volume ?
> 
> ...




*I trade weekly strategies*
@AussieStockDawg, What I can say for sure is that I don't use Norgate's AUX1 feature to show the "daily dollar turnover" in any of my strategies.

Skate.


----------



## ducati916 (15 November 2021)

DaveTrade said:


> *A problem to solve*
> 
> I’ve been trading in a discretionary manner, looking at and evaluating each market individually.




Which as you are probably realising is not the way to go. Markets are related, hence the rise of inter-market analysis in the '90's. Possibly (probably) even earlier.



DaveTrade said:


> I have a number of tools that allow me to view a market in various ways and then decide if and how to trade it. This is a problem for a purely mechanical system because the mechanical system wants take the ‘one size fits all’ approach but in reality, markets are different and therefore do respond a bit differently.




Here I am making a couple of assumptions due to your not describing your 'tools'. The tools that I use are to (try) to recognise (via inter-market analysis) the macro-environment that the various markets (equity, debt, commodities, fx) find themselves.

I think it is true that a single mechanical system would trade all markets the same way. That is simply by definition. However there are many 'mechanical' (algo's) employed across the various markets and now even individual stocks or commodities.



DaveTrade said:


> Maybe two different equity markets would respond in a similar manner but I found a problem between the first two markets that I selected due to the fact that one is equities and the other commodities. They have different personalities. I need to adjust how I’m trading these markets to find a compromised approach that will be good enough for both.




I note that in your later post, you have decided upon the S&P500. Of course you could break this down to the 11 primary sectors that have ETFs. These of course break down into even further specialised ETFs. I'll give you the list of some.








DaveTrade said:


> I know what you system traders are thinking right now, ‘and he thought it would be easy’. Well I wasn’t thinking that, maybe a little, I thought I could slap this this together in the background while I was doing other things. OK may I was thing that.




Indeud!

jog on
duc


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## ducati916 (15 November 2021)

DaveTrade said:


> *Initial testing of the NTW system*
> 
> In starting to put things together and testing how the planned components of the system worked with each other, a few problems were highlighted. Problems are always expected but usually the ones that you get are not the ones that you originally expected. I’ve had to do a lot of fine tuning to basically align the elements of the system with each other and some major changes to the system as a whole.




Sounds interesting.





DaveTrade said:


> I’m now doing the initial backtest using only one market, the SPY. If this works out well then I may be satisfied with leaving the system as a one market system. I have made changes to produce more trades, I hope it’s enough. If it’s a one market system I can increase my 5% per trade rule without exceeding my previous 30% account exposure for the system. If I increased my position size four times bigger I will still only have a system wide risk of 20%.




The SPY is currently a tricky one. If you are simply going to trade SPY, fine. But if you are wanting to trade sectors within SPY, that is slightly different. If you are simply going to trade the individual stocks, that is different again. Obviously you already know this.

The advantage of just SPY is that you can put on size and easily manage the position. The disadvantage is that the % returns are simply the aggregate of the constituents. Everybody gets greedy looking at the 'what ifs'.



DaveTrade said:


> Another advantage of using the one market (SPY) is that this is a market that I follow on a day to day basis anyway, so it’s a very familiar market and I don’t even have to log onto my computer because the market is reported in the news every day on the radio and TV.
> 
> There has a lot of talk on the forum about making a system robust and not over tuning a system to a particular market or particular conditions. As with a lot of things in life, I think that both sides of the argument can be right and both can be wrong. What I mean in saying that is that I think a particular situation would need to be defined before determining which side of the argument would best apply to it.




Which takes us back to your earlier post and market environments or character.




DaveTrade said:


> I am planning to possibly use only one market for my system and I have tuned it to a degree to this type of market.




Until it changes. By way of example a number of historical markets:















DaveTrade said:


> What I’ve done is not something that won’t work in another market but something that may not get as many trades in another market as it would in this one. That will reduce profit in another market but won’t increase my risk.




You seem to be implying a form of diversification will provide (some) risk mitigation. In quiet markets, that may be true. In meltdown markets, it will not. Correlations rise to 1.0.




DaveTrade said:


> As I have said before, the most important factor is managing risk and in reading the forum posts, people are only making each side of the argument because they are of the opinion that their side of the argument is less risky.




I haven't followed closely enough the various arguments.

However, those who traded through various markets that turned Bear (1987, 1998, 2000, 2016, 2018, 2020) know that the drawdowns when they come, come fast and are getting (apart from 1987) faster.

The only thing that saves you is correctly hedging. Of course that has a cost to your upside. Or, I suppose if you can predict the future.





DaveTrade said:


> When I do my backtest I won’t be testing 20 or 30 years and I won’t be testing from after the covid crash until now, I’ll just use a period that includes at least one market crash, a down turn and a sideways section of market.





See above.

jog on
duc


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## czehoul (16 November 2021)

Skate said:


> *The Platinum Strategy *
> Let me explain the inner working of this strategy as it relies heavily upon an ADX indicator for a buy signal which measures the strength of a trend. It's a handy indicator that works perfectly in both trending & range-bound markets. As well as the ADX indicator buy signal "The Platinum Strategy" use a confirming indication of a "Volume Weighted Moving Average" over two different time periods to indicate when a price is trending higher. Both these are conditional on the "Ulcer index indicator" is "Down".
> 
> *Summary of the Ulcer Index*
> ...



Thanks Skate for sharing the platinum strategy. I am trying to implement this in Amibroker as a practice based on you descriptions in this thread. However I was not able to get the result similar like yours (very bad result and don't even close). I must be missing out something or have totally different understanding. I will summarize my understanding of the buy and sell rules as below, could you please let me know if I am completely wrong?

*Buy Rules*
1. 20 period breakout:- C > Ref(HHV(H, 20), -1)

2. ADX is trending higher for several bar:- ADX(14) > Ref(ADX(14), -1) AND Ref(ADX(14), -1) > Ref(ADX(14), -2)

3. Ucler Index is going down and it is lower than 5:- ulcerIndex < Ref(ulcerIndex , -1)   and ulcerIndex < 5

4. Index filter is on:- Index > MA(Index, 10)

*Sell Rules*
1. Ucler Index is greater than 5:- ulcerIndex > 5

2. 40% trailing stop if index filter is positive other wise 10% trailing stop:- 
ts1 = 40;
ts2 = 10;
ts = IIf( IndexFilter , ts1 , ts2 );
ApplyStop( stopTypeTrailing , stopModePercent , ts , exitatstop = 2 ); 

3. 4X ATR multiplier profit stop:- 
period = 10; // ATR period
multiplier = 4; // ATR multiplier
ApplyStop(stopTypeTrailing, stopModePoint, multiplier*ATR( period ), True, True );

4. Stale stop? If read from one of you message that you are using Ucler index (sell rule 1 above) as stale stop so I did'nt implement it.

Thank you.


----------



## Skate (16 November 2021)

czehoul said:


> Thanks Skate for sharing the platinum strategy. I am trying to implement this in Amibroker as a practice based on you descriptions in this thread. However I was not able to get the result similar like yours (very bad result and don't even close). I must be missing out something or have totally different understanding. I will summarize my understanding of the buy and sell rules as below, could you please let me know if I am completely wrong?
> 
> *Buy Rules*
> 1. 20 period breakout:- C > Ref(HHV(H, 20), -1)
> ...




@czehoul thanks for your interest & your simplistic explanation of the "Platinum Strategy" that I must say is close to the money.

The buy rule of a "20-period breakout" is just a minor part of the buy condition. Filters, parameters, & positionscore also have a hand in deciding which positions are selected. The selection of positions is critical to reducing false breakouts & profitability of the strategy




The red circled area on the parameter setting forms part of the buy condition as well as a "bullish indicator" not mentioned. If your version of the "platinum Strategy" has 1127 lines of code, I would pretty much say you have nailed it.



czehoul said:


> Stale stop? If read from one of you message that you are using Ucler index (sell rule 1 above) as stale stop so I did'nt implement it.




Nope, don't trivialise the "StaleStop" exit strategy. It's also pleasing when others talk about some of my filters such as the "StaleStop" exit strategy, the "GTFO Filter" as if they are mainstream.

*StaleStop exit strategy is a combination of 4 exit conditions*
The StaleStop exit strategy is placed in a loop to measure bar-by-bar calculations. Other traders simply exit a position that has not made a new high over a nPeriod of days to weeks. Personally, doing it that way is highly ineffective (IMHO). Using the "OR" function allows the "StaleStop" exit to be added to a trailing stop loop as the calculations need to be done "bar-by-bar".

*The StaleStopExit strategy *
(a) The StaleStop exits after a certain number of bars when there is a loss in momentum.
(b) The StaleStop also will execute after a percentile drop of the ROC filter over a "nPeriod" from the High of the entry price. (the buy price)
(c) A simple GMMA exit combined with a volatile BBO exit strategy is (simple & effective) without going into any detail.
(d) An "Ulcer Up" indicator is at the very heart of everything I'm trying to achieve.

 In saying all this - as traders, we don't need a fancy strategy to make money. We just have to know when to enter a confirmed trend with strength & get out before the stampede. How you do it is up to you. I promote only the ideas that have worked for me. If they didn't work I wouldn't waste my time posting about them.

Skate.


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## DaveTrade (16 November 2021)

After getting a massive response from ducati916, thanks for your interest BTW, I thought I should respond by saying where I’m at and what I see as a possible next step going forward.

I’ve been coding and recoding trade ideas and slowly increasing the number of trades that I’m getting from this in the SPY. One potential problem from doing this is that when you get more winners you also get more losers and I won’t know exactly what my stats are until I go through that first manual backtest. This first backtest is not intended to be a backtest of the final system, it’s just a step to get feedback in the process of designing the system. If I can’t get acceptable results from the one market then my intention was to test on the $SPX sectors. I would be hoping that reducing the number of trade types that I’m using to only the most reliable ones but over the multiple markets (the sectors), would then bring the backtest stats within an acceptable range.

I won’t have the money from selling my real estate until mid next year so I have about six to seven months to decide if I will use a mechanical system or continue with my discretionary trading in a more systematic manner. Whatever way that I decide to work this money in the markets I’ll be using a tested and retested systematic approach. Although I have many year’s experience in the markets I have never traded such a large amount of money (to me) before and I haven’t had to report to anyone before. This time my wife will be on the board of directors.

PS;  Can someone tell how that you get those @userid's in blue put into your posts.


----------



## peter2 (16 November 2021)

@DaveTrade These labels only turn blue when posted.


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## DaveTrade (16 November 2021)

So that people better understand what I’ve been saying I should explain that I’m using a charting software called Trade Navigator which has a programming language called Tradesense. This allows a user to program just about anything onto the chart. This is how I’ve created my own indicators and how I’m able to program various trades. So that’s how I’ve been programming various trades for this system and seeing what they look like on the chart. I can even use indicators and functions that I’ve written for programming a trade.

The software does have a backtest facility but I prefer the do it manually. You can even trade from the chart but I’ve never gotten into all the software’s functions, I just use the broker’s platform to place trades.

The other thing that I’ve only mentioned once on the forum, and I think that may have been in a conversation, is that I intend on trading the A$-US$ as another market in this system, to act as a currency hedge. The difference is it wouldn’t really be a hedge because a hedge is something you lose money on, it will be a trade to make money and provide a currency hedge while doing it. I hope this post fills in any questions like ‘what the f* is this guy talking about’.


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## ducati916 (17 November 2021)

DaveTrade said:


> If I can’t get acceptable results from the one market then my intention was to test on the $SPX sectors. I would be hoping that reducing the number of trade types that I’m using to only the most reliable ones but over the multiple markets (the sectors), would then bring the backtest stats within an acceptable range.




Here are 2 examples of sectors within SPY as they trade against SPY:






Worth considering.

jog on
duc


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## ducati916 (17 November 2021)

DaveTrade said:


> The other thing that I’ve only mentioned once on the forum, and I think that may have been in a conversation, is that I intend on trading the A$-US$ as another market in this system, to act as a currency hedge. The difference is it wouldn’t really be a hedge because a hedge is something you lose money on, it will be a trade to make money and provide a currency hedge while doing it. I hope this post fills in any questions like ‘what the f* is this guy talking about’.





Currencies can be tricky.




The point though was more related to 'hedges'.

Hedges, if correctly implemented, are value adding (additive) to portfolios over time. Mark Spitznagel has a recent book on this subject (Safe Haven).

I would argue that at current valuations (Stocks, Bonds) hedges are critical to mitigate the really elevated risks generated from extended valuations and the current macro-environment.

There are (obviously) a number of ways of adding hedges to your portfolio. 


jog on
duc


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## Rabbithop (17 November 2021)

Skate said:


> Sometimes you feel like dumping stuff & this thread might be the perfect place.
> 
> *Helping Others*
> You might want to dump stuff here to help others
> ...



I am a newbie here, just trying to navigate my way in this Forum. Following Dr B's direction. Just read post n liking it.


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## Skate (17 November 2021)

Rabbithop said:


> I am a newbie here, just trying to navigate my way in this Forum. Following Dr B's direction. Just read post n liking it.




@Rabbithop thank you for your kind words, I'm glad you are liking what you are reading. I was chuffed to read @DrBourse referral, personal recommendations (that I appreciated) carry so much more weight. There is also a free eBook on offer in (ePub) format to download so you can read it on an iPhone or iPad. To read it on other phones or your laptop you need to have an "ePub reader" installed which is a free app. 

*The "Dump it here" thread is an exhausting read & requires a big commitment*
The alternative site below is for others who want to read a snappier version of some of the things I want to say.









						Trading PANDA
					






					tradingpanda1.wordpress.com
				




Welcome aboard.  

Skate.


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## Skate (17 November 2021)

DaveTrade said:


> I have many year’s experience in the markets




@DaveTrade when the advice comes from experienced forum members such as @ducati916 - agree or disagree - when he speaks we should all act like a Psychiatrist and say: "Tell Me More".

*It's sad to say *
"Quality posts are getting thinner these days".

*Duc's daily post always include the musings of Mr flippe-floppe-flye*
Not only are the posts written by "Mr flippe-floppe-flye" a joy to read but his particular unique & amusing style are chock-a-block full of valuable information. None more so than this short passage.

_"Follow trends best we can and consider counter-trends to be something of an anathema. I have traded in almost every way imaginable and can easily punch out 15% daily gains if concentrated in degenerate stocks. But, at least in my experience, it always evens out and the tortoise rarely loses to the hare. Heed my advice young Fly and don’t think you know more than the all knowing market"._

Skate.


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## DrBourse (17 November 2021)

Skate said:


> @Rabbithop thank you for your kind words, I'm glad you are liking what you are reading. I was chuffed to read @DrBourse referral, personal recommendations (that I appreciated) carry so much more weight. There is also a free eBook on offer in (ePub) format to download so you can read it on an iPhone or iPad. To read it on other phones or your laptop you need to have an "ePub reader" installed which is a free app.
> 
> *The "Dump it here" thread is an exhausting read & requires a big commitment*
> The alternative site below is for others who want to read a snappier version of some of the things I want to say.
> ...




Just read through the past 20 or so pages of Skate’s “Dump it Here Forum”, lots of in-depth, valuable & educational posts on Market Software Systems, Back-testing, etc, so I thought I would join the discussions with a few observations of my own journey over the past 35/40 years.



Wannabe Share Traders venture into the Share Trading Sandpit for various reasons, those reasons are way too numerous to document here.

HOWEVER, I would like to say that the one _WRONG REASON_ is, IMO, when the Wannabe joins the Share Trading World just “To Make Money”.

Those people usually make up most of the 98% of Failed Traders that we read about.

Then on the other hand, IMO the _BEST REASON_ people jump into the Share Trading Sandpit, is when they decide that they want to begin in a NEW PROFESSION, they usually make up the other 2% of Newbies.

Of that 2%, 1% will break even at best because they do not have the dedication to ‘do the hard yards’.



Having said that leads me back to the discussions within the past 20 or so pages re Market Systems, Back-testing, etc.



Like everyone else I started with no knowledge of the Share Market.

Over the first 5 years I managed to educate myself, and bought into a lot of Software Trading Package’s.

During this phase of my career, I also began to question how these packages managed to produce results that would entice me to buy a certain stock – most of the providers, when questioned, could not give me a satisfactory explanation, and of course they would they not provide me with the magical formulas they were using. (PS: There is a hidden message here).

When I used MS Excel, with basic mathematical calculations, using the same data, I always differed with these programs results. So, they were obviously adding unknowns to the basic mathematical formulas.

Those package’s were obviously “Black Box Systems”, where those unexplained calculations magically produced the results what I was looking for, Big problem was that they were very seldom correct.

The other thing I noticed was that I was spending way too much time playing with each individual package, hours of trying different data entered info into the package trying to get a result that was invariably wrong, when I would rather be actively trading.



Obviously, some people like to work with complex systems, but that’s not my style.

I prefer the KISS System.

Those people that do survive in the ASX Sandpit are the ones that find “the system suits their trading style”.

To cut a long story short, I guess I’m saying that I’ve gone full circle with my trading – started with basic TA & FA, then for the next 5 years progressively working my way through the obligatory Software Packages, and for the past 30+ years I have been trading with basic TA & FA Tools – I found that too many ‘Bells & Whistles’ were a hinderance for me.



Once I fully understood basic TA, and the world of Candlesticks and Indicators (Indicators both on chart & below chart), I found that a couple of simple Indicators (set with the appropriate terms) below the Chart will act as an accurate source of info for Back-testing, and for Entry & Exit Signals.



I might also add, that Software Trading Programs 35/40 years ago were pretty basic, obviously the ones we have access to today should be totally different, but I never really tried any of them.



Guess you could class the above saga as a WOFTAM, but it’s my WOFTAM so who give a Sheit.



Skate I’ve gone full circle – Basic to Overload then back to Basic over that 35-40 year timeframe.

We first met back in 2013 when I offered you a little bit of help – Now I’m learning heaps from you, in reality you have “Set the Bar” way too high for me, so I will just learn what I can from you B4 I eventually fall off the perch.



Cheers.

DrB


----------



## Skate (17 November 2021)

DrBourse said:


> We first met back in 2013 when I offered you a little bit of help




*The kindness of others is not to be underestimated *
I'm in the same camp agreeing with @DrBourse that "simplicity" works as good as anything I've found over the years. I always get a kick when experienced members decide to post information from their point of view.

*Trading in a nutshell*
With trading, it's as simple as "buying a position hoping sometime in the future we can offload that position to someone else at a higher price". It sounds simple but it's extremely hard to achieve & even harder to do consistently.

*Explanation*
I try extremely hard to explain my "views" & "systems" that I trade, where some never do. Without valuable contributions from members, this thread would have died a slow death some time ago.

*Morphed*
The "Dump it here" thread has morphed over time. I try very hard to post information in such a way that it encourages others to want to read on a little bit more.

*Helpful posts*
Since 2013 I've had computer changes resulting in losing the original information that @DrBourse kindly supplied all those years ago. Thankfully, the information has been uploaded that will last for years to come.

Skate.


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## DrBourse (17 November 2021)

Skate said:


> *The kindness of others is not to be underestimated *
> I'm in the same camp agreeing with @DrBourse that "simplicity" works as good as anything I've found over the years. I always get a kick when experienced members decide to post information from their point of view.
> 
> *Trading in a nutshell*
> ...



There are quite a few pages that I have not posted into the 3 x DrBourse Beginners Forums,
Anyone wanting pdf copies should direct message me for my email addy - happy to give free copies to those that ask.


----------



## DrBourse (17 November 2021)

Skate said:


> *What about DEBT, that must be bad.*
> 
> Not all debt is bad, some debt is even beneficial. Let me explain what good debt is and what bad debt as I explained in another thread.
> 
> ...




Back on page 4 of this forum on 16/12/18 Skate lobbed the above post.

I would like to add something to that post, something for the Newbies to ponder.


""Basically a High Debt/Equity Ratio needs to be investigated before anyone jumps to an incorrect assumption....
Debt can be a problem in some cases, But for some stocks the "Excessive Debt" is Providing Positive Returns to Shareholders....
Remember there is "Good, Productive Debt" But there is also "Bad and Unproductive Debt", as mentioned in Skates post, the trick is identifying what is OK relative to individual companies....

Say that Debt is helping provide a 2.5% Div Yield,…..Zero Debt they would also probably have a Zero Div Yield - so theoretically a bit more Productive Debt could increase that return substantially - This is where astute directors etc come to the fore - Good Financial Management will make a company greater - Bad Financial Management will send a company broke....
Have you researched the Co Directors and the Financial Team, what is their past record like???....Do they know what they are doing with the current ??% Debt/Equity Ratio???......How much is Short Term Debt, How much is Long Term Debt, What are the Loan Contract Details...are there Roll Over Provisions in the Contracts....What are the Loan % Rates, and are the Rates Competitive, or are they exorbitant????….Look at their Balance Sheet/Financial Position, Do they have money invested that could be used to repay the debts at a minutes notice????…..
What are the Tax Implications with such a High Debt Load, Good or Bad????….

In the current  interest rate environment, can higher Debt to Equity ratios be sustained.

Back in the Old Days punters like us only had those mythical % guidelines to help our decision making process - in todays environment we have endless research resources at our fingertips..

 The Old Rules like the ones people refer to are just that, "Old Rules".

Basically, the Debt to Equity Ratio (D/E Ratio) is explained as “to express all company liabilities as a % of Shareholders Equity”…..
I should also mention that there are NUMEROUS different ways to calculate the D/E Ratio…
Here are a few of the options:- ….
1. Total Liabilities/Shareholder Equity multiplied by 100 = Ratio %....
2. Interest Bearing Debt/ Shareholder Equity multiplied by 100 = Ratio %....
3. Interest Bearing Debt minus Cash/ Shareholder Equity multiplied by 100 = Ratio %....
4. Shareholder Equity/Long Term Debt multiplied by 100 = Ratio %....
5. Long Term Debt plus Total Equity = Capitalisation THEN That capitalisation Total is used in the final calculation of:-  Capitalisation/Long Term Debt multiplied by 100 = Ratio %....
6. Total Liabilities/Net Worth minus Intangible Assets…
7. Financial Debt/ Shareholder Funds minus Intangibles & Preference Capital…

Some Analysts show their D/E Ratio as “Gearing or Leverage Ratios”…
And there are several more ways to calculate a D/E Ratio…

Misinterpreting the D/E Ratio can be fatal to your profits – you may be missing out on a great trade because you used a D/E Ratio that was ridiculously high, when, with the correct calculation is was actually very low…
The bottom line as usual is DYOR…
Find out how your provider calculates their D/E Ratio, and then decide if that calculation is what you need to help in your analysis procedures….""

The following snapshot shows just one example of what differences that can be produced – the result for each company’s D/E Ratio can differ by 100’s….



Cheers....
DrB.


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## Skate (18 November 2021)

DrBourse said:


> I rely heavily on a 3 indicators combination, a CCI (10) and an MFI (30) below the chart, and a 30 day Linear Regression on the chart.
> I've found over the years that the CCI is not always available on some platforms (Commsuc for example).
> In the absence of the CCI, I find that a Will%R (12 or 13) gives a very similar indicator End Point as the CCI (10)




*If I may ask you a question*
@DrBourse would you please clarify how you use the 3 indicators in combination?

*Hyperlink to the original post*





						DrBourse TA Help for Beginners
					

I do not use a Conventionally Accepted Stop Loss or Trailing Stop Loss System…I feel that those systems belong to the Longer Term Investors…Once I have in my opinion, enough Signals/Signs from my Tools of Trade, I will act immediately…For example if a Bearish Candle Pattern and/or my Indicators...




					www.aussiestockforums.com
				




*I've used (AVZ) as the example*
The chart example below is my interpretation of how to take advantage of the three indicators that have been suggested. Why use (AVZ)? simply because there has recently been activity by @Sean K & @Boggo in the "avz-avz-minerals thread" that I found interesting. 

*Hyperlink to the AVZ thread*





						AVZ  - AVZ Minerals
					

Just scanned the scoping study again and the high transport costs got a mention, but what jumped out for me was the following I think that the Chinese will not let this resource sit idle for to long as the EV revolution is getting closer.  Yeah well spotted Trav ……  You certainly don't spend...




					www.aussiestockforums.com
				




*AVZ Chart*
On the chart below I've plotted the CCI (10) and an MFI (30) with the plot of the middle range of a 30 day Linear Regression. I must say using the three indicators as a simple "entry & exit reference" has merit. The three indicators listed (IMHO) deserve further research. I'll leave it up to @DrBourse will expand & clarify how best to use those indicators. The way I'm using the combination of these three indicators could simply be chalk & cheese to the original design.




Skate.


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## Skate (18 November 2021)

*Well if I only read @DrBourse 1st manual*
The CCI(10) & MFI Indicator has 38 examples each explaining in detail how to use them both (all in his 1st manual). There are also graphics for those that find it difficult to grasp. Linear Regression is mentioned 9 times with pictorial examples & a comprehensive overview. I'm sure the information that I have received would be copyrighted so I won't use "words or descriptions" from his first manual.

*I have made 37 separate posts on the (CCI) indicator*
The (CCI) momentum oscillator identifies cyclical trends as it determines the difference between the mean price of a security & the average of the means over a chosen lookback period. Simply the CCI indicator compares this difference.

*More information is found here*





						Dump it Here
					

@Warr87 Thank-you kindly.  The code samples are particularly useful.   Thought they might be mate. I think I got most of those code snipets from members here too.




					www.aussiestockforums.com
				




*The Money Flow Index indicator (MFI)*
The Money Flow Index (MFI) is a technical oscillator that uses price & volume data for identifying overbought or oversold signals in an asset that is well explained in @DrBourse 1st manual. It can also be used to spot divergences that warn of a trend change in price. The oscillator moves between 0 & 100. Unlike conventional oscillators such as the Relative Strength Index (RSI), the Money Flow Index incorporates both price and volume data, as opposed to just price. For this reason, some analysts call MFI the volume-weighted RSI. Basically, when the MFI rises, this indicates an increase in buying pressure. When it falls, this indicates an increase in selling pressure.

*Linear Regression*
It's simple for Amibroker to calculate the linear regression using the 30-period range as suggested. In my calculations, I have used the middle range of the "Linear Regression" line. I should also say, the function accepts periods parameter that can be constant as well as time-variant.

*My next project*
I'll code a strategy using @DrBourse three indicators & backtest them to see if it's viable to use these as the buy & exit condition.

Skate.


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## Skate (18 November 2021)

*The Dr Bourse Daily Strategy*
On face value the strategy performed "Okay" I suppose but the drawdown was unacceptable in its raw form. Adding a few filters & the results improve considerably.

*1 Year Backtest report*
The backtest period is from the 18th of November being a random selection. (18th November 2020 to today)






*2 Year Backtest report*
The backtest period is from the 18th of November being a random selection. (18th November 2019 to today)






*5 Year backtest report*
The backtest period is from the 18th of November being a random selection. (18th November 2016 to today)
# Yikes, the exit strategy definitely needs a rethink.





*Summary*
Yep, I'm a believer that you could use these three indicators as an entry into a trend "but using the reverse conditions" as an exit strategy, I'm not too sure about that one.

Skate.


----------



## Skate (18 November 2021)

DrBourse said:


> I rely heavily on a 3 indicators combination, a CCI (10) and an MFI (30) below the chart, and a 30 day Linear Regression on the chart.
> I've found over the years that the CCI is not always available on some platforms (Commsuc for example).
> In the absence of the CCI, I find that a Will%R (12 or 13) gives a very similar indicator End Point as the CCI (10)




*Dr Bourse Daily Strategy*
I've used (AVZ) as the example to display the "entry & exit" using @DrBourse 3 indicators that he mentions in the first post on this subject matter.

*Disclaimer*
Adding a few filters improved the strategy considerably but unfortunately delayed the entry at times.






*For direct comparison*
This is the strategy that has been coded from one of @ducati916 posts. Both the "Ducati Daily Strategy" & "Ducati Weekly Strategy" have an uncanny ability to pick the pivots at the start & completion of a trend.




Skate.


----------



## DrBourse (18 November 2021)

Skate said:


> *If I may ask you a question*
> @DrBourse would you please clarify how you use the 3 indicators in combination?
> 
> *Hyperlink to the original post*
> ...






Firstly I would have to say, and I think it's in some of my previous posts, that Penny Dreadful Stocks are NOT conducive to rational TA.Personally I would be using an ABC Calculator on AVZ (if anyone wants a working copy, just hafta ask), here is a snapshot of that ABC Calc



Skate said:


> *If I may ask you a question*
> @DrBourse would you please clarify how you use the 3 indicators in combination?
> 
> *Hyperlink to the original post*
> ...



Firstly I would have to say, and I think it's in some of my previous posts, that Penny Dreadful Stocks are NOT condusive to rational TA.
Personally I would be using an ABC Calculator on AVZ (if anyone wants a working copy, just hafta ask), here is a snapshot of that ABC Calc.


There is an Explanation Tab as part of the Excel SS - and there are numerous Comment Boxes (red triangles) that explain what is required.


Anyhow, back to Skate's original Question.
So here goes…
I prefer to use Trading View with a "Chart Template" as shown below.
The CCI  is always set @ 10 on Close - The MFI is always set @ 30.
The Linear Regression in this example is set @ 120 (it’s a Covid thing IMO).
Note on the Right Hand Side I have about 120 codes.
As I scroll down that list the Chart for the next code automatically appears.
Then I just 'eyeball the chart' and make my decisions - takes about 20 minutes (Max) to go though the 120 codes
The following are examples of what I am looking for, - it will probably take a beginner a couple of years to fully understand my methodology.

*First we look at what you need to look for with Chart Indicators. *














*Now we need to understand the "linear Regression Indicator".*










*Now the Final piece of the Puzzle is the Candlesticks.*
It will be easier for interested parties to go to the "DrBourse TA Help For Beginners" Forum in the Beginners Section.
There are dozens of examples of what I look for, so there is not much point in publishing them all again here.

OK - that was all pretty easy to follow, right.

Now we look at the chart and apply all the above info to the chosen chart.
Now read the Text Boxes on the Chart for my explanation of how I locate POSSIBLE TRADES.
This is just the 1st stock code on my list.

Looks like I have to continue this saga on the next post.


----------



## DrBourse (18 November 2021)

DrBourse said:


> Firstly I would have to say, and I think it's in some of my previous posts, that Penny Dreadful Stocks are NOT conducive to rational TA.Personally I would be using an ABC Calculator on AVZ (if anyone wants a working copy, just hafta ask), here is a snapshot of that ABC Calc
> 
> 
> Firstly I would have to say, and I think it's in some of my previous posts, that Penny Dreadful Stocks are NOT conducive to rational TA.
> ...



The saga continues.



Look at what happens to the Price when the MFI is At or Above its Centreline, AND also what happens when it is Below it's Centreline.
There are dozens of other examples within the "DrBourse TA Help For Beginners" Forum in the Beginners Section.
The above principles apply to any term chart, Tick, Minute, Daily, Weekly, Mthly, Yearly - it just depends on you Trading or Investment timeframe.

Skate, to summ up, yes I use 3 Indicators, but there are other TA considerations, like Candlesticks, Gaps, Major & Minor Sup & Res Lines, etc, etc

This Profession is not easy, most idiots dissapear pretty quickly, only those with the dedication to go the hard yards will survive.

Note: AVZ is one of the few PD's I've seen that works under my process.

Cheers.
DrB


----------



## Skate (18 November 2021)

DrBourse said:


> Note: AVZ is one of the few PD's I've seen that works under my process.




*AVZ was selected at random*
The selection of (AVZ) was instigated by recent posts.



DrBourse said:


> The Linear Regression in this example is set @ 120 (it’s a Covid thing IMO).




*Fair enough*
Resetting the parameter to (120) delayed the exit slightly without a noticeable difference to the entry. But in saying this, the next quote of yours needs to be considered to understand the delay exit signal.



DrBourse said:


> but there are other TA considerations, like Candlesticks, Gaps, Major & Minor Sup & Res Lines, etc, etc




*The most recent signal*
I have marked each of our charts to display my interpretation of where the most current buy signal should be. I'm using the "Low Band" rather than the "Low line" of the band. I'm sure it will make a difference. In my defense, the Amibroker code is doing all the heavy lifting without intervention.

*# Question 1*
Using my chart - is the most recent entry for (AVZ) as "indicated" on the chart accurate?

(a) Yes
(b) No
(c) Close






*# Question 2*
Using your chart - is the most recent entry as indicated by the "red circles" on the chart accurate? Also just a minor point I have indicated by the red square a false breakout. There is another midway between the square & circle that I didn't markup. I'm positive these false breakouts could be eliminated.

(a) Yes
(b) No
(c) Close




*In conclusion*
I'm absolutely positive that beginners reading these posts would find it difficult to comprehend let alone understand. Without having @DrBourse manuals to reference, as I'm sure it would be all "Double-Dutch". With all that said, it's a prime example of how we can lever off another person's ideas as well as their methodologies.

Skate.


----------



## Boggo (18 November 2021)

Skate said:


> *In conclusion*
> I'm absolutely positive that beginners reading these posts would find it difficult to comprehend let alone understand. Without having @DrBourse manuals to reference, as I'm sure it would be all "Double-Dutch". With all that said, it's a prime example of how we can lever off another person's ideas as well as their methodologies.
> 
> Skate.




Not just beginners imo.

Back in the formative Metastock days I went through a lot of processes somewhat similiar to some of what i've seen in above posts.
I have gone full circle and now work on a weekly KISS principle, works for me but maybe not for everyone !

(click to expand)


----------



## Skate (18 November 2021)

DrBourse said:


> The above principles apply to any term chart, Tick, Minute, Daily, Weekly, Mthly, Yearly - it just depends on you Trading or Investment timeframe.




*Well blow me down*
The signals are just efficient no matter the periodicity. The signals are a little late compared to the "Ducati Blue Bar Weekly Strategy"




Skate.


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## Skate (18 November 2021)

Boggo said:


> I have gone full circle and now work on a weekly KISS principle, works for me but maybe not for everyone !




Hey, @Boggo I'm positive using the (KISS) principle would work for everyone even those who take pleasure trading complex strategies. It appears you & @DrBourse have come full circle.

*BTW*
Once again, thank you for posting up a chart of (AVZ), in doing so gives everyone the opportunity to understand clear & concise entry points. I take a lot of pride in the structure of my charts so they can be easily understood with a passing glance but I think you win in this department.



Boggo said:


> May be of interest.
> *(Disclosure,I do hold AVZ).*




*The HappyCat Chart*
For full disclosure, I hold (AVZ) as well. I'm uploading "The HappyCat Strategy" chart for comparison. We all take position at the mercy of the parameters & filters we elect to use.







Sean K said:


> Crikey! Why did I have this on my watch list and watch this happen from the side lines...




*Well, two out of three isn't bad*
But it's a real shame that @Sean K is not enjoying the ride. As they say "the more the better".  

Skate.


----------



## Sean K (18 November 2021)

Skate said:


> *Well, two out of three isn't bad*
> But it's a real shame that @Sean K is not enjoying the ride. As they say "the more the better".
> 
> Skate.




Very sad. 😡 Fortunately, some other things are working for me.


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## DrBourse (18 November 2021)

Skate said:


> *Well blow me down*
> The signals are just efficient no matter the periodicity. The signals are a little late compared to the "Ducati Blue Bar Weekly Strategy"
> 
> View attachment 133097
> ...



Hi Skate,


Skate said:


> *Well if I only read @DrBourse 1st manual*
> The CCI(10) & MFI Indicator has 38 examples each explaining in detail how to use them both (all in his 1st manual). There are also graphics for those that find it difficult to grasp. Linear Regression is mentioned 9 times with pictorial examples & a comprehensive overview. I'm sure the information that I have received would be copyrighted so I won't use "words or descriptions" from his first manual.
> 
> *I have made 37 separate posts on the (CCI) indicator*
> ...



Hi Skate, in your above post you mention *"The Money Flow Index (MFI) is a technical oscillator that uses price & volume data for identifying overbought or oversold signals in an asset that is well explained in @DrBourse 1st manual. It can also be used to spot divergences that warn of a trend change in price. The oscillator moves between 0 & 100".*

I feel I should reitterate that I use a Centreline on the MFI, not the normally accepted O'Bought & O'Sold Lines of 60 & 40.
I reckon that would interfere with your 'backtesting' of my approach to trading.
Cheers M8


----------



## Skate (18 November 2021)

DrBourse said:


> Hi Skate,
> 
> Hi Skate, in your above post you mention *"The Money Flow Index (MFI) is a technical oscillator that uses price & volume data for identifying overbought or oversold signals in an asset that is well explained in @DrBourse 1st manual. It can also be used to spot divergences that warn of a trend change in price. The oscillator moves between 0 & 100".*
> 
> ...




*Thanks for the heads up*
I’ve also acknowledged how hard it is to “Code” the skills that others possess, let alone trying to interpret what you have just read. When there are so many variables with fundamentals thrown in “not to mention” mental & visual skills - it’s impossible to have signals aligned.

Thanks for the additional information. This small exercise was extremely rewarding because I have a better idea of how to marry those indicators to achieve a positive outcome.

Skate.


----------



## DrBourse (18 November 2021)

Skate said:


> *AVZ was selected at random*
> The selection of (AVZ) was instigated by recent posts.
> 
> 
> ...



Question 2.
I would not have been interested in entering a trade in early Nov, That is a Double Top that you circled on the CCI, that is a SELL Signal.
The idea is to Buy when the Indicators are rising from below the O'Sold Line, and to Sell when the Indicators are dropping from above the O'Bought Line.
The best Buy Signal on that chart is the one I marked in the Text Box "Buy - Both Indicators Rising from Lows" at about 0.15c, and I can see no real reason to Exit that Trade YET, maybe tomorrow or in a few days time, but not yet.
DrB


----------



## Skate (18 November 2021)

DrBourse said:


> The best Buy Signal on that chart is the one I marked in the Text Box "Buy - Both Indicators Rising from Lows" at about 0.15c, and I can see no real reason to Exit that Trade YET, maybe tomorrow or in a few days time, but not yet.




@DrBourse thank you for the clarification. It just goes to prove, I have more work to do.

Skate


----------



## DrBourse (19 November 2021)

Skate said:


> *If I may ask you a question*
> @DrBourse would you please clarify how you use the 3 indicators in combination?
> 
> *Hyperlink to the original post*
> ...



Hi Skate,

I think in my post from some time ago (can’t find the exact post) I said that “*I rely heavily on a 3 indicators combination, a CCI (10) and an MFI (30) below the chart, and a 30 day Linear Regression on the chart*”.

That’s is correct, BUT looking at that ‘chart template’ with the 3 basic indicators is just the 2nd step in my process.



Again, as I have mentioned previously in the three DrBourse Help for Beginners Forums, I look to Buy on Monday, Tuesday or Wednesday, then Sell on Tuesday, Wednesday, Thursday or Friday. My Exit Points are primarily dictated by what I read within Candlesticks, Indicators and Other Tools of Trade. I will only buy if/when my entry parameters are met. Some of those parameters will change hour by hour, according to market movements.

I Prefer to Trade Financially Sound Stocks, that immediately reduces any Risk, Pullbacks will still happen, but if the FA is sound then the stock should recover. My Stock Selection is based on 60% Financial Analysis and 40% Technical Analysis - If a stock does not meet my FA criteria, then I do not bother with its TA (so PD’s are never on my Hit List) - Once I locate a Financially Sound Stock, I then proceed to look at its TA.

*NOTE:-* I conduct my own FA, I regularly update my list of 120 stocks, I only use a company’s EOFY Balance Sheet & their regular updates, I do not believe any other published analysis because each one manages to embellish the results to suit their needs (There is a separate post in the DrB FA Forum that explains what I mean).



*My TA starts* by referring to page 118, looking at my Indicator positions on a Wkly Chart, then a Dly Chart to locate +ive Stocks.

*Then,* the 3 main things I look for are...

1. Candles that meet my Linear Regression Indicator requirements.... (pages 139 to 142)

2. MFI above a Centreine of 50... (page 95)

3. CCI Rising from an Oversold Position... (pages 108 & 109)

*Then *I would look at other TA, like the rest of my On Chart Indicators, Candle Formations, Trend/Support/Res Lines, Mkt Depth, Announcements, Overnight ADR's & OTC's, etc etc..



So Basically – If FA is OK, I proceed, if 1, 2 & 3 (above) meet my needs, then I proceed. ---- HOWEVER, if any of those levels are not met, then I scrap that stock for that day.



IMO, it would be impossible to ‘automate, or program’ my trading process – software programmers are not that intelligent.



Direct Message me if anyone would like a .pdf copy of the pages I often refer to, I will email them to you.

Cheers.
DrB


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## DrBourse (19 November 2021)

DrBourse said:


> Hi Skate,
> 
> I think in my post from some time ago (can’t find the exact post) I said that “*I rely heavily on a 3 indicators combination, a CCI (10) and an MFI (30) below the chart, and a 30 day Linear Regression on the chart*”.
> 
> ...



As a quick followup to one of my previous posts, here is this mornings AVZ Chart - we now have our 1st Confirmed Exit Signals.


----------



## DrBourse (19 November 2021)

DrBourse said:


> As a quick followup to one of my previous posts, here is this mornings AVZ Chart - we now have our 1st Exit Signals.
> 
> 
> 
> ...



Also Note the *Overseas ADR & OTC Codes* to the Right Hand Side of the AVZ Chart - checking these each morning gives me an idea of what *MAY* happen to our Aust counterpart codes.
As I mentioned previously there is an in-depth post on ADR's in the DrB GENERAL Forum.


----------



## DrBourse (19 November 2021)

Thats enough from me for a while - got some research to do on IPL & NUF.


----------



## Skate (19 November 2021)

DrBourse said:


> I think in my post from some time ago (can’t find the exact post) I said that “*I rely heavily on a 3 indicators combination, a CCI (10) and an MFI (30) below the chart, and a 30 day Linear Regression on the chart*”. That’s is correct, BUT looking at that ‘chart template’ with the 3 basic indicators is just the 2nd step in my process. IMO, it would be impossible to ‘automate, or program’ my trading process.




*I have to agree with you there*
It's a real shame experience takes time. Also, I agree that having the correct skillset & using a range of indicators allows you to be more reactive & in tune with the unfolding situations. 

*We all see something different*
I'm saying, give the same price chart to a variety of experienced traders & they will always see something different. When it comes to chart reading, I'll leave that to the expert as some patterns can give you a false sense of security leading you into making a poor trading decision.

Skate.


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## Skate (19 November 2021)

*The consistency of indicators*
For those who lack the required skills to decipher a range of fundamentals (that can be a real challenge at times), there is another option. Systematic trading is an alternative, where you can build or buy a robust trading strategy. Using indicators has one advantage, which is consistency "over a range of repeatable patterns". Selecting the correct indicators just might be the key to success. Poor selection can often result in poor trading performance & drawdowns. So, how can we build more robust trading strategies?

*The answer is simple*
By levering off the knowledge of others. I stress test every idea that gels. @ducati916, @peter2, & @DrBourse have promoted such ideas that I have capitalised on. These ideas are not only promoted in the "Dump it here" thread but also scattered throughout the forum.

Skate.


----------



## Skate (19 November 2021)

DrBourse said:


> I rely heavily on a 3 indicators combination, a CCI (10) and an MFI (30) below the chart, and a 30 day Linear Regression on the chart.




*This got me thinking *
It was a "brainfart" really how to combine 3 indicators as a trading strategy. My initial idea was to "Buy" when the CCI(10) was greater than both the MFI(30) & the 30-day Linear Regression & "Sell" when the close of the CCI(10) is lower than both MFI(30) & the 30-day Linear Regression.

*Just to be clear*
Using the 3 indicators "my way" was not the way intended or suggested. Throwing caution to the wind, I set about coding these indicators to form an entry & entry point, the criteria using the indicators in this manner was simple & straightforward. The results exceeded my expectations & now the idea has been added to my "to-do" list.

*Recap*
If you look at the buy & sell points in the chart below the signals (green circles & red square) are respectable & worthy of further research "in any man's language".




Skate.


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## Skate (19 November 2021)

*Most traders can’t predict*
I tend not to believe those who think they can predict the future but can’t predict if the market will open higher or lower tomorrow. Trading is all about catching price movements & the most sought-after indicators are those that identify price trends. While the trends are obvious in retrospect, it's another matter altogether to identify the trend in the heat of trading. Combining the three indicators @DrBourse has highlighted will not only help traders detect the trend direction but also the trend strength of the movement.

*Deceived by patterns *
As a mechanical system trader, I'm constantly looking for repeatable chart patterns, patterns that can be turned into a trading strategy. It's one thing to have a good idea but without vigorous testing, it will all be for nought. Patterns are everywhere. Some patterns are deadly & can lead you to make a poor decision looking at the "middle of the chart" trying to predict what will happen next on the "right-hand edge of the chart".

Skate.


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## DrBourse (19 November 2021)

Skate said:


> *This got me thinking *
> It was a "brainfart" really how to combine 3 indicators as a trading strategy. My initial idea was to "Buy" when the CCI(10) was greater than both the MFI(30) & the 30-day Linear Regression & "Sell" when the close of the CCI(10) is lower than both MFI(30) & the 30-day Linear Regression.
> 
> *Just to be clear*
> ...





Perhaps refer to pages 38 to 43 for an explanation of how my world works.
Cheers M8


----------



## DrBourse (19 November 2021)

DrBourse said:


> View attachment 133123
> 
> Perhaps refer to pages 38 to 43 for an explanation of how my world works.
> Cheers M8




See the following page 38 - Note the 1st, 2nd, 3rd & 4th Buy Points - IF was in this trade (buying at the 1st Buy Point), and if the profit was sufficient, I could have Sold to you at the time you suggest to buy which looks like it was after the 4th Buy Point..


Cheers M8


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## Skate (19 November 2021)

DrBourse said:


> Perhaps refer to pages 38 to 43 for an explanation of how my world works.




*Fair enough *
I was throwing it out there (chewing the fat) how I could use the 3 indicators other than the way you have suggested. Admittedly my posts were well off the mark, but it was another way "my way" how I could use these 3 indicators within a strategy. I made a disclaimer that the way "I coded" those 3 indicators created a "few false signals" where your method eliminates them somewhat. I'll recode the entry condition as per your suggestion. But before I do, I want to make a few remarks about how to reduce false signals.

*Let's talk about false signals*
False signals are impossible to avoid & this is where the commodity channel index (CCI) comes into its own by filtering out many of those false, annoying signals. There are a number of rather complicated indicators available to measure trend direction & strength but none of these indicators, unfortunately, are perfect.

*Some indicators do a fantastic job*
The average directional index (ADX) & the moving average convergence/divergence (MACD) indicators are just two that never fail to perform. The (ADX) shows the strength of a price movement & the (MACD) shows the direction of the move. You can even use the (ADX) functions as a trend detector, rising as price strengthens into an identifiable trend & falling when price moves sideways or loses its trending power.

*Unfortunately*
The (ADX) does not reveal the trend direction. The (MACD) on the other hand, indicates price momentum identifying price direction. Combine the (ADX) & (MACD) with a (CCI) & (MFI) might produce pleasing results. Use them incorrectly & it will end in tears.

Skate.


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## Skate (19 November 2021)

DrBourse said:


> Perhaps refer to pages 38 to 43 for an explanation of how my world works.
> Cheers M8







*Yes, that makes more sense *
The entry signal indicated by the (red box) as rightly explained by your blue caption on the chart aligns with @ducati916 Blue Bar entry. It's a pity that there is a required amount of intervention in deciding to take a position or pass over it.

*I'm not in that camp *
I only allocate 10 minutes to physical trading each week & most of that time is taken up with entering (buy & sell) positions in the pre-auction.

Skate.


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## ducati916 (19 November 2021)

So @Skate 

This chap has an interesting take: https://www.olivermsa.com/msa-methodology.html

Now I have no idea if this could be coded. For obvious reasons he does not go into detail on how he does it. I have created a copy cat using his basic thesis, which if you are interested I can PM you on.

jog on
duc


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## Skate (19 November 2021)

ducati916 said:


> if you are interested I can PM you on




@ducati916, Yes I would be very interested "PM" away. In the meantime, I'll have a read of the hyperlink.

Skate.


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## Skate (19 November 2021)

ducati916 said:


> So @Skate
> 
> This chap has an interesting take: https://www.olivermsa.com/msa-methodology.html
> 
> ...




*Momentum Structural Analysis (MSA)*
After having viewed the website & watch the presentation video I have to conclude that their "Momentum Strategy" is a combination of "Fundamental as well as Technical" analysis to generate two reports per month covering short-term & long-term trends for you to take advantage of. Wait for it, for a low cost of $299 per year.

*Short background (for those interested)*
J. Michael Oliver entered the Futures side of trading in 1975. In the 1980s Mike began to develop his own momentum-based method of technical analysis.  He learned early on that orthodox price chart technical analysis left many unanswered questions and too often deceived those who trusted in price chart breakouts, support/resistance, and so forth. In 1987 he decided to develop his structural momentum tools into a full analytic methodology. Read the testimonials & it's evident he is worth his weight in salt, gold, whatever.

Skate.


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## Skate (19 November 2021)

*I want to discuss the "Ducati Blue Bar Strategy"*
The MSA that Duc hyperlinked to is built around momentum & other propriety fundamental feeds. Now back to @ducati916 who often drops gems & often speaks about taking advantage of momentum. I'm of the opinion those gems never get the attention they deserve. 

*Not a second thought*
I don't think many give Duc's gems a second thought let alone apply a blow torch to his ideas. We all have opinions of what works & what doesn't when it comes to trading but at times find it difficult to have the confidence in putting our money on the line trading someone else's idea. 

*MSA*
After reading @ducati916 recent post & on a propriety MSA strategy I believe it's very similar to "Ducati Blue Bar Strategy" which is a momentum strategy in its purest form. "The "Ducati Blue Bar Strategy" has an uncanny ability to pick moment pivots in "real-time" with extreme accuracy & I have demonstrated this in real-time in this thread.

Skate.


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## Skate (19 November 2021)

*"The Ducati blue bar strategy" & the "Duc Indicator" are both brilliant ideas *
Since Duc has dropped those gems I've been hard at work trying to develop them further. We have all been given the same information but I'll bet you pounds-to-peanuts not one reader is running with the idea.

*When others post*
It's exciting to experience how other traders such as @DrBourse, @peter2, @MovingAverage, @qldfrog, @frugal.rock & a few others "how" they make their stock selection & the methodology that decides when a position is to be entered. Admittedly I don't have the time or unique skills-set to evaluate positions as they do. My "go-to" to do the evaluation is either the weekly or daily "Ducati Blue Bar Strategy" to understand their reasoning a little better.

*Trading the bounce*
The "Ducati Blue Bar Strategy" trades the "bounce" by picking when a trend turns using momentum, "volatility & volume". If the trend is up (Blue Bars) we buy & if the trend is down (Red Bars) we sell. The strategy is simple, effective & clean, using a combination of "Parameters, Filters & PositionScore" the profitability of the strategy jumps off the charts.

*More can be found here*




__





						Dump it Here
					

So you managed to integrate the indicator to run inside your various strategies...nice. I'll be interested to see how it performs in the 'bounce' that we have currently. A timely signal should the bounce (start to) collapse into a second low, would be very advantageous and I daresay profitable...




					www.aussiestockforums.com
				




Skate.


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## Skate (19 November 2021)

*Weekly results*












Skate.


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## KevinBB (19 November 2021)

ducati916 said:


> So @Skate
> 
> This chap has an interesting take: https://www.olivermsa.com/msa-methodology.html
> 
> ...



Well, my interpretation goes something like this:

Actual monthly bars are compared to the 36 month moving average, and the price data is converted into a percentage away from that 36 month moving average. So, in effect, you have a data series which is moving about the mean. A very good candidate for a mean reversion system.

Now, I am terrible at Excel charts, so please excuse the poor quality (can't figure out how to change the X axis), but this is what a chart of XJO would look like using this bloke's system. The chart contains monthly data from July 1996, up to and including today's close.



Just for some context, the first drop below the X Axis is June 2002, then March 2008, and the most recent high is August 2021. _And, by the looks of things .... we're on the way down_. Sorry, but I can't get the chart any better ... I need a lesson in Excel Charts.

KH


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## KevinBB (19 November 2021)

There you go, a little clearer. At least on this one you can read dates.

Remember, this is very long term. Monthly bars moving around a 36 month moving average. The data series will always move back to the long term moving average, which is shown here as 0 (zero), the X axis.




KH


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## ducati916 (20 November 2021)

KevinBB said:


> There you go, a little clearer. At least on this one you can read dates.
> 
> Remember, this is very long term. Monthly bars moving around a 36 month moving average. The data series will always move back to the long term moving average, which is shown here as 0 (zero), the X axis.
> 
> ...





This is what Mr Oliver's charts look like:




jog on
duc


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## KevinBB (20 November 2021)

ducati916 said:


> This is what Mr Oliver's charts look like:



Have a look at his Momentum 102 PDF (link here). Its this document on which I have based the above charts.
KH


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## ducati916 (20 November 2021)

KevinBB said:


> Have a look at his Momentum 102 PDF (link here). Its this document on which I have based the above charts.
> KH





Nice!

jog on
duc


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## Skate (20 November 2021)

Skate.


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## Skate (20 November 2021)

Cam019 said:


> *Food for thought*
> I've been reviewing my backtest and trade stats (which I am more than comfortable with) and listening to a lot of trend following podcasts and I have picked up on some interesting opinions that I will share with you. Specifically in respect to trend following, if one of the main tenents of trend following is to *let our open trade profits run* to allow us to hunt down outlier trades that make most of the systems money, *why are we so concerned with drawdowns* from equity highs when those drawdowns from equity highs could simply be fluctuations of open trade profits which we need to let move, to find those outlier trades?




*Comments pulled from Chartist website*
_"Momentum is a logical, time-tested approach supported by vast amounts of academic and industry research gathered over many decades. Stocks that have done well recently tend to continue doing well in the following months and even years. This strategy specifically targets Large Cap stocks that are outperforming their peers, *although it can be used on any universe of stocks.* The strategy trades just once a month. The strategy allows users to generate buy and sell signals, run backtests and adjust a myriad of parameter settings without needing to understand coding. Other filters include price, volume, turnover, market regime and two position sizing modes"_

@Cam019 *that's an interesting concept (monthly periodicity trading) *
As both @Cam019 & @Warr87 have purchased the Chartist Large Cap Momentum turnkey strategy has me thinking about a few points.

(a) Would the strategy perform using the ASX All Ordinaries with 10-position Portfolio?
(b) The idea promoted by @Cam019 to "let your open trade profits run", is the logical conclusion sound?
(c) On the flip side, would the drawdown be beyond the limit that you could stomach before reaching for the spew bucket?



Cam019 said:


> *I HAVE MODIFIED THE PARAMETERS OF THE ORIGINAL TURNKEY STARTEGY TO SUIT MY RISK TOLERANCE. MY RESULTS WILL DIFFER FROM THAT OF THE ORIGINAL SOURCE CODE. *
> So, to be crystal clear, like @Warr87 *I will not* be the using the Large Cap Momentum turnkey strategy in its original form. I will be using my slightly modified version of it. I have been able to make some minor adjustments which means the following:
> I have *increased* my CAGR by 30.58%
> I have *increased* my maxDD by 46.61%






Warr87 said:


> My new monthly momentum system that will be traded on the ASX300 universe. I have chosen to run my system on the ASX300 and not the ASX100 like Radge. I will also be using 10 positions, not 5. I am not running a filter. My system in comparison may be riskier than Radge's.




*Now points to consider*
(a) Momentum happens in all periodicities.
(b) Nick said, "Stocks that have done well recently tend to continue doing well in the following months and even years".
(c) Nick also said, the "Momentum Turnkey Strategy" targets "Large Cap stocks" that are outperforming their peers

*It's got me thinking*
The "Momentum Turnkey Strategy" is a monthly momentum strategy & after reading the comments made by @Cam019 & @Warr87 my interest has been sparked. Trading monthly requires little work & if the results are only viewed once a month it would lower the stress involved as well.

*I've coded a 10-position monthly momentum strategy *
In the next post, I'll display a few backtests so the returns can be viewed. I've included the metrics that I can capture on the screen.

Skate.


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## Skate (20 November 2021)

*Skate's Monthly Momentum Strategy*
The strategy is a $100k, 10-position portfolio ($10k bets)

*The backtest reports from left to right:*
1. 20th November 2016 to today (5 years) 
1. 20th November 2017 to today (4 years) 
1. 20th November 2018 to today (3 years) 
1. 20th November 2019 to today (2 years) 
1. 20th November 2020 to today (1 year)





*Observations*
The performance is respectable & trade frequency is low. Now let's review the 8 largest wins & compare them to the 8 largest drawdowns.






*Summary*
If you are prepared to accept the occasional large individual drawdown it would be a tradeable strategy. But if you are "the type" that views your results on a daily basis I'm sure you would find it extremely difficult to refrain from selling positions mid-stream.

Skate.


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## Newt (20 November 2021)

Very interesting.  

Shouldn't that be ASX300 or ASX200 if trading large caps Skate?  One would expect much greater liquidity (only an issue for very large accounts), probably lower returns, and hopefully lower volatility if trading a "larger cap" universe than ASX500?


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## Skate (20 November 2021)

Newt said:


> Very interesting.
> 
> Shouldn't that be ASX300 or ASX200 if trading large caps Skate?  One would expect much greater liquidity (only an issue for very large accounts), probably lower returns, and hopefully lower volatility if trading a "larger cap" universe than ASX500?





Skate said:


> Nick said, the strategy specifically targets Large Cap (ASX100) that are outperforming their peers, *although it can be used on any universe of stocks.*




@Newt, trading large caps strangles returns. Neither @Cam019 nor @Warr87 is trading the (ASX100). Warr has stated that he is trading the (ASX300) index that has more volatility. The All Ordinaries has more volatility again & that volatility is smoothed over a month. With a momentum strategy, the periodicity is of no concern. Trading with small ($10k) bets liquidity is not an issue.

*It happens naturally*
@Cam019 has the idea to let "your profits run" at the expense of a larger drawdown. His idea is sound but his maximum Draw Down of 46.61% is not palatable. There is always a fine line between "profits & drawdowns". When seeking larger returns, unfortunately, increases the drawdowns. What I consider to be the "Goldilocks" trade-off, others will have a different view in relation to their own risk tolerance.

Skate.


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## Newt (20 November 2021)

I agree - any work I've done on ASX200 and 300 (or similar) rarely seems  worth the benefit - less return, similar DD risk - assuming proper position sizing and risk measures.  For weekly TF, the FPO and XAO universes seem adequate - and possibly a niche that is too small to interest many sophisticated large investment operations.

Just curious what others had experienced.


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## qldfrog (20 November 2021)

Newt said:


> I agree - any work I've done on ASX200 and 300 (or similar) rarely seems  worth the benefit - less return, similar DD risk - assuming proper position sizing and risk measures.  For weekly TF, the FPO and XAO universes seem adequate - and possibly a niche that is too small to interest many sophisticated large investment operations.
> 
> Just curious what others had experienced.



Actually it is something that surprised me:
DD on XAO and FPO are quite similar, while potential gains higher on FPO.
But to handle carefully as FPO often hard to buy sell at open due to smaller market


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## qldfrog (20 November 2021)

qldfrog said:


> Actually it is something that surprised me:
> DD on XAO and FPO are quite similar, while potential gains higher on FPO.
> But to handle carefully as FPO often hard to buy sell at open due to smaller market



Apologies i mixed up my initial answer FPO better BT on most of my systems..but designed for FPO so no surprise


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## peter2 (20 November 2021)

FPO - What's this?  Is it an ASX universe created by Norgate?


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## rnr (20 November 2021)

peter2 said:


> FPO - What's this?  Is it an ASX universe created by Norgate?



Hi @peter2,

From memory it means Fully Paid Ordinary shares.

Cheers,
Rob


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## Newt (20 November 2021)

Yes, sorry Peter.  Should have explained, but Rob already has.

One challenge with the full Norgate platinum subscription is defining what will go into that "fully paid ordinary" universe and there is quite a lot of granularity to include or exclude stapled securities, etc.


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## qldfrog (21 November 2021)

Newt said:


> Yes, sorry Peter.  Should have explained, but Rob already has.
> 
> One challenge with the full Norgate platinum subscription is defining what will go into that "fully paid ordinary" universe and there is quite a lot of granularity to include or exclude stapled securities, etc.



Yes differences between Premium Data FPO ( they "created" that subset of the asx market) and what we can reproduce in NDU (Northgate data)
In a nutshell, FPO includes much more than XAO:
usually ,and from memory,
 around nearly 3000 stocks.so all your micro caps etc or seen differently a lot of garbage too🥴 but in the worlf of million dollars meme JPEGs...


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## qldfrog (21 November 2021)

qldfrog said:


> Yes differences between Premium Data FPO ( they "created" that subset of the asx market) and what we can reproduce in NDU (Northgate data)
> In a nutshell, FPO includes much more than XAO:
> usually ,and from memory,
> around nearly 3000 stocks.so all your micro caps etc or seen differently a lot of garbage too🥴 but in the worlf of million dollars meme JPEGs...



actually less than I thought, I just checked 1232 stocks as of this weekend..so XAO +


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## Cam019 (21 November 2021)

Skate said:


> (c) On the flip side, would the drawdown be beyond the limit that you could stomach before reaching for the spew bucket?



I think this is only an issue if we look at drawdowns as something we must try and limit or avoid. I prefer to reframe drawdowns as a combination of actual closed trade equity drawdown and open trade equity fluctuations. The open trade equity profits aren't mine as I haven't closed the position and the only way to catch large outliers, which will increase my CAGR over time, is to let those open trade profits fluctuate.

As trend followers we might look at a chart of a stock and accept that the stock won't go up in a straight line and therefore, we need to accept some profit giveback in order to catch the overall larger trend. _I remember listening to a CWT podcast with Nick where he talks about a dymanic trailing stop - 40% when regime filter is up, ratcheting up to 10% when the regime filter turns down. _Well, I see my equity curve as the same type of thing. My equity curve isn't going to go up in a straight line, it will zig and zag, it will pull back, it will consolidate and go sideways, however if I stick to my system and take the trades my system tells me to, I can expect that I will create the longer term up trend of my equity curve, albiet with short to medium term return volatility.

*I need to give my equity curve room to move in order to create the long term trend of my equity curve.*

It's so interesting to me that the focus is on reducing drawdowns and not maximising returns. I know everybody has different risk tolerances and capital preservation definitely becomes an issue the closer we get to retirement, however I am sceptical of these short term backtests showing incredible returns with minimum to minuscule drawdowns. @Skate the monthly systems are not run on monthly data as shown in your backtest results.

So, I ran the system I will be using in my SMSF, which is a *modified version* of Nick's 'Large Cap Momentum' strategy on the XAO with a maximum of 10 portfolio positions and we get the following results:

*Backtest period: 01/01/1993 - 21/11/2021*
CAGR: 37.13%
MaxDD: -62.84%

This is the most interesting bit for me and one of the reasons I stuck with the ASX100.




In April of 2000 you had to put up with a -51.9% month. I know people are going to say it doesn't matter because that was over 20 years ago - but it does matter because it is a result that the system has produced before which means it is now within your systems expected results.



Skate said:


> @Newt, trading large caps strangles returns.



Actually, my testing shows that for this strategy, the thing that strangles returns the most is the using a regime filter.



Skate said:


> Neither @Cam019 nor @Warr87 is trading the (ASX100).



I am trading the ASX100 for my SMSF system.



Skate said:


> @Cam019 has the idea to let "your profits run" at the expense of a larger drawdown. His idea is sound but his maximum Draw Down of 46.61% is not palatable. There is always a fine line between "profits & drawdowns". When seeking larger returns, unfortunately, increases the drawdowns.



Once again, I think if you're taking the view that open trade profits are yours and you're trying to defend every equity high, then you're going to have to problems living with drawdowns.

Here is a question for everyone concerned about defending equity highs. *When you position size, do you do it off original equity plus/minus closed trade profits and loses only or do you position size off your open trade profits as well?*


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## qldfrog (21 November 2021)

Cam019 said:


> I think this is only an issue if we look at drawdowns as something we must try and limit or avoid. I prefer to reframe drawdowns as a combination of actual closed trade equity drawdown and open trade equity fluctuations. The open trade equity profits aren't mine as I haven't closed the position and the only way to catch large outliers, which will increase my CAGR over time, is to let those open trade profits fluctuate.
> 
> As trend followers we might look at a chart of a stock and accept that the stock won't go up in a straight line and therefore, we need to accept some profit giveback in order to catch the overall larger trend. _I remember listening to a CWT podcast with Nick where he talks about a dymanic trailing stop - 40% when regime filter is up, ratcheting up to 10% when the regime filter turns down. _Well, I see my equity curve as the same type of thing. My equity curve isn't going to go up in a straight line, it will zig and zag, it will pull back, it will consolidate and go sideways, however if I stick to my system and take the trades my system tells me to, I can expect that I will create the longer term up trend of my equity curve, albiet with short to medium term return volatility.
> 
> ...



I use open trade profits as well , but with high churnout, probably not as different as it would be if i was rarely selling buying


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## Skate (21 November 2021)

Cam019 said:


> When you position size, do you do it off original equity plus/minus closed trade profits and loses only or do you position size off your open trade profits as well?




@Cam019 thank you for a detailed explanation. As far as your question goes, position size to me is a simple re-balancing of your next bet size. Meaning, the bet will either increase or decrease according to the trading funds (cash) available.

*Let me explain how I re-balance my position size*
Re-balancing allows bets sizes to vary in accordance with the ongoing trading results of your strategy (positive & negative). It's a direct correlation to the current cash in your trading account due to closed profits & losses. The size of the bet or "next series of bets" depends on the cash available so all funds are deployed in the markets. The next bet size "Position Size" is a simple re-balancing technique to reinvest closed profits & losses ensuring every trading dollar is put into the markets "to fight the good fight".

*How?*
Position-sizing uses the cash balance in your trading account. This cash balance is used to calculate the "size" of the next bet or series of bets. It's simply a way of putting every dollar to work.

*What is the Re-Balancing Formula?*
Cash Trading Balance/outstanding positions required = the new bet size ("PositionSize"). This will now be the new bet for each & every pending trade (the new PositionSize also calculates the number of shares to buy in the pre-auction)

*Re-balancing works both ways*
Re-balancing position sizing works for me as all available funds are constantly in the markets. Re-balancing works both ways. When trading isn't going well, the bet size decreases because of closed losses. But hey, when times are good why shouldn't I take advantage of these conditions & increase my bet sizes. It's the "make hay while the sun shines" theory.

*Re-balancing has been hard-coded in *
I've explained in a previous post that re-balancing can be done on the fly as it's one of the parameters settings.

*To select the parameter setting "open" the slider icon*
The portfolio size of $100k with 10 positions = $10k initial bet size. (Each bet is 10k)



*The setting above displays these calculations (number of shares to buy & the buy offer)*




*How to change the parameters?*
"Left-click" on the parameter settings, the "slider" icon circled above. A drop-down list will appear so you can alter "*the bet size" *allowing you to make these adjustments on the fly. Changing your bet size is done by changing the "Trading Funds" dollar size (CBA Funds in my case). The strategy will automatically re-calculate the new number of shares to buy for that bet size.

*Parameter Changes*
Let's assume we have sold 5 positions (a combination of wins & losses) & now have a total of $63,254 "cash" in our trading account. After entering the new cash balance (CBA Funds) & the number of positions required (5) the Exploration Analysis is ready to proceed. The initial bet size started at $10k but now with open profits, the next series of bets increased from $10k to $12,634. (after re-balancing). By doing it this way ensures every dollar (soldier) is put into the markets "to fight the good fight".

*To select the parameter setting "open" the slider icon*
All that is required is to change the Trading Funds (CBA Funds) to the cash amount available being $63,254. Now change the "Positions Required" to (5). Hit [OK] to close the parameter settings drop-down box then hit [Explore].




*The setting above re-calculations the number of shares to buy*




*Summary*
Re-balancing my next bet size is a powerful strategy I employ that adds to my profitability. Well, doing it "this way" works for me.

Skate.


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## rnr (21 November 2021)

Cam019 said:


> Here is a question for everyone concerned about defending equity highs. *When you position size, do you do it off original equity plus/minus closed trade profits and loses only or do you position size off your open trade profits as well?*




Hi @Cam019,

I must be missing the point of this question as *open trade profits* are not available for use to in taking a new position.

Cheers, Rob


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## Joe90 (21 November 2021)

Skate said:


> _*"The Ducati blue bar strategy" & the "Duc Indicator" are both brilliant ideas *
> Since Duc has dropped those gems I've been hard at work trying to develop them further. We have all been given the same information but I'll bet you pounds-to-peanuts not one reader is running with the idea._



Hello Skate, please provide a link to the grail referenced above, I've spent a lot of time fishing for these.....


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## Newt (21 November 2021)

Joe90 said:


> Hello Skate, please provide a link to the grail referenced above, I've spent a lot of time fishing for these.....



Dump it Here is going to need an index post at the start at this rate.....


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## Skate (21 November 2021)

Joe90 said:


> Hello Skate, please provide a link to the grail referenced above, I've spent a lot of time fishing for these.....




Hi @Joe90, have a read of this post that also contains the hyperlinks below.




__





						Dump it Here
					

So for $300k, no slippage, All Ords universe, 20 positions on this strategy - on the left below.  On the right for comparison is my older stragey, Full ASX universe, 15 positions trading from mid 2019 (this strategy is so slow to accumulate positions it didn't make sense starting from 1/1/2020...




					www.aussiestockforums.com
				




*This is the series of posts - the timeline that gave rise to the "Ducati Blue Bar Strategy"*
https://www.aussiestockforums.com/posts/1065849/
https://www.aussiestockforums.com/posts/1065921/
https://www.aussiestockforums.com/posts/1066161/
https://www.aussiestockforums.com/posts/1066911/
https://www.aussiestockforums.com/posts/1066996/
https://www.aussiestockforums.com/posts/1067016/
https://www.aussiestockforums.com/posts/1067059/
https://www.aussiestockforums.com/posts/1067241/
https://www.aussiestockforums.com/posts/1067303/

*All the information has been disclosed to make a profitable strategy*
I've made over 70 posts about the "Ducati Blue Bar Strategy" & if you use the search feature you will find them all.  

*Knowledge, "leads to action"*
@ducati916 posted some helpful hints (passing on some of his knowledge) in the "Dump it here" thread has resulted in 3 new afl's for me. (1) "The Ducati Blue Bar Strategy" (2) "The Ducati Stop & Go Indicator" & (3) "The Ducati Acceleration Indicator" all respectable in their own right. I'm now a firm believer that we don't need a fancy strategy to make money in this game. Using "The Ducati Blue Bar Strategy" with prudent "Money management" with a sharp "PositionScore" code brings this strategy to life. (parameter settings are also important - being part of the mix)

*"The Ducati Blue Bar Strategy"*
This strategy just keeps giving by picking the turning pivot with ease (in real-time). The signals are generated by using two commonly found indicators. Reverse the entry condition & you have yourself a handy exit strategy. When the position doesn't follow through "The Ducati Blue Bar Strategy" exits very quickly without any other inputs, simple & clever.

Skate.


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## Skate (21 November 2021)

*A simple explanation*
Put four traders in a room together & they will all have their reason why they "enter & exit" a position. Put four "system traders" in another room & their reasoning behind why they enter a trade can be just as dramatic & diverse.

*Trading is a basic process*
We all tend to overthink trading but when you strip back trading to the bare basics it's all about trading the price differential, catching trends, knowing when to get in & more importantly when to get out. Money management takes care of the rest.

*Price differential*
I'm not a fancy trader, I jump on confirmed trends & hop off in a timely manner looking for the next ride. Trends are happening in all timeframes & market conditions. Picking the strong movers is the secret. Knowing when to hop-on & hop-off is the tricky part & the purchase "needs to be timed". Timing is everything in this game.

Skate.


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## Skate (21 November 2021)

Skate said:


> Re-balancing ensures every dollar (soldier) is put into the markets "to fight the good fight".




*The advantages of staying fully invested*
I personally preferred to stay fully invested & therefore sacrifice “buying bargains”. Not being fully invested will cost you. Having idol money lying around is a wasted opportunity. Not being fully invested would be to bet "against" the tide of history, which has continued to push markets higher. If you’re waiting to buy on a ‘dip’, you might end up missing a 20% gain while you wait for a 5%, 10%, or 15% ‘dip’ to come along!

*Selling during a crash*
No one knows whether the market is at the top, bottom, or otherwise anyway. It’s hard enough to know what the "mood of the market" is during a trading day, let alone tomorrow, or next week. As for selling during a crash, aside from the obvious loss of money, it has a devastating psychological effect. If you’re only thinking in the short term, it’s easy to get caught up in the volatility of the market pulling out before you give it time to recover. Doing so makes you much more prone to lose as @Cam019 has recently explained. Remember “Trading is a marathon, not a sprint”. I'm sure trading a monthly strategy will put everything into perspective.

Skate.


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## Skate (21 November 2021)

*What am I not seeing?*
"The Ducati Blue Bar Daily Strategy", "The Ducati Stop & Go Indicator" & "The Ducati Acceleration Indicator" sprung into life from reading & understanding a few posts. Posting about them in various threads was to encourage others to think "what did Skate see that I didn't". I'm just saying others (not all) rarely put knowledge into action.  

*As the saying goes*
"If what you learn leads to knowledge, you become a fool - but if what you learn "leads to action", you can become wealthy. 

*As traders, we are all different*
The difference between a successful trader is not a lack of knowledge, but rather a "lack of will to action that knowledge".  

Skate.


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## Skate (21 November 2021)

*No surprises here *
I'm surprised that there are some who don't understand how a trend really works, & how it impacts all strategies, both for trading & for development, so I thought I would share my opinion as this is as basic as it gets.

*So here we go*
Beginners are very concerned about finding a system that works all the time. They are especially concerned about entries. They want to hit the entry as close to the turning point of a trend as possible. (read my posts on the "Ducati Blue Bar Strategy"). The reality is when a market is trending up, it really doesn't matter what you are using for entries as long as you are entering in the direction of the trend.

*A few simple trend indicators are all you need to enter a trade*
Selecting entries during trends requires almost no brain cells. Once we are in a position, the problem becomes when do we exit.

Skate.


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## Skate (21 November 2021)

*Volatility & Volume*
"Volatility & Volume" (momentum) is the real driver of a trend. Meaning we enter a trend on "volatility & volume" & get off the ride when momentum slows, stalls, or heaven forbid it turns down. There are so many indicators that measure both of these, the trick was getting two indicators to work in unison. It pays to do your own research to find indicators that will work for you. Getting into a trend is not that difficult using a range of indicators, using two is sometimes better. Getting out of a trend & timing the exit is a little more complex.

*Mental toughness*
Giving a good strategy to someone else is not the measure of a strategy. It's rather the "mental toughness" of the trader that is the real decider.

*A trading system is usually most effective when "implemented consistently" *
One problem frequently encountered by individual traders is the "difficulty" in following a system. Sticking to a system requires discipline & discipline is often difficult when trading on "emotions". Don't let emotions "rule the day". Traders tempted to second-guess their strategy is a recipe for disaster.

Skate.


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## Skate (21 November 2021)

*I'll bring it to a close*
I'm starting to ramble & I've found others are turned off when they have so much to read or catch up on. But before I do I want to make an observation.

*The ASF has new members visiting every day*
I know they all have the urge to make money. Most get involved in trading because they see all their friends making money out of it, but themselves. The newspapers are spruiking Cryptos at the moment generating interest in trading. So, they think to themselves, "Hey this looks easy, I'll have a go!". Trading can be exciting in a bull market, markets that are rising & unfortunately, the good times don't last forever.

*Education is required*
New traders start trading without learning the rules of the game - a recipe for disaster! This phenomenon always occurs at top of the market because that is when the most excitement is generated. Exactly the time when the professionals are selling!

I'm hopping down off my soapbox now.

Skate.


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## qldfrog (21 November 2021)

rnr said:


> Hi @Cam019,
> 
> I must be missing the point of this question as *open trade profits* are not available for use to in taking a new position.
> 
> Cheers, Rob



Yes they are not available to use but you can have a cash reserve to smooth the results..imagine a 10 positions system 100k startthen one share falls 20pc and is sold you got 8k cash but your other 9 positions went up 10pc
You portfolio overall is 9x11+8 or 107k
You can either buy your next position for 8k..your cash or as i do:say 107k among 10 positions is 10.7k and i do next position buy for 10.7k.
Remember as well as your buys are overvalued aka last close plus roughly3 to 5pc; in most cases, you will buy below
normally you will spend a bit less than your intended max and i am happy with that method.
To each his own


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## Skate (21 November 2021)

@ducati916 *often posts the quote of the day*
This is worthy of I repost, I hope Duc doesn't mind as I haven't sort permission.




Skate.


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## Cam019 (21 November 2021)

qldfrog said:


> Yes they are not available to use but you can have a cash reserve to smooth the results..imagine a 10 positions system 100k startthen one share falls 20pc and is sold you got 8k cash but your other 9 positions went up 10pc
> You portfolio overall is 9x11+8 or 107k
> You can either buy your next position for 8k..your cash or as i do:say 107k among 10 positions is 10.7k and i do next position buy for 10.7k.
> Remember as well as your buys are overvalued aka last close plus roughly3 to 5pc; in most cases, you will buy below
> ...



@rnr

Rob, this is where @qldfrog and I do things slightly differently. In this method of using fixed percentage allocation my new position size would be $9,800 not $10,700. I would be using the 9 original positions at $10,000 original position size, and then the $8,000 sale proceeds - $98,000 / 10 = $9,800 OR if I only had the $8,000 cash, I would buy the next position smaller with the $8,000.

I don't use open trade profits to calculate position sizing.

The same thing would apply to fixed fractional position sizing. If we were using 1% risk per trade @qldfrog would probably be using $1,070 risk per trade and I would be using $980.

Same process, slightly different calculation.


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## Cam019 (21 November 2021)

@Skate bringing up beginners made me think of something I wanted to share with everyone. Something that I surely would have appreciated reading when I joined this forum 5-6 years ago. It will be quick.

Below are some 5+ year backtest results of the system I will be trading in my SMSF. On the *right* is my actual system results over the last 5 years and on the *left* is the exact same system, over the exact same backtest timeframe with a very quick click of a button change - I have turned off the historical constituent database testing.

So, whatever you read on this thread or forum from me or anyone else, hear from another person, read on twitter, whatever it is - make sure you test the idea correctly and get the correct answers.


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## Warr87 (21 November 2021)

Cam019 said:


> Actually, my testing shows that for this strategy, the thing that strangles returns the most is the using a regime filter.




I found this too. The filter does help with keeping MDD down, but you sacrifice some nice gains. This is one of the reasons why my particular iteration of the large cap strategy is riskier. And as I've mentioned in other posts, I understand why Nick has it in there as not everyone is going to want to take on the same amount of risk as myself (or you Cam for that matter).

In other testing, I've also found that a filter can also reducing returns on daily systems. Weekly seems to be a good place to employee a filter. But not every system is the same, just as a filter doesn't always make sense.


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## rnr (21 November 2021)

qldfrog said:


> Yes they are not available to use *but you can have a cash reserve to smooth the* results..imagine a 10 positions system 100k startthen one share falls 20pc and is sold you got 8k cash but your other 9 positions went up 10pc
> You portfolio overall is 9x11+8 or 107k
> You can either buy your next position for 8k..your cash or as i do:say 107k among 10 positions is 10.7k and i do next position buy for 10.7k.
> Remember as well as your buys are overvalued aka last close plus roughly3 to 5pc; in most cases, you will buy below
> ...



Hi @qldfrog,

So, in reality your starting capital $100,000 plus the amount of your cash reserve and not the $100,000 as used in the example posted by @Cam019.

Cheers, Rob


----------



## qldfrog (21 November 2021)

rnr said:


> Hi @qldfrog,
> 
> So, in reality your starting capital $100,000 plus the amount of your cash reserve and not the $100,000 as used in the example posted by @Cam019.
> 
> Cheers, Rob



True, basically a small buffer, in reality, i seldom need it as i am rarely fully invested  andi alsosell winners from time to time.add the average lower purchase price on open vs max price entered and the buffer is there already


----------



## DaveTrade (22 November 2021)

MovingAverage said:


> Without giving away your secret sauce it would be great to hear a little more about how you envisage NTW operating. Also, are you planning to use AB or something else for system evaluation?




I’ve completed the initial backtest on my NTW system. The backtest was done on only one market, the SPY, for the 15Y period from July 2006 through to July 2021.




I selected this period for my initial test because it includes the 2008 crash, the 2020 covid flash crash and the 2015 year of sideways market. This period also included some long trending periods which would be favourable for any trending system. The main reason for choosing this period for my initial test was to see how the system performed when trading through these different market environments.

Even though I’ve changed the system from up to six markets down to only one market, I haven’t increased the setting for market risk from 5% for this test. This means that the results of this test were achieved with a maximum account risk of 5% as well. In this initial test the system had a 6% account drawdown with the maximum consecutive losses of three. These two metrics are most important to me and I’m pleased with this result. The system had 35 trades achieving a 345% profit over the period. The backtest does not include fees or trade slippage but it was done without using options. The use of options should more than compensate for fees and slippage so I’m regarding the backtest results as valid feedback.

I’ve used three different trades in the backtest which I’ve called Green, Purple and Blue. The Green trades had 9 winners and 7 losses, the Purple had 5 winners and 8 losses and the Blue had 6 winners and 0 losses.

My next step is to backtest the ten year period prior to 2006 using the same trades and compare the results from both backtests. The difference in the metrics between the two backtests should give the feedback I need to decide if modifications will be needed before the system goes live.


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## Newt (22 November 2021)

Gee, its going to be tough getting a statistically significant backtest for so few trades over such a long timeframe DaveTrade.


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## DaveTrade (22 November 2021)

Newt said:


> Gee, its going to be tough getting a statistically significant backtest for so few trades over such a long timeframe DaveTrade.




Yes not a lot of trades. I'm looking to see how the trades that I'm using will perform in another period of the market, I may get even less trades, I may get more. The trades are sound in that they have their own edge but if I need to have a larger sample to feel confident before going live then I'll have to run them on another market to get it. Good point. Thanks for your feedback.


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## Skate (24 November 2021)

*No need to re-invent the wheel*
I was sent a BBO strategy from a well-respected member recently & I was amazed how well it performed. Thinking about how the strategy was coded just goes to prove how robust this type of strategy is. The Bollinger Band Breakout is a simple idea & easily implemented. Many trade a variation of the BBO strategy because it's a trusted workhorse that works across all time periods. The BBO is a brilliant idea of John Bollinger.

*The Bollinger Band Breakout *
The BBO uses the upper band to indicate the momentum & strength of the breakout. Bollinger Bands are two lines that show the volatility of the market, extremely comparable to support & resistance levels. The bands automatically widen when volatility increases & contract when volatility decreases. These bands measure deviation. This is the reason why they can be very helpful in diagnosing trends. There are multiple uses for Bollinger Bands & I use them as a part of my "StaleStop" exit strategy.

Skate.


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## Skate (24 November 2021)

*The Chartist BBO Strategy 10-Years On*








						The BBO Strategy 10-Years On
					

It's been 8-years since Unholy Grails was released.One of the most popular strategies was the Bollinger Band Breakout (BBO) strategy.




					www.thechartist.com.au
				











						More on the BBO Strategy
					

We revisited the BBO Strategy 10-years after it was first published in Unholy Grails. The article prompted numerous questions about the strategy.




					www.thechartist.com.au
				




*Recently published July 20th, 2021*
_"One of the most popular strategies was the Bollinger Band Breakout (BBO) strategy named “One of the Top 10 Trading Systems of All Time” by Futures Truth and remains a popular trend following strategy. The Regime Filter hasn’t added a great deal of benefits in the last 10-years, but as we saw in 2008, it certainly did come in handy by cutting the drawdown substantially"._

*The article prompted numerous questions* 
_The first was, “Being busy I prefer to trade weekly charts. How does the BBO Strategy perform on that time frame?”_

*Great question*
_"All in all the BBO Strategy has proven itself to be effective across different time frames and markets"._

Skate.


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## othmana86 (24 November 2021)

Hi All
FYI radge is offering 50% off his turnkey systems. Nov 26-29. Thought I’d put it out there in case someone was thinking about it.


----------



## Skate (24 November 2021)

*Versions of the BBO Strategy*
We all tend to have our own unique version of John Bollinger's idea & it's at the "very heart" of my "BBO Strategy". I prefer to trade the strategy weekly.

*Skate's BBO Strategy*
My version of the strategy incorporates an Index "Buy Filter" as well as a "Take Profit Stop" that relies heavily on a "StaleStop" exit strategy. The backtest results over the last two years aren't too shabby but that's not the reason why I'm posting the backtest report. The reason is to display the "comparison" between the number of "signals" for each exit type.

*730-day Backtest*
The backtest period is for the previous 730-days (2 years of trading to be exact). This period starts on 24/11/2019 making sure it incorporates the COVID flash-crash.










*Summary*
Difficult times required a rethink - this is where a take profit stop can into its own. Out of 110-trades, the "Take Profit Stop" resulted in 33 exits. The "Stale Stop" resulted in 39 exits. A trailing stop only exited 28 times. When there is a good number (33%) of exits resulting in taking profits it's a fair indication of the robustness of the strategy.






Skate.


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## Newt (24 November 2021)

othmana86 said:


> Hi All
> FYI radge is offering 50% off his turnkey systems. Nov 26-29. Thought I’d put it out there in case someone was thinking about it.



Do you have to be a member - where is the offer listed please?


----------



## othmana86 (24 November 2021)

Newt said:


> Do you have to be a member - where is the offer listed please?



No, I don’t think have to be a member. He sent an email out this afternoon. He said “stay tuned for more information”. I’ll PM you once he sends more details.


----------



## CNHTractor (26 November 2021)

othmana86 said:


> No, I don’t think have to be a member. He sent an email out this afternoon. He said “stay tuned for more information”. I’ll PM you once he sends more details.



Received email this morning from The Chartist


_Black Friday is here and The Chartist is offering 50% off all Turnkey Trading Systems* with the coupon code *BlackFriday2021*. Simply enter the coupon code on checkout.

Hurry, this offer is valid for four days only.

Nick_


----------



## Skate (26 November 2021)

Skate.


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## Skate (27 November 2021)

Skate.


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## Newt (28 November 2021)

Dammit Skate, you must be running a more aggressive trailing/stale stop for winning trades in tough markets and giving the losers a bit more room to run!?  

Must compute, new data, must compute........


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## Skate (28 November 2021)

Newt said:


> Dammit Skate, you must be running a more aggressive trailing/stale stop for *winning trades in tough markets* and giving the losers a bit more room to run!?
> 
> Must compute, new data, must compute........









*Bloody Hell, what's going on?*
Why has "The Platinum Strategy" decided to sell profitable positions? To be honest both positions have simply run out of steam. The first chart (ABR) is the "Weekly Chart" & on face value its looks ok with a minor pullback. But the issue will be more telling using the "Ducati Daily Blue Bar Chart"






*"Ducati Daily Blue Bar Chart"*
Now let's view the "Ducati Daily Blue Bar Chart". Starting back as far as Tuesday (ABR) simply ran out of steam. If we were trading a "Daily Strategy", we would have exited at the open on Wednesday.






*Now let's talk about (AVZ)*
The Platinum runs an Index Filter that drives the trailing stop. When the Index is UP, the strategy has a 40% Trailing Stop. The Red/Green ribbon denotes when the Index Filter is "on or off". The trailing stop (line) is also plotted on the chart. When the "Trailing Stop" line is "RED" it denotes a 40% trailing stop. When the Index Filter turns "OFF" the "RED" Trailing Stop turns from a "RED" line to a "PINK" line. Unfortunately, the "PINK" exit arrow denotes that the position has been taken out by a 10% Trailing Stop.





*Let's double-check*
Using the "Ducati Daily Blue Bar Chart" the "RED" daily bar confirms momentum has decreased since Wednesday & confirmed as an "exit" on the next bar, & that will be Monday at the open.





*Summary*
Even though the positions have been kind. Both strategies "know" the good times are over at the moment.

Skate.


----------



## Skate (28 November 2021)

*To answer a question*
I received two similar questions: "Why aren't the positions (IMU), (INR) & (PPS) not being sold"?




*Charts*
As there was interest I thought I would post the reply for others to understand. Well, the 3 positions IMU, INR, PPS were so close to exiting but just missed out. You could exit these positions if you like as I expect them to be sell signals next week. But I prefer not to make judgment calls nor override the strategy. Do it once & you'll do it again & again & again.

*1. (IMU)*





*2. (INR)*





*3. (PPS)*





*Summary*
The good thing about trading the signals from the "Exploration Analysis" is that this method displays all the "RAW" signals.

Skate.


----------



## Skate (30 November 2021)

*The flash-crash on Friday was horrendous to all system traders *
Trading at times can be downright annoying because we are not immune to a sudden shift in market sediment. The markets do change but the underlying rules for success don’t seem to. It is still driven by the same two opposing forces, fear, & greed. Companies have not changed since Friday, & now it's all systems go today. Trying to figure all this stuff out can be frustrating.

*Let's not try to make trading complicated*
Using logic to figure what the market might do on any given day is a waste of time in my opinion. Over-thinking is an overrated attribute when it comes to trading. Smart people tend to think logically & have a hard time dealing with a market that ignores what should be painfully obvious. The market is illogical at times & if you are too analytical, you will be surprised often.

Skate.


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## Skate (30 November 2021)

*Why do traders lose at trading?*
The answer is that we are humans not machines. When it comes to trading you need to be clinical, "resist being emotional". Trading emotionally makes us trade irrationally. We are not wired to trade successfully. To overcome that weakness you have to have a system in place or a trading strategy. Having a system or strategy to trigger an action without debate adds value & allows you to sleep at night.

*There is nothing new when it comes to trading ideas*
There has been a debate over the last few months about the usefulness of a backtest. The differing opinions relate to the time period of a backtest to achieve meaningful results "is the contentious issue". Personally, I favour test results over the last 4-5 years because to "me" it offers a more reliable evaluation framework. Backtest over a longer-term period often spanning 15-20 years as far as I'm concerned becomes less relevant to trading in these difficult times. System traders would be better served concentrating on the process that adds value to the portfolio than anything else.

Skate.


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## Skate (30 November 2021)

*The backtest period is important*
When you concentrate too much on long term backtests metrics to construct a strategy its usefulness in the short-term can be stifled. Performance results can be like “chalk & cheese” when conducting an evaluation over massive time frames. Performance observed in the past may offer little insight into the strategy performance in the short term. All I'm saying, markets have changed over the last 20 years.

Skate.


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## Skate (30 November 2021)

*Trend followers get the same signals*
Two "trend following strategies" usually receive similar signals but can exhibit substantial short-term performance differences. Why is that?

*Strategy evaluation*
I'm not convinced that one strategy is better than the other without gathering more information. Indeed, even strategies with nearly identical construction rules & long-run average returns can deviate meaningfully through time. The lesson for mechanical system traders is to remain cautious when interpreting past performance results. 

*A simple starting date in the short term can heavily impact the strategies performance *
A strategy needs to be evaluated over different markets & time periods to average the results. Confidence in a strategy is the first step in the process of deciding to take the strategy to the next level of evaluation.

Skate.


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## Rabbithop (30 November 2021)

Skate said:


> *The flash-crash on Friday was horrendous to all system traders *
> Trading at times can be downright annoying because we are not immune to a sudden shift in market sediment. The markets do change but the underlying rules for success don’t seem to. It is still driven by the same two opposing forces, fear, & greed. Companies have not changed since Friday, & now it's all systems go today. Trying to figure all this stuff out can be frustrating.
> 
> *Let's not try to make trading complicated*
> ...



It's our human nature, knee jerk reaction to the hammer knock.


----------



## Rabbithop (30 November 2021)

Skate said:


> *Why do traders lose at trading?*
> The answer is that we are humans not machines. When it comes to trading you need to be clinical, "resist being emotional". Trading emotionally makes us trade irrationally. We are not wired to trade successfully. To overcome that weakness you have to have a system in place or a trading strategy. Having a system or strategy to trigger an action without debate adds value & allows you to sleep at night.
> 
> *There is nothing new when it comes to trading ideas*
> ...



What a wise saying in your first paragraph. Will change some wordings but keeping to your wise idea n sending it to serious gamblers, hoping to save some souls.


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## Cam019 (30 November 2021)

Oh I love this thread because I am going to disagree with @Skate and many others on this point until the day we die.



Skate said:


> *The backtest period is important*
> When you concentrate too much on long term backtests metrics to construct a strategy its usefulness in the short-term can be stifled. Performance results can be like “chalk & cheese” when conducting an evaluation over massive time frames. Performance observed in the past may offer little insight into the strategy performance in the short term. All I'm saying, markets have changed over the last 20 years.
> 
> Skate.




Oh my. Where do I begin. Let me see if I can put this in point form to make it easy for readers to digest.

*The backtest period is important.*

You should be concerned about *long term backtests*. Usefulness in the short-term is irrelevant. You want to design a system that performs well over a long data set. You cannot code a system to perform well in all market conditions. That's why I want something that performs exceedingly well over a long period of time, that is hard to stomach. Because no one in their right mind would want to be there trading a system that can produce 40%+ drawdowns and has infrequent profits. But, this is the way to make money in the markets.

The more entry and exit conditions you code into a system in addition to optimising your parameters over what I consider to be a miniscule to minimium amount of data, the more you are treading the path of *robustlessness.*

Can someone please just humor me and put up a backtest of their system that is optimised to recent data and post a up backtest since 1992. I'd love to see it. Let's do it in the name of transparency.

I will never understand the idea of over-optimising your systems to say, 1-5 years worth of data under the guise of oh, "the markets have changed". Yes, the markets have changed, but human behaviour has not.


----------



## Cam019 (30 November 2021)

Skate said:


> Performance observed in the *recent* past may offer little insight into the strategy performance in the short term *future*.


----------



## Skate (30 November 2021)

Cam019 said:


> Can someone please just humor me and put up a backtest of their system that is optimised to recent data and post a up backtest since 1992. I'd love to see it. *Let's do it in the name of transparency*.




I'll show you my Monthly results for the dates below on the "proviso" you do the same with Nick's Version of his Monthly Momentum Strategy. 

*My question*
Is it a deal?

*For transparency*
Make the portfolio size: $100k
Position Size: 10 
Index: ASX All Ordinaries

(a) 1/1/2021 to Now (11 months)
(b) 1/1/2020 to Now (1 year & 11 months)
(c) 1/1/2016 to Now (5 years & 11 months)
(d) 1/1/1992 to Now

You can post first as your strategy has been professionally developed & coded with parameter settings that will trade all markets.

Skate.


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## Cam019 (30 November 2021)

Skate said:


> I'll show you my Monthly results for the dates below on the "proviso" you do the same with Nick's Version of his Monthly Momentum Strategy.
> 
> *My question*
> Is it a deal?
> ...



Hahahahaha!

Oh Skate.

No, no deal. We need a rehash of the rules.

I'm not asking to compare strategies to see whos performs better on a certain index with certain position sizes. This isn't a pissing contest.

What I'm saying is - I don't believe that optimising a systems parameters over a short window of time will hold up when running a long term backtest on historical constituent data. So, I am asking anyone who is game, post up your short term optimised strategies performance over the long term. If you do - great. If you don't - great.

You can find Nicks strategy results here.


----------



## Skate (30 November 2021)

Cam019 said:


> Hahahahaha!
> 
> Oh Skate.
> 
> ...




*It's not a pissing contest*
@Cam019, I'm more than willing to post results showing you how to code for today's market condition "versus" the same strategy trading from 1992. I'm saying trading at the turn of the century, 1900, 1930, 1950 & 1992 was a different era. It's not comparing "like for like"



Skate said:


> *The backtest period is important*
> When you concentrate too much on long term backtests metrics to construct a strategy its usefulness in the short-term can be stifled. Performance results can be like “chalk & cheese” when conducting an evaluation over massive time frames. Performance observed in the past may offer little insight into the strategy performance in the short term. All I'm saying, markets have changed over the last 20 years.




*The two dates are important*
This is the time we all struggled to come to terms with the (COVID Flash-Crash). I had to have a rethink & I've suggested in many posts that others should do the same, review their trading strategy.

(a) 1/1/2021 to Now (11 months)
(b) 1/1/2020 to Now (1 year & 11 months)

*This is important*
The other two time periods is to show that a recent backtest from 5 years ago did perform as expected, whereas 1992 is less relevant.

(c) 1/1/2016 to Now (5 years & 11 months)
(d) 1/1/1992 to Now



Cam019 said:


> You should be concerned about *long term backtests*. Usefulness in the short-term is irrelevant. You want to design a system that performs well over a long data set. You cannot code a system to perform well in all market conditions. That's why I want something that performs exceedingly well over a long period of time, that is hard to stomach




*Summary*
I'm sure others would be disappointed as myself that you wouldn't "put up". There is no pressure for you to do so but I'm at a loss why you wouldn't take the opportunity to fully explain why you hold an alternative view to mine. Posting your "Monthly Momentum Strategy" backtest results will go a long way for others to understand where your remarks are coming from. Without displaying your backtest results limits your explanation. Without substance, I'll take your post as a comment rather than an alternative view. You are simply promoting old ideas from an out-of-date book(s). Just because it may have been relevant decades ago doesn't make it true today.

Skate.


----------



## Skate (30 November 2021)

Cam019 said:


> *What I'm saying is - I don't believe that optimising a systems parameters over a short window of time will hold up when running a long term backtest on historical constituent data.* So, I am asking anyone who is game, post up your short term optimised strategy performance over the long term. If you do - great. If you don't - great.




@Cam019, we are on the same page as far as _"I don't believe that optimising a systems parameters over a short window of time will hold up when running a long term". _

*Correct*
I've stated (we are trading in a different era). What worked many moons ago has a habit of not "stacking-up" trading in today's volatile markets. I'm just telling it as I find it. With advancements in coding, safeguards that are needed today weren't needed years ago. Also, the thinking & trading methodology has come a long way since the "olden" days.

*For transparency*
Portfolio size: $100k
Position Size: 10
Index: ASX All Ordinaries

(a) 1/1/2021 to Now (11 months)
(b) 1/1/2020 to Now (1 year & 11 months)
(c) 1/1/2016 to Now (5 years & 11 months)
(d) 1/1/1992 to Now

*I'll post in the ascending date order*
There are a few metrics to consider. The exposure is unacceptably low (33.23%). The return is better than Bank Interest. Overall "Skate's Monthly Momentum Strategy" is not suitable or coded for that period. To have the strategy perform it would need to be curve fitted, & you know what that will do.




*Summary*
This strategy is not a strategy I would have traded back in 1992.

Skate.


----------



## Cam019 (30 November 2021)

Skate said:


> *It's not a pissing contest*
> @Cam019, I'm more than willing to post results showing you how to code for today's market condition "versus" the same strategy trading from 1992. I'm saying trading at the turn of the century, 1900, 1930, 1950 & 1992 was a different era. It's not comparing "like for like"



Skate, I don't need you to show me how to code for "todays market conditions". If the ASX100 established and data was available from the turn of century - I would use it in my backtest too. It is not different. Human emotion/behaviour and liquidity drive markets. So, what your basically saying is that over the span of a mere 121 years, the way humans react to their emotions, react to their feelings of fear and greed, has changed? No chance.


----------



## Skate (30 November 2021)

*"Skate's Monthly Momentum Strategy" *
This strategy has been systematically coded for robustness "trading volatile markets" since the (COVID Flash-Crash).

*For transparency*
Portfolio size: $100k
Position Size: 10
Index: ASX All Ordinaries

(a) 1/1/2021 to Now (11 months)
(b) 1/1/2020 to Now (1 year & 11 months)
(c) 1/1/2016 to Now (5 years & 11 months)
(d) 1/1/1992 to Now

*I'll post in the ascending date order*
(c) 1/1/2016 to Now (5 years & 11 months). Really, I ask you, how far back do you need to revisit to have meaningful results.




Skate.


----------



## Cam019 (30 November 2021)

@Skate

*My SMSF system - (01/01/1992 - 31/12/2021)




*


----------



## Cam019 (30 November 2021)

Skate said:


> Really, I ask you, how far back do you need to revisit to have meaningful results.



As far as the data set will allow you to go.


----------



## qldfrog (30 November 2021)

Cam019 said:


> Skate, I don't need you to show me how to code for "todays market conditions". If the ASX100 established and data was available from the turn of century - I would use it in my backtest too. It is not different. Human emotion/behaviour and liquidity drive markets. So, what your basically saying is that over the span of a mere 121 years, the way humans react to their emotions, react to their feelings of fear and greed, has changed? No chance.



except that most of trading is done by computers nowadays:
from investopedia:
What Is an Automated Trading System?​
Automated trading systems — also referred to as mechanical trading systems, algorithmic trading, automated trading or system trading — allow traders to establish specific rules for both trade entries and exits that, once programmed, can be automatically executed via a computer. *In fact, various platforms report 70% to 80% or more of shares traded on U.S. stock exchanges *come from automatic trading systems.1

Thanks god, human react the same, obviously instant access to information vs getting the paper a week later does not matter


----------



## Cam019 (30 November 2021)

qldfrog said:


> except that most of trading is done by computers nowadays:
> from investopedia:
> What Is an Automated Trading System?​
> Automated trading systems — also referred to as mechanical trading systems, algorithmic trading, automated trading or system trading — allow traders to establish specific rules for both trade entries and exits that, once programmed, can be automatically executed via a computer. *In fact, various platforms report 70% to 80% or more of shares traded on U.S. stock exchanges *come from automatic trading systems.1
> ...



You know humans code those systems, right?


----------



## Skate (30 November 2021)

Cam019 said:


> Skate, I don't need you to show me how to code for "todays market conditions". *If the ASX100 established and data was available from the turn of century - I would use it in my backtest too*. It is not different. Human emotion/behaviour and liquidity drive markets. So, what your basically saying is that over the span of a mere 121 years, the way humans react to their emotions, react to their feelings of fear and greed, has changed? No chance.




@Cam019, you're not listening, you have a "closed mind". Just have an "open mind" of what I'm saying & displaying. 

*Let me show you a graph. "SOMETHING HAS CHANGED"*
The recent inflows to equities exceed the combined inflow of the past 19 years. I would say something is different, something has changed over the last few years. What about the investment in "Bitcoin" over the last few years. The value invested in bitcoins was* $742.3 billion* as of July 29, 2021, & it's even more today. 

*Trading is different from years gone by*
I would say something is different, something has changed over the last few years. 




I'll post the other backtest reports to complete the series.

Skate.


----------



## Skate (30 November 2021)

Cam019 said:


> @Skate
> 
> *My SMSF system - (01/01/1992 - 31/12/2021)
> 
> ...




*Now what about posting the other date periods*
(a) 1/1/2021 to Now (11 months)
(b) 1/1/2020 to Now (1 year & 11 months)
(c) 1/1/2016 to Now (5 years & 11 months)

Skate.


----------



## Cam019 (30 November 2021)

Skate said:


> @Cam019, you're not listening, you have a "closed mind". Just have an "open mind" of what I'm saying & displaying.



Let me make something really clear for you. Just because someone disagrees with you, doesn't mean they're close minded.


----------



## Skate (30 November 2021)

*"Skate's Monthly Momentum Strategy"*
This strategy has been systematically coded for robustness "trading volatile markets" since the (COVID Flash-Crash).

*For transparency*
Portfolio size: $100k
Position Size: 10
Index: ASX All Ordinaries

(a) 1/1/2021 to Now (11 months)
(b) 1/1/2020 to Now (1 year & 11 months)
(c) 1/1/2016 to Now (5 years & 11 months)
(d) 1/1/1992 to Now

*Ascending date order*
(b) 1/1/2020 to Now (1 year & 11 months).




Skate.


----------



## Cam019 (30 November 2021)

*My SMSF system - (01/01/2016 - 31/12/2021)




*


----------



## Cam019 (30 November 2021)

*My SMSF system - (01/01/2020 - 31/12/2021)*


----------



## Cam019 (30 November 2021)

*My SMSF system - (01/01/2021 - 31/12/2021)*


----------



## Skate (30 November 2021)

Cam019 said:


> Let me make something really clear for you. *Just because someone disagrees with you, doesn't mean they're close minded*.




*No, No*
You have it wrong. We have a different view. I'm in the process of explaining "what you have asked". I'm posting backtest results so others can understand "why" I hold the views I do.



Cam019 said:


> Oh I love this thread because *I am going to disagree with @Skate *and many others on this point until the day we die.




*It's not a contest of ideas* 
The 'Dump it here' thread is not about "right or wrong" or whether you’re right & I'm wrong - that's not the point or "for that matter" important. When I make a statement, I'll explain why I hold those few. When others have an alternative view, I'm interested in understanding why. Just saying "I disagree" without an explanation helps no one understand your point.

Skate.


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## qldfrog (30 November 2021)

Cam019 said:


> You know humans code those systems, right?



the human who codes is not shaking in its boots nor dribbling with envy, moreover, most of the big boys use AI and qant who are looking at each other inputs etc, none of these human as it is played within ms  much faster than any human responses.especially for the Big blue caps
Anyway, we agree to disagree . good luck and we will see where we stand in 10y time


----------



## Skate (30 November 2021)

*What the hell*
Your results from 1992 are okay, this year the results are dismal. Why?

*I'm suggesting*
Since the COVID Flash-Crash, all trading strategies need to be re-evaluated, that's all. A strategy that worked years ago may not be suitable for trading with the conditions were are experiencing at the moment.

*I'm saying, something has changed!*
Also, we have an enormous amount of new trading participants who are looking for a quick way of getting rich. With the new participants & their way of trading has certainly altered the markets "in a way" that we can take advantage of.




Skate.


----------



## Skate (30 November 2021)

*"Skate's Monthly Momentum Strategy"*
This strategy has been systematically coded for robustness "trading volatile markets" since the (COVID Flash-Crash).

*For transparency*
Portfolio size: $100k
Position Size: 10
Index: ASX All Ordinaries

(a) 1/1/2021 to Now (11 months)
(b) 1/1/2020 to Now (1 year & 11 months)
(c) 1/1/2016 to Now (5 years & 11 months)
(d) 1/1/1992 to Now

*Ascending date order*
(a) 1/1/2021 to Now (11 months)





*Portfolio Signals*
For full transparency, these are the signals for this calendar year.






Skate.


----------



## Skate (30 November 2021)

*"Skate's Monthly Momentum Strategy"*
This strategy has been systematically coded for robustness "trading volatile markets" since the (COVID Flash-Crash).

*I'm saying, something has changed!*
The enormous amount of new traders has certainly altered the markets. A strategy that has been systematically coded to trade since (COVID) may not work as designed back in the days gone by.



*Say no more*
The exposure back in 1992 compared to 2021 is stark. The results are reflective of this. Phew, this brings me to an end.

Skate.


----------



## qldfrog (30 November 2021)

Skate said:


> *"Skate's Monthly Momentum Strategy"*
> This strategy has been systematically coded for robustness "trading volatile markets" since the (COVID Flash-Crash).
> 
> *I'm saying, something has changed!*
> ...



@Cam019 19, I also suspect that most systems are using a minimum price and amount traded per day in your buy filter??
as such since 1992, prices have jumped by 2 just with inflation (and not even thinking PE)


in USD but similar here:
"The dollar had an average inflation rate *of 2.37% per year* between 1992 and today, producing a cumulative price increase of 97.14%"
so I assume you have a variable in your backtests with is a ratio applied in your backtest to all hardcoded such figures,
doable but I somehow doubt it is done? otherwise, what is the point .
If not, maybe I have helped you there:
 if I was to believe the 1992 onward backtests were useful:
which I am not  , that is the very minimum change I would do to my code,
the mandatory  use of relevant indexed $ values


----------



## Newt (30 November 2021)

Skate said:


> @Cam019, you're not listening, you have a "closed mind". Just have an "open mind" of what I'm saying & displaying.
> 
> *Let me show you a graph. "SOMETHING HAS CHANGED"*
> The recent inflows to equities exceed the combined inflow of the past 19 years. I would say something is different, something has changed over the last few years. What about the investment in "Bitcoin" over the last few years. The value invested in bitcoins was* $742.3 billion* as of July 29, 2021, & it's even more today.
> ...




Holy Frack......!
That inflows graph shows a pretty stark change.  

On backtesting, does anyone here use the Amibroker Walk Forward functions in the their backtests?


----------



## MovingAverage (1 December 2021)

Cam019 said:


> What I'm saying is - I don't believe that optimising a systems parameters over a short window of time will hold up when running a long term backtest on historical constituent data. So, I am asking anyone who is game, post up your short term optimised strategies performance over the long term. If you do - great. If you don't - great.



Bit like flipping a coin twice and on both coin flips it comes up tails....then making the ridiculous assumption that for any coin flip you will have a 100% chance of getting a tails. A lot of people here really struggle with the basic concept of applying sample size and statistical relevance to their backtesting.


----------



## Cam019 (1 December 2021)

Skate said:


> *Say no more*
> The exposure back in 1992 compared to 2021 is stark.




It kind of shocks me that someone hasn't mentioned this, so I will.

You have basically proved my point about robustlessness.

The reason you have such low exposure with a long-term backtest is because the signals you have data mined for, and curve fitted to approximately 2 years of post "COVID Flash-Crash" data, didn't exist very often throughout the whole data set from 1992/1993.

So, what is going to happen when the markets change again and you need to curve fit your system after the next unforseeable market crash?

How do you know exactly when will be the next optimal time to 'curve-fit' your system'?



Skate said:


> This strategy has been systematically coded for robustness "trading volatile markets" since the (COVID Flash-Crash).




You're trying to tell me that your system has been "coded for robustness" on a 37 trade sample size from 01/01/2020? Give me a break!


----------



## Skate (1 December 2021)

MovingAverage said:


> A lot of people here really struggle with the basic concept of applying sample size and statistical relevance to their backtesting.




Nailed it.

Skate.


----------



## qldfrog (1 December 2021)

MovingAverage said:


> Bit like flipping a coin twice and on both coin flips it comes up tails....then making the ridiculous assumption that for any coin flip you will have a 100% chance of getting a tails. A lot of people here really struggle with the basic concept of applying sample size and statistical relevance to their backtesting.



we can stress relevance too


----------



## Skate (1 December 2021)

*"Past success does not guarantee future performance." *
You'll see this warning tacked onto everything from those wishing to sell you something trade-related. So why is it there, & what exactly does it mean? 

*Trading involves risk*
Trading is a risky process that centres around the process of making good decisions & managing risk. With systemic traders, it is about the methodology & process that counts. Past results can be helpful when analysing a strategy, as long as the time horizon is meaningful "to you". Also, the past returns can be a helpful metric when choosing to evaluate a strategy further. A signal backtest is not an evaluation.

*A sound trading plan with a good strategy works!*
Much of the time, some traders (well most) are driven by their emotions, & these traders are the ones that cause prices to "rise & fall". More often than not, they trade at the wrong times, letting their "emotions" control their decisions. They buy more during rallies & sell more during slumps. If there appears to be a downward trend on the horizon, many begin to panic. If you're trying to build wealth, that is a losing strategy. 

Skate.


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## MovingAverage (1 December 2021)

qldfrog said:


> we can stress relevance too



I know where you are going with that, but I am using it strictly in the context of statistics and I'm not using it to suggest recent data has more relevance than older historic data.


----------



## Skate (1 December 2021)

*Posted without permission*
@ducati916 quote of the day.




Skate.


----------



## ducati916 (1 December 2021)

So just looking at some of the comments made recently. One proviso is that these comments may well be made in the context of the ASX. 

My comments are in relation to the S&P500:








1. Something that has changed in (stock) markets: the greater involvement of Central Banks (manipulation of short end of curve, QE and direct purchases of securities) in 'supporting markets'.

2. The nature of participants involvement, ie. Options:

3. Constituents of various indices being replaced. Relevant if indices are being traded.




4. Flows of international debt:




5. Re. the 'law of large numbers' and statistical relevance; markets are not the correct milieu to rely upon statistical measures.

jog on
duc


----------



## qldfrog (1 December 2021)

MovingAverage said:


> I know where you are going with that, but I am using it strictly in the context of statistics and I'm not using it to suggest recent data has more relevance than older historic data.



Sure MA, but it was too easy..could not refrain.we know where we both stand there.👍


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## MovingAverage (1 December 2021)

qldfrog said:


> Sure MA, but it was too easy..could not refrain.we know where we both stand there.👍



I know it was...you gave me a good laugh. I like that we have different opinions--that's what makes trading. If we all had the same opinions there would be no trading


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## MovingAverage (1 December 2021)

This is a genuine question, but when I say "statistically relevant" what do people think that means? @ducati916 point 5 above makes me think people have very different definitions what what it means because @ducati916 reference is definitely at odds.


----------



## ducati916 (1 December 2021)

MovingAverage said:


> This is a genuine question, but when I say "statistically relevant" what do people think that means? @ducati916 point 5 above makes me think people have very different definitions what what it means because @ducati916 reference is definitely at odds.








This is the definition that I would use.

jog on
duc


----------



## Cam019 (1 December 2021)

MovingAverage said:


> This is a genuine question, but when I say "statistically relevant" what do people think that means? @ducati916 point 5 above makes me think people have very different definitions what what it means because @ducati916 reference is definitely at odds.



Okay, so the two things I would look at are sample size of the backtest and the number of optimizable variables in the system.

The more optimizable variables in your system, the larger the sample size you are going to require to understand whether there is an actual 'edge' created by trading the system with the parameters that have been chosen. The lower the sample size (and the more optimizable variables in your system) the more likely there is nothing other than a random chance relationship of the chosen parameters over the backtested period.

I like to use a rough guide which I found here a while back.

Backtest sample size = 50 + (50 * number of optimizable variables in the system)

I have 5 optimizable variables in my system, including position sizing, so therefore I want to have a bare minimum sample size of 300 trades. For my system, this means I would have to backtest from* 01/01/2006 to 31/12/2021* to get my minimum required sample size. I get 301 trades for this period.

My personal preference is to go back as far as the data allows me to - 1992/1993.


----------



## MovingAverage (1 December 2021)

This is what should be important to system traders, but is not what you suggested in point 5.


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## MovingAverage (1 December 2021)

The problem I have with this thread (this is not a personal attack) is that a lot of folks talk about testing over a period of time and generally the assumption is the longer the time frame the better. This is rubbish.

I bet if I was to say I did a backtest (over whatever time period you care to suggest--I don't care) and my back test executed 5000 trades who would suggest that is good (statistically relevant)?


----------



## Cam019 (1 December 2021)

MovingAverage said:


> The problem I have with this thread (this is not a personal attack) is that a lot of folks talk about testing over a period of time and generally the assumption is the longer the time frame the better. This is rubbish.
> 
> I bet if I was to say I did a backtest (over whatever time period you care to suggest--I don't care) and my back test executed 5000 trades who would suggest that is good (statistically relevant)?



If you had 120 optimizable variables - I'd still probably say it wasn't enough.

However, if you ignore my ridiculous comment for a moment - yes 5,000 trade sample size over whatever time period is statistically significant.

I do just want to say that I have been harping on about length of backtest, but that is in relation to the timeframe I trade on - monthly. I do need to go back this far to get a statistically significant sample size.

Due to trading this timeframe, I also want to have as few optimizable parameters as possible to get enough sample size. If I had 6 more variables in my system, I couldn't get enough sample size to trade a monthly system.


----------



## ducati916 (1 December 2021)

MovingAverage said:


> This is what should be important to system traders, but is not what you suggested in point 5.
> 
> View attachment 133658





That's correct. 

That is because I do not subscribe to that methodology in approaching markets. Probably 2 examples as to why.

(i) A company's CEO runs off with the secretary. Share price tanks, gapping down 30%.
(ii) A new variant of a disease is announced, market as a whole gaps down.




A random (future event) can change a trend immediately.

Thus reliance on a backtest are potentially futile or very dangerous.

So a further thought on how markets (may) change, effecting a very different outcome to one envisaged. So since 2000 the Fed has ridden to the rescue in each market blow-up. This has been increasing: 2008, 2020 being 2 obvious examples.

Moving forward, is it a 'given' that they will do so the next time? Given that they may have to make a choice between 'stocks' and their 'fiat currency'. Either choice is bad for stocks. How relevant is a backtest?

jog on
duc


----------



## Cam019 (1 December 2021)

ducati916 said:


> How relevant is a backtest?



How relevant is someones subjective opinion?


----------



## MovingAverage (1 December 2021)

Cam019 said:


> If you had 120 optimizable variables - I'd still probably say it wasn't enough.
> 
> However, if you ignore my ridiculous comment for a moment - yes 5,000 trade sample size over whatever time period is statistically significant.
> 
> I do just want to say that I have been harping on about length of backtest, but that is relation to the timeframe I trade on - monthly. I do need to go back this far to get a statistically significant sample size.




The reality is that the number of actual trades in your backtest needs to be put into the context of how many possible trade were available during that time period--what you take and what are available are often very different. In reality there are many constraints that limit us from taking all possible trades--capital constraints, risk management, position sizing etc etc etc. So for example, if during that period for which my backtest took 5000 trades there were 1,000,000 possible trades (couldn't take them all because of constraints) I'd suggest 5000 may not be statistically relevant. But if the 5000 trade were in the content of 6000 possible trades I'd suggest it's likely to be statistically relevant.


----------



## MovingAverage (1 December 2021)

ducati916 said:


> (i) A company's CEO runs off with the secretary. Share price tanks, gapping down 30%.
> 
> 
> jog on
> duc



Company CEO's have run off with their secretary before so you'd reckon historic data would have that baked in


----------



## Skate (1 December 2021)

MovingAverage said:


> The problem I have with this thread (this is not a personal attack) is that everyone talks about testing over a period of time and generally* the assumption is the longer the time frame the better. This is rubbish.*




Nailed it again.



Cam019 said:


> I like to use a rough guide which I found here a while back.
> 
> My personal preference is to go back as far as the data allows me to - 1992/1993.




Martyn Tinsley who @Cam019 references, BTW, is well-credentialed that I have already made a series of posts on.

*Does your trading system "really" have an edge?*




*Recommended viewing *
I'm suggesting if you get any spare time watch the short videos that Martyn Tinsley has produced. Martyn embarks on a journey to challenge the "backtesting status quo" that prevails among system traders that are often discussed in this thread. Martyn highlights the pitfalls of herd-mentality with regards to "backtesting & optimization", which will prove to be extremely informative. 

*Optimising parameters*
Traders often struggle to optimise their systems in order to find parameters with the most effective edge. This often results in the systems losing money in practice, especially when traded on a live account. Without understanding this fully, traders are likely to continue choosing the wrong parameters to trade.

*Parameter values that provide no edge at all often appear to perform in optimisation as if they do*
Every trader needs to be very aware of this anomaly. Parameter values with little or no edge can often produce far better results in optimization than the parameters that offer the best edge, & the best chance of success in the long term. If you’re not careful, it will be these sub-optimal values that you choose to trade.

*Direct link to Martyn Tinsley series of YouTube videos*
Martyn's educational style is a joy to watch.



			https://www.youtube.com/c/Darwinexchange/videos
		


Skate.


----------



## MovingAverage (1 December 2021)

Cam019 said:


> If you had 120 optimizable variables - I'd still probably say it wasn't enough.
> 
> However, if you ignore my ridiculous comment for a moment - yes 5,000 trade sample size over whatever time period is statistically significant.
> 
> ...




If you're an AB user and you haven't done this before, look into the difference between scan and explore. I've got scan setup to spit out all possible trades for a period of time which is useful for putting the number of trades you actually take in a backtest in context with total possible number of available trades. It is also pretty easy to code into your backtest output.


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## ducati916 (1 December 2021)

Cam019 said:


> How relevant is someones subjective opinion?




Totally irrelevant. Which is exactly the point. A historical backtest however will, due to the empirical record, make a definitive assumption.

jog on
duc


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## Skate (1 December 2021)

MovingAverage said:


> If you're an AB user and you haven't done this before, look into the difference between scan and explore. I've got scan setup to spit out all possible trades for a period of time which is useful for putting the number of trades you actually take in a backtest in context with total possible number of available trades. It is also pretty easy to code into your backtest output.




*Straight from the horse's mouth*
(a) The Scan is meant as a quick tool to show *raw, unprocessed, non-delayed* signals as they are present in Buy/Sell/Short/Cover arrays. The scan does not do ANY processing. The output of scan is *not* customizable. It merely displays cells/bars where buy/sell/short/cover signals occur.
(b) Exploration is meant as a generator of fully user-customizable tables, or Excel-like tabular reports. It does NOT use Buy/Sell/Short/Cover variables. It only uses *Filter* variable to decide which data rows to display. You can customize the Exploration layout freely. You can define your own columns and the content of data displayed. It does NOT do any extra (hidden) processing to display data.
(c) The Backtester is a tool to perform trading system performance testing on historical data. *It performs a LOT of internal processing*, including trade delays, removing redundant signals, position-sizing, applying portfolio-level constraints, etc.

Skate.


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## ducati916 (1 December 2021)

MovingAverage said:


> Company CEO's have run off with their secretary before so you'd reckon historic data would have that baked in




A phrase adapted from the Book of Ecclesiastes; the author complains frequently in the book about the monotony of life. The entire passage reads, “*The thing that hath been, it is that which shall be; and that which is done is that which shall be done: and there is no new thing under the sun.*”

The question however is twofold: will this remain true moving forward and is that actually a true statement about financial markets?


jog on
duc


----------



## Skate (1 December 2021)

MovingAverage said:


> If you're an AB user and you haven't done this before, look into the difference between scan and explore




*"Skate's Monthly Momentum Strategy"*
@MovingAverage made a great post highlighting the differences between "Scan & Explore". I'll take it one step further & show the practical example of ways to trade using the "Backtest" versus the "Exploration Analysis". I have previously canvassed the different & associated pitfalls between the two.

*Using Backtest to generate signals*
The Backtester is a tool to perform trading system performance testing on historical data. It performs a "LOT of internal processing", including trade delays, removing redundant signals, position-sizing, applying portfolio-level constraints, etc.





*Using Exploration Analysis to generate signals*
Using the "Exploration Analysis" generates fully user-customizable tables. You can customize the Exploration layout freely. You can define your own columns and the content of the data displayed. This is my preferred method to generate signals as the information is invaluable to "me"




*Summary*
As you can see, they are the same signals but using the "Exploration Analysis" allows me to add additional columns of information that display more information through additional coding.

Skate.


----------



## MovingAverage (1 December 2021)

ducati916 said:


> The question however is twofold: will this remain true moving forward
> 
> 
> jog on
> duc



I reckon it will...human nature is what it is and CEO's (some but not all) will continue to "screw the crew". As sure as the sun comes up is man's desire to sow his seeds  I think someone else said it here a few posts back--human nature hasn't changed a lot


----------



## Skate (1 December 2021)

*Not now but sometime in the future*
There will be members who read the posts from today as well as last week, which will resonate with them more than others. Which point of view will they accept is not for us to decide. "The Dump it here" thread is _a_bout ideas - "not a contest of ideas".

*Civility when expressing an opinion*
When members express an opinion, what is important "is the words" they use to express that alternative point of view or express an opinion is the true measure of this thread. I truly appreciate when valued, experienced members take the time to express those ideas & even though at times I don't agree, I take them on board & feel wealthier for it.

*Acceptance*
We can all agree to disagree - we can all contest our ideas but to express those views in a manner that's has been promoted recently has been a real credit to all members. Your belief system defines whether you agree or disagree with a member's post but if you don’t listen you forgo the right to understand their point of view.

*A few members with conviction*
I enjoy reading those who prosecute their case forcefully with conviction & when they have something to say it pays to listen. Some posts I re-read to pick up the gems they causally scatter.

Well done guys,

Skate.


----------



## Skate (1 December 2021)

*Something fresh & trade-related*
@ducati916 made a remarkable post about Crypto today that I would like to condense & add my opinion.

*Cryptos is built on fairy dust*
_"Crypto's is basically like stock in an empty company that doesn't do anything except promote the sale of its own stock. Crypto's such as Bitcoin is a fool's investment of those who trade hoping to offload it on someone dumber than them who will pay more for it. Crypto trading is not economically distinguishable from Ponzi Schemes"._

*BOE stands for 'built on enthusiasm'*
Bitcoin is built on the enthusiasm of others that doesn’t have any intrinsic value but mainstream adoption is showing no signs of letting up anytime soon. Bitcoin is currently in unchartered territory & nobody knows when the current bull run is going to stop or take a pause.

*I can't understand it*
Ultra-easy monetary policy has pumped trillions of dollars into cryptocurrencies & perhaps most important of all is the institutional interest which has skyrocketed this year expanding their investments in the world’s premier digital currency. Big names including Fidelity, BlackRock & Citigroup have followed suit are just a few. Also, well-respected long-term investors are getting in on the act with high volumes of money being splashed about.

*Summary*
I want to finish with Duc's assessment:
"Bitcoin is a fool's investment of those who trade hoping to offload it on someone dumber than them who will pay more for it".

Skate.


----------



## ducati916 (1 December 2021)

MovingAverage said:


> I reckon it will...human nature is what it is and CEO's (some but not all) will continue to "screw the crew". As sure as the sun comes up is man's desire to sow his seeds  I think someone else said it here a few posts back--human nature hasn't changed a l






MovingAverage said:


> I reckon it will...human nature is what it is and CEO's (some but not all) will continue to "screw the crew". As sure as the sun comes up is man's desire to sow his seeds  I think someone else said it here a few posts back--human nature hasn't changed a lot





So if we agree on 'human nature', then we will see further innovation within financial products, to which the true ramifications are unknown to their creators and especially the users.

So in 2008, CDOs cubed was an extension of an already dangerous idea. Currently, the world derivative exposure is now at a 'Quadrillion + (1000 Trillion). Is that priced into the market? Let's say that it is; then Mr Skate's idea of an acceleration of downside is relevant (2020) when trying to build a system. Both 2008 and especially 2000, gave traders ample time to exit if they were paying attention.

2020 was much faster.

The next blow-up will be faster yet, driven by unseen, interlinked exposures, that won't even start in the stock markets. Is your portfolio ready for a 30% decline in a major index over a 24/48hr time period from your backtesting? The 'speed' of a serious decline is accelerating. Of course this is more of an exit issue (potentially) than an entry issue.

jog on
duc


----------



## MovingAverage (1 December 2021)

ducati916 said:


> So if we agree on 'human nature', then we will see further innovation within financial products, to which the true ramifications are unknown to their creators and especially the users.
> 
> The next blow-up will be faster yet, driven by unseen, interlinked exposures, that won't even start in the stock markets. Is your portfolio ready for a 30% decline in a major index over a 24/48hr time period from your backtesting? The 'speed' of a serious decline is accelerating. Of course this is more of an exit issue (potentially) than an entry issue.
> 
> ...




For sure--have no doubt that further innovation and regulatory changes will drive changes in the market and its behaviour. But just so we are clear, I do subscribe to the theory that markets and their behaviour has and will continue to change but that doesn't mean past market behaviour is irrelevant.

Whether the next blow-up will be faster yet, neither you, I or anyone else can predict what the markets will do in the future so as they say...time will ultimately tell us how the markets will behave in the future. I am not advocating nor have I advocated that designing a mechanical system on historic data will tell you how your system will behave in the future, but using techniques like walk forward testing will and does give you a degree of insight into how your system will deal with future market behavior. There is no such thing as certainty in trading (no matter what your trading style is) but there are degrees of probably and I am very comfortable with that.


----------



## qldfrog (1 December 2021)

MovingAverage said:


> If you're an AB user and you haven't done this before, look into the difference between scan and explore. I've got scan setup to spit out all possible trades for a period of time which is useful for putting the number of trades you actually take in a backtest in context with total possible number of available trades. It is also pretty easy to code into your backtest output.



I would agree with that 
Just but there is a fine line between all candidates and final choices..
many systems mine included roughly take the smallest SP first; which introduce a bias mostly to small caps..
[rough approximation the smaller the SP the smaller the company..]
if ranking is doing most of the filtering vs the selective being done for a smaller pool of candidates l, it can make a big difference;
Hope I convey my thoughts?
Anyway, I agree that the total number of trades possible vs nb of trades taken is indeed statistically relevant


----------



## qldfrog (1 December 2021)

for @Cam019 :
without trying or needing to relaunch the debate, and while I believe this is worth zip:
I run my current strategies from the 1/1/1992 :
Remember when buffaloes, donkeys or man power was still the #1 machinery used in what is 2021's  #1 economic power ;-)
Note that these have been designed and optimised for the 2019 onward periods
These are the results on both XAO (with history) and my FPO definition
They are mostly live or will be on FPO.


you will note that my results are more statistically relevant than some other offered and the results are not too shabby especially looking at max DD
if I take the last one :QFsec


less pleasant shape QFDuc:


and the laggard:
DLGuppy whose only purpose is to act shiftily to be out on crash and is by far the worst


Not too bad when you consider that these have been designed and optimised for the 2019 onward periods...
So Yes feel free to have a quick check  since WWI if you want but develop  for recent times
Please note that there was no inflation indexation in that code


----------



## Cam019 (1 December 2021)

qldfrog said:


> feel free to have a quick check since WWI



This made me laugh! 

Look, we could discuss our beliefs until we are blue in the face, or dead. However, I would much rather agree to disagree and accept each other are going to do things the way they believe is right. I think @MovingAverage said this earlier, but everyone doing different things is what creates trading opportunites in the market. If we all did the same thing, the same way, our systems wouldn't work.

I appreciate you putting that up, even if you think it has no value.

Just one question from me.

Did you purposely design the systems to have approx. less than 50% exposure, or is that simply a bi-product of what I call 'curve-fitting' your system to more recent market data?


----------



## qldfrog (1 December 2021)

Cam019 said:


> This made me laugh!
> 
> Look, we could discuss our beliefs until we are blue in the face, or dead. However, I would much rather agree to disagree and accept each other are going to do things the way they believe is right. I think @MovingAverage said this earlier, but everyone doing different things is what creates trading opportunites in the market. If we all did the same thing, the same way, our systems wouldn't work.
> 
> ...



yes, we will carry on disagreeing and fair enough
Exposure
I noticed that too:
probably the effect of filters, SP and volume check etc on the earlier periods: in my 2019 onward BT, they are in the 50% to 80% range
If I can, I want high exposure..let the soldiers fight
So overall not disappointed by what i found out, and data should be ok now.
You will notice some flat behaviors  for some system on some longuer periods, others where it is more a smooth constant gain etc;
My conclusion is that these systems as they are now must not be that bad to get these results on a huge period outside design optimisation range;
And as you noted, low exposure for decent returns gives great risk factored return


----------



## Skate (2 December 2021)

qldfrog said:


> My conclusion is that these systems as they are now must not be that bad to get these results on a huge period outside design optimisation range;




*Trading strategies change over time & need to be updated or modified (why?)*
As @ducati916 has already explained, the main reason is that over time the market changes, it can be gradual at times or very sudden. Changes in the markets mean the core reason to jump on to patterns will change due to a variety of market conditions. I've noted that since (COVID) there has "not been" a gradual shift but more rapid swings in volatility, or is it just me?

*Why do trading strategies work in the first place?*
It’s because the strategy manages to identify re-occurring patterns with a change in market behaviour. A simple trading strategy does not need to be complicated in identifying trends & patterns because we have history on our side as these patterns have proven to have worked in the past. When these patterns shift or no longer produce the "edge" that you count on for profitability, a rethink of your strategy is required. The whole world is built on evolving developments to produce better outcomes & it's no different with a trading strategy. If you don't keep pace by tweaking your strategy, eventually it will lead you down the path of financial heartbreak.

Skate.


----------



## qldfrog (2 December 2021)

Skate said:


> *Trading strategies change over time & need to be updated or modified (why?)*
> As @ducati916 has already explained, the main reason is that over time the market changes, it can be gradual at times or very sudden. Changes in the markets mean the core reason to jump on to patterns will change due to a variety of market conditions. I've noted that since (COVID) there has "not been" a gradual shift but more rapid swings in volatility, or is it just me?
> 
> *Why do trading strategies work in the first place?*
> ...



100%;
your are preaching to a believer, as per my posts here, i actually believe anything pre 2006 is completely worthless and with an EMA style of relevance as we come nearer, most of my checks and designs are post 2019 which offer not only a good relevant recent sample but also some nice different trading periods:
 crash, recovery  boom, flat..what else do we want?
I actually believe the hard bit in systems trading is how to know when to stop and desist a system; Howard Bandy which I have the upmost respect for, did some serious work on this subject..I am just an amateur so before reaching that stage, i first have to create a decent set of systems, ->priorities first
But once you reach a cruising stage, [Note to self not there yet ;-) ] .will I ever? , that is the next step


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## Skate (2 December 2021)

*What is a trading “Edge”?*
I used the word "edge" in my last post, & I believe most would have passed over that word without a second thought. We throw around the word “edge” like it means something. But when that word is thrown about there is usually no follow up about what that name means "or" how we go about developing a trading edge. 

*My definition *
A trading edge describes patterns we can take advantage of. All traders believe they have an edge or else they wouldn’t risk money trading. But depending on your definition you need a trading "edge" or otherwise, it's called gambling. 

*The most accepted definition on this forum* 
An "edge" is a simple process of “winning more when you win than you lose when you lose” & "let your winners run & cut your losses short". Whatever definition you apply to your "edge" can mean something totally different. Having a diversified portfolio, investing & trading, or simply letting "time" in the markets are all varieties of an "edge". Whatever the "edge" it needs to be rigorously tested to make sure its a positive "edge" that consistently performs as expected.

Skate.


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## Skate (2 December 2021)

qldfrog said:


> I actually believe the hard bit in systems trading is how to know "when" to stop and desist a system.




@qldfrog has raised a very important subject. How do you know when the strategy is only in drawdown rather than the strategy has stopped working. Back to his comment about "when". When do you make a decision that the strategy has stopped working completely & desist with the system?

*How Do You Know If a Strategy Has Stopped Working?*
After the development of a strategy that has passed your testing criteria, you decide to trade it. 

*Think about this*
What if those signals dipped right after you went live, how many traders would panic & turn it off immediately? This is where experience comes in as experienced traders know that drawdowns are a natural part of trading. They occur with such regularity, sometimes so small that they go unnoticed, & other times large enough that might make you question your strategy.

Skate.


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## Skate (2 December 2021)

qldfrog said:


> I first have to create a decent set of systems, so priorities first




*Curve Fitting (it's not a Bad, Bad, word after all)*
@Cam019, touched on “Curve Fitting” previously which is a good point to consider. But with all strategies, they have a "certain degree" of curve fitting to suit the market being traded. Trading strategies define certain market behaviour & it's these behaviours that we try to take advantage of in our trading. 

*Knowing the market is not enough*
However, when we analyse market data, we have a tendency to concentrate on picking the entry sweet spot. But what we also should be doing at the same time is working out ways to try & reduce the random noise that comes as a parasite with those signals. (Elimination of the noise is beyond my pay grade, but I try my best)

*When signals keep failing, what do I do?*
Unfortunately, there is no way you can tell with 100% certainty that once a strategy goes into drawdown, whether it's the beginning of the end or merely another dip in the curve. Frankly, no one knows.

*You can't know *
Therefore, you need to set a stop loss on the strategy level. When the strategy hits the stop loss, you just stop trading it without hesitation. The strategy might start working again, & in that case, you preferably should wait for confirmation that the upswing is not just temporary. Yesterday @finicky remarked "Invest for the Future" & hyperlinked to a short (15 minute) video about how to use "stop losses". It's worthy of a look as it explains clearly how "nothing" works well all the time. 

Skate.


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## Skate (2 December 2021)

*Catchphrases without a detailed explanation fall well short of educational value*
I trust all our trading strategies have been rigorously tested to make sure they have a good chance of continuing to make profits well after its initial development. Catchphrases have value only when you understand how they can be applied in relation to your trading methodology.

*Parasite in trading*
It's unfortunate that signals don't work or follow through all the time. Fifty per cent of trend following signals are just parasites  Therefore, it is crucial that we "do not" build our trading strategies around market noise but rather we employ filters to separate the weak from the strong. 

*Filtering signals*
In doing so, filtering gives not a "better strike rate" but signals that have a better than average chance of going to the moon. These are the signals we are seeking by selecting only the strongest. Without filtering the signals, we can expect no better than picking entries & exits randomly. As mechanical system traders, we need to eliminate the noise so we don’t buy false breakouts that originate from the standard “ebb & flow” of prices.

Skate.


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## Skate (3 December 2021)

divs4ever said:


> could you  please ask Santa for a few buckets for me also  , i am getting  compulsory draw-downs via M&A activity  .. SKI , AST , ONT , API , YFZ , possibly ZEL and maybe some more yet and i can't even tweak the formula. so am looking at maybe 5-10% of the portfolio sitting in cash at the bank   .. hoping the banks don't freeze up in a credit-crunch but valuation metrics are in crazy places  , do we permanently live in  crazy land , or does reality bite , eventually
> 
> *i hold MQG ( 'free-carried' ) ( and participate in the DRP )*
> since my theoretical av. SP is $26.76 , i am NOT unhappy with the div.




@divs4ever trading has runs, sometimes the share price runs up as well as down. Trading is all about timing, you have to time the entry as well as the exit. When investing, as with (MQG) it's all about the time in the market. Investing in good quality companies that pay dividends you enjoy not only those dividends but the capital gains with the passing of time.

*Trading the bounce (the blue bars) has been a profitable* *strategy*
"The Ducati Blue Bar Strategy" when it comes to a trading strategy is simple in design & structure as it incorporates (volatility & volume). As traders, we don't need a fancy strategy to make money. If you traded nothing but the blue & red bars of the "The Ducati Blue Bar Strategy" you would be tripping over yourself going to the bank. "The Ducati Blue Bar Strategy" is uncannily accurate when applied to all timeframes, the signals are fast & snappy. Adding prudent "Money management" with a sharp "PositionScore" brings this strategy to life.

*Back to timing the markets*
Other than (YFZ) the entry & exit positions are clearly displayed using "The Ducati Blue Bar Weekly Strategy". I have made a stack of posts on how accurate this strategy picks the turn in momentum in real-time.

*You have highlighted a few securities of concern*
I'll post the charts for (SKI, AST, ONT, API, YFZ, & ZEL) so you can compare the signals of the "Ducati Blue Bar Strategy" with your entry & exit points. Systematic Trend Trading depends on nailing not only the entry but also the exit.

*Chart for (SKI)*






*Chart for (AST)*






*Chart for (ONT)






Chart for (API)*






*Chart for (YFZ)






Chart for (ZEL)*





Skate.


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## divs4ever (3 December 2021)

cheers  ,  my usual issue  with trading  , is distractions  , whether it is medical appointments   , work  times ( before 2017 )  unreliable internet  , and i am just bad at it  ( wasn't even looking at WOR earlier this week when it went below the target price  ..  i guess i will have to wait longer

 for example many years back i was stalking BPT  but LNC went plummeting past  so i grabbed some  now that adventure worked out for me eventually  i even got some BPT well below the target price ... three years later

 it seems the harder i plan  the more instinct gets in the way  and i just have to figure out how to make the best of it  ( but don't worry i have made some spectacular messes as well  .. but you can only loss one hundred percent of the capital if you don't use leverage

 and yes some falling knives miss the hand completely  and pin my foot to the floor

 i normally aim to hold SOME of that share 'forever '  ( when deciding to buy in )

 ZEL bought in November 2018 @ $5.00 

and added in November 2019  @ $4.75   looks like i will crystallize a loss ( unless the sale falls through )

 SKI bought in October 2011 @ $1.20  ,  yes i will do OK  but i was after a good steady stock  , can i find a replacement  ( not in the Oz utility market i suspect )

 AST  bought as SPN   very much the same story as SKI 

 YFZ  was a short stay for me  ( about 100% gain crystallized )  i liked the business model  , but someone liked it better ( and the majority loved the offer )

 ONT  was slow work picking the dips in an illiquid stock  another profit made  , but i wanted a stock  capable of paying divs when the market was in turmoil ( i hold PSQ and have already rescued the investment cash what is the chance of it going sub $1.25 again , so i can place the ONT profits )

 API  ( more than SIG ) was bought as a sector exposure  and had accumulated a big ( for me ) position , now sure i will ( most likely ) crystallize a healthy profit  but how will i replace it  , surely not with extra SIG  which has taken me 10 years to accumulate  a holding only 12% of the API position 

  now sure other opportunities MIGHT come along in my lifetime 

 but this M&A activity   has put big holes in the strategy  well before the market has actually imploded 

 i mean sure during a meltdown i am liable to get some BHP cheap ( but i already have a comfortable amount ) and the same with several of my winners  between  some lucky picks in 2011 , and have spare cash in 2020  some drops will have to be insane  to create  a tempting price 

 CLV  near 17c 

BPT near 40c

DTL near 90c 

 OZL below $5

 TPG near $1

 PDL near $2

 SNL near $2.50 

 now sure SOL might come back to $13 

 but many others have little chance  of coming back to a 'nice price ' even if the overall market drops by 60%

( good luck holding your breath for MQG to hit $20 again  as an example )

  and to boot would i really tip more cash into my current big losers ( like CCE ) i think not

 so mostly new stocks in the middle on what could be sheer carnage  ( even if the market circuit breakers limit the overall drop to 10% per day  )

 but it is all fun and games until someone loses an eye


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## ducati916 (3 December 2021)

Skate said:


> *Trading strategies change over time & need to be updated or modified (why?)*
> As @ducati916 has already explained, the main reason is that over time the market changes, it can be gradual at times or very sudden. Changes in the markets mean the core reason to jump on to patterns will change due to a variety of market conditions. I've noted that since (COVID) there has "not been" a gradual shift but more rapid swings in volatility, or is it just me?
> 
> *Why do trading strategies work in the first place?*
> ...





Some data to consider and analysis of that data:






Although the compounded average annual change in the stock market is near 5% over the past century, the _range_ of dispersion in annual returns is dramatic. This chart presents the distribution of yearly index changes within the single-digit range of -10% to +10% during the past century overall and during the secular bull and bear cycles. In addition, a second range was determined to include half of the years within the range and half of the years outside the range. More than 50% of the years ended with changes in the index exceeding +/-16% (either greater than -16% or greater than +16%).




This analysis presents an uncanny relationship between stock market performance and the volatility of the market. We do not assert a causal relationship; rather, the coexistence of the relationship implies that many measures of risk actually compound in declining markets. By contrast, the reward-to-risk relationship improves significantly in strong markets. In the context of secular bull and bear markets, this relationship further emphasises the need to consider risk as well as reward in an investor’s investment decisions.


jog on
duc


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## ducati916 (3 December 2021)

Skate said:


> *Trading strategies change over time & need to be updated or modified (why?)*
> As @ducati916 has already explained, the main reason is that over time the market changes, it can be gradual at times or very sudden. Changes in the markets mean the core reason to jump on to patterns will change due to a variety of market conditions. I've noted that since (COVID) there has "not been" a gradual shift but more rapid swings in volatility, or is it just me?
> 
> *Why do trading strategies work in the first place?*
> ...





Some further data (pretty self-explanatory).






jog on
duc


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## Skate (3 December 2021)

qldfrog said:


> I deleted heaps of posts before clicking send.
> The only negative is that it leaves no place to humour.



@qldfrog a bit of humour never goes astray.

*A woman is following a grandfather and his badly-behaved grandson at the supermarket*
He has his hands full with the child screaming for sweets, biscuits – all sorts of things.
The grandad is saying in a controlled voice,
_“Easy, William, we won’t be long … easy boy.”_

Another outburst & she hears the grandad calmly say,
_“It’s okay, William. Just a couple more minutes & we’ll be out of here. Hang in there, boy.”_

At the checkout, the little horror is throwing items out of the trolley. The grandad says again in a controlled voice,
_“William, William, relax buddy, don’t get upset. We’ll be home in five minutes, stay cool William.”_

Very impressed, she goes outside to where the grandfather is loading his groceries & the boy into the car.

She says, “It’s none of my business, but you were amazing in there. I don’t know how you did it. That whole time you kept your composure, & no matter how loud & disruptive he got, you just calmly kept saying things would be okay. William is very lucky to have you as his grandad.”

“Thanks,” says the grandpa. _“But I am William. The little bastard’s name is Kevin.”_

Skate.


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## Skate (3 December 2021)

ducati916 said:


> an uncanny relationship between stock market performance and the volatility of the market.




*Mr flippe-floppe-flye*
This is not Duc's quote of the day but it should be. (lifted without permission)




Skate.


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## Skate (3 December 2021)

Skate said:


> *Volatility *
> It doesn’t matter what system you are trading - the best way to handle volatility is to just accept it.





divs4ever said:


> _"Famed investor Jim Rogers has seen quite a few bear markets in the last half-century, but he fears the biggest one yet could be right around the corner"._





divs4ever said:


> sure Jim Rogers is a scaremonger and doom merchant but valuation metrics are in crazy places , do we permanently live in crazy land , or does reality bite , eventually




*Quote of the day (reposted without permission)*
@ducati916 said today: 
_"In the context of secular bull and bear markets, this relationship further emphasises the need to consider risk as well as reward in an investor’s investment decisions"._

*The Duc succinctly "nailed it"*
When others comment that they can handle big drawdowns they need to read Duc's paragraph not once, not twice, but many times till it starts to sink in. Notions to the contrary make little sense.




Skate.


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## divs4ever (3 December 2021)

my main problem so far with big market drops ( but i only  have been investing since the start of 2011)  

 is i tend to get overwhelmed by a choice of potential  targets 

 while March 2020 was NOT a disaster for me  , i had some cash courtesy of prudent  reductions in the previous two months ( September 2019 and Repo Madness made me very nervous )  and probably could have done a better job in the bargain hunting department  , but the cash i couldn't find a home in March/April 2020  came in quite useful  later in the year  so i rate  my efforts in 2020 a D or maybe C  , could have done better  but also could have done  much worse 

 the current problem is valuations in many companies  are very high  and i don't see a near term lift in earnings to justify those valuations


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## Skate (3 December 2021)

divs4ever said:


> the current problem is valuations in many companies are very high and i don't see a near term lift in earnings to justify those valuations.




Fair enough.



divs4ever said:


> ( I hold BHP and WPL )




*Is there no "long-term" value here (FMG)*
The iron ore producer, along with other base metal miners, traded higher as Reuters reported that the Chinese government would allow some Chinese banks to provide more loans to property developers for project development.




*Even though you have slightly missed the boat*
There is still a nice entry at $17.13 (at the time of posting) according to the "Ducati Blue Bar Weekly Strategy"




Skate.


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## divs4ever (3 December 2021)

i didn't 'miss the boat ' on FMG     , but late to the party absolutely  my av. SP is  $17.05 

 with buys at $19.90 ( cum dividend )

$17.60 

 and $14.90  all done in August/ September this year 

 have i stopped buying  .. probably not , but maybe no more FMG this year  ( although sub $14.50 ..... )

 by the way FMG dipped below $17   today  a few minutes ago 

  but a blue chip with that sort of volatility  must attract  a few cashed up traders 

 plenty of uncertainty ahead  and FMG  has some pluses in the coming years ( but possibly some negatives as well )


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## Skate (3 December 2021)

Skate.


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## MovingAverage (3 December 2021)

divs4ever said:


> the current problem is valuations in many companies  are very high  and i don't see a near term lift in earnings to justify those valuations



I often think about this. Reckon the reason valuations are off the planet is that interest rates are so low and there is a lot of money floating around...a "where else do I put my money" is no doubt driving folks to seek out returns from the stock market which is pushing up valuations. I wonder whether the current valuations will pull back once interest rates start to creep up.


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## qldfrog (3 December 2021)

MovingAverage said:


> I often think about this. Reckon the reason valuations are off the planet is that interest rates are so low and there is a lot of money floating around...a "where else do I put my money" is no doubt driving folks to seek out returns from the stock market which is pushing up valuations. I wonder whether the current valuations will pull back once interest rates start to creep up.



Another reason these can not go up smoothly.if rba or fed push up rate, market crash, panic sets in with all the BTD retail crowd..AND governments become insolvent due to monstrous debt size...smooth then horror crash...


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## MovingAverage (3 December 2021)

qldfrog said:


> Another reason these can not go up smoothly.if rba or fed push up rate, market crash, panic sets in with all the BTD retail crowd..AND governments become insolvent due to monstrous debt size...smooth then horror crash...




Do you remember the "recession we had to have"...don't believe for a minute that they aren't prepared to allow the economy take a hit. Sometime things need a reset.


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## qldfrog (3 December 2021)

MovingAverage said:


> Do you remember the "recession we had to have"...don't believe for a minute that they aren't prepared to allow the economy take a hit. Sometime things need a reset.



The Reset they are looking for is not an economic one 😂


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## divs4ever (3 December 2021)

MovingAverage said:


> I often think about this. Reckon the reason valuations are off the planet is that interest rates are so low and there is a lot of money floating around...a "where else do I put my money" is no doubt driving folks to seek out returns from the stock market which is pushing up valuations. I wonder whether the current valuations will pull back once interest rates start to creep up.



 yes i agree   , but please remember unofficial inflation ( erosion of buying power ) also  is part of the mix  ,  and that  is  a very  clever escape artist 

 ideally valuations should come back  to reality with increased productivity  ( but don't hold your breath waiting for that )

 a current trap  is increases in earnings  ( percentage-wise ) from  a very low base  after a troubled 2020


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## divs4ever (3 December 2021)

MovingAverage said:


> Do you remember the "recession we had to have"...don't believe for a minute that they aren't prepared to allow the economy take a hit. Sometime things need a reset.



 they are quite ready  for US ( you and me ) to take a hit  , not so happy  for the party donors   and the companies they invest in privately to get smashed 

 in simple terms  it will be the taxpayer ( maybe four or five future generations  of them ) that will pick up the bill


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## divs4ever (4 December 2021)

"THE FINANCIAL SYSTEM IS AN ENORMOUS BLACK HOLE", SAYS LONDON PAUL OF THE SIRIUS REPORT.​


 now if the things  discussed in this video  confuse you , don't feel bad  , the current complexity is designed to confuse almost everybody

 go find the movie  ' The Big Short '  and use that as your beginners lesson  ( especially the derivatives and credit swaps part  , but DON'T ignore the packaged bonds and mortgages  part either )

 DYOR


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## qldfrog (4 December 2021)

Just a note: i am guilty as hell here.and feeling so.
Dump it here might not be the best place for the last few posts.
Mea culpa, i started it🥴..this should probably go in the Great Reset thread, or a more general economy thread.
Have all a great weekend.
As i look at NYSE so far, it is not a good look for the coming weeks and our systems risk profile
I noted gold and pm up, BTC down..so not a digital gold?
And AUD..outch


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## MovingAverage (4 December 2021)

qldfrog said:


> Just a note: i am guilty as hell here.and feeling so.
> Dump it here might not be the best place for the last few posts.
> Mea culpa, i started it🥴..this should probably go in the Great Reset thread, or a more general economy thread.
> Have all a great weekend.
> ...



Ok, so the RBA has had its fun with low interest rates…now get on and crank up the offical cash rate. That will fix things up.


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## qldfrog (4 December 2021)

MovingAverage said:


> Ok, so the RBA has had its fun with low interest rates…now get on and crank up the offical cash rate. That will fix things up.



Amd market will crash..maybe..honestly i would be very happy to have TD available at +3pc over inflation..but i can dream


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## MovingAverage (4 December 2021)

qldfrog said:


> Amd market will crash..maybe..honestly i would be very happy to have TD available at +3pc over inflation..but i can dream



Doubt it will crash, but no doubt we’ll have a pull back but hey….market pullbacks are good because they create buying opportunities


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## Skate (4 December 2021)

Skate.


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## divs4ever (4 December 2021)

qldfrog said:


> Amd market will crash..maybe..honestly i would be very happy to have TD available at +3pc over inflation..but i can dream




 HOPEFULLY , the market would retrace ( or more likely correct ) to test buyer support  , because many buyers are chasing yield ( especially me ) so there is some pressure on some investors ( and fund managers ) to have that money working .

 the important  question on the Australian market ( we have solid hints the US and UK markets are using  heavy levels of leverage ) is how much  leverage is being used by traders/investors  , even if ASX listed stocks are over-valued  the amount of FORCED selling in the dips  is very important .

 the ASX is not over-valued everywhere ( thank goodness ) but as usual the popular stocks are  , 

 now obviously there is always the chance  of a major over-reaction in a downturn  , because there are still supply-line issues and virus concerns , and massive quantitative easing  to push liquidity ( or the impression of it ) into the economy  , so some investors won't be full of confidence in the near-term future ( despite the rhetoric )

now i haven't been investing in the money market  for much longer than the stock market ( i started to take notice of it from 2008 ) but in my short experience  in TDs  the rates CHASE the real inflation increases  but look good because of the manipulation in 'official inflation rates '

 ( thank you Kevin Rudd for alerting me  to the complexities of the money markets  , when he came out with the 'deposit guarantees ' , the research needed drew me much deeper than i expected )

  now i suppose the unasked question in the Australian business scene  , is  what do the business results ( and job figures ) look like without  the extraordinary measures , like jobkeeper and rent moratoriums


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## Skate (4 December 2021)

divs4ever said:


> some investors won't be full of confidence in the near-term future ( despite the rhetoric )




*A short extract from Berkshire Hathaway 2021 Annual Shareholders Meeting*
Warren Buffett warns new entrants to the stock market that stocks don’t always go up & it’s not as easy as it sounds to identify the winners out of thousands of other companies at their early stages. Warren Buffett is considered one of the most successful investors in the world and has a net worth of over 100 billion dollars. 

*The short 12-minute YouTube video is well worth a watch*



Skate.


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## divs4ever (4 December 2021)

yes i should probably consider whether to recover the investment cash from TUA , it has been a nice run since the spin-off 

 ( i bought some extra TUA to go with the holding issued via the demerger )

 thanks for the heads up  ( am mostly preoccupied trying to find sensible places to park money )


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## divs4ever (4 December 2021)

not only Buffet  giving notes of caution ( but of course   you should always be cautious  , in a bull market or not  , so as not be  caught up negatively  in over-reactions )

 i haven't been watching Buffet closely this year  is he still sitting on a big pile of cash reserves "
 ( which makes sense for Buffet/Berkshire because they have the opportunity to be an alternate financier  , when they spot an opportunity )


----------



## Skate (4 December 2021)

Skate said:


> Trading isn’t about getting rich, it's more about financial independence supporting yourself without an income, being able to choose to live your life on your terms.




*Warren Buffett is a smart & kind-hearted person who has "lived his life on his terms"*
Buffett was born in Omaha, Nebraska. In his youth, he developed an interest in investing & made incredible stock market returns over his career. As a boy, he knew the power of saving & making money. It's no wonder he conquered the financial world. With the passing years he came around to see his ability to help others.



divs4ever said:


> I haven't been watching Buffet closely this year is he still sitting on a big pile of cash reserves




@divs4ever, if you haven't seen this documentary it's well worth a look. It's an uplifting story of what drove him to be the successful person he is today.

*Becoming Warren Buffett 2016 HBO Documentary *
Being the weekend, it's the perfect time to unwind & watch an interesting documentary about Warren Buffett from his youth to today.




Skate.


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## divs4ever (4 December 2021)

i think Buffet is trying to talk us out of  'set and forget ' for individual  stocks  ( i am more in the 'buy and watch school ' but then i am still trying to learn more about the market and investing )

 another way to see Buffet's idea from a different  perspective  is to see how many 100 year old companies  are listed on the ASX  , now granted some have changed the business model  or the industry they participate in   , and some have  had a detour via bankruptcy/restructure .

 i am not against index funds  , but i do use them sparingly as an insurance  against poor stock selection  , currently i am more biased towards  a variety of LICs tapping the manager's wisdom and research abilities , BUT if there was a proper market melt-down  i would probably up my index fund holdings  during the investor confusion , and let them ride any recovery wave


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## qldfrog (4 December 2021)

Mr @Skate, still OK with keeping PRT with its current takeover (board recommended) price at 36c vs last close @ 42c ? I understand a 11c franking value is also on offer


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## qldfrog (4 December 2021)

qldfrog said:


> Mr @Skate, still OK with keeping PRT with its current takeover (board recommended) price at 36c vs last close @ 42c ? I understand a 11c franking value is also on offer



reason I ask is I usually get out ASAP in my systems when this type of situation happens.


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## Skate (4 December 2021)

qldfrog said:


> Mr @Skate, still OK with keeping PRT with its current takeover (board recommended) price at 36c vs last close @ 42c ? I understand a 11c franking value is also on offer - reason I ask is I usually get out ASAP in my systems when this type of situation happens.




@qldfrog, the "Platinum Strategy" is just that, a "strategy" that produces buy & sell signals. The beauty of trading using the "Exploration Analysis" for signals is that if the signal falls foul of your trading plan you can elect to take or pass on the signals. Positions being held without an exit signal allow you to sell them when your trading plan overrides.

*"A Trading Plan"*
A trading plan "decides" if you will enter or exit a position, not the strategy. A "Trading Plan" trumps a "Trading Strategy". Buy & sell signals are generated using a mathematical formula & nothing more. The rapid decline of the last few weeks has caught everyone by surprise. Weekly systematic traders would have felt the burn that was unavoidable. It's a perfect reminder of why a trading plan trumps a trading strategy. Trading revolves around decisions.

Skate.


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## Skate (4 December 2021)

*I've had another suggestion from a group member*
"What about we liquidate all positions as the Index Filter is off & start fresh when the tide changes"

I*'ve explained*
Trading using the "Exploration Analysis" signals allows you to trade any number of possibilities. This method of trading the "raw" signals allows you to exit & join at any time. The signals are "PositionScored" in as much as the signals are scored by price in "ascending order". There are some companies I refuse to buy & if they are a "listed signal" I pass them over & just take the next signals. When it comes to exit signals they are non-negotiable. If you get an exit signal, exit without hesitation.

*I'll wait a little longer*
There is another who wants to join the group & trade the signals. Being indecisive he wants to wait & see "how" the strategy performs in the short term before investing (which is fair enough). The "Platinum Strategy" allows you to be a "cafeteria trader". What this means is that you can "pick & choose" which signals to take as each signal has the same chance of success.

*The Platinum Strategy *
This strategy would be one of my most cautious strategies to trade without stifling performance. The only criticism I have "trading this strategy" is that it's out of a position quick smart if "momentum" doesn't carry through in the "short term". By the way, this is by design.




Skate.


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## Skate (4 December 2021)

*But it started so well*
I've had another question - "the strategy started well but now it's losing money, is there something wrong with the strategy?"

*The answer I gave was along these lines*
A good strategy takes time to develop. Those new to trading are very concerned about finding a strategy that works quickly while at the same time quickly dismissing a good strategy that refuses to display early gains. At times, a strategy with a few simple trading rules has often become the foundation of a good strategy & the "Platinum Strategy" is no different.

*Short term results*
The measure of a strategy is not how it performs (either in the short or long term) but rather the consistency of returns. Shooting for the moon is not what a trader should be looking to achieve but rather build profits over time. Just by "not losing money" can be considered a good strategy. Capital preservation is the "game in town" when it comes to trading.

*"The Platinum Strategy"*
It's been tough trading recently. The "Backtest results" below on the left side are over an "11 month period" compared to the returns on the right are the results of one month.





*Monthly returns*



Skate.


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## qldfrog (4 December 2021)

Skate said:


> View attachment 133802
> 
> 
> *But it started so well*
> ...



As long as you avoid blood orange months


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## Skate (5 December 2021)

qldfrog said:


> As long as you avoid blood orange months




*This is no coincidence, trading is always erratic*
Most successful traders use a mechanical trading system a trading system automates the entire process of trading. Systematic trading makes it easier to trade consistently because there are a set of rules which specifically define what should be done. Despite the inner emotional struggles that might come from a long series of losses, trading is simply not left up to the judgment of the trader & by doing so trading will be more consistent.

*If you have a mechanical trading system that works, you will follow it*
If you know that your system makes money over the long run it is easier to take the signals & trade according to the system during periods of losses. If you are relying on your own judgment during trading you may find that you are fearful just when you should be bold & courageous when you should be cautious.

Skate.


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## Skate (5 December 2021)

MovingAverage said:


> I often think about this. Reckon the reason valuations are off the planet is that interest rates are so low and there is a lot of money floating around...a "where else do I put my money" is no doubt driving folks to seek out returns from the stock market which is pushing up valuations




*Where else do I put my money?*
With new money entering the markets @MovingAverage pointed out that this money is "pushing up valuations". With new money come “Overconfidence", the lack of attention to details, & sometimes invested or traded with excessive trust in the judgments of others. The current high prices are being sustained largely by enthusiasm (FOMO) rather than by consistent estimation of real value.

*Today's investment culture*
I believe there are millions of adults now entering the stock market as well as investing in crypto. They are trading as if the price level is simply going to keep rising at its current rate. Even though the stock market is higher than it has ever been, traders & investors behave as though it can never be too high, & it can never go down for long. 

*Why would they behave this way? *
Their logic is apparently consistent with the media "free lunch theory", the theory of easy money. Now if researchers & media analysis are studying stock prices & confirming their value, why should they waste their time trying to figure out "what" is a reasonable price to pay? The media concentrates on trivial facts (having an answer for everything) that tend to be superficial at best. Whether the misconceptions are true or not - they don't really care. 

Skate.


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## Skate (5 December 2021)

*Trading Mistake*
One trading mistake from my observation with forum members is that they seek shelter & comfort in the fact they bought their favourite shares at much lower prices than it is today. When there is a substantial fall in their favourite stock it clouds their judgment or their ongoing assessment of the holding. I'm just saying if one day the outlook for that holding deteriorates significantly, don't hide behind the fact you have been an investment or trading genius thus far. What comes next can easily take away "all the rewards" from being loyal to that stock in the past.

*Another trading mistake *
There are some mistakes that are often made by the less experienced trader & that is to "never sell" unless the share price recovers above the original purchase price. Why do they do it? - I'll tell you why, it's because they can't bring themself to sell at a loss.

Skate.


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## Skate (5 December 2021)

*Training yourself to think clearly*
Our values shift according to new information but when it comes to trading we tend to stay within our circle of comfort. Our brain tricks us into believing something different with those people who have "open minds" whilst those who have "closed minds" won't even consider it "even it's a good idea". This is the very reason "training yourself to think clearly" doesn't work for everyone. 

*Being receptive*
There are some people who have open minds whereas "closed-minded" people have no degree of openness. But overall subtle conditional methods by repeating the "same message" can make a big difference over time.

*Forming an opinion is important*
A lot of our expectations affect the assumptions we use to shape our perception when it comes to trading. Our perception even shapes what we want to read & what we want to hear or learn. Our expectations, assumptions & perceptions shape the way we trade in ways that some will never understand. Our brain is constantly assessing & re-assessing only information that matches our (beliefs) & blocks out the rest. This is why when experienced traders take the time to express ideas (ideas from their trading experience) others are not accepting of those ideas. This non-acceptance is because the idea doesn't fall into line with what the reader believes or what they have previously read in a trading book.

Skate.


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## Skate (5 December 2021)

*Just let your brain adjust to the “value” of what we see*
I think we're too inconsistent on separating what's real & worthwhile when it comes to trading or learning from experience. Our expectations from trading can be something totally different from reality. Our mind disguises the truth & we only start to see "what's true" after we start trading. When you first start out trading the truth may be malleable at first but sets to concrete when "real dollars" are on the line.

*You have to have (PHD) when it comes to trading*
If you have a mechanical trading system that works, "confidence, consistency, & discipline" will flow naturally. This is the reason some traders are profitable than others. Persistence, Hard work & Determination (PHD) is certainly required to achieve a level of success from any trading system or strategy.

Skate.


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## Skate (10 December 2021)

Skate.


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## Skate (11 December 2021)

*Summary*
This liquidates the final 4 open positions.




Skate.


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## Skate (12 December 2021)

over9k said:


> And honestly, if you think any of the old rules since before the pandemic crash still apply then I'm not really sure what to say to you. If you (or anyone else) don't realise that we're now living in an entirely different market and everything before the crash of march last year no longer applies then there's really nothing else I can say.





ducati916 said:


> No one seems to have picked up on this point, maybe, irrelevant to mechanical systems traders. Over the past few months, the market has changed





peter2 said:


> I anticipate that trading conditions will continue to be frustrating for quite some time as the market participants work through the current crazy economic conditions.





ducati916 said:


> Bear markets, corrections are notorious for sneaking up on you from behind.





Skate said:


> Market change can be gradual due to a variety of market conditions. I've noted since (COVID) there has "not been" a gradual shift but more rapid price swings.




*Is there a place for value investing rather than trading at the moment?*
Price fluctuations have only one significant meaning & I'm paraphrasing a quote from Benjamin Graham's book "The Intelligent Investor" published many moons ago. In one paragraph Graham talks about price fluctuations & the opportunity it affords. These price fluctuations provide an opportunity to "buy wisely" when prices "fall sharply" & to "sell wisely" when they "advance a great deal". Graham goes on to say "your worst enemy – is likely to be yourself", or something similar. (Food for thought)

Skate.


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## Skate (12 December 2021)

*Trading is so complicated*
They say, don't put all your eggs in one basket & I'm sure most on this forum splits their wealth into many baskets. But when it comes to trading or investing we tend to stay in our circle of comfort. There have been a few questions asked of me recently about increasing wealth. Is it better to invest or is it better to trade?

*Life is just a series of answers to questions*
With most questions, an answer is easy, but having that question revolve around money & logic leaves the room. To answer money questions the time frame you are talking about brings the answer sharply into focus. 
*
Lest view trading versus investing*
What's the difference, lets answer that one first. It really boils down to "timing the market" versus "time in the markets". Trading constantly buys & sells positions to keep a portfolio full, while an investor fills their portfolio with long-term positions. A trader buys & sells the fluctuations of the market while an investor holds through these fluctuations. 
*
I've found most want answers, not an education*
There is no quick & easy answer that suits all people but after explaining this it's normally followed up by - So what is better, tell me?

Skate.


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## Skate (12 December 2021)

*Wealth creations takes time & effort*
Unfortunately, wealth creation takes time to create (unless you win the lottery or have wealthy parents). It can be as simple as spending less than you earn & make the difference earn its keep. The normal response is that there is never any money left over. There is an easy answer to this - "make sure there is" (money left over) how you do it is up to you. Humans are ingenious when it comes to problem-solving. When we put our mind to it there are many clever & inventive ways to solve any issue.

*Why be in a hurry*
With time on your side, make additional personal non-concessional contributions to your Superannuation. Or, invest in good quality companies. With time on your side, you can use harness the power of history. Look at any quality stock over the last ten years & the equity curve will have minor fluctuation, that's a given but the right side of the equity curve will be higher than the left. That's history doing the work for you. That's called "time in the market".
*
No, I want to trade?*
Okay, there is short-term trading, medium-term trading & long term-trading. Trading also revolves around "time & effort".

Skate.


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## divs4ever (12 December 2021)

Skate said:


> *I've found most want answers, not an education*
> There is no quick & easy answer that suits all people but after explaining this it's normally followed up by - So what is better, tell me?



 you could try an answer of   ,  'defining what your investment  needs to for YOU '

 personally  i have a hard enough time trying to get the outcome I desire ( sure it is a quirky one  , but realizing it had to be atypical  was a BIG step forward , followed  a smaller step that i would have to do most of it  myself )

 sometimes a good answer inspires the desire for education 

cheers


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## Skate (12 December 2021)

*Let's talk about* *time & effort when it comes to trading*
Recently there has been plenty of talk about trading periodicity & which is better. Well, with trading it comes down to the time you have or the effort you want to put in. Learning to trade is time-consuming, to say the least, being able to trade profitably takes even longer.
*
Mechanical system trading*
Why narrow it down to system trading? For one reason, it is quick, simple & with little effort, you can start trading straight away using commercially coded software. Starting from scratch it's a horrendous learning curve that many will simply not have the time to devote to this endeavour. To start trading straight away you only need 3 things & you are good to go. 

(1) AmiBroker 
(2) Norgate data 
(3) Commercially code trading software

Skate.


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## Skate (12 December 2021)

divs4ever said:


> personally i have a hard enough time trying to get the outcome



*
Mechanical System Trading has been proven to work*
So with that understanding, it doesn't work all the time. When there is a run of losing trades doubt creeps in. Watching your equity dissolve in front of your eyes is when "emotional trading" kicks in. This is why you need a trading strategy with an edge or in plain English, a strategy that makes more than it loses.
*
But what periodicity do I trade - you didn't say?*
Well, that's a decision for you. Some like the thrill, some like the money, some just like the idea of being a trader. There are personal reasons when to trade & how often. 

Skate.


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## Skate (12 December 2021)

*Let's talk about commercially coded software*
Recently I know there are those who have purchased professionally coded commercial software from "The Chartist" so I will use that for my "time & effort" example. As I've said with this type of professional software & Amibroker with Norgate Data you are good to go.

*The Chartist Software*
I prefer to talk about Nick's methodologies from his website & trading books. The idea I'll concentrate on is (a) Monthly Strategy, (b) Daily (BBO) Strategy,  (c)  Weekly (BBO) Strategy & (d) Weekly (WTT) Strategy. In the next post, I'll display the outcome @divs4ever mentioned. The Bollinger Band Breakout Strategy works well in all time frames so I'll post the "Daily & Weekly" for comparison.

1. Monthly Momentum Strategy
2. Daily Bollinger Band Breakout Strategy (Daily BBO)
3. Weekly Bollinger Band Breakout Strategy (Weekly BBO)
4. Weekend Trend Trader (WTT)

*But, is there a difference when it comes to profits?*
I'll let you decide as I'll post up the last 365 days of Backtests. Why, so there is no fudging the results, that are very current. I'll start the backtest on the 12th December 2020 to today the 12th December 2021. (being Fridays end of close)

Skate.


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## Skate (12 December 2021)

*Let's talk about trading a Monthly Strategy*
There are a few trading "The Chartist" Monthly Momentum Strategy. The results look pleasing & it's perfect for those who want to trade using it with their "Self Managed Superannuation Fund" (SMSF) as @Warr87 & @Cam019 has recently been posting about. Cudo's to them as IMO it's a perfect strategy to do the job. The "Monthly Momentum Strategy" trades infrequently once a month. Trading only a couple of dozen times (22) a year - meaning the commission is reasonable.

*Disclaimer*
The backtest results are from my version of the "Monthly Momentum Strategy". The results aren't too shabby & the drawdown is quite respectable. Exposure is high giving the comfort of being fully invested most of the time. Daily & weekly price volatility is a thing of the past that allows you to weather the mental stress other periodicities tend to excite. 

*The backtest period*
From the 12th December 2020 to today the 12th December 2021. (being Fridays end of close). As you can see, this period the last (365-days) was a great time to trade. The "Buy & Hold" annual return was 11.86%. 




Skate.


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## Skate (12 December 2021)

*Let's talk about trading a Daily Strategy*
Thinking about it, I should have posted the daily strategy first & worked my way up to the Monthly Strategy. Well, what is done is done. There have been a few trading "The Chartist" Daily Bollinger Band Breakout Strategy (BBO) or commonly called their (Growth Portfolio). I'll post the Daily results first & as this strategy is rather unique in being robust over different time frames. Minor coding is all that is required to bring this strategy to life.

*I'll post the "Weekly Version" of the (BBO) as well *
There is a difference in the number of trades resulting in a higher commission charge but at times the "security" one feels getting out sooner rather than later might be the decider whether you trade the (BBO) as a weekly or Daily Strategy.

*Disclaimer*
The backtest results are from my version of the "Daily Bollinger Band Breakout Strategy". The results aren't too shabby & the drawdown is in line with most trend trading strategies.

*"Time & effort" example*
(244) round trips indicate the amount of time is needed to trade this strategy compared to (22) trades with the Monthly Strategy.

*The backtest period*
From the 12th December 2020 to today the 12th December 2021. (being Fridays end of close). As you can see, this period the last (365-days) was a great time to trade. The "Buy & Hold" annual return was 11.12%.






# The weekly version of the (BBO) strategy will be next.

Skate.


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## Skate (12 December 2021)

*Let's talk about trading a (BBO) Weekly Strategy*
Whether you trade the "Bollinger Band Breakout Strategy" as a Daily or as a Weekly strategy, it involves only minor coding to bring the Daily (BBO) Strategy to life.

*The "Weekly Version" of the (BBO)*
There is a difference in the number of trades resulting in a lower commission charge (62-trades versus 244-trades for the Daily version). It also allows you to ride out the daily price fluctuations without panicking. This feeling of not responding to every daily price move might be the decider whether you trade the (BBO) as a weekly.

*Disclaimer*
The backtest results are from my version of the "Weekly Bollinger Band Breakout Strategy". The results aren't too shabby & the drawdown is lower than most trend trading strategies as I incorporate the Bollinger Bands as an additional exit strategy.

*"Time & effort" example*
(62) round trips indicate that there is less amount of "time & effort" needed to trade the weekly version of the (BBO) strategy compared to (244) trades when trading the same strategy on a daily periodicity.

*The backtest period*
From the 12th December 2020 to today the 12th December 2021. (being Fridays end of close). As you can see, this period the last (365-days) was a great time to trade. The "Buy & Hold" annual return was 10.87%.




Skate.


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## Skate (12 December 2021)

*The "Weekly Version" of the (WTT)*
There is much that has been written about the "Weekend Trend Trader" & from memory, there is also a book devoted to the strategy. The (WTT) strategy is a simple 20-period breakout system well in tune with a variety of market conditions. Trend trading has proven itself as a way to trade. Nick's idea is to buy high & sell even higher.

*Disclaimer*
The backtest results are from my version of the "Weekend Trend Trader Strategy". The results aren't too shabby & the drawdown is lower than most trend trading strategies but higher than the Bollinger Bands with its additional exit strategy.

*"Time & effort" example*
(88) round trips indicate that there is a little more "time & effort" needed to trade the weekly version of the (WTT) Strategy compared to the (BBO) strategy of only (62) trades.

*The backtest period*
From the 12th December 2020 to today the 12th December 2021. (being Fridays end of close). As you can see, this period the last (365-days) was a great time to trade. The "Buy & Hold" annual return was 10.87%.




Skate.


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## Skate (12 December 2021)

*To summarise (Monthly)*
The few turnkey strategies promoted by "The Chartist" are sound in their methodology. Whether you elect to trade a "Monthly Momentum Strategy" that requires little "time & effort" might be the perfect strategy to have a go at trading, dipping a toe in to start. 

*To summarise (Daily or Weekly)*
Trading a weekly strategy gives you additional "time to think" over a daily strategy because you make all your trading decisions over the weekend rather than being reactive to daily moves. Daily strategies are not for the faint-hearted as emotional pressure will constantly keep hitting you in the back of the head driving you to override your system during the day.

*Day trading*
If you are considering Day Trading then be "Very, Very, Careful" as there are sharks in them waters!

Skate.


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## Skate (12 December 2021)

*Trading Crypto's*
Now, this is my opinion, don't do it. Those beginning their trading journey should not start off trading cryptocurrencies. I'm amazed at the amount of enthusiasm that cryptocurrencies have. If enough believe crypto has value, I guess that's all it takes. I have trouble wrapping my head around that "nothing" has a tradable value. The (CIO) of Magellan, Hamish Douglass remarked that crypto is not an asset but is an illusion, imaginary & absolutely nothing. Berkshire Hathaway Vice Chairman Charlie Munger called bitcoin a "turd" that's “disgusting & contrary to the interests of civilization.” that's been "invented out of thin air”. (Their descriptions are in line with mine)

*Bitcoin is built on the enthusiasm of others*
Bitcoin has no intrinsic value but the adoption & investment in bitcoin shows no signs of letting up anytime soon. Bitcoin is currently in unchartered territory taking a pause before the next big move. I have no idea if that move will be down or up.

@ducati916 *recently said*
"Bitcoin is a fool's investment of those who trade hoping to offload it on someone dumber than them who will pay more for it".

Skate.


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## Skate (14 December 2021)

*Stimulate discussion*
I've made a lot of posts to stimulate members to open up & express their point of view, alternative trading ideas. I've found it hard to keep my posts short & snappy. 

*Trading is confusing for the best of us *
I know from experience that trading can be extremely confusing when you are just starting out on your personal trading journey. New members visit our community looking for answers every day. With seasoned members, it's something to read, but when those members express alternative opinions or make a post on the subject matter it gives them something to think about on a deeper level.

*Strategy Evaluation*
I want to talk about the frustration of trying to evaluate a trading strategy. It's amazing the amount of effort & clarity of thinking that is required to choose a strategy knowing how trading can get "Batshit crazy" when your money is on the line. It's similar to the frustration you will experience when reading my next series of posts - that if you get to the end. Those who haven't visited for a while & catching up will certainly think "is it worth the effort". It's a sign of the times, "our tolerance for others & our attention span" is getting shorter as the years' pass.

Skate.


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## Skate (14 December 2021)

*Strategy Evaluation & Backtest Results*
Even posting a series of backtests results can be tiresome while adding a level of frustration to others. Today we are conditioned to read & hear "sound bytes" with little interest in the full story. Frankly, with so much information it's little wonder that anyone has time or patience for anything more these days.

*Today is one of those days*
I'll be asking a simple question in regards to three different strategies. So you can make an informed decision the series of backtests will be from 1st July 2015, the "date I started trading", no further back. Also, you won't have you rely on one or two backtests to make an informed judgment or decision as I'll be uploading many reports.

*It's a simple question*
If you could only pick one strategy to trade which would it be? - I'm really not expecting many answers if any as it involves a bit of effort.

Skate.


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## Skate (14 December 2021)

*Strategy Development*
But before I start uploading reports I want others to think about the extensive testing that goes into strategy development & the ongoing re-testing fine-tuning.

*You can listen to too many*
Reading various trading threads here at ASF sounds good in theory, but the problem is that getting so many different trading opinions & trading styles becomes confusing & in the end, you won't know what to believe thus putting a handbrake on your trading.

*Using the ideas of others*
Over time I've used the ideas of others to determine if there is an "edge" that I can garner for my style of trading. I spend all my day crunching numbers looking to ride off the "experience" of others.

Skate.


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## divs4ever (14 December 2021)

well i would have participated more , but i don't see 'trading ' as a talent of mine 

 i see trading  as the buying and selling of shares  to generate both a profit AND a regular income ( whereas   i see an opportunity and decide to take it , or not )

 so trading to 'pay the bills ' would be more accidental for me  rather than predictable  , add to that  a capital gain is not my primary focus  , more a consolation prize for making a disappointing choice 

 all that said.  does NOT mean  this thread hasn't provoked some extra thinking and added some potentially useful ideas  to my skill set  ( trying to escape a poor choice but still  in profit , is not always so easy  , and neither is picking a good time to dump an obvious tragic )


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## Skate (14 December 2021)

*Why do we need a trading system?*
I tend not to believe those who think they know what the future holds. Most traders can’t predict if the market will open higher or lower tomorrow let alone what a company’s price movement might do in the future.

*Find your comfort level*
With the passing of time, you will gain experience by reading various trading threads to work out what will work for you that suits your personality. The hardest part is finding yourself a setup you like, one that's simple you will follow according to your mindset. When you start trading you will not believe the voices in your head, the uncertainty that you will feel - this is the reason you need a trading strategy you can trust.

Skate.


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## Skate (14 December 2021)

divs4ever said:


> this thread hasn't provoked some extra thinking and added some potentially useful ideas to my skill set




*Crystal ball*
Unfortunately, @divs4ever no one has a crystal ball, that's why I need an indication of what might happen or the probability of what might happen. I believe we can enhance our odds trading using a mathematical model rather than what I feel. Admittedly any strategy in the real market may behave differently from the backtest results but it's ultimately up to you to decide if you want to trade it on past performance or not.

*Take the good with the bad*
Every trader has bad weeks & good weeks but if the good weeks out way the bad "it's a good strategy" by my standards. I'll be including a variety of starting dates for the backtests of the three strategies in question because I know the starting date can have a big bearing on the performance of any strategy under evaluation. I'm just saying relying on the information is all we have in the development of any strategy. The more information & results you have will build confidence in taking the strategy to the next level of development.

Skate.


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## divs4ever (14 December 2021)

Skate said:


> *It's a simple question*
> If you could only pick one strategy to trade which would it be? - I'm really not expecting many answers if any as it involves a bit of effort.




 i have a very crude  'channel trading system '  which will NOT suit many simply because  trading moves might not happen for years 

 and i can't really call it 'successful '  because only one of the three targeted stocks selected has generated the desired moves 

 'failure ' 1 is BPT   the original target price was sub 80c a share  which took  3 years  to get but BPT continued to plummet so was compelled to 'average down ' the lowest  buy was just 40 cents five months later  .. which left me uncomfortably over-weight as the stock recovered  , so i recovered the invested cash '  so now the profits are running  but now my new buy target is set  at sub 60 cents ( does anyone want to hold their breath waiting for that )

 so BPT a successful foray  but the trading plan looks to be in tatters 

 ' failure ' 2  SUN just doesn't hit my buy/reduce targets often enough to make to effort of watching worth it  , if it wasn't for the DRP participation   i would call it a bust ( or at best break-even )

' success ( ??? ) ' QBE  the plan was  buy below $11  and sell HALF the last buy(s)  above $14  and participate in the DRP , now price action since 2013  has made the buy target of sub $10 ( more likely sub $9 since 2019 ) and REDUCE above $13  ( am still in the DRP)

 and courtesy of the DRP additions  this has been chugging along  while my average share cost  gets some downward pressure 

 HOWEVER the beauty of this plan ( if you select the right stock ) is you can leave the orders in for months/years  and let the volatility work for you ( but ALWAYS read the anns that trigger the tumbles  , eventually one will be scary enough to make you bail  , completely )

 DYOR


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## Skate (14 December 2021)

*Looking for long term trends*
Paper trading has the ability to qualify long-term trends. The issue with long-term trending systems is that they are hard to qualify as the returns could be down to sheer luck as this just adds complexities to evaluate a strategy correctly.

*The backtest period is important*
We have canvased the ideal of what length a backtest should be used to have meaningful results. Others have posted their views which is completely opposite to mine. As with @qldfrog I'm a believer in shorter-term backtests to evaluate the metrics as IMHO its usefulness diminishes the longer the backtest period. Performance results can be like “chalk & cheese” when conducting an evaluation over massive time frames. Performance observed in the past may offer little insight into the strategy performance in the short term. All I'm saying, markets have changed over the last 20 years.

Skate.


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## divs4ever (14 December 2021)

Skate said:


> *Crystal ball*
> Unfortunately, @divs4ever no one has a crystal ball, that's why I need an indication of what might happen or the probability of what might happen. I believe we can enhance our odds trading using a mathematical model rather than what I feel. Admittedly any strategy in the real market may behave differently from the backtest results but it's ultimately up to you to decide if you want to trade it on past performance or not.
> 
> *Take the good with the bad*
> ...



oh , i inherited a crystal ball , but sadly i have never been able to  get it to work  ,  and my 1980's pocket calculator has been mega-useful in double-checking  my mental arithmetic , so for a 'learning-by-the seat-of-his-pants ' novice , the outcome so far hasn't been that bad 
 BUT   picking the good times to BUY and SELL  are mega-important for all novices regardless of strategy chosen , so learn to eyeball those charts and graphs and understand the jargon and the math

 the market is very capable distracting you from the correct timing of your moves ( which why i don't mind orders sitting in the market for weeks/months WAITING , it is easier to cancel an order than calculate and make a new order  in the heat of the frenzy ) 

 and yes don't forget the boring bit  , go back to the moves you have made  and try to learn the lessons from what went right AND wrong


----------



## Skate (14 December 2021)

*Strategy evaluation*
I'm not convinced that one strategy is better than the other without gathering more information. Indeed, even strategies with nearly identical construction rules & long-run average returns can deviate meaningfully through time. The lesson for mechanical system traders is to remain cautious when interpreting past performance results.

*Back to the simple question*
If you could only pick one strategy to trade which would it be? - I'm really not expecting many answers if any as it involves a bit of effort.

*Strategies in question*
(a) The Platinum Strategy
(b) The WTT Strategy
(c) The BBO Strategy

*Thinking about it*
When you start trading any strategy doubt will always creep questioning if you have made the correct choice in trading "The Platinum Strategy" over the others. At least the WTT Strategy & BBO Strategy are well tested & the methodology is sound, whereas "The Platinum Strategy" is yet to be tested.

*The backtest period*
1st July 2015 to 30th June 2021. The period from 2015 falls in line with the period I have been trading.




Skate.


----------



## Skate (14 December 2021)

*Back to the simple question*
If you could only pick one strategy to trade which would it be? - I'm really not expecting many answers if any as it involves a bit of effort.

*Strategies in question*
(a) The Platinum Strategy
(b) The WTT Strategy
(c) The BBO Strategy

*The backtest period*
1st July 2017 to 30th June 2021 (4 complete financial years).




Skate.


----------



## Skate (14 December 2021)

*Back to the simple question*
If you could only pick one strategy to trade which would it be? - I'm really not expecting many answers if any as it involves a bit of effort.

*Strategies in question*
(a) The Platinum Strategy
(b) The WTT Strategy
(c) The BBO Strategy

*Let's just look at one financial year in isolation*
The backtest period is the 2019/2020 financial year. This period encompasses the COVID flash crash.




Skate.


----------



## Skate (14 December 2021)

*Back to the simple question*
If you could only pick one strategy to trade which would it be? - I'm really not expecting many answers if any as it involves a bit of effort.

*Strategies in question*
(a) The Platinum Strategy
(b) The WTT Strategy
(c) The BBO Strategy

*Let's look at the last financial year*
The backtest period is the 2020/2021 financial year. This is the period where most struggled, not all but some.




Skate.


----------



## Skate (14 December 2021)

*Back to the simple question*
If you could only pick one strategy to trade which would it be? - I'm really not expecting many answers if any as it involves a bit of effort.

*Strategies in question*
(a) The Platinum Strategy
(b) The WTT Strategy
(c) The BBO Strategy

*Let's feel the frustration of multiple charts*
The next series of backtests is to display the difference that can occur when starting a new strategy. The next 11 posts will depict the results if we started the strategy at the start of each month in ascending order. Looking at a multitude of results can be confusing & contradictive at the same time. No wonder new to mechanical systems trading finds it difficult at first.

*Backtest Period  #1*
1st January to today




Skate.


----------



## Skate (14 December 2021)

*Backtest Period #2*
1st February to today.




Skate.


----------



## Skate (14 December 2021)

*Backtest Period #3*
1st March 2021 to today.




Skate.


----------



## Skate (14 December 2021)

*Backtest Period #4*
1st April 2021 to today.




Skate.


----------



## Skate (14 December 2021)

*Backtest Period #5*
1st May 2021 to today.




Skate.


----------



## Skate (14 December 2021)

*Backtest Period #6*
1st June 2021 to today.




Skate.


----------



## Skate (14 December 2021)

*Backtest Period #7*
1st July 2021 to today.




Skate.


----------



## Skate (14 December 2021)

*Backtest Period #8*
1st August 2021 to today.




Skate.


----------



## Skate (14 December 2021)

*Backtest Period #9*
1st September 2021 to today.




Skate.


----------



## Skate (14 December 2021)

*Backtest Period #10*
1st October 2021 to today.




Skate.


----------



## Skate (14 December 2021)

*Backtest Period #11*
1st November 2021 to today.

It was unfortunate that I started trading "The Platinum Strategy" in November, the timing couldn't have been worse in retrospect but that's trading.




Skate.


----------



## Skate (14 December 2021)

*Back to my original question*
If you could pick only one strategy to trade which would it be? 

I'm really not expecting many answers if any as it involves a bit of effort
Thinking about it a little further, there would be "no one" who would put in the effort to answer the simple question, which is understandable.  But if it was a strategy "you" were planning to trade I'm sure the same effort would be applied.
*
Other than looking at a few backtest results what did it achieve?*
Well, nothing really. 
*
What was the exercise?*
It was an exercise to display what you have to endure to evaluate a strategy after you have spent months coding it. It appears all the strategy have their moment in the sun even though at different times. Trend trading is highly correlated but those three strategies above have low correlation.

*Comparing the exits*
Each of those systems has different exit strategies. The different types of exits are reflected by the number against that type even the dollar expectancy differs from month to month. In my humble opinion, any of the strategies would be okay to trade. They all have relatively low drawdowns which is a bonus trading in these trying times. 

*In all honesty*
The question doesn't need answering. 

Skate.


----------



## Skate (14 December 2021)

*Luck*
I'm also at odds with @peter2 when it comes to mentioning the word "luck" with "trading" as his way of trading revolves around skill.

*I believe we all need a degree of luck*
All systematic traders need to be aware of the significance of "timing & luck" when they start trading. As an example, system traders who started last year in January 2020 got hammered with the COVID-19 flash crash. In hindsight, they were just unlucky to start when they did. After any major drop, traders are normally fearful to get back in. Restarting to trade again also relies on a degree of luck to kick them off on the right foot. 

*Starting the new "The Platinum Strategy" in November was sheer bad luck*
Another failure will make it even harder to start trading the strategy next time around - "if there is a next time for many".

*Abandoning a strategy too quickly*
When strategies are not performing as expected or they don’t follow the backtest results we tend to start fiddling & modifying a perfectly good strategy disguised as a trading strategy improvement. The development stage of a system is when these measures are crafted & certainly not during the paper trading phase. @cynic has made a stack of posts in this thread where he mentions that trading doesn't always follow the backtests results. I'd suggest you do a search for his posts as they are worthy of a re-read.

Phew....




Skate.


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## qldfrog (14 December 2021)

Skate said:


> *Luck*
> I'm also at odds with @peter2 when it comes to mentioning the word "luck" with "trading" as his way of trading revolves around skill.
> 
> *I believe we all need a degree of luck*
> ...



Sorry, a bit of time i do not have today to do a proper answer


----------



## MovingAverage (14 December 2021)

Skate said:


> I'm a believer in shorter-term backtests to evaluate the metrics as IMHO its usefulness diminishes the longer the backtest period.
> 
> Skate.



This is a very surprising statement...you're in fact suggesting that long term tests somehow mask the true performance of a system, which can only truly be seen through short term term testing? If you plan to trade your system for an length of time you can't seriously suggest that just a few hundred simulated trades is good enough? You need to understand the steady state dynamic of your system over the longer term. I like my coin flip analogies so you are in effect suggesting that to flip a coin once and land heads (that is in effect your short term analysis) is all the evidence you need to assume that any future coin flip will be 100% guaranteed to turn up a heads. I think you are confusing short term back test (a handful of trades) with relevance to current market dynamics--to conflate the two is a major mistake. This is why WF testing is so important. 

Your sim result run out to a few hundred trades--anyone with half a brain wouldn't go live with a system after only simulating a few hundred trades. But, hey...it's your money so trade away.


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## Skate (14 December 2021)

MovingAverage said:


> This is a very surprising statement...you're in fact suggesting that long term tests somehow mask the true performance of a system, which can only truly be seen through short term term testing? If you plan to trade your system for an length of time you can't seriously suggest that just a few hundred simulated trades is good enough? You need to understand the steady state dynamic of your system over the longer term. I like my coin flip analogies so you are in effect suggesting that to flip a coin once and land heads (that is in effect your short term analysis) is all the evidence you need to assume that any future coin flip will be 100% guaranteed to turn up a heads. I think you are confusing short term back test (a handful of trades) with relevance to current market dynamics--to conflate the two is a major mistake. This is why WF testing is so important.
> 
> Your sim result run out to a few hundred trades--anyone with half a brain wouldn't go live with a system after only simulating a few hundred trades. But, hey...it's your money so trade away.





Skate said:


> *The backtest period is important*
> *We have canvased the ideal of what length a backtest should be used to have meaningful results. Others have posted their views which is completely opposite to mine.*




Skate.


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## Skate (15 December 2021)

MovingAverage said:


> you're in fact suggesting that long term tests somehow mask the true performance of a system, which can only truly be seen through short term testing? If you plan to trade your system for an length of time you can't seriously suggest that just a few hundred simulated trades is good enough?




@MovingAverage, I'm not suggesting that at all.

*Confidence is required*
Once you have coded a system with a positive expectancy, the entry & exit can be modified to suit the "times" or a particular "market". Parameters & filters likewise can be re-tuned.

*Having a differing point of view on how to develop a strategy doesn't put us at odds*
Using one time-frame over another doesn't mean one of us is "right & the other is wrong". All we have is a different view on the length of the journey to give us the confidence to trade one system over another.

*The Turtles System*
I'll explain why "The Turtle System" worked in the 1980s & up to 1996 "then it stopped".

*The core reason the system stopped is that the markets changed*
This is the main reason why I add more emphasis on recent data to be in line with the state & volatility of the market. Also, in recent times technology has changed. Back in the early day's traders didn't trade with software. Interest rates were different, risk management was different, philosophy was different. Market predictability has also changed since COVID with a vast amount of people trying their luck, entering the markets on mass.

*Markets change & evolve *
The world of money is now different from years ago, trading has changed considerably so systems need to evolve or go the way of the dinosaurs. My view of backtesting has evolved over time. After I realised the markets have changed a lot it didn't take me long to work out "what once held true doesn't hold true today". The understanding of this has been a bit of a problem for some to comprehend or accept.

*Below are some of your posts*
Take what you will from them but I suggest you read them carefully to understand nothing is set in concrete.



MovingAverage said:


> I'm pretty bloody minded about sticking to the rules of my systems and have been pretty good over the years, if my systems say buy I buy and if my systems say sell I sell...nothing more and nothing less matters.






MovingAverage said:


> I know I should have done nothing and run my system at close today, but I just couldn't ignore the profit given the crappy state of the market. Shame on me, so feel free to strip me of my system trader title and call me a discretionary trader






MovingAverage said:


> I pretty much overrode all my systems today and closed out all my positions. I’ve found it mentally too tough to continue trading in this market despite what my backtesting tells me.






MovingAverage said:


> Started trading the system in early 2015. It basically did nothing for the first 2.5 years, but really found it's momentum around mid 2017 and has really got some good traction since then. It was a real test of my patience to keep trading that system for 2.5 years and make little progress.




*Three trading periods*
I'm guessing the trade results below are from the same strategy. Looking at those distinct periods, I believe something changed & I'm not suggesting you fiddled with your strategy but rather it was that the "market that changed" over that short period of time.







MovingAverage said:


> If I run backtests now over that period ( Jan 2015 to Aug 2017) the real performance you see above is inline with the backtest






MovingAverage said:


> It is seriously tough trading through a lot of consecutive losers and for me that messes with my head so is something I'm very sensitive to. My backtests over 4000 historic trades have this particular system sitting at max consecutive winners of around 36 and max consecutive losers at around 20. The current figures on the live version of the system (which is shown in the graphs above) has consecutive winners at 10 and consecutive losers at 9, but that is after around 351 live trades, which is clearly far less than the 4000 trades executed in my backtests.






Skate said:


> *What to believe*
> Everybody talks about technical or fundamental analysis as they know it intimately & feed it to others with the best of intentions (most of the time). Like all skills, if you are trading for financial freedom you better make yourself comfortable as it takes an extraordinary length of time to be good at it. My point is, "there are different trading methods" that work & all you need to do is to find something that suits your lifestyle, schedule, & most of all is your personality. Your personality will ultimately decide if you can stick to a plan even when the going gets tough.




Skate.


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## Skate (15 December 2021)

*Does turtle trading still work in today’s market?*
Dennis and Eckhardt did not invent trend following but used it "successfully" during the 1980s "their period in the sun". While turtle trading worked in the 1980s, there are differing opinions about whether the turtle trading system would work today. 



Skate said:


> *Looking for perfection*
> For those looking for the perfect strategy, there isn’t one, so in the meantime, why re-invent the wheel – pick an idea that’s been backtested, proven to work & modify the idea to suit the job you want it to achieve.




*The markets have changed a lot*
"It’s important to adjust a system, adjusting the system is important,” said Dennis. His system, his core system of entries & exits unfortunately doesn't work today.

Skate.


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## Skate (15 December 2021)

*Jerry Parker, a disciple of Dennis & one of the original turtle investors*
Jerry believes that turtle trading is timeless but risk management when trading is pivotal. He goes on to remark that constant research, parameter adjustments & re-tuning of the entry & exit conditions are the "keys" to trading profitably.

_“You’re continuing to do research, finding robust systems, and that means systems with the least amount of parameters that tell you how to initiate, liquidate, or stay out of a trade. We’re always looking to build systems that are based on momentum or based on range dependent discrete time frames where you’re confirming that a trend is in place”, _said Parker.

_“So, you’re always looking to capture directional price movement. Obviously, managing risk is paramount, so you manage risk from the trade size, you limit it in the markets and sectors that you trade,”_ added Parker.

Skate.


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## Skate (15 December 2021)

*Is turtle trading past its prime?*
Turtle trading was innovative in the 1980s, but wouldn’t be effective now. Inflation was higher & there were more solid trades to follow in the 1980s than there are now. Dennis noted that mental discipline was just as important to turtle trading as following his rules.

*Parker also said that the risk management strategy can be tweaked to adapt to today’s stock market*
_“We have a risk management concept that overlays the portfolio that’s based on marginal utility. So, we’re harvesting profits along the way which is very different than what we did learn in the original Turtle trading programs. We’re still doing the same things, just a little bit differently than we used to,”_ said Parker.

Skate.


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## Skate (15 December 2021)

*Why do trading systems stop working?*
Trading systems often work for a while but some traders will stick to the system believing it can't fail. When you start to lose money consistently the penny will eventually drop. When it does you will realise the truth that your strategy is no longer working. 

*Something has changed*
When the system stop working some cease trading altogether. They will start trading the same strategy when they perceive the system has come back to life. In reality, they become a glutton for punishment finding themselves back in the saddle riding a lame horse. 

*Over time systems fail*
The purpose of this post was to highlight that some systems do fail, not because the methodology was wrong but merely because the markets have changed over time & "your system didn't". All I wanted to say is when your system stops working there is an alternative. I should also say in closing, "some systems stop working because they never really worked in the first place".

Skate.


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## qldfrog (15 December 2021)

Seen in term of engineering, most trading systems do not have feedback loops.or only a basic one gtfo on index, and mostly rely on an implied system loop( SP and volume).
The holy grail would be an inbuild feedback loop which would create a dynamic system..probably via dynamic parameters.
Not easy task..not only code wise but mostly  concept algorithm wise.
I tried starting from a very very basic base and so far no success
but between full AI ML, and a feedback loop, i will try first the feed back loop.
At least you can understand the decisions


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## MovingAverage (15 December 2021)

Skate said:


> *Below are some of your posts*
> Take what you will from them but I suggest you read them carefully to understand nothing is set in concrete.
> 
> 
> ...




What have those prior posts of mine got to do with the comment I made in relation to backtest period and number of trades taken? Please don't confuse my comments on you backtest results as not agreeing market conditions have changed. I'm simply saying that your original post asked people to pick 1 of your 3 strategies. And I'm suggesting I wouldn't pick any based on your sim results of a few hundred trades--not that using recent data is wrong.


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## MovingAverage (15 December 2021)

Skate said:


> *Three trading periods*
> I'm guessing the trade results below are from the same strategy. Looking at those distinct periods, I believe something changed & I'm not suggesting you fiddled with your strategy but rather it was that the "market that changed" over that short period of time.
> 
> View attachment 134289
> ...




Nope--I have made two very significant changes to my system that are responsible for this change in performance. The first is the universe of stocks from which buy set-up are looked for (this drove the improvement in the second block you identified) and the second is a profit exit (the drove the improvement in the third block you identified). Yes and even on non-recent data these changes drive a significant change so it is good to assume that any change in market dynamics has had only marginal impact on the system's performance


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## Skate (15 December 2021)

MovingAverage said:


> Please don't confuse my comments on you backtest results as not agreeing market conditions have changed. I'm simply saying that your original post asked people to pick 1 of your 3 strategies. And I'm suggesting I wouldn't pick any based on your sim results of a few hundred trades--not that using recent data is wrong.




I'll take that as a comment about not selecting any of the strategies on a few hundred trades. 

The original Backtest period was selected because it was the date I elected to start trading (July 2015)



MovingAverage said:


> What have those prior posts of mine got to do with the comment I made in relation to backtest period and number of trades taken?




The previous posts confirmed that you had not followed your trading strategy but over-ridden your strategy with more information. It was a way to explain that nothing is set in stone. When we are talking about "strategy improvements" that's a different kettle of fish & you shouldn't confuse the two.



MovingAverage said:


> Nope--I have made two very significant changes to my system that are responsible for this change in performance. The first is the universe of stocks from which buy set-up are looked for and the second is a profit exit. Yes an even on non-recent data these changes drive a significant change.




*Bingo, that's my point *
Strategy improvements never cease, why? because market conditions change & so should your strategy. I made this remark in my previous posts. 

Also, "Kudos to you" for finding improvements on non-recent data. By the way, that's harder said than done & highly unusual.

Skate.


----------



## MovingAverage (15 December 2021)

Skate said:


> The previous posts confirmed that you had not followed your trading strategy but over-ridden your strategy with more information. It was a way to explain that nothing is set in stone. When we are talking about "strategy improvements" that's a different kettle of fish & you shouldn't confuse the two.




If you look through my historical posts again you will see I have always said it is extremely easy to simply suggest you just keep plowing through your system trades based on sim results but it is a whole other thing to actually place loosing trade after loosing trade when you're live trading with money on the line--system trading can really mess with your head. 




Skate said:


> *Bingo, that's my point *
> Strategy improvements never cease, why? because market conditions change & so should your strategy. I made this remark in my previous posts.
> 
> Also, "Kudos to you" for finding improvements on non-recent data. By the way, that's harder said than done & highly unusual.
> ...




Again, look through my historical posts and I have never advocated a "set and forget mentality"--but again I'm, not suggesting decisions be made on the basis of a few hundred or less historical trades--that is not enough to get a good understanding of your system.


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## ducati916 (15 December 2021)

Some data on market returns:




Change in market conditions?

jog on
duc


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## Skate (15 December 2021)

ducati916 said:


> Change in market conditions?




There sure has been, the graph nails it.

Skate.


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## ducati916 (15 December 2021)

Skate said:


> *Is turtle trading past its prime?*
> Turtle trading was innovative in the 1980s, but wouldn’t be effective now. Inflation was higher & there were more solid trades to follow in the 1980s than there are now. Dennis noted that mental discipline was just as important to turtle trading as following his rules.
> 
> *Parker also said that the risk management strategy can be tweaked to adapt to today’s stock market*
> ...




Originally, they would pyramid into their positions (increasing exposure) as price went in their favour. Clearly now, quite a different strategy.

jog on
duc


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## ducati916 (15 December 2021)

Some further data:







Does it make a difference to how systems would perform?

jog on
duc


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## MovingAverage (16 December 2021)

Seems to be lots of conjecture about whether market dynamics have changed in recent times, but I'm not so sure about that and at least based on a high level look of a couple of key market characteristics I'm not convinced todays market is any different to the market of 10 years ago. Being a system trader my comments are based on characteristics around technical indicators and I am not in the least bit interested in changes in fundamentals (don't trade based on them).

Below is the chart of XAO over the past 20 or so years. Let's start by looking at volume. Sure, since early 2020 we've seen a jump in volume and a lot of that is the big Covid sell off and the subsequent piling in of money trying to capture the post Covid rebound. But this volume is nothing we haven't seen before. Just look back at the 2008 through to 2012 period--higher volumes. So let's take a look at volatility--seems like there are lots of folks running around saying the market is more volatile than ever, but is it really? Looking at ATR as a proxy for volatility again we saw a rapid increase in volatility in early 2020 and that can be put down to the rapid Covid sell off, but after that sell off the volatility has continued to drop off. Yup, we've seen this volatility before. Just look at that high volatility and slow decline from around late 2008. Our current volatility is back to 2010 levels.

As far as price action goes, the XAO has been tracking sideways since July of this year, but that's nothing unusual and you don't need to be a skilled chartist to see sideways movement of XAO has happened on many occasions 10 years or more ago. 

So I'm not entirely convinced (based on this cursory review of the market) our current market conditions are that dissimilar to that which we experienced 10/12 years ago. Clearly the XAO is at all time highs but several key old characteristics appear to be playing out again.


----------



## divs4ever (16 December 2021)

maybe it was because i was an investing novice  10 years back  , but i suggest the markets are a LOT scarier now 

 higher yes  , but also disproportionately riskier


----------



## MovingAverage (16 December 2021)

divs4ever said:


> maybe it was because i was an investing novice  10 years back  , but i suggest the markets are a LOT scarier now
> 
> higher yes  , but also disproportionately riskier



Maybe markets are a lot scarier now because you have more experience and better understanding of the market--as a novice ignorance is sometimes bliss


----------



## peter2 (16 December 2021)

*LUCK*:  I agree that the word "luck" can be applied to individual decisions, results and short term trading. However in the longer term the positive expectancy (profits) that my methodology generates is not due to luck. I disagreed that luck plays a part in my trading performance in the medium and longer periods. I didn't disagree (I agree)  that luck can be applied to individual events. 

Concerning the back tests of the three strategies. I agree with @MovingAverage that there isn't enough information to make an informed decision as to which is my preferred strategy. My main reason is that I'm unaware of the details of each strategy. As a part time analyst I yearn for more details because I can only develop confidence in a system if I know all the strategy details. I'll never buy a "black-box" strategy no matter how good the back-tests are. Knowing the details is an important aspect of my personality in regard to trading systems.

I do want to highlight one 'flaw" with the short term back-tests displayed earlier. It's my understanding that the Platinum System includes a market filter. When this filter turns on it tightens the trailing stops and prevents new entries. I don't believe that we can properly evaluate the effectiveness of a system with a market filter if the back-test period doesn't include one or more periods that turns the filter on.


----------



## peter2 (16 December 2021)

Just between you and I @Skate. Looking through the results of all the back-tests that you've posted, there's been one constant that I believe is responsible for the many outstanding profits.  

I'm not going to reveal it here. I'll PM you with my opinion.


----------



## qldfrog (16 December 2021)

peter2 said:


> Just between you and I @Skate. Looking through the results of all the back-tests that you've posted, there's been one constant that I believe is responsible for the many outstanding profits.
> 
> I'm not going to reveal it here. I'll PM you with my opinion.



a bit like showing a lolly and putting it back in the bag


----------



## KevinBB (16 December 2021)

qldfrog said:


> a bit like showing a lolly and putting it back in the bag



Worse that that ... just like showing a lolly, and then eating it. At least if its in the bag it is retrievable.
KH


----------



## Skate (16 December 2021)

peter2 said:


> Just between you and I @Skate. Looking through the results of all the back-tests that you've posted, there's been one constant that I believe is responsible for the many outstanding profits.






peter2 said:


> I'm not going to reveal it here. I'll PM you with my opinion.




As usual, @peter2 nailed it.

Skate.


----------



## qldfrog (16 December 2021)

peter2 said:


> Just between you and I @Skate. Looking through the results of all the back-tests that you've posted, there's been one constant that I believe is responsible for the many outstanding profits.
> 
> I'm not going to reveal it here. I'll PM you with my opinion.



Mr @peter2, can we narrow " results of all the back-tests that you've posted" to the last 3 recent BT posted..[Disclaimer:I have not analyzed these  yet ]or more wide and generic..
Or is this too specific?


----------



## Newt (16 December 2021)

peter2 said:


> Just between you and I @Skate. Looking through the results of all the back-tests that you've posted, there's been one constant that I believe is responsible for the many outstanding profits.
> 
> I'm not going to reveal it here. I'll PM you with my opinion.



 But, but, but......!   
GRrrrrrrrrr!


----------



## peter2 (16 December 2021)

LOL, sorry for the teaser. You know I can't resist one occasionally to stimulate some discussion. 

We all know that @Skate 's main strategy is trend trading. They may have slightly different entries but all his systems are trend following in nature. This is important, if you want to make the big bucks trade the trends. 

I'm not going to reveal what I think is @Skate 's system's secret sauce. I think you all know it already but I'm not so sure that you realise the importance of it. 

What type of stocks do we need to include in our trading universe to make the huge percentage gains that we often see in @Skate's back-tests?  How frequent are these big percentage gains? Are they frequent enough so that a back-test can produce an above market performance no matter when it's started? 

The secret sauce is only one element of a great dish. A dish's main ingredient is the hero but the secret sauce elevates the experience. IMO without this secret sauce @Skate's systems would produce performances slightly above the market and not be as transcendent as they seem.


----------



## Skate (16 December 2021)

peter2 said:


> I'm considering making some adjustments to my trading methodology. There may not be as many trading opportunities as we like. Have you noticed that @Skate 's Platinum System now only carries 10 positions instead of 20? I may trade fewer positions also. So, in order to get the performance I desire I may have to risk a little more in each trade. I'm probably going to be quicker on the exits as well.




*Let's talk about trading methodology*
We tend to trade in a similar way over & over again & we rarely deviate from the recipe we have traded in the past.

*In the past*
I've traded up to 53 positions in a portfolio & explained why I traded such large numbers. @peter2 to his credit gave the idea ago, thinking it wouldn't work but to his amazement, it did.  Peter gave a great explanation why trading such a large number of positions was advantageous "at the time". If you trade a large number of positions in your portfolio today it would end in heartbreak.

*Why concentrate only on 10 positions?*
In these trying trading conditions, you need to keep your positions tight & only select the positions that can have a decent bonce through the power of percentages as we are seeking a percentage increase & not a currency increase. Having increased bets concentrated on a few positions insures when you have a "win" you have a "decent win". It's also wise to reduce the number of positions & exit the suckers that don't perform quick smart. I've adapted to this new trading environment & so should you. Peter eloquently expressed this in his last post of which is quoted above.

Skate.


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## Skate (17 December 2021)

*When do we exit a position?*
I could make a series of lengthy posts that would become repetitive in nature or I can post a capture of a 365 day backtest of "The Platinum Strategy" as a picture paints a thousand words. Profits can build & dissipate quickly so with the current trading environment it's advantageous to grab profits while they are on offer. A few years ago I wouldn't have considered doing this as my research back then proved it was not the correct exit strategy to employ.

*Exploration Mode*
I have 5 different exploration modes. Sometimes additional reports allow you to look at the same information from different angles as trading "depends" on information from a variety of sources, let alone being able to debug your code efficently.

(1) *Basic* - to give basic information, the information that I need in a condensed format
(2) *Custom* - a little more detailed
(3) *Verbose* - more information than are needed but still an important format
(4) *Debug* - with experience at times coding needs to "Debug" to find faults
(5) *All* - What the heck, at times I'll throw them all up on the one analysis. Sometimes "more" is better.




Skate.


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## Skate (17 December 2021)

*I'm making this the quote of today*
This is an extract from @ducati916 post today (uploaded without permission)




Skate.


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## Skate (17 December 2021)

Skate.


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## MovingAverage (17 December 2021)

Skate said:


> Having increased bets concentrated on a few positions insures when you have a "win" you have a "decent win".
> 
> Skate.



Fiddling with your position sizing to get acceptable results is just masking an underlying system with mediocre performance.


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## Skate (17 December 2021)

MovingAverage said:


> Fiddling with your position sizing to get acceptable results is just masking an underlying system with mediocre performance.




@MovingAverage you can't keep misrepresenting what I have said to suit your narrative. This has to stop. 

*Tennis*
Let's not play tennis with each other, if you have an alternative opinion - feel free to express it. You have the right to express an alternative view or even make a few posts on the correct way to position size a "mechanical trading system". 

*Blurting out one-liners is not educational to anyone*
We can both hold a different opinion & neither of us could eventually be right. Expressing why you hold your opinion & why I hold mine helps others to understand the point from different angles.

*For the benefit of others*
In a recent private message, I remarked how trading has changed for me since COVID & the steps I have taken to bring my strategy in line with current market conditions. I've even explained when trading was good, I took advantage of those conditions having a larger than expected "position size" ranging from (40-53) positions in each portfolio. 

*Desperate times required desperate measures *
As I have amended my trading strategy I've explained why it was necessary. After doing so I posted comparison charts & graphics to lineate the difference it made. I've even taken the time to explain why having a "Take Profit Stop" can be an advantage to a strategy's profitability in these trying times.

*Why did I explain all this? *
I did it in the hope others would think about what I have done & why. I didn't spew out one-liners but took the time & effort to give a measured explanation & the "reason" for the changes I've made.

*How things have changed*
The 20th of January 2019 seems like a long time ago & it probably is when it comes to trading. In the 2019 post, I explained my strike rate (win rate) was around 50%. I always post accurate & up to date records so others can experience my trading method. At times I overshare, but that's just me.
*
Since the 1st of January 2020*
My strike rate has hit an all-time low of 39%. I'm just saying, back in the early days "up until the COVID period" trading was so much easier & my equity curve was so much smoother. Those who maintain trading has not changed since COVID well frankly my trading doesn't reflect the status quo. Then again, it just might require more research on my part to establish if my methodology of re-coding made the difference or was the real culprit for the lower strike rate was due to the much tougher trading environment.

*My gut feeling is it's the latter*
I should also say a 39% strike rate is on par with a trend following strategy but as usual, I'm seeking above par results.

*Since COVID my win rate has dropped to 39%.*
I had not "realised" my strike-rate had dropped substantially as the profits during this period were still strong. I must confess I only look to solve a problem when one is noticed.

*Like the old saying*
"If you can't see the problem, there is no answer"




*For the advantage of others *
(a) Consider if your post adds value to the discussion.
(b) When expressing an alternative view, start off by saying “In my opinion …” and try to focus on the issues rather than the person.
(c) We are all wordsmiths to some degree & it's easy to incite an emotional, knee-jerk response, creating an emotional outburst.
(d) Ask a detailed question & you will get a detailed response.
(e) Ask a one-liner, & all it deserves is a one-liner in response.

*Don't post one-liners*
Most members ask questions or post a response making a statement as a one-liner, (not all but some) & sometimes their responses are the same, it's unhelpful. If you skim read my post you'll learn nothing & at times you will "completely miss the point" I was trying to get across by jumping to the wrong conclusion. 

*It takes time*
It takes a lot of time & effort to give a measured response so all I'm asking is if you have a question detail it precisely, let me understand why you don't understand as constantly going back & forward with others is tiresome, boring & more importantly, it wastes our time.

*Same old same old*
Some members tend to follow patterns of behaviour, posting to invoke an emotional response, never answering questions directly to justify their position but they "always demand documentary evidence" from others to support their assertions, while offering none in return.

*# Please don't let that be you.

On a lighter note *
@MovingAverage thank you for posting in the "Dump it here" as it has certainly helped, without the generosity of senior traders "making a contribution" the "Dump it here" thread would have died long ago.

*With respect*
If you or others want to make a difference, keep the material on the issue at hand while refraining from telling others their views are flawed. Simply take the effort to explain why from your advantage point.  

Skate.


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## MovingAverage (17 December 2021)

Skate said:


> @MovingAverage you can't keep misrepresenting what I have said to suit your narrative. This has to stop.
> 
> 
> *Blurting out one-liners is not educational to anyone*
> We can both hold a different opinion & neither of us could eventually be right. Expressing why you hold your opinion & why I hold mine helps others to understand the point from different angles.



It's not a one-liner...you like quoting my past posts so why not look back to the post I made sometime ago to you about system testing and position sizing. I said back then that if you really want to understand a system's performance you need to isolate the impact of position sizing--you discounted me with no reason. I clearly stated back then my opinion on position sizing and the artificial influence it can have on a system's performance. Nothing new here. I'm merely suggesting that if your system isn't performing then to fiddle with your position sizing isn't fixing the problem.

BTW, you keep saying the market has changed but you've offered no insight into that. I recently countered your opinion with details about why I believe the current market hasn't changed. So please, do not suggest I offer no insight into my opinions.

Also, not that long ago in one of my prior posts (which I sure you can find) I suggested profit taking exit in breakout systems was a good thing. I even posted up example trade of why it was good. You absolutely lambasted the idea without any supporting evidence and here you are now suggesting they're good


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## othmana86 (18 December 2021)

MovingAverage said:


> Fiddling with your position sizing to get acceptable results is just masking an underlying system with mediocre performance.



What if position sizing based on volatility forms part of your strategy?

I think radge refers to doing this in his monthly rotational strategy, wether he actually does it or not I’m not sure.


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## Skate (18 December 2021)

*For transparency*
There was one sell signal this week, a position not held in the Platinum10-position portfolio. The corresponding chart is uploaded to display the entry & exit points.















Skate.


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## MovingAverage (18 December 2021)

othmana86 said:


> What if position sizing based on volatility forms part of your strategy?
> 
> I think radge refers to doing this in his monthly rotational strategy, wether he actually does it or not I’m not sure.



Position sizing is very important—and I’m not advocating one position sizing over another. Yes, position sizing is a crucial part of your strategy and if volatility based techniques work for you then great, but there is a subtle point that I was trying to make with my earlier post. In MY OPINION (it’s important to state that in this thread now) a mechanical system (not your overall strategy) should be tested and evaluated with minimal influence from position sizing. This will give you a much clearer insight into how your system really behaves. I’ll put up some sim results later today to better illustrate the issue.


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## MovingAverage (18 December 2021)

So here is the point I am endeavoring to highlight. The below shows backtests for a system (what the system is makes no difference for this purpose). The first results are for the system using the common positioning sizing technique of a maximum of 20 open positions each position being 5% of the portfolio's value. This technique appears a lot in the backtesting results posted in this thread and is somewhat of a defacto standard here.

The returns below look pretty good don't they--and you'd be forgiven for thinking this is great let's go live with this. Pay close attention to the returns from 2011 to 2021.




Well now let's strip out the impact of ever increasing position sizes that is inherent in the ever popular position sizing technique of 20 position each being 5% of the portfolio's value and instead level the playing field by maintaining the same position size over the same 20 or so years. Below are the returns for the same system but using a fixed dollar position size, which in this case is 20 positions each of $5000 ($100,000 starting value) and this remains across the 20 year span. The above results started with $100,000. Guess what...check out the returns from 2011 to 2021...bloody terrible. And this is the point I was making earlier: fiddling with position sizing to get acceptable results is just masking a system with mediocre performance.


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## ducati916 (18 December 2021)

MovingAverage said:


> So here is the point I am endeavoring to highlight. The below shows backtests for a system (what the system is makes no difference for this purpose). The first results are for the system using the common positioning sizing technique of a maximum of 20 open positions each position being 5% of the portfolio's value. This technique appears a lot in the backtesting results posted in this thread and is somewhat of a defacto standard here.
> 
> The returns below look pretty good don't they--and you'd be forgiven for thinking this is great let's go live with this. Pay close attention to the returns from 2011 to 2021.
> 
> ...





So a couple of questions:

(a) I assume not an issue where position sizing (as alluded above) is a specific variable in the strategy; and
(b) The results above (the fixed position size) rather looks like the markets changed, would you agree?

jog on
duc


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## MovingAverage (18 December 2021)

ducati916 said:


> So a couple of questions:
> 
> (a) I assume not an issue where position sizing (as alluded above) is a specific variable in the strategy; and
> (b) The results above (the fixed position size) rather looks like the markets changed, would you agree?
> ...




No idea what you mean by point a). Position sizing is what it is—an input to the system. Depending on your definition of variable, my sims show both scenarios—first as a variable and the second where it is not a variable. As for b) you do not need my sim results to come to that conclusion—just look at my earlier chart of XAO and my comments that some aspects and dynamics of the current market resemble our market post the 2008 GFC. In any event, the market is always changing day-to-day, week-to-week, month-to-month, year-to-year and so on so on.


----------



## ducati916 (18 December 2021)

MovingAverage said:


> 1. No idea what you mean by point a). Position sizing is what it is—an input to the system. Depending on your definition of variable, my sims show both scenarios—first as a variable and the second where it is not a variable. As for b) you do not need my sim results to come to that conclusion—just look at my earlier chart of XAO and my comments that some aspects and dynamics of the current market resemble our market post the 2008 GFC.






MovingAverage said:


> 2. In any event, the market is always changing day-to-day, week-to-week, month-to-month, year-to-year and so on so on.





1. Well that's not exactly what you said:

"_The above results started with $100,000. Guess what...check out the returns from 2011 to 2021...bloody terrible. And this is the point I was making earlier: fiddling with position sizing to get acceptable results is just masking a system with mediocre performance."_

If position size as an input is a variable that is actively chosen, specifically to improve performance, then that is different to simply masking poor performance through ignorance and error of what you are doing.


2. So 'change' in markets (obviously) needs a definition. Fluctuations, which you are (seemingly) referring to, are not the definition of 'change' that others are using or possibly only myself.

When we (or I) talk about 'change', we are talking about forces within the markets that drive the secular trends as opposed to simple volatility.

On that basis, would you agree that the market appeared to 'change' in 2011 using your backtest as an example?

jog on
duc


----------



## Cam019 (18 December 2021)

MovingAverage said:


> So here is the point I am endeavoring to highlight. The below shows backtests for a system (what the system is makes no difference for this purpose). The first results are for the system using the common positioning sizing technique of a maximum of 20 open positions each position being 5% of the portfolio's value. This technique appears a lot in the backtesting results posted in this thread and is somewhat of a defacto standard here.
> 
> The returns below look pretty good don't they--and you'd be forgiven for thinking this is great let's go live with this. Pay close attention to the returns from 2011 to 2021.
> 
> ...



I'm not sure I agree with you. Haha! That's not surprising, right! 

Isn't this just simple maths? Simple vs compounding rate of return.

Let's say your account size started with $100,000. Well $5,000 position size is obviously 5% of your accounts capital. However, the larger your capital grows (which is the goal over time) the lower the percentage of your account balance each $5,000 position size will be, and therefore each realised profit or loss will have a lesser effect on the growing capital base over time - hence the lower returns.

Why bother backtesting with a position sizing model that does not compound realised profits? This does not make sense to me.


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## MovingAverage (18 December 2021)

ducati916 said:


> 1. Well that's not exactly what you said:
> 
> "_The above results started with $100,000. Guess what...check out the returns from 2011 to 2021...bloody terrible. And this is the point I was making earlier: fiddling with position sizing to get acceptable results is just masking a system with mediocre performance."_
> 
> If position size as an input is a variable that is actively chosen, specifically to improve performance, then that is different to simply masking poor performance through ignorance and error of what you are doing.




I have absolute no idea what point it is you are trying to make here, but that is probably because I have a low IQ. You keep referring to “input variable” and not sure why. I’ve made my point on position sizing having an undue influence on systems and how it can mask an otherwise mediocre system—which I stand by. Given I can’t comprehend your points let’s just leave this here unless you can simply your proposition for my simple mind.




ducati916 said:


> 1. Well that's not exactly what you said:
> 
> "_The above results started with $100,000. Guess what...check out the returns from 2011 to 2021...bloody terrible. And this is the point I was making earlier: fiddling with position sizing to get acceptable results is just masking a system with mediocre performance."_
> 
> ...



Again, I don’t really understand your point. Can you give me an explicit example or two of what forces you are referring to. The reality is that the charts of the current market suggest we have been here before—yes I know you’re not referring to charts. If these forces you speak of are external then I have no idea or interest to understand those because they manifest themselves in the charts. As I said before, markets are changing all the time, but are we in a period that is radically different to the past—nope I don’t think so. Not prepared to draw any conclusions on market dynamics from my sim results other than to say yes pre ‘11 and post ‘11 are different, but again that is very obvious from my earlier post on XAO


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## MovingAverage (18 December 2021)

Cam019 said:


> I'm not sure I agree with you. Haha! That's not surprising, right!
> 
> Isn't this just simple maths? Simple vs compounding rate of return.
> 
> ...



I agree with you and what you say is right. But my point is all about understanding your system’s behaviour without external influences. Again IN MY OPINION when you’re initially building, evaluating or refining your system I’m just suggesting it be done without the influence of position sizing. By all means factor in position size but that should be done after you’ve settled you’re initial system using fixed position sizing. You can then get a better understand of how much of your strategy’s performance can be put down to the system per se and how much to position sizing. Here’s is a crude example…imagine someone starting live trading that system I posted results for and they started in 2019…do you reckon they would really have any chance of even getting double digit returns for that year?


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## Skate (18 December 2021)

MovingAverage said:


> I clearly stated back then my opinion on position sizing and the artificial influence it can have on a system's performance.






MovingAverage said:


> In MY OPINION (it’s important to state that in this thread now) a mechanical system (not your overall strategy) should be tested and evaluated with minimal influence from position sizing. This will give you a much clearer insight into how your system really behaves. I’ll put up some sim results later today to better illustrate the issue.






MovingAverage said:


> The first results are for the system using the common positioning sizing technique of a maximum of 20 open positions each position being 5% of the portfolio's value.




*Well you live & learn*
I don't know of anyone who would backtest using anything other than fixed dollar position sizing. Using any other method over time you wouldn't be able to enter a position as the bet size would be enormous. I'll show you that in a few backtest & why it is silly.

*Disclaimer*
When you see any of my backtests that are uploaded they are all "Fixed Dollar Position Size" meaning the bet size remains constant.

*Talk about misleading backtest results*
I hope no one is using that methodology when in the development phase of a strategy or backtesting the worth of a strategy. The ASX has a very shallow depth of the market that can't accommodate large bets. Even so, if it could the slippage would be enormous. 
*
Let me post a few captures*
"The Platinum Strategy" is my latest creation so I'll use this strategy as an example. The strategy is a 10-position portfolio with $10k bets with no rebalancing. I'll explain rebalancing when it comes to the next bet sizes or (Position Sizing) in the next post. But let's evaluate a backtest using a few different well-established methods when it comes to live trading. 

*The backtest will be in this order*
(a) Fixed Dollar Position Sizing (fixed Dollar bet size)
(b) Fixed Fractional Risk %
(c) Fixed % of Portfolio Equity




Skate.


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## Skate (18 December 2021)

*The backtest will be in this order*
*(a) Fixed Dollar Position Sizing (fixed Dollar bet size)*
(b) Fixed Fractional Risk %
(c) Fixed % of Portfolio Equity

*The backtested strategy will be "The Platinum Strategy"*
Please notice that the position size (bet size) is a fixed $10k with "NO REBALANCING". I'll explain what rebalancing is in the next post




*The backtest period will be 4 years in duration*
If you follow along you will experience firsthand why backtesting other than a fixed dollar amount can be misleading. This was the point @MovingAverage was making. The backtest period is from 18th December 2017 to the end of trade Friday 17th December 2021. The position size is fixed at $10k with 10-positions.

(a) Fixed Dollar Position Sizing (fixed Dollar bet size)





*Fixed (Position Size) bet size of $10k*
As you can see the bet size is constant & it never changes.

*(a) Fixed Dollar Position Sizing (fixed Dollar bet size)*




Skate.


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## Skate (18 December 2021)

*The backtest will be in this order*
(a) Fixed Dollar Position Sizing (fixed Dollar bet size)
*(b) Fixed Fractional Risk %*
(c) Fixed % of Portfolio Equity

*The backtested strategy will be "The Platinum Strategy"*
Please notice that the position size (bet size) is Fixed Fractional Risk %.




*The backtest period will be 4 years in duration*
Following along you will experience firsthand why backtesting other than a fixed dollar amount can be misleading. This next capture will display how the next bet size will be so large it's untradeable.

*The backtest period *
The backtest period is from 18th December 2017 to the end of trade Friday 17th December 2021. The position size is a Fixed Fractional Risk % with 10-positions.

*(b) Fixed Fractional Risk %


*


*Fixed Fractional Risk %  (Position Size) bet size*
As you can see the bet size constantly varies & at times untradeable. The bet size starts off around $10k but quick balloons out to around $90k for each bet. It's not achievable to enter the market without slippage "which will" shift the market.

*(b) Fixed Fractional Risk %


*


Skate.


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## Skate (18 December 2021)

*The backtest will be in this order*
(a) Fixed Dollar Position Sizing (fixed Dollar bet size)
(b) Fixed Fractional Risk %
*(c) Fixed % of Portfolio Equity*

*The backtested strategy will be "The Platinum Strategy"*
Please notice that the position size (bet size) is a Fixed % of Portfolio Equity.




*The backtest period will be 4 years in duration*
Following along you will experience firsthand why backtesting other than a fixed dollar amount can be misleading. This next capture will display how the next bet size will be so large it's untradeable.

*The backtest period*
The backtest period is from 18th December 2017 to the end of trade Friday 17th December 2021. The position size is a Fixed % of Portfolio Equity with 10-positions.

*(c) Fixed % of Portfolio Equity


*


*Fixed % of Portfolio Equity (Position Size) bet size*
As you can see the bet size constantly varies & at times untradeable. The bet size starts off around $10k but quick balloons out to around $146k for each bet (what a joke). It's not even achievable to enter the market without slippage "which will" shift the market. Also getting a $146k on would be next to impossible in one transaction.

*(c) Fixed % of Portfolio Equity


*

Skate.


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## Skate (18 December 2021)

*I'm now talking about live trading & position sizing*
There are different ways to position size other than fixed dollar amounts when you are trading a live account. The benefits are there when you have a limited supply of trading capital. Like most, I have my way of "rebalancing my position size". Let's call it my bet size as it would be less confusing. I've made over 20 posts on how I rebalance my next series of bets (with graphics). 

*Amibroker "Exploration Analysis" *
Allows you to modify your next bet SIZE with a simple line of code no matter the balance of your outstanding funds not in the markets.

*Rebalancing is simply calculating the dollar size of the next bet or series of bets*
Pyramiding works both ways, the bet will either increase or decrease according to the trading funds available.

Skate.


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## Skate (18 December 2021)

*Trading in the pre-auction necessitates dollar re-balancing of positions sizing*
Re-balancing will be a direct correlation to the current trading account balance. It's a simple process & it's how I increase the size of the next series of bets. My trading account balanced is averaged over the next series of bets to have all my trading funds deployed in the markets. Using a (+/-) 3% premium results in "unused" fund. The outstanding funds are added to the regular bet size of the portfolio.

*"Re-balancing Explanation" (Position Size)*
Re-balancing my next bet is referred to as "Position Size". Re-balancing is a simple technique to reinvest profits & make corrections for losses. Re-balancing ensures every trading Dollar is put into the markets "to fight the good fight".

Skate.


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## Skate (18 December 2021)

*How do I rebalance?*
Re-balancing is adjusting the size of my next bet. Position-sizing (the bet size) uses the trading Bank balance feed to calculate the size of the next bet or series of bets. It's simply a way of putting every dollar to work.

*What is the Re-Balancing Formula?*
Trading Bank Balance/outstanding positions = new "Position Size" the new bet size. This will now be the new bet for each & every pending trade. The new "Position Size" also calculates the number of shares to buy in the pre-auction. It couldn't be simpler.

Skate.


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## Skate (18 December 2021)

*Most fail to realise rebalancing works both ways*
Re-balancing the next bet works for me as I need all my available funds to be constantly in the markets. Most fail to realise re-balancing works both ways. When trading is not going well, the size of the next bet decreases because of the losses incurred, even a string of losses is reflected. Boy, when times are good why shouldn't I take advantage of these conditions & increase my bet sizes. It's "making hay while the sun shines".

*In summary*
If you are backtesting & "not live trading" it would be advisable to backtest "only with a fixed dollar amount" ensuring that the backtest results will be accurate, constant, believable & achievable. The backtest period becomes irrelevant using a fixed dollar amount. Using any other method "cooks the books" & certainly "skews the results". Well, it's a first for me to learn others backtest using methods other than the "Fixed Dollar Amount".

Skate.


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## elbee (18 December 2021)

Skate,
I fully agree backtesting should not include compounding but should be based on a fixed equity.
However I also believe backtesting should reflect how trades will be executed in practice.
The backtests you have posted above seem to assume you will be buying a fixed dollar amount at the opening price, and you are willing to pay that opening price whatever it may be.
If that is how you intend to trade then that's fine. But I suspect most of us enter  trades with a limit and thus backtesting scripts should reflect that or be potentially misleading.
For example would you have taken the trade in LVT at the end of 2017 that is shown in your backtest?


----------



## Skate (18 December 2021)

elbee said:


> Skate,
> I fully agree backtesting should not include compounding but should be based on a fixed equity




@elbee that was the point I was trying to get across. During a strategy development stage & parameter settings, a fixed dollar amount will be accurate, constant, believable & achievable.



elbee said:


> However I also believe backtesting should reflect how trades will be executed in practice.




This is where we depart. Trading using the Backtest trade management feature will be reflective of how you decide to trade. But running a backtest to qualify the trading results over many decades becomes irrelevant because when live trading you wouldn't be able to enter those trades at the value recommend.



elbee said:


> The backtests you have posted above seem to assume you will be buying a fixed dollar amount at the opening price, and you are willing to pay that opening price whatever it may be. If that is how you intend to trade then that's fine.




No, this is not how I trade it was an exercise to show others how backtesting using alternative methods of a short 4 year period can skew the results giving you a false sense of security to place your money down. I'm made a multitude of posts explaining in great detail how I enter a trade & why, I have also posted parameter captures so it's easy to understand. I trade in the pre-auction only, which has already been discussed as well.



elbee said:


> But I suspect most of us enter trades with a limit and thus backtesting scripts should reflect that or be potentially misleading.




Now we are back on the same page. Trading through the "Backtest" Portfolio manager using whatever position size you decide is up to you, it's a personal choice. But if you want to test the validity of one entry over another, one parameter over another, or one filter instead of another - all I'm suggesting is that you use a metric that compares & contrasts the results by using a constant fixed dollar position as your starting point.



elbee said:


> For example would you have taken the trade in LVT at the end of 2017 that is shown in your backtest?




Your question is too vague as you didn't say which backtest you were referring to. So you don't have a follow up question my answer will be just as vague.

"I might have, or I may not have - it all depends"

Skate.


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## Skate (19 December 2021)

*Monte Carlo Parameter Settings*




__





						Monte Carlo simulation
					





					www.amibroker.com
				







*Simulate Using Trade List - Position sizing*
Position sizing defines the position sizing method used by the Monte Carlo simulator in "trade list" mode:

*Don't change *
This uses the original position size as used during backtest. Keep in mind that it always uses the original dollar value of the trade, even if your formula is using percent of portfolio equity.

*Fixed-size *
This uses a fixed number of shares/contracts per trade
*
Constant value* 
This uses a fixed dollar amount for opening any trade

*# Percent of equity #*
This uses a defined percent of the current simulated equity value. Be careful when using this setting - it causes that position size of one trade depends on profits on previous trades (compounding profits) and creates serial dependence. It may also lead to extra compounding effect when you have overlapping trades in your original backtest as bootstrap performs trades sequentially (so they don't overlap). For this reason, its use is limited to cases when no overlapping trades occur.

*Best practices*
To remove risks of serial correlation affecting the results of Monte Carlo simulation it is highly encouraged to use fixed position sizing (either fixed dollar value of trades or fixed number of shares/contracts), so the order in which given trade occurs in the original sequence does not affect its profit/loss due to compounding.

*Summary*
If Amibroker Monte Carlo uses fixed position sizing in their calculations it's the reason why they "highly encourage" you to use fixed position sizing when backtesting to eliminate the effect of compounding. Eliminating the compounding effect, the results will be accurate, constant, believable & achievable.

Skate.


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## Skate (19 December 2021)

Cam019 said:


> Why bother backtesting with a position sizing model that does not compound realised profits? This does not make sense to me.




@MovingAverage *supplied the perfect answer is below*


MovingAverage said:


> IN MY OPINION when you’re initially building, evaluating or refining your system I’m just suggesting it be done without the influence of position sizing. By all means factor in position size but that should be done after you’ve settled you’re initial system using fixed position sizing. You can then get a better understand of how much of your strategy’s performance can be put down to the system per se and how much to position sizing.




*Altering the next bet size (rebalancing in response to recent performance*


Skate said:


> Re-balancing the next bet works for me as I need all my available funds to be constantly in the markets. Most fail to realise re-balancing works both ways. When trading is not going well, the size of the next bet decreases because of the losses incurred






howardbandy said:


> Adjusting position size on a trade-by-trade basis in response to recent performance. The key to staying profitable is continuing to monitor the recent trades, reducing position size when in a drawdown and increasing position size when the system is working well.






howardbandy said:


> The position size is fixed or is determined within the trading system model. It should not be fixed. It should vary as the performance varies. It should not be determined within the trading system model. It should be determined within the trading system Management model. This gives the trader an opportunity to tune position size as performance changes, and to recognize the onset of system failure in time to reduce position size to protect account.




Skate.


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## Skate (24 December 2021)

Skate.


----------



## Skate (24 December 2021)

*Due to the Christmas weekend, these are the signals for next week



Exploration Analysis Signals





Backtest Signals








*

Skate.


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## Skate (28 December 2021)

*The 20% Flipper Strategy*
This strategy has been done to death over the years but with a new perspective, my interest has been reignited. I'm now wondering if the basic Flipper strategy can be improved?

*The Flipper is a very simple trend trading strategy *
With slight modifications & a few extra filters, I found the Flipper to work well in these trying times. The Flipper also worked well in the last quarter of 2018 & in Feb/March of 2020  which were both difficult trading periods. The Index Filter & the exit strategy limited the drawdown during these periods.

*The basic rules are very simple*
If a stock moves 20% from a low point, you buy & if a stock falls 20% from a high point, you exit. With a slight deviation from the original 20-positions to a 10-position portfolio, trading it weekly, the results aren't too shabby at all. The strategy premise is sound but with a new combination of filters & additional exit conditions, the returns become more consistent. It's surprising since 2000 it has never had a losing year.

*Weekly Backtest Setting*
Norgate Platinum Subscription.
All Ordinaries Current & Past.
$100k, 10-position strategy.
$10k fixed position size.

*5 year backtest*
During this 5 year period, there were two tough trading periods (the end of 2018 & the Covid Flash Crash Feb/Mar 2020) & the Flipper handled both of them with ease,





*3 year backtest*
The COVID flash crash "wasn't too scary" for the Flipper as most trend-following systems failed to exit quickly enough when the trend turned.





*It's a work in progress*
I've incorporated a market timing system & used the percentage of the "Rate of Change Filter" as the momentum indicator. I've also found that you need a bullish indicator to control the entries. Taking the raw signals without these extra filters & the returns can be very patchy at best.

Skate.


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## MovingAverage (28 December 2021)

Skate said:


> *The 20% Flipper Strategy*
> This strategy has been done to death over the years but with a new perspective, my interest has been reignited. I'm now wondering if the basic Flipper strategy can be improved?
> 
> *The Flipper is a very simple trend trading strategy *
> ...



Those results look like they have potential. Heard a lot about the 20% flipper but never really bothered to look at it in detail. A question for you: the 20% from a low entry—is that from a pivot point; that is are you looking for downtrends that have pivoted (bounced up) by 20%? This is very different from a simple 20% increase.


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## Skate (28 December 2021)

MovingAverage said:


> Those results look like they have potential. Heard a lot about the 20% flipper but never really bothered to look at it in detail. A question for you: the 20% from a low entry—is that from a pivot point; that is are you looking for downtrends that have pivoted (bounced up) by 20%? This is very different from a simple 20% increase.




@MovingAverage it's not as simple Nick makes it out to be - as there is ambiguity about what constitutes a low. What I've done is use the percentage of the ROC of the close for one week prior & which has to be greater than the percentage of the uptrend.

*This is important*
The "Buy" condition uses an alternate zigzag Function avoiding the problem with Amibroker built-in function. The function is then used within looping to include the variety of stops I have.

*Read here *




__





						Download Alternative ZIG type function For Amibroker (AFL)
					

Alternative ZIG type function - Largest database of free formulas, indicators, oscillators and trading systems for Amibroker (AFL), Metastock, eSignal (EFS), and NinjaTrader



					www.wisestocktrader.com
				




*Some alternate zigzag codes*
https://forum.amibroker.com/t/fast-afl-code-for-zigzag-based-on-price-change-anyone/20513/28
https://forum.amibroker.com/t/zigzag-atr-vs-percentage/21078

*Summary*
I believe it's worth the effort for those looking at a simple trend trading strategy. The results are pleasing & I'm sure the strategy can be improved.

Skate.


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## DaveDaGr8 (29 December 2021)

Whenever someone mentions Zig Zag and building a trading system around it, i get a cup of coffee because i know it's going to be messy. 

I've uploaded a video that shows in realtime what happens with Ed Pottaschs formula. You can see that the turning points MOVE in time as the graph is scrolled. He plots lines to the high highs and the low lows, which is what Zig Zag's do. There's also a point in the video where the line starts heading down drastically a few days before the price heads down.

Not saying that it can't be used, but make sure you test it and use it with caution !!!


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## qldfrog (29 December 2021)

DaveDaGr8 said:


> Whenever someone mentions Zig Zag and building a trading system around it, i get a cup of coffee because i know it's going to be messy.
> 
> I've uploaded a video that shows in realtime what happens with Ed Pottaschs formula. You can see that the turning points MOVE in time as the graph is scrolled. He plots lines to the high highs and the low lows, which is what Zig Zag's do. There's also a point in the video where the line starts heading down drastically a few days before the price heads down.
> 
> Not saying that it can't be used, but make sure you test it and use it with caution !!!



One of the zigzag system i tried  now a couple of years ago ...and so as i was very green , was actually future looking.in a nasty not fully understood to this day way.
was not the AB zigzag but still faulty ...
So got burn..but probably worthwhile reviewing again now that i have greyer hairs


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## Skate (29 December 2021)

DaveDaGr8 said:


> Whenever someone mentions Zig Zag and building a trading system around it, i get a cup of coffee because i know it's going to be messy.
> 
> I've uploaded a video that shows in realtime what happens with Ed Pottaschs formula. You can see that the turning points MOVE in time as the graph is scrolled. He plots lines to the high highs and the low lows, which is what Zig Zag's do. There's also a point in the video where the line starts heading down drastically a few days before the price heads down.
> 
> Not saying that it can't be used, but make sure you test it and use it with caution !!!





Skate said:


> *Lets talk about the ZiGZag Indicator*
> There has been discussions about how to use a ZigZag indicator correctly. @captain black often spoke of the ZigZag function for use in the development of his systems & went to great lengths to explain *the ZigZag function should never used in a trading strategy because the signals keep repainting when more data is received*. (Football analogy - the goal posts keep shifting with additional data)





Skate said:


> *Important drawback of the ZigZag indicator
> The ZigZag function looks into the future & of course, should never be used for trading with real money*. It's okay to use the ZigZag function in your strategy development phase - use it as a guide to how accurate your signal are in relationship to the pivot points.




*Summary*
1. I don't use the ZigZag indicator in my Flipper Strategy. 
2. The ZigZag indicator repaints as @DaveDaGr8 have explained with a visual. 
3. Do not trade using the ZigZag indicator.

Skate.


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## MovingAverage (29 December 2021)

Skate said:


> @MovingAverage it's not as simple Nick makes it out to be - as there is ambiguity about what constitutes a low. What I've done is use the percentage of the ROC of the close for one week prior & which has to be greater than the percentage of the uptrend.



After spending an hour or so rummaging through my boxes of old trading books I found my copy of Unholy Grails. Seems like he's looking for a 20% rebound (pivot) off a down trend--pic below illustrates an entry of the flipper. Not having thought too hard about it but might make an interesting coding challenge to get that in AB. As @DaveDaGr8 pointed out--I too usually reach for a coffee when seeing the use of ZigZag. Personally I stay well clear of ZigZag in AB as it is loaded with potential "errors".


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## Skate (30 December 2021)

Skate said:


> My definition of happiness is ‘*desiring’ what you have* !!




*Thinking out loud waiting for the markets to open*
The true secret of happiness is not found in seeking more, but in developing a capacity to enjoy less. Happiness & contentment are both in short supply these days.

*The secret to keeping frustration in check is acceptance*
Acceptance is making the best out of everything that happens. Whatever life throws your way, you have to embrace it, challenges make your life so exciting & without them, you wouldn't be the person you are today.

*So much of life is out of our control*
But we can control how we feel by changing our expectations. So never let our happiness hinge on what we can't control. We are all just passing through this life, experiencing a very unique & personal journey, a journey we only get to experience once. Accepting that there will be speedbumps along the way is just a fact of life.

Skate.


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## Skate (30 December 2021)

*The raw signals for this week*




*The Flying Bat Strategy - overview*
It's a simple strategy that uses a few indicators to sharpen both the entry & exit signals. As the strength of a trend is so important in filtering out false signals, I've decided to use the "RSI, StochD & MACD" indicators in "combination" to return the best bang-for-buck. Those three indicators are at the very heart of everything this strategy hopes to achieve. The premise behind the idea is simple. Enter on a confirmed trend with strength & get out when strength fails to keep building. At times it can be slow to accumulate positions as it's very selective. This strategy has a complex exit strategy that incorporates a "take profit stop".

*"The Flying Bat Strategy" began trading yesterday 29th December 2021*
I had planned to start the Flying Bat Strategy from the 4th January 2022 but with the short week this week, I decided to bring it forward a few days. 

*Shootout* "The Platinum Strategy versus The Bat Strategy" 
This shootout should provide a good "side-by-side" comparison with "The Platinum Strategy". The two strategies are completely different in construction. "The Platinum Strategy" suits the more cautious trader whereas "The Bat Strategy" is in for the long haul.

1. "The Platinum Strategy" gets into positions quickly & gets out of positions just as quickly. 
2. "The Bat Strategy" is more of a growth strategy & very selective in getting into a position with extra time given to prove with itself.

*Collation of strategies*
As "The Platinum Strategy" was in 100% cash before this week's signals it's a perfect time for both strategies to start off with a fresh slate for a direct comparison. This project will go through until the 30th June 2022 to sort out the winner. A short 6-month shootout will at least give an indication of how both strategies perform. It's pure indulgence on my part. No matter what the markets do in this 6-month period I'm sure one of the strategies will shine.

Skate.


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## Skate (31 December 2021)

Skate.


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## Skate (31 December 2021)

Skate.


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## Skate (31 December 2021)

Skate.


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## MovingAverage (31 December 2021)

So that brings Q2 for FY22 to a close. So here's a snap shot of the performance of my three live systems from 1 July 2021.

First up is my weekly system. Since 1 July through to 31 Dec this system has gained around 10.7%. Below shows the systems performance with reference to unit price. As you can see performance of this system flatlined through the period early Oct to around mid Nov, after which the system experienced about a 7-10% drawdown. In the past week or so the systems performance has started to improve slightly. 




Next is my EOD system. Since 1 July through to 31 Dec this system has only gained around 3.8%. This system had a reasonable Q1 FY22 but struggled to get any serious upward traction in Q2. Unlike my weekly which closed out a lot of its open positions my EOD has not experienced much trade activity and has remained around 80 to 90% invested. This system is more focused on big cap stocks delivering dividends so not surprised but its ordinary growth, but this performance doesn't include dividends for which there have been. About 90% of this system's open positions have been in the green since 1 July so it remains a relatively low risk system.




Finally my swing system. In Q2 of FY22 it started to find some traction and while it didn't execute many trades it has gained around 6.6% during 1 July to 31 Dec. Most of this gain was put on during the last few months. 




Enjoy your new year everyone.

Stay classy ASF.


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## Newt (31 December 2021)

Thank you so much  for sharing your YTD performance figures system across 3 very different systems MovingAverage.  I was actually digging back the other day trying to find the last time you'd shared this.  I'm personally down as much as you're up over a fairly challenging 6 months.  Kudos for do what you doing and continuing on with business.  👍


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## MovingAverage (31 December 2021)

Newt said:


> Thank you so much  for sharing your YTD performance figures system across 3 very different systems MovingAverage.  I was actually digging back the other day trying to find the last time you'd shared this.  I'm personally down as much as you're up over a fairly challenging 6 months.  Kudos for do what you doing and continuing on with business.  👍



Thanks—hope it is informative. I’m trying to do this at the end of each quarter. My last post was the end of Q1 so if you specifically want my last post on this look back to end of Sept early Oct. Happy new year to you.


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## Skate (1 January 2022)

*Exploration Raw Signals *





*Backtest Portfolio Signals *












Skate.


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## Skate (1 January 2022)

*Exploration Raw Signals *





*Backtest Portfolio Signals*






*It all starts again...*




Skate.


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## Skate (1 January 2022)

peter2 said:


> You can't go wrong buying stocks when they start to go up. Sell any that don't follow through and hold the winners.




@peter2 *has explained trend trading in *
1. Buy trending stock
2. Sell them when they don't follow through
3. Hold the winners
_# (4) Knowing when to sell the winners_



divs4ever said:


> the age old question , ' *should i have waited longer* ( higher ) or should i have sold at all '






charlsie said:


> In all of my 25 years of trading, *the most costliest mistake has ALWAYS been not selling a stock*. If anybody asks what *the most important part of trading is to me, I tell them "learning how to pull the trigger on a sell"*.




*Getting into a trend is easy*
Profitability comes from "selling the losers quickly" & knowing "when to sell the winners" is the secret.

Skate.


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## Ann (1 January 2022)

Skate said:


> knowing "when to sell the winners" is the secrete.




This is the bit I am now working on on my KISS thread. I believe, on the whole, it may be quite simple as with the solution to most problems in life. So if what I think works, then it will not be a secret, all the world will be able to see how it is done.


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## bk1 (1 January 2022)

Skate said:


> is the secrete.



Lets hope it doesn't leave a nasty stain on the carpet, then....


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## Skate (1 January 2022)

peter2 said:


> *New Positions:* *CXL, LTR, AGY, QPM*




*When others post*
It's exciting to experience how other traders make their stock selection & the methodology that decides when a position is to be entered. Admittedly I don't have the time or unique skills-set to evaluate positions in this manner. My go-to is either the weekly or daily "Ducati Blue Bar Strategy" to understand the reasoning a little better. Coding is pretty straightforward & it's easy to chart positions to understand the logic behind the selection.

*Volatility & volume within an up-trend*
"The Ducati Blue Bar Strategy" is easy to understand as the first "Blue Bar" is the signal bar, meaning we enter the position on the next day at the open. We sell the position on the 2nd red bar as the first "red" bar is the signal bar. "The Ducati Daily Blue Bar strategy" is a simple "volatility & volume" picking the increased "volatility & volume" of individual positions & plotting them with Blue & Red Bars so there is no mistaking what's going on with the price.

@peter2 *New Position (CXL)*
Trading is subjective but "The Ducati Blue Bar Strategy" plots the timing to enter & exit this position. It's one of many mechanical methods that involve no thinking. Meaning skill is not required

1. Buy the 2nd BLUE bar &
2. Sell the 2nd RED bar






@peter2 *New Position (LTR)*
"The Ducati Blue Bar Strategy" plots the timing to enter & exit this position. Simply buy the 2nd BLUE bar & Sell the 2nd RED bar.






@peter2 *New Position (AGY)*
"The Ducati Blue Bar Strategy" plots the timing to enter & exit this position. Simply buy the 2nd BLUE bar & Sell the 2nd RED bar.






@peter2 *New Position (QPM)*
"The Ducati Blue Bar Strategy" plots the timing to enter & exit this position. Simply buy the 2nd BLUE bar & Sell the 2nd RED bar.





*Mechanical System trading*
History has proven this style of trading works (Trend Trading). "The Ducati Daily Blue Bar strategy" is a simple "volatility & volume" picking the increased "volatility & volume" of individual positions & plotting a time to buy & sell, a simple & effictive process.

Skate.


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## Skate (1 January 2022)

bk1 said:


> Lets hope it doesn't leave a nasty stain on the carpet, then....





Skate said:


> *Proof reading*
> I apologise for not proof reading my post.




Thanks, @bk1, it's been corrected. I should proofread my posts but at my age, I don't have the time. As Sweet Brown famously said _"ain't nobody got time for that"_

*The Original*




*Why don't I proof read*
"Ain't Nobody Got Time for That"

It's much better expressed by Ms Sweet Brown - who would of 'thunk' you could make a ton of money from this?



Skate.


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## Ann (1 January 2022)

Skate said:


> *When others post*
> It's exciting to experience how other traders make their stock selection & the methodology that decides when a position is to be entered. Admittedly I don't have the time or unique skills-set to evaluate positions in this manner. My go-to is either the weekly or daily "Ducati Blue Bar Strategy" to understand the reasoning a little better. Coding is pretty straightforward & it's easy to chart positions to understand the logic behind the selection.
> 
> *Volatility & volume within an up-trend*
> ...




I find the series of blue and red bars interesting on your charts. The closest I can get to these is to use Heikin-Ashi. Simply using H-A
as an auto entry and exit strategy may help you sell higher and enter lower, preferably using the 50dsma. In that way, you wouldn't be selling out just as the stock appears to be on the rise again. Just a thought and not meant to be a criticism. 

Buy in with the light candles above the 50dsma, sell on the first dark after a good run-up, buy back in on the light as soon as the price is above the 50dsma. This would not be my first choice of trading, too much unnecessary activity for my taste! 

Anyone interested in playing with Heikin-Ashi can find it on https://www.incrediblecharts.com/




All the best to you and yours for the New Year @Skate


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## Skate (1 January 2022)

*Chart Reading - we are seeing different things*
@peter2 & @Ann have the unique ability to read chart patterns as they are developing. Some Chart patterns can give you a false sense of security & can lead you into making a poor trading decision. With a "Mechanical Trading System", the ambiguity is removed. With system trading, you either take the signal or you don't.

*What is the best - Technical or Fundamental Analysis or is it a combination of them both?*
It’s really for you to decide between Technical & Fundamental Analysis or it can be a combination of both. The decision will be made on which method will give you your trading edge. The analysis process that allows you to have the confidence to lay your money down is the correct process for you. Some traders feel more aligned to one style than the other but the comfort level you feel will ultimately choose the process for you.

*It's enlightening to view the charts of others*
Charts are easy to interpret after the fact (in hindsight) as they are more predictable than they were before they occurred. Chart readers have a unique ability to express their opinion on certain information that validates what we already know to be true & then create a story about it to make sense out of the event as we attempt to explain it to ourselves.

*The charts below give a comparison *
As traders, we all have our reason to enter & exit a trade & the charts below illustrate the different methods. Is one charting method better than the other? I don't think so because they are looking at the same information & the interpretation is the only difference.

*Daily Charts*
My previous charts for (AGY, CXL, LTR) were weekly charts & as @Ann posted a daily chart for AGY it's fitting to re-post the charts for the same periodicity. Each chart displays the entry & exit points for comparison only.


*Skate's Chart for (AGY)*





*Ann's Chart for (AGY)*





*Peter's Chart for (AGY)*







*Skate's Chart for (CXL)





Peter's Chart for (CXL)*







*Skate's Chart for (LTR)





Peter's Chart for (LTR)*







peter2 said:


> After all we're both trading the same types of price moves, trend and momentum and these can be easily defined.




*Summary*
The charts for the three positions (AGY, CXL, LTR) are typical "trend trading" breakouts. The chart for (QPM) has not been uploaded as @peter2 explains this position is the odd one out. (QPM) has been on Peter's watchlist for a possible reversal opportunity going on to explain it's more a "gutfeel" reversal to be perfectly honest.

Skate.


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## peter2 (1 January 2022)

Thanks for posting the daily charts. I know my entries are very similar to the Duc's. The Duc's are a little too sensitive for me and I wait for the chart to be clearer. The LTR charts are a good example. Lots of noise with the Duc's signals and I'm happy to buy the BO above the noise.


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## Ann (2 January 2022)

Skate said:


> *Daily Charts*
> My previous charts for (AGY, CXL, LTR) were weekly charts & as @Ann posted a daily chart for AGY it's fitting to re-post the charts for the same periodicity. Each chart displays the entry & exit points for comparison only.



No Skate, I was very careful to post a weekly chart and not a daily chart, my time scale was a 12month period I think your time scale may have been nine months. Otherwise, my comparison would have been pointless. 

Here are the two charts again, your weekly chart and my weekly chart.







Edit: your buy in was June/july mine was June,  as the rise above the 50dsma was the go signal.


----------



## Ann (2 January 2022)

Skate said:


> @peter2 & @Ann have the unique ability to read chart patterns as they are developing.




Neither @peter2 nor I have a 'unique' ability to read charts, it is simply years of practice. There are a host of accomplished chartists on this forum with their own individual take on a chart read. We all find our reliable truths about how we read a chart. That is purely 'time in', and practice, years and years of practice. I practice almost every day. I work and work on my charts regardless of whether I am trading or not. The beauty of trading is it allows mistakes to be made and those mistakes are worth profoundly more than any loss incurred if one takes the time to do a forensic analysis of the error of the trade. However, it means once a person has learned to read a chart then they are not trapped or beholden to a 'system'.  In other words, they are not hostages and potential victims of the 'system'.



Skate said:


> It’s really for you to decide between Technical & Fundamental Analysis or it can be a combination of both.




Frankly, most people who call themselves Fundamental investors are simply kidding themselves, they are just suckers for a good story. Having said that there are very gifted people who can cut through all the garbage and really look at the figures and know what they are seeing. This is fine if you are prepared to spend hours and hours assessing a single company. A chartist on the other hand can look at the pure essence of a company in its chart, as all the available information both public and insider, is on full display and can assess its health within seconds.



Skate said:


> Chart readers have a unique ability to express their opinion on certain information that validates what we already know to be true & then create a story about it to make sense out of the event as we attempt to explain it to ourselves.




You totally misunderstand what charting is all about Skate, we as chartists do not need to 'create a story' all we will say is what aspects of the chart we may be focused on and attempt to share our view with others. There is no created story, simply what each of us is seeing. No reasonable chartist will ever say 'this will happen because'... We say we believe something will happen if certain indications on the chart come to pass. 

Let me give a quick example FMG. Many people here are very positive regarding FMG and its ability to rise. This may very well be so, many people I respect here, are bullish. I on the other hand have my reservations, why? For me, I see two very long term trendlines becoming resistance lines and the 200dsma sits above the current price level and it has fallen off a short term support line. When and if these resistance lines are overcome then I could certainly come back and assess the stock. However, there is also an overhead resistance line coming up shortly on the Iron Ore price chart and if that causes a fall back in the Iron Ore price then I should suspect this will cause more downward pressure on FMG. Do I know for sure? No. Does it matter? Again no. However, if I was holding FMG, then I would need to make a decision about an exit or not if it continues under $20.

Daily chart 12 month view.


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## Skate (2 January 2022)

Cam019 said:


> Rollover to the SMSF is now complete. Funds have been transferred to the trading account. Funds have arrived. *Ready to rock 'n' roll.*






Cam019 said:


> I've been reviewing my backtest and trade stats (which I am more than comfortable with) and  *trend following is to let our open trade profits run* to allow us to hunt down outlier trades that make most of the systems money,* why are we so concerned with drawdowns?*




*Exciting times*
I can clearly remember being at the same stage @Cam019 finds himself. It was a time of excitement & exhilaration bundled with a bit of nervousness thrown in. Cam's recent post had me thinking about a few remarks he had previously made - being more concerned with catching the long-term moves at the expense of higher drawdowns.

*Monthly Momentum Strategy*
I'm sure Cam's "Monthly Momentum Strategy" resembles nothing like my strategy. Having a different set of parameters & filters is just skirting around the edges. My momentum strategy uses only two indicators as the buy condition being the StochD & MACD.

*Predictive powers. How? *
Moving average convergence divergence (MACD) is a trend-following momentum indicator that shows the relationship between two moving averages of a security’s price. Stochastic is also a momentum indicator that shows the strength of a current trend. It does so by comparing the current price to the range of prices within a definite lookback period. Combining the StochD & MACD forms a solid indicator of strength. These two indicators are at the very heart of everything this strategy hopes to achieve. The premise behind the idea is simple. Enter on a confirmed monthly trend with strength & get out at the end of the month when strength fails to keep building.

*6 Years of Backtest results*
If you have the conviction of @Cam019 with the persistence of @MovingAverage trading this strategy should appeal to those who enjoy watching paint dry. If you can accept the drawdowns, the rest would be smooth sailing.





*Summary*
I'll be watching Cam's thread with extreme interest while at the same time wishing him the best of luck.

Skate.


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## Skate (2 January 2022)

Ann said:


> You totally misunderstand what charting is all about Skate, we as chartists do not need to 'create a story' all we will say is what aspects of the chart we may be focused on and attempt to share our view with others.






Skate said:


> *Charting *
> Chart readers always protect there arse by saying it could go this ways, than again the price may go the other way (bloody confusing at best) Furthermore, I’m suggesting that chart patterns are easy to interpret after they happened & they are more predictable than they were before they occurred.






Skate said:


> If you have an alternative view on this post, please feel free to express it. (*I'm expressing my opinion only*)






Skate said:


> If opinions didn't differ there wouldn't be any trading..






Skate said:


> like many other members on ASF "I have an opinion".






Skate said:


> Sometimes you may not like my opinion if so don't worry - "I have plenty more"




*It's your Choice*
Chart reading is one tool, reading financial statements is another, the tool you pick belongs to you as it's ultimately your choice. The financial market is a complex system, but that doesn’t mean it requires a complex strategy to be successful. Most traders can’t predict if the market will open higher or lower tomorrow let alone what a company’s price movement might do in the future.

*Coding an idea*
Coding a trading idea stands head & shoulders above all other tools mentioned above (IMHO) & it's the perfect tool to have in our trading toolbox.

*I tend not to believe those who think they know what the future holds*
The problems with Chart Patterns (as I see it) Patterns look good in the middle of the chart when you can only trade at the hard right edge.

*I knew it all along*
Looking back at charts with 20‐20 vision in hindsight is sometimes called the “I‐knew‐it‐all‐along effect,” suggesting that people view events after they happened as more predictable than they were before they occurred & *"most"* chart readers fall into this category. 

*To prevent an argument*
## (At this point I would like to reiterate that I said "MOST" & not "ALL") ##

*Opinions*
Often, we realise our errors (incorrect opinions or assumptions) after the fact & it's far too late to change that opinion when trading live.

Skate.


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## Skate (2 January 2022)

*A difference of opinions is healthy*
Having an alternative view to others & expressing in a polite manner is how we learn but once an alternative is expressed robustly it can quickly escalate encouraging others to join in. Instead of arguing the point, they tend to attack the person with the intent of upsetting them until they respond emotionally. After reading some comments in "another thread" it's time to make a general comment.

*The "Dump it here" thread *
I quickly discourage others from arguing with others in this thread as it's like masturbating in public. It may feel good to you, but it looks disgusting to everyone else & it just makes the other person work harder to find ways to disagree with you.

Skate.


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## Skate (2 January 2022)

Ann said:


> if I was holding FMG, then *I would need to make a decision* about an exit or not if it continues under $20.




*Mechanical System Trading "makes the decision for you"*
As @Ann has posted a daily chart of (FMG) it gives me a segue way to do the same. As I mentioned earlier my go-to is either the monthly, weekly, or daily "Ducati Blue Bar Strategy" to understand comments made by others. The "Ducati Blue Bar Strategy" is pretty straightforward & it's easy to understand as the chart has only two coloured bars. (Blue & Red).

*The first "Bar" is the signal bar*
The first "Blue Bar" is the signal bar, meaning we enter the position on the next day at the open. We sell the position on the 2nd red bar as the first "red" bar is the signal bar.

*Periodicity*
As "The Ducati Daily Blue Bar strategy" is a simple "volatility & volume" strategy is unique in that it works in all periodicities without coding alterations.

*Monthly Chart (FMG)*
The entry & exit signals are displayed for quick reference. Periodicity is not a concern as "volatility & volume" is a constant in all time frames. The "Aqua Arrow" denotes the result from taking the position.









*Weekly Chart (FMG)*
The entry & exit signals are displayed for quick reference. Periodicity is not a concern as "volatility & volume" is a constant in all time frames.








*Daily Chart (FMG)*
The entry & exit signals are displayed for quick reference. Periodicity is not a concern as "volatility & volume" is a constant in all time frames.








*For Comparison*
@Ann Daily chart for FMG





*Summary*
Looking at the "Aqua Arrows" on my charts demonstrates no matter what periodicity you elected to trade "The Ducati Blue Bar Strategy" would have been profitable, which is the end game for system traders. Trend trading is timing when to jump on & when to hop off - riding one trend after the other is the name of the game.

Skate.


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## Ann (2 January 2022)

Skate said:


> *For Comparison*
> @Ann Daily chart for FMG




OK, let's do a four-month daily comparison with your chart and mine, as my original chart you used was in an entirely different time frame of 12 months. My capital is not being eroded by unnecessary trading. I entered once and exited once. As an aside, consolidation periods can be very beneficial when a stock eventually takes off. It takes out the sellers to an extent, which in turn reduced the selling pressure on the way up.
I hope I am not appearing argumentative, I am not attacking Skate or his system just offering an alternate view if anyone has the interest and energy to learn to chart.


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## Skate (2 January 2022)

Skate said:


> *A difference of opinions is healthy*
> Having an alternative view to others & expressing in a polite manner is how we learn but once an alternative is expressed robustly it can quickly escalate encouraging others to join in. Instead of arguing the point, they tend to attack the person with the intent of upsetting them until they respond emotionally. *After reading some comments in "another thread" it's time to make a general comment.*




@Ann those comments were not directed at you. On the contrary, I appreciate you posting your view with charts as they add tremendous value for others.

The post I made was in reference to ongoing comments made in another thread. Comments such as these can influence how one behaves in general & politeness can evaporate from this thread.

It was a "general" timely reminder that I make on a regular basis & they are never directed to anyone in particular.

Skate.


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## Ann (2 January 2022)

Sorry Skate, I hope you don't mind me littering your thread but just to make it clear for everyone to see how I draw my short term trendlines (all trendlines actually) I do it on end-of-day prices so I can really get fine precision to really know when a price has moved out of a support line. This is the same 4-month daily chart only now drawn with EOD.


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## Skate (2 January 2022)

Ann said:


> I hope I am not appearing argumentative, I am not attacking Skate or his system just offering an alternate view if anyone has the interest and energy to learn to chart.






Ann said:


> Sorry Skate, I hope you don't mind me littering your thread but just to make it clear for everyone to see how I draw my short term trendlines (all trendlines actually) I do it on end-of-day prices so I can really get fine precision to really know when a price has moved out of a support line. This is the same 4-month daily chart only now drawn with EOD.




*An alternative point of view*
No, to the contrary, you are not littering up this thread & you have certainly not been argumentative at all. "Alternative views" are welcomed with open arms. I just hope others study your charts as I do. There are some gems to be found in your charts.

*Charts*
I post charts to demonstrate the message I'm trying to get across as a few charts help me explain the point a little better as a "picture paints a thousand words".

# Visuals that back up a point of view are priceless.

Skate.


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## Skate (2 January 2022)

*Most losses are not the result of a poor plan, but of failure to follow it*
Trading is a very emotional experience & emotions can sometimes sabotage the best of plans, even when trading is traveling nicely it’s difficult to follow the plan.

*The nature of the trading game*
I've been reading the recent comments with interest. It's a perfect time to remember that trading is not always a bed of roses, losing days/weeks & even a few losing years are inevitable. Even after you have learned to trade successfully, you will still take your hits. It's pleasing to read the end-of-year posts of others as it gives you a benchmark to compare your recent performance.

Skate.


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## Skate (2 January 2022)

*Staying disciplined & focused in 2022*
At this time of the year, we tend to do a bit of soul searching to establish if we could have done better. We like to think that our results are a direct consequence of our insight & efforts, but the reality is our results are at the mercy of the markets. Pure & simple, good traders are calculated risk-takers.  

*You should continually seek further knowledge *
You can read almost any trading book or a series of posts on this forum to discover the gems. Yet most people fail to follow them. Write down anything that you read on this forum that gels or otherwise you’ll forget. Your trading ability comes from within by executing your trading plan consistently with confidence.

*We need discipline*
Discipline will be required in 2022 to face the challenges that may present over the coming months. Being disciplined lets you better cope when the unexpected happens in difficult trading times.

Skate.


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## Skate (3 January 2022)

Skate said:


> At this time of the year, we tend to do a bit of soul searching to establish if we could have done better.




*The old saying “you don’t go broke by taking profits” is utterly wrong for a trend follower*
Trend followers need to fight the temptation of grabbing quick profits by cutting winners early instead of letting them run. This means traders need to accept giving up large profits before the trend resumes, or you'll get stopped out again & again. The real bummer is that trend trading has a win ratio lower than 50%.

*Trend Trading is not a free lunch*
Trend following might look easy in backtests, but it’s far from easy to trade the system flawlessly without behavioural mistakes. At first, you take on a position & it slowly heads your way, until it suddenly reverses & heads down finding yourself being constantly stopped feeling like a "death by a thousand cuts". This means most trades will end up as losses. In reality, most traders have a hard time tolerating such a system as "trend trading" is not for everyone.

Skate.


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## Skate (3 January 2022)

*It’s tough to be a trend follower*
The truth is, most traders give up or don’t take the next signal after a series of losses & have trouble pulling the trigger after a multitude of losing trades in a row. The main advantage of trading a trend trading strategy is simplicity, jumping on & off trends. Trading this way doesn’t require a lot of time to manage & works best on longer time frames. 

*Behavioural mistakes*
Your success in the markets is ultimately less about your strategies (your entries & exits), but more about your behaviour. Being human means we all make behavioural mistakes that impact our returns. If you have a tendency to override your strategy you're probably better off spending less time following the markets by trading a monthly strategy.

Skate.


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## Ann (3 January 2022)

Skate said:


> *It’s tough to be a trend follower*
> The truth is, most traders give up or don’t take the next signal after a series of losses & have trouble pulling the trigger after a multitude of losing trades in a row. The main advantage of trading a trend trading strategy is simplicity, jumping on & off trends. Trading this way doesn’t require a lot of time to manage & works best on longer time frames.



I like trend trading, that is why I rely very heavily on the 200dsma. If the 200dsma is moving upward and the price of a stock has moved above the 200dsma, but not too far above, of course, just a wee bit as this is where mistakes can be made if the price is too far above the 200dsma as it could fall back to re-test the 200dsma. If you see your stock falling by 20%-50% as it re-tests the 200dsma, it can take serious balls to stay in the trade. Then given you didn't buy in too far above the 200dsma, just hang out in that stock until it falls below the 200dsma again, there you have your auto buy and sell trigger. If it is travelling sideways then don't enter until the 200dsma line starts to curve up again. No drama, no stress, very time economical, very easy signal in and out with minimal trading. That is how I traded for years when I was working and bringing up kids and very time-poor. It works really well and I rarely had a stock that lost money.

If a shorter time frame for trading is desired then work with the 50dsma in the same manner, again, easy, stress-free and minimal trading required. 

You can mix and match as well. Get in once the 200dsma is curving up and just under the price and get out when it has been rising for a while when it falls below the 50dsma, sell. If it then rises above the 50dsma again, you could re-enter, wash rinse repeat. However, there is a lot more trading associated with this but more upside profits can be had.

Again, not taking a shot at Skate or his system, just offering some thoughts from a 20year charting veteran.


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## Skate (3 January 2022)

*What is a Moving Average?*
A moving average is a technical indicator to determine the direction of a trend & is a popular indicator with many variations. As a simple moving average (SMA) is in the discussion I'll concentrate & confine my comments to this one alone. My all-time favourite moving average is John Ehlers - "Deviation-Scaled Moving Average" (DSMA) that I may post about after clearing up a few misconceptions of the use of moving averages in trading. 

*The SMA is not so simple to trade*
The SMA might be simple to calculate but isn’t as simple to trade. But I'm first to admit it's the most popular of all indicators in trading. But like most indicators, it isn’t a cure-all for trading. Choosing the right moving averages adds reliability to all technically-based strategies but is best confined as an indicator, rather than a signal generator.

Skate.


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## Skate (3 January 2022)

*The SMA as an indicator*
Moving averages basically calculate the average price of a certain number of periods to smooth out the price action with a visual representation of the overall directional movement. Moving averages can be used to generate trading signals but not so much with trend trading as the lag of the indicators is the killer.  

*Moving averages are known to be lagging indicators*
All moving averages lag behind movements in price. A faster MA has less lag when compared to a slower MA. Moving averages also work well as filters & it's primarily used in Index Filters & buy filters.

*Summary*
Far too many traders have tried to use the simple moving average for "Buy & Sell" signals. There are some traders who might be able to pull this off using "multiple moving averages" for the trigger, such as "Guppy's Moving Averages" but on average it rarely works as expected. To that point, save yourself some time & heartache & just stick with using "moving averages" to determine the strength of the move, & restrict using them to generate "buy & Sell" signals.

Skate.


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## Skate (3 January 2022)

*DSMA is a useful moving average*
Deviation Scaled Moving Average (DSMA) is more than a useful moving average. John Ehlers "Deviation-Scaled Moving Average" (DSMA) is an adaptive moving average that features rapid adaptation to volatility in price movement.

*Moving averages have two characteristics*
They lag and they smooth data. But there are different ways to tweak them. DSMA is one way to make them more adaptive to current prices & make the smoothing heavier. It accomplishes this adaptation by modifying an EMA if the standard deviations from the mean.
*
The DSMA’s responsiveness can be changed* 
Ehlers, Deviation Scaled Moving Average (DSMA) is best suited for trend-following systems as it uses a data smoothing technique that acts as an exponential moving average with a dynamic smoothing coefficient. The smoothing coefficient is automatically updated based on the magnitude of price changes quickly adapting to these changes. 
*
Summary*
Forget about using a simple moving average (SMA) & go directly for the big gun as the DSMA’s responsiveness runs rings around all other types of moving averages, hands down.

Skate.


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## Skate (3 January 2022)

*Guppy's Multiple Moving Averages*
As trend trading strategies go, using "Guppy's Multiple Moving Averages" would be a suitable choice as it's easy to follow & understand. The relationship between the 12 exponential moving average (EMA) tells the story of long & short-term buyers.

*The Guppy Multiple Moving Average (GMMA) indicators*
This nifty homegrown lagging indicator provides an exciting approach using 12 (EMA). The Guppy Multiple Moving Averages is a great tool if you are considering building a trend-following system. The (GMMA), is a fine technical indicator that identifies the strength & changes in trends. The changes in the trend are indicated by the GMMA ribbon. The combined (EMA) ribbon times the "entry & exit" & as a signal goes it's more than useful in timing when to get in & out of a trade.

*Summary*
There are multiple uses for moving averages in trading systems but there is some trickery to be done to achieve good results.

Skate.


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## Skate (3 January 2022)

*Cracking the GMMA indicator*
As a trend trader, it’s just not enough to identify a confirmed trend. Timing the entry (when to jump into a trend) is so important. The Guppy's (GMMA) Indicator allows you to get into a trend as soon as possible & to get out after a trend has reversed.

*More information is found here*





						Dump it Here
					

Hey all, I have a question that I'm hoping someone on this forum can help me with.  I have a system which trades specific US stocks such as MSFT or VISA etc. The system trades LONG only, holds positions for 1-10 days and is mean reverting in nature. It will trade between 150-250 positions per...




					www.aussiestockforums.com
				




Skate.


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## Skate (3 January 2022)

*DSMA*
The idea & the mathematics behind "Ehlers DSMA" is not new. Ehlers has a habit of twisting his earlier ideas & making them new again. Also, Ehlers DSMA indicator modifies the alpha term of an "EMA" whereas Tushar Chande, uses the RSI to adjust the alpha term to achieve similar results. Perry Kaufman, on the other hand, uses his "Effectiveness Ratio" to adjust the alpha term - meaning they all achieve similar outcomes using different indicators & methods. Why mention this?* - *For others to understand the logic behind the idea which is sound, solid & effective (to a point - I might stress)

*DSMA Indicator*
I have a competitive trading system built around Ehlers DSMA indicator & performance is respectable. John Ehlers “A Peek into the Future” filter isn't new as I've had the filter in the "to do" basket since 2019. As there is less chatter in the "Dump it here" thread it was the perfect time to make a post about John Ehlers & his indicators. Up until yesterday, his "Voss Filter" was collecting dust. I now believe I should give it the same respect as I've given his DSMA Indicator.

*For those technically minded - read more about the DSMA indicator here*
https://www.mesasoftware.com/papers/DEVIATION SCALED MOVING AVERAGE.pdf

*The DSMA Strategy is a solid performer *
The Backtest period below is from 1/1/2016 to the end of trade 31/12/202. The issue with trading "Ehlers DSMA" is the exposure is low but in fairness, the drawdown is also low.





*The DSMA (5 Year) Equity Curve*
The COVID flash crash was handled without any major issues but with all trend-following systems, 2021 had its moments struggling to achieve traction during the year.





*Summary*
The DSMA strategy sits nicely within my stable of strategies.

Skate.


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## DaveTrade (3 January 2022)

Skate said:


> *Summary*
> Forget about using a simple moving average (SMA) & go directly for the big gun as the DSMA’s responsiveness runs rings around all other types of moving averages, hands down.



@Skate I think that some may take your statement the wrong way. An indicator is what it is and if a person requires a particular functionality that is provided by an SMA then that indicator is extremely useful to them.


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## Skate (3 January 2022)

peter2 said:


> @Skate 's posts are always read with interest.
> 
> You said it yourself, the start of trends can only be identified in hindsight. All attempts to identify them at the time will be an exercise in probability. We may be correct at the time or we may not.
> 
> *All your back tests have conclusively shown that it doesn't matter if we can't identify the exact start of the trend. If we manage the exits well we can create a positive edge.* This is the most important aspect of a profitable trading system.




*I read & analyse many posts*
At times I'm looking for the hidden gems that most including the poster are unaware of. When you know something you mistakenly believe everyone else knows it as well. I've posted charts & backtests to explain my point of view confirming the ideas have legs as a trading system.

*I have a habit of losing interest quickly*
I'll develop a trading system & once it's been through the wringer I'll trade it. Without puffing, they seem to perform as expected. In the background, I have strategies at various stages of development. Even if a strategy is performing I'll turf it to try something different. The Platinum & Flying Bat Strategies are my latest two to have a crack at the big time & by-the-way, I'm expecting great things from these two.

*It's all about timing the exit*
@peter2 remarked that it doesn't matter if we can't identify the exact start of the trend. If we manage the exits well we can create a positive edge. Well, Peter has a knack of succinctly nailing a point. The point Peter made is exactly the philosophy I employ in all my strategies.

Skate.


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## Skate (3 January 2022)

DaveTrade said:


> @Skate I think that some may take your statement the wrong way. An indicator is what it is and if a person requires a particular functionality that is provided by an SMA then that indicator is extremely useful to them.




@DaveTrade that is not in dispute. 

Your post allows me to clarify what I have said about a simple moving average (SMA). The SMA is an extremely useful indicator & I didn't say it wasn't. Cherry-picking one statement out of context is normally unhelpful as it gives the wrong impression of what I've just written.



Skate said:


> *The SMA as an indicator*
> Moving averages basically calculate the average price of a certain number of periods to smooth out the price action with a visual representation of the overall directional movement. *Moving averages can be used to generate trading signals but not so much with trend trading as the lag of the indicators is the killer.*






Skate said:


> *Moving averages are known to be lagging indicators*
> All _*moving averages lag *_behind movements in price. A faster MA has less lag when compared to a slower MA. _*Moving averages also work well as filters & it's primarily used in Index Filters & buy filters.*_






Skate said:


> *The SMA is not so simple to trade*
> The SMA might be simple to calculate but isn’t as simple to trade. But _*I'm first to admit it's the most popular of all indicators in trading.*_ But _*like most indicators, it isn’t a cure-all for trading.*_ Choosing _*the right moving averages adds reliability to all technically-based strategies but is best confined as an indicator, rather than a signal generator.*_






Skate said:


> *Summary*
> Far too many traders have tried to use the simple moving average for "Buy & Sell" signals. There are some traders who might be able to pull this off using "multiple moving averages" for the trigger, such as "Guppy's Moving Averages" but on average it rarely works as expected. To that point,_* save yourself some time & heartache & just stick with using "moving averages" to determine the strength of the move*_, & restrict using them to generate "buy & Sell" signals.




Skate.


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## Ann (3 January 2022)

Skate said:


> *The SMA as an indicator*
> Moving averages basically calculate the average price of a certain number of periods to smooth out the price action with a visual representation of the overall directional movement. Moving averages can be used to generate trading signals but not so much with trend trading as the lag of the indicators is the killer.



No on the contrary Skate, I must disagree, the SMA is not a lag because it is a watched signal/indicator, a trigger for the dozens, hundreds or thousands of traders waiting for an entry indicator/signal/whistle blow/ trigger/gunshot/ whatever you want to call the point where the trader commits his money.  Many people try to get very clever with MAs thinking they will get an edge. If you are using a less used MA, you will have a less-used entry/exit point.  The best edge anyone can ever have is to know when the majority of traders are going to commit to a trade, that is why I use the 'simple' MA as that is the standard-setting on Stockcharts, the 50dsma and 200dsma. More traders would use Stockcharts than any other chart system around. I want to be right in the thick of the herd so I can get the go signal as it happens.

Another point is when a trader is looking at trading shorter trading periods they don't want their money tied up in a stock going nowhere for any length of time, that may be lost opportunities. 

Let's look at your system using your chart for FMG, your entry was September 27th at $15.60 opening price.  Then you sold and bought back in at $1 above your exit price. So that is say $40 brokerage and if you have a $10,000 holding let's say 640 shares that's another $640 plus $40 not in your pocket. Then you do a final close on December 24th at $19.60 opening price. That is almost exactly three months in the market with four trades and a miss of around $680 along the way. (My calcs are always open for criticism).

Now let's look at my chart using the SMAs as an entry point November 12th at $15.75 closing price. I then sit in the trade until it fails the 200dsma and a short term rising support line then exit on December 29th at $19.28 closing price. Two trades and a month and a half in the market.

I want to make it very clear to anyone reading this, I am not in a dispute or even in a passive-aggressive argument with Skate, I find this sort of stuff absolutely fascinating to look at different styles of trading and charting. It gives me a chance to think beyond my normal roadways. I am always searching and seeking better ways of trading and honing my skills. I may have been at this for 20 years but will never cease to have a desire to keep learning.

Anyone is welcome to calculate the proceeds from both trades, I am over the figures now! 

These two charts are adjusted to be identical time frames with each other but with one extra day on the left side of my chart.


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## Ann (3 January 2022)

Skate said:


> *Guppy's Multiple Moving Averages*
> As trend trading strategies go, using "Guppy's Multiple Moving Averages" would be a suitable choice as it's easy to follow & understand. The relationship between the 12 exponential moving average (EMA) tells the story of long & short-term buyers.



Uurgh, they are just like bloody party streamers all over my charts. I tried them out for about a minute when Colin added them to the indicators list until the untidiness and unnecessary junk got in my way. Pretty but and you can create your own colour scheme, whoohoo!🥳🤪


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## Skate (3 January 2022)

*Having a difference of opinions is healthy*
When others post from their perspective it allows others to think more deeply about a subject. The opinions I post are my opinions alone & from my trading experience. When I make a post it's done to help others understand the information slanted from the views I hold. The recent series of posts was to explain that Moving Averages are a great indicator but a tad disappointing using them as a signal generator. I went on to explain "Guppy's Multiple Moving Averages" is the exception but fails to deliver the promised results so widely expressed.



Ann said:


> No on the contrary Skate, I must disagree, the SMA is not a lag






Skate said:


> *Choosing the right moving averages adds reliability to all technically-based strategies but is best confined as an indicator, rather than a signal generator.*






Alpha_Bet said:


> EMA is a lagging indicator.






gartley said:


> Using lagging indicators is like chasing shadows against a wall.....






Hopeful said:


> Most standard indicators are lagging ones. Doesn't anyone use a leading indicator? The lagging ones like MAs and EMAs are pretty useless IMHO.




*All indicators are lagging*
All versions of "moving averages" are lagging & that's why I made a post about Ehlers DSMA indicator quoting that his idea to reduce the lag mathematically improves performance. Using the mathematical genius of  Ehlers DSMA indicator as a trading strategy the backtest results I posted are respectable.

Skate.


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## othmana86 (3 January 2022)

@Skate and others, the insight you provide makes my brain juices flow. The research doors are wide open. Particularly the last few posts. Thank you


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## Skate (4 January 2022)

othmana86 said:


> @Skate and others, the insight you provide makes my brain juices flow. The research doors are wide open. Particularly the last few posts. Thank you






Ann said:


> Uurgh, *they are just like bloody party streamers all over my charts.* I tried them out for about a minute when Colin added them to the indicators list until *the untidiness and unnecessary junk* got in my way.






Skate said:


> *Guppy's Multiple Moving Averages*
> As trend trading strategies go, using "Guppy's Multiple Moving Averages" would be a suitable choice as it's easy to follow & understand. The relationship between *the 12 exponential moving average (EMA) tells the story of long & short-term buyers.*




*Guppy's Multiple Moving Averages (GMMA)*
The multiple lines of the Guppy help traders see the strength or weakness in a trend better than if only using one (or two) EMAs. The 12 EMAs are separated into two groups. Compression to the expansion of the “lines of the ribbon” tells one story whereas the reverse (expansion to compressions) tells another. On the other hand, the "crossing" of the ribbons, is a whole other story in itself. The GMMA ribbon (the indicator) identifies the trend, the strength of the trend & the reversal of the trend.

*GMMA Ribbon Colours*
The short-term investors are represented by the “Blue Ribbon” & the longer-term investors are represented by the “Red Ribbon”. To keep the post short, those interested can do their own research as to how these lines (of the ribbon) interact. We can use the association of the "GMMA ribbon" (the lines) to our advantage. The downside to (GMMA) it’s a "lagging indicator" that will never catch the low of the pivot but at times goes very close.

*Twisting the GMMA*
I’ve twisted Guppy’s idea. I've taken the average of Guppy's slow & fast-moving (EMA's) then added a smoothing factor. Using the average of the EMA bands (IMHO) sharpens the usefulness of the indicator allowing me to turn the GMMA indicator into a complete trend trading strategy.

*Weekly (FMG) Chart*





*Guppy's MMA - 2 year backtest*
This backtest includes the COVID period to demonstrate how this strategy handled this trading period. Overall it was mighty disappointing but overall it recovered nicely.









*Guppy's MMA*
Don't forget I’ve twisted Guppy’s idea. I've taken the average of Guppy's slow & fast-moving (EMA's) then added a smoothing factor. This in itself is worthy of the exercise. Twisting it up, I've used the average of the EMA bands to sharpen the usefulness of the indicator allowing me to turn the GMMA indicator into a complete trend trading strategy. It's not a perfect trend trading strategy but it's simple to follow & implement. In my opinion, don't discard Guppy's idea too quickly as a trend following system or indicator. (more lines are better than one)

*Summary*
The 'Dump it here' thread is about ideas, ideas that I've found helpful in my trading experience.

Skate.


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## MovingAverage (4 January 2022)

Over the past few months the media has certainly been ramping up the prospects on an imminent interest rate rise and of course the media being the purveyors of doom and gloom that they are like to claim the share market will be headed to Armageddon once we get an interest rate hike.  So today's article in the AFR (headline below) got me thinking--how exactly has the market reacted to RBA cash rate increases. Unsurprisingly the facts are very different to the media's perspective.




So let's take a look back at the RBA's official cash rate going back to 1990--cash rate is shown below.




Now let's look at the XAO for the same period (today back to around 1990)




A few key observations:

a) During the period from around 1990 to 1993 the RBA cash rate experienced a dramatic decline of over 50% yet during this rapid decline in the cash rate the XAO seemed to have a period of just moving sideways. Certainly there was no remarkable movement in the XAO that you might otherwise expect to be the result of a significant decline in the cost of money.

b) We saw amazing growth in the XAO from around 2003 to 2007, but guess what? During this period RBA cash was also increasing and in fact it rose about 50% over this period.

c) We then had the GFC kick in in 2008 and while the XAO experience a significant decline so to did the RBA's cash rate.

d) Finally, during the period from 1994 to 2002 we experience some volatility in the RBA's cash rate but despite the ups and down of the cash rate the XAO just kept on marching upward

So, despite the AFR's headline today I'm not too sure that history shows us that the market does not react well to hikes in the RBA cash rate. Sure, in the short term an increase in the RBA might scare the market a little but history would appear to suggest that the market will brush off the rate hike and continue along its merry way.


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## qldfrog (4 January 2022)

Skate said:


> *Guppy's Multiple Moving Averages (GMMA)*
> The multiple lines of the Guppy help traders see the strength or weakness in a trend better than if only using one (or two) EMAs. The 12 EMAs are separated into two groups. Compression to the expansion of the “lines of the ribbon” tells one story whereas the reverse (expansion to compressions) tells another. On the other hand, the "crossing" of the ribbons, is a whole other story in itself. The GMMA ribbon (the indicator) identifies the trend, the strength of the trend & the reversal of the trend.
> 
> *GMMA Ribbon Colours*
> ...



Guppy relies on an average of ema on different period( raw summary) so obviously can lag a bit due to the longuer period of some of these ema.
Without revealing trade secret, you can obviously tweak this to weight various periods differently and so bring back some responsiveness..
Hope it helps:
 i trade a guppy based system.
Time will tell


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## Ann (4 January 2022)

qldfrog said:


> Guppy relies on an average of ema on different period( raw summary) so obviously can lag a bit due to the longuer period of some of these ema.
> Without revealing trade secret, you can obviously tweak this to weight various periods differently and so bring back some responsiveness..
> Hope it helps:
> i trade a guppy based system.
> Time will tell





Obviously, a person can create whatever group of MAs in any time frame they wish. One could always experiment with different times of MAs both simple, weighted, or exponential. Guppy has the short-term MAs typically set at 3, 5, 8, 10, 12, and 15 periods. The longer-term MAs are typically set at 30, 35, 40, 45, 50, and 60 according to Investopedia.

Ignoring the bottom two MAs of 50 and 200 on the chart which are mine, you can play with the MAs by switching on and off MAs in the tick box. I tried that back in the day but I still found it obliterated the chart information for me and I just missed so much, as by then it had been a few years and I had learned to chart without gimmicks. But it could work as a basis for creating a personalized group if so desired.


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## qldfrog (4 January 2022)

Ann said:


> Obviously, a person can create whatever group of MAs in any time frame they wish. One could always experiment with different times of MAs both simple, weighted, or exponential. Guppy has the short-term MAs typically set at 3, 5, 8, 10, 12, and 15 periods. The longer-term MAs are typically set at 30, 35, 40, 45, 50, and 60 according to Investopedia.
> 
> Ignoring the bottom two MAs of 50 and 200 on the chart which are mine, you can play with the MAs by switching on and off MAs in the tick box. I tried that back in the day but I still found it obliterated the chart information for me and I just missed so much, as by then it had been a few years and I had learned to chart without gimmicks. But it could work as a basis for creating a personalized group if so desired.
> 
> ...



Indeed and as systematic trader, i just adopt a set of weight /period parameters which statistically work for my system on a given period, very different from the visual chartist in you Ann.
My approach will always be sub optimal at a specific time.but i think peope now understand and fit to their needs/approaches


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## Ann (4 January 2022)

Skate said:


> *Guppy's Multiple Moving Averages (GMMA)*
> The multiple lines of the Guppy help traders see the strength or weakness in a trend better than if only using one (or two) EMAs.




There are only three trends one needs to recognize on a chart, up, down or across. MAs of any colour, time period or quantity are really unnecessary to ascertain this. Simple hand drawn trendlines, preferably drawn on an EOD chart will tell you what you need to know.
One needs to select a time period as charts can be going up at the same time the trend is going down or vice versa!! 🤔

For instance, TLS. I like to pull right back as far as possible to see the full picture on any chart, it can tell you a lot. The long term trendline from its time of listing is falling but the shorter term price trend is going up. All I need are two trendlines, clean and simple. No MAs, nothing, simple as it gets. Just a very basic skill, nothing genius or complex. As an old IC contributor used to say, even blind Freddy could see this. I will add my own saying, even dopey Dora could draw these trendlines.


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## Ann (4 January 2022)

qldfrog said:


> Indeed and as systematic trader, i just adopt a set of weight /period parameters which statistically work for my system on a given period, very different from the visual chartist in you Ann.
> My approach will always be sub optimal at a specific time.but i think peope now understand and fit to their needs/approaches



May I be a Dopey Dora and get you to rephrase these two sentences, I truly have no idea what you are saying. Dyslexia, sorry.


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## ducati916 (4 January 2022)

MovingAverage said:


> Over the past few months the media has certainly been ramping up the prospects on an imminent interest rate rise and of course the media being the purveyors of doom and gloom that they are like to claim the share market will be headed to Armageddon once we get an interest rate hike.  So today's article in the AFR (headline below) got me thinking--how exactly has the market reacted to RBA cash rate increases. Unsurprisingly the facts are very different to the media's perspective.
> 
> View attachment 135183
> 
> ...





The issue is the 'real' return:




The trend in rates is down, save for the Taper Tantrum in late 2018 early 2019 which caused the Fed to reverse. Stocks (assets) like low rates. The capitalisation rate is the inverse of real yield.




Real yield is visualised as the interplay between yields/PPI/CPI. When yields are low, what matters is whether PPI is inflating faster than CPI. This is the input costs v output sales revenue. As long as the margin is positive for CPI, companies (stocks) are profitable.




PPI inflation is a function of commodity prices, which are themselves a function of investment and production. High commodity prices encourage mal-investments which leads to over-production, think US Shale. These are eventually liquidated in deflationary busts (US housing 2008, US Shale 2020, etc).

Low prices create low investment, which leads directly to low production, which leads back to low supply, which leads to rising prices, particularly when yields are low due to monetary stimulus. Of course credit creation went off the charts in 2020/2021.

The real rate is nominal yield less inflation. So currently the real yield is negative. Stonks will continue until the market believes that Central banks will continue to raise rates into a positive return...which currently means rates on the 10yr at 8%.

If rates went to 8%+, stonks would shed 90%+

The thing is rates do not need to get to 8%. Rates might only need to get to 2.5% to trigger a market crash, say 15%+ decline, at which point I'm betting the Fed are straight back down to ZIRP which is a real NIRP. That is a 100pt basis point move from where we are.

There is no 'taper' yet:




The Fed states: by March 2022, ZERO QE (from the current $250B/month). That will give you your 100bp virtually overnight and probably a fair bit more. Do you think Mr Powell will stand pat and continue the taper?

Of course that will NEVER happen (nor will a yield above the rate of inflation) with the current leadership as that would create an epic deflation, crushing over a QUADRILLION dollars in debt and derivatives worldwide. The GFC would look like the teddy bears picnic.

Rather, we will continue to jawbone, now we taper, now we don't, until the inflationary pressures become so pernicious that the currency collapses. If DXY goes, so do most other fiats. Russia and China have built significant gold reserves, which, if allocated to backing their fiat currencies, could save them. The Fed claims 8000 tons. True, false?

The interesting question is BTC? Does it collapse or actually act as a store of value? If it collapses, Mr Saylor and MSTR are consigned to the history books.

jog on
duc


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## peter2 (4 January 2022)

The MAs in the GMMA are exponential MAs. It's possible to change them to simple, weighted or any other calculation type. A system back tester can do this easily to discover which MA type works best for their system. 

MAs in general are sub-optimal in that they don't always work as well as we like, especially in non trending markets. It's import that we understand the strengths and weaknesses in our systems and that they fit our personality. 

People either "get " the GMMAs or they don't. Their real advantage is indicating the strength of the trend. When the shorter term MAs move apart from the longer MAs the trend is strong.  If the trend is strong don't sell the short term pull-backs.


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## Ann (4 January 2022)

peter2 said:


> People either "get " the GMMAs or they don't. Their real advantage is indicating the strength of the trend. When the shorter term MAs move apart from the longer MAs the trend is strong. If the trend is strong don't sell the short term pull-backs.




But Peter wouldn't you agree these two lines will tell you all you need to know about the (shorter-term) trend, still using the example of TLS. The pace of the trend is picking up within the already rising trend. If the price falls off the quicker rising trend and settles back on the slower upward trend, then one also would not sell. However, if the price fell off the slower trendline then perhaps an exit may be considered after a simple sideways consolidation was discounted. Clean, easy, clear, simple.


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## MovingAverage (4 January 2022)

ducati916 said:


> The thing is rates do not need to get to 8%. Rates might only need to get to 2.5% to trigger a market crash, say 15%+ decline, at which point I'm betting the Fed are straight back down to ZIRP which is a real NIRP. That is a 100pt basis point move from where we are.




Interest rates per se haven't triggered market crashes--broader economic/social woes do, but not interest rates. Let's look back to our recent crashes--the 2000 dot.com crash was triggered by massive overvaluations that came home to roost. The 2008 crash was triggered by defaults of junk mortgage backed securities and the 2019 crash was triggered by fear of the sky falling in because of covid. So I don't think there is anything to suggest that interest rates getting back to 2.5% per se will trigger a stock market crash.


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## qldfrog (4 January 2022)

Ann said:


> May I be a Dopey Dora and get you to rephrase these two sentences, I truly have no idea what you are saying. Dyslexia, sorry.



being a systematic trader means I need to have a one fit all approach within my realm: SP range, index belonging so it is a given that i will not have the greater optimisation that you require as a visual chartist

no dyslexia here but english as a 2nd / 3rd language so I produce a lot of garbage.but well intented..well that is my genuine purpose...
.and here i am on the computer..when on the smartphone keyboard, i am pathetic
My apologies Ann..I also tend to be too..far too verbose..the latin side in me


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## Skate (4 January 2022)

*Turning ideas into code is simple*
"Guess-working" a chart is time-consuming & is at the mercy of interpretations. Coding is pretty straightforward & it's easy to chart positions to understand the logic behind the idea. Below is the code from Cesar Alvarez. It proves that you don't need to re-invent the wheel.

*Coding an idea*
Coding a trading idea stands "head & shoulders" above all other tools mentioned above (IMHO). A trend trading strategy is the perfect tool to have in our trading toolbox. Mechanical System Trading is the simplest way to trade that I've found. Trading this way takes little skill & involves only minutes a week. If you can press one button you have the skill.

*Cesar Alvarez*
Back in February 2015, Cesar made reference to a unique PositionScore he was discussing at the time. Below is a simplified version of the positionscore that was under discussion. The original code was not disclosed. I've used weekly bars for the calculation but I assume his code is much more complicated. The code below should give nearly the same results that are worthy of further research

*PositionScore*
nWeek = 20;
PositionScore = 100+ROC(C, 5*nWeek);

*Cesar HHV - entry & exit strategy*
Cesar often quotes a simple entry & exit strategy to explain his theory. I have used a simple 20-period breakout that will fit nicely to evaluate his positionscore.

*20-period Strategy*
HighestValue = Ref(HHV(H, 20), -1);
LowestValue = Ref(LLV(L, 10), -1);
Buy = C >= HighestValue;
Sell = C <= LowestValue;

*1 year backtest





Equity Curve


*




The Triangle said:


> There's enough free material on the internet, in the library, on youtube, that you should never have to pay for anything.




*Summary*
Trading ideas need not be complicated. The backtest results above is the combination of Cesar Alvarez "entry & exit" condition using his reconstructed positionscore. Combine the two into a simple trend trading strategy & the results are not half bad. For those looking for a trend strategy, the code above is a starting point.

Skate.


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## Ann (4 January 2022)

qldfrog said:


> being a systematic trader means I need to have a one fit all approach within my realm: SP range, index belonging so it is a given that i will not have the greater optimisation that you require as a visual chartist



Apologies froggie, I had no idea English was your second language. Sometimes I can pick accents within the written word but not with yourself. This is what I am hearing you say, please correct me if I have misunderstood.


"being a systematic trader means I need to have a one fit all approach within my realm:" = I understand this to mean- I want a simple way to trade where I don't need to think about it.
Fair enough as long as it is making you constant and sustainable profits. If not then perhaps you may need to find another simple system where you don't need to think about it or potentially not trade until you can work out a better way.



qldfrog said:


> no dyslexia here but english as a 2nd / 3rd language so I produce a lot of garbage.but well intented..well that is my genuine purpose...
> .and here i am on the computer..when on the smartphone keyboard, i am pathetic
> My apologies Ann..I also tend to be too..far too verbose..the latin side in me




You are certainly are not pathetic, nor verbose and I have never read garbage from you. That is why I was so keen to understand what you were saying to me.  I find with dyslexia, I have trouble with comprehension, I fully understand each word but in combination over a sentence or two, it can become totally meaningless. That is why I like to read @Skate, as he puts up a bold heading and then with very few words explains what he is trying to say. This is really the best way for Dyslexics to read.



qldfrog said:


> My approach will always be sub optimal at a specific time.but i think peope now understand and fit to their needs/approaches




I am reading this as meaning "I could do better if I had the time and energy" Fair enough! I think the most important part of all is if you are having fun. Qudos to you for putting your trading on display. I need to make more time to enjoy other peoples' trading journals.


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## qldfrog (4 January 2022)

Ann said:


> Apologies froggie, I had no idea English was your second language. Sometimes I can pick accents within the written word but not with yourself. This is what I am hearing you say, please correct me if I have misunderstood.
> 
> 
> "being a systematic trader means I need to have a one fit all approach within my realm:" = I understand this to mean- I want a simple way to trade where I don't need to think about it.
> ...



your point about bold and and concise text is  nice to know.
I will try to use..will probably take me a while to master but i will try
Thanks for the feedback


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## investtrader (5 January 2022)

Ann said:


> No on the contrary Skate, I must disagree, the SMA is not a lag because it is a watched signal/indicator, a trigger for the dozens, hundreds or thousands of traders waiting for an entry indicator/signal/whistle blow/ trigger/gunshot/ whatever you want to call the point where the trader commits his money. Many people try to get very clever with MAs thinking they will get an edge. If you are using a less used MA, you will have a less-used entry/exit point. The best edge anyone can ever have is to know when the majority of traders are going to commit to a trade, that is why I use the 'simple' MA as that is the standard-setting on Stockcharts, the 50dsma and 200dsma. More traders would use Stockcharts than any other chart system around. I want to be right in the thick of the herd so I can get the go signal as it happens.



Ann,
Great analysis. Not only are traders watching the 200MA, but investors.


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## ducati916 (5 January 2022)

MovingAverage said:


> 1. Interest rates per se haven't triggered market crashes--broader economic/social woes do, but not interest rates.






MovingAverage said:


> 2. Let's look back to our recent crashes--the 2000 dot.com crash was triggered by massive overvaluations that came home to roost.






MovingAverage said:


> 3. The 2008 crash was triggered by defaults of junk mortgage backed securities and the 2019 crash was triggered by fear of the sky falling in because of covid.






MovingAverage said:


> 4. So I don't think there is anything to suggest that interest rates getting back to 2.5% per se will trigger a stock market crash.





1. Interest rates are always there in the mix. Particularly when valuations are stretched and bubbles have formed.

2. The 2000 period: yields rose throughout 1999.




3. And why did junk bonds default? Because they were ARMs (Adjustable Rate Mortgages) that were set very low with teaser rates that then adjusted higher once the teaser period was over. The crash was the most expected crash ever.




Rates rose into 2007.




Rates were cut quickly, then raised back, which created a further collapse and down they came again.

3. In 2019 we had the first 'Taper Tantrum' and rising rates were squashed. When COVID hit, rates went to the lowest nominal ever since the 1930's. Real rates have since then turned negative (NIRP) due to the re-emergence of inflation.

4. Yields at a nominal 2.5% are still in real terms negative. What I am saying is that at 2.5% +/-, the market will start to believe that the Fed actually means business and will throw another tantrum via a sell-off. The Fed will (IMO) cave in and lower rates again.

Actually what we are really talking about is the withdrawal of QE. QE is actually far more inflationary to asset prices than are interest rate hikes (monetary policy) and the rise of 100bp nominal yield does not truly reflect the loss of inflationary stimulus that the banks currently enjoy via QE.

If/when QE taper is implemented, watch how fast the financials sell-off. The financials support the broader market of stonks. Following fast on the heels of the financials will be the indices because the banks tend to buy sector ETFs rather than individual stonks.

jog on
duc


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## Greynomad99 (5 January 2022)

I'd agree that interest rates didn't cause the 2000, 2008 or 2020 bear markets (sorry - I've never liked the word 'crash'). However, I'd also say it is possible that interest rates could indirectly cause a bear market. We've lived through a time of seemingly ever reducing rates (but I for one can remember having a home loan at 13%!) so having ridden the elevator to the basement there is only one way for rates to go. Rising rates dampen consumer confidence and impact company profits (which filters through to the share price).
Central banks have always been able to influence rates by reducing the cash rate, but that won't work any more and I'm not sure they can stop rates from rising, pushing up inflation and scaring the beejeezus out of investors. Rising interest rates also result in investors moving cash from equities to other investments. Australia is one of the most personally indebted nations in the world where many have borrowed to the hilt. When rates were say 5% and moved up to say 6% it would see a 20% increase in interest repayment (which is pretty massive) but with loans of say 2% rising by the same 1% means a 50% increase in interest payments and a pretty massive flow on to inflation and mortgage distress.

That said, I think we'd need a confluence of negative events to see a bear market and interest rates (which go hand in hand with inflation) might be just one of the contributory factors. Unless something major happens - like China having a brain snap and invading Taiwan or Russia invading Ukraine, I'm still favouring a correction rather than a bear market.


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## MovingAverage (5 January 2022)

ducati916 said:


> 3. And why did junk bonds default? Because they were ARMs (Adjustable Rate Mortgages) that were set very low with teaser rates that then adjusted higher once the teaser period was over. The crash was the most expected crash ever.



Nope--not that simplistic. You omitted the fact that there was also a coinciding broad-based fall in the value of the underlying assets which made the prospect of refinancing very difficult. That coupled with the fact that people could pretty much just walk away from their liabilities resulted in the large defaults that triggered everything else.


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## Ann (5 January 2022)

ducati916 said:


> 3. And why did junk bonds default? Because they were ARMs (Adjustable Rate Mortgages) that were set very low with teaser rates that then adjusted higher once the teaser period was over. The crash was the most expected crash ever.






MovingAverage said:


> Nope--not that simplistic. You omitted the fact that there was also a coinciding broad-based fall in the value of the underlying assets which made the prospect of refinancing very difficult. That coupled with the fact that people could pretty much just walk away from their liabilities resulted in the large defaults that triggered everything else.




There was so much more to it than just these reasons. The whole bond package was a ruse and the sad thing is it still goes on today.

If anyone is interested in reading a wonderful book that offers the best and clearest explanation of exactly what happened leading up to 2007/8 I can highly recommend  https://www.amazon.com.au/Colossal-Failure-Common-Sense-Collapse/dp/0307588343


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## Skate (5 January 2022)

investtrader said:


> Ann,
> Great analysis. Not only are traders watching the 200MA, but investors.




*Using a "Moving Average" to trade*
I was reading the notes of an institutional trader remarking that average daily volume is the single biggest factor in scanning for signals. The next is daily volume. Their main objective is to move large amounts in & out of the markets without shifting the price. 

*This got me thinking, how do they actually do it?*
They scan using a simple formula (the moving average over the last 5 periods) multiply by (the moving average of the volume of the last 21-periods) then filter the results by momentum.

*Nah, it couldn't be that simple*
Well, you live & learn. Fancy the big guys moving large sums with something so crude. This got me thinking, would it be effective to trade such a beast. Two lines of simple code & I'm up & running. There was no mention that they used other filters or parameters so to give the idea a fighting chance I've added a few filters of my own.

*365 day backtest*
Not too shabby of a trading strategy on face value.





*365 Day Equity Curve*
So far so good









*3 year backtest*
Turn over the belly of the beast & it reveals a dark side. 





*3 Year Equity Curve*
I'll give this strategy the flick as it would require additional work. The basic premise couldn't handle COVID & there were a few months that had larger drawdowns than I could tolerate. 





*Summary*
In my opinion, this simple idea might work for the institutional trader but it's not for me.

Skate.


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## Ann (5 January 2022)

Skate said:


> Their main objective is to move large amounts in & out of the markets without shifting the price.




Generally, when I have hunted down a big sell from a fundie with very little price movement, it always appears to be a pre-arranged deal. You can see one or two funds moving in for the buy and over a few weeks the buyers slowly sell the stock back into the market and nick off. Not saying this always happens but it would be the simplest and least disruptive action from the seller on the stock. The only visible footprint is a huge volume spike on the day that sets off the punters for a bit, thinking someone big is buying in.


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## ducati916 (6 January 2022)

Greynomad99 said:


> 1. I'd agree that interest rates didn't cause the 2000, 2008 or 2020 bear markets (sorry - I've never liked the word 'crash'). However, I'd also say it is possible that interest rates could indirectly cause a bear market.






Greynomad99 said:


> 2. We've lived through a time of seemingly ever reducing rates (but I for one can remember having a home loan at 13%!) so having ridden the elevator to the basement there is only one way for rates to go. Rising rates dampen consumer confidence and impact company profits (which filters through to the share price).






Greynomad99 said:


> 3. Central banks have always been able to influence rates by reducing the cash rate, but that won't work any more and I'm not sure they can stop rates from rising, pushing up inflation and scaring the beejeezus out of investors.






Greynomad99 said:


> 4. Rising interest rates also result in investors moving cash from equities to other investments.






Greynomad99 said:


> 5. Australia is one of the most personally indebted nations in the world where many have borrowed to the hilt. When rates were say 5% and moved up to say 6% it would see a 20% increase in interest repayment (which is pretty massive) but with loans of say 2% rising by the same 1% means a 50% increase in interest payments and a pretty massive flow on to inflation and mortgage distress.






Greynomad99 said:


> 6. That said, I think we'd need a confluence of negative events to see a bear market and interest rates (which go hand in hand with inflation) might be just one of the contributory factors. Unless something major happens - like China having a brain snap and invading Taiwan or Russia invading Ukraine, I'm still favouring a correction rather than a bear market.




If you actually read what you have written, you'll see that you actually agreed with the data.

jog on
duc


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## ducati916 (6 January 2022)

MovingAverage said:


> Nope--not that simplistic. You omitted the fact that there was also a coinciding broad-based fall in the value of the underlying assets which made the prospect of refinancing very difficult. That coupled with the fact that people could pretty much just walk away from their liabilities resulted in the large defaults that triggered everything else.





Why did the assets fall?

Because when yields rise, prices (market values) fall. 

Due to the margin involved in purchasing bonds (Hedge Funds pay 5%, ie.95% margin) a very small contraction = large move in equity. Banks have even higher margin. They were not 'supposed' to eat their own cooking and hold inventory, but they did, hence big problems.

The root cause: rising interest rates.

jog on
duc


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## ducati916 (6 January 2022)

Ann said:


> There was so much more to it than just these reasons. The whole bond package was a ruse and the sad thing is it still goes on today.
> 
> If anyone is interested in reading a wonderful book that offers the best and clearest explanation of exactly what happened leading up to 2007/8 I can highly recommend  https://www.amazon.com.au/Colossal-Failure-Common-Sense-Collapse/dp/0307588343





LEH was late in the crisis. LEH simply informed the market (incorrectly) that there were no bailouts coming. Bear Stearns had already failed and financial institutions across the board were scrambling.

jog on
duc


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## MovingAverage (6 January 2022)

ducati916 said:


> Why did the assets fall?
> 
> Because when yields rise, prices (market values) fall.
> 
> ...



Because they were over cooked—it was a bubble. There was some extremely dodgy valuation practices going on back then.

root cause: over valued underlying flakey mortgage backed assets


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## ducati916 (6 January 2022)

MovingAverage said:


> Because they were over cooked—it was a bubble. There was some extremely dodgy valuation practices going on back then.
> 
> root cause: over valued underlying flakey mortgage backed assets





And 'mortgages' are valued on interest rates.

jog on
duc


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## MovingAverage (6 January 2022)

ducati916 said:


> And 'mortgages' are valued on interest rates.
> 
> jog on
> duc



Mortgages are valued on interest rates….hmmm. Isn’t it the mortgaged asset that determines the value not interest rates? You’re also overlooking that value also factors in risk—those US sub prime mortgage back assets hid all of that risk


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## eskys (6 January 2022)

ducati916 said:


> And 'mortgages' are valued on interest rates.
> 
> jog on
> duc



I was thinking interest cover can also affect interest rate borrowing? Ducati is deep....interesting thread to learn....too much water causes flooding, too much QE causes inflation....lower interest rates to curb inflation....withdrawl of tapering will cause rise in interest rates (that's what I understand from these discussions) but on the whole I don't think rise in interest rates cause crashes, in my opinion, it's the fear of rising interest rates that causes volatililty.........but please don't donk me on the head if I've got it wrong


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## Rabbithop (6 January 2022)

This link is very interesting n informative for others who wants to learn. Thank you all for taking the time to put in your valuable add on info.


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## ducati916 (6 January 2022)

MovingAverage said:


> 1. Mortgages are valued on interest rates….hmmm. Isn’t it the mortgaged asset that determines the value not interest rates?






MovingAverage said:


> 2. You’re also overlooking that value also factors in risk—those US sub prime mortgage back assets hid all of that risk





1. Value is a calculation based on price for cash-flow from an asset, which includes capital appreciation. Value is a rather nebulous concept.

To calculate value, an input price, which is the cost of capital required to purchase that asset needs to be applied. The cost of capital is the interest rate.

2. And when that risk reprices (rising yields) asset prices also revalue (fall) which can provide a very different value.

jog on
duc


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## ducati916 (6 January 2022)

eskys said:


> 1. I was thinking interest cover can also affect interest rate borrowing?






eskys said:


> 2. Ducati is deep....interesting thread to learn....too much water causes flooding, too much QE causes inflation....HIGHER interest rates to curb inflation....withdrawl of tapering will cause rise in interest rates (that's what I understand from these discussions) but on the whole I don't think rise in interest rates cause crashes,






eskys said:


> 3. in my opinion, it's the fear of rising interest rates that causes volatililty.........but please don't donk me on the head if I've got it wrong





1. Correct.

2. I have just edited your original post in capitals. I think you have the gist.

3. A further example:





The '87 crash was October '87.

Observe the rise in yield into the end of '87.

jog on
duc


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## eskys (6 January 2022)

Hi ducati, I made a mistake there, I meant to say tapering or tapering of QE will cause rise in interest rates, not sure how to edit my post (got to explore that)


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## qldfrog (6 January 2022)

eskys said:


> Hi ducati, I made a mistake there, I meant to say tapering or tapering of QE will cause rise in interest rates, not sure how to edit my post (got to explore that)



Eskys, you can only edit the post for a limited time after posting.
Error and typos happen.no drama
On major issues, you can ask for your post to be deleted..but will go via administrators so please use sparsely and think if it is worth their time


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## eskys (6 January 2022)

qldfrog said:


> Eskys, you can only edit the post for a limited time after posting.
> Error and typos happen.no drama
> On major issues, you can ask for your post to be deleted..but will go via administrators so please use sparsely and think if it is worth their time



The more I think about this subject, the more confused I've become.....think I better stick to home economics and my simplistic way of navigating life


----------



## ducati916 (6 January 2022)

eskys said:


> Hi ducati, I made a mistake there, I meant to say tapering or tapering of QE will cause rise in interest rates, not sure how to edit my post (got to explore that)





Correct. Tapering will cause a rise in interest rates (yield) and a decrease in credit creation. Hence, a mitigating force against inflationary pressures, but concurrently increasing the risk of a deflationary event.

Which is exactly why Central Banks are caught whatever they do or do not do.

jog on
duc


----------



## Rabbithop (6 January 2022)

eskys said:


> The more I think about this subject, the more confused I've become.....think I better stick to home economics and my simplistic way of navigating life



Don't let this type of common human big fingers typo error or our brain racing off with our thoughts faster than our fingers can type causing spelling error or a word or two missing in the sentence or before we can preview our message, the finger hit the post key.
Finally, Best to re read your post after posting, if error occurs, can edit or delete it quick.


----------



## eskys (6 January 2022)

So, higher interest rates to curb spending, hence prevent inflation? When I say spending, I mean, people going out and buying, eg over inflated stuff? Real estate for example? Is that why that Commsec tweets about real estate growth prediction? My brain is working over time now.....Dow red last night, good luck, everyone


----------



## ducati916 (6 January 2022)

eskys said:


> So, higher interest rates to curb spending, hence prevent inflation? When I say spending, I mean, people going out and buying, eg over inflated stuff? Real estate for example? Is that why that Commsec tweets about real estate growth prediction? My brain is working over time now.....Dow red last night, good luck, everyone





The effect on consumer spending occurs, but it is indirect.

(i) Cost of capital for mortgages increases for new mortgages and variable mortgages;
(ii) Equity withdrawal loans costs rise;
(iii) Bank loan costs increases;
(iv) Rising rates can indicate inflationary pressures, which is a loss of fiat purchasing power;
(v) PPI rising faster than CPI places pressure on companies profit margins, resulting in higher prices for consumers and a crisis when they cannot be raised further. Employees want higher wages, further pressure on margins, resulting eventually in business failures.

This is CORE PPI/CPI




jog on
duc


----------



## eskys (6 January 2022)

In other words, you are saying that rise in interest rates are cost related which I agree. So, materials costs go up, as with every thing else.

In light of all these, would it not be in the the interests of central banks to keep interest rates down low? So much talk of tapering, causing fears. The Fed will take these into account and dampen fears, by tapering softly to minimise disruptions to markets, businesses, lives etc...so if interest rates have to go up, they'll do it slowly and carefully, preventing a crash?


----------



## MovingAverage (6 January 2022)

This speaks volumes--look what preceded the GFC market crash in Oct of 2007. All those shitty sub prime residential mortgage backed securities--their underlying assets of over-valued housing saw a rapid devaluation starting early 07. The bubble had burst.




Meanwhile the official US cash rate (interest rate)--which you can see below--was consistently increasing in the lead up to the 2007 crash. This ever increasing interest rate certainly didn't dampen the performance of the US market or residential property prices. But once the bubble burst on the over-priced residential housing assets the official cash rate dropped right off. Again, this falling interest rate did nothing to stop the US market crashing.


----------



## MovingAverage (6 January 2022)

Got Covid--well it's not all doom and gloom if you have. 
Why not adjust your position sizing according to your chances of dying from Covid? 
Yup, some quant has developed a model for determining your survival time. 
So forget using those old school positioning methodologies such as a % of your capital--why not augment your position sizes based on how long you can live with Covid.

https://financial-hacker.com/the-covid-survival-calculator/#more-4224


----------



## ducati916 (6 January 2022)

MovingAverage said:


> This speaks volumes--look what preceded the GFC market crash in Oct of 2007. All those shitty sub prime residential mortgage backed securities--their underlying assets of over-valued housing saw a rapid devaluation starting early 07. The bubble had burst.
> 
> View attachment 135297
> 
> ...





You have simply confirmed my earlier posts.

Ta.

jog on
duc


----------



## qldfrog (6 January 2022)

MovingAverage said:


> Got Covid--well it's not all doom and gloom if you have.
> Why not adjust your position sizing according to your chances of dying from Covid?
> Yup, some quant has developed a model for determining your survival time.
> So forget using those old school positioning methodologies such as a % of your capital--why not augment your position sizes based on how long you can live with Covid.
> ...



this algo is flawn in that covid Omicron flavor is at least 50% less potent..last unbiased figures i found.
so if you get the old strength because your country is locking you down and so preventing the "good" omicron spreading and so infecting you with Delta or original flavour, all these figures are compounded.

You need to add probability of getting sick at all..aka in short your age at the minimum.
But if quant are happy to bet ..usually your money...their issue and it could be a vauable tool:
but you should have as minimum parameters: average age of investor, probably BMI and rate of co morbidity etc
It is actually doable but the economic covid impact has never been of any significance, only the restrictions attached to it and these are not science so do not follow rules
we have not had massive workforce wiped and buried, at most 2 weeks off which pales into significance vs current measures, lockdown quarantines and segregation/exclusion
In a free world, there is a model to be built and profit to be taken, in our real world, just resell RAT.


----------



## MovingAverage (6 January 2022)

ducati916 said:


> You have simply confirmed my earlier posts.
> 
> Ta.
> 
> ...



Well we must be saying the same thing--asset bubble bursting not interest rates drove the 2008 market crash


----------



## ducati916 (6 January 2022)

eskys said:


> In other words, you are saying that rise in interest rates are cost related which I agree. So, materials costs go up, as with every thing else.
> 
> In light of all these, would it not be in the the interests of central banks to keep interest rates down low? So much talk of tapering, causing fears. The Fed will take these into account and dampen fears, by tapering softly to minimise disruptions to markets, businesses, lives etc...so if interest rates have to go up, they'll do it slowly and carefully, preventing a crash?





So the next step is understanding the difference between NOMINAL and REAL rates. The nominal rate is just the yield, ie. 1.7%. The real rate is the nominal yield less the rate of inflation. So aggregate CPI inflation is +/- 7%, which means that the real rate is 1.7% - 7% = (-5.3%), so a negative yield.

To go to a positive real yield, yields would need to rise to +/- 8%.

My 'feeling' is that if nominal yield rises to 2.5% - 3% (which are still negative in real terms) we'll see a market crash (-15% - 20%) on SPY. Not because yields are showing a positive real yield, but because market participants are warning the Fed that a continued rise in rates will pop the tri-bubble (stonks, bonds, and housing) creating a massive deflation (think 1930's).

Look at the issues over the last 2 days in SPY.

jog on
duc


----------



## MovingAverage (6 January 2022)

qldfrog said:


> this algo is flawn in that covid Omicron flavor is at least 50% less potent..last unbiased figures i found.
> so if you get the old strength because your country is locking you down and so preventing the "good" omicron spreading and so infecting you with Delta or original flavour, all these figures are compounded.
> 
> You need to add probability of getting sick at all..aka in short your age at the minimum.
> ...



All good points Frog--was being a bit flippant with that post--no trades for me today so just catching up on some reading  . Think I just stick to old school position sizing


----------



## Skate (6 January 2022)

*How the yield curve is sending a recession 'signal' (short 9-minutes video)*
Only hours ago (6th Jan 2022) DoubleLine Capital Founder & CEO Jeffrey Gundlach discuss 2022 market concerns, the Fed, inflation, interest rates, the yield curve, and the Consumer Price Index in a short 9-minute YouTube that's interesting.



Skate.


----------



## qldfrog (6 January 2022)

MovingAverage said:


> All good points Frog--was being a bit flippant with that post--no trades for me today so just catching up on some reading  . Think I just stick to old school position sizing



Sure .. but there are so many areas we could genuinely look at for influence in trading it is not a per se silly idea.. 👍


----------



## Skate (7 January 2022)

Skate said:


> *Conviction*
> A person with a conviction is a hard person to change. Tell him you disagree and he turns away. Show him facts or figures and he questions your sources. Appeal to logic and he fails to see your point.




*Reposted without permission*
In @ducati916 daily post, there was a quote that hit a chord with me. I have retitled it as "Duc's Quote of the Day"




Skate.


----------



## Skate (7 January 2022)

DrBourse said:


> Each individual must have a plan for Buying & Selling that suits their Level of Tolerance.






Rabbithop said:


> Trade with your Head not your heart..




*Also reposted without* @ducati916 *permission*
There is no Holy Grail when it comes to trading & there is no easy & simple answer to be consistently profitable. The best approach to the market is highly subjective. Trading is straightforward, yet many make a mess of it. One of the main reasons that traders fail in the market is because they don’t have a plan, or if they do - they don’t follow it.





Skate.


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## Skate (7 January 2022)

Skate.


----------



## Skate (7 January 2022)

Skate.


----------



## Skate (7 January 2022)

Skate.


----------



## Skate (7 January 2022)

*One signal last week gapped above the "buy offer"*
The buy signal for (SYR) last week was not taken as the price gapped above the "Buy Offer" of $1.87





*Purge Notification*





*Trading Rules*
# If positions aren't executed at the open "the position stays open during the day" & purged after the close.

*Important*
"Never buy at market" you need to be executed at the "Offer" or not at all.

*The Buy Rules*
1. The "Buy offer" is good for one day only
*2. Never chase the price.*
3. There are some positions that you will miss (like "SYR" today)
4. Positions not executed during the day need to be purged after the close
5. Do not "carry over" orders (positions need to be executed on the same day)
6. The buy rules are not flexible

*The Sell Rules*
1. Never sell before a signal is given
2. Sell in the pre-auction at the "Offer"
3. If the position is not sold in the pre-auction wait till 10:30 am for the market to settle
4. If the position is still open after 10:31 am - sell immediately "at market"
5. The sell rules are not flexible

Skate.


----------



## entropy (7 January 2022)

Ann said:


> No on the contrary Skate, I must disagree, the SMA is not a lag because it is a watched signal/indicator, a trigger for the dozens, hundreds or thousands of traders waiting for an entry indicator/signal/whistle blow/ trigger/gunshot/ whatever you want to call the point where the trader commits his money.  Many people try to get very clever with MAs thinking they will get an edge. If you are using a less used MA, you will have a less-used entry/exit point.  The best edge anyone can ever have is to know when the majority of traders are going to commit to a trade, that is why I use the 'simple' MA as that is the standard-setting on Stockcharts, the 50dsma and 200dsma. More traders would use Stockcharts than any other chart system around. I want to be right in the thick of the herd so I can get the go signal as it happens.
> 
> Another point is when a trader is looking at trading shorter trading periods they don't want their money tied up in a stock going nowhere for any length of time, that may be lost opportunities.
> 
> ...



Ann, Skate: Thank you both for this discussion, most helpful for a newby like me!

Both of you have interesting methods and will require me to put in some time to digest them.

A side note Skate: Re your graphics, the red on black looks really good but the dark blue on black tests my feeble eyes, any chance of lightening the blue a little or is there a way for me to adjust things at my end?


----------



## Ann (7 January 2022)

entropy said:


> Ann, Skate: Thank you both for this discussion, most helpful for a newby like me!
> 
> Both of you have interesting methods and will require me to put in some time to digest them.
> 
> A side note Skate: Re your graphics, the red on black looks really good but the dark blue on black tests my feeble eyes, any chance of lightening the blue a little or is there a way for me to adjust things at my end?




I think the difference in our methods is simply one of me saying learn to chart properly without gimmicks and Skate is saying, hey I am looking for the holy grail where it is automatically in and automatically out which will yield an auto profit of X. Please buy my system and buy my words of wisdom (sourced from the greats like Zig Ziglar) and so on.

I am now at the age where it is quite clear there is no easy way, just bloody hard work. However, after a while, it becomes easier and easier as long as you don't try to support yourself with a crutch. 

Having said that, I may be doing Skate a grave injustice so please don't see this as a criticism of Skate's methods or motives as I have not read all his threads. Those I have read all just ring so very, very familiar as I being an old salesperson from waaay back to the 60s.


----------



## Skate (7 January 2022)

Ann said:


> Skate is saying, hey *I am looking for the holy grail *where it is automatically in and automatically out which will yield an auto profit of X. *Please buy my system and buy my words of wisdom* (sourced from the greats like Zig Ziglar) and so on.




@Ann, I’m not saying that at all, & you are being unkind to characterise me in that way.



Skate said:


> *There is no Holy Grail *when it comes to trading & there is no easy & simple answer to be consistently profitable. The best approach to the market is highly subjective. Trading is straightforward, yet many make a mess of it. One of the main reasons that traders fail in the market is because they don’t have a plan, or if they do - they don’t follow it.




*I have never offered anything for sale*
I post new ideas & sometimes a twist on “old ideas” to invoke thinking on a deeper level.

*The 'Dump it here' thread*
The sole purpose of this thread is to help others gain knowledge. I have a good memory & post what I've found beneficial in my trading experience. The thread is for the exchange of ideas, *"not a contest of ideas"*. 

*Speed reading is a curse *
Speed reading my posts doesn't allow others to understand what I've written. I've found some members can't help themselves by posting to point-score at every turn, belittling or ridiculing others & in my opinion it's not the way forward. We are a community of like-minded people who have common interests & goals. All members who are at different stages & levels of experience can still make a contribution to this thread if they have the desire to help others.

Please *T.H.I.N.K.* before posting.

*T* - is it *true*?
*H* - is it *helpful*?
*I* - is it *inspiring*?
*N* - is it *necessary*?
*K* - is it *kind*?

Skate.


----------



## MovingAverage (7 January 2022)

Ann said:


> I think the difference in our methods is simply one of me saying learn to chart properly without gimmicks and Skate is saying, hey I am looking for the holy grail where it is automatically in and automatically out which will yield an auto profit of X. Please buy my system and buy my words of wisdom (sourced from the greats like Zig Ziglar) and so on.
> 
> 
> Having said that, I may be doing Skate a grave injustice so please don't see this as a criticism of Skate's methods or motives as I have not read all his threads. Those I have read all just ring so very, very familiar as I being an old salesperson from waaay back to the 60s.



I've read plenty of stupid posts on this forum (some of those posts were my own), but this post of yours takes the cake   Why on earth would you post such a character assassination when you openly admit you haven't read his "threads". Unbelievable!!!

Skate gives more than most on this forum--freely and openly. I'm not sure you even appreciate the idiocy of your statement suggesting he is chasing the holy grail  Have you actually read any of his posts ?

Where do these people come from  Time for me to down a couple of beers so I can really say what I think.


----------



## ducati916 (7 January 2022)

MovingAverage said:


> I've read plenty of stupid posts on this forum (some of those posts were my own), but this post of yours takes the cake   Why on earth would you post such a character assassination when you openly admit you haven't read his "threads". Unbelievable!!!
> 
> Skate gives more than most on this forum--freely and openly. I'm not sure you even appreciate the idiocy of your statement suggesting he is chasing the holy grail  Have you actually read any of his posts ?
> 
> Where do these people come from  Time for me to down a couple of beers so I can really say what I think.




Finally, something we agree on!

jog on
duc


----------



## MovingAverage (7 January 2022)

ducati916 said:


> Finally, something we agree on!
> 
> jog on
> duc



We may disagree but at least we don't get personal


----------



## Ann (7 January 2022)

Skate said:


> *T* - is it *true*?
> *H* - is it *helpful*?
> *I* - is it *inspiring*?
> *N* - is it *necessary*?
> *K* - is it *kind*?



*T* - Try always to be* Truthful*. Always add the disclaimer, I may be wrong.
*H* - *Helping* others in palliative care,  AIDS patients and Dementia patients when I was all but crippled with long term chronic fatigue.
*I- *I live to* Inspire* people to move beyond their situation with words of encouragement but never telling them how to live or think.
*N*-* Never* big-noting myself with adopted words of wisdom.
*K*- *Knowledge* is something all can gain with effort, investigation, study and hard work.

*B* - Be your* Best* by effort, endeavour and deep thought.
*I*- Take an *Interest* in all things, as everything interlinks.
*G*- *Get-over-yourself*, too many people trip over their own ego on the journey to success.



Ann said:


> Having said that, I may be doing Skate a grave injustice so please don't see this as a criticism of Skate's methods or motives as I have not read all his threads. Those I have read all just ring so very, very familiar as I being an old salesperson from waaay back to the 60s.




Sorry again Skate, I know many folks here wear their ego on their sleeves but thought you were above this with all your words of wisdom. I have no doubt those who have not read all the self-improvement books from decades past may love your thread. Nothing like recycling, everything old is new again. It is all good. I loved it back in the day, no doubt Zig Zigler pinched from Napoleon Hill. I still keep The Law of Success https://en.wikipedia.org/wiki/The_Law_of_Success I bought back in the '60s in my bookcase. 

Again I say, I may be truly unjust to Skate, but there always just seems to be the tiniest whiff of BS here. However, nothing grows so well as having a little BS sprinkled over it!

Continue on Skate, I find this all very entertaining. After all, I am nothing and no one so just ignore me, folks, no harm done!

If my intrusions on your thread become too difficult for you Skate, just let me know and I shall certainly nick-off and not darken your pages. Would hate to upset you or put you off your stride. It is your thread and I respect that.


----------



## Ann (7 January 2022)

MovingAverage said:


> I've read plenty of stupid posts on this forum (some of those posts were my own), but this post of yours takes the cake   Why on earth would you post such a character assassination when you openly admit you haven't read his "threads". Unbelievable!!!
> 
> Skate gives more than most on this forum--freely and openly. I'm not sure you even appreciate the idiocy of your statement suggesting he is chasing the holy grail  Have you actually read any of his posts ?
> 
> Where do these people come from  Time for me to down a couple of beers so I can really say what I think.



Criticism has happily been taken!


----------



## Skate (7 January 2022)

Ann said:


> Again I say, I may be truly unjust to Skate, but there always just seems to be the tiniest whiff of BS here





Ann said:


> Sorry again Skate, I know many folks here wear their ego on their sleeves





Ann said:


> Continue on Skate, I find this all very entertaining.




@Ann your response was very disappointing to read but at least now we can draw a line under the unwarranted comments & move on. 

# This is not what this thread is about. 

*Offending a member is hard to detect*
Anonymity does not give anyone the right to be impolite to others. At times there have been snide remarks made that are "unacceptable" & tend to undermine the friendly atmosphere of any thread, not just this one. 

*What's more important*
This thread gives you the ability to express your views without being "ridiculed or challenged".  



MovingAverage said:


> We may disagree but at least we don't get personal




*Ridiculing others serves no purpose*
If you disagree with someone rather than argue the merits of their points, post an alternative view, you don't have to belittle members to get your point across. @MovingAverage has already remarked - play the "the point" not the "person". 

Skate.


----------



## DaveTrade (7 January 2022)

A side effect of Covid causes emotions to heat and ego's to swell. This is not directed at any one person, it's spreading like covid accross the forum.


----------



## eskys (7 January 2022)

ducati916 said:


> So the next step is understanding the difference between NOMINAL and REAL rates. The nominal rate is just the yield, ie. 1.7%. The real rate is the nominal yield less the rate of inflation. So aggregate CPI inflation is +/- 7%, which means that the real rate is 1.7% - 7% = (-5.3%), so a negative yield.
> 
> To go to a positive real yield, yields would need to rise to +/- 8%.
> 
> ...



Apologies for the late reply, ducati. Wow, this is getting really deep, out of my depth. Need an accountant to explain all these, ever so slowly for me to grasp (will grab the accountant at the weekend)  Sorry, no reflection on you, ducati. I'm not in finance, so have limited understanding in these matters. Your understanding of the subject is very deep. Thank you for your time in educating me. I'm sure other forum members have learned something on the subject. Have a great weekend..........


----------



## eskys (7 January 2022)

Ann said:


> Criticism has happily been taken!



Ann,I don't like to see you upset.........Ann? Hope you're ok?


----------



## MovingAverage (7 January 2022)

DaveTrade said:


> A side effect of Covid causes emotions to heat and ego's to swell. This is not directed at any one person, it's spreading like covid accross the forum.



Not so sure it's Covid....I just put it down to the usual behavour that comes with retail investors


----------



## Ann (7 January 2022)

One thing I find profoundly helpful is criticism by anyone in any way. I am always grateful as it is something I can build from. Constant fawning and compliments tend to be nice for a feeble ego but not productive for long term improvement.

It is also a wonderful way to shield oneself from feeling slighted or hurt. It is always better to ask what did I do wrong, how am I being misinterpreted? Instead of saying how dare they speak to me like that, I am offended and need to teach them better behaviour.

Talking about  books, as I was previously, I can highly recommend another one I have shared with my son called

The Subtle Art of Not Giving a F*ck. It can be highly liberating if one is not already practising this invaluable art! 



Skate said:


> @Ann your response was very disappointing to read but at least now we can draw a line under the unwarranted comments & move on.



Oh yes please Skate, let's do that!


----------



## Ann (7 January 2022)

eskys said:


> Ann,I don't like to see you upset.........Ann? Hope you're ok?



I am not in the tiniest way upset but thank you very much for your concern eskys. @MovingAverage or anyone should always feel free to voice their disapproval of anything I say or do. I meant what I said when I accepted the criticism. There was no upset or antagonism. Sadly sometimes the written word doesn't come across the way it was meant, always a problem, particularly on a forum.
Bless, eskys for your kindness.
​


----------



## Ann (7 January 2022)

Damn the link to the book didn't work...
Let's see how this goes...









						The Subtle Art of Not Giving a F*ck
					

Alternate cover edition of ISBN 9780062457738  In this generation-defining self-help guide, a superstar blogger cuts through the crap to ...



					www.goodreads.com


----------



## MovingAverage (7 January 2022)

Ann said:


> One thing I find profoundly helpful is criticism by anyone in any way. I am always grateful as it is something I can build from. Constant fawning and compliments tend to be nice for a feeble ego but not productive for long term improvement.



Oh really....all you did is come along and said there was a whiff of BS to skate's posts. That is not constructive criticism--why don't you point out exacting one post of skates where you believe he is bullshitting and I mean highlighting serious errors in his system analysis. Go on, just show us one post! I bet you can't because I think the concept of system trading doesn't jell with you so you resort to ridicule. Here is what I reckon--you have no idea what system trading is about do you? I've looked at your contributions to this thread and there is not one single post from you with any substance or insight regarding system trading. As old Bob Hawke famously said--go away you silly old bugger.


----------



## eskys (7 January 2022)

Ann said:


> I am not in the tiniest way upset but thank you very much for your concern eskys. @MovingAverage or anyone should always feel free to voice their disapproval of anything I say or do. I meant what I said when I accepted the criticism. There was no upset or antagonism. Sadly sometimes the written word doesn't come across the way it was meant, always a problem, particularly on a forum.
> Bless, eskys for your kindness.
> ​



I get a sense that you are a kind person,  Ann. Sounds strange saying this not knowing you or met you (as you know I've been here about a fortnight ago or maybe more) This is the problem with social media, posts are often misunderstood or misconstrued. The above post says a lot about you as a person, Ann..........I like that. Have a good rest,  and have a great weekend.....give you a hug, xx


----------



## Ann (7 January 2022)

MovingAverage said:


> -why don't you point out exacting one post of skates where you believe he is bullshitting and I mean highlighting serious errors in his system analysis. Go on, just show us one post! I bet you can't because I think the concept of system trading doesn't jell with you so you resort to ridicule. Here is what I reckon--you have no idea what system trading is about do you? I've looked at your contributions to this thread and there is not one single post from you with any substance or insight regarding system trading. As old Bob Hawke famously said--go away you silly old bugger.



I have never called @Skate or anyone a name of any kind including a bullshtr. 
I don't need a system, I am able to chart. 
I always think backtesting is a total waste of time and pretty much bullsht, as it can be cherry-picked but on this occasion, you ask for a flaw in the system, sure!  https://www.aussiestockforums.com/threads/dump-it-here.34425/post-1153470

Now as far as your comment of "go away you silly old bugger."  I would not be in the least offended if @Skate told me this as it is his thread, however, until that time I will contribute when and if I feel I can value add. I notice @Skate takes the opportunity to bounce things off other peoples comments on occasions, which can be very interesting and thought-provoking.


----------



## MovingAverage (7 January 2022)

Ann said:


> I don't need a system, I am able to chart.



This statement sums you up perfectly. Sigh...retail traders

Good bye


----------



## qldfrog (7 January 2022)

ducati916 said:


> Finally, something we agree on!
> 
> jog on
> duc



Was going to post something on the same line @MovingAverage 😂


----------



## MovingAverage (7 January 2022)

qldfrog said:


> Was going to post something on the same line @MovingAverage 😂



Come on, we only disagree on using old data in back tests


----------



## MovingAverage (8 January 2022)

Ann said:


> I always think backtesting is a total waste of time and pretty much bullsht, as it can be cherry-picked but on this occasion, you ask for a flaw in the system, sure!  https://www.aussiestockforums.com/threads/dump-it-here.34425/post-1153470



You probably don't realise this but that link you posted up shows without doubt that you are a complete and utter amateur trader. You must be the only person on the planet that thinks an MA is not a lagging indicator--do yourself a favour and look into how it is calculated. Like I said--retail traders, sigh.


----------



## qldfrog (8 January 2022)

MovingAverage said:


> Come on, we only disagree on using old data in back tests



But we also disagree on the meaning of old 😂.
Anyway let's forget the last few posts, this thread is better than that.
Covid imho can be blamed
For the last 3y, people have been brainwashed to fear what is hardly more than a nasty flu strain.as we have had every decade or so
Shaking in their boots they are wearing face nappies in their cars, avoiding hugs and not meeting friends and family.
they have been sacrificing life waiting for a miracle solution sold to them even before it existed: a "vaccine"...
And once it is there welll, you need another shot, and another one and another one 
vaccinated or not, people transmit the disease and weak people die so they hate the unjabbed as they represent the proof it is not the answer, and the unjab hate them as they represent the sheeple and the mankind we are all part of and bear and share the cost
Anger hate fear to ease the denial feeling 
What a fertile pestilence compost, so road rage suicide social media rage, even in LinkedIn or here.
We can thank our leaders of both side.
I will excuse Ann and others on that base


----------



## MovingAverage (8 January 2022)

qldfrog said:


> But we also disagree on the meaning of old 😂.
> Anyway let's forget the last few posts, this thread is better than that.
> Covid imho can be blamed
> For the last 3y, people have been brainwashed to fear what is hardly more than a nasty flu strain.as we have had every decade or so
> ...



All wise words Frog--and agree this thread is above that. But as for your last sentence...there is no data to suggest Covid induces stupidity


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## Ann (8 January 2022)

MovingAverage said:


> This statement sums you up perfectly. Sigh...retail traders



Sure, I am a retail trader, at least I trade and not only do I trade I call my shots in public, here...





__





						KISS Trading with Ann
					

Just for fun, I thought I would try for a portfolio of 10 shares/ETFs built up over three months and held until they break through a vital trendline/resistance and get sold. This will all be done manually with IC charts. I will eyeball the charts, draw my support and resistance trendlines and...




					www.aussiestockforums.com


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## MovingAverage (8 January 2022)

What is it with you anyway @Ann ...why are you so hell bent on having a pissing contest over whether charting is superior to systems??? I wonder if it is a case of pictures are for those incapable of dealing with numbers. Anyway, my bladder is empty and I'm done pissing.


----------



## Ann (8 January 2022)

MovingAverage said:


> What is it with you anyway @Ann ...why are you so hell bent on having a pissing contest over whether charting is superior to systems??? I wonder if it is a case of pictures are for those incapable of dealing with numbers. Anyway, my bladder is empty and I'm done pissing.



Crikey lad, calm, deep breaths! Why on earth are you so defensive?  I can understand someone being upset thinking their friend was being attacked and coming to the rescue, that's sweet. You seem to be making everything so personal. I love charting and the magic of charts and would love to share my love. However, I can understand if people are blind to the subtleties of a chart and simply find running numbers better. Good, fine!  Everyone to their own. If I match charts with @Skate whose to say he won't have an aha moment with something he sees on one of my charts. It may give him a clue as to what to tweak on his chart system, it may not but who knows.


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## MovingAverage (8 January 2022)

Ann said:


> It may give him a clue as to what to tweak on his chart system, it may not but who knows.



You just don’t get it do you…he does NOT trade charts. Lord have mercy—someone help me out here. Please someone…anyone…please help. Oh the pain Will Smith…the pain


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## Ann (8 January 2022)

MovingAverage said:


> You just don’t get it do you…he does NOT trade charts. Lord have mercy—someone help me out here. Please someone…anyone…please help. Oh the pain Will Smith…the pain




You need to calm yourself MA, you are making yourself look a bit silly, are you perhaps sipping a little wine? What does he do with his charts apart from backtest his system?


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## Skate (8 January 2022)

*Open Summary Condensed*










*Exploration Raw Signals*






*Backtest Portfolio Signals*








Skate.


----------



## Skate (8 January 2022)

*Open Summary Condensed*









*Exploration Raw Signals*





*Backtest Portfolio Signals





SYR - Purge Notice *





*

*

Skate.


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## Sir Burr (8 January 2022)

Ann said:


> are you perhaps sipping a little wine?




I bet that "Ignoring" (the troll) button is getting workout haha.


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## MovingAverage (8 January 2022)

Righto Boys and Girls,

I know folks around here like trading weekly systems so thought I'd share a bit of insight that might be of interest. The popular default period for weekly EOD systems is Monday to Friday. After close on Friday you look for your buys and sells and then place those trades for execution at the open on Monday. For various reasons I'm moving away from trade execution at open on Mondays so wanted to understand the impact of executing my weekly orders at the open on other days of the week. Below sim results show the impact of order execution at the open of each day of the week.

Highlights to take note of: executing orders on Monday and Friday have similar performance results, but there is some reasonable variation in performance on Tuesday through to Thursday. Most notably executing orders on a Wednesday deliver over 10% improvement in net profit with not a significant change in other underlying system characteristics (e.g., win rate, DD etc etc). 

Now it is very possible that the improvement below in Wednesday's performance is just down to trade sequence so it is very important to do a more detailed MC analysis to get an overall picture of the improvement. As I have said before I think AB's MC analysis is seriously flawed and should not under any circumstances be taken seriously. However, I haven't had the time yet to do proper MC analysis on these simulations (I've been too busy arguing the merits of charting v system based trading with others) but as a preliminary indication I've included a snap shot of AB MC output. You can see that Wednesday does appear to deliver an overall improved MC performance with the MC average being around 10% higher than Monday and while I haven't bothered to look at the standard deviation of those MC results a visual inspection of the MC graph for Wednesday would seem to suggest a tighter SD particularly around the mean. Next step for me will be to do better MC analysis to better understand the true performance and impact of change the day on which to execute trades.


----------



## entropy (8 January 2022)

MovingAverage said:


> Righto Boys and Girls,
> 
> I know folks around here like trading weekly systems so thought I'd share a bit of insight that might be of interest. The popular default period for weekly EOD systems is Monday to Friday. After close on Friday you look for your buys and sells and then place those trades for execution at the open on Monday. For various reasons I'm moving away from trade execution at open on Mondays so wanted to understand the impact of executing my weekly orders at the open on other days of the week. Below sim results show the impact of order execution at the open of each day of the week.
> 
> ...



Interesting work MA! Thank you for posting this research. Does the "Wednesday Effect" appear generally throughought the market, ie big caps, medium caps, small caps, banking sector, mining sector etc?

Perhaps, due to time zones, "something" is happening on Tuesdays in the bigger exchanges overseas?
Is Tuesday a big settlement day perhaps elsewhere?


----------



## MovingAverage (8 January 2022)

If anyone is interested in playing around with this you can change the start day of your weekly bars by going into your AB DB settings menu, click on intraday settings, and you will see a weekly time compression first day of the week option that you can select.


----------



## MovingAverage (8 January 2022)

entropy said:


> Interesting work MA! Thank you for posting this research. Does the "Wednesday Effect" appear generally throughought the market, ie big caps, medium caps, small caps, banking sector, mining sector etc?
> 
> Perhaps, due to time zones, "something" is happening on Tuesdays in the bigger exchanges overseas?
> Is Tuesday a big settlement day perhaps elsewhere?




Very good question and not something I've looked at yet--would definitely be worth looking at that. My weekly just trades All Ords so haven't looked deeper than that at this stage


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## MovingAverage (8 January 2022)

I preface the following comments by saying what is important to my trading is consistency of returns--I don't go chasing those occasional massive wins. Lots of small constant winners is my objective to reduce volatility in returns, which isn't for everyone but it is for me.

So below is the annual returns from 2015 through to today. Monday is on the far left followed by Tuesday and so on through to Friday at the far right. Anyway, while based on net profit Wednesday seems good when you scratch beneath the surface it turns out most of this performance was gained from an abnormally profitable year in 2015 in which profit was around 80%. On closer review I probably prefer Thursday because the annual returns are far more consistent and it included 2021 performance that was more inline with prior years.

Anyway, much more analysis is needed at this stage.


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## Skate (8 January 2022)

MovingAverage said:


> I know folks around here like trading weekly systems so thought I'd share a bit of insight that might be of interest.




The recent series of posts by @MovingAverage is exactly what this thread is all about. When new ideas are raised it makes us revisit the way we trade. We all fall into the trap of being repetitive with our trading & sometimes we tend to do what others are doing.



Skate said:


> *A traders edge*
> The question for me is - "when is an edge useful" when it comes to trading. The edge might be nothing more than the randomness of entries or the confidence to have a go. Randomness could be anything & everything from, the volatility of the markets, external influences, or world events - who knows!






Skate said:


> *Changing nature of markets*
> Having an "edge" might be an accepted "catchphrase" when trading is going gangbusters. When trading is performing badly, we readily accept that our strategy has lost its "edge" & we set about improving it.




*Trading with an edge*
An edge comes in many forms but it's all about consistency. Trend traders jump on confirmed trends & jump off when the trend slows, stops, or reverses. Mechanical System Trading creates consistency with confidence. Without confidence in your trading strategy, you won’t keep pulling the trigger when the going gets tough regardless of how good you think your system is.

Skate.


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## qldfrog (8 January 2022)

MovingAverage said:


> I preface the following comments by saying what is important to my trading is consistency of returns--I don't go chasing those occasional massive wins. Lots of small constant winners is my objective to reduce volatility in returns, which isn't for everyone but it is for me.
> 
> So below is the annual returns from 2015 through to today. Monday is on the far left followed by Tuesday and so on through to Friday at the far right. Anyway, while based on net profit Wednesday seems good when you scratch beneath the surface it turns out most of this performance was gained from an abnormally profitable year in 2015 in which profit was around 80%. On closer review I probably prefer Thursday because the annual returns are far more consistent and it included 2021 performance that was more inline with prior years.
> 
> ...



For what it is worth,
I did follow a similar check with the systems i was using 2 y or so ago and did NOT find any worthwhile difference.
If you add the inconvenience of inter day trading: limited time to run system and enter trades, at the time i discarded the option.
We also now there is a significant risk off on fridays so that can influence the monday start ..all linked to your type of trading..and so system.
Wo going knto details, i think MA is providing the way to do your own checks 👍


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## Newt (8 January 2022)

MovingAverage said:


> If anyone is interested in playing around with this you can change the start day of your weekly bars by going into your AB DB settings menu, click on intraday settings, and you will see a weekly time compression first day of the week option that you can select.
> 
> 
> View attachment 135440




Yes, many thanks MA - always meant to read up and try and see if any effect.  Last few posts most appreciated.


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## DaveTrade (8 January 2022)

MovingAverage said:


> Lots of small constant winners is my objective to reduce volatility in returns, which isn't for everyone but it is for me.



Me too.


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## Skate (8 January 2022)

entropy said:


> A side note Skate: Re your graphics, the red on black looks really good *but the dark blue on black tests my feeble eyes*, any chance of lightening the blue a little or is there a way for me to adjust things at my end?




@entropy, I'm assuming you are talking about the "Ducati Blue Bar Strategy" Charts I post (Dark Blue on Black). If you are having issues I'm sure others would be having issues as well. I'm prepared to change the colour if it helps your eyes. Select from below.

*#1. Original Blue*





*#2. Aqua*





*#3. Light Blue*





*Summary - Chart trading*
"The Ducati Daily Blue Bar strategy" chart is easy to understand as the first "Blue Bar" is the signal bar, meaning we enter the position on the next bar at the open. We sell the position on the 2nd red bar as the first "red" bar is the signal bar. Trading is simply buying & selling on the second bar, the colour denotes whether you buy or sell. Trading couldn't be any simpler than this.

Skate.


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## entropy (9 January 2022)

Skate said:


> @entropy, I'm assuming you are talking about the "Ducati Blue Bar Strategy" Charts I post (Dark Blue on Black). If you are having issues I'm sure others would be having issues as well. I'm prepared to change the colour if it helps your eyes. Select from below.
> 
> *#1. Original Blue*
> 
> ...



Thank you Skate!
The Aqua and Light Blue were much clearer!


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## qldfrog (9 January 2022)

entropy said:


> Thank you Skate!
> The Aqua and Light Blue were much clearer!



Aqua is best by far on my smartphone if it helps🙏


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## Skate (9 January 2022)

entropy said:


> The *Aqua *and Light Blue were much clearer!






qldfrog said:


> *Aqua* is best by far on my smartphone if it helps




Thank you for your input - I'll change the bar colour to Aqua.

Skate.


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## Skate (9 January 2022)

Ann said:


> Added a new one this week AKE.






Skate said:


> It's exciting to experience how other traders make their stock selection & the methodology that decides when a position is to be entered. My go-to is either the Monthly, Weekly or Daily "Ducati Blue Bar Strategy" to understand the reasoning a little better.






Skate said:


> "The Ducati Blue Bar Strategy" is easy to understand as the *first "Blue Bar" is the signal bar*, meaning *we enter the position on the next day* at the open. *We sell the position on the 2nd red bar as the first "red" bar is the signal bar.*




*The Blue Bar Strategy*
This strategy has the unique ability to pick confirmed momentum of any security in any time frame. It displays the entry & exit points on the corresponding chart. The first coloured bar is the "signal bar" & the entry is at the opening of the next bar.

*Choice of signals*
Depending on the time frame, the signals vary. The three charts are for evaluation only to discern the difference a periodicity makes when trading. 

*AKE - Daily Chart*
If you were trading a daily periodicity, the signals are shown on the chart below.





*AKE - Weekly Chart Signals*
If you were trading a weekly periodicity, the signals are shown on the chart below.





*AKE - Monthly Chart Signals*
If you were trading monthly periodicity, the signals are shown on the chart below.





*Summary*
The periodicity you are trading determines the entry & exit positions on the charts. At times on a daily chart, an exit could be an entry on a weekly chart or vice-versa. The one thing about the "Ducati Blue Bar Strategy" it picks the optimal points (as far as the strategy is coded) no matter the period you elect to trade.

Skate.


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## Skate (14 January 2022)

Stockybailz said:


> can I please suggest a 30 weekly ema moving average. i find that stock moving above this line should be considered Bullish. Stocks below at a loss. This is probable as a long term position and i thought it may be something you would like to try as a support base line.






Ann said:


> who knows how many people are now going to look at the 30wema






Ann said:


> Having said that, I really don't think it matters a whole lot which MAs one uses. It is only an indicator after all.






Skate said:


> *Trading with an edge*
> An edge comes in many forms but it's all about consistency.




*Trading Moving Averages*
There has been some good banter on the "kiss-with-ann" thread that's worthy of a post. 

*This has got me thinking*
Could we use a Simple Moving Average (SMA) or use an Exponential Moving Average (EMA) as a trading strategy. Using an (SMA) or (EMA) as a trading system was not suggested or implied. As an exercise, it would be interesting if we could enter & exit positions using a moving average. As a side note, the results below have money management & parameter setting to give the strategy (idea) a fighting chance. A Stale Stop, Trailing Stop & a TakeProfit Stop were all applied.

*The backtest below is for the last 2 years that includes the COVID period.*
(a) The backtest below on the left is trading a "200-Day Moving Average". Simply buy when the close is above the 200-Day Moving Average & Sell when the close is below the average.

(b) The backtest on the right is trading a "30-Week Moving Average". The strategy simply buys when the close is above the 30-Week Moving Average & Sell when the close is below it.




*What's the point?*
Nothing really, it was a way of testing out a trading idea. Recently it's been suggested that I evaluate another trading idea developed by Peter Aan. It's another moving average trading strategy that uses a "Weekly high/low moving average". Peter Aan's idea is simple to a degree that I'll post about next using the same period as above.

Skate.


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## Skate (14 January 2022)

*Trading Moving Averages*
I've recently made a post about institutional traders moving large amounts of money in & out of the markets without shifting the price using moving averages. In the post, I could have worded the formula they use a little better. The formula is the MA of the "close" of the last 5 WEEKS (multiplied ) by the MA of the "volume" of the last 21 WEEKS - then filtered by momentum.





__





						Dump it Here
					

Ann, Great analysis. Not only are traders watching the 200MA, but investors.   Using a "Moving Average" to trade I was reading the notes of an institutional trader remarking that average daily volume is the single biggest factor in scanning for signals. The next is daily volume. Their main...




					www.aussiestockforums.com
				



*
The backtest below is for the last 2 years that includes the COVID period (the same as above)*
The results below uses a "5-Week MA" of the "close" (multiplied ) by the "21-Week MA" of the "volume" then filtered by momentum. Also, this strategy has money management & parameter setting to give the strategy a fighting chance. A Stale Stop, Trailing Stop & TakeProfit Stop were all applied to the strategy. I must say "the system drawdown" is well beyond my limits.




*Next Up*
I want to explore Peter Aan trading idea using a 3-Week period using a "Weekly High/Low Moving Average". The results surprised me.

Skate.


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## Skate (14 January 2022)

*3-period "Weekly High/Low Moving Average Strategy" by Peter Aan*
A well-respected member passed on information as well as an article about a "3-Week Trading System" with a twist. Trend following seldom uses any variations of the popular "stock standard" moving average or (EMA) to give an indicator when the markets are buoyant let alone an idea for a stand-alone trading strategy.

*Simple Moving Average*
Moving averages are used to smooth prices & are widely used in various ways in technical analysis. To compute a simple moving average of five prices, for instance, add the five prices together & divide by five. That's the average over that period.

*Most moving averages of price are based on the closing price  *
But here is the twist. Peter Aan suggests that you compute moving averages of the weekly highs & lows, based on the most recently completed calendar week. This is a very simple system. When weekly prices cross or "break" through either of the moving average levels, it is a signal to buy or sell. The rules of the system are straightforward. All I want to say is "don't let the simplicity of this system fool you".

*Here's the simplicity *
Because of the way the moving averages are computed, the buy & sell signals for a given week are a distance from each other that is approximately equal to the average weekly volatility for the period considered. This strikes a nice balance between many moving average systems, which can sometimes be whipsawed by rather small price movements to trigger signals & therefore, usually require large dollar risks per trade.

*The backtest below is for the last 2 years that includes the COVID period (the same period as above)*
The results below uses a "3-Week MA" of the "High" & the "3-Week MA" of the "Low" forming a channel equal to the average weekly volatility for the 3-Week period. I have money management & parameter setting to give the strategy a fighting chance. A Stale Stop, Trailing Stop & TakeProfit Stop were all applied to the strategy. I must say "the system drawdown" is well beyond my limits as well.




*Summary*
Would I trade any of the "Moving Average" systems I've posted about recently? Certainly not, but there are others who have a high-risk tolerance would.

Skate.


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## Skate (14 January 2022)

*Trading Signals*
There has been some good banter on the "kiss-with-ann" thread about the advantages of charting "Moving Average". @Ann has been posting positions of interest & @tech/a mentioned a couple that are high potential trades in his opinion, naming (BRN) & (CXO). Also to be fair he also remarked that "a 200 M/A is just an average of numbers means bugger all".

*Positions (BRN) & (CXO)*
It's exciting when experienced traders suggest a stock selection. When a stock suggestion is made I use the "Ducati Blue Bar Strategy" to understand the reasoning behind the suggestion a little better. "The Ducati Blue Bar Chart" is easy to understand as the first "Blue Bar" is the signal bar, meaning we enter the position on the next day at the open. We sell the position on the 2nd red bar as the first "red" bar is the signal bar. (It's as simple as buying blue bars & selling red bars)

*BRN weekly Chart*
I'm not making a comment as the chart speaks for itself.






*CXO weekly Chart*
I'm not making a comment on this chart either as the chart speaks for itself.





Skate.


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## Skate (14 January 2022)

*Lagging Indicators*
I have to re-iterate that both the Simple Moving Average (SMA) & Exponential Moving Average (EMA) are lagging technical indicators. The Exponential Moving Average (EMA) uses calculations to smooth out the inherent lag time of the (SMA). In simple terms, both moving averages are a "graphic line" on a price chart, that's all.

*3-Week High/Low Trading Strategy*
First, you need to keep in mind that "moving averages" are not magical tools. But, by using two moving averages with the same period, follows the price strength with one simple twist. Defining the average of the lows & highs creates a zone, a band, or channel to use another phrase. Everything is simple with this strategy as we trade once we break above or below the 3-period band.

*(BRN) used as the example *
It's exciting when experienced traders suggest a stock selection & the 3-Week Moving Average Chart displays the buy position for (BRN) that @tech/a has suggested.




*Summary*
Using the "Moving Average price band" combines the power of using multiple moving averages of the same periods but using different forms of calculations. This technique allows you to find unique trading opportunities that no one else is able to spot.

Skate.


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## qldfrog (14 January 2022)

Skate said:


> *Lagging Indicators*
> I have to re-iterate that both the Simple Moving Average (SMA) & Exponential Moving Average (EMA) are lagging technical indicators. The Exponential Moving Average (EMA) uses calculations to smooth out the inherent lag time of the (SMA). In simple terms, both moving averages are a "graphic line" on a price chart, that's all.
> 
> *3-Week High/Low Trading Strategy*
> ...



But if you find unique trading opportunities no one else can spot, do you not go by definition against the trend?
Is not trend trading in essence trading with the masses?
Toying with you Mr Skate 😁


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## DrBourse (14 January 2022)

Hi Skate,
Is the WMA an opttion for use with that system?
Just wondering.


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## Skate (14 January 2022)

qldfrog said:


> But if you find unique trading opportunities no one else can spot, do you not go by definition against the trend?
> Is not trend trading in essence trading with the masses?
> Toying with you Mr Skate 😁




*Great comment*
@qldfrog that's a great point about trading with the masses but using a 3-week average of the lows & highs creates a zone, a band, a channel to enter & exit a position. The simplicity of channel trading is that the channel is equal to the average weekly volatility for the period. I just hope this one point is not missed by anyone. 



DrBourse said:


> Hi Skate,
> Is the WMA an opttion for use with that system?
> Just wondering.




*Great suggestion*
@DrBourse that's a great suggestion worthy of more research. For others, what @DrBourse is suggesting is that we use the weighted average to form our 3-Week Moving Average Channel. A 3-Week weighted average gives a weight of 3 to the most recent week, 2 to the previous week & down to 1 for the third week for a 3-week lookback period. Using the (WMA) would be simple & clean.

Peter Aan suggests that you compute using a simple moving average of the weekly highs & lows, based on the most recently completed calendar week. I'm sure that the Doctors suggestion would be just as feasible. I reckon you could even use an (EMA) & trade the strategy as a pullback system. 

*Here's the simplicity*
Because of the way the moving averages are computed, I'm positive you could use a variety of moving averages to create your own unique strategy that may give you an edge because no matter what version of moving averages you use you are trading in essence the average weekly volatility for the period. 

Skate.


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## DrBourse (14 January 2022)

Hi again Skate.
Thought I should explain why I prefer The WMA over either of SMA or EMA.
Your above explanation is Spot On.
My explanation (pages 50, 80 & 81), is a pictorial explantion of why I always use the WMA.






Cheers.
DrB


----------



## Skate (14 January 2022)

DrBourse said:


> Hi Skate,
> Is the WMA an opttion for use with that system?
> *Just wondering.*




*Wonder no longer*
@DrBourse made a suggestion of using the weighted moving average to form a 3-Week Moving Average Channel rather than a Simple Moving Average Channel. Every metric across the range was worse than expected using (WMA). I've been racking my brain to understand why. The only reason I can come up with is the channel is no longer equal to the average weekly volatility altering the entry & exit points.




*Summary*
The suggestion was sound, assuming the entry & exit points would be more responsive but not so as exit positions were held longer increasing the drawdown & the losers holding period.

Skate.


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## DrBourse (14 January 2022)

Skate said:


> *Wonder no longer*
> @DrBourse made a suggestion of using the weighted moving average to form a 3-Week Moving Average Channel rather than a Simple Moving Average Channel. Every metric across the range was worse than expected using (WMA). I've been racking my brain to understand why. The only reason I can come up with is the channel is no longer equal to the average weekly volatility altering the entry & exit points.
> 
> View attachment 135763
> ...



M8, can I ask what term WMA you used - those results just do not make sense IMO


----------



## Skate (14 January 2022)

DrBourse said:


> M8, can I ask what term WMA you used - those results just do not make sense IMO




I used the same 3-week period for both backtest. 



Skate said:


> *A Stale Stop*, Trailing Stop & TakeProfit Stop were all applied to the strategy. I must say "the system drawdown" is well beyond my limits as well.




*Let me explain*
(a) I re-coded your suggestion from scratch using the 3-Week (WMA) as the entry condition. For simplicity, I've used (WMA) as the Stale Exit. The strategy also includes a Trailing Stop & Take Profit Stop Exit to give the strategy every chance of success.

(b) My previous strategy was coded weeks before using the 3-week (SMA) as the buy condition & 3-Week SMA exit strategy as part of my Stale Stop exit wring the best performance out of it at the time. 

*Let me re-code both strategies so they are the same*
In a few minutes, I'll recode both strategies using the same parameters & conditions for an equal comparison. I'm guessing restricting my Stale Stop Strategy to the (SMA) only will alter the performance.

Skate.


----------



## DrBourse (14 January 2022)

So I guess what I need to know is - Are you using A "Black Box Type System" where you are unable to select your own WMA Settings, or can you use a setting of say 7 or 10 or whatever you want to use - or is it just a case of Hit the Software Prog's WMA Button and then hope for the best ?


----------



## Skate (14 January 2022)

DrBourse said:


> So I guess what I need to know is - *Are you using A "Black Box Type System" *where you are unable to select your own WMA Settings, or* can you use a setting of say 7 or 10 or whatever you want to use *- or is it just a case of Hit the Software Prog's WMA Button and then hope for the best ?




@DrBourse my strategy is coded from scratch. The (WMA) & (SMA) are Amibroker built-in functions. The Amibroker (WMA) function calculates the weighted average for the selected period. I can use any period for either function. Peter Aan original suggestion was that you compute moving averages of the 3-weekly highs & lows, based on the most recently completed calendar week. I strictly adhered to that period for the exercise. I'm not suggesting that this is a tradable strategy, far from it in its current form but rather throwing the idea out there for others to think about how other traders garnish an edge that at times is easy. 

Skate.


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## DrBourse (14 January 2022)

OK, so unless you can select your own "weighted average setting for the selected period", then it's a "BB System", Dangerous to say the least - I have always avoided BB Systems.

With all Software Trading Platforms, the crucial thing is that the user *"Must be able to Drive EVERYTHING"*, otherwise we have no idea how their formulas are constructed.
That is, they could be built so that the Software gives a result desired by those that constructed it in the first place.
In other words, they could have programed the WMA to always show results that are below the Black Box Systems favoured EMA & SMA.

Years ago I challenged a couple of BBSystem Providers, they all refused to explain their "in house formulas" - anyone with an enquiring mind would have to as 'WHY the reluctance to be truthful'.

Count me out of this discussion, Personally I would not place any creedence in any of their results.

Sorry M8


----------



## Skate (14 January 2022)

Here we go
Both strategies are now using the same parameters & conditions for the buy & sell that give a direct comparison. Comparing apple to apples certainly makes a difference. 



Skate said:


> *I've been racking my brain to understand why*. The only reason I can come up with is the channel is no longer equal to the average weekly volatility altering the entry & exit points.




*I've been racking my brain to understand why*
Now I know the reason, it was because my original strategy has my "Stale Stop Exit" included in the strategy. My original strategy incorporated my "Stale Stop Exit" whereas the strategy coded with @DrBourse suggestion didn't have it included as his idea was re-code from scratch. The 2-year backtest results are not that far apart.




*Summary*
Note to self, keep using the original "Stale Stop Exit" as it exits a position sooner, rather than later.

Skate.


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## DrBourse (14 January 2022)

But you still cannot Select your own "*weighted average setting eg: 7, 10, 20 , 30, 50 200 etc*", correct ?
But you can choose you own "Selected Period", correct ?
Strange to say the least M8.
Think I'll leave that BB System to the Sheep of this world.
So, I hope the Sheep use it the way it's designed to be used, it will make my job easier, because I reckon they are Barking up the Wrong SHEEP".


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## Skate (14 January 2022)

DrBourse said:


> OK, so unless you can select your own "weighted average for the selected period", then it's a "BB System". With all Software Trading Platforms, the crucial thing is that the user *"Must be able to Drive EVERYTHING"*, otherwise we have no idea how their formulas are constructed.






DrBourse said:


> But you still cannot Select your own "*weighted average setting eg: 7, 10, 20 , 30, 50 200 etc*"




@DrBourse if I may. So others don't get the wrong impression I'll supply the 8 lines of code (from the 1178 lines of code used in the strategy) to better explain how the 3-week High/Low Strategy has been coded. I have used the "Param Function" in my code so other lookback periods can be selected without recoding the entire strategy. Maybe the sticking point is that Amibroker has the (WMA) as a built-in function.

*For transparency*
The raw Amibroker code that I have used is supplied below. Also, the hyperlink & Amibroker reference is also supplied for a better understanding of how Amibroker (WMA) function is coded.

*#1. WMA Buy & Sell Condition*
Periods1 = Param("Periods1",3,1,750,2);
Periods2 = Param("Periods2",3,2,750,2);

WMA1 = WMA(H,Periods1);
WMA2 = WMA(L,Periods2);

BuyFilter2 = C > WMA1;
SellFilter2 = C < WMA2;

BuySetUp = BuyFilter2 AND WeeklyFilters AND NOT OnLastTwoBarsOfDelistedSecurity AND NorgateIndexConstituentTimeSeries( "$XAO.au" );
StaleStopExit = SellFilter2 OR OnSecondLastBarOfDelistedSecurity;

*OR

#2. SMA Buy & Sell Condition*
Periods1 = Param("Periods1",3,1,750,2);
Periods2 = Param("Periods2",3,2,750,2);

SMA1 = MA(H,Periods1);
MA2 = MA(L,Periods2);

BuyFilter2 = C > MA1;
SellFilter2 = C < MA2;

BuySetUp = BuyFilter2 AND WeeklyFilters AND NOT OnLastTwoBarsOfDelistedSecurity AND NorgateIndexConstituentTimeSeries( "$XAO.au" );
StaleStopExit = SellFilter2 OR OnSecondLastBarOfDelistedSecurity;

*For those who have Amibroker*




__





						AFL Function Reference - WMA
					





					www.amibroker.com
				





*WMA*
- weighted moving average​*Moving averages, summation*
(AmiBroker 40)​


*SYNTAX**wma( ARRAY, periods )**RETURNS*ARRAY*FUNCTION*Calculates weighted average. 5 day weighted average gives weight of 5 to the most recent quote, 4 to the previous quote, down to 1 for the 5-bar back quote. The function accepts time-variable _periods._*EXAMPLE*WMA( Close, 5 )

Skate.


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## DrBourse (14 January 2022)

YUP, BB System IMO.
Skate, your preferred "Selected Period "seems to be 3 weeks.
So can you enter, or program a WMA 15 into the system (15 = 15 trading days in the 3 week Selected Period).
Maybe a WMA 21 would be ok.


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## Skate (14 January 2022)

DrBourse said:


> YUP, BB System IMO.
> Skate, your preferred "Selected Period "seems to be 3 weeks.
> So can you enter, or program a WMA 15 into the system (15 = 15 trading days in the 3 week Selected Period).
> Maybe a WMA 21 would be ok.






Skate said:


> *"don't let the simplicity of this system fool you".*




@DrBourse the point of the exercise was to do a "series of posts" on an article I was supplied within a private message from a member I respect. After reading the article "it was something new to me" so I decided to share my findings. I assumed trading a "3-Week Moving Average Channel Strategy" wouldn't have legs as a trading system that's why I remarked "don't let the simplicity of this system fool you" as it did me.

*I'm not suggesting it's a strategy to trade but a different way of trading*
The results in its rarest form aren't too shabby & with a slight adjustment to the exit strategy, the strategy grew an extra leg. I also highlighted the drawdown of this strategy was beyond my tolerance level. Without inspiration from others, it's hard to post content that may hold some interest for others.

*Built-in Functions*
I've never really thought about the in-built functions of Amibroker as a "Black Box" system but rather an arrangement of functions that have been already expertly coded. Another thing that I would like to mention is the speed of the calculations in Amibroker brought about by the use of ARRAYS is a sheer touch of brilliance.

Skate.


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## DrBourse (14 January 2022)

OK M8


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## Skate (14 January 2022)

Skate.


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## Skate (14 January 2022)

Skate.


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## Skate (14 January 2022)

Skate.


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## Skate (14 January 2022)

*Correction for transparency*
The raw Amibroker code that I have used has an array error. The Amibroker Array (SMA1) was incorrectly used it should have been (MA1) that the "BuyFilter2" array references. 

*#1. WMA Buy & Sell Condition*
Periods1 = Param("Periods1",3,1,750,2);
Periods2 = Param("Periods2",3,2,750,2);

WMA1 = WMA(H,Periods1);
WMA2 = WMA(L,Periods2);

BuyFilter2 = C > WMA1;
SellFilter2 = C < WMA2;

BuySetUp = BuyFilter2 AND WeeklyFilters AND NOT OnLastTwoBarsOfDelistedSecurity AND NorgateIndexConstituentTimeSeries( "$XAO.au" );
StaleStopExit = SellFilter2 OR OnSecondLastBarOfDelistedSecurity;

*OR

#2. SMA Buy & Sell Condition*
Periods1 = Param("Periods1",3,1,750,2);
Periods2 = Param("Periods2",3,2,750,2);

MA1 = MA(H,Periods1); // Correction made - SMA1 used in the orignal posted code instead of MA1
MA2 = MA(L,Periods2);

BuyFilter2 = C > MA1;
SellFilter2 = C < MA2;

BuySetUp = BuyFilter2 AND WeeklyFilters AND NOT OnLastTwoBarsOfDelistedSecurity AND NorgateIndexConstituentTimeSeries( "$XAO.au" );
StaleStopExit = SellFilter2 OR OnSecondLastBarOfDelistedSecurity;

# I apologise for the mistake 

Skate.


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## qldfrog (14 January 2022)

DrBourse said:


> OK, so unless you can select your own "weighted average setting for the selected period", then it's a "BB System", Dangerous to say the least - I have always avoided BB Systems.
> 
> With all Software Trading Platforms, the crucial thing is that the user *"Must be able to Drive EVERYTHING"*, otherwise we have no idea how their formulas are constructed.
> That is, they could be built so that the Software gives a result desired by those that constructed it in the first place.
> ...



you got it completely wrong @DrBourse here   sorry , you can "Drive everything" 
Amibroker is a C like programming language with loops etc, and you are in full control if you wish so to redefine WMA EMA etc as per your fancy and add tweak on it there are a few preset fct but you can write your own as well
as raw as possible while giving you convenience.
But I think Mr Skate sorted his issue


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## DrBourse (14 January 2022)

OK qldfrog, never used Amibroker, so I was flying blind with most of my questions, just wanted to make sure it was totally driveable, and not a Black Box System.
NP.
Cheers


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## qldfrog (14 January 2022)

DrBourse said:


> OK qldfrog, never used Amibroker, so I was flying blind with most of my questions, just wanted to make sure it was totally driveable, and not a Black Box System.
> NP.
> Cheers



fully understood, no grief,  it is good to have some differing and sometimes confrontational (is that english?)  opinions
Have a nice week end,


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## Joe90 (14 January 2022)

Captain Obfuscation (aka the bull headed one) inferring Amibroker is a blackbox system? That's rich, must be why the Amibroker user manual is 1478 pages long, after all its such a simple black box.


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## qldfrog (14 January 2022)

Joe90 said:


> Captain Obfuscation (aka the bull headed one) inferring Amibroker is a blackbox system? That's rich, must be why the Amibroker user manual is 1478 pages long, after all its such a simple black box.



Misunderstanding i am sure
.this thread is for sharing , challenging status quo and ideas.all are welcome and no point being harsh here please🙏


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## Skate (15 January 2022)

Skate.


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## Skate (15 January 2022)

Skate.


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## Skate (17 January 2022)

*The 2 year backtest below is for comparison that includes the COVID period*
The results below use a "3-Week MA" of the "High" & the "3-Week MA" of the "Low" forming a channel equal to the average weekly volatility for the 3-Week period with slight alterations to the original code.

*The re-coding of the original strategy was slight but extremely time-consuming *
Both strategies incorporate a Stale Stop, Trailing Stop & TakeProfit Stop but the most recent version of the strategy is the one on the right. The improvements were worth the effort. The original strategy (the one on the left) I wouldn't consider trading but with the improvements, I would. The low channel exit as suggested by the strategy developer has been removed from the "Stale Stop Exit" using my default setting instead was where the biggest improvement came from. The "system drawdown" is now within my limits.

*The slight re-coding has changed the metrics*
As a mechanical system trader, I find it difficult to trade a system knowing that strategy improvements always come at a cost that I have highlighted in red.




*Trading a 3-Week Moving Average Channel*
Overall it was a worthwhile exercise & I thank the member for passing on the information.

*Summary*
Would I really trade the updated "3-Week Moving Average Strategy"? - Nah, not really. 

Skate.


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## Skate (17 January 2022)

*"Most People Have No Idea What's Coming" *
@ducati916 has been warning that 2022 will have its challenges but Peter Schiff's steps it up to the next level.

*The warning is simple*
_“This is a completely dysfunctional economy that is going to collapse when the bottom drops out of the dollar.  I think that crisis is close at hand with everything being in a bubble except gold and silver because gold & silver are real money"_.

*Peter Schiff is a seasoned Wall Street prognosticator *
Best known for his accurate predictions of the performance of the stock market, commodities, gold, & the dollar.

*Peter Schiff's last warning*
_"We really couldn’t survive the economic downturn. So, the Fed bailed us out with more money printing. You know, we haven’t been innovating our way out of the crisis. We’ve been printing our way out. But we’ve printed out way into an even bigger crisis because now we’re paying the piper. Because this inflation acts as a lag. In fact, I think we’re still dealing with the inflation that was created before the pandemic. Wait until we catch up to the even greater inflation that we created after.”_

*The short video below is extremely interesting*
Peter Schiff speaks about the U.S but the message is a world issue. Inflation, economy, U.S dollar, money printing & more. Peter remarked getting interest rates to "Zero" was easy, lifting them will be the challenge.



Skate.


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## MovingAverage (17 January 2022)

Skate said:


> View attachment 135950
> 
> *The 2 year backtest below is for comparison that includes the COVID period*
> The results below use a "3-Week MA" of the "High" & the "3-Week MA" of the "Low" forming a channel equal to the average weekly volatility for the 3-Week period with slight alterations to the original code.
> ...



That ratio of consecutive losers to consecutive winners of 2.5x would be mentally very tough to trade


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## Newt (17 January 2022)

Very true MA.  As a generality (not commenting on Skate's backtest specifically), many of us initially think below 40% win rate is palatable, but is actually pretty "miserable" lot of the time over the long run.  Doable, but lots more discipline and gumption required in the long run.  

Must confess I personally watch % winners closely in backtests, but will have to keep a better eye on the "consecutive win" or loss parameters during backtesting.


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## Trader X (17 January 2022)

For those who are aware of or follow Lyn Alden's research and commentary, her January newsletter is just spot on, great read.


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## MovingAverage (17 January 2022)

Newt said:


> Very true MA.  As a generality (not commenting on Skate's backtest specifically), many of us initially think below 40% win rate is palatable, but is actually pretty "miserable" lot of the time over the long run.  Doable, but lots more discipline and gumption required in the long run.
> 
> Must confess I personally watch % winners closely in backtests, but will have to keep a better eye on the "consecutive win" or loss parameters during backtesting.



People’s personal approach will often dictate what system metrics are important to them. For me personally my day-to-day approach to trading is not particularly sensitive to overall win/loss %. By that I mean the win/loss % doesn’t mess with my head when it comes to the challenges of getting up every day and placing my trades day in day out. However, what really does mess with my head is the consecutive number of winning or losing trades—I find it really tough to place a long sequence of losing trades no matter how well I know the system. So I tend to only live trade systems that have a  much greater number of consecutive winning trades than losing trades. Whether a system has 40%, 50% or 60% overall winning trades doesn’t really bother me too much.


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## ducati916 (18 January 2022)

Trader X said:


> For those who are aware of or follow Lyn Alden's research and commentary, her January newsletter is just spot on, great read.




I would certainly agree that her research is good.

A topic that she hasn't touched on however, the withdrawal of QE (Taper) on stonks.

QE is the purchase of $120B/month of bonds/MBS from commercial banks. The money the banks use to purchase Treasury debt and/or grant mortgages is created ex nihilo. This 'money' (fiat currency) sits on the liability side of the bank's balance sheet. The purchased asset, on the asset side of the balance sheet. When the asset is sold to the Fed. the bank's ledger at the Fed is credited with the sale price (at par) of the bond.

This asset can be drawn down, which it is, and a purchase of a new asset stonks, replaces the sold bond on the bank's balance sheet as an asset balancing the liability of the cash created originally.

That is $120B/month of equity (mortgage) support that goes to zero in Fed. 2022.

As Ms Alden indicates, the US economy has been financialised over a number of decades, ie. the stonk market is the economy.

If the stonk market declines by (pick a number) 20%, what will the Fed do?

(a) Nothing and continue to raise rates;
(b) Re-instigate QE, lower rates back to ZIRP and in real terms deeply NIRP?

Both answers result in chaos.

(a) Results in mass bankrupticies, and massive deflation a la 1930's style of corporations and eventually the government, which cannot pay its liabilities outside of currency creation. This inflationary pressure offsets to a degree the deflationary pressures.

(b) Results, eventually in the (hyper) inflationary destruction of DXY and by extension, all other fiat currencies.

I 'think' the Fed will choose (b). Either choice is horrible.

jog on
duc


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## Skate (18 January 2022)

MovingAverage said:


> People’s personal approach will often dictate what system metrics are important to them





Skate said:


> The re-coding of the original Moving Average Strategy was slight but extremely time-consuming




*Kaufman's Adaptive Moving Average (KAMA)*
Before finishing off the series of posts about trading Moving Averages it would be remiss of me not to include another unique type of moving average being the "Kaufman's Adaptive Moving Average" (KAMA) that's been suggested by the same member to explore. I was supplied the Amibroker code but decide to bring my old "KAMA Strategy" & give it another burl using my coding instead.

*Lagging vs Leading Indicators & How To Use Them *
There is a short video to explain the differences between the SMA EMA KAMA & MAVs that I will post shortly on how to put these indicators to best use in your trading systems. But before I do I would like to make a few remarks about Kaufman's Adaptive Moving Average (KAMA) in particular. Understanding the difference between lagging & leading Indicators means you can develop trading strategies that work more reliably in today's uncertain markets.  

Skate.


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## Skate (18 January 2022)

*I've recently posted about three "Moving Averages" being the SMA, EMA & WMA*
There is a fourth to add to the list of moving averages being Kaufman’s Adaptive Moving Average "KAMA" so you can compare the lagging/leading nature & consider if they can be adapted in your trading system to give you that elusive trading edge. The (KAMA) indicator is handy because of its unique character of indicating the market trend & volatility. 

*If you don't know it, we all trade trends*
As traders, we all “make a decision” on the basis that future trends will continue to develop in the same direction as the past trends. Like all moving averages, the KAMA shines head & shoulders over all the others (IMHO) & it can even be used for support & resistance levels.
*
There are so many questions*
How do we get into a new trend?
How do we know if a trend is trending nicely?
How does one quantify a trend?
How does one work out the quality of a trend?

Skate.


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## Skate (18 January 2022)

*Alternative uses for the KAMA indicator*
The KAMA indicator can be used to identify existing trends, & impending trend changes. Knowing when a trend is changing you can take advantage of the reversal points to enter or exit a position.

*How do we use the KAMA indicator?*
Basically, the uses are unlimited or limited only by your imagination & research. A simple way would be to use the KAMA line (that is simple to plot on a chart). When the KAMA indicator "line" is moving lower, it indicates the existence of a downtrend & when it’s moving higher, it shows an uptrend. Compared to the Simple Moving Average, the KAMA indicator is less likely to generate false signals that may cause a trader to incur losses.

Skate.


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## Skate (18 January 2022)

*Here is the secret - the "KAMA" is an adaptable indicator*
The KAMA indicator can be used in a few different ways by coding two sets of KAMA parameters & using the crossing of the lines to trigger signals. For example, when the faster KAMA line crosses above the slower KAMA line, this indicates a change from a downtrend to an uptrend. The KAMA signals are faster than both (SMA or EMA). 

*The KAMA Parametres that I use*
I use a standard 10-period look back with a fast period of (2) & a slow period of (30). These parameters are not set in stone as they are dependant on other parameters & filters, but it's a starting point for those who want to do additional research & backtesting.

*The KAMA indicator can easily be applied to a chart *
Customizing the indicator by specifying its parameters for its calculation & these changes allows you to analyse the behaviour to predict future price movement. One of the uses of Kaufman’s Adaptive Moving Average is to identify the general trend of current market price action. 

Skate.


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## Skate (18 January 2022)

*A must watch Video*
There is a short YouTube video where Martyn Tinsley explains the differences between a range of moving averages (SMA, EMA, KAMA) - it's well worth watching even if you are a seasoned trader. The KAMA indicator is discussed at the 10:15 minute mark for those who are time-poor.



Skate.


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## MovingAverage (18 January 2022)

Skate said:


> *A must watch Video*
> There is a short YouTube video where Martyn Tinsley explains the differences between a range of moving averages (SMA, EMA, KAMA) - it's well worth watching even if you are a seasoned trader. The KAMA indicator is discussed at the 10:15 minute mark for those who are time-poor.
> 
> 
> ...




I've tried a lot of different MAs over the years but admittedly in the context of an index filter. Overall I keep coming back to the old fashioned simple MA as it seems to be the most robust across a range of different markets.


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## Skate (18 January 2022)

MovingAverage said:


> I've tried a lot of different MAs over the years but admittedly in the context of an index filter. Overall I keep coming back to the old fashioned simple MA as it seems to be the most robust across a range of different markets.




@MovingAverage that's fair enough, each to their own. Up next, I was going to make a series of posts about something that's really exciting but as I was given the information in private it would be best left for others to research. The information was supplied by the same member as before who suggested I research how to use "Perry Kaufman's Efficiency Ratio" & how to apply it to any strategy.  

*"Perry Kaufman's Efficiency Ratio"*
In my humble opinion, the Efficiency Ratio "ER" may just be the perfect trend indicator that can be used in any timeframe. I also thank him for the Amibroker code & reference material that has been kindly supplied.

Skate.


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## MovingAverage (18 January 2022)

Skate said:


> @MovingAverage that's fair enough, each to their own.



All very much depends on the application too. An indicator used for a particular purpose may be good but applied to a different purpose may suck.


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## Skate (18 January 2022)

*KAMA Strategy 2 year backtest*
As I have posted previous results of a "3-Week MA Strategy". It's only fair that I code a "3-Week KAMA Strategy" using Kaufman's Adaptive Moving Average (KAMA) without any fancy footwork in the background. I'm absolutely positive changing the standard parameters would have a positive bearing on the results.




*Summary*
The backtest above was to indicate the results using Kaufman's Adaptive Moving Average (KAMA) in its raw form instead of a Simple Moving Average (SMA). I do have a KAMA Strategy that I haven't used for quite some time, I dig it out & do a comparison. My KAMA strategy would have been refined before placing it away. From memory, I called it "White Kama"

Skate.


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## Skate (18 January 2022)

*Crikey Batman*
I now know why I didn't have the guts to trade this strategy. Back when this strategy was being developed I never had a "Take Profit Stop" by default. As I use it in every strategy I trade these days I'll post a backtest with one active for comparison.

*White KAMA Strategy with no "Take Profit Stop"*
2 year Backtest





*White KAMA Strategy with a "Take Profit Stop" by default*
2 year Backtest

*



Summary*
With added knowledge since this strategy was developed, I may be able to get the drawdown to a tolerable level. I'll put it on my To-Do list.

Skate.


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## MovingAverage (18 January 2022)

@MovingAverage Up next, I was going to make a series of posts about something that's really exciting but as I was given the information in private it would be best left for others to research.

What…then why say anything at all?


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## Skate (18 January 2022)

MovingAverage said:


> @MovingAverage Up next, I was going to make a series of posts about something that's really exciting but as I was given the information in private it would be best left for others to research.
> 
> What…then why say anything at all?




@MovingAverage I was going to condense a complex subject on "Kaufman's Efficiency Ratio" so others could understand. The most recent series of posts about trading a variety of different types of moving averages didn't really appeal. I even supplied the code for further research. There would be some who didn't completely understand how the different moving averages could be used in multiple ways.

*SMA, EMA, WMA & KAMA *
This group of moving averages all have their advantages. As I've done extensive research on Kaufman's Adaptive Moving Average (KAMA) & by doing a few posts on the subject would finish off the series about trading moving averages. I'm sure some wouldn't share my enthusiasm for trading these styles so I supplied a video & time stamp for those who wanted to understand the "KAMA" a little better.

*"Perry Kaufman's Efficiency Ratio"*
In my humble opinion, the Efficiency Ratio "ER" may just be the perfect trend indicator that can be used in any timeframe. I was intending to do a series of posts on Kaufman's Efficiency Ratio & explain how this "trend indicator" could be used & coded adding "spice" to any trend following strategy. It takes a great deal of time to do a series of posts in such a way as to spark the interest of others. I'd bet pounds to peanuts not many would have taken the time to comprehend the code I supplied for the SMA & WMA Buy & Sell Condition, let alone the parameters I use in the KAMA Strategy.

*Lets us not bore others to death*
So instead of doing a series of posts & backtests on the Kaufman's Efficiency Ratio, I thought it would be better for those who are interested to do their own research on the "ER". I constantly post information that inspires my research but I fully realise it's repetitive & also a chore to read at times.

Skate.


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## qldfrog (19 January 2022)

Skate said:


> @MovingAverage I was going to condense a complex subject on "Kaufman's Efficiency Ratio" so others could understand. The most recent series of posts about trading a variety of different types of moving averages didn't really appeal. I even supplied the code for further research. There would be some who didn't completely understand how the different moving averages could be used in multiple ways.
> 
> *SMA, EMA, WMA & KAMA *
> This group of moving averages all have their advantages. As I've done extensive research on Kaufman's Adaptive Moving Average (KAMA) & by doing a few posts on the subject would finish off the series about trading moving averages. I'm sure some wouldn't share my enthusiasm for trading these styles so I supplied a video & time stamp for those who wanted to understand the "KAMA" a little better.
> ...



ER helps  a lot, even without covid  , added it to a mixbag system on weekly XAO with full  history and behaving quite well


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## MovingAverage (19 January 2022)

Skate said:


> *SMA, EMA, WMA & KAMA *
> This group of moving averages all have their advantages. As I've done extensive research on Kaufman's Adaptive Moving Average (KAMA) & by doing a few posts on the subject would finish off the series about trading moving averages. I'm sure some wouldn't share my enthusiasm for trading these styles so I supplied a video & time stamp for those who wanted to understand the "KAMA" a little better.




Just a personal opinion and not a reflection of your post. MA's certainly have a place, but using them to directly generate buy/sell signals using the vanilla crossover approach is certainly tough. By their very nature, they get you into trades late, get you out of trades late and you get whipsawed everywhere with the slightest hint of volatility. Appreciate there are many different types of MAs but generally all of them suffer from these problems--some MAs might prove marginally better than other MAs but they all have the same problem.



Skate said:


> *"Perry Kaufman's Efficiency Ratio"*
> In my humble opinion, the Efficiency Ratio "ER" may just be the perfect trend indicator that can be used in any timeframe. I was intending to do a series of posts on Kaufman's Efficiency Ratio & explain how this "trend indicator" could be used & coded adding "spice" to any trend following strategy. It takes a great deal of time to do a series of posts in such a way as to spark the interest of others. I'd bet pounds to peanuts not many would have taken the time to comprehend the code I supplied for the SMA & WMA Buy & Sell Condition, let alone the parameters I use in the KAMA Strategy.




For what it's worth, if you believe the Efficiency Ratio is a good trend indicator I'd love to see how it stacks up against the SMA when used as an index filter. Folks (including myself) like using the SMA as an index filter--it's simple and reasonably effective for that purpose but I do believe there is room for improvement in this area.  



Skate said:


> *Lets us not bore others to death*
> So instead of doing a series of posts & backtests on the Kaufman's Efficiency Ratio, I thought it would be better for those who are interested to do their own research on the "ER". I constantly post information that inspires my research but I fully realise it's repetitive & also a chore to read at times.
> 
> Skate.




You can please some of the people some of the time but not all the people all the time. You just have to post and if some find it repetitive and a chore to read then folks can just scroll on by


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## othmana86 (19 January 2022)

Skate said:


> @MovingAverage I was going to condense a complex subject on "Kaufman's Efficiency Ratio" so others could understand. The most recent series of posts about trading a variety of different types of moving averages didn't really appeal. I even supplied the code for further research. There would be some who didn't completely understand how the different moving averages could be used in multiple ways.
> 
> *SMA, EMA, WMA & KAMA *
> This group of moving averages all have their advantages. As I've done extensive research on Kaufman's Adaptive Moving Average (KAMA) & by doing a few posts on the subject would finish off the series about trading moving averages. I'm sure some wouldn't share my enthusiasm for trading these styles so I supplied a video & time stamp for those who wanted to understand the "KAMA" a little better.
> ...



Not boring at all! Keep the posts coming


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## MovingAverage (19 January 2022)

As a general rule I don't bother with charts, but I have been watching XAO over the past few months because one of my systems is breakout based. If you're a system breakout trader you might be interested. What I've done below is overlaid a standard regression channel (shown in the while dotted lines) on the XAO weekly chart. The upper and lower lines are placed at 2 standard deviations from the middle regression line. Poor old XAO has just been bouncing off the upper and lower 2SD lines since Jun/July last year. Given where XAO currently sits within that channel I don't think us poor breakout traders will be seeing any joy soon. XAO hasn't seen this type of protected sideways movement before, but think we'll need to see a full bar out side the upper 2SD level (7881) before we can start getting excited about our breakout systems getting into gear.


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## Skate (19 January 2022)

othmana86 said:


> Not boring at all! Keep the posts coming




@othmana86 I can guarantee you lengthy posts are a pain to read but sometimes the subject matter won't allow me to post in bite-size. I'll only make one post so others can understand why I believe the Efficiency Ratio "ER" may just be the perfect trend indicator that can be used in any timeframe. 

*Kaufman’s Efficiency Ratio (ER)*
Efficiency Ratio is calculated by dividing the price change over a period by the absolute sum of the price movements that occurred to achieve that change. The resulting ratio ranges between 0 and 1 with higher values representing a more efficient or trending market.

*The mathematical genius of Kaufman*
When prices move in wide swings within the lookback period, the sum of the denominator becomes very large compared to the numerator, & ER approaches zero. A trend is considered “persistent” only when RE is above a certain value, of (0.3 or 0.4) while choppy markets have ERs closer to Zero (0)

*These are the parameters I've decided on*




*Summary*
The Kaufman Efficiency Ratio provides a simple method to quantify market noise. In other words, it gauges how smoothly prices are moving from one level to another. This indicator is a great way to determine when your systematic trading system might be losing its edge. When the noise in prices becomes too high, you will start seeing weaker trends & vice versa. Using this indicator helps determine when a trend is strong. It pays to remember, the “trend is your friend”.

Skate.


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## Skate (20 January 2022)

Skate said:


> *SMA, EMA, WMA & KAMA *
> This group of moving averages all have their advantages.




*The "KAMA" is an adaptable indicator*
Before I move on from "moving averages" I should mention that Amibroker has its own adaptive moving average built-in (AMA) function. (AMA) calculates the adaptive moving average similar to (EMA) but the smoothing factor could be time-variant (array). 

*More information can be found here:*
AFL Function Reference - AMA (amibroker.com)

*AMA2 – is also an adaptive moving average with a twist*
The (AMA2) function calculates adaptive moving average similar to (AMA) but the (AMA2) has a twist with separate control of "feedbackfactor".

*More information can be found here:*
AFL Function Reference - AMA2 (amibroker.com)

Skate.


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## Skate (20 January 2022)

*Moving averages are usually thought of as a trend-following tool*
That traditional thinking fails to take advantage of the moving average’s ability to pinpoint extremes in price that you can customise making it one of the best fall-back exit plans around.



MovingAverage said:


> MA's certainly have a place, but using them to directly generate buy/sell signals using the vanilla crossover approach is certainly tough.




*What is the best way to trade moving averages?*
We all have different personalities, risk tolerances, beliefs, & biases that dictate the approach we take when trading moving averages. Finding a method that you can stick with & execute the signals without hesitation with confidence is the key, assuming your strategy has a real edge.

Skate.


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## Skate (20 January 2022)

*Plan how to get into & out of the market*
Being smart is not enough. Striving for excellence, not perfection is your primary focus. My focus has always been on market timing & risk management having a solid plan on how to get in & out of positions.

*As a trader, you have "one job"*
That one job is to survive to be around for the long term.

*How? *
By understanding how "you" will react under a variety of trading conditions & how your trading strategy will perform when the market is trending, choppy, erratic, or volatile. Knowing this increases your chances of survival.

*Why mention this? *
So you understand the importance of developing a strategy that will meet your expectations.

*As humans*
If you want to know why we are unhappy at times, it's because of one reason - "Our expectations haven't been met"

*My definition of happiness *
"Desiring what you have" not “appreciating what you have” - there is a major difference.

Skate.


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## DrBourse (20 January 2022)

Hi Skate,

Thought I may as well throw my contrarian views on Moving Averages into the discussion.
IMO there is only one type of MA to use, and that is, the Weighted Moving Average.
IMO the best place to use WMA's is on your favourite Indicator (see pages 38, 41 & 43) , Don't like using MA's on Charts, as you know I prefer the Linear Regression on my Charts (see pages 139 to 142).




For those punters that are interested in my approach, those page numbers are within the forum "DrBourse TA Help for Beginners".
Or, for anyone that would like a free .pdf copy of all the pages that I mention, click my Avitar, then select "Start Conversation".


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## Skate (20 January 2022)

DrBourse said:


> IMO there is only one type of MA to use, and that is, the Weighted Moving Average






MovingAverage said:


> I've tried a lot of different MAs over the years but admittedly in the context of an index filter. Overall I keep coming back to the old fashioned simple MA as it seems to be the most robust across a range of different markets.




*We are all creatures of habit*
We all have our favourite indicators & usually stay within the comfort of those select few. Making a few posts on the SMA, EMA, WMA, KAMA, AMA, AMA2 & Kaufman's Efficiency Ratio was so others could understand the major differences. Each has their own place in trading & that shouldn't be discounted. 

*Avoiding false breakouts is a common goal among trend traders *
The Kaufman Efficiency Ratio provides a simple method of quantifying a market’s noise, helping traders focus on the smoothest trends. I was suggesting you could add Kaufman’s efficiency ratio to a simple trend-following strategy to determine whether its performance improves, that was it in a nutshell. I should have also mentioned that the lookback period should be equal to the longest run of upward/downward price changes. Using a longer lookback period will ‘squeeze’ the ER values together, possibly making it less useful in filtering entry signals.

*Summary*
Using WMA is good, using an SMA is also good but using KAMA & Kaufman Efficiency Ratio in your strategy is even better. Why? For the reasons, I have explained in the last series of posts. Basically what I'm saying is this - "whatever indicator you are happy with is the right indicator for you".

Skate.


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## Skate (21 January 2022)

Skate.


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## Skate (21 January 2022)

Skate.


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## Skate (21 January 2022)

Skate.


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## MovingAverage (21 January 2022)

Interesting week. We are now at the lower 2SD level. We've been here several times before (July, Oct and Dec) and bounced back. Anyone care to predict next week's movement relative to the lower 2SD?


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## Skate (21 January 2022)

MovingAverage said:


> Anyone care to predict next week's movement relative to the lower 2SD?




Sorry, I don't even know what I having for tea.

Skate.


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## qldfrog (21 January 2022)

Skate said:


> View attachment 136258
> 
> 
> 
> ...



I would just say: the higher you fly, the harder the fall..a week to forget..but no-one would be surprised


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## MovingAverage (21 January 2022)

qldfrog said:


> I would just say: the higher you fly, the harder the fall..a week to forget..but no-one would be surprised




So I should be loading up on shorts?


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## MovingAverage (21 January 2022)

Skate said:


> Sorry, I don't even know what I having for tea.
> 
> Skate.



I'm curious @Skate...have you thought about what's on the menu tonight?


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## Skate (21 January 2022)

MovingAverage said:


> I'm curious @Skate...have you thought about what's on the menu tonight?




@MovingAverage my wife hasn't decided. If she doesn't know, nobody knows.

Skate.


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## MovingAverage (21 January 2022)

Skate said:


> @MovingAverage my wife hasn't decided. If she doesn't know, nobody knows.
> 
> Skate.



What does the good Mrs Skate think about where XAO will end up next week.


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## Skate (21 January 2022)

Skate said:


> @MovingAverage my wife hasn't decided. If she doesn't know, nobody knows.
> 
> Skate.




I just asked my wife & she said "after today results" it will be most likely a "baked meal", at the moment she is looking in the pantry for a can of "Baked Beans"

Skate.


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## Skate (21 January 2022)

MovingAverage said:


> What does the good Mrs Skate think about where XAO will end up next week.




@MovingAverage she said let's take this one step at a time & "sort out tea first".

Skate


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## qldfrog (21 January 2022)

MovingAverage said:


> So I should be loading up on shorts?



not sure, I expect a BTD, I have sold a couple of PUT on ASX200 between 38% and 50% gain last 3 days, i need to replenish these


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## MovingAverage (21 January 2022)

Skate said:


> I just asked my wife & she said "after today results" it will be most likely a baked meal, at the moment she is looking in the pantry for a can of "Baked Beans"
> 
> Skate.



Brutal session today, that's for sure. Was doing ok in Jan until this week. Given it all back and some


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## qldfrog (21 January 2022)

Shorts wise, i tend to stick to chinos....


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## Newt (21 January 2022)

Big downers on a Fri never much fun waiting to see what the US market serves up for our Monday.....


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## Skate (22 January 2022)

Skate.


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## Skate (22 January 2022)

Skate.


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## MovingAverage (22 January 2022)

Newt said:


> Big downers on a Fri never much fun waiting to see what the US market serves up for our Monday.....



Now we know what the US has for us on Monday 😢


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## Cam019 (22 January 2022)

MovingAverage said:


> Now we know what the US has for us on Monday 😢



Good lord. Split Enz are back!


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## MovingAverage (22 January 2022)

Newt said:


> Big downers on a Fri never much fun waiting to see what the US market serves up for our Monday.....



I just wish the US Fed would get on with it and rip that bloody Band-Aid off—just hurry up and put up interest rates so we can all get on with life. All this “will they won’t they” is just creating uncertainty.


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## othmana86 (23 January 2022)

MovingAverage said:


> I just wish the US Fed would get on with it and rip that bloody Band-Aid off—just hurry up and put up interest rates so we can all get on with life. All this “will they won’t they” is just creating uncertainty.



Agree


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## MovingAverage (24 January 2022)

If the SPI is anything to go by  (down 0.7%) we've experienced far worse open declines...just another day.


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## othmana86 (25 January 2022)

A bit quiet in here. Hopefully everyone’s systems has reverted them to cash during this decline.


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## Skate (25 January 2022)

*Tomorrow will be a good day*
My motto is, any day you don't lose is a "good day". I'm expecting a "good day" tomorrow as I only trade the ASX. 

*Thinking is underrated*
Trading psychology is something most people don’t think about but at times like these, it's unavoidable. The possibility of losing money can easily corrupt your thinking & force you to make the wrong decisions at exactly the wrong time. Your biases can lead you down the wrong path if they are not aligned with reality.

Skate.


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## MovingAverage (25 January 2022)

othmana86 said:


> A bit quiet in here. Hopefully everyone’s systems has reverted them to cash during this decline.



Nope. Swing system getting busy and 75% invested with a bunch of buys for Thursday, daily EOD closing out a bunch of positions on Thu and will remain about 20% invested and my weekly still 50% invest but that may well change come Friday.


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## qldfrog (25 January 2022)

othmana86 said:


> A bit quiet in here. Hopefully everyone’s systems has reverted them to cash during this decline.



some but not all, so a 5 figure loss today on my systems currently 60% cash and one bear position.all daily are good but weekly obviously feeling the hit/heat


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## MovingAverage (25 January 2022)

Skate said:


> *Tomorrow will be a good day*
> My motto is, any day you don't lose is a "good day". I'm expecting a "good day" tomorrow as I only trade the ASX.



Tomorrow will certainly be a welcome breather, but still 2 days of upcoming action in the US to deal with on Thursday


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## Skate (25 January 2022)

*The Edge*
@MovingAverage & many more has the most basic thing you need to be a successful trader is an edge, an advantage in your trading that produces a positive net profit over the long-term. This edge is the culmination of all your research, planning, execution, & state of mind while managing your portfolio. When you want to make money over the long run, a good way to analyse a strategy is to look at the history of its returns. The time period that you do this is a contentious issue in this thread. Survivorship is the name of this game.

Skate.


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## Skate (25 January 2022)

*Trading is a roller coaster of emotions*
In my opinion, to be successful as a trader you need to be able to disassociate yourself from the money side of trading, & accepted that losing your money is a normal part of trading. Without the correct mindset, your decision-making process will be affected.

*We all feel stress when we lose*
It’s vital to learn how to accept losing money. The last two weeks have not been kind to trend traders & how you'll react in the short term when placed under stressful conditions is something we all need to learn. Controlling your emotions, training your mind to stay calm under pressure, controlling how & what you think is extremely important when the losses keep piling higher. I'm just saying, how you handle stress will decide whether you’ll be a success or a failure at trading.

Skate.


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## Skate (25 January 2022)

othmana86 said:


> A bit quiet in here. Hopefully everyone’s systems has reverted them to cash during this decline.




@othmana86 I hope the last few posts liven the thread as the last two days haven't been pretty for me personally. As @MovingAverage said: "Tomorrow will certainly be a welcome breather" it might just be the circuit breaker I need. I think it was @peter2 who said once: "you can tell when things aren't going well when everyone goes quiet"

Skate.


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## MovingAverage (25 January 2022)

Skate said:


> *The Edge*
> @MovingAverage & many more has the most basic thing you need to be a successful trader is an edge, an advantage in your trading that produces a positive net profit over the long-term. This edge is the culmination of all your research, planning, execution, & state of mind while managing your portfolio. When you want to make money over the long run, a good way to analyse a strategy is to look at the history of its returns. The time period that you do this is a contentious issue in this thread. Survivorship is the name of this game.
> 
> Skate.



What you're looking at below is the unit value of my weekly system. You can clearly see this week's drawdown, but as can be easily seen the system has had worse post covid drawdowns (look at late Jan / early Feb 2021) but while the portfolio's value has experienced considerable volatility since Nov of 2020 it has continued to move upwards.


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## Skate (25 January 2022)

MovingAverage said:


> What you're looking at below is the unit value of my weekly system. You can clearly see this week's drawdown, but as can be easily seen the system has had worse post covid drawdowns (look at late Jan / early Feb 2021) but while the portfolio's value has experienced considerable volatility since Nov of 2020 it has continued to move upwards.
> 
> View attachment 136522




*Conviction*
This is what I'm talking about "having the correct mindset" to trade with conviction. Well done.




Skate.


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## qldfrog (25 January 2022)

MovingAverage said:


> What you're looking at below is the unit value of my weekly system. You can clearly see this week's drawdown, but as can be easily seen the system has had worse post covid drawdowns (look at late Jan / early Feb 2021) but while the portfolio's value has experienced considerable volatility since Nov of 2020 it has continued to move upwards.
> 
> View attachment 136522



And this FY was great for MA; but in a week like this week, unless trading shorts, you can at best limit losses/be 100% in cash.
Part of life;
Obviously, any weekly system will leave you with frustration as you see the slaughter unwinds...but you chose weekly for a reason; my daily systems are all good and all cash..but they can not even hope to recover ...whereas who knows? the weeklysystems  could jump on Thursday or Friday and recover some or all these losses;
note : if you have intraweek SL etc, that is a different beast......


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## MovingAverage (25 January 2022)

MovingAverage said:


> What you're looking at below is the unit value of my weekly system. You can clearly see this week's drawdown, but as can be easily seen the system has had worse post covid drawdowns (look at late Jan / early Feb 2021) but while the portfolio's value has experienced considerable volatility since Nov of 2020 it has continued to move upwards.
> 
> View attachment 136522



I should add that this week's sell off has seen my system go into a drawdown of about 10%--well with the system's simulated max drawdown of around 20%.


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## MovingAverage (25 January 2022)

Skate said:


> *Conviction*
> This is what I'm talking about "having the correct mindset" to trade with conviction. Well done.
> 
> View attachment 136527
> ...




"Conviction" is absolutely what it is all about. I hear you on the missed opportunity but my system was 100% cash at that stage because the index filter had the system turned off.


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## Skate (25 January 2022)

MovingAverage said:


> "Conviction" is absolutely what it is all about. I hear you on the missed opportunity but my system was 100% cash at that stage because the index system had the system turned off.




@MovingAverage, yes, I knew that your index filter (buy filter) was off. At the time & (not in hindsight), it was better to be "safe, than sorry". If the market kept the trajectory it was on you would have looked like a genius. No one expected the strong rebound. The quickness of the rebound caught most & it was unprecedented at the time. I should also say it caught commentators as well "forecasting" something different than what happened.

Skate.


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## Skate (25 January 2022)

*The ambitions of China  *
China's national rejuvenation has become a historical inevitability. The relentless rise of China, & its state governance model, within the globalized system, presents an immense structural challenge to the “liberal international order” that has prevailed for nearly a century, as led by the “United States”. This shift & COVID has affected my trading results over the last couple of years & I assume it has been for many others.

*The slow decline of the West*
The United States & China will have the greatest influence on global dynamics, supporting competing visions of the international system & governance that reflect their core interests & ideologies.

*The Party’s stated role is to “educate & guide” entrepreneurs *
Xi Jinping recently said, “Today’s world is changing, it is a world in which new opportunities & new challenges keep emerging, a world in which the international system & international order are going through deep adjustment & a world in which the relative international forces are in profound shift with the slow decline of the West.”

*I was shocked to watch this video today*



Skate.


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## MovingAverage (25 January 2022)

Skate said:


> @MovingAverage, yes, I knew that your index filter (buy filter) was off.
> 
> Skate.



This is what raised my interest in your recent Efficiency Ratio posts. I just use the old faithful "close above or below the MA of the index" to turn the system on or off. While I haven't spent much time researching more efficient techniques I'm sure a more efficient index filter would yield overall performance improvements


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## MovingAverage (25 January 2022)

Skate said:


> View attachment 136528
> 
> 
> *The ambitions of China  *
> ...




Let me guess…Fox News doesn’t like democrats 😂


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## MovingAverage (25 January 2022)

It’s nice to get away from the computer


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## divs4ever (25 January 2022)

MovingAverage said:


> Let me guess…Fox News doesn’t like democrats 😂



 took a free-kick  at those that promise ( and rarely deliver )  on a long term problem ( the Democrats )  but in reality FOX and NWS only care  about clicks ( eyes watching ) ,  this will all be forgotten  when a new headline appears ( by everybody )


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## Skate (25 January 2022)

MovingAverage said:


> Let me guess…Fox News doesn’t like democrats 😂




*The graphic of the homeless in the YouTube video was disturbing*
The whole world is going through a profound shift with most western societies in slow decline was the point of the post. China portrays an alternative. 

Skate.


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## MovingAverage (25 January 2022)

Skate said:


> *The graphic of the homeless in the YouTube video was disturbing*
> The whole world is going through a profound shift with most western societies in slow decline was the point of the post. China portrays an alternative.
> 
> Skate.



The divide between the haves and have nots is getting depressingly wider


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## Skate (25 January 2022)

Skate said:


> Xi Jinping recently said, “Today’s world is changing, it is a world in which *new opportunities* & adjustment a  profound shift with the *slow decline of the West*.”




*China has poverty*
The USA has poverty & social problems. The footage of the homeless was an eye-opener, verging on being disturbing. The Youtube video was not meant to be political but to highlight how western democracies are in deep decline.



MovingAverage said:


> The divide between the haves and have nots is getting depressingly wider




Civil unrest, disobedience & lack of respect is on the rise. Also, @MovingAverage nailed it as the divide between the "haves & have nots" is getting wider. Love or hate China it's something they are addressing.

Skate.


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## MovingAverage (25 January 2022)

Skate said:


> The Youtube video was not meant to be political but to highlight how western democracies are in deep decline.




Not wanting to get overly political (one of the things I like about this thread is that for the most part politics doesn't take over) but I remember many many decades ago Jeff Kennett was commenting on the rot that was setting into western society and he lamented that the rise of US style individualism (individual rights prevailing over what is better for society at large) was an emerging cancer. I still think about Kennett's comment today and believe that it underpins a lot of the decline we are seeing in certain western countries.


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## qldfrog (25 January 2022)

MovingAverage said:


> The divide between the haves and have nots is getting depressingly wider



but this is different now from 20 or 40y ago, before it was between the 20% and 80%, now it is between the 0.001% and the rest; we are de facto in a feudal society with the left clamming taxes and being happy of seizing assets from the disappearing middle and former old class and replacing them by a multinational elite, stateless managing the rest, with  their own cops (gov. peons)
That is the Reset..ironically a twisted rotten socialism merging with cronyism .
Where did this come from, in my opinion from the seed dropped by the former USSR who contaminated the teachers and classical left in the 1970's then brainwashed generations after generations until we reach this tribal racist and sexist world of equality of outcome madness, sometimes average among generation, as your ancestors were better off, we should be better off to be "fair" etc;
The west is dead and after 3y in China, we have not a chance.i just hope Russia will survive as this leaves some chance to get back the democratic dream
not the std view I know but the std right and left idealogies do not apply anymore


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## divs4ever (25 January 2022)

wait until the faithful peons realize the replacement robots/drones/AI is rushing to make them obsolete


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## qldfrog (25 January 2022)

divs4ever said:


> wait until the faithful peons realize the replacement robots/drones/AI is rushing to make them obsolete



I pity these leftist  feminist zlgbt etc supporters of the Reset:
historically, they are the first to be garotted once the takeover of society  is a done deal;
 look at trotskyists after the Soviet revolution, or Robespierre during the french revolution, same during Pol Pot or Mao power runs...


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## divs4ever (26 January 2022)

ah-ha  , i read a fair bit of ( alternate ) history as well  , could get interesting ( whoops , i mean entertaining )

 i believe the Nazis ( who were Nationalist Socialists ) had a little purge party as well


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## peter2 (26 January 2022)

ASF - Slow motion train wreck or *it will be, if the off topic general chat continues in this trading thread. *



	

		
			
		

		
	
 IMHO this needs a cleanup already,  @Joe Blow


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## basilio (26 January 2022)

Intriguing story.  Who came in to turn the US stock exchange around ?

How Yesterday's Miraculous Market Rebound Prevented A Massive Crash​


by Tyler Durden
Tuesday, Jan 25, 2022 - 03:15 PM
We previously discussed how a mystery put-selling whale emerged just around noon on Monday...


... and helped reverse a historic rout of nearly 5% in the Nasdaq, which then attracted a frenzy of retail dip-buying momentum chasers, who reversed near-record selling in the first half of the day to near-record buying in the second half.







__





						How Yesterday's Miraculous Market Rebound Prevented A Massive Crash | ZeroHedge
					

ZeroHedge - On a long enough timeline, the survival rate for everyone drops to zero




					www.zerohedge.com


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## Skate (26 January 2022)

Skate said:


> immense structural *challenge to the “liberal international order*” that has prevailed for nearly a century, as led by the “United States”. *This shift & COVID has affected my trading results over the last couple of years *& I assume it has been for many others.




Thanks, @basilio for getting the "Dump it here" thread back on track. In retrospect, it was a poor choice of subject matter to reinforce "my" point of view that COVID & China's national rejuvenation program in conjunction with the decline of western societies (that China sees as a weakness) adds uncertainty to global markets. The video was visual proof of the decline of the USA.

*“The Land of the Free & the Home of the Brave”*
Reflecting on Australia Day, how does the history of the U.S. national anthem reflect the country’s long struggle with racial, economic, gender inequality? - Now add civil disobedience, civil unrest & epidemic homeless to that mix "reflects the true direction" of today's society. Don't get me wrong we are not "lily whites" when it comes to the issue we have, "our nationalism" is also in decline.

*Tolerance & Respect*
Two words have gone missing (AWOL) over the last few decades. We need to bring them both back & apply them in spades. That alone will help rebuild our society, inch by inch.

Skate.


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## Trader X (26 January 2022)

MovingAverage said:


> Not wanting to get overly political (one of the things I like about this thread is that for the most part politics doesn't take over) but I remember many many decades ago Jeff Kennett was commenting on the rot that was setting into western society and he lamented that the rise of US style individualism (individual rights prevailing over what is better for society at large) was an emerging cancer. I still think about Kennett's comment today and believe that it underpins a lot of the decline we are seeing in certain western countries.



Think Kennett was on the wrong track.  Increasing socialism is the emerging cancer that's eroding western democracies. This was the underlying message in Carlson's piece.  Probably worth reading Hayek's "The Road To Serfdom", compelling insights.  The wealth divide is largely a consequence of fiscal and monetary policies (MMT) supporting increasing government intervention in social policy, the central planning model. Without massive handouts funded by borrowed money, we would see more homeless on the streets of Australia also. Borrowing billions to do the politically expedient thing may win/retain votes, but just shifts the repayment burden onto future generations.


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## Skate (26 January 2022)

peter2 said:


> IMHO this needs a cleanup already, @Joe Blow




*The "Dump it here" thread has gone off-topic*
With the thread being quiet & to appease @othmana86 I made the remark that the shift in China & the emergence of COVID has affected my trading results over the last couple of years. I'm not saying it's the only reason but "global uncertainly" has weighed heavily on the markets. 

*Trend Trading*
My trading style is "systematic trend trading" & those who also trade "trends" would be negatively affected (IMO). Before making the post about the decline of democratic societies & the U.S. as the example I made (6) previous posts about staying the course if you have conviction & faith in your trading strategy. From there the thread spiraled off course quickly. @peter2 is absolutely correct - the "Dump it here" thread is not the place for idle chit-chat or a thread to discuss "subjects" other than trading.

Skate.


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## Skate (26 January 2022)

*Trading is hard*
Trading successfully is hard, REALLY hard, which is why the majority of people who try to make money from trading fail. 

*Communication is so difficult *
It's extremely hard to get a point across so others understand when the topic has any degree of complexity or subtlety. Once you get a handle on the subject there are a hundred assumptions that need to be unpacked & just as many terms that need to be defined in detail. To express an alternative view it takes time to understand what is being present, that's why speed reading is the killer of trading education. 

Skate.


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## Skate (26 January 2022)

*Have you ever reversed the signals?*
Technical Analysis is based on trends, "well to be truthful" all trading is based on trends & Technical Analysis (my preferred method of trading) is basically chart based studies of trading volume & price. By analysing past prices & volume we attempt not to measure a security's intrinsic value, but instead, use charts & other tools to identify patterns that can suggest future activity. 

*Assumption trading*
We are working on the assumption that the past performance gives us a glimpse "an indication" of future performances by revealing the actual buying & selling decisions of other market participants. 

*Trend trading is trading with the herd*
As "Trend trading" has notoriously a low strike rate (win/loss ratio) can it be reversed by swapping the buy & sell signals? (is it as simple as that?)

Skate.


----------



## Skate (26 January 2022)

Skate said:


> As "Trend trading" has notoriously a low strike rate (win/loss ratio) can it be reversed by swapping the buy & sell signals? (is it as simple as that?)




Nah, it's not that easy, to be honest, it only makes the results worse.

*Simply "chart patterns" fail*
Critics of "technical analysis" think that chart patterns work until they fail, & they are correct to a certain degree. The failure of the pattern may not always be predictable from following the past pattern, especially if there is an unforeseen shock as in this past few weeks.

Skate.


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## ducati916 (26 January 2022)

Skate said:


> *Have you ever reversed the signals?*
> Technical Analysis is based on trends, "well to be truthful" *all trading is based on trends* & Technical Analysis (my preferred method of trading) is basically chart based studies of trading volume & price. By analysing past prices & volume we attempt not to measure a security's intrinsic value, but instead, use charts & other tools to identify patterns that can suggest future activity.
> 
> *Assumption trading*
> ...




(i) '_all trading is based on trends_'; and
(ii) '_Trend trading has (a) notoriously low strike rate_.'; and
(iii) '_an indication" of future performances by revealing the actual buying & selling decisions of other market participants.'_

Are these all true statements?

(i) & (ii) seem to be contradictory. Do the various timeframes create conflict within the trends, resulting in the low strike rate? Or, the definition of a trend needs greater precision. For the first part of the issue: what impact if any does fractal theory contribute or remove to the understanding of a trend? If not, what is required to better understand a trend?

(iii) Are all buying/selling decisions (immediately) visible? Some examples where they are not:

(a) hedged positions in the futures markets and physical markets (relevant if you are trading commodities);
(b) Hedged or outright positions in the Options, Futures and Stock markets (an example of this was provided on another thread).

jog on
duc


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## divs4ever (26 January 2022)

i find trends more useful as a ( mostly ) long investor  ,  timing those buys( accumulations ) and sells ( reductions ) a fraction  better ( but that extra gain spreads over a longer period ) , 

 the key in my opinion is the ability to back off from a trade  because i am neither a forced buyer  nor forced seller  ( i reckon trying to trade the market for constant income  , would be beyond my abilities )

 but then again i mostly find myself on the contrarian side  of the trading herd  ( because i don't NEED to sell at the end of the week/month )

 besides  i really don't need the distraction  on a lender sending out margin alerts every time they think the market will implode 



Skate said:


> *Assumption trading*
> We are working on the assumption that the past performance gives us a glimpse "an indication" of future performances by revealing the actual buying & selling decisions of other market participants.




  now of course i am using the 'what IF ' principal  , say i was interested  in FMG yesterday  , and lobbed in a buy order at $19  , it really isn't that urgent if i buy yesterday or even Friday  and missing out totally isn't a heart-breaker either 

 a professional trader ( trading for regular income ) faces much more pressure


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## Skate (26 January 2022)

ducati916 said:


> (i) '_all trading is based on trends_'; and
> (ii) '_Trend trading has (a) notoriously low strike rate_.'; and
> (iii) '_an indication" of future performances by revealing the actual buying & selling decisions of other market participants.'_
> 
> Are these all true statements?




@ducati916 to answer the first question, I believe every statement I make is true but at times not to others. That's why alternative views are always encouraged. I would also like to make this statement - "we all see the world through our eyes" and "Our perception forms our reality".



ducati916 said:


> the definition of a trend needs greater precision - what is required to better understand a trend?




@ducati916, now that's one great comment & even a better question as I trade using technical analysis using a robust mechanical trading system but at times falls well short of expectation.

*What stock do we choose & what criteria do we use?*
Well, that is the $64,000 question, & you are correct in saying we need to have a better definition of a trend so we enter it with greater precision. Striving for excellence is the goal & there are different trading methods that work better than others. I spent countless hours studying the market as new investors only focus on the allure of recent past returns which are right there to read or see. They downplay risk because it isn’t in sight and that’s a point worth remembering. At times I fail to perceive the real risk of trading always seeking to improve both areas you have mentioned.

*What's annoying with trend trading (IMHO)*
It's more of an irritation than annoying as no matter what I do (code-wise) it usually ends in (a) greater returns or (b) lower drawdowns & at times I achieve both "at the same time" but the ultimate strike rate never changes to any degree.

Skate.


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## Skate (26 January 2022)

divs4ever said:


> say i was interested in FMG yesterday , and lobbed in a buy order at $19 , it really isn't that urgent if i buy yesterday or even Friday and missing out totally isn't a heart-breaker either
> 
> a professional trader ( trading for regular income ) faces much more pressure




*Timing the markets*
As a systematic trend trading "timing the markets" rather than "the time in the market" is how I make money trading. Jumping on & off a trend is how I make money. Let's use FMG as the exercise as "I am a holder".

*What's the point of the chart?*
To clearly show how timing the market works in real-time. It also displays two entries that failed. Trading trends is not all "peaches & cream" BUT over time it works because of the mathematical edge trading this way.




Skate.


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## ducati916 (26 January 2022)

Skate said:


> @ducati916 to answer the first question, I believe every statement I make is true but at times not to others. That's why alternative views are always encouraged. I would also like to make this statement - "we all see the world through our eyes" and "Our perception forms our reality".
> 
> Skate.




Trends form a 'pattern'. Is a pattern subjective or objective? Clearly it is subjective. Further we subject that subjective perception to further perceptive filters via 'indicators' and other enhancements and tools of clarity.

Reality and perception can therefore be very far apart.

The Quant's (may) jump in and claim (greater) objectivity via their meta-data analysis. The Quants (invariably) rely on statistical tools to quantify the data. This is an empirical method. If the past is prelude, fine. Are statistics reality? Probably not.

Reality and perception remain, very far apart.

jog on
duc


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## MovingAverage (26 January 2022)

Skate said:


> Thanks, @basilio for getting the "Dump it here" thread back on track. In retrospect, it was a poor choice of subject matter to reinforce "my" point of view that COVID & China's national rejuvenation program




Oh I dunno about that @Skate—you outlined a very broad remit for this thread when you set it up. Seems like the recent digression from the usual “system trading nuts and bolts” is still within scope. It’s nice to stray off topic at times. Yes discussions of a political nature can turn into a shitshow as is evident from other politically focused threads here. Certainly hope we can respectfully  venture off topic from time to time.



Skate said:


> Sometimes you feel like dumping stuff & this thread might be the perfect place.
> 
> *Helping Others*
> You might want to dump stuff here to help others
> ...


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## Skate (26 January 2022)

ducati916 said:


> Reality and perception remain, very far apart.




@ducati916 you are absolutely correct in the statement above & so is mine below.



Skate said:


> "Our perception forms our reality".




*Perception = reaction*
Let me take this comment one step further "Our reaction is driven by our perception" 

*That's the reason we tend to do stupid things at times *
A lot of our expectations affect the assumptions we use to shape our perception when it comes to trading. Our perception even shapes what we want to read & what we want to hear or learn. Our expectations, assumptions & perceptions shape the way we trade in ways that some will never understand. 

*Our brain is constantly assessing & re-assessing only information that matches our (beliefs) & blocks out the rest*
This is why when experienced traders take the time to express ideas (ideas from their trading experience) others are not accepting of those ideas. This non-acceptance is because the idea doesn't fall into line with what the reader believes or what they have previously read in a trading book.

Skate.


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## Skate (26 January 2022)

MovingAverage said:


> Oh I dunno about that @Skate—you outlined a very broad remit for this thread when you set it up




*Perception*
@MovingAverage you are correct to some degree as your perception of my original statement can be taken in many ways. But the true interpretation is consistent with "helping others". There isn't much about the way we function that "beliefs" don't play a major role. 

*Beliefs *
Let's combine two powerful words (a) Beliefs & (b) Perception. At times combining both (Beliefs & Perception) can get us into trouble as we interpret what has been said or written from our perception then our belief forms our opinion. At times those opinions can be wrong without even realising it. 
*
Our Belief structure*
Bloody hell, our belief structure keeps on working regardless of whether or not we are consciously aware of them. If you were to follow my train of thought you would have read a slant towards education. Dumping information that can be helpful to others.

*Helping Others (condensed)*
You might want to dump stuff here to help others & unload (dump) something off your chest. You might even want to dump some gems. Sometimes you can't let some things go (thoughts) till you dump them on paper. If you want to dump it, dump it here to "Help others"

Skate.


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## ducati916 (26 January 2022)

Skate said:


> @ducati916 you are absolutely correct in the statement above & so is mine below.
> 
> 
> 
> ...




This subject is canvassed (more or less) fully by Tversky and Kahneman.

One example, also highlighted by Keynes (who was a better mathematician than he was an economist) is the difference between the 'probability' of the evidence as opposed to the 'weight' of the evidence, in coming to a decision under uncertainty. How would you measure them? Is one better than the other in the markets?

There are many of these anomalies that lie in wait for traders.

A question. Is trading a zero sum game? If yes, how does that affect a trend? If no, same question.

A second question. In the markets is there an informational imbalance? If there is, what trend should you be trading fractally?

jog on
duc


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## Skate (26 January 2022)

ducati916 said:


> *"WSS are getting ready for another co-ordinated buying spree of physical silver. I’ll jump on board for further physical +5kg this week".*






ducati916 said:


> In the markets is there an informational imbalance?




@ducati916 made a great comment in his daily update today & this short video should be of interest to "physical Silver hoarders". I realise that the question Duc refers to about "information imbalance" is different from my reply about the imbalance of information about "physical silver" is what I would rather highlight. The video chat with David Morgan was casual, & his views when it comes to the silver market were enlightening.

*Highlights from the video*
(a) Why the silver's investment & industrial demand will be robust in 2022?
(b) The silver market has seen a modest supply deficit in prior years - what could alter the demand-supply imbalances?
(c) What role does silver play in the new energy era?
(d) Can it be viewed as a store of energy?
(e) What's on the horizon that could indicate that 2022 will be Silver's year?
(f) Is the rest of 2022 looking promising for precious metals?



*Summary*
If you put all the physical silver in a football stadium on "one side" & the silver claims on the "other side" they don't match. This point has been reinforced by @ducati916 forever. This signal point is missed by most. (paper silver doesn't match the physical)

Skate.


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## Skate (26 January 2022)

ducati916 said:


> There are many of these anomalies that lie in wait for traders.




Yep, the anomalies are so enormous they can't be coded.

*What lays in store for traders in 2022*
The short video goes a long way to explain why Jim Rogers believes the worst "Bear Market" is coming. Can you believe this "Silver is 60% down" from its all-time high?

*Jim Rogers talks about the Chinese economy & interest rates*
I don't want to start another off-topic comment but Jim Rogers explains the best way to protect yourself from this bear market & discusses if now is a good time to invest in gold and silver. Also, he discusses if interest rate hikes have a significant impact on the stock market & if China's central bank's digital coin be a new dimension in the Chinese yuan's bid to compete as a reserve currency with the US dollar?

This video should hold interest for every trader.

*Highlights from the interview include*
(a) Is this going to be the #WorstBearMarket in history?
(b) Is there anything the Federal Reserve can do about it?
(c) Will they be able to avoid a major bear market if they cease printing money?
(d) Is there anything we can do about the alarming developments in China's real estate market.
(e) The risk of contagion for Chinese & international banks as a result?



Skate.


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## MovingAverage (26 January 2022)

Skate said:


> *Perception*
> @MovingAverage you are correct to some degree as your perception of my original statement can be taken in many ways. But the true interpretation is consistent with "helping others". There isn't much about the way we function that "beliefs" don't play a major role.
> 
> *Beliefs *
> ...





Skate said:


> *Perception*
> @MovingAverage you are correct to some degree as your perception of my original statement can be taken in many ways. But the true interpretation is consistent with "helping others". There isn't much about the way we function that "beliefs" don't play a major role.
> 
> *Beliefs *
> ...



That’s all a bit deep for my peanut sized brain but we all take different things out of different posts. I simply scroll by those posts that don’t interest me—no big deal. Just because someone thinks a few posts here are off topic doesn’t mean others don’t find them helpful in some regard. If the underlying motive is to be helpful then surely all posts do not need to adhere to some person’s strict definition of “trading”. Your post about China while digressing from the usual dry posts we all make relating to trading nuts and bolts it certainly had some relevance to trading—as you pointed out. There were some responses to that post that didn’t interest me so I just scrolled by—pretty easy. Those posts that resonant with followers of this thread will generate engagement and spur further discussions (plenty of examples of that) and those that are not relevant will quickly fall by the wayside. I think this thread has a way of recalibrating itself onto the interesting trading discussions and I don’t think we need content police saying what’s worthy of this thread and what’s not (that’s not a shot at anyone other than to say allow folks to post what they want) Anyhow…I’m of to my beach to have a swim and a few very cold brews and think about all things not trading related. Stay classy ASF.


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## Skate (26 January 2022)

MovingAverage said:


> Your post about China while digressing from the *usual dry posts* *we all make relating to trading nuts and bolts* it certainly had some relevance to trading—as you pointed out.




@MovingAverage you have hit the nail on the head. My posts are "DRY" & becoming more so. I'm finding it harder to post information that is not only beneficial but interesting to read.

Skate.


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## ducati916 (26 January 2022)

MovingAverage said:


> That’s all a bit deep for my peanut sized brain but we all take different things out of different posts. I simply scroll by those posts that don’t interest me—no big deal. Just because someone thinks a few posts here are off topic doesn’t mean others don’t find them helpful in some regard. If the underlying motive is to be helpful then surely all posts do not need to adhere to some person’s strict definition of “trading”. Your post about China while digressing from the usual dry posts we all make relating to trading nuts and bolts it certainly had some relevance to trading—as you pointed out. There were some responses to that post that didn’t interest me so I just scrolled by—pretty easy. Those posts that resonant with followers of this thread will generate engagement and spur further discussions (plenty of examples of that) and those that are not relevant will quickly fall by the wayside. I think this thread has a way of recalibrating itself onto the interesting trading discussions and I don’t think we need content police saying what’s worthy of this thread and what’s not (that’s not a shot at anyone other than to say allow folks to post what they want) Anyhow…I’m of to my beach to have a swim and a few very cold brews and think about all things not trading related. Stay classy ASF.





I agree.

For slightly different reasons.

The comments are more 'macro' orientated than systems orientated. Macro is a perception that involves the big picture for risk assets and risk assumption.

jog on
duc


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## MovingAverage (26 January 2022)

Skate said:


> @MovingAverage you have hit the nail on the head. My posts are "DRY" & becoming more so. I'm finding it harder to post information that is not only beneficial but interesting to read.
> 
> Skate.



Your posts are not dry. My reference was more a flippant reference to the general topic of system trading, which is inherently dry and it is what it is--nothing wrong with that. Trading is not all beer and skittles. Your posts, and those of other contributors to this thread, are nonetheless extremely interesting and relevant to regulars of this thread.


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## divs4ever (26 January 2022)

but isn't Macro an important part of WHEN to trade ( or resist )

 if it isn't it must be pretty tough out-witting the HFTs  and automated traders  , who get serious discounts on the costs


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## ducati916 (26 January 2022)

So here is an example of price chart anomalies:

So these are the gold futures:




This represents (very) unusual activity, some $500 million of contracts long in 1 day in the Options market.




Now the MM's who sell the contracts are now net short $500M, unless they hedge their positions. Now the COMEX doesn't (unless you look) see the physical market as this is essentially the producers, who, by long standing convention sold into the consortium of Bullion banks and the London market. Due to the Basel III requirements hedging became a lot more difficult in the paper markets.

Long story short: what you see, is not always what you get.

Simply looking at the chart...bull or bear? If you were a systems chap, bull or bear? 

Historically, silver always lags gold in bull moves, eventually overtaking it along the way. If you trade silver, you really want to know what gold is up to. Another 'illusion' that can be generated by charts.

jog on
duc


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## othmana86 (26 January 2022)

MovingAverage said:


> "Conviction" is absolutely what it is all about. I hear you on the missed opportunity but my system was 100% cash at that stage because the index filter had the system turned off.



Your chart is the epitome of resilience . I think you shared something similar a few months back.


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## othmana86 (26 January 2022)

@Skate i am officially appeased .


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## Newt (26 January 2022)

I loved a tweet by Radge sometime last year - along the lines of the bear market the bears have been predicting for 18months has arrived (from memory it was around the sidewise and sometimes down period 1st half of 2021 - after the market had moved up around by some a much greater % than the small down move.  

I guess not dis-similar to "bears have predicted 10 of the last 5 bear markets".....


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## MovingAverage (26 January 2022)

Newt said:


> I loved a tweet by Radge sometime last year - along the lines of the bear market the bears have been predicting for 18months has arrived (from memory it was around the sidewise and sometimes down period 1st half of 2021 - after the market had moved up around by some a much greater % than the small down move.
> 
> I guess not dis-similar to "bears have predicted 10 of the last 5 bear markets".....



Keep predicting a crash long enough and sooner or later you’ll be right 😂


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## MovingAverage (26 January 2022)

Skate said:


> *Trend trading is trading with the herd*
> As "Trend trading" has notoriously a low strike rate (win/loss ratio) can it be reversed by swapping the buy & sell signals? (is it as simple as that?)
> 
> Skate.




The assumption is that trend trading is about chasing long positions, but that’s only half the story. There’s money to be made by shorting trends. Flip your long only system to shorts and suddenly the win/loss ratio looks pretty good.


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## DaveDaGr8 (26 January 2022)

MovingAverage said:


> Keep predicting a crash long enough and sooner or later you’ll be right 😂



A broken clock is still right twice a day.


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## MovingAverage (27 January 2022)

Tough going this week that's for sure, but my swing system still managing to close out a few positive positions.


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## Trader X (27 January 2022)

MovingAverage said:


> Keep predicting a crash long enough and sooner or later you’ll be right 😂



The problem is the nebulous definition of the term crash.  If you're highly leveraged or trading derivative products, a 20% move against your positions could take you out at a much greater percentage loss.  The main differences between the GFC and now is the much greater amounts of leverage, debt, inflation and interest rates.  The Federal funds rate in 2007, just before the GFC event, averaged 5% in contrast to now .25% - no room to maneuver.  A sharp downturn in markets now will test the resolve of the Fed and RBA to raise rates to tackle inflation this year.  Seriously doubt all the forecast rate hikes will be implemented.


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## MovingAverage (27 January 2022)

Trader X said:


> The problem is the nebulous definition of the term crash.  If you're highly leveraged or trading derivative products, a 20% move against your positions could take you out at a much greater percentage loss.  The main differences between the GFC and now is the much greater amounts of leverage, debt, inflation and interest rates.  The Federal funds rate in 2007, just before the GFC event, averaged 5% in contrast to now .25% - no room to maneuver.  A sharp downturn in markets now will test the resolve of the Fed and RBA to raise rates to tackle inflation this year.  Seriously doubt all the forecast rate hikes will be implemented.



Wasn’t intending to get into a debate about the technical definition of “crash”. I just used it in the general sense as a reference to those who crawl out from under their rocks to claim the sky is falling in every time the market drops.
Anyway, that aside—yes I agree the current levels of debt and leverage are a big concern. I guess we’ll just have to see how the cards fall over the coming weeks and play the hands we’re dealt.


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## divs4ever (27 January 2022)

Trader X said:


> The problem is the nebulous definition of the term crash.  If you're highly leveraged or trading derivative products, a 20% move against your positions could take you out at a much greater percentage loss.  The main differences between the GFC and now is the much greater amounts of leverage, debt, inflation and interest rates.  The Federal funds rate in 2007, just before the GFC event, averaged 5% in contrast to now .25% - no room to maneuver.  A sharp downturn in markets now will test the resolve of the Fed and RBA to raise rates to tackle inflation this year.  Seriously doubt all the forecast rate hikes will be implemented.



 being a 'low debt person ' i had  never considered that angle  , i NORMALLY apply a negative percentage to a major index  ( say minus 30% or worse  to the XJO ) 

ALTHOUGH i saw an analysis on March 2020  arguing a 'crash' must also pierce the long term support levels 

 but yes the next confidence shaker could be very educational


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## MovingAverage (27 January 2022)

divs4ever said:


> ALTHOUGH i saw an analysis on March 2020  arguing a 'crash' must also pierce the long term support levels



Interesting definition


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## divs4ever (27 January 2022)

i thought so  and made an argument to support that view 

 i was quite happy to call March 2020  a ( not that bad ) crash  up to reading that 

 and of course we had that K-shaped recovery to really muddy the waters 

 i still like the -30% ( from the cycle peak ) as an early guide though  ( dirty but quick )


----------



## MovingAverage (27 January 2022)

divs4ever said:


> being a 'low debt person ' i had  never considered that angle  , i NORMALLY apply a negative percentage to a major index  ( say minus 30% or worse  to the XJO )
> 
> ALTHOUGH i saw an analysis on March 2020  arguing a 'crash' must also pierce the long term support levels
> 
> but yes the next confidence shaker could be very educational



Now I'm definitely no chartist so feel free to ridicule my analysis, but here's my observation based on the XAO chart below.

A few things worry me: the price movement of XAO is now in uncertain territory. The white regression channel on the price chart clearly shows XAO price movement well within two standard deviations since July. However what worries me is this week we have now seen XAO move well and truly outside the lower two standard deviation level so interesting times ahead. Looking at the ATR we are definitely seeing an uptick in volatility relative to the longer term volatility since the start of 2021. Only thing that I'm curious about is that this week hasn't seen an increase in volume, which if you look back to the covid sell off that decline was accompanied by increased volume.


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## divs4ever (27 January 2022)

compare it to January 2019  as a guide to 'more usual times '

 now the difficult factor is 'real inflation'  to subtract  from the market gains 

 ( PS  in March 2020  there was a LOT of forced selling  , now will rebalances  triggered by the BHP unification  will that  cause similar amounts of 'forced trading ' )


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## MovingAverage (27 January 2022)

divs4ever said:


> now the difficult factor is 'real inflation'  to subtract  from the market gains



Easy solution to offsetting the inflationary impact on our market gains….we’ll just have to work smarter to improve our trading returns 😂


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## qldfrog (27 January 2022)

MovingAverage said:


> Now I'm definitely no chartist so feel free to ridicule my analysis, but here's my observation based on the XAO chart below.
> 
> A few things worry me: the price movement of XAO is now in uncertain territory. The white regression channel on the price chart clearly shows XAO price movement well within two standard deviations since July. However what worries me is this week we have now seen XAO move well and truly outside the lower two standard deviation level so interesting times ahead. Looking at the ATR we are definitely seeing an uptick in volatility relative to the longer term volatility since the start of 2021. Only thing that I'm curious about is that this week hasn't seen an increase in volume, which if you look back to the covid sell off that decline was accompanied by increased volume.
> 
> View attachment 136629



Missing volume:
maybe the big movers and shakers have been actually out of the market..we saw huge periods of [top open, low close] which could indicate off load by manipulators aka big fishs?
Another potential cause: the Super funds and retails individuals invested in ETFs are more stable and expect a rebound.
Volume might come suddenly after 2 days+ of constant fall, or if the rebounds stop and new lows are reached here or on the NYSE.or after the week end...
Note: just ideas..I have no clues


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## MovingAverage (27 January 2022)

qldfrog said:


> Missing volume:
> maybe the big movers and shakers have been actually out of the market..we saw huge periods of [top open, low close] which could indicate off load by manipulators aka big fishs?
> Another potential cause: the Super funds and retails individuals invested in ETFs are more stable and expect a rebound.
> Volume might come suddenly after 2 days+ of constant fall, or if the rebounds stop and new lows are reached here or on the NYSE.or after the week end...
> Note: just ideas..I have no clues



Yup…will be watching volume closely over next week. But as it stands without the increase in volume I struggle to get my head around this being a broad based sell off (but hey, what do I know). Haven’t looked at this week’s volume on DJI.


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## qldfrog (27 January 2022)

MovingAverage said:


> Tough going this week that's for sure, but my swing system still managing to close out a few positive positions.
> 
> View attachment 136626



was interested to check EOD
Before anything:
:not a bragging war or anything ..just interested in seeing if any share was flying thru intact;
not judgemental
ABR closing at 2.06 or -6.4% today;
STM flat -25% in last 5 days
GMG -3.72% today at $22.03, lost $1.5 since Monday
UWL -3.7% at $3.9 lost 20c since Monday....
So in short bloobath;
*So lucky you got out..I actually missed that critical point!!!
*
but I did worse look at these:

Daily changeopencloseBTR$0.063$0.046​-$0.021-31.34%WIA$0.076​$0.063​-$0.012​-16.00%​
These 2 packets were enough to make my portfolio go from positive to negative
and I forget -9% on NST


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## divs4ever (27 January 2022)

MovingAverage said:


> Yup…will be watching volume closely over next week. But as it stands without the increase in volume I struggle to get my head around this being a broad based sell off (but hey, what do I know). Haven’t looked at this week’s volume on DJI.



 a Bell Direct member posts advancers/decliners  most nights 

Chart - Regular contributor
*Posted Friday at 5:41 PM*  (3 Likes)





Nasty, 1118 more falling stocks than rising.

Chart - Regular contributor
*Posted Monday at 6:13 PM*  (3 Likes)




1222 more falling stocks than rising. Big numbers here.

Chart - Regular contributor
*Posted Tuesday at 6:57 PM*  (2 Likes)




1416 more falling stocks than rising, very nasty.

Chart - Regular contributor
*Posted Today at 5:16 PM*  (1 Likes)




783 more falling stocks than rising, still big numbers here.


 and the dollar value turned over is fairly solid as well  ( for those 4 days )

7.2bn shares were traded, worth $14.5bn. ( for today )
  so that estimation of $96 billion  to rebalance after the BHP unification  should have noteworthy moments

 HOWEVER Commsec likes to focus on the XJO  which often looks less scary ( only 200 stocks to choose from )


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## MovingAverage (27 January 2022)

qldfrog said:


> *So lucky you got out..I actually missed that critical point!!!*
> 
> ​



There was no luck involved—my system made deliberate decisions to get me in and out of the trades so nothing to do with luck 🤪 I’m just being flippant and don’t want to stir up that discussion again 😂


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## qldfrog (28 January 2022)

MovingAverage said:


> There was no luck involved—my system made deliberate decisions to get me in and out of the trades so nothing to do with luck 🤪 I’m just being flippant and don’t want to stir up that discussion again 😂



Sorry, luck was wrong term.
What this "crisis'/crash shows is the advantages of daily vs weekly during crashes.
My wins so far this week on my hedging and currencies are just mopping up the losses on the daily systems.so instead of a killing this week, i hope to end flat.
Time will tell .
System report tonight might be delayed as the Frog is getting social: omicron times 😊


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## MovingAverage (28 January 2022)

In a friendly way I often remind my daughter that buy and hold is for lazy folks that don't know what they're doing--she has a buy and hold approach.

Well this morning she asked me to check in on the performance of her holdings--much to our great surprise she is up almost 6% from 1 January. So today she is making me eat **** sandwiches for lunch


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## divs4ever (28 January 2022)

MovingAverage said:


> In a friendly way I often remind my daughter that buy and hold is for lazy folks that don't know what they're doing--she has a buy and hold approach.
> 
> Well this morning she asked me to check in on the performance of her holdings--much to our great surprise she is up almost 6% from 1 January. So today she is making me eat **** sandwiches for lunch
> 
> View attachment 136654



 buy and hold is for folks earning a healthy income elsewhere  

 that doesn't mean some don't WATCH and deploy  extra cash strategically


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## Skate (28 January 2022)

Skate.


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## Skate (28 January 2022)

Skate.


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## Skate (28 January 2022)

Skate.


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## Skate (29 January 2022)

Skate.


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## Skate (29 January 2022)

Skate.


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## Skate (29 January 2022)

*WTF, the language of some traders have changed*
I have noticed the change in the language of discretionary traders where mechanical traders just winge about losses. Trading is all about riding trends that can vary to the extremes. Being a mechanical system trader I never have to use self-flagellation as the decision to enter or exit a trade is out of my hands.



Nick Radge said:


> I'm not going to take anyones side because I do both. My mechanical systems do better maninly because I am a poor discretionary trader by nature. I therefore allocate more funds to mechanical than discertaionary




*Discretionary Trading & Mechanical Rules Based Trading*
I'm not going to start a debate as to which is better as it's been done to death. Having the conversation revolve around one type of trading versus another only invokes emotions. Having a robust discussion is not my intent but it's a very interesting subject.

*Mechanical system trading*
This is a method for trading where all trade decisions are made according to an exact set of rules (a trading system). Traders do exactly what their system tells them to do, without deviating in any way based on instinct.





*Discretionary trading*
This is a method of trading where all decisions are made according to the instincts of the trader. In all fairness discretionary trading is all about being flexible with additional information deciding the trading decision process using a variety of tools in their toolbox.




Skate.


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## Skate (29 January 2022)

*Tested & proven*
Mechanical system trading has a solid basis for all underlying buy & sell signals, that have been tested & hopefully proven to have a trading edge. Mechanical trading does take losses at times & that is to be expected because you are letting your system make all your decisions.

*To some degree, we are all discretionary traders*
Oftentimes system traders do gradually develop an instinct for trading that helps them to be profitable so I'm not preaching we are all in or out when it comes to the way we trade, it is never black & white as many times there are grey areas. Because of these grey areas we need a "Trading Plan" that overrides a "Trading Strategy". There are times when you might notice something about a trade signal that tells you that you shouldn't be taking the trade, even if your system says that you should. Whether you skip that trade to save money or you alter your system to avoid those trades, that involves discretion.

*Mechanical system trading relies on a trading plan (for sure)*
I'm just pointing out if you get six buy signals it's okay to isolate one signal when it falls foul of your trading plan.




Skate.


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## Skate (29 January 2022)

*Trading based on fixed rules*
From entry to trade management, risk management & finally the exit oversimplified system trading but it's a start. 
*
A discretionary trader always sees something*
A discretionary trader is going to look at the market from many different angles using a variety of tools from their "toolbox" trying to form a well-argued opinion. The purpose is obvious. To come to the conclusion for the trade setup. Confirmation bias is one of our worst enemies because we want to see "what we want to see" & convince ourselves that the decision we are going to make is the correct one. But you can take it from me, there is always self-doubt trading this way (discretionary).

Skate.


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## Skate (29 January 2022)

*Which is better - Discretionary or rules-based trading?*
The answer might depend on your understanding & definition of "discretionary" as opposed to "rule-based trading". For me, it’s really simple, because "technical analysis" can be backtested to decide if the rule-based trading has an edge. 

*What's the definition?*
I'll leave the definition of discretionary trading & rule-based trading to the Duc as he nails it in a few words.



ducati916 said:


> It would be easier to define discretionary trading as subjective trading and mechanical or rule based as objective trading




Skate.


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## Skate (29 January 2022)

*Trend Trading a "mechanical system" works best in a bull market (surprise, surprise)*
Well, why have a system? That's a fair question & it is simple to answer "To help a trader make a trade" 

*Indecisiveness is a killer*
If you leave that decision to some, they would never make a trade, doubt & indecisiveness is a killer. Also, a mechanical trading system can be designed to be adaptive to market conditions whereas using discretionary it's hard for you to "see the forest for the trees" 

*Summary*
Instinct trading is not for me.

Skate.


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## ducati916 (29 January 2022)

Skate said:


> *Which is better - Discretionary or rules-based trading?*
> The answer might depend on your understanding & definition of "discretionary" as opposed to "rule-based trading". For me, it’s really simple, because "technical analysis" can be backtested to decide if the rule-based trading has an edge.
> 
> *What's the definition?*
> ...





Now there are many types of discretionary traders. @peter2 would likely classify himself as a discretionary trader. However I daresay he would not classify himself as 'subjective', trading quite definite chart pattern set-ups.

I'm subjective because I can trade (my rules allow me to) any stock, with any pattern, in any market (bull/bear).

Which is not to say I don't have any rules at all. My philosophy however is that the markets are largely random. That the future is unknown. That any given stock, can do anything. Given that belief, my system has to allow that belief to be expressed in a profitable manner. Which it does.

I like most, try to predict. Mostly for the intellectual stimulation that it provides. Partly, because being informed allows some landmines to be sidestepped. I focus these efforts more on the macro-big picture, rather than the micro day-to-day fluctuations. I tend to choose big themes, rather than individual stock narratives.

jog on
duc


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## Skate (29 January 2022)

ducati916 said:


> Now there are many types of discretionary traders. @peter2 would likely classify himself as a discretionary trader.




@ducati916, I agree, Peter is different from most discretionary traders but I do believe his trading is "subjective" at times. After reading his recent couple of posts it was the first time he involved a money value to reinforce a point. The take-away for me was the loss was due to a series of subjective decisions. 

*Being subjective*
Subjectiveness was the reason why he was extremely hard on himself to the point of self-flagellation. We are all wordsmiths to some degree but a change in his tone & word choices instigated this series of short posts from me today. 

*But before I finish *
I want to make another statement that mechanical or rule-based trading has only two major rules. Those two rules are "precision & confidence". Both are needed to enter & exit a trade. The minor rules will look after themselves. If you’ve been worried about the volatility this week or the uncertainty it brings, it's only natural but "comfort" can be sort knowing a "mechanical system trading" will make the decisions for you "rather than your gut".

Skate.


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## Garpal Gumnut (29 January 2022)

Skate said:


> @ducati916, I agree, Peter is different from most discretionary traders but I do believe his trading is "subjective" at times. After reading his recent couple of posts it was the first time he involved a money value to reinforce a point. The take-away for me was the loss was due to a series of subjective decisions.
> 
> *Being subjective*
> Subjectiveness was the reason why he was extremely hard on himself to the point of self-flagellation. We are all wordsmiths to some degree but a change in his tone & word choices instigated this series of short posts from me today.
> ...



So @Skate can you see if there is any place for all over the shop such as I who trade on the vibe.

But keep an account and desist if in danger of loss or not enough gain.

Ruthless as you with my baser emotions and Lady Hope.

gg


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## Skate (29 January 2022)

Garpal Gumnut said:


> So @Skate *can you see if there is any place for all over the shop such as I who trade on the vibe.*
> But keep an account and desist if in danger of loss or not enough gain.
> Ruthless as you with my baser emotions and Lady Hope.
> 
> gg




@Garpal Gumnut what makes trading so difficult is that "there are no rules". The problem is that 'excess freedom' cause people to become "overwhelmed" losing money because they don't 'know' what to do next.

*To answer your question directly*
"It's your money & you can do whatever you want" - but for others let me take the time to explain why new traders struggle at first.

*Why do new traders struggle?*
Why? it's because most of the time they don't have "rules" to follow. Most people live their entire life around rules & most of them like being told what to do. People are conditioned from childhood to listen to authority & follow the ‘rules’. Living in a society you need to be a "conformist" or else you are punished. It's similar when it comes to trading.

*With large amounts of money on the line*
I'm saying it's better to have a structure, a set of rules that you will follow otherwise you will tend to break them along the way, solely for the purpose of justifying how you feel "in" the moment.

*Simple message*
If you are a system trader have a set of defined rules, keep the system as simple as possible, validate it (robust backtesting) & trade it with precision & confidence!

Skate.


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## MovingAverage (29 January 2022)

*Which is better - Discretionary or rules-based trading?*


Skate said:


> The answer might depend on your understanding & definition of "discretionary" as opposed to "rule-based trading". For me, it’s really simple, because "technical analysis" can be backtested to decide if the rule-based trading has an edge.



Good series of posts @Skate.

Your comment on which is better really resonates with me. To me I’ve never understood why the two are often compared to debate which is better. I find those that raise the issue of “which is better” are naive and inexperienced traders. Take for example the recent series of posts on this thread by Ann suggesting she was capable of reading charts and had no need for your “holy grail black box approach”—completely ridiculous comparison. All approaches to trading that make you money are good—be it system, discretionary or whatever . The issue is more about understanding your own personal strengths and weakness as that will often determine what approach is better suited to you. For me, I honestly don’t trust my own subjective judgement so stay well away from discretionary as I can’t make money from it.


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## qldfrog (29 January 2022)

MovingAverage said:


> For me, I honestly don’t trust my own subjective judgement so stay well away from discretionary as I can’t make money from it.



I second that,same here.👍
I will never be able to understand last night HOOD going up 10pc after release of abysmal results,and lower forecasts...
I let my statistically right system do the call..but i understand other people might be different


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## ducati916 (30 January 2022)

Skate said:


> *Trading based on fixed rules*
> From entry to trade management, risk management & finally the exit oversimplified system trading but it's a start.
> 
> *A discretionary trader always sees something*
> ...




About 15yrs ago I read a thread on EliteTrader (I think it still exists) featuring a chap named Maverick74. @wayneL will probably remember him, I think he even commented on the thread at the time, anyway...

The thread was talking about some rather esoteric options theory and application. Maverick74, at the time, was some form of market maker for one of the investment banks...not explicitly stated, but inferred.

Mr Maverick74 was (a) very profitable and (b) by some distance, far more informed than 99% of participants at EliteTrader at that time. Reading that thread was probably my epiphany moment in my trading to that point. Prior to that I had been a day-trader/swing-trader based on charts/technicals.

The 'key' to making huge dollars from trading is (a) the ability to trade significant leverage and (b) 100% guarantee that you will not blow-up your account.

The leverage allows you to turn lesser % returns into big real returns. The 100% guarantee costs. It is not free. Hence the lower absolute % returns (more than compensated for by the increased leverage).

This, I think was the thread: https://www.elitetrader.com/et/threads/writing-options-for-a-living.53037/page-2

What you eventually glean is that the markets are a very complex form of arbitrage theory.

Once you take this onboard, it becomes very clear why there are seemingly random movements in prices. Taking it to its logical conclusion, arbitrage theory (could) allow you to state that the unknown future is a random price, contrasted with the present known price, which allows a trade to be placed in the present. Purists will say an arbitrage is buying gold in London for a lower price than they can sell gold in New York for. The spread is the 100% guaranteed profit. Correct. Arbitrage theory takes that axiom theoretically to all manner of different applications.

I could give you the answer, but that would (a) not be appreciated, you only appreciate what you earn and (b) constitute quite a bit of work for me in explanations etc.

What category would this fall into? Probably mechanical.

jog on
duc


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## entropy (30 January 2022)

Skate said:


> *Tested & proven*
> Mechanical system trading has a solid basis for all underlying buy & sell signals, that have been tested & hopefully proven to have a trading edge. Mechanical trading does take losses at times & that is to be expected because you are letting your system make all your decisions.
> 
> *To some degree, we are all discretionary traders*
> ...



Nicely put Skate.
I like to look at three pairs of moving averages, a short term, a medium term and a long term. This throws up a list of candidate buys. I list these based on market capitalization: I don't think the market accidentally has say CBA as the top-priced bank.
Then I look at dividends paid: a company that has skimpy, erratic or no dividends sends me an alert (I know there are exceptions).
Next I scan the directors share holdings and their purchases and sales. Directors with no or little "skin in the game" or directors selling off their holdings sets off an alert


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## Skate (30 January 2022)

entropy said:


> Nicely put Skate.
> I like to look at three pairs of moving averages, a short term, a medium term and a long term. This throws up a list of candidate buys. I list these based on market capitalization: I don't think the market accidentally has say CBA as the top-priced bank.
> Then I look at dividends paid: a company that has skimpy, erratic or no dividends sends me an alert (I know there are exceptions).
> Next I scan the directors share holdings and their purchases and sales. Directors with no or little "skin in the game" or directors selling off their holdings sets off an alert




*Now that's what I'm talking about*
@entropy to have any chance in this game you need a plan & your plan is solid. If you keep your trading plan consistent you'll do okay as consistency is the name of the game.

*In between the signals, just hang on for the ride*
No matter what your selection criteria were, or what has motivated you to place a ‘buy’ order, you have to realise "everything is out of your control" from that point on till you elect to sell, so in the meantime just hang on for the ride.






*Guppy's Multiple Moving Averages*
Looking at three pairs of moving averages performs as a trend trading strategy. As trend trading strategies go, using "Guppy's Multiple Moving Averages" would be a suitable choice for you to have a look at as it's easy to follow & understand.

*Sometimes more is better*
I understand you use three moving averages whereas Guppy uses twelve EMA's. It's the relationship between the twelve exponential moving averages (EMA's) that tells the story of long & short-term buyers. The (GMMA) is composed of multiple lines that help traders see the strength or weakness in a trend better than if only using one or two moving averages or (EMAs). Compression to the expansion of the “lines of the ribbon” tells one story whereas the reverse (expansion to compressions) tells another. On the other hand, the "crossing" of the ribbons, is a whole other story in itself.

Skate.


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## entropy (30 January 2022)

Skate said:


> *Now that's what I'm talking about*
> @entropy to have any chance in this game you need a plan & your plan is solid. If you keep your trading plan consistent you'll do okay as consistency is the name of the game.
> 
> *In between the signals, just hang on for the ride*
> ...



Thanks Skate! I will take a look at Guppy's work.

Was there an Ogden Nash ditty that went: cats have kittens, dogs have puppies, guppies have guppies?


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## Skate (30 January 2022)

*Trading*
Trading is just about selecting companies that you believe will increase in price over time. Once you place your buy order, just hang on for the ride as it's all you can do from here on (the black line in my post above). Once you place a buy order the only thing left for you to do is manage your sell orders as everything is in the lap of the gods. Trading is an emotional roller coaster & how you manage your psychology really matters even more than your stock selection.

*Trading is all about price movement.*
Nothing works perfectly in trading so the next best thing is to accept that sometimes it works well & other times it doesn't. Last week it certainly didn't go to plan, why? because you can't code for the unexpected. I should clarify the last statement. You can code for a steady decline but unfortunately when the decline is rapid during "one week" you just have to suck it up. Those that can handle that & "roll with the punches" will do okay. Forget about the money & focus on the process of successful trading. The more you obsess about the money the more likely it will derail your success.  

*I mean everyone*
Every strategy & every trader will have periods of good performance & periods of poor performance. Accepting "losing periods" helps you to remain focused on the long-term outcome. Learning how to control your emotions when your account suffers a few losses allows you to grow as a trader.

Skate.


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## Skate (30 January 2022)

*No one like to hear their baby is ugly*
Well in essence that's what happened when I was recently told, my "Flying Bat Strategy" is a "dud". Well, that may be true but I'm prepared to let the strategy mature to see if it can turn from an "ugly duckling into a swan". The "duck analogy" will have to do as the analogy would lose its meaning when you realise a baby bat is called a "pup".

*Using a small sample*
Let's not revisit the debate about a small backtest sample size & the relevant meaning it holds. But what I would like to do is to give the backtest for the "Flying Bat Strategy" (a) trading period & (b) a backtest for the last 365 days, meaning the previous year's backtest. 

*So how is the "Flying Bat Strategy" performing?*
At the moment it's struggling but for no other reason than the uncertainty the markets hold with the participants running scared, otherwise, it tracking the backtest results. There is a discrepancy comparing the results between my actual results & the "Amibroker backtests". Simply it's the methodology that Amibroker uses to enter & exit trades that differs slightly from mine. I trade using the signals from the "Amibrokers Exploration Analysis" using my own mathematical formula that is subject to a trading plan when determining to place a buy & sell offer. For the sake of the exercise, it's close enough.

*Backtest results*
The capture below is the backtest for the "Flying Bat Strategy" trading period (13th December 2021 to 28th January 2022)






*Actual trading results *
The capture below is the actual trading results for the "Flying Bat Strategy" trading period (13th December 2021 to 28th January 2022). Both the Backtest & actual results are disappointing & I can fully understand why it was called a "dud". The uploaded weekly results & the shootout will be uploaded in real-time each week to establish if this strategy can turn things around in the next 5 months.






*I hate lengthy posts*
But in all fairness, I'll post a 365 day backtest for completeness. All strategies take time to develop & at times we can be too quick to judge if a strategy is worth the extra time to prove its worth. I should also say if the strategy is a "dud" you'll never lose a great deal of money as this strategy will pull you out when things are not going to plan.




*Summary*
I'm prepared to lose a little in the short term in the "hope" the long-term outcome mimics the results above. Trading is a game of probabilities.

Skate.


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## Sir Burr (30 January 2022)

Skate said:


> Accepting "losing periods"




What would be your gauge to drop the "Flying Bat Strategy?"

I see the backtest above has 5 max consecutive losers and 10.79% drawdown.
Something below that?


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## Skate (30 January 2022)

Sir Burr said:


> What would be your gauge to drop the "Flying Bat Strategy?"




@Sir Burr it's not about the dollar amount or number of consecutive losses nor is it the drawdown percentage when live trading but more to do with "not overriding" the strategy. There will be a stage where losses are more of an irritation than a worry. Large losses really annoy me but strangely enough, large wins never do. I forgot to say, "all the hard work has previously been done"

*The Flying Bat Strategy - overview*
It's a simple strategy that uses a few indicators to sharpen both the entry & exit signals. As the strength of a trend is so important in filtering out false signals, I've decided to use the "RSI, StochD & MACD" indicators in "combination" to return the best bang-for-buck. Those three indicators are at the very heart of everything this strategy hopes to achieve. The premise behind the idea is simple. Enter on a confirmed trend with strength & get out when strength fails to keep building. At times it can be slow to accumulate positions as it's very selective. This strategy has a complex exit strategy that incorporates a "take profit stop".

Skate.


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## peter2 (30 January 2022)

If we start a trend following trading system just before a significant market selloff the early results will never look good. It doesn't indicate that the system is a dud. The system realised the losses as it should. It's now that beginning traders look for another system that seems better. This is the start of the beginners or amateur cycle. They fail to understand that profitable systems will have losing periods.

I hope that @Skate continues with his current project and shows how both his current systems work their way out of their drawdowns and back into profit.

There is no way of knowing how long this process will take because the results are at the mercy of the market.

Working your trading system through a drawdown and back into profit is a very satisfying experience. One that enhances a traders confidence significantly.


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## qldfrog (30 January 2022)

Loosing money last week should not be a problem for any relaxed system traders.it is expected.
But if you have a steady growing market, peers making profit and your system is not catching up, then it is  time to wake up and check for issues.
A bad experience last year as explained in my hashed prose on my thread is a nice example of such a counter trend and the need to react and investigate.
But once the issue is fixed, you should then see clear benefits 

The week before last was my best ever, while last week was my worst.but so far keeping cool:
all within expected variations
Systems are now more in cash so losses will reduce if the fall goes on, but we still have buys on Monday which will gains if the markets btd.
Whatever happens , i just follow the instructions.
now is not the time to tweak


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## Cam019 (30 January 2022)

peter2 said:


> If we start a trend following trading system just before a significant market selloff the early results will never look good. It doesn't indicate that the system is a dud. The system realised the losses as it should. It's now that beginning traders look for another system that seems better. This is the start of the beginners or amateur cycle. They fail to understand that profitable systems will have losing periods.
> 
> I hope that @Skate continues with his current project and shows how both his current systems work their way out of their drawdowns and back into profit.
> 
> ...



@peter2 I know this is not directed at me, but it probably could be! Started January 10th. See you all for the first monthly update after tomorrows close! Hahaha!


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## peter2 (30 January 2022)

@Cam019  Not sure whether to laugh or cry with you after your post. 
However I know you're not some beginner who would be scared out of their trading plan after an immediate (untimely) drawdown. Lets discuss your results in 3 years (36 mths) time heh?


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## Sir Burr (30 January 2022)

Skate said:


> it's not about the dollar amount or number of consecutive losses nor is it the drawdown percentage



Just examples of what people may use to turn off a system.
Another might be the equity curve dropping below a MA.

Curious if there is a indicator for pulling the pin on The Fly Bat Strategy as it's a mechanical system.

Best answer so far...


qldfrog said:


> peers making profit and your system is not catching up


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## Cam019 (30 January 2022)

peter2 said:


> @Cam019  Not sure whether to laugh or cry with you after your post.
> However I know you're not some beginner who would be scared out of their trading plan after an immediate (untimely) drawdown. Lets discuss your results in 3 years (36 mths) time heh?



No point crying Peter. You may as well laugh because the only thing we can control as traders is our emotions and our (hopefully lack of) reactions.

You're right - I won't be throwing in the towel. I know this system is profitable over the long term and I also know that I shouldn't even bat an eyelid if I see a 20-25% DD. Common place using this system.


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## Skate (30 January 2022)

Sir Burr said:


> Curious if there is a indicator for pulling the pin on The Fly Bat Strategy as it's a mechanical system.




@Sir Burr that's a simple enough question that I may answer in stages so others can understand my logic. I apologise for the delay in answering your question but I've been busy. Also I'll type as quick as possible & as aways the response won't be proof read.

*What gets me out of a position - I'll list them so it's not confusing *
1. For a start the "Flying Bat Strategy" doesn't use an "Index Buy Filter" but it does use an Index Filter to control the trailing stop. The trailing stop is a two-tied percentile exit strategy, meaning a larger stop when the Index is deemed to be on that shortens when the Index Filter turns off.
2. The "Flying Bat Strategy" incorporates a "Take profit Stop" (not what you are asking but worth mentioning)
3. The "Flying Bat Strategy" incorporates a "multilayer" stale stop.

*Let's talk about a "Stale Stop" it's critical *
First off the "Stale Stop Exit Strategy" is to gauge when momentum is shifting, slowing, or reducing. Lack of momentum in the right direction will stifle performance. The "Stop Stop Exit" is measured bar-by-bar. There are multilayers to the "stale exit" as momentum needs to be calculated bar-by-bar from every angle. 

*So what is in my "Stale Stop Exit"?*
(a) GTFO Indicator. This indicator gets bandied around as if it's a mainstream indicator, which it isn't.
(b) There is also a nPeriod Moving Average with a twist. That single line adds to the story.
(c) Momentum is measured by "StochD & MACD" indicators. The parameter setting is tuned so they to work together.
(d) Also there has to be a "line in the sand" drawn so that the high of the entry is not less than the previous nPeriod (this is important)
(e) I also incorporate a "Bollinger Bands" volatility exit with the Norgate "Delisted" function.

*This "Stale Stop Exit" appears complicated & it is*
Well, using a standard stand-alone "Trailing Stop" exit doesn't cut it in many ways as a "Trailing Stop" will give back so much open profit & makes the drawdown look pathetic. I enter on confirmed trend & when the trend loses steam I want to be off the ride. The only issue is when trading a weekly strategy you need to endure the "weekly volatility". 

*You win some & you lose some* 
There is no guesswork when trading a systematic trend system because the decision to enter & exit is determined by the strategy. Unfortunately, there will be times when you experience a string of losses all because you are letting your system make all your decisions for you. 

*Summary*
When the tough times hit, I pray that I've done a good enough job during the "off-season".

Skate.


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## qldfrog (30 January 2022)

Cam019 said:


> @peter2 I know this is not directed at me, but it probably could be! Started January 10th. See you all for the first monthly update after tomorrows close! Hahaha!



@Cam019 , i decided to remove my SL and go full system early 2020 after starting my first system late  2029.what you will tell us will be a breeze as opposed... i feel your pain.
Most of my  current systems also restarted in December so no previous gain to cushion this month....you are not alone 🙏


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## Sir Burr (31 January 2022)

Skate said:


> my "Flying Bat Strategy" is a "dud". Well, that may be true




Thanks Skate, the only reason I asked is because of the above comment. Nothing to do with it looking a dud but thought good timing to jump in while the market has dropped 10% or whatever 

I know very well, starting a system sees it go straight into drawdown as it exits the non-trending and hangs onto the trending.

Not talking about an index filter here but turning the system off and moving on due to under performance, not living up to the backtest results. I would have thought being a system, the most obvious thing would to use an indicator and not by emotions.

I'm now wondering if there are other systems coded & discussed in this thread that have been dumped along the way and if so how was the decision made. Gut or indicator.


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## qldfrog (31 January 2022)

qldfrog said:


> @Cam019 , i decided to remove my SL and go full system early 2020 after starting my first system late  2029.what you will tell us will be a breeze as opposed... i feel your pain.
> Most of my  current systems also restarted in December so no previous gain to cushion this month....you are not alone 🙏



Typo: i meant covid crash hit after starting late *2019*


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## Jeda (31 January 2022)

qldfrog said:


> Typo: i meant covid crash hit after starting late *2019*



2%


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## Skate (31 January 2022)

Sir Burr said:


> I'm now wondering if there are other systems coded & discussed in this thread that have been dumped along the way and if so how was the decision made. Gut or indicator.




@Sir Burr *I code a lot of systems, paper trade them & ultimately will trade most of them*
When I code a new system I'm eager to trade it & if I don't stop trading the older strategies the new strategies can't have their day in the sun. What I'm fumbling to say is this, "I'll stop trading good performing strategy just to play with something else". In saying this I have a few strategies I've been trading for a while & I have never considered benching any of them.



Sir Burr said:


> I know very well, starting a system sees it go straight into drawdown as it exits the non-trending and hangs onto the trending.




*The "Platinum Strategy" & the "Flying Bat Strategy" are the two latest systems in my stable *
If I thought they were "Duds" I wouldn't be giving weekly live signals with ongoing weekly reports. I'm expecting these two to perform as expected over time & the shootout will determine which coding methods work the best.

*All trend trading strategies will perform in a bull market*
Seasoned traders all know "trend trading" depends on a buoyant market & suffers when it's not.

*Summary*
There are a few who are trading along & they won't be happy if they don't perform. I would also like to say, "there is never a good time to start trading a new strategy" so it pays to give the strategy a little time to perform its mathematical advantage.

Skate.


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## entropy (1 February 2022)

Skate said:


> *No one like to hear their baby is ugly*
> Well in essence that's what happened when I was recently told, my "Flying Bat Strategy" is a "dud". Well, that may be true but I'm prepared to let the strategy mature to see if it can turn from an "ugly duckling into a swan". The "duck analogy" will have to do as the analogy would lose its meaning when you realise a baby bat is called a "pup".
> 
> *Using a small sample*
> ...



Excuse my ignorance, Skate, still new to trading and associated software.
I roll my own with Excel/VBA and recently started following Howard Bandy's posts to roll my own Python model and testing program.

The tables that you post like "365 Day Backtest": are these results from a hold-out sample?
That is do you, say, for argument's sake, choose 10 years of trading data then split this into two sets of data, a training/development set of say 9 years of data and a holdout set of the recent 1 year of data.

The 9 years of training data is filtered in some way to produce profitable candidate stocks. They are then followed in the recent 1 year of holdout data to see if they remain profitable?

It seems filtered candidate stocks whose profitability collapses when live traded may suffer from what Bandy calls "loss of stationarity" ie distributional measures (for example means, std dev etc) of test data are not the same for holdout data nor are the same for live data.
Any comments appreciated.


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## Skate (1 February 2022)

entropy said:


> The tables that you post like "365 Day Backtest": are these results from a hold-out sample?




@entropy let me put the 365 days backtest into perspective first. To give an indication of how a strategy would have performed in the past using Norgate Platinum Data I could pick any backtest period. I use 365 days so the backtest can't be cheery picked as I use today's date as the reference point. Choosing a variety of lookback periods allows you to understand how your finalised strategy would perform on past data. The backtest is the index I choose to trade.



entropy said:


> That is do you, say, for argument's sake, choose 10 years of trading data then split this into two sets of data, a training/development set of say 9 years of data and a holdout set of the recent 1 year of data.




*Nah, what you are talking about is done in the strategy development phase*
The backtests that I'm throwing up (the backtest captures) are after all the development has been completed with the strategy being finalised & physically traded. To get to a "stage where a strategy can be traded live" lots of work has already been done, similar to what you are referring to.

*Strategy Development & Monte Carl simulations*
But as you have mentioned strategy development I'll post a little about Monte Carlo simulations & backtesting. Once you have a set of metrics which do you use to compare apples with apples & not apples with oranges.

*Let's talk about backtesting* (the period selected)
Backtesting a lot of data can be a good thing but backtesting over a longer time frame, there is always the randomness of outliers skewing the results leading you down the path of changing the code to fit the randomness of outliers. Meaning, just be aware of the randomness of outliers before making any significant changes to your strategy.

*It can mess with you *(Monte Carlo is important)
Backtesting over a large data set "randomness" can mess with you & your strategy development. Concentrate on the Monte Carlo “Out Of Sample” (OOS) results & take much less notice of the Monte Carlo “In Sample” results.

*It's important*
Monte Carlo results can be a missing metric in the development of a strategy. In reality, outliers can falsely lead you down a path of strategy correction lowering the probability of returns when actively trading the system compared to your backtesting results. The more you learn the more you understand the importance of having statistical data to compare results. Monte Carlo Simulations adds randomness to the strategy by running several thousand simulations using different data points to compute the average of the results.

*Microsoft Excel*
Originally, I used Microsoft Excel to visualise this data from the Monte Carlo Simulations creating a histogram showing the minimum & maximum return. With that same data, I was able to create a "scatter plot" to show the average annual returns versus the maximum drawdowns. But from AmiBroker version 5.94 onwards, a Monte Carlo simulator is built-in to the backtest, saving you all this extra work.

*The general idea behind Monte Carlo analysis*
Monte Carlo Analysis is a process of validating the robustness of the Trading Strategy by performing multiple trials runs using a combination of positions from your trading system (backtested data). It's worthy to note "seasonality" automatically becomes part of the equation. You can use these statistics to analyse the characteristics of your trading system simulating a set of Equity curves using random numbers from the backtest data. These large sets of simulations are then used to find the likely probability of unseen risks in your trading strategy. The Monte Carlo Simulations "out-of-sample" (OOS) results are the true measure of the strategy. Why? because the strategy has been developed using "in-sample" data & is already known.

*Monte Carlo Simulation*
This process allows you to randomly select any number of Monte Carlo runs. I run either 100 or 1,000 runs all depending on how quickly I want to view the results. The more runs the more reflective the results will be. I prefer to use 1,000 runs which means 1,000 different trades from the original trade list. 1,000 runs are used to produce new random trades thus it's unlikely to pick the original "PostionScored" trades.

*1,000 runs will give a random perspective of the robustness of your strategy*
Understanding the robustness of your trading system helps identify any problem with your trading strategy. It's worthy to understand "Monte Carlo" analysis will not solve any problems. To put it in simple terms "Monte Carlo Simulation" is just a validation process, a tool to help you create a better trading system.

*Interpreting the results*
The results of the Monte Carlo simulations are displayed in the "Monte Carlo" tab of the Backtest report. At the top of the backtest results, the Monte Carlo tab displays a table that gives values of a few key statistics derived from the cumulative distribution charts.

*Use the Search Feature*
If you don't understand a particular terminology or simply want to know more use the "search feature" with "keywords" or phrase by "Skate". After 3422 posts in this thread, I've most likely posted about a range of questions you could think to ask. Lengthy answers might be what you are seeking but they become a pain for others to read.

Skate.


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## entropy (1 February 2022)

Skate said:


> @entropy let me put the 365 days backtest into perspective first. To give an indication of how a strategy would have performed in the past using Norgate Platinum Data I could pick any backtest period. I use 365 days so the backtest can't be cheery picked as I use today's date as the reference point. Choosing a variety of lookback periods allows you to understand how your finalised strategy would perform on past data. The backtest is the index I choose to trade.
> 
> 
> 
> ...



Skate, Thank you for the detailed reply, the explanations you have provided are greatly appreciated and have given me plenty to go on with.
Thanks for drawing my attention to the 'search' feature, had not thought of using it in this way.


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## Skate (1 February 2022)

*Reposted without permission*
The recent market trend nearly guarantees most trend traders will be losing money to some degree because when "financials & miners" take a beating, the overall market takes a beating. As a general rule when the big two make waves the overall market "turns down" splashing everything else.




Skate.


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## Skate (1 February 2022)

*We all should be thinking about how to "protect what we have"*
I've spent endless hours trying to code a strategy to reduce the emotional stress of trading. Limiting drawdowns always come at a cost & integrating a "Take Profit Stop" has certainly helped in this regard.

*What’s right is whatever works for you*
Cutting losses has to be part of a solid trading plan, which includes applying a few different stop methodologies. I've never found "joy" in using an exit strategy in isolation. During these difficult trading periods applying a "Take profit Stop" will result in an early exit but that's the price you have to pay to lock in profits. When applying an exit strategy it's always a compromise & there should be no reason to select one method over the other than to drive a positive outcome.

*Stay focused as trading is so uncertain*
Having "sound risk management", & "position sizing" will be for naught if you don’t have the discipline to consistently execute your trading plan. With "Trend Trading", you need to be able to accept that some trades just "don't work" & that's why you need to stay disciplined.

*Reposted without permission*
@ducati916 has a way with words & never leaves you in doubt as to what message he trying to get across.




Skate.


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## Jeda (1 February 2022)

if i did that in 2020 I'd be poorer than i am today


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## ducati916 (1 February 2022)

Skate said:


> *We all should be thinking about how to "protect what we have"*
> I've spent endless hours trying to code a strategy to reduce the emotional stress of trading. Limiting drawdowns always come at a cost & integrating a "Take Profit Stop" has certainly helped in this regard.
> 
> *What’s right is whatever works for you*
> ...





Sometimes it is easier to see a bottoming process rather than a topping process:




Now even a 3yr old can figure out the following:

Someone gives you $120B/mth to buy assets.
Then they say that they are going to not only take away your $120B/mth, but in addition raise interest rates on you and then sell assets to you, reducing the amount of cash that you hold.

When they gave you money the market went up.
What do you think happens next?

The 'Bear' has arrived. This 'bounce' has a couple of days to run technically. That is your chance to (a) lighten up, (b) hedge or (c) go outright short.

Mr Powell will 'pivot' (again) but when that is, is just a best guess. My guess +/- (-30%) in SPY. The NASDAQ is more volatile up/down, but particularly down.

I'll be long commodities and long SQQQ. While I have been long commodities for a while already, I'll looking to get short NASDAQ:




jog on
duc

jog on
duc


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## qldfrog (1 February 2022)

Jeda said:


> if i did that in 2020 I'd be poorer than i am today



Definitively in april or may, but what about January or February?
I tend to know the answer


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## Jeda (1 February 2022)

qldfrog said:


> Definitively in april or may, but what about January or February?
> I tend to know the answer




I'd be poorer now


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## qldfrog (1 February 2022)

Jeda said:


> I'd be poorer now
> 
> View attachment 136878



So imagine how much better you would have been selling in january and buying anytime in the following year (12 months)..just saying...
But good on you👍


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## Jeda (1 February 2022)

qldfrog said:


> So imagine how much better you would have been selling in january and buying anytime in the following year (12 months)..just saying...
> But good on you👍




I see what you're saying but no one saw covid coming. turned into a great time to buy  ✌️


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## BoNeZ (1 February 2022)

divs4ever said:


> buy and hold is for folks earning a healthy income elsewhere



Buy and Hold gives me a healthy income thanks to dividends which combined with other passive income means I can retire.

Hold doesn't mean never sell but the trigger is not based on the current price or trend. I will sell when a share no longer meets my rules but turnover is very slow.

I run other strategies for profit with some money going back into the winning strategy, some into new strategies and some into more buy and hold shares.


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## Skate (2 February 2022)

*Having a flutter*
After reading @Cam019 was starting a new Monthly Strategy & @Warr87 already posting pleasing results sparked my interest in having a bit of a flutter. I usually don't trade a strategy until paper trading has been completed but as I've been using "The Ducati Monthly Blue Bar Strategy" for some time it was the perfect candidate to use for this exercise.

*What "another" strategy?*
I wasn't going to post monthly progress reports for "The Monthly Strategy" because this area is covered by two other members. So why am I posting?

*For one simple reason *
To display January was a tough trading month with one position (BRN) making all the difference. Only for (BRN) I would also be underwater for January.

*Talk about "Luck"*
For what it's worth I'll post the results for January & display the rotational positions for February.

*We are trading different indexes*
@Cam019 trades the ASX100 accumulation index better known as the (XTOA) for his monthly signals
@Warr87 trades the ASX300 universe for his monthly signals
# I'll be a bit different as I'll stick with the All Ordinaries for my signals.

*# January 2022 Monthly Amibroker Exploration Signals *





*# January 2022 Monthly Amibroker Backtest Signals*





*# January 2022 Monthly Results*





*# January 2022 Monthly Equity Curve*





*I have made a series of posts on a Monthly Strategy*
For those interested - I have made a few posts about a "Monthly Strategy" with pleasing backtest results that can be found here:




__





						Dump it Here
					

But it started so well I've had another question - "the strategy started well but now it's losing money, is there something wrong with the strategy?"  The answer I gave was along these lines A good strategy takes time to develop. Those new to trading are very concerned about finding a strategy...




					www.aussiestockforums.com
				







__





						Dump it Here
					

To summarise (Monthly) The few turnkey strategies promoted by "The Chartist" are sound in their methodology. Whether you elect to trade a "Monthly Momentum Strategy" that requires little "time & effort" might be the perfect strategy to have a go at trading, dipping a toe in to start.   To...




					www.aussiestockforums.com
				







__





						Dump it Here
					

You know humans code those systems, right?  the human who codes is not shaking in its boots nor dribbling with envy, moreover, most of the big boys use AI and qant who are looking at each other inputs etc, none of these human as it is played within ms  much faster than any human...




					www.aussiestockforums.com
				







__





						Dump it Here
					

Hi @Skate , Just curious if you got an update to the open positions of the Ducati Strategy? Also do you see EOS & AD8 are at a good entry point?  @Bazzi "The Ducati Daily Blue Bar strategy" is a daily strategy but I've decided to update the portfolio results after the close on Fridays. (a) As...




					www.aussiestockforums.com
				




*Summary*
If there is interest I'll post a monthly update to confirm how the strategy is performing otherwise I'll update my two weekly strategies as normal.

Skate.


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## Skate (2 February 2022)

*# February 2022 Monthly Amibroker Exploration Signals*





*# February 2022 Monthly Amibroker Backtest Signals*




Skate.


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## qldfrog (2 February 2022)

Jeda said:


> I see what you're saying but no one saw covid coming. turned into a great time to buy  ✌️



"but no one saw covid coming." look at my post from december 2019;was lucky to look at this from first seats due to my work in china at the time.
 so I did VERY well there and lost nothing overall during that crash.What I did NOT see coming was the vertical recovery...So while i did not lose much , just the systems engaged then, I did miss most of the rebound
What is done is done, looking forward now


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## Warr87 (2 February 2022)

The monthly strategy also trades well within a few different US universes too (NASDAQ-100 being the main one). But the COVID crash really paints a poor MDD, otherwise it also performs well there. Maybe not much of a diversification, but another market can be good to spread your systems. Admittedly the US and AUS markets have a high correlation. I don't have european market data to test it there.

Looking forward to seeing how you fair with your system. I think dual momentum strategy's perform quiet well on medium to long term type strategies.


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## Jeda (3 February 2022)

qldfrog said:


> "but no one saw covid coming." look at my post from december 2019;was lucky to look at this from first seats due to my work in china at the time.
> so I did VERY well there and lost nothing overall during that crash.What I did NOT see coming was the vertical recovery...So while i did not lose much , just the systems engaged then, I did miss most of the rebound
> What is done is done, looking forward now




Not according to your other posts on that other investing format at the time   thats the funny thing about the interent the evidence never completely disappears


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## qldfrog (3 February 2022)

Jeda said:


> Not according to your other posts on that other investing format at the time   thats the funny thing about the interent the evidence never completely disappears



That is for the trend system which lost as per trend systems did 
Aka roughly 1/20th of fin assets
 believe me both supers 100% cash by end december 2019
And the rest of investment was cash gold and put.just filled tax return for FY19-20. And definitively paying taxes on profit.
With tax returns, the evidences do not disappear😉


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## Jeda (3 February 2022)

qldfrog said:


> That is for the trend system which lost as per trend systems did
> Aka roughly 1/20th of fin assets
> believe me both supers 100% cash by end december 2019
> And the rest of investment was cash gold and put.just filled tax return for FY19-20. And definitively paying taxes on profit.
> With tax returns, the evidences do not disappear😉




yeah 2%


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## Skate (3 February 2022)

BoNeZ said:


> Buy and Hold gives me a healthy income thanks to dividends which combined with other passive income means I can retire. Hold doesn't mean never sell but the trigger is not based on the current price or trend. I will sell when a share no longer meets my rules but turnover is very slow.




*We all have the urge to make money*
@BoNeZ is correct when he references the desire to have a healthy income. Unfortunately, the good times when trading doesn’t always seem to last that long because most traders focus on what the markets can do for them not what the markets can do to them. When the markets turn down what happens next can get ugly. When the market starts going down, new traders know little how to preserve profits & they watch their profits quickly disappear, hoping that prices go back up again whereas @BoNeZ takes a more conservative realistic view.

*Free will seems to be pulling your strings *
Those traders who have little trading experience "think they have free" will when it comes to trading but all is not what’s it’s cracked up to be. The feeling that we define our own trading choices just isn't correct because it’s hard to get enough mental distance to see what’s really going on in the markets. 

*I’m just saying as traders we have a hard time differentiating between confidence & intelligence*
Free will is inherently flawed when related to trading as our decisions are manipulated with additional information, not so when you are a "mechanical system trader" as those decisions are out of your control & made for you.

Skate.


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## Skate (3 February 2022)

ducati916 said:


> Sometimes it is easier to see a bottoming process rather than a topping process. BTC is looking reeeeeeearlly bearish. BTC losing its vol. mojo.




*Reposted without permission*
I'm sure @ducati916 won't mind if I post from his daily article a graphic that sums "Bitcoin" in a few beans.



*Trading Cryptos*
Now, this is my opinion, if you are new to trading "don't trade Cryptos". I'm just repeating myself here for those beginning their trading journey that they should not start off "trading cryptocurrencies". I'm amazed at the amount of enthusiasm that cryptocurrencies have. In saying this if enough "believe" crypto has value, I guess that's all it takes. I have trouble wrapping my head around that "nothing" has a tradable value.

*Bitcoin is built on the enthusiasm of others*
Not only bitcoin but crypto's, in general, doesn’t have any intrinsic value but mainstream adoption & investment is showing no signs of letting up anytime soon. Recently I've noticed that professional & amateurish exuberance is slightly waining at the moment. Bitcoin is currently in unchartered territory & nobody knows where the current run is going to stop or take a pause, but the mainstream adoption is showing no signs of letting up anytime soon.

*The only thing (Bitcoin) is good for is speculation*
The slightest whiff of negative news causes serious price correction but it certainly makes for an exciting story, one that borders on insanity at times (IMHO). Cryptocurrencies are fake coins made out of fairy dust.

*When push comes to shove will you be able to offload your crypto onto someone dumber?*
The notion that traders could lose almost if not all of their money seemed absurd but most likely possible. High conviction traders will trade it to nothing. Crypto's such as Bitcoin is a fool's investment of those who trade hoping to offload it on someone dumber than them who will pay more for it than they did. Taking a foolish risk with crypto could put you in so "deep" it will be virtually impossible for some to get back out, "they are the ones I worry about".

*Summary*
If you know the risk & you are a seasoned trader it's just another vehicle to speculate on. The general warning is for those just starting out.

Skate.


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## Skate (3 February 2022)

*Reposted without permission*
I'm sure @ducati916 won't mind if I post his "quote of the day" as it ties in nicely with my post above. Manipulation goes on more than we think or know, the uninformed & most Bitcoin traders never realises that this practice is highly orchestrated & planned with precision.





Skate.


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## ducati916 (3 February 2022)

Skate said:


> *Reposted without permission*
> I'm sure @ducati916 won't mind if I post from his daily article a graphic that sums "Bitcoin" in a few beans.
> 
> View attachment 136978
> ...








So those recovered coins have been the subject of a bankruptcy claim(s).

A Hedge Fund purchased those claims (at a deep discount) from individual creditors, waiting for the settlement. Settlement is next month, March 2022.

Those coins will be sold.

That could be some major selling pressure.

jog on
duc


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## Skate (4 February 2022)

Skate.


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## Skate (4 February 2022)

Skate.


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## Skate (4 February 2022)

Skate.


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## Skate (5 February 2022)

Skate.


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## Skate (5 February 2022)

Skate.


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## Skate (6 February 2022)

*Is it really possible to trade a monthly momentum strategy? *
I have a simple idea about trading & realised the only way to make a profit is by finding stocks that are moving. After starting the "Monthly Momentum Strategy" with "enthusiasm & vigor" I'm now concerned about how to extract the maximum amount of money from the market with minimal risk. Trading a long-term momentum strategy doesn't make sense to me at the moment after thinking about it a little more. When your money is on the line you will think about trading differently than talking about the methodology. Well, to tell you the truth I feel that it will be "near impossible" for this type of strategy to work as intended with such uncertainty in the markets at the moment. 

*Why? *
For a few reasons really. Short-term momentum traders seek to identify strong trends to take advantage of the expected price change. "Short-term" momentum trading buys when the price is rising & sells them when they have peaked. The goal is to work with volatility by finding buying opportunities in short-term uptrends (Not long-term trends) & exits at the first sight of losing momentum. The whole premise of this type of strategy is based on the idea that if there is enough force behind a price move, it will continue to move in the same direction. Staying with this strategy "month on month" will certainly test anyone's mettle & certainly it will test mine. 

*Momentum trading is similar to breakout trading*
The issue I see is when an unforeseen negative event occurs during the trading month it will force the price lower without the ability to counteract against such moves in the short term. My monthly momentum strategy doesn’t attempt to find the top or bottom of a trend but instead focuses on the main body of the price move "trying to exploit" market sentiment by follow the majority.

*Summary*
Backtesting indicates a monthly momentum strategy has worked in the "past" but the lingering question I'm asking myself is this - will a "monthly momentum strategy" be able to withstand the riggers of trading the current short-term volatility?

Skate.


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## Skate (6 February 2022)

*Confidence to pull the trigger with a new trading idea*
Trading the "Monthly Momentum Strategy" was done on a whim but I know I should have applied logic before trading this monthly strategy, but in the heat of the moment, it’s often hard to resist the voice of your inner self. Having a new strategy is like having a new sports car, you are "busting at the seams" to give it a spin.

*Greed is not helpful *
I'm first to admit greed must have seeped into the equation to trade a monthly momentum strategy as I didn't want to be the one who misses out on making all that money especially when the share market is experiencing a lot of volatility. After thinking about the methodology & understanding the strategy a little more a "cool head" would have served me well.

*There is a fine line between "having a go" & "being reckless"*
It's a fine line we walk because as traders we get trapped in analysis paralysis & ultimately miss out on the opportunity to start building a portfolio. My friendly piece of trading advice is not to let your "emotions" drive your trading "decision". When trading you need to keep a "cool head" so you don’t make the mistake of trading on a whim.

Skate.


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## Skate (6 February 2022)

*The more consistent you do what you do, the more consistent your results will be*
I know the paragraph header sounds double dutch but it's applicable when "Backtesting" a tradeable strategy. Why?

*First off*
When your backtest result becomes more consistent you will build a level of confidence to put money on the line having the discipline to follow the system, particularly during a spell of drawdowns. 

*Secondly*
Backtesting allows you to practice with the system, thus improving its proficiency. 

*Thirdly*
Many “coders” concentrate on making the most amount of money out of the strategy & not on execution, so they miss the critical metrics that make the bottom line what it is. 
*
Performance aspects *
Certain performance aspects have a direct impact on the system's "profitability" but what I'm after in my strategies is "predictability" as this game is built around "probabilities". Recording & tracking the performance of your trading system as many members do in this forum is absolutely essential to truly maximise your profits helping you get to the next level with your trading. 
*
Summary*
Take advantage of these amazing resources on this forum & don’t skimp on your trading education. Even if you think you know, you probably don't.

Skate.


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## ducati916 (6 February 2022)

Skate said:


> *Is it really possible to trade a monthly momentum strategy? *
> I have a simple idea about trading & realised the only way to make a profit is by finding stocks that are moving. After starting the "Monthly Momentum Strategy" with "enthusiasm & vigor" I'm now concerned about how to extract the maximum amount of money from the market with minimal risk. Trading a long-term momentum strategy doesn't make sense to me at the moment after thinking about it a little more. When your money is on the line you will think about trading differently than talking about the methodology. Well, to tell you the truth I feel that it will be "near impossible" for this type of strategy to work as intended with such uncertainty in the markets at the moment.
> 
> *Why? *
> ...




Afternoon Mr Skate:

Currencies are ideal for monthly based trending systems. Nice long lasting trends.






jog on
duc


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## qldfrog (6 February 2022)

ducati916 said:


> Afternoon Mr Skate:
> 
> Currencies are ideal for monthly based trending systems. Nice long lasting trends.
> 
> ...



I agree with Mr Ducati, currencies would provide you with trends tradable on a monthly basis, but i suspect that without leverage, it is not really worth while.
If you stick to the ASX, currency ETFs will not provide you with the tools you need, and you might not be able to backtest with your data feed..


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## ducati916 (6 February 2022)

qldfrog said:


> I agree with Mr Ducati, currencies would provide you with trends tradable on a monthly basis, but i suspect that without leverage, it is not really worth while.
> If you stick to the ASX, currency ETFs will not provide you with the tools you need, and you might not be able to backtest with your data feed..





That is true. However, use Options on the currency ETFs. Then you can go long or short additionally.





Plenty of leverage available. Fixed risk. September expiry. Set and forget.

jog on
duc


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## Skate (11 February 2022)

Skate.


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## Skate (11 February 2022)

Skate.


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## Skate (11 February 2022)

Skate.


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## Skate (12 February 2022)

Skate.


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## Skate (12 February 2022)

Skate.


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## MovingAverage (15 February 2022)

Nice succinct summary of some key system performance metrics for back-testing, what those metrics mean and what values to keep an eye out for. 

https://www.quantifiedstrategies.com/trading-strategy-and-system-performance-metrics/


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## qldfrog (15 February 2022)

MovingAverage said:


> Nice succinct summary of some key system performance metrics for back-testing, what those metrics mean and what values to keep an eye out for.
> 
> https://www.quantifiedstrategies.com/trading-strategy-and-system-performance-metrics/




already considering first few, not enough Sharpe ratio when I think about it good hints on targets to aim for..will check my systems in these lines
As times go, and as discussed in the link, I also like more and more checking at the equity curve look, smooth looking, aiming for the sky but not exponential or jittery,
A nice summary article in my view
Thanks MA


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## othmana86 (15 February 2022)

@Skate or anyone have you ever looked into a dynamic trading system?
That it is the system will act differently depending on market conditions. There’s two examples that I can think of off the top of my head.
Example 1
If Market is rising: use standard trading system
If market is flat or declining: revert to an MR system

Example 2
If market is rising: use standard trading system
If market meets bear condition: trade bear ETFs based on X rules.

some food for thought..


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## Skate (15 February 2022)

othmana86 said:


> anyone have you ever looked into a dynamic trading system?




*To answer your question - no I haven't*
I'm sure it can be done but you would have to work through it as it wouldn't be as simple as you indicate because "switching" raises new questions about the sell condition of remnant positions. FYI, I've made a stack of posts on switching between systems contained in one strategy. Do a search if interested. It might not be exactly what you need but allows you & others to understand Amibroker "switch statement".

*Two examples of the Switch Function*
1. Switching the Strategy
2. Switching the Exploration Mode

*The Switch Strategy*
This strategy holds 7 individual strategies. Using the switch function I can select the strategy for Backtesting or Exploration Analysis. By selecting the strategy it sets the unique "Buy & Sell" condition, filters, StaleStop, VolatilityStop, & TrailingStop for that strategy as each strategy is different when it comes to these settings.

*Switch Statement*




__





						switch Statement
					





					www.amibroker.com
				




*Posts to read*




__





						Dump it Here
					

AmiBroker Param Function The “Param Function” is the handiest feature that I use in my strategy development phase. The “Param function” allows me to switch between my definable parameters. This feature adds a new user-definable parameter to your strategy which is accessible via a Parameters...




					www.aussiestockforums.com
				







__





						Dump it Here
					

Moreover A picture paints a thousand words. These are a few typical "Pocket Pivot Strategy" entries (no-frills entry at that). The charts below display "pivot points" entries.                    Skate.




					www.aussiestockforums.com
				




Skate.


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## qldfrog (15 February 2022)

othmana86 said:


> @Skate or anyone have you ever looked into a dynamic trading system?
> That it is the system will act differently depending on market conditions. There’s two examples that I can think of off the top of my head.
> Example 1
> If Market is rising: use standard trading system
> ...



or
 If Market is rising: use standard trading system, System 1 is on and gathering hay, system2 in standby
If market is flat or declining: System1 enter a pause mode, no buy just sell
and System2 gets alive;
Many , or just me?, use *a set of systems*, trying hard to have them disconnected and independent and then check global results on the sum of them
It can get quite messy if you try doing everything in one set of code, even worse to check what is wrong/working


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## ducati916 (16 February 2022)

othmana86 said:


> @Skate or anyone have you ever looked into a dynamic trading system?
> That it is the system will act differently depending on market conditions. There’s two examples that I can think of off the top of my head.
> Example 1
> If Market is rising: use standard trading system
> ...





Assuming that system 1 is a long only system, then:

The old market adage: 'there is always a bull market somewhere'.

If you accept this, then:

Assuming that your trading universe from where you select your stocks holds stocks/futures/ from all asset classes, stocks, commodities, bonds, cryptos, then, there should be no issues.

In other words, your system will only select securities that (presumably) are displaying upward trends. At the moment we have commodities, oil being the most obvious example, but there are many others. Then you have stocks of producers of commodities that are also bullish, CVX, XOM, CENX (aluminium) etc.

Of course this is a very simplified analysis.

Possibly of interest: https://blogs.cfainstitute.org/inve...isited-moving-averages-above-average-returns/

jog on
duc


jog on
duc


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## Skate (16 February 2022)

ducati916 said:


> In other words, your system will only select securities that (presumably) are displaying upward trends. Of course this is a very simplified analysis.
> 
> Possibly of interest: https://blogs.cfainstitute.org/inve...isited-moving-averages-above-average-returns/




*Technical Analysis Revisited: Moving Averages = Above Average Returns?*
@ducati916 posted a hyperlink to an article about trading moving averages that equals above-average returns. The article revolves around two portfolios that went long the S&P 500 when it traded above its moving average and shorted it when it traded below. One portfolio was constructed based on a 50-day moving average, the other on a 200-day moving average. You can read the article but it's not why I'm making a post today, other than to revisit an alternative trading method to the above.

*What's the point *
I've hesitated in making another post about trading "Moving Averages" as this topic has been done to death. Sure, you can trade a moving average strategy & make acceptable returns but trading this style comes with risk. Trading moving averages make our job difficult because of the lag but it does a reasonable job of smoothing data. 

Skate.


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## Skate (16 February 2022)

*Testing out a "moving average" trading idea*
Trading "moving averages" is not magical but using two short-term moving averages to define a moving average channel is also not new. Using the lows & highs of the short-term 3-period moving averages creates a band that allows trading that band.

*How? *
Simply "Buy" when the close is greater than the 3-period moving average of the high & "Sell" when the close is lower than the 3-period moving average of the low.  In a nutshell that's the engine that drives this strategy. The returns are above average & with additional work, I'm sure it would turn into a tradable strategy.

*3-Year backtest results*
16/2/2019 to today 16/2/2022










*Summary*
It's a simple trading strategy "but" it can also form "part of a buy & sell condition". Using moving averages have their place in trading & their use is only limited by your imagination.

Skate.


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## Skate (18 February 2022)

CityIndex said:


> All trading carries risk




*Bitcoin & the mysterious world of cryptocurrencies*
Bitcoin & cryptocurrencies, in general, are all built on the enthusiasm of others that don’t have any intrinsic value.

*The only thing (Bitcoin) is good for is speculation*
It certainly makes an exciting story, one that has become a byword for insanity in the markets that's unlikely to replace national or fiat  as negative news causes serious price correction adding to its volatility & instability.

*The graphic below has been posted without permission*
@ducati916 daily posts hold so much information & at times screen capture to reinforce a point of view, it's for this very reason I'm reposting it today.




Skate.


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## Skate (18 February 2022)

Garpal Gumnut said:


> I am interested in crypto, much as I am in Forex, Shorting and Options but have never had the balls to give it a go. I probably never will.




*Bitcoin is currently in unchartered territory*
Governments & central banks, the latest being Canada have begun implementing unprecedented fiscal & monetary policies to mitigate the effects of cryptocurrencies on the world's financial systems. Government digital transformation is already taking shape putting in measures to discourage investments in such vehicles.

*It's a punt. It's a gamble. What it isn't is real.*
Crypto's is basically like stock in an empty company that doesn't do anything except promote the sale of its own stock. Crypto's such as Bitcoin is a fool's investment of those who trade hoping to offload it on someone dumber than themself. The mysterious world of cryptocurrencies is exciting at the moment for some - but for those without experience, trading these coins will eventually end in tears. If you are aware of the heightened risk of trading crypto & still decide to trade, well that's called an informed decision & not one I would agree with.

*Remember this screen capture?*
The capture below is also from one of @ducati916 daily posts that sums up cryptocurrencies precisely.




Skate.


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## eskys (18 February 2022)

Skate said:


> *Bitcoin is currently in unchartered territory*
> Governments & central banks, the latest being Canada have begun implementing unprecedented fiscal & monetary policies to mitigate the effects of cryptocurrencies on the world's financial systems. Government digital transformation is already taking shape putting in measures to discourage investments in such vehicles.
> 
> *It's a punt. It's a gamble. What it isn't is real.*
> ...



I don't have the guts or udder in cryto..........by the way, Skate, what you posted about trading makes a lot of sense to me, thank you.


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## Skate (18 February 2022)

Skate.


----------



## Skate (18 February 2022)

Skate.


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## Skate (18 February 2022)

Skate.


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## Skate (18 February 2022)

*Do you use an "Index Buy Filter" or not?*
The shootout between the "Flying Bat Strategy" & "Platinum Strategy" over a short 6 month period should determine whether to trade with or without an "index buy filter".

(a) The "Platinum Strategy" has an "index buy filter" that keeps you out of the markets when trading conditions are unfavorable.
(b) The "Flying Bat Strategy" has "no index buy filter".

*The real question*
Should you trade when the market is non-responsive?

*Sitting on your hands*
The "Platinum Strategy" is on the super-safe side of trading & will "keep you out" of the markets when the "index buy filter" is (off) or "kick you out" of a position quickly when the position doesn't respond as expected.

*Trading constantly "comes at a cost" sometimes*
With no "index buy filter" attached to the buy condition "The Flying Bat Strategy" scratches the itch of allowing you to trade on a constant weekly basis. I'm just saying when you have a new car it's hard to leave it in the garage because you just want to take it for a spin every week.

*We can't help ourselves*
As a trader, we want to trade every week & that's where the "Flying Bat Strategy" comes into its own. Sitting on the sideline twiddling our thumbs is not in our DNA as a trader.

*So, should we trade when the market is non-responsive?*
I'm saying - "doing nothing is hard to do".

Skate.


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## MovingAverage (18 February 2022)

Skate said:


> *It's a punt. It's a gamble. What it isn't is real.*
> Crypto's is basically like stock in an empty company that doesn't do anything except promote the sale of its own stock. Crypto's such as Bitcoin is a fool's investment of those who trade hoping to offload it on someone dumber than themself. The mysterious world of cryptocurrencies is exciting at the moment for some - but for those without experience, trading these coins will eventually end in tears. If you are aware of the heightened risk of trading crypto & still decide to trade, well that's called an informed decision & not one I would agree with.




When high profile celebrities start publicly endorsing crytpo currencies you can be guaranteed it's for fools. But hey, what do I know I'm just an old fart not in touch with modern technology


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## rnr (18 February 2022)

MovingAverage said:


> When high profile celebrities start publicly endorsing crytpo currencies you can be guaranteed it's for fools. *But hey, what do I know I'm just an old fart not in touch with modern technology*




Hi @MovingAverage,

Welcome to the club my friend.
It is worth noting that membership is not all that exclusive however, you will be surprised to learn that the number of members is increasing rapidly.

Cheers, Rob


----------



## Skate (19 February 2022)

*Amibroker Exploration Analysis Raw Signal*
For transparency, this is the only signal generated this week







Skate.


----------



## Skate (19 February 2022)

Skate.


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## othmana86 (20 February 2022)

qldfrog said:


> or
> If Market is rising: use standard trading system, System 1 is on and gathering hay, system2 in standby
> If market is flat or declining: System1 enter a pause mode, no buy just sell
> and System2 gets alive;
> ...



Good thoughts! Thanks


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## othmana86 (20 February 2022)

Skate said:


> *To answer your question - no I haven't*
> I'm sure it can be done but you would have to work through it as it wouldn't be as simple as you indicate because "switching" raises new questions about the sell condition of remnant positions. FYI, I've made a stack of posts on switching between systems contained in one strategy. Do a search if interested. It might not be exactly what you need but allows you & others to understand Amibroker "switch statement".
> 
> *Two examples of the Switch Function*
> ...



Thanks skate.


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## othmana86 (20 February 2022)

Skate said:


> *Bitcoin is currently in unchartered territory*
> Governments & central banks, the latest being Canada have begun implementing unprecedented fiscal & monetary policies to mitigate the effects of cryptocurrencies on the world's financial systems. Government digital transformation is already taking shape putting in measures to discourage investments in such vehicles.
> 
> *It's a punt. It's a gamble. What it isn't is real.*
> ...



Why does that even matter though? What you are saying would only really matter if you are investing and buying and holding for life.

crypto is 100% a tradeable universe .. more risky yes but definitely tradeable. Risk v reward. It’s speculative sure, allocate a smaller percent of your portfolio trading it.

I’ve seen solid systems with high returns on crypto more than ASX by a mile so are the drawdowns but with overall  positive expectancy.

I am not advocating for or against crypto, but it is mainstream with money flowing into it, rightly or wrongly. Crypto.com is a major sponsor for a bucket load of events. F1 as an example, I believe they also have a stadium called crypto.com arena in the US.

It’s value is what you and I agree it is. This really is not too dissimilar to FIAT that’s not backed by any true gold reserves.

anyway that’s just my view. If you think you can make money.. trade it.


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## Skate (20 February 2022)

othmana86 said:


> crypto is 100% a tradeable universe .. more risky yes but definitely tradeable. If you think you can make money.. trade it.






Skate said:


> *If you are aware of the heightened risk of trading crypto & still decide to trade, well that's called an informed decision *& not one I would agree with.




Skate.


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## Skate (22 February 2022)

IFocus said:


> Enhancing Trader Performance by Brett Steenbarger highly recommended




*Enhancing Trader Performance - Brett N. Steenbarger*
There are some passages you read that resonate more than others. 

*Two questions from Brett's book*
1. “How do you learn trading basics, undergo the beginner’s frustrations, and still sustain the ability to perform”
2. “How you structure your learning, however, will determine whether trading becomes the worthy challenge or a frustrating obstacle.”

*The answer is found in the same book*
"If you do not find a style of trading and a trading market that match your talents and interests, you will not spend enough time in the state of flow to supercharge your learning efforts. Nor will you cultivate the second-order competence that will allow you to weather inevitable trading storms. Finding a niche means so much more than simply making money or having fun. It is the discovery of that worthy challenge that energizes you, tapping into your deepest sense of meaning.”
*
More reading if interested*




__





						TraderFeed - Brett Steenbarger, Ph.D.
					

TraderFeed is a very interesting psychology of trading blog. There are other threads here about this site but they seem to get bogged down into personal opinion. I am hoping just to keep this as a regular upload of his posts without it becoming littered with negativity. It may be of help for...




					www.aussiestockforums.com
				







__





						The Brett Steenbarger thread
					

Anyone else out there follow Brett Steenbarger?  His blog which he updates very frequently is always full of gems.  Case in point  http://traderfeed.blogspot.com/2009/12/lessons-for-developing-traders-more-on.html




					www.aussiestockforums.com
				











						BRETT STEENBARGER'S TRADING PSYCHOLOGY RESOURCE CENTER
					

Contact For Trading Firms and Media:  steenbab at aol dot com   My Twitter Feed:  @steenbab   RADICAL RENEWAL  - Free blog book on t...




					traderfeed.blogspot.com
				




Skate.


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## DaveTrade (22 February 2022)

Skate said:


> "If you do not find a style of trading and a trading market that match your talents and interests, you will not spend enough time in the state of flow to supercharge your learning efforts. Nor will you cultivate the second-order competence that will allow you to weather inevitable trading storms. Finding a niche means so much more than simply making money or having fun. It is the discovery of that worthy challenge that energizes you, tapping into your deepest sense of meaning.”



Thank you Skate, exactly the point I've been trying to make in another thread.


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## MovingAverage (22 February 2022)

Skate said:


> *It's a punt. It's a gamble. What it isn't is real.*
> Crypto's is basically like stock in an empty company that doesn't do anything except promote the sale of its own stock. Crypto's such as Bitcoin is a fool's investment of those who trade hoping to offload it on someone dumber than themself. The mysterious world of cryptocurrencies is exciting at the moment for some - but for those without experience, trading these coins will eventually end in tears. If you are aware of the heightened risk of trading crypto & still decide to trade, well that's called an informed decision & not one I would agree with.



Don't mean to bring this thread back to crypto, but this headline's reference certainly gave me a good laugh.


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## Skate (22 February 2022)

*How can we determine a trend?*
It's been volatile trading these last few weeks & the effectiveness of a trend can be patchy. Using an "Index Buy Filter" has the ability to keep you out of the markets when unfavorable trading conditions exist. I should also remark that professional traders trade constantly. I also have a mix of Trading Systems that incorporate an "Index Buy Filter" where others don't.  



MovingAverage said:


> I've tried a lot of different MAs over the years but admittedly in the context of an index filter. Overall I keep coming back to the old fashioned simple MA as it seems to be the most robust across a range of different markets.




*An "Index Buy Filter" *
Using a "Buy Filter" has limitations as the standard run-of-the-mill buy filters use a "moving average" to indicate when the index is off or on. Just by the very nature of using a moving average or its "variations" have a habit of getting you "out" a bit late & reentering the markets can also be "delayed". The lag associated with this type of indicator "is a killer in this game".

Skate.


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## Skate (22 February 2022)

*Kaufman’s Efficiency Ratio (ER)*
The Efficiency Ratio also has its limitations but the "ER" spots trends in prices & can be used in conjunction with other technical indicators to improve the performance of those indicators. Efficiency Ratio is used to define the strength of a price trend to see how effective the trend is. 

*All trends are not equal*
It's super vital to define a trend as they can be "strong or weak". Entering only in a "strong trend" is vital when seeking improvements to a strategy's performance.

*Disclaimer - Using Efficiency Ratio *
1. The Efficiency Ratio (RE) has nothing to do with volatility, this is "important to understand".
2. The Efficiency Ratio (RE) may help recognise periods of strong trends & eliminate side-way range trading.

*Volatility*
In technical analysis, the Efficiency Ratio (ER) is just a tool to measure the efficiency of a trend. The Efficiency Ratio (RE) is not a volatility indicator but it can be used in conjunction with a "volatility indicator" as it adjusts to volatility changes.  

Skate.


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## Skate (22 February 2022)

MovingAverage said:


> Don't mean to bring this thread back to crypto, but this headline's reference certainly gave me a good laugh.
> 
> View attachment 137944




*Munger has made his feelings on crypto known in the past*
“I hate the bitcoin success,” he said last year. “I think the whole damn development is disgusting & contrary to the interests of civilization.” Despite his apparent loathing, Munger said he was not completely opposed to the US Federal Reserve launching its own digital currency.

*Charlie Munger on crypto: ’the whole development is disgusting*
At the 2021 annual Berkshire Hathaway shareholders meeting live-streamed on Yahoo Finance, Warren Buffett & Charlie Munger address the crypto market. The 2 minute leaves no doubt on their feelings about cryptos.









						Charlie Munger on crypto: ’the whole development is disgusting’
					

At the annual Berkshire Hathaway shareholders meeting live streamed on Yahoo Finance, Warren Buffett and Charlie Munger address the crypto market now being valued at $2 trillion.



					hk.tv.yahoo.com
				




*Warren Buffett: Bitcoin Is An Asset That Creates Nothing*
Berkshire Hathaway CEO Warren Buffett speaks to CNBC's Becky Quick about what he thinks about bitcoin & the cryptocurrency markets.



Skate.


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## MovingAverage (22 February 2022)

Skate said:


> *How can we determine a trend?*
> It's been volatile trading these last few weeks & the effectiveness of a trend can be patchy. Using an "Index Buy Filter" has the ability to keep you out of the markets when unfavorable trading conditions exist. I should also remark that professional traders trade constantly. I also have a mix of Trading Systems that incorporate an "Index Buy Filter" where others don't.
> 
> 
> ...



The lag has to be considered in the context of your overall hold times. Index filters are generally useless for short hold time of day a few days which is why I don’t bother with any index filter on my swing system. But on my weekly long only which can have an average hold time of many many months the lag generally has minimal adverse impact


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## MovingAverage (22 February 2022)

Skate said:


> *Munger has made his feelings on crypto known in the past*
> “I hate the bitcoin success,” he said last year. “I think the whole damn development is disgusting & contrary to the interests of civilization.” Despite his apparent loathing, Munger said he was not completely opposed to the US Federal Reserve launching its own digital currency.
> 
> *Charlie Munger on crypto: ’the whole development is disgusting*
> ...




I didn’t think too deeply about it—I just thought it funny as I’ve never heard anyone refer to an asset class as a venereal disease. It just appealed to my immature sense of humour


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## Skate (24 February 2022)

*Fear is rampant*
The Chief Investment Officer for Motley Fool Scott Phillips, explains that the ASX is tanking going on to say that you need to look at the bigger picture how to feel & what to do right now. 

*The short YouTube video is compelling*



Skate.


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## MovingAverage (24 February 2022)

Skate said:


> *Fear is rampant*
> The Chief Investment Officer for Motley Fool Scott Phillips, explains that the ASX is tanking going on to say that you need to look at the bigger picture how to feel & what to do right now.
> 
> *The short YouTube video is compelling*
> ...




Great post @Skate. Some good common sense advice in that video. It's not about timing the market...it's about time in the market.

My thoughts are with the ordinary folks of the Ukraine--this will be a very tough time for them.

Putin you are a complete and utter f wit


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## Skate (25 February 2022)

Skate.


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## Skate (25 February 2022)

Skate.


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## Skate (25 February 2022)

Skate.


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## Skate (25 February 2022)

Skate.


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## soren_lorensen (25 February 2022)

Skate said:


> *An "Index Buy Filter" *
> Using a "Buy Filter" has limitations as the standard run-of-the-mill buy filters use a "moving average" to indicate when the index is off or on. Just by the very nature of using a moving average or its "variations" have a habit of getting you "out" a bit late & reentering the markets can also be "delayed". The lag associated with this type of indicator "is a killer in this game".
> 
> Skate.



okay, noted and agree - but how's your's different and what time frame/systems are you applying it to? 

a simple ma filter over the longer term on weekly or monthly systems is still significantly better than buy and hold, but yes there will always be lag to exit and re-enter, 2008GFC took 15-18months and simple filter kept you out of the big drop but 20covid took 6weeks and you'd have probably not seen much difference.

a simple 200day ma filter monthly during the covid crash would have been a killer (in the short term)

i'm interested in hearing what you recommend to reduce this lag?


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## Skate (25 February 2022)

soren_lorensen said:


> i'm interested in hearing what you recommend to reduce this lag?




@soren_lorensen to save a long boring post about lagging indicators I'm suggesting you search "Lag" by "Skate" & there would find 42 separate posts on the subject.

*Other than that *
Using an "Index Buy Filter" or not is really a personal decision driven by your risk tolerance as both have their "pros & cons". Also, the run of the mill "Index Buy Filters" uses a simple moving average to indicate how the market is performing in relationship to a "nPeriod" moving average.

*I'm not suggesting you trade with one or not*
Is an "Index Buy Filter" Crude? - yes,
Is an "Index Buy Filter" Simple? - yes,
Is an "Index Buy Filter" Effective? - yes.



soren_lorensen said:


> okay, noted and agree - but how's your's different and what time frame/systems are you applying it to?




Oh, I wish it was that simple.



soren_lorensen said:


> a simple ma filter over the longer term on weekly or monthly systems is still significantly better than buy and hold




Yes, there is a difference between trading & investing. Both have their places & I entertain both.



soren_lorensen said:


> yes there will always be lag to exit and re-enter, 2008GFC took 15-18months and simple filter kept you out of the big drop but 20covid took 6weeks and you'd have probably not seen much difference.




*Using a "Buy Filter" has limitations *
When I refer to a "Buy Filter" I'm referring to a standard run-of-the-mill "Index Buy Filter". Most "Index Buy Filter" use a simple "moving average" to indicate when the index is off or on. There are a few low-lagging moving averages that I use & have posted about them many times before. I've even explained the strategies where they have been applied.

*Search for moving averages*
Search keywords such as "SMA, EMA, DSMA, KAMA" by "Skate" to understand their uses a little better.

Skate.


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## Skate (25 February 2022)

*Using an "Index Buy Filter"*
Using an "Index Buy Filter" has the ability to keep you out of the markets when unfavourable trading conditions exist, that's a given. I should also remark that professional traders trade constantly. I also have a mix of Trading Systems that incorporate an "Index Buy Filter" where others don't.

*"Index Buy Filter"*
The shootout between the "Flying Bat Strategy" & "Platinum Strategy" over a short 6 month period should determine whether to trade with or without an "index buy filter".

(a) The "Platinum Strategy" has an "index buy filter" that keeps you out of the markets when trading conditions are unfavorable.
(b) The "Flying Bat Strategy" has "no index buy filter".

*The real question*
Should you trade when the market is non-responsive?

*Recent trading results with the comparison between using an "Index Buy Filter" & "not"*




*The "Platinum Strategy" uses an "index buy filter"*
This strategy is on the super-safe side of trading & will "keep you out" of the markets when the "index buy filter" is (off) or "kick you out" of a position quickly when the position doesn't respond as expected.

*The "Flying Bat Strategy" uses "NO index buy filter"*
Referring to the above equity curve, the last three weeks haven't been kind at all. Trading constantly "comes at a cost" but scratches the itch of allowing you to trade on a constant weekly basis. I'm just saying when you have a new car it's hard to leave it in the garage because you just want to take it for a spin every week.

*My original question *
Should we trade when the market is non-responsive?

*I'm just saying *
"Doing nothing" is "hard to do". Sitting on the sideline "twiddling my thumbs" is not in my DNA as a trader

Skate.


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## Skate (25 February 2022)

*Trading is a tough gig*
These last few months would test any new trader as it's not been the most optimal time to trade. Even seasoned traders are not happy but it's nothing that we haven't seen before. Rest assured the good times will return, hanging in there will test your mettle. Your ability to cope well when difficult trading conditions persist may be the ultimate decider if you will be a profitable trader or not.

Skate.


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## soren_lorensen (25 February 2022)

Skate said:


> *Trading is a tough gig*
> These last few months would test any new trader as it's not been the most optimal time to trade. Even seasoned traders are not happy but it's nothing that we haven't seen before. Rest assured the good times will return, hanging in there will test your mettle. Your ability to cope well when difficult trading conditions persist may be the ultimate decider if you will be a profitable trader or not.
> 
> Skate.



Do you use any intraday strategies? 
Are your systems long only?

There are many intra trading opportunities to be had, especially around earnings season - now i guess most of your systems are systems i.e. systematic, but even so, there are many intra day system, mean reversion etc, have you seen Radge (US) MR performance today (last night) ??


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## Skate (25 February 2022)

soren_lorensen said:


> Do you use any intraday strategies?




No, I don't.



soren_lorensen said:


> Are your systems long only?




Yes, they are.



soren_lorensen said:


> now i guess most of your systems are systems i.e. systematic




Yes.



soren_lorensen said:


> have you seen Radge (US) MR performance today (last night) ??




No, I haven't - do you have a link?

*Also, I only trade the ASX*
The commission would kill me trading a "Mean Reversion Strategy" on the ASX using CommSec. It's also a pity you redacted parts of the Share Trade Trader portfolio report. I would be interested to do the calculations.

Skate.


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## soren_lorensen (25 February 2022)

Skate said:


> No, I don't.
> 
> 
> 
> ...



Yes agree Commsec would be a bad choice for MR systematic approach

I didn't redact, nick does






I'm pretty sure his daily post on PnL is his whole portfolio which i think is about 7 systems or thereabouts.

but it's just @thechartist on twitter


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## DaveDaGr8 (26 February 2022)

That would be Nicks Daytrading system not his MR system.

Last night was a perfect daytrade bar. There have been a few so far this year. Helps to take the edge off the systems that are currently bleeding cash.

Note .... This is NOT nicks turnkey daytrade system that he sells.


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## MovingAverage (26 February 2022)

soren_lorensen said:


> Do you use any intraday strategies?
> Are your systems long only?
> 
> There are many intra trading opportunities to be had, especially around earnings season - now i guess most of your systems are systems i.e. systematic, but even so, there are many intra day system, mean reversion etc, have you seen Radge (US) MR performance today (last night) ??
> ...



Go back a month or so on Nick’s US intra-day and he had some big losses, which only a seasoned trader like Nick could stomach and continue on trading


----------



## Skate (26 February 2022)

Skate.


----------



## Skate (26 February 2022)

Skate.


----------



## Skate (26 February 2022)

*Amibroker Exploration Analysis Raw Signals*





*Amibroker Portfolio Backtest Signals*








Skate.


----------



## MovingAverage (26 February 2022)

This is a great example of faith in your systems and removing the emotion from your head when trading.

Couple of posts from Nick...check out his YTD P&L which he posted on 12 Feb. The second pic which he posted a few hours ago show he's still in the red but is clawing back a lot of his mid Feb losses. 

Not many would stick with that.


----------



## Skate (26 February 2022)

MovingAverage said:


> It's not about timing the market...it's about time in the market.






Skate said:


> *Trading is a tough gig*
> These last few months would test any new trader as it's not been the most optimal time to trade. *Even seasoned traders are not happy but it's nothing that we haven't seen before*. Rest assured the good times will return, hanging in there will test your mettle. Your ability to cope well when difficult trading conditions persist may be the ultimate decider if you will be a profitable trader or not.





*12th February 2022 to 24th February 2022*
Nice recovery







Skate.


----------



## Ann (26 February 2022)

Skate said:


> *12th February 2022 to 24th February 2022*
> Nice recovery



Nice to know what they were! I guess you need to pay for a sub?


----------



## soren_lorensen (27 February 2022)

DaveDaGr8 said:


> That would be Nicks Daytrading system not his MR system.



thanks Dave, 

Do you know anything about Nick's MR system, he mentions the code is open source but i cannot find any link to the source code.


----------



## MovingAverage (27 February 2022)

soren_lorensen said:


> thanks Dave,
> 
> Do you know anything about Nick's MR system, he mentions the code is open source but i cannot find any link to the source code.



Open source does not equal free. You gotta pay him to get access to the source code


----------



## soren_lorensen (27 February 2022)

MovingAverage said:


> Open source does not equal free. You gotta pay him to get access to the source code



obviously he sells this product, but...

open source 

denoting software for which the original source code is made freely available and may be redistributed and modified.

i'm guessing what he actually means is the code is viewable/editable by the purchaser and not open source in the traditional meaning, better maybe to say the user can edit the code directly or something like that.


----------



## MovingAverage (27 February 2022)

soren_lorensen said:


> obviously he sells this product, but...
> 
> open source
> 
> ...



Understand…but Nick doesn’t subscribe to that definition. Like I said, pay him and he’ll give you the source code. His definition of open source also does not allow you to distribute your derivative works from his source code


----------



## Sir Burr (27 February 2022)

MovingAverage said:


> pay him











						MEAN REVERSION STRATEGY
					

Mean Reversion strategy to profit from short term price movements; Buy strongly trending stocks experiencing brief periods of weakness.




					www.thechartist.com.au
				




...but that's not the US HFT system.
That would be a subscription with compulsory steel balls.


----------



## MovingAverage (27 February 2022)

Sir Burr said:


> MEAN REVERSION STRATEGY
> 
> 
> Mean Reversion strategy to profit from short term price movements; Buy strongly trending stocks experiencing brief periods of weakness.
> ...



Must admit I’m not up on what Nick sells as subscription and turnkey. I guess I was just highlighting that Nick’s “open source” turnkey systems are not free. Most folks automatically assume open source equals free


----------



## DaveDaGr8 (28 February 2022)

soren_lorensen said:


> thanks Dave,
> 
> Do you know anything about Nick's MR system, he mentions the code is open source but i cannot find any link to the source code.




As @MovingAverage says, the source code is not free.

I would definately not call it open source either because you are not allowed to share it ( you have to sign an NDA ), but you can modify it at your discretion.

For a comparison i just ran a backtest from Nicks stock code from year to date. I was interested to see how his turnkeys were travelling through this 2 month period.

*$SPX ( 1/1/22  O = 4778 ... 25/2/22 C = 4384  YTD -8.24% )*



*Nicks MR Unmodified ( US )*


*Nicks DayTrade LONG Unmodified ( RUI 25% margin)*


*Nicks Daytrade SHORT Unmodified ( RUI 25% margin )


Nicks WTT Unmodified ( ASX )


Nicks Large Cap MOMO Unmodified ( ASX 100 ).

*

He publishes his long term results on his site so i won't repeat them here.

The US market is currently down 8.24% and ASX 6.5% YTD, 
Discounting the 2 day trading strategies the MR is the only system holding it's head above the waterline (just), The MR's performance to date for the year is ahead of the 2 trend following/momentum systems which isn't surprising given the market. It is also beating his premium portfolio, ASX momo and US momo. 

BUT ....... We are looking at a particular point in time with a specific set of conditions. For long term performance through broader market conditions you really should go to his site and study the results of his systems over a longer time period, they're all freely available.

*** Daytrading strategies should be discounted because they are NOT something that come ready to run out of a box.

I am NOT advocating Nicks systems. I don't run any of them and i don't think Nick does either, at least not in their turnkey form.


----------



## Skate (28 February 2022)

DaveDaGr8 said:


> For a comparison i just ran a backtest from Nicks stock code from year to date.




@DaveDaGr8 that's an excellent post with great content for a short evaluation of Nick's turnkey strategies. If it's not too much trouble would you also do the same comparison with a backtest period of (365-days) & two years backtest?

So the backtest is not cherry-picked - the one & two years backtest should start & conclude with the 28th February. Doing so allows others & myself to evaluate professionally written code in relation to their own efforts.

Skate.


----------



## DaveDaGr8 (28 February 2022)

1 Year & 2 year versions.

*SPX*




* MR System ( US )*




*Large Cap Momo ( ASX )*




*Day Trade Long  ( US )*




*WTT (ASX )*


----------



## soren_lorensen (1 March 2022)

DaveDaGr8 said:


> Daytrading strategies should be discounted because they are NOT something that come ready to run out of a box.
> 
> I am NOT advocating Nicks systems. I don't run any of them and i don't think Nick does either, at least not in their turnkey form.



Thank you for running those comparisons on the 2/12/24 month backtests.

The performance of the US LONG daytrade is very solid from what i can see here.

What do you mean the daytrading strategies should be discounted ... "they are NOT something that come ready to run out of a box" d'you mean the chartist api also needs to be purchased or do you mean something else ??

Yes i see this often, individuals not advocating for turnkey code defaults, i guess most purchasers tweak to avoid anyone gaming the signals; i know Nick also has mentioned he has his own tweaks on these, so it's essentially purchasing a broad canvass on a trading approach from which each individual can tweak for their own needs.


----------



## AussieStockDawg (1 March 2022)

DaveDaGr8 said:


> For a comparison i just ran a backtest from Nicks stock code from year to date. I was interested to see how his turnkeys were travelling through this 2 month period.
> 
> *$SPX ( 1/1/22  O = 4778 ... 25/2/22 C = 4384  YTD -8.24% )*
> 
> View attachment 138295




Can you please demystify what "SPX" is


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## DaveDaGr8 (1 March 2022)

Yes the US DT is a rock solid performer and it can be tweaked a bit.

The majority of people here don't talk about them and don't seem interested in them.

Yes you need to setup a whole infrastructure framework. IB, an API, Norgate, amibroker all built in a custom VPS. Nick has posted a video on it with some pretty simple go to instructions.

I spend almost NO time anymore looking at the mechanics of daytrading, it's mostly all automated. I could walk out on Monday and come back on Friday and hopefully it's still ticking away.

What i spend my time doing is looking at the reports of anomalies if there are any, then tracing and downloading minute or tick data and piecing together WHY something didn't work the way it should have.

The other thing i do is look at potential flaws and weaknesses that can break and take down the system ? when will i get hacked ? how can i slow down a hacker ? Having a system online 24/7 exposes you to the world.

To be honest that's just looking at the rabbit hole. Once you fall in it you'll realise just how deep it goes.

Just to reiterate .... I DON'T run Nicks daytrading strategy or any of the other turnkey strategies.


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## DaveDaGr8 (1 March 2022)

AussieStockDawg said:


> Can you please demystify what "SPX" is



It is the S&P 500 Index, the top 500 companies in the US . 

In Amibroker it has the symbol $SPX


----------



## AussieStockDawg (1 March 2022)

DaveDaGr8 said:


> Just to reiterate .... I DON'T run Nicks daytrading strategy or any of the other turnkey strategies.




Hi Dave, are you trading any of Nick's subscription services, or using his API for US trading ?


----------



## DaveDaGr8 (2 March 2022)

AussieStockDawg said:


> Hi Dave, are you trading any of Nick's subscription services, or using his API for US trading ?




No i don't use either his subscriptions, turnkeys or API for trading, i just like to use it as a baseline for my own trading.

I bought all his turnkeys during his black friday deal last year at 50%. It was an offer too good to pass up.


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## Sir Burr (2 March 2022)

DaveDaGr8 said:


> Yes you need to setup a whole infrastructure framework. IB, an API, Norgate, amibroker all built in a custom VPS.




Yes and you would want to cover all the risks for that mean reversion.
Hopefully that VPS doesn't have the unthinkable happen during the US market.

Imagine a big IB margin account while you're snoring away. You place a few hundred trades before the market opens to trigger at a price and the API limits the number of trades bought.

Then the VPS has an outage and your API resets during a market sell off. Oooops.

You'd have an alarm on your mobile if an outage happened but you'd be out of bed in a flash scrambling to cancel trades.


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## soren_lorensen (2 March 2022)

Sir Burr said:


> Yes and you would want to cover all the risks for that mean reversion.
> Hopefully that VPS doesn't have the unthinkable happen during the US market.
> 
> Imagine a big IB margin account while you're snoring away. You place a few hundred trades before the market opens to trigger at a price and the API limits the number of trades bought.
> ...



I'm sure Nick has pointed out on his twitter in the past that they have had some technical glithes with the US systems running overnight in the past which caused problems but not sure the extents of it to be honest. I believe the US markets have some halts based on volitility and circuit breakers where the market is closed for the rest of the day on limit down (-20%)


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## Skate (4 March 2022)

Skate.


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## Skate (4 March 2022)

Skate.


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## Skate (4 March 2022)

Skate.


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## Skate (5 March 2022)

Skate.


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## Skate (5 March 2022)

Skate.


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## wasp (9 March 2022)

Sir Burr said:


> Yes and you would want to cover all the risks for that mean reversion.
> Hopefully that VPS doesn't have the unthinkable happen during the US market.
> 
> Imagine a big IB margin account while you're snoring away. You place a few hundred trades before the market opens to trigger at a price and the API limits the number of trades bought.
> ...



I run 4 heavily modded versions of Nick's day trade strategies. 1 x short and 3 x longs. I use his API to manage the orders and I run it from a server. As soon as a trade is filled, an MOC order is immediately placed (although out of the thousands of orders I've had filled the last 12 months, about 5 times there was no MOC order placed). So the API resetting during a market sell off would not affect any of the strategies, as the API simply manages the open and filled orders, it doesn't react to live price movements. 
The worst case scenario with regards to outage of VPS would be that the API won't cancel my unfilled orders, nor will it place MOC orders as it should. I attempt to max out my entire account every night anyway, so theoretically I can't exceed what I intend to as IBKR won't allow this. So I could potentially be stuck holding a bunch of positions which were intended to be exited at the close of the market... so if this scenario ever happened, I would just sell at the next open. The odds of this happening are slim, the consequences would not be that bad - and potentially could even work in my favour.


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## AussieStockDawg (10 March 2022)

wasp said:


> I run 4 heavily modded versions of Nick's day trade strategies. 1 x short and 3 x longs. I use his API to manage the orders and I run it from a server.




Hi Wasp - what does Nick recommend as the minimum position and portfolio size for these systems ?

Thanks


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## wasp (10 March 2022)

AussieStockDawg said:


> Hi Wasp - what does Nick recommend as the minimum position and portfolio size for these systems ?
> 
> Thanks



I don’t know if Nick has specifically recommended any minimum size, but you want to minimise commission drag by placing larger orders. I initially started with $50k plus $25k IBKR margin long only strategy unmodified and it was profitable. Once I was satisfied I wasn’t going to lose all my money I upped my account size. Position sizing is tricky without 4:1 margin, I did a lot of back testing with various combinations of max positions and position sizing. 
If you reached out to Nick on Twitter he would probably answer your questions, I’ve found him to be generous with his time and knowledge, as well as being very helpful.


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## peter2 (10 March 2022)

Don't we just hate it when we do the right thing and sell when we should and the bloody price takes off like a flying bat. 






Of course the system doesn't know that Russia produces and exports heaps of potash around the world and *HFR* has a potash project in Spain.

This happens to all of us. The upward price movement paused and price remained in a corrective pattern which triggered the sell signal for the Flying Bat System.  Looks like the next impulsive swing may have started.

ps: Check out the other ASX potash stocks; *SHP* (Germany), *APC*, *KP2. SO4 *- so sad, too bad.


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## Newt (10 March 2022)

G'damn bats!


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## DaveDaGr8 (10 March 2022)

AussieStockDawg said:


> Hi Wasp - what does Nick recommend as the minimum position and portfolio size for these systems ?
> 
> Thanks




This question probably has more to do with you, your account size and ability to stomach a loss. Here's a simple calculation :

1 - On ANY system work out what the maximum drawdown is likely to be, ie. Backtest it. 
2 - Work out how much you think you can stomach to lose and halve that amount.
3 - Calculate your portfolio capital to stay within your MDD.

ie, Your system produces a MDD of around 20% through backtesting.  
If you THINK you can stomach a $20 K drawdown, you should calculate for a $10K maximum drawdown ( *this is expectation vs reality* ). 
Your calculated portfolio size should not exceed $50K.

Also, don't be fooled into thinking daytrading strategies are magic bullets and better than other strategies, they're just different. I would never run a daytrading strategy in isolation. Most daytrading strategies require a 4:1 leverage amount to become effective, so the amount of money exposed to the market is quite a lot and your portfolio can be quite volatile and unpredictable. 

To put all this in perspective my DT portfolio is currently *down 12% since the start of this week ... *3 days. You should think about whether or not that's something that would stress you out.


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## peter2 (10 March 2022)

DaveDaGr8 said:


> To put all this in perspective my DT portfolio is currently *down 12% since the start of this week ... *3 days. You should think about whether or not that's something that would stress you out.



Yikes, I'm stressed just reading it.


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## DaveDaGr8 (10 March 2022)

Yep .. It only takes one bad bar to ruin a month or one good bar to make a month.

This week it was 7-3 ... The US dropped 3% in one session, 
Last month it was the 24-Feb, where we had a perfect bounce and the daytraders cleaned up.

These are extreme days though.


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## ducati916 (11 March 2022)

@Skate what do you reckon on this?









						Composer – Investing. Built Better.
					

Meet Composer, the automated trading platform and investment app. Discover your potential investing based on data and logic with Composer.



					www.composer.trade
				




jog on
duc


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## Skate (11 March 2022)

ducati916 said:


> @Skate what do you reckon on this?
> 
> 
> 
> ...





@ducati916 in a nutshell & at a quick glance "Composer" is a simple "menu-driven backend architecture" for trading the US markets & is relatively a new concept as of November 2021. The name is derived from you "Composing" (building) your own automated investing strategies. (Similar to many already)

*"Composer" is a no-code tool for building strategies*
Composer is corralled into different accounts (portfolios) so that you can execute "buy & sell orders" in multiple accounts so the data & execution ensure the structure is kept to a minimum.

*"Composer" is software that helps with the creative part of investing *
The investing strategy is a decisions process that relies on data being fed into the "Core Logic Investment Strategy". The investment strategy can then be executed from individual accounts for trade execution. The individual accounts form the modules displayed on their website.

*You add "their ingredients" to their backend architecture (their software)*
Their software as with most others "you" need to create, inspect, backtest & modify the strategies, whether you know how to code or not. Composer is the backend architecture of the software that allows you to add "programmed features" to it thus increasing the structure & effectiveness of the strategy. At the end of the day, it's a tool to help you in your decision-making process, rather than replace them altogether.

*Summary*
Being new, "Composer" will take time to develop into an effective tool requiring a community to swap ideas to make it work. After all, it's just a tool to help you make trading decisions. "Composer is an automated trading platform" that allows you to build strategies without coding experience allowing you to watch your trades execute automatically. I should also say you need to be "smarter than the average" who has a lot of time on their hands to handle the frustration of setting up individual trading portfolios & getting it to work as promised.

Skate.


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## Skate (11 March 2022)

*For those interested*
Whether you'd like to simply look up the latest stock price, or analyze price patterns both platforms come with pre-built features so that you can write and share your own indicators & strategies. "TradingView" is similar to "Composer" but TradingView has intelligent drawing tools & a set of tools for in-depth market analysis, covering the most popular trading concepts.

*Composer*
"Composer" is a no-code tool for building strategies








						Composer – Investing. Built Better.
					

Meet Composer, the automated trading platform and investment app. Discover your potential investing based on data and logic with Composer.



					www.composer.trade
				




*TradingView*
Trading technology from TradingViews gives you tools for pattern recognition used in technical analysis.








						TradingView – Track All Markets
					

Where the world charts, chats and trades markets. We're a supercharged super-charting platform and social network for traders and investors. Free to sign up.




					www.tradingview.com
				




*Investing.com*
This is another handy site, worthy of visiting.








						Investing.com Australia - Financial News, Stock Quotes & Charts
					

Investing.com Australia serves traders of a wide range of asset classes with real-time charts & quotes along with news and analysis.




					au.investing.com
				




Skate.


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## Skate (11 March 2022)

Skate.


----------



## Skate (11 March 2022)

Skate.


----------



## Skate (11 March 2022)

Skate.


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## Skate (12 March 2022)

Skate.


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## Skate (12 March 2022)

Skate.


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## Skate (18 March 2022)

Skate.


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## Skate (18 March 2022)

Skate.


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## Skate (18 March 2022)

Skate.


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## MovingAverage (18 March 2022)

Folks using index filters might find their systems turning back on...my weekly has certainly sprung back into life--lots of buys. With the world going down the s-bend...what the hell I'll be placing my buy orders on Monday


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## Skate (18 March 2022)

MovingAverage said:


> Folks using index filters might find their systems turning back on...my weekly has certainly sprung back into life--lots of buys. With the world going down the s-bend...what the hell I'll be placing my buy orders on Monday



*
Same here*
The Platinum Strategy has 10 buys 
The Flying Fox Strategy has 2 buys

Skate.


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## peter2 (18 March 2022)

You beat me to it. I also think the Platinum will turn back on after this week. 

@Skate also beat me to it. I gotta type faster.


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## Skate (18 March 2022)

Skate.


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## MovingAverage (18 March 2022)

Skate said:


> *Same here*
> The Platinum Strategy has 10 buys
> The Flying Fox Strategy has 2 buys
> 
> Skate.



Might have missed this on one of your earlier posts, but are you live trading both of these strategies?


----------



## Skate (18 March 2022)

MovingAverage said:


> Might have missed this on one of your earlier posts, but are you live trading both of these strategies?




There is a group of us trading both these strategies.

Skate.


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## qldfrog (19 March 2022)

MovingAverage said:


> Might have missed this on one of your earlier posts, but are you live trading both of these strategies?



I do 😊


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## qldfrog (19 March 2022)

Will be interesting to see if my moa stategy will start on Monday.has been initiated but no buy for more than a month, well before i started this trip.


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## Skate (19 March 2022)

Skate.


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## Skate (19 March 2022)

Skate.


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## qldfrog (20 March 2022)

qldfrog said:


> Will be interesting to see if my moa stategy will start on Monday.has been initiated but no buy for more than a month, well before i started this trip.



MOA is full on buying on Monday....
QFSec fully on since last week so just a few buy /sell there 
Interesting coming week.
Obviously all is good again, a rise of .25 is going to squash the 10% inflation and Ukraine just a blip.
What i found stunning was the resilience of ASX vs US market.
Especially considering the weight of our banks, it was not a resilience due to materials strengths


----------



## MovingAverage (20 March 2022)

qldfrog said:


> Especially considering the weight of our banks, it was not a resilience due to materials strengths



 Growth stocks (AKA loss making companies 😂) seem to have bounced back…well at least the ones I own and watch saw some reasonable gains)


----------



## Ann (20 March 2022)

Hi @Skate, I thought I would take the opportunity to practice my volume spike theory on your recent pick of SLR. Just so that everyone is clear I am not being critical of Skate or his choices. I am simply practising my theory of volume spike trading before I either adopt it or chuck it. Hope you don't mind Skate, it was too tempting from what I was seeing.


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## MovingAverage (23 March 2022)

Who thinks this turn around in the XAO will be short lived with another pullback at around the 7833 level, which it's been bouncing off since July last year?


----------



## Ann (23 March 2022)

MovingAverage said:


> Who thinks this turn around in the XAO will be short lived with another pullback at around the 7833 level, which it's been bouncing off since July last year?



Bonds and gold are fooking themselves, where else can they park their money....crypto?


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## MovingAverage (23 March 2022)

Ann said:


> Bonds and gold are fooking themselves, where else can they park their money....crypto?



So you're saying XAO will blow past 7833?


----------



## Ann (23 March 2022)

MovingAverage said:


> So you're saying XAO will blow past 7833?



7903 would be nicer! I am putting a few bob back into the markets, actually, I have not stopped putting money in even during the fall when I saw something I liked, but I have also been selling when it appeared appropriate. 
Am I right, am I wrong, no idea! Time will tell.  But I keep my stop loss levels up to date!


----------



## frugal.rock (23 March 2022)

Ann said:


> Bonds and gold are fooking themselves, where else can they park their money....crypto?



"The 90-day correlation between the top cryptocurrency and the S&P 500 has risen to the highest level since October 2020."


----------



## frugal.rock (23 March 2022)

Interesting to see TZN being a signal.
I mentioned it in a private conversation on the 14/3.


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## Ann (23 March 2022)

frugal.rock said:


> "The 90-day correlation between the top cryptocurrency and the S&P 500 has risen to the highest level since October 2020."



The thing about crypto is it does not pay a dividend it is purely growth. The vast majority of big money wants growth *and* income. Hence bonds, real estate and stocks are so popular. Gold is always a smaller percentage of a balanced portfolio. I believe crypto will become a part of a balanced portfolio but it will be a minor percentage as with any non-income producing investments such as artworks.


----------



## Cam019 (23 March 2022)

Ann said:


> The thing about crypto is it does not pay a dividend it is purely growth.



Not correct. You can stake certain cryptos.


----------



## ducati916 (24 March 2022)

Also it is relatively easy to receive dividends on gold/silver bullion now. Running at about 6% currently. Gold/silver are non-liability holdings. If putting up to receive a dividend, you will of course incur counter-party risk.

jog on
duc


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## MovingAverage (24 March 2022)

Ann said:


> 7903 would be nicer!



hope you're right


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## Skate (25 March 2022)

Skate.


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## Skate (25 March 2022)

Skate.


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## Skate (25 March 2022)

Skate.


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## Skate (26 March 2022)

*Amibroker Exploration Analysis Raw Signals*








Skate.


----------



## Skate (26 March 2022)

*Amibroker Exploration Analysis Raw Signals*








Skate.


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## Skate (31 March 2022)

*Amibroker's (April 2022) Raw Signals*
Next Month's Exploration Analysis Raw Signals





*Amibroker's (April 2022) Portfolio Signals*
Next Month's Backtest Portfolio Signals








Skate.


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## Skate (1 April 2022)

Skate.


----------



## Skate (1 April 2022)

Skate.


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## Skate (1 April 2022)

Skate.


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## MovingAverage (1 April 2022)

So here we are...finishing the week near a critical resistance level. Sure hope those thinking we'll keep marching north are right. But to be honest I'm glad I offloaded a number of my longs at close today. Looking forward to next week


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## Skate (2 April 2022)

Skate.


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## Skate (2 April 2022)

Skate.


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## DaveTrade (2 April 2022)

Skate said:


> View attachment 139832
> 
> 
> 
> ...



@Skate what you are doing here displaying the ongoing results of your systems is the ultimate lesson for all about systematic trading. Looking at these two, I like the way that the Platinum Strategy has a flat bottom on it's equity curve, so I can say even at this early stage, it's my favorite.


----------



## Skate (2 April 2022)

DaveTrade said:


> I like the way that the Platinum Strategy has a flat bottom on it's equity curve, so I can say even at this early stage, it's my favorite.




@DaveTrade out of the two it's my favourite as well.

1. The Flying Bat Strategy has no Index Buy Filter so it scratches an urge to constantly be in the markets.
2.  The Platinum Strategy has an Index Buy Filter & is trades on the side of caution. 

*Hold time*
Also, you will notice that some positions are only held for 1 to 2 weeks as those positions are not traveling as expected. The "Take profit Stop" grabs profits when a limit is reached. The "Stale Stop Exit" is also time-driven that works bar-by-bar.

*Summary*
The flying Bat is trying as hard as it can without hindrance other than a "Take Profit Stop" as well as a "Stale Stop Exit". The "The Platinum Strategy" is super cautious in selecting positions & the positions entered still meet the buy condition, traveling in the right direction with a set level of momentum.

Skate.


----------



## qldfrog (2 April 2022)

Skate said:


> @DaveTrade out of the two it's my favourite as well.
> 
> 1. The Flying Bat Strategy has no Index Buy Filter so it scratches an urge to constantly be in the markets.
> 2.  The Platinum Strategy has an Index Buy Filter & is trades on the side of caution.
> ...



I would not say favorite: i would say suited to current times.
FB would i am sure make a killing in the post covid boom, etc
As Mr Skate, I have an index looking cautious system : my latest MOA doing quite well since starting whereas my more reckless systems   have had heavy losses and are still in serious DD.
One point which surprised me yesterday is that my MOA is liquidating and going full cash on monday.🥴
Something i was not expecting.will have to check i have no technical or data issues....


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## Skate (2 April 2022)

DaveTrade said:


> lesson for all about systematic trading




@DaveTrade over time I lost a bit of focus on why I started the "Dump it here" thread in the first place. As the thread has morphed more into "system trading" it's given me the opportunity to discuss in general terms some of my thoughts for those wanting to read along. 

*A series of posts*
I have just finished putting "pen to paper" explaining a few of my thoughts only to realise it's longer than anyone can hold attention these days. I'll chunk the posts for those interested to read my next comment about system trading. Doing it this way may hold interest to some.

Skate.


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## Skate (2 April 2022)

*Systematic Trading*
First off I want to make it crystal clear why I believe systematic trading has a major advantage over all other forms of trading. The major advantage is that all patterns (signals) can be coded in “precise terms” removing the human intervention & all forms of judgment calls that can result in poor decisions.

Skate.


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## Skate (2 April 2022)

*We all seek a profitable trading system using a process we can follow unconditionally*
The journey starts by researching a trading method that has been proven to work in the past. Once the idea turns into a process all that is left is to verify that the system will work today as it has in the past.

*Choosing a metric for the evaluation & validation*
When choosing a metric for validation, stay with the same metric because the comparison between results will be more consistent than jumping from one metric to another "consistency is what we are ultimately after". When we establish the basic trading idea is worthy of additional effort "small refinements" to lift the idea to the next level might be all that is needed for a long-term tradeable strategy.

Skate.


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## Skate (2 April 2022)

*The interpretation of results will be subjective*
Using & swapping between a variety of metrics can skew the validation process & at times vary considerably. I’ve made plenty of posts on how to evaluate a strategy & the metrics that can be used. I even posted about my personal preferences. A quick search is all that is needed.

*Let me just give you a heads-up*
Traders are very good at selective vision as we see what we want to see without qualifying something that doesn’t fall within our belief system. Meaning we accept what we believe & discard the rest that is contrary to what we want to accept.

Skate.


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## Skate (2 April 2022)

*Let's talk about Metrics for a moment*
Metrics are one of the most academic topics about trading systems & there are so many of them that I find it difficult to know which one is more appropriate to evaluate a specific system, it's really quite frustrating at times.

*A good metric*
There is no better metric is your trading account balance. One peculiar thing I noted in my test results is that a good part of the gains comes from a few stocks that move a lot but that's how a trend-following strategy works. Eliminating the outliers as suggested by a few others can skew the results going from persevering with a handy strategy to discarding a perfectly good strategy.

Skate.


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## Skate (2 April 2022)

*Removing judgment*
System trading's main advantage is that it has mathematically defined “precise” indicators that calculate every data bar applying calculations in deciding what to trade when to buy & when to sell.

*But all this comes at a cost*
Drawdowns are the “Elephant in the room” as there is a level at which everyone stops trading a strategy when experiencing a larger than acceptable level of loss. 

*A large drawdown is acceptable *
But only when Backtesting. Large drawdowns during backtesting are never given a second thought as larger than acceptable drawdowns are like “water off a duck's back” & no real consideration is given to them. Drawdowns are an important metric when your money is on the line. The level of drawdown that you believe you can handle "when your money is on the line" will be tested in ways that you would not have thought possible.

Skate.


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## Skate (2 April 2022)

*So what metric is important during the evaluation phase?*
Well, it’s not isolated to one metric during the system development process a “baseline” of the risks is more important to be established. It’s darn easy to get wrapped up in the backtest results without due consideration for the risks that you have to endure to arrive at the final profit figure. It's only human to hone in on the “profit” portion first of the strategy because it's the best estimate of future performance.

*Signals don’t always work to our advantage*
Our trading idea, meaning our “trading rules” & “parameters” we adopt is for the sole purpose to define the pattern that generates our entry & exit signals timing the opportunity to our trading advantage. As system traders, we are seeking to mathematically identify, define & quantify & rank those important signals the best we can. 

*Trading is not a precise endeavour *
Why? because of the immense variables that can change in a heartbeat. For this very reason, is why hard-coded patterns recognition doesn’t always go as planned. After saying this "statics" are definitely on our side, "some of the time".

Skate.


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## Skate (2 April 2022)

*Seeking a profitable trading strategy that triggers accurate signals*
A trading system is profitable as long as the logic that identifies a pattern that “triggers” the signal consistently precedes a favourable trading opportunity. The relationship between certain patterns that eventuates in a profitable trade is the pattern we need to concentrate on. We also need to understand that not all signals follow through. 

*Understanding is needed*
Using the same code generates a variety of signals but you need to understand that these patterns are the “signals”. It’s also fair to say these patterns have a habit of generating a fair share of "false signals" that is hard to avoid or eliminate. In all fairness "system traders" must do everything to ensure their model recognises persistent profitable patterns & concentrating only on those, that’s our sole purpose as a coder.

Skate.


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## Skate (2 April 2022)

*Trusting your work*
To be blunt, we all have a habit of trusting someone else’s work rather than our own as we believe they know more than us “which may be so” but it’s worth remembering it’s your “money” on the line, not theirs. 

*Get into the right mindset*
Having the correct mindset goes a long way in establishing the right “psychology” needed in this game as trading is as much to do with “psychology” as getting everything else right. Having the right mindset allows you to trust your strategy, to take all the signals when they appear. This mindset will allow you to exit a trade when a “profit stop” is triggered or keep you in a trade when experiencing a large drawdown. 

*Freedom*
Trading a quality system allows you the freedom not to second-guess the strategy & that's priceless. In the end, it comes down to the confidence you have in your work.

Skate.


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## Skate (2 April 2022)

*Do not accept traditional wisdom "blindly"*
Just because others write about a subject from authority doesn’t always make it right for you & how you go about accepting the associated risks when it comes to your money or financial future. 

*It’s okay to read about a theory *
But blindly believing what you have read has merit without being tested is a recipe for disaster. By all means, test every theory to evaluate its predictive powers. I'm just saying, sometimes what has worked in the past has a habit of not working in the present. The basic idea might be worthy of extra work & a slight parameter shift may be all that is required to make an old idea "new again" bringing it into the new century.

Skate.


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## Skate (2 April 2022)

*Summary*
Every trade is a trend following trade no matter the entry criteria. Why? because the price must change in the direction for the trade to be profitable. Trading systems aren’t perfect but that is not the point, the point is that any trading system must be “useful”. I’m first to admit “bad stuff” can happen & usually does. You can even experience larger drawdowns than you are comfortable with but that’s where confidence comes into play with the system you have elected to trade. We seldom get an opportunity to recover from serious mistakes that’s the reason for testing. Mistakes are hard to eliminate but with further “trading education,” they can be reduced somewhat.

*It's time for me to hop off the soapbox*




Skate.


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## qldfrog (2 April 2022)

All these points are wisdom, i would just add that we are also working in a dynamic environment.
Markets are dynamic.
What i mean here is:
What was right yesterday may not be tomorrow.and that is a key point, or should be for everyone
Human nature stays the same , i hear some say , but 20y ago, most of the trades were indeed manual, now they are not.
20y, not every worker in Australia was forced to put 10% of his raw income into the mostly domestic share market...now, they do and so on.
What could be a genious strategy 20y ago can be a dud now, and if a strategy works well, it is doomed to be eroded as more people jump onboard...
So be aware there is no *final* Holy grail solution.
It is a neverending quest
Also, in engineering, systems need a feedback loop to be stable, it is my belief this is the same in system trading 
Not that i am nowhere near that magic system
I let more knowledgeable persons carry on from there 😊


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## Ann (2 April 2022)

Skate said:


> *Summary*
> Every trade is a trend following trade no matter the entry criteria. Why? because the price must change in the direction for the trade to be profitable. Trading systems aren’t perfect but that is not the point, the point is that any trading system must be “useful”. I’m first to admit “bad stuff” can happen & usually does. You can even experience larger drawdowns than you are comfortable with but that’s where confidence comes into play with the system you have elected to trade. We seldom get an opportunity to recover from serious mistakes that’s the reason for testing. Mistakes are hard to eliminate but with further “trading education,” they can be reduced somewhat.




Agree with you Skate, with the exception of the _testing _aspect. All the testing in the world can't beat good old experience and practice.  You need to know your comfortable boundaries. I was totally comfortable with large drawdowns recently because I had many years of experience with setting stop-loss levels and knowing how to handle them without incurring an unnecessary loss.



Skate said:


> We seldom get an opportunity to recover from serious mistakes that’s the reason for testing.




I would think anyone who is starting out or in fact anyone, no matter how experienced should always trade only to the limit of their comfort zone and limit their risk to the amount they are prepared to lose, so there should be no serious mistakes made.  Mistakes should actually be viewed as an asset in order to gain greater understanding.
However, just my thoughts and I am not talking about an automated computer system of course!


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## DaveTrade (2 April 2022)

Ann said:


> I would think anyone who is starting out or in fact anyone, no matter how experienced should always trade only to the limit of their comfort zone and limit their risk to the amount they are prepared to lose, so there should be no serious mistakes made. Mistakes should actually be viewed as an asset in order to gain greater understanding.
> However, just my thoughts and I am not talking about an automated computer system of course!



Wise words for all traders.

PS: Doesn't apply to gamblers.


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## Ann (2 April 2022)

DaveTrade said:


> PS: Doesn't apply to gamblers.



Very true, DaveTrade. Gamblers play the odds to win, although no doubt the gamblers amongst us may well say there is a learned skill to that as well, only achieved through experience.


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## frugal.rock (2 April 2022)

B.J. Neblett — ‘We are the sum total of our experiences. Those experiences – be they positive or negative – make us the person we are, at any given point... ​


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## Skate (8 April 2022)

Skate.


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## Skate (8 April 2022)

Skate.


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## Skate (8 April 2022)

Skate.


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## peter2 (8 April 2022)

Good to see both systems working their way out of their recent draw downs. They could do this because of two things, their positive edge and the fact that they continued to trade to their plans.

IMO working through a period of draw down has got to be the hardest time for new or inexperienced traders. It's during this time that their confidence in their system(s) are really tested. Have you got what it takes to be a profitable trader?

Edit: Flying Bat not there yet, but it will make it soon.


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## Skate (8 April 2022)

peter2 said:


> Good to see both systems working their way out of their recent draw downs. They could do this because of two things, their positive edge and the fact that they continued to trade to their plans.
> 
> IMO working through a period of draw down has got to be the hardest time for new or inexperienced traders. It's during this time that their confidence in their system(s) are really tested. Have you got what it takes to be a profitable trader?
> 
> Edit: Flying Bat not there yet, but it will make it soon.




@peter2 you are absolutely correct on every point you have mentioned. With all trading systems, I've always found that it takes time for them to develop into profits no matter how good a system backtests.

*Trading systems aren’t perfect*
But that's really not the point. Trading systems "just need to be useful” over time. 

*Trading is a slow process when safety is your main concern*
Confidence in your own work goes a long way in helping you trade through a series of drawdowns. System trading's main advantage is that it has mathematically defined “precise” entry & exit points deciding what to "trade" when to "buy" & when to "sell". Meaning there is never any pressure to make judgment calls.

Skate.


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## Skate (9 April 2022)

Skate.


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## Skate (9 April 2022)

Skate.


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## investtrader (9 April 2022)

I am guessing the PAN exit is profit take type exit or target? The narration says 'STALE'.

Can I ask what universe you are trading? Thanks


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## Skate (9 April 2022)

investtrader said:


> I am guessing the PAN exit is profit take type exit or target? The narration says 'STALE'.




*I also hate reading long-winded posts *(my apologies in advance)
@investtrader the StaleStop exit is correct. My "StaleStop Exit" is a combination of 6 exit conditions being met & is extremely difficult for me to explain simply without explaining the complex coding involved.

*Rapid changes in price*
First off the "Stale Stop Exit Strategy" is to gauge when momentum is shifting, slowing, or reducing but there are other conditions that need consideration as well. There are multilayers to the "StaleStop Exit" as momentum needs to be calculated bar-by-bar from every angle as well as the relationship to previous bars.

*Why is this so important? *
For this very reason "spikes" in either direction, that fall outside the relationship to previous bars means something has shifted, something has changed that is usually only explained later. I'm saying these shifts can proceed an "official announcement" & my way of thinking it's better to be "safe" than "sorry". Traders hate uncertainty & I'm the same.

*Clarification*
Many moons ago I would have every StaleStop separated with their individual column in the "Exploration Analysis" for debugging purposes. Over the period I've become more minimalistic as far as reporting goes. Also, the "StaleStop Exit" does not use the Minimum, Maximum, or Average metric but more with the "Relationship" to previous bars.

*The Exit condition *
I now use only 3 coloured arrows as well as the wording printed on the chart to denote the exit application that has been used. Simplicity with visuals aids is so handy when looking at multiple charts. As they say "a picture paints a thousand words". A "StaleStop Exit" correctly implemented keeps all my strategies in rotation mode.

*Colour Coding*
1. (Green Arrow = Take Profit Stop Exit),
2. (Yellow Arrow = StaleStop Exit) &
3. (Red Arrow = Trailing Stop Exit)

*The StaleStop (measured bar-by-bar)*
(a) The StaleStop exits after a certain number of bars when there is a loss in momentum.
(b) The StaleStop also will execute after a percentile drop of the ROC filter over a "nPeriod" from the High of the entry price. (the buy price)
(c) A simple GMMA exit (simple & effective) without going into detail.
(d) An unhealthy relationship between MACD & StochD over a "nPeriod" to the most recent bar.
(e) The UlcerUp indicator falls out of range.
(f) The "GTFO" indicator has been activated.

*The "Stale Stop Exit" I use appears complicated & it is*
Well, using a standard stand-alone "Trailing Stop" exit doesn't cut it in many ways as a "Trailing Stop" will give back so much open profit & makes the drawdown look pathetic. I enter on a confirmed trend & when the trend loses steam I want to be off the ride. The only issue is when trading a weekly strategy you need to endure the "weekly volatility".

*The Take profit Stop*
The "take profit stop" is simply an ATR (4) profit stop. We are chart "experts in hindsight" but system trading picks the moves in real-time. Also using a "Take Profit Stop" these days is certainly a sign of the times adopting this feature allows you to take advantage of the shift in trading since COVID. I've spent endless hours trying to code a strategy to reduce the emotional stress of trading. Limiting drawdowns always come at a cost & integrating a "Take Profit Stop" has certainly helped in this regard. Using a "Take Profit Exit" locks in the profit allowing us to "immediately" look for the next ride.

*It's prudent*
I should point out at this stage that all trend-following systems need to trade when the markets are bullish to achieve good results. Conversely, trend trading systems will struggle to produce reasonable profits when markets are down-trending or going sideways which is on full display with "The Flying Bat Strategy" recently posted results, but at least it allows me to trade every week otherwise trading becomes boring.

*Chart for PAN*
For full disclosure, I have attached the chart with notations for clarification.




*Also, to answer your other question*
I trade the ASX All Ordinaries.

Skate.


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## investtrader (9 April 2022)

Thanks for the excellent description. Obviously a lot of work went into your exits - which are way more important than entries. 
I have gone 'simpler' , more long term and I mix in fundamentals. It is slightly annoying to see big individual trade drawdowns but it is the price you pay for a riding longer trends. I have found my /technical fundamental ports performed way better in this last 3 months than purely technical.


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## Skate (9 April 2022)

investtrader said:


> I have found my /technical fundamental ports performed way better in this last 3 months than purely technical.




*Preamble*
@investtrader, first off, let me say thank you for taking the time to read my posts in the "Dump it here" thread as I appreciate those who make the effort to understand my point of view or the methodology of my trading method. When others don't agree it's always refreshing when they explain their "alternative" rather than telling me when I'm "wrong". 

*What I'm trying to point out *
There is no right or wrong way when it comes to trading, rather it's a personal endeavor.
*
Back to the point you raised*
Those who find a method of trading, in my opinion, have really nailed it. Ultimately you have to find what works for yourself so you can sleep at night as this is "the most important" aspect of trading.

*Trading a combination of ideas*
When you have arrived at an approach that works for you, you have found your "Holy Grail". Trading is all about trial & error. After you develop a style, it is important to stick with it & not give up just because you don’t make immediate progress. We all have different levels of risk tolerance, patience, activity, & different approaches to handling the emotional ups & downs of the markets. What is comfortable for you will drive another to distraction & if you can appreciate that fact, arriving at a style that works for you is easier.

*I'll leave the last word to *@ducati916 


ducati916 said:


> It is the discipline brought by the individual that is important.




Skate.


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## investtrader (9 April 2022)

Absolutely 100% agree. Find a method/s that works for you then have 100% confidence to trade it - that is indeed the holy grail. Way harder than it looks and why most fail.
Just to add for other members benefit - I have live tested my method now for about three years. This is the equity curve (live for last 12 months). Pity I didn't allocate more funds to it.


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## Skate (9 April 2022)

investtrader said:


> the equity curve (live for last 12 months). *Pity I didn't allocate more funds to it.*




*The Key to Success*
In hindsight, everything is crystal clear but with trading, no one knows what tomorrow will bring. The key to success is properly managing your investments after you buy them. As you have pointed out investing is not a rigid, structured approach & what works best is highly subjective. I posted the words from @ducati916 to indicate that "you" have made a system work that needs congratulating. 

Skate.


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## Skate (14 April 2022)

Skate.


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## Skate (14 April 2022)

Skate.


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## Skate (14 April 2022)

Skate.


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## qldfrog (14 April 2022)

Skate said:


> View attachment 140436
> 
> 
> 
> ...



the bat is reaching for the sky, leaving that lead footed shiny Platinum showoff behind


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## Skate (14 April 2022)

qldfrog said:


> the bat is reaching for the sky, leaving that lead footed shiny Platinum showoff behind




*Trading non-related strategies*
At times trading non-related strategies smooth the equity curve. Combine that with two different trading styles one being more aggressive than the other & the nail-biting aspect of trading becomes less of an issue. The combined results are ultimately what we strive for. Rating a strategy by performance is highly overrated as the combination of the performance is more meaningful.

*Combination of two non-related strategies*
Instead of trading "one" 20 position portfolio, the "Shootout" trades "two" 10 position portfolios & after 16 weeks both strategies are now in profit. When you first start trading a new strategy it's really disappointing to experience immediate drawdowns when your portfolio goes underwater. Accepting early losses is easier to handle if you have confidence in your own work. Most traders lack patience & at times lack the knowledge of how "system trading" really works.

*Combined Dashboard*





*The Individual Equity Curve*




Skate.


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## Skate (16 April 2022)

Skate.


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## Skate (16 April 2022)

*Amibroker Exploration Analysis Raw Signals*
There are no sell signals for the 'Flying Bat Strategy" this week so there are no positions to buy. The Raw signal below is generated but are not required. All raw signals are posted nevertheless.








Skate.


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## qldfrog (16 April 2022)

Skate said:


> View attachment 140482
> 
> 
> 
> ...



So there are no raw sell signal either?As i missed one buy previously , i purchased AGY as part of previous raw buys..just want to make sure it is not on sell this monday😊


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## Skate (16 April 2022)

qldfrog said:


> So there are no raw sell signal either?As i missed one buy previously , i purchased AGY as part of previous raw buys..just want to make sure it is not on sell this monday😊




*First off*
AGY is not a sell at the moment.

*Trading using Amibroker "Exploration" Raw Signals *
The beauty of trading using Amibroker raw signals is that they generate every signals that match your precise mathematical formulas whereas trading using the Amibrokers "Portfolio Manager" has a disadvantage in this regard. The "Portfolio Manager" only reports signals for positions that are already in the portfolio at the time the report is generated.

*Missing a signal for whatever reason is okay*
Raw signals allow you to trade at any time for whatever reason whereas if the signal was not in the "Portfolio Manager" a sell signal would never be generated.

*Why do I prefer trading using raw signals?*
Well for a few reasons. I can elect to skip a signal if it falls outside of my trading plan or my conviction wouldn't allow me to trade certain commodities. Sometimes I'll hate a company from a previous trade experience or for a million other reasons. Heck, I can even elect to take a break for a week or two & rejoin trading when time or my mood permits.

*Joining late*
One member in the trading group had funds delayed & wanted to know if it was too late to start trading the strategy as he missed the first 3 weeks? I explained it doesn't matter at all as "raw signals" keep coming. This means if he misses one signal or elects to take the next signal makes no difference at all.

*Signals*
@qldfrog rest assured when "AGY" needs to be sold there will be a raw signal to do so & it will be included in the weekly post. It's a good time to explain to others that whether a position is in profit or experiencing a loss is irrelevant when it comes time to sell that position. The decision to sell a position is dependent on a multitude of reasons that are all calculated using precise formulas.

*(AGY) this week is a "hold"*




Skate.


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## Skate (16 April 2022)

Lone Wolf said:


> Something to be careful of is that in reality you aren't missing random trades, you are missing a very specific type of trade. The trades that gap up on open and don't look back. It's worth checking how many of your winners start this way.




*Trading using Amibrokers "Exploration Analysis Signals"*
In the previous post, I explained that there are "reasons" why I elect to trade using the raw signals the "Exploration Analysis" generates. One of the main reasons is that calculations are coded for the "number of shares to buy" at an "offer" for trading in the pre-auction. The last column is a double-check that my investment doesn't exceed the maximum value of each trade.

*Re-balancing my next bet size*
At times my remaining "trade" bank balance increases, as well as decreases & those values, need to be considered when it comes to working out my next bet size. Using the "Exploration Analysis" this feature is easily calculated making sure every dollar allocated to trading is fully deployed. This feature alone is worthy of trading this method rather than using Amibroker's "Portfolio Manager" feature.

*Missing a signal because of "Gapping at the open"*
@Lone Wolf pointed out in a previous post that "missing a signal" or signals of a "certain types" being (Gap-Ups) can skew your trading results in the long run, which is fair enough & it's a valid point for him to raise. I choose to trade in the pre-auction with a maximum "offer price" ensuring my calculations fall within the metric of my trading style (F.Y.I. - the buy position is only valid for one day).

*My style works for me*
I'm contented in missing those odd signals that punch above my offer & Gap-Up at the open. I should also say in my defense that the "offer" determines the number of shares purchased at the open. Allowing for "Gap-Ups" alters the number of shares purchased that at times the allocated funds won't cover.

*Also the "Exploration Analysis" all the work is pre-done*
Even to a beginner trading "Raw Signal" could be any easier as they are in the order the signal are placed into the markets. Colour coding also helps to understand why a position is being sold. Simply, trading this way is a piece of cake.




Skate.


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## Newt (16 April 2022)

Skate said:


> *Why do I prefer trading using raw signals?*
> Well for a few reasons. I can elect to skip a signal if it falls outside of my trading plan or my conviction wouldn't allow me to trade certain commodities. Sometimes I'll hate a company from a previous trade experience or for a million other reasons. Heck, I can even elect to take a break for a week or two & rejoin trading when time or my mood permits.




That's the only nanometer of discretionary admission I've seen from you for a while Skate.  
Glad to see some humanity in your "trading machine".  I'm sure there would be relatively few signals you'd let fall through to the keeper in the end.


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## Skate (16 April 2022)

Newt said:


> I'm sure there would be relatively few signals you'd let fall through to the keeper in the end.




@Newt not many go through to the keeper, “Deed of Arrangement” & “take over offers” are the exception as they fall foul of my trading plan.

*I trade all the signals *
Other than those two exceptions I trade everything than comes along because I just don’t know which ones will be the winners.

Skate.


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## Newt (16 April 2022)

Excellent, so in effect these are not discretionary over-rides but things you can't currently code that are complications  worth avoiding.  Would be interested if you have any particular website you recommend for finding and dodging those 2 situations?


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## Skate (16 April 2022)

Newt said:


> Excellent, so in effect these are not discretionary over-rides but things you can't currently code that are complications  worth avoiding.  Would be interested if you have any particular website you recommend for finding and dodging those 2 situations?




*I trade with Commsec *
@Newt, before I entry any position I check the previous 3 months of announcements that are found on the individual security webpage & if neither is mentioned I’m good to go.

*To* *be* *honest*
I don’t know or even care what security I’m buying or for that matter what the company does. Some will say “boo, hiss” but to me it’s just a game of mathematics. Also, thinking to me is overrated when all my entry & exit positions are coded with absolute precision & I’m not smart enough to override any of them.

Skate.


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## DaveTrade (16 April 2022)

Skate said:


> all my entry & exit positions are coded with absolute precision & I’m not smart enough to override any of them



But smart enough not too.


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## Lone Wolf (19 April 2022)

Skate said:


> *Missing a signal because of "Gapping at the open"*
> @Lone Wolf pointed out in a previous post that "missing a signal" or signals of a "certain types" being (Gap-Ups) can skew your trading results in the long run, which is fair enough & it's a valid point for him to raise. I choose to trade in the pre-auction with a maximum "offer price" ensuring my calculations fall within the metric of my trading style (F.Y.I. - the buy position is only valid for one day).



My quote was specifically replying to qldfrog who was at the time trying to simulate the impact of missed buy orders due to open gaps by setting a random chance to skip a trade. My response was that I don't think it's the same because you aren't missing them at random, you're missing the ones that exhibit a very specific behaviour. 

But that's more an academic conversation had when trying to get your backtest as close as practical to reality. The number of stocks I've personally missed in real trading due to this is statistically insignificant, but that would vary depending on what you trade. There's also nothing you can do really. You need to set a limit, most (all?) brokers force you to set a limit somewhere reasonably close to the action so you can't just put in a $1000 limit to guarantee your fill. Nor would I want to. My system relies on a certain set of conditions. My expectation of future higher prices is based on getting in an a specific point following those conditions. If I can't get the entry point I want then too bad. There will be others. 

You can easily set up Amibroker backtest to ignore a trade if it gaps up. But the problem is it will replace it with a different stock when in reality your money went unallocated that day. You could do some complicated thing where if it gaps up, you enter the trade, then exit intra bar at a price equal to the entry price, thus preventing another position being taken while making no profit on the gap up trade and making the funds available for the next set of signals. But I feel going to this effort would be majoring in the minors.

It's still worth looking in your backtests to see if your biggest outliers are valid entries. Peter2 said recently that while some back testers would remove outliers from their system to get a better idea of the average performance, he sees outliers as an opportunity. How do I position myself to maximize the chance of being involved when the outliers come along? I'd suggest doing both. How well does the system work without the lucky outliers? How well does the system take advantage of the outliers that are bound to come around?


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## qldfrog (19 April 2022)

Lone Wolf said:


> You could do some complicated thing where if it gaps up, you enter the trade, then exit intra bar at a price equal to the entry price, thus preventing another position being taken while making no profit on the gap up trade and making the funds available for the next set of signals. But I feel going to this effort would be majoring in the minors.



I was actually thinking the same or similar by buy one share and dumping it at next open..but you are probay right..might not be worse.
Changing the realm: higher sp,more traded stocks seem yo make a significant difference in these missing trades number which are indeed often the up gapping ones and are the outliers. Which make the difference between win or loss in most of my systems


----------



## Skate (20 April 2022)

*Nick Radge once said *
_"The trader's life becomes a revolving door of disappointment & frustration as they move from method to method without consistent results, they flip from one stock trading system to another, perhaps discarding methods prematurely. The trader's life becomes a revolving door of disappointment & frustration as they move from method to method without consistent results, also known as the beginner's cycle." 
_
*Nick also went on to say*_
"Whichever methods you choose, the goal is to gain a better understanding of yourself & most importantly realise whether you have any repeating operating patterns, usually subconscious, that may be hindering your trading performance. It takes time to work on a trading plan & develop a strong trader's psychology. It is essential for every successful trader to learn more about money management, create & test other trading ideas thoroughly. This can be accomplished more thoroughly if the trader is not pressurised with the expectation of immediate results. As capital allows, strategies can be added to the trading plan & by then the trader will have a much more solid foundation, which will contribute to future growth."_

*Stop Strategy Jumping*
I received this video link in an email today & it's worth the 15 minutes of your time to watch & absorb the message. The video is basically a summary of Nick's two paragraphs above.



Skate.


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## Skate (20 April 2022)

*Trading is scary*
Each strategy I trade has been backtested to death because when my money is on the line I try to leave nothing to chance. The strategies aren't perfect but they are useful when it comes to making a few "bob". The fear of losing money is the single biggest factor why traders don’t follow their strategy & start fiddling at the edges as explained in the previous post.

*Fear turns to Anger*
When overriding a strategy turns out to be the wrong decision "fear will soon turn to anger". When your emotions run high it pays not to trade because another wrong decision makes the situation worse. 

*Selling is cheap* 
When in doubt, I say "pull out". Too many seem to think that if they sell a stock, they are somehow prevented from buying it back again. Not so. For most traders, the biggest stumbling block to selling is mental.

Skate.


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## Skate (22 April 2022)

Skate.


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## Skate (22 April 2022)

Skate.


----------



## Skate (22 April 2022)

Skate.


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## Skate (23 April 2022)

*AGY is not a sell at the moment*
@qldfrog rest assured when "AGY" needs to be sold there will be a raw signal to do so.





Skate.


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## Skate (23 April 2022)

Skate.


----------



## noirua (23 April 2022)

Can you share some screenshots worth of 90002.2 + upvotes?
					

Gifar's answer:




					qr.ae


----------



## frugal.rock (23 April 2022)

Doesn't surprise me to see the subtle message given by your platinum strategy. With thanks.
Will be interested to see how the FB strat goes next week.
I trimmed back to 30% cash on Wednesday/Thursday, more due to hitting equity highs than market rumblings though.
Hopefully the buy the dip scenario pulls up the US markets on Monday night. 🤞

Have found trimming down on equity highs  and removing funds to be a great self preservation method. Wish I had started doing it a long time ago...
Year to date.


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## Newt (24 April 2022)

frugal.rock said:


> Doesn't surprise me to see the subtle message given by your platinum strategy. With thanks.
> Will be interested to see how the FB strat goes next week.
> I trimmed back to 30% cash on Wednesday/Thursday, more due to hitting equity highs than market rumblings though.
> Hopefully the buy the dip scenario pulls up the US markets on Monday night. 🤞
> ...



How are you trading Frugal - is this all discretionary?


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## frugal.rock (24 April 2022)

Newt said:


> How are you trading Frugal - is this all discretionary?



Trading quietly, yes, all discretionary.


----------



## noirua (27 April 2022)

Peter Kay is ‘doing great’ as he makes rare public appearance to launch boat
					

He recently returned to the stage after 11 years.




					metro.co.uk
				



View attachment 140840


----------



## MovingAverage (27 April 2022)

Once again it looks like XAO was incapable of breaking through that circa 7833 level


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## noirua (29 April 2022)

A cheeky carpenter who hid a rude carving in a church roof has been exposed 800 years later.  The rude carving is believed to have been h...
					

A cheeky carpenter who hid a rude carving in a church roof has been exposed 800 years later.  The rude carving is believed to have been hidden for 800 years in the roof of the All Saints Church in Hereford. Credit: Reddit:  Carpentry work was begun on the church roof circa 1200 and completed arou...




					qr.ae


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## noirua (29 April 2022)

List of supercentenarians who died in 2021
					

This is a list of supercentenarians who died in 2021. This list includes validated, and unvalidated supercentenarians with at least a claimed date of birth and death. Unvalidated claims to age 115 or older may be found at Longevity Claims.       Validated       Unvalidated




					gerontology.fandom.com


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## Skate (29 April 2022)

Skate.


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## Skate (29 April 2022)

Skate.


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## Skate (29 April 2022)

Skate.


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## Skate (30 April 2022)

Skate.


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## qldfrog (30 April 2022)

Skate said:


> View attachment 141087
> 
> 
> 
> ...



AGY on sell😉.
Thanks Mr Skate


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## Skate (30 April 2022)

*Amibroker Exploration Analysis Raw Signals*
There are no sell signals for the 'Flying Bat Strategy" this week so there are no positions to buy. The raw signals below are generated but not required. All raw signals are posted nevertheless.









Skate.


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## qldfrog (30 April 2022)

Skate said:


> View attachment 141092
> 
> 
> 
> ...



A slight omission SLR is a sell this week as it is in our portfolio and set for sale based on signals


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## Skate (30 April 2022)

qldfrog said:


> A slight omission SLR is a sell this week as it is in our portfolio and set for sale based on signals




@qldfrog good pickup, thankfully someone is on the ball.

*Correction*
The Flying Bat Strategy has a buy & sell this week.

Skate.


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## Miner (30 April 2022)

Folks
Would any of you please share your experience with the BetaBanko trading platform and similar trading platforms are now in the market?
On an investment of $250, they match $250. Only takes a commission. Why should they spend their money? Where and what is the catch?
Some scam to help you win on a small amount to entice for a big buck and disappears?
They apparently operate from Sweden and use computer-generated phone nos. Catching Fish?
Another one is IRONFX registered in Bermuda.


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## Skate (1 May 2022)

*Summary*
At this stage, trading a monthly strategy is not for me.

Skate.


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## MovingAverage (1 May 2022)

Miner said:


> Folks
> Would any of you please share your experience with the BetaBanko trading platform and similar trading platforms are now in the market?
> On an investment of $250, they match $250. Only takes a commission. Why should they spend their money? Where and what is the catch?
> Some scam to help you win on a small amount to entice for a big buck and disappears?
> ...



Sorry—don’t have personal experience but have you seen this 









						Beta Banko Review (betabanko.com Scam) - Personal Reviews
					

Read our Beta Banko review to see if we recommend this broker for trading. Just to clear doubts, this is a betabanko.com review.




					www.personal-reviews.com


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## Skate (1 May 2022)

*Trading Monthly - It's not for me*
Let me try to explain why trading a monthly strategy is not for me. After looking at the recent results of two other members trading monthly strategies have proven to be not for the faint-hearted. I falsely believed trading a monthly strategy would be a piece of cake but not so. 

*The feeling of not being in control*
The physical & emotional control of trading monthly is somewhat taken out of your hands. Trading is unpredictable & there is so much that can happen when trading in any time period. I have now traded daily, weekly & monthly systems experiencing the best & worse of each. I'm first to admit trading daily is profitable & exciting but I couldn't sustain the enthusiasm as the workload wouldn't permit me to have a life.  

*My comfort zone *
I've found trading weekly systems to be "my goldilocks period". Trading daily or weekly systems allow you to "respond" rather than "react" to spikes in volatility. Responding to those spikes makes the down days "stomachable to some degree" whereas trading a monthly strategy removes that level of comfort.

Skate.


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## Skate (1 May 2022)

*Trading a monthly strategy *
Parking a $100k in this "set & forget" type strategy, I thought the pressures of trading would be alleviated somewhat "but" to my surprise, it's proven not to be the case. The uncertainty of world events at the moment is contributing to this feeling of a lack of control which isn't a nice feeling.

*Trading traits*
Your personality will decide if you can properly execute positions trading a monthly strategy. What seems natural to many traders executing in lower time frames, "switching" to a monthly system will certainly feel alien to some degree. You can’t control the market but when trading lower time frames you "believe" that you have control over how you’ll react when trading becomes emotional. When trading monthly it doesn't afford you this luxury.

Skate.


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## Skate (1 May 2022)

*Like all skills*
If you are trading for financial freedom it takes an extraordinary length of time to become profitable & that is the reason why you need to find a strategy you can follow religiously. Your personality will ultimately decide if you can stick to the plan when the going gets tough.

*My point is...*
There are many different trading methods that work. You just need to find something that suits your lifestyle, schedule & ultimately your personality.

*I've made the commitment*
Trading a new monthly strategy, I knew it would take time for this system to perform but personally, I can't wait until the end of June so I can wind up this exercise. In summary, trading a monthly system is certainly not for me.

Skate.


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## Skate (1 May 2022)

Skate.


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## Miner (1 May 2022)

MovingAverage said:


> Sorry—don’t have personal experience but have you seen this
> 
> 
> 
> ...



Excellent share @MovingAverage . Thanks a lot


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## ducati916 (1 May 2022)

Skate said:


> *Trading a monthly strategy *
> Parking a $100k in this "set & forget" type strategy, I thought the pressures of trading would be alleviated somewhat "but" to my surprise, it's proven not to be the case. The uncertainty of world events at the moment is contributing to this feeling of a lack of control which isn't a nice feeling.
> 
> *Trading traits*
> ...




Mr Skate, a monthly strategy, particularly in a long only strategy, is for a bull market. It is not for a bear market, which of course we are now in.

If you had (cherry pick a time period) traded a monthly strategy in the US from 2009 through 2021, I'm sure you would have been happy with the results.

jog on
duc


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## Skate (1 May 2022)

ducati916 said:


> Mr Skate, a monthly strategy, particularly in a long only strategy, is for a bull market. It is not for a bear market, which of course we are now in.
> 
> If you had (cherry pick a time period) traded a monthly strategy in the US from 2009 through 2021, I'm sure you would have been happy with the results.
> 
> ...




@ducati916 initially the exercise to trade a monthly strategy “on a whim” was driven by greed alone as the Backtest results were impressive “but they always are”. Running the monthly strategy for 6 months I calculated picking up a quick $10k (currently up $8,599). Even if the monthly strategy turns out to be a goldmine I still couldn’t mentally trade this time period.

Skate.


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## MovingAverage (1 May 2022)

Skate said:


> *Trading Monthly - It's not for me*
> Let me try to explain why trading a monthly strategy is not for me. After looking at the recent results of two other members trading monthly strategies have proven to be not for the faint-hearted. I falsely believed trading a monthly strategy would be a piece of cake but not so.
> 
> *The feeling of not being in control*
> ...



I’m with you….thing that makes me very nervous about monthly systems is that even in back testing over past 20/30 years you just can’t get enough trades to give a good level of statistic relevance. No way I’m going near monthly systems. Also, with such a long hold time for me id want a robust hedge strategy in place and that starts to complicate things a little too much for my trading approach. But hey, each to their own


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## Skate (6 May 2022)

Skate.


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## Skate (6 May 2022)

Skate.


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## Skate (6 May 2022)

Skate.


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## MovingAverage (6 May 2022)

Reckon stops will be tightening up after todays session with lots of sell orders for Monday.


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## Skate (7 May 2022)

Skate.


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## Skate (7 May 2022)

Skate.


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## ducati916 (10 May 2022)

So the Fed issued today a 'liquidity warning'.

They can't reverse back into QE (not yet anyway) and we have QT looming.

So if they are caught both ways, howabout closing the market as happened in 1914 and 2001?

jog on
duc


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## qldfrog (10 May 2022)

ducati916 said:


> So the Fed issued today a 'liquidity warning'.
> 
> They can't reverse back into QE (not yet anyway) and we have QT looming.
> 
> ...



is there a place to be if they close the market? is cash even the best way?


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## Skate (13 May 2022)

Skate.


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## Skate (13 May 2022)

Skate.


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## Skate (13 May 2022)

Skate.


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## Skate (14 May 2022)

*Raw signals for this week*
For full transparency, these are the raw signals generated for this week.








Skate.


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## Skate (14 May 2022)

Skate.


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## Newt (14 May 2022)

Go Bat!  Stubbornly coming out of the cave each evening searching for juicy tidbits of fruit even in the darkest rainy weather.  

Promising pinbar rebound off previous years tops for Russell 2000, but DJIA and Nasdaq still leave room for plenty of downside.  Will take 1 or 2 strong weeks for most systems with market index filters to turn on again however.  My systems tend to be conservative coming back "on" - but have played over the years with "what would have happened" if buying had started a week or month or two early after later 2018, the GFC.  Surprisingly it rarely makes much long term difference - seems to take quite a few weeks for weekly momentum systems to get their....well,..... "momentum" back.

Has anyone seen Alan Kohler's serious of randomly correlated graphs in recent days during ABC news.  Love the way he politely reminds you no-body really knows where the markets will go next, even though the Financial Media would try to convince you each day it was because of X, Y and Z.


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## AussieStockDawg (14 May 2022)

Apologies if  this is not be the thread to ask in.

I'd greatly appreciate it if those who use Amibroker could share details and or .afl of the charts and chart layouts that you use to get some ideas.

I want to setup some standard layout charts to be able to assess relative performance across markets/market sectors and stocks, triple screen, etc.


Thanks


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## qldfrog (14 May 2022)

AussieStockDawg said:


> Apologies if  this is not be the thread to ask in.
> 
> I'd greatly appreciate it if those who use Amibroker could share details and or .afl of the charts and chart layouts that you use to get some ideas.
> 
> ...



My own view only: AB is not that great for charting.everything is doable but i just stick to very basic charts, displaying my indicators buy sell signals so maybe a few ma etc.i have always had issues managing multiple panes with different charts on same data.they do not behave as i expect.please anyone with a different view, i am all ears and ready to learn👍


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## frugal.rock (14 May 2022)

*That's Life.*

Recently, 27th April, I started a day job again. Not really by choice, but from wanting to help someone I met a few years ago.
He has a new business, baby was due etc. The situation reminded me of 2007 when my wife had our first.

As a result, trading got put on the back burner, totally.
Since then and now, 1 partial sell to cover a new buy, but largely disinterested in the markets throws.

Mixed emotions on the results, but a portfolio reduction (around 30%) near the highlighted high, has somewhat alleviated a bit of financial pain.
It's just money right?
Hopefully the market lifts it's game, but I'm reminded of the dead cat, and my take. On the way down it bounces off balconies and air conditioners...
Hopefully Friday's effort signals a landing bounce.

As a discretionary and sometimes contrarian trader, the portfolio doesn't really suit a long hold scenario.
Capitulation should've been on the 27th April when I started working.
I noted that the portfolio went down around 5% in early trade,  but recovered to near flat.
That was my signal. Ignored with apathy due to my current quest.

The results of a a trader who neglects the situation?




Some further thoughts are,
I admire the "weekend warrior" trading systems.
I don't agree that these modern markets are a decent platform to apply weekly based system trading.
Perhaps a mixup of an end of week being midweek might make a difference, but overall, the time frame I believe is a killer under the changed landscape, which suited my style to a tee.

*Inactive Member *

I haven't posted for a while, so am having a dump after a few Southern Comforts with diet coke.

I saw a bat on a powerline a few days ago. Fried. Clinging by rigor to one line by a leg.
I wondered how long it would "hang 5 ?"
before the inevitable.
Hopefully a Mary Shelley character revives the bat. 🦇


----------



## qldfrog (15 May 2022)

frugal.rock said:


> Perhaps a mixup of an end of week being midweek might make a difference, but overall, the time frame I believe is a killer under the changed landscape, which suited my style to a



This is an area debated much.
I agree that a week is a long time during these volatile time.i personally moved to a set of daily systems during the last year but: the workload is intense, and while work does not scare me, availability does.a gp or dentist appointment becomes a drama if it interferes with asx opening time, worse going away or losing connectivity...so not an easy way practically.
Everyone is different but really interfering with daily life..and..well did not make much difference..still get more small cuts than big one but mot really better results for me..both weekly and daily systems got similar BT as well even targetting recent time such as the 2020 crash and pump.
Changing the week start trading weekly on monday, tuesday, etc seems to change zip as well based on  BT.
Counter intuitively i have to say as i thought it would, even years ago...
I think the key is the trade or do not trade...embedded in the system "code".
Today all my systems are down, some heavily but one, which stopped trading relatively early on.
But we can  expect that one will miss any rebond whereas the the other will gorge.
The sad fact is that you do not make money on a long only trend system in a bear market.so you either stop trading, or swallow the DD in the hope that markets will rebond.


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## Skate (15 May 2022)

qldfrog said:


> The sad fact is that you do not make money on a long only trend system in a bear market.so you either stop trading, or swallow the DD in the hope that markets will rebond.




*Hindsight*
Is simply understanding an event only after it has happened & "with hindsight", I should never have traded within the yellow circles or during a sideways trend.

@qldfrog *nailed it*
"You only make money trading with the trend" but the real issue is that "you don't know when a trend starts & when it stops" 



peter2 said:


> I'm less inclined to buy pull-backs in this market environment. I'll wait for prices to make new highs before I'll buy. *Buying pull-backs in bullish markets only.*




*A picture paints a thousand words*
The 4-year weekly capture below is the ASX:XAO & this pattern repeats in all time frames.




Skate.


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## Skate (15 May 2022)

peter2 said:


> If your current preferences are system trading then take noteswhen you come to @Skate's post about his systems and his processes. The information you seek is there but you have to decide which parts resonate with you. *IMO skip the psycho babble posts as they won't mean much* *to you yet. It's only when we notice that things are not as easy as it should be that we need to understand what's holding us back. Then the psycho babble may start to make sense.*







*Losing money is not fun*
It's times like these that we need to keep our losses or drawdowns in perspective. I tend to use boxing analogies to put things into perspective but until you have been hit in the face a few times it tends not to sink in. Peter loves tennis & he knows that you can't win every point but that doesn't mean you don't try. You win some & you lose some, that's the nature of the game.



peter2 said:


> The portfolio lost value this week as the commodity selloff continues. No surprises here with the performance so far as *it was an unlucky time to start a portfolio of spec stocks*.




*Freaking out*
There is never a good time to start trading a new strategy, I know this & Peter knows this & has commented that the starting date of any new strategy can have a big impact on its early results.

Skate.


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## qldfrog (15 May 2022)

qldfrog said:


> This is an area debated much.
> I agree that a week is a long time during these volatile time.i personally moved to a set of daily systems during the last year but: the workload is intense, and while work does not scare me, availability does.a gp or dentist appointment becomes a drama if it interferes with asx opening time, worse going away or losing connectivity...so not an easy way practically.
> Everyone is different but really interfering with daily life..and..well did not make much difference..still get more small cuts than big one but mot really better results for me..both weekly and daily systems got similar BT as well even targetting recent time such as the 2020 crash and pump.
> Changing the week start trading weekly on monday, tuesday, etc seems to change zip as well based on  BT.
> ...



Just have to be clear,i stopped all my daily in February as i could not physically carry these on during an o/s trip.
I have not restarted dailies yet as the new found free time allow me to focus on life and other activities inc potential project.


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## Skate (15 May 2022)

*The psycho-babble *
The psycho content in the "dump it here" thread is important so you have a sound understanding of how trading affects everyone & to some degree it affects some more than others. Being armed with this understanding helps place drawdowns into perspective. With a string of losses or an accumulation of losses, we tend to "react" rather than "respond" to these unfolding events.

*This is important*
"Reacting to a situation doesn't give you time to think, responding does".

*Pesky emotions*
Traders tend to underestimate the importance of their emotions when making decisions. If you have a totally mechanical or mathematical approach to the market, you don’t have to worry too much about pesky emotions, but they are still there to some degree. Some days are lemons whereas other days are lemonade, accept this & you are halfway there to getting your emotions under control.

*If it's too much to bear - alleviate the stress*
We all feel that sinking feeling in our guts when a trade goes against us. This is the time when our emotions are being hijacked "encouraging" us to do the wrong thing at the wrong time. But if the stress is too much to bear, the simple & effective solution to alleviate the internal discomfort is to exit the trade, solely to relieve this distress. I'm just saying "Staying on your feet is a much better alternative than laying on the canvass".

Skate.


----------



## Sir Burr (15 May 2022)

Skate said:


> View attachment 141696
> 
> 
> *Losing money is not fun*




Power to Radge
YTD PnL: -533,184


----------



## Ann (15 May 2022)

Sir Burr said:


> Power to Radge
> YTD PnL: -533,184



Hopefully, that is just his drawdown?


----------



## qldfrog (15 May 2022)

Sir Burr said:


> Power to Radge
> YTD PnL: -533,184



In percentage and is it FY Oz Style or calendar year?
My calendar years are not much fun


----------



## MovingAverage (15 May 2022)

Sir Burr said:


> Power to Radge
> YTD PnL: -533,184



That takes some serious nuts and conviction to continue trading through that and not many could do that.


----------



## Ann (15 May 2022)

MovingAverage said:


> That takes some serious nuts and conviction to continue trading through that and not many could do that.



Depends on the portfolio percentage I should think, I thought he had a few million in his portfolio so it could be a four or five% drawdown. No biggie, it is all relative.


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## Skate (15 May 2022)

Ann said:


> Depends on the portfolio percentage I should think, I thought he had a few million in his portfolio so it could be a four or five% drawdown. No biggie, it is all relative.



I recently made a post how talking about percentages you quickly become desensitized to its real value. Relating a loss in percentage & converting it to dollars is sobering.

Skate.


----------



## Ann (15 May 2022)

Skate said:


> I recently made a post how talking about percentages you quickly become desensitized to its real value. Relating a loss in percentage & converting it to dollars is sobering.



Yes, I am sure converting a percentage that seems reasonable and within the bounds of a reasonable drawdown could become a sobering if not catastrophizing effect on someone by converting it to dollars. Once that is done the person will then begin to think of it in terms of what they could have bought with that money what pleasure they could have had and that will then lead to an unhealthy feeling of loss and even possibly planting the seeds of fear for the future. In other words, setting the trader up with an unhealthy perspective. Not something I subscribe to, it is hard enough when the markets puke and you are in the middle of it. I always look to bolster my inner voice with positives, not negatives. It makes trading so much easier and calmer.


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## Skate (15 May 2022)

*Looking at percentages*
Looking at your trading results as percentages only you’ll become quickly conditioned & accepting. A drawdown of 20%, yeah, that's acceptable & let's face it, we have all made the same remark at one stage or another.

*You need to convert percentages to dollars *
20% converted to dollars takes on a new meaning so don't let percentages fool you into a false sense of security.

*Percentages are relevant to the size of your portfolio.*
(a) On a $20k portfolio, 20% is bearable but trading a larger portfolio it can be devastating & hard to swallow.
(b) On a $100k portfolio, 20% takes on a new meaning 
(c) Trading a $1m or $2m portfolio 20% becomes very relevant indeed. That's $200k & $400k of your funds "GONE".

Skate.


----------



## Ann (15 May 2022)

Skate said:


> (c) Trading a $1m or $2m portfolio 20% becomes very relevant indeed. That's $200k & $400k of your funds "GONE".



Only if you panic and sell the lot. Otherwise, it is simply a drawdown. I think it is simply a case of who has the knowledge and the balls to stare the market down!


----------



## MovingAverage (15 May 2022)

Ann said:


> Depends on the portfolio percentage I should think, I thought he had a few million in his portfolio so it could be a four or five% drawdown. No biggie, it is all relative.



Sorry, most folks focus on $$ not percentage of portfolio. A $500k drawdown doesn't get any easier to accept just because it might be 10% to 20% of your portfolio. Humans are humans and even Nick R is a retail trader so that's still tough.


----------



## Ann (15 May 2022)

MovingAverage said:


> Sorry, most folks focus on $$ not percentage of portfolio. A $500k drawdown doesn't get any easier to accept just because it might be 10% to 20% of your portfolio. Humans are humans and even Nick R is a retail trader so that's still tough.



I don't subscribe to Nick R, is he bemoaning his loss/drawdown?


----------



## MovingAverage (15 May 2022)

MovingAverage said:


> Sorry, most folks focus on $$ not percentage of portfolio. A $500k drawdown doesn't get any easier to accept just because it might be 10% to 20% of your portfolio. Humans are humans and even Nick R is a retail trader so that's still tough.



I think the difference with someone like Nick being able to deal with a $500k drawdown is not that he sees it in terms of a % of his portfolio, but rather his experience and faith in his systems and backtesting.


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## MovingAverage (15 May 2022)

Ann said:


> I don't subscribe to Nick R, is he bemoaning his loss/drawdown?



Absolutely not


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## Ann (15 May 2022)

MovingAverage said:


> I think the difference with someone like Nick being able to deal with a $500k drawdown is not that he sees it in terms of a % of his portfolio, but rather his experience and faith in his systems and backtesting.



So he has confidence in what he is doing? I would be astounded if he is in the least upset. Maybe wrong of course.


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## MovingAverage (15 May 2022)

Ann said:


> So he has confidence in what he is doing? I would be astounded if he is in the least upset. Maybe wrong of course.



You're wrong...he is very emotionless about it. Follow him on twitter if you want some insight


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## Ann (15 May 2022)

MovingAverage said:


> You're wrong...he is very emotionless about it.





Ann said:


> I would be astounded if he is in the least upset.



That's what I just said!


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## Mohammed Hazabig'un (15 May 2022)

Top thread @Skate 

Why don't you System people who struggle buy a System off Nick? I understand the creative enjoyment of creating your own but you can still do that wirh smaller amounts.


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## Skate (15 May 2022)

@Mohammed Hazabig'un welcome to the forum & after reading a few of your posts it's obvious you have much to offer.

*Buying a strategy is the quickest way to start system trading*
To answer your question directly, many contributors to the "Dump it here" thread have already purchased "Turnkey" strategies from Nick with varying degrees of trading success.

*Nick Radge once said*
_"It takes time to work on a trading plan & develop a strong trader's psychology. It is essential for every successful trader to learn more about money management, create & test other trading ideas thoroughly." _

*We all struggle*
No matter how we elect to trade we all struggle to get the balance right that allows us to gain the financial freedom we all seek. Erratic market behaviour & world events are mudding the water at the moment for system traders. If it wasn't that it would most likely be something else. Having patience is a key to successful trading as the markets always seem to rise steadily. I'm just saying, "to make money you always need to be engaged in the market".

Skate.


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## qldfrog (15 May 2022)

Mohammed Hazabig'un said:


> Top thread @Skate
> 
> Why don't you System people who struggle buy a System off Nick? I understand the creative enjoyment of creating your own but you can still do that wirh smaller amounts.



What makes you believe Nick's system would be better?
In that case you can just leave your money with a Lic or fund.
The process of building a system and confidence and trust is as important as the code.otherwise you will be out at the first DD.
My view only👍


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## Mohammed Hazabig'un (15 May 2022)

qldfrog said:


> What makes you believe Nick's system would be better?
> In that case you can just leave your money with a Lic or fund.
> The process of building a system and confidence and trust is as important as the code.otherwise you will be out at the first DD.
> My view only👍



Thanks. Just wondering. I considered it myself, I even spoke to Nick a year or two ago but couldn't be sure as I don't know systems. Like buying a Car but not having the knowledge to know the good from the bad.


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## qldfrog (16 May 2022)

Mohammed Hazabig'un said:


> Thanks. Just wondering. I considered it myself, I even spoke to Nick a year or two ago but couldn't be sure as I don't know systems. Like buying a Car but not having the knowledge to know the good from the bad.



I have no doubt Nick's system are much better than the ones i initially developed.it can be a way for some maybe.
Nick' book unholy grail is my bible and i highly value the person...so not negative.
But personally, i would not stick with a significant DD in a system i had not sweated on and know intimately.
One option could be to buy and tweak one of Nick systems?
You start from a good proven code and spend the time and effort to get really familiar with it, add your own sauce to fit your own tolerance to DD, stagnation, etc.
You save yourself time and probably a lot of money.
I think some people on ASF took that way 
I can honestly say that my learning process phase  cost me $100's of thousand both in losses, opportunity losses etc in the last 10y, on a mix of systems trading, and discretionary trading...
i have reached a stable plateau probably early this year, in time to see natural market linked DD, and a potential historical crash ahead.
This is not a sweet drive.so you could save a lot of pain
So Nick system and a good effort to customise one to your taste might save you a Ferrari (or a Tesla if this fits more your silly money splurge😊)
Good luck, you are on the right site to learn👍


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## Mohammed Hazabig'un (16 May 2022)

qldfrog said:


> I have no doubt Nick's system are much better than the ones i initially developed.it can be a way for some maybe.
> Nick' book unholy grail is my bible and i highly value the person...so not negative.
> But personally, i would not stick with a significant DD in a system i had not sweated on and know intimately.
> One option could be to buy and tweak one of Nick systems?
> ...



You'd be fast approaching the 10,000 hours of mastery Frog, hopefully that pot of Gold is just over the horizon.

Turning on the Computer and letting a System "play" with hundreds of thousands of your hard earnt while you go to Bed like Nick does isn't for me. I already don't sleep too well, too interested in the U.S. Market News.

OT, but former Fed Chair Ben Bernanke hypothesised Crashes are less likely nowadays, I assume due measures implemented post 87, and recent Crashes. Still can obviously happen, but less likely. Don't know myself. In the Fed (and RBA) we trust.


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## Gunnerguy (16 May 2022)

Challenging to control the emotions at the moment but remember ... 

it is a drawdown , not a loss unless you sell

‘Time in the market’

If you don’t need the money then you don’t need to sell

6-12 month emergency funds

Patience .....

Yes we are all hurting now but (I hope) this is just a blip in the slow long term grind upwards over 1-5-10 years

Gunnerguy


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## qldfrog (16 May 2022)

Gunnerguy said:


> Challenging to control the emotions at the moment but remember ...
> 
> it is a drawdown , not a loss unless you sell
> 
> ...



In most cases, for systems traders..not investors, DD is an actual loss..you get out ready to reenter


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## Newt (16 May 2022)

qldfrog said:


> I have no doubt Nick's system are much better than the ones i initially developed.it can be a way for some maybe.
> Nick' book unholy grail is my bible and i highly value the person...so not negative.
> But personally, i would not stick with a significant DD in a system i had not sweated on and know intimately.
> One option could be to buy and tweak one of Nick systems?
> ...




If I did it all over again would buy one or two Radge systems, subscribe for a year or two.  Did subscribe for a brief period many years ago, but too early in the learning process to fully comprehend and incorporate all the info probably.  Hard to know who/what makes a good mentor, and lots of sharks in the water - not including Radge in that category.


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## Mohammed Hazabig'un (18 May 2022)

There's a quote from @Trembling Hand years ago in here: "when losses start occurring I go back to Demo Trades".


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## Skate (19 May 2022)

Mohammed Hazabig'un said:


> Looking at the XJO it hasn't done a lot since gapping up at the Open. *ROC and ADX still indicating Sell* ( thank you @Skate ), but this could mean it'll recover abit after the Aus Employment figures come out.




*When is the correct time to buy?*
Well, that's a personal decision, one that we all grapple with from time to time. There is a great discussion taking place in "the-official-asx-is-tanking-panic-thread" & there have been made some reasonable points made by @wayneL, @waterbottle, @divs4ever & @Mohammed Hazabig'un but as usual I rather keep my posts corralled in the "Dump it here thread" as my comments are general in nature. My entry points are driven by precise mathematical formulas that at times vary from market sentiment. To overcome this variation in sediment I use "The Ducati Blue Bar Strategy" which only measures two metrics "volatility & volume". 

Skate.


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## Skate (19 May 2022)

Mohammed Hazabig'un said:


> Considering loading up again. Maybe I need a slap.




*When do we consider "loading up again"?*
To me, it's simple, "when the sentiment changes" - meaning when the bars of the strategy change from "red bars to blue bars" (that I will display later) it's a fair indication helping you decide whether the time is right to "load up again".  

*Is the strategy accurate?*
Well to a degree. "The Ducati Daily Blue Bar Strategy" certainly picks the turns but unfortunately those "turns in sediment" don't always follow through. But in my defense, nothing works perfectly in this game. Manipulation & "logical people" making "illogical decisions" don't help the cause when mathematics is applied. The markets are simply hard to predict but easy to understand in hindsight. The beauty of using just two metrics "volatility & volume" indicates these turns in sediments bar-by-bar. (in any time frame)

Skate.


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## Skate (19 May 2022)

*A simple strategy that uses volatility & volume*
I've made multiple posts on the advantages of "The Ducati Blue Bar Strategy" when it comes to a trading strategy that is simple in design & structure as it incorporates (volatility & volume). As traders, we don't need a fancy strategy to make money. It's exciting to experience how other traders make their stock selection & the methodology that decides when a position is to be entered. Admittedly I don't have the time or unique skills-set to evaluate positions in this manner. My go-to is either the weekly or daily "Ducati Blue Bar Strategy" to understand the reasoning a little better. Coding is pretty straightforward & it's easy to chart positions to understand the logic behind the selection.

*Volatility & volume within an up-trend*
To understand "The Ducati Blue Bar Strategy" the first "Blue Bar" is the signal bar, meaning we enter the position on the next day at the open. We sell the position on the 2nd red bar as the first "red" bar is the signal bar. "The Ducati Daily Blue Bar strategy" is a simple "volatility & volume" picker. Picking the increased "volatility & volume" of individual positions or indexes using only "Red & Blue Bars" allows you to visualize where the price is heading.

*The Daily Blue Bar Strategy applied to the "XJO" index*
Applying "The Daily Ducati Blue Bar Strategy" to the "XJO index" the coloured bars display the turn in sediment. (in real-time I should add). This "Daily" strategy gets you "in & out" pretty quickly when there is a "move" or when the "volatility & volume" starts to go "pear shape". With this strategy, there is no "guesswork" as it's as simple as following the coloured bars.




*For full disclosure*
The yellow ribbon displayed at the bottom of the chart is a "caution" indicator displaying yellow when the "sentiment" is not all that decisive or clear cut.

Skate.


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## Mohammed Hazabig'un (19 May 2022)

Many thanks for that Skate 

I'd seen your Ducati Blue Bar strategy before and it peaked my interest, even for an "Infidel Fundamentalist".


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## investtrader (20 May 2022)

This is pretty close! I could tell you how I did it but then I'd have to kil ya!


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## Skate (20 May 2022)

Skate.


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## Skate (20 May 2022)

Skate.


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## Skate (20 May 2022)

Skate.


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## MovingAverage (20 May 2022)

Question is whether XAO can hold the 7233 support despite DJI now well and truly in uncharted territory with support a long way off.


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## Mohammed Hazabig'un (20 May 2022)

There's a quote in here from @qldfrog that he went to Systems to take the emotions out of it. It's not just the emotions, it's a busy life, lack of sleep, too many coffees, reading/seeing things, anything can make you Buy or Sell when your Logic knows it's not right.
The Head and Gut, before the Heart (emotions) usually.


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## Skate (21 May 2022)

Skate.


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## Skate (21 May 2022)

Skate.


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## Skate (21 May 2022)

Mohammed Hazabig'un said:


> There's a quote in here from @qldfrog that he went to Systems to take the emotions out of it. It's not just the emotions, it's a busy life, lack of sleep, too many coffees,* reading/seeing things, anything can make you Buy or Sell when your Logic knows it's not right.*
> The Head and Gut, before the Heart (emotions) usually.




*Behavioural errors create bad decisions*
The tendency to make behavioural mistakes costs money. Mistakes are generally made by traders who do not know the fundamentals, including the behavioural pitfalls. Some habits can be quite positive, other times just irritating but when you fail to see them in yourself, they can be extremely dangerous.

*Market Sentiment*
Usually, there’s a good explanation to explain the sentiment of the market but we should be wary when the market moved for no apparent reason. When you can’t explain why the market is moving, you should be suspicious of the moves the market makes.

Skate.


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## Skate (21 May 2022)

bigdog said:


> The tumultuous trading capped a seventh straight losing week, its longest such streak since the dot-com bubble was deflating in 2001. The company in charge of the index says a bear market has not officially begun. “Whether or not the S&P 500 closes in a bear market does not matter too much,” - “A lot of pain has already been experienced.”  "I think a lot of investors are kicking themselves for not having gotten out on signs that the economy was probably slowing and the Fed was making its policy pivot".




*Two steps forward & three steps backward*
You win some & you lose some, trading is not smooth sailing at the best of times let alone in these times of uncertainty. @bigdog post today goes a long way in explaining why most traders are feeling disappointed with how the markets have behaved these last 6 or so months. The line chart below demonstrates the "ups & downs" that we all experience. (it's frustrating but that's just how trading is). 




Skate.


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## Skate (21 May 2022)

*System trading is jumping on & off trends capitalising on price movements*
It's often said that timing the market rarely works but trading this way can be profitable. I realise the best time to trade is when the markets are trending upwards whilst also understanding that there are times when being constantly involved in the markets can be just as profitable, if not more so. 

*I appreciate being always in the markets is fraught with danger *
Timing the entry is "significant" but timing the exit is really, "critical". Our brain is constantly assessing & re-assessing information that matches our beliefs blocking out the rest. It's for this very reason that system trading has an edge for me as those required skills are sadly lacking.

*Time in the markets (Passive investment style)*
This type of investing can be referred to as a "buy & hold" investment style. Buy & Hold strategies, relies on the theory that "overtime" markets will go up, driven by solidly profitable companies. I'm not saying you can "buy & take your eye off the ball" but rather check periodically that the original investment decision is still applicable.

Skate.


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## Mohammed Hazabig'un (21 May 2022)

I was reading research on one of the best consistent Market timers of all time. He would get out well AFTER the Market dove, not before lol. And he was one of the best lol.

Even Nick Radges method is based on exit after the dive. 

You either learn to Momentum Trade (short term), Value Invest (long term) or Buy n Hold - (love them dividends, right @divs4ever ).


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## divs4ever (21 May 2022)

Mohammed Hazabig'un said:


> I was reading research on one of the best consistent Market timers of all time. He would get out well AFTER the Market dove, not before lol. And he was one of the best lol.
> 
> Even Nick Radges method is based on exit after the dive.
> 
> You either learn to Momentum Trade (short term), Value Invest (long term) or Buy n Hold - (love them dividends, right @divs4ever ).



i am terrible at timing  , so i try to move early   ( nibble on the slide ,  reduce on the rally )

 the beauty  of nibbling on the downward trend   is IF it bounces at the bottom  you have extra chances to buy more ( if you choose to )

 while selling in the uptrend   you can calculate   what profit levels you are locking in ( not sweating about will the trade complete )

 also during 2020  several anomalies  appeared   divs withheld  AFTER  being declared  ,  , in some cases AFTER the ex-div. date  and in one case ON the payment date

 just mentioning this in case a corporate type is watching  , us investor types  are mostly trying to LIVE on those div. incomes ( so issues like that  makes us cautious about adding more in your company if we have surplus cash , not that important until cap. raising time )

 PS and YES the brokerage fees really mount up , but it is the price you pay for being cautious


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## MovingAverage (23 May 2022)




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## MovingAverage (23 May 2022)

Looking at making some changes to one of my live systems. Which version of the system would you take?

System stat's on the left are for the current system and right is the "new improved system". 

Headline figures of the new improved system look inviting: net profit % has increased from around 440% to a little over 600%. System drawdown % also improved from -8.3% to around 6.6%.

Despite the new improved system's better headline figures I'll be sticking with the old version--why? Because I prefer the more consistent annual returns in the original system--annual performance is less volatile in the original system.


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## Skate (23 May 2022)

MovingAverage said:


> System stat's on the left are for the current system and right is the "new improved system".




@MovingAverage by removing an index buy filter can at times mask other underlying issues. On those backtest results I would “also” stick with the current system. But to be honest I would like to understand a little better why there is a low exposure trading this strategy, that’s the area of first concern. It’s only a rough guess but if you are trading this system at the moment you would be well south of -3.3%.

Skate.


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## qldfrog (23 May 2022)

MovingAverage said:


> Looking at making some changes to one of my live systems. Which version of the system would you take?
> 
> System stat's on the left are for the current system and right is the "new improved system".
> 
> ...



Funny, i look at the two charts and  without looking at actual figures, just shapes..i go straight for the one on the right .
I then look at figures and absolutely no dilemma..the one on the right...
People are different...


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## MovingAverage (23 May 2022)

Skate said:


> @MovingAverage by removing an index buy filter can at times mask other underlying issues. On those backtest results I would “also” stick with the current system. But to be honest I would like to understand a little better why there is a low exposure trading this strategy, that’s the area of first concern. It’s only a rough guess but if you are trading this system at the moment you would be well south of -3.3%.
> 
> Skate.




Index Filter not removed...why did you assume that? 

These backtest results in my post are done with fixed position sizing and my live trading does not in any way used fixed position sizing (and the positions I've taken in live are considerably larger than those in the sims too) so these sim DD figures do not reflect what I'm experiencing in my live DD, which is sitting at a max DD of around 15%


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## MovingAverage (23 May 2022)

@Skate same system with no filtering...looks ugly


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## Skate (23 May 2022)

MovingAverage said:


> Index Filter not removed...why did you assume that?







Skate.


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## Skate (23 May 2022)

MovingAverage said:


> @Skate same system with no filtering...looks ugly




@MovingAverage, this backtest looks uglier but more realistic & there is much to work with. The results since COVID looks okay to me.




Skate.


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## MovingAverage (23 May 2022)

Skate said:


> View attachment 142069
> 
> 
> Skate.




Ok, can see why you assumed that but definitely not the case--both are using the same index filter.

Main difference is the new system on the right is using a more aggressive entry setup. Current system on the left is using an entry confirmation but the system on the right is not using the entry confirmation. This is also shown by the fact the right system is taking more trades because it is not looking for an entry confirmation signal.


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## MovingAverage (23 May 2022)

Skate said:


> @MovingAverage, this backtest looks uglier but more realistic & there is much to work with. The results since COVID looks okay to me.
> 
> View attachment 142070
> 
> ...




No way I would ever trade that. The post covid rise you identify is an anomaly--how often does a market crash and rebound to that extent. You'd effectively be trading year after year hoping for a rapid sell off in the hope of a massive rebound. Nope--not for me I'm afraid.


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## Skate (23 May 2022)

MovingAverage said:


> *Ok, can see why you assumed that but definitely not the case--both are using the same index filter.*
> 
> Main difference is the new system on the right is using a more aggressive entry setup. Current system on the left is using an entry confirmation but the system on the right is not using the entry confirmation. This is also show by the fact the right system is taking more trades because it is not looking for an entry confirmation signal.




Fair enough.

*Can you explain this?*




Skate.


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## Skate (23 May 2022)

MovingAverage said:


> No way I would ever trade that. The post covid rise you identify is an anomaly--how often does a market crash and rebound to that extend. You'd effective be trading year after year hoping from a rapid sell off in the hope of a massive rebound. Nope--not for me I'm afraid.




@MovingAverage, if presented with those three strategies to improve I would ask for the last one. As @qldfrog said, "People are different".

*Traders, we are all different*
While one person sees an opportunity, others see something completely different. Thus, it’s our perception that creates value at any given time.

Skate.


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## MovingAverage (23 May 2022)

Skate said:


> Fair enough.
> 
> *Can you explain this?*
> 
> ...



You're talking about the increase in exposure, right? It's taking more trades which drives up the exposure.


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## MovingAverage (23 May 2022)

Skate said:


> @MovingAverage, if presented with those three strategies to improve I would ask for the last one. As @qldfrog said, "People are different".
> 
> *Traders, we are all different*
> While one person sees an opportunity, others see something completely different. Thus, it’s our perception that creates value at any given time.
> ...



Agree...there is no absolute right system...you trade what suits your personal style and what your objectives are. For me I like consistent yearly returns and happy to trade off headline performance to get consistency--there's no free lunch. Highlighting this was the point of my post.


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## Skate (23 May 2022)

MovingAverage said:


> You're taking about the increase in exposure, right? It's taking more trades which drives up the exposure.




Sorry, I should have framed the question differently to avoid confusion.

*My question*
Why is the exposure of both systems so low?




Skate.


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## MovingAverage (23 May 2022)

Skate said:


> Sorry, I should have framed the question differently to avoid confusion.
> 
> *My question*
> Why is the exposure of both systems so low?
> ...




Ok sorry--got it.

It is not an overly aggressive system as you can tell. In summary--the answer to your question is look at the average hold time...it has a conservative entry set up and when it does take a position it generally only holds the position for a relatively short period of time. I deliberately wanted this system to have short hold times so I could reduce drawdown.


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## Skate (23 May 2022)

MovingAverage said:


> Agree...there is no absolute right system...you trade what suits your personal style and what your objectives are. *For me I like consistent yearly returns* and happy to trade off headline performance to get consistency--there's no free lunch. *Highlighting this was the point of my post*.




@MovingAverage, I've done much the same. I have a few mainstay strategies that have "performed" over a considerable amount of time & I never play with the mix. When I code a new strategy or have a new idea about a trading system, I'll post & trade it for a short period of time so others can follow along. Sometimes it works well & there is value in doing the exercise. At other times the results are at the mercy of the markets. 
*
The point is? *
It proves none of us have a crystal ball or a strategy that works all the time. IMHO, @peter2 has nailed his style but his results at the moment demonstrate what I've just highlighted. 

*"You win some & you lose some" *
If trading was easy, we wouldn't need this forum.

Skate.


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## MovingAverage (23 May 2022)

MovingAverage said:


> Ok sorry--got it.
> 
> It is not an overly aggressive system as you can tell. In summary--the answer to your question is look at the average hold time...it has a conservative entry set up and when it does take a position it generally only holds the position for a relatively short period of time. I deliberately wanted this system to have short hold times so I could reduce drawdown.



I should add that more importantly the short hold times reduced significantly the standard deviation in returns during MC analysis. For me this is important since it improves OOS returns lining up with sims, which is again back to predictability of future performance.


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## Newt (23 May 2022)

What a great exercise, for everyone to see 2 experienced traders looking through the glasses of very different experiences and preferences.  Thanks for sharing MA.  I wasn't convinced there was a statistical difference in the 2 systems until saw how many more trades the 2nd system would take.  Not my style to take too many extra trades without significant improvement in returns, so I'd be sticking with System 1 probably....


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## MovingAverage (23 May 2022)

Newt said:


> What a great exercise, for everyone to see 2 experienced traders looking through the glasses of very different experiences and preferences.  Thanks for sharing MA.  I wasn't convinced there was a statistical difference in the 2 systems until saw how many more trades the 2nd system would take.  Not my style to take too many extra trades without significant improvement in returns, so I'd be sticking with System 1 probably....



The extra trades was also a factor in me sticking to the original version of the system. Interesting the number of trades jumped significantly but the exposure didn't jump as significantly. For me personally I often view the number of trades as a measure of a system's efficiency--the more trades the less efficient.


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## MovingAverage (23 May 2022)

Skate said:


> *"You win some & you lose some" *
> If trading was easy, we wouldn't need this forum.
> 
> Skate.



For sure...if it was easy everyone would be making money, but reality is someone has to lose money for someone to make money and if it was easy no one would lose money.


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## MovingAverage (23 May 2022)

MovingAverage said:


> For sure...if it was easy everyone would be making money, but reality is someone has to lose money for someone to make money and if it was easy no one would lose money.



Although @Skate some say that the market may not be a zero sum game.









						Is the Stock Market a Zero-Sum Game?
					

Yes and no.




					www.morningstar.com


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## investtrader (23 May 2022)

You stats show for the original system winners are held for 15.67 bars for 21.93%. But the version with no market filter holds for 170.22 bars for 79%? Seems to be a big reliance on the index filter.


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## MovingAverage (23 May 2022)

investtrader said:


> You stats show for the original system winners are held for 15.67 bars for 21.93%. But the version with no market filter holds for 170.22 bars for 79%? Seems to be a big reliance on the index filter.



Yup


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## investtrader (23 May 2022)

How many 'trades' did your index filter do in the test period?


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## MovingAverage (23 May 2022)

investtrader said:


> How many 'trades' did your index filter do in the test period?



Don't understand what you mean? My index filter doesn't do any trades


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## investtrader (23 May 2022)

I mean that it would seem that your index filter is really doing the 'trading'.  If trades are normally held for that long without a filer it is really mainly just the filter doing the trading it would seem.


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## qldfrog (23 May 2022)

MovingAverage said:


> the more trades the less efficient.



You understand that this is very debatable, I would disagree there and efficiency is based on cost, at the extreme, if it costs nothing to trade a lot, do it if the returns  or risk justify it.

Then the zero sum game is actually wrong IMHO
Why? With growth of the economy/monetary inflation, the share market will always trend to grow so the buy sell exchanges making the market will always be slightly in profit by a tiny bit
The only real loser is the fact that statistically and on a long enough period, selling actions are always a mistake:
 these sold shares will statistically always be worth more in the future
So the principle beyond the famous *buy and forget *or *time in the market sayings*
With a limited life expectancy, on an individual basis , it gets harder to justify as this century trend has ups and downs, and may even reverse on a society collapse.
We do not known much about the roman empire stock market trends in its decline ;-)


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## MovingAverage (23 May 2022)

investtrader said:


> I mean that it would seem that your index filter is really doing the 'trading'.  If trades are normally held for that long without a filer it is really mainly just the filter doing the trading it would seem.




No, the index filter is not really doing the trading. Does the filter being on or off influence the system, of course it does and as you can see it has a reasonable influence but it doesn’t directly trade specific positions as you seem to be suggesting. My filter and the way my system uses it is a little smarter than just a binary “is the market trending up or down” for turning on or off the system for the purposes of entering or exiting positions. The system is using several characteristics of the filter (not just simply whether it is on or off) to adjust near term entry and exit conditions. Putting it crudely, my filter is used more so to adjust the system (including entry and exit conditions) but it does not trade positions as you’ve suggested.


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## MovingAverage (23 May 2022)

qldfrog said:


> You understand that this is very debatable, I would disagree there and efficiency is based on cost, at the extreme, if it costs nothing to trade a lot, do it if the returns  or risk justify it.
> 
> Then the zero sum game is actually wrong IMHO
> Why? With growth of the economy/monetary inflation, the share market will always trend to grow so the buy sell exchanges making the market will always be slightly in profit by a tiny bit
> ...



Nothing more enlightening than a debate with you @qldfrog 👍 When I say efficiency I use the term more broadly than just restricted to a cost analysis, which is very important but not the only factor. When I say efficiency I also factor in things like effort, work, risk etc. Here’s a simple example for you, you’ve got two systems and both made you 30% in the past 12 months (forget brokerage and other costs at this stage). To get to that 30% one of the systems only required you place 2 trades per month and overall you had about 25% of your capital deployed (exposure). The second system required you to place 250 trades per month and on average you had around 80% of your capital deployed. I argue that the first system is far more efficient than the second system because It generated the same return using less resources—less of my time to manage trades, less trades per month and less capital (lower exposure).

Don’t get me wrong—I’m not suggesting an efficient system is a profitable system. You referenced buy and hold, yes it’s extremely efficient but the right relatively less efficient mechanical system could beat buy and hold for profit.


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## DaveTrade (23 May 2022)

MovingAverage said:


> Nothing more enlightening than a debate with you @qldfrog 👍 When I say efficiency I use the term more broadly than just restricted to a cost analysis, which is very important but not the only factor. When I say efficiency I also factor in things like effort, work, risk etc. Here’s a simple example for you, you’ve got two systems and both made you 30% in the past 12 months (forget brokerage and other costs at this stage). To get to that 30% one of the systems only required you place 2 trades per month and overall you had about 25% of your capital deployed (exposure). The second system required you to place 250 trades per month and on average you had around 80% of your capital deployed. I argue that the first system is far more efficient than the second system because It generated the same return using less resources—less of my time to manage trades, less trades per month and less capital (lower exposure).
> 
> Don’t get me wrong—I’m not suggesting an efficient system is a profitable system. You referenced buy and hold, yes it’s extremely efficient but the right relatively less efficient mechanical system could beat buy and hold for profit.




I would definitely go the most profit with the least risk and effort, that said, if it could be done with buy and hold then great. It's all about weighting the factors up for the balance to suit each of us I suppose.


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## qldfrog (23 May 2022)

MovingAverage said:


> Nothing more enlightening than a debate with you @qldfrog 👍 When I say efficiency I use the term more broadly than just restricted to a cost analysis, which is very important but not the only factor. When I say efficiency I also factor in things like effort, work, risk etc. Here’s a simple example for you, you’ve got two systems and both made you 30% in the past 12 months (forget brokerage and other costs at this stage). To get to that 30% one of the systems only required you place 2 trades per month and overall you had about 25% of your capital deployed (exposure). The second system required you to place 250 trades per month and on average you had around 80% of your capital deployed. I argue that the first system is far more efficient than the second system because It generated the same return using less resources—less of my time to manage trades, less trades per month and less capital (lower exposure).
> 
> Don’t get me wrong—I’m not suggesting an efficient system is a profitable system. You referenced buy and hold, yes it’s extremely efficient but the right relatively less efficient mechanical system could beat buy and hold for profit.



Yes fully agree, there is a reason i did not restart all my daily systems..lower risk slightly better than weekly but easily 5xmore work and a lot of constraint..so i am with you there.
I was seeing your point initially more against the ultra fast trading: fully computerized and doing zillions of trades.
I tend to have a very high number of trades 
if a system is working, i should have as much of my money working ..so very dynamic, many trades , high volatility..and great potential but obviously high risk of higher losses on mistakes or just market jitters..
My heart is still young and i did not get Pfizer 😊


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## MovingAverage (27 May 2022)

So the US has a few solid days and some "experts" start claiming the market has found the bottom and now things are on the up     Being the pessimist I am not sure I share their enthusiasm. Weekly DJI not that exciting for me--we've seen this before and the market lacked conviction.


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## Skate (27 May 2022)

MovingAverage said:


> So the US has a few solid days and some "experts" start claiming the market has found the bottom--we've seen this before and the market lacked conviction.






Greynomad99 said:


> While I remain positive about the market, thoughts of a further drop of say 10% into a bear market and a sea of pain have been growing as international economic conditions continue to erode.




*Summary*
Caution is advised.

Skate.


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## MovingAverage (27 May 2022)

Skate said:


> *Summary*
> Caution is advised.
> 
> Skate.



I find it somewhat crazy that this week's rebound in the US has been lead by a growing certainty and increasing prospects the US economy is slowing and heading to recession and this is underpinning a confidence that the US Fed will not be as aggressive on interest rate hikes   I appreciate I have an old school view of the world, but my view of the world is a growing strong economy would spur a rebound in the market, but no...these days an economy on the decline is all the rage. Markets never cease to surprise, hey.


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## Mohammed Hazabig'un (27 May 2022)

MovingAverage said:


> I find it somewhat crazy that this week's rebound in the US has been lead by a growing certainty and increasing prospects the US economy is slowing and heading to recession and this is underpinning a confidence that the US Fed will not be as aggressive on interest rate hikes   I appreciate I have an old school view of the world, but my view of the world is a growing strong economy would spur a rebound in the market, but no...these days an economy on the decline is all the rage. Markets never cease to surprise, hey.



The Fed appearing more flexible, Demand, Employment and Wages hanging in there and BTD sentiment prevailing imo.

Just Inflation as opposed to stagflation


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## Rabbithop (27 May 2022)

Skate said:


> *Summary*
> Caution is advised.
> 
> Skate.



Fully agreed. Don't think its the bottom of it yet. Calmness before the Tsunami, only my view.


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## Skate (27 May 2022)

peter2 said:


> I have wondered if the results would be better with a market filter. *(p2-asx-swing-trading-pull-backs thread)*




*Trading a pure Pullback Strategy*
At times trading pullback can be hamstrung by an "index buy filter" & can lessen its effectiveness. Trading a "Pullback Strategy" constrained by an "Index Buy Filter" admittedly gives confidence but (IMHO) it's safe to trade a "Pullback Strategy" no matter how the overall market is traveling.

*Trading a Trend Trading  Strategy & how does an Index Filter operate?*
An index filter is your safety net as it will keep you from trading when conditions are unfavourable. It can be as simple as you want it to be. A well-defined filter can lock in profits or stop you from losing more money if your position is underwater. In essence, when an index filter turns off it has the ability to protect your precious capital. When an index filter turns off you have a multitude of choices on what to do next with open positions & it's not limited by the next two examples. Example (a) you can exit all positions or (b) shorten up the "stop-loss" settings "generating" a sell signal sooner than when the index filter is on.

Skate.


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## Skate (27 May 2022)

*The shootout between the "Flying Bat Strategy" & "Platinum Strategy" *
Over a short 6-month period should determine whether to trade with or without an "index buy filter".

(a) The "Platinum Strategy" has an "index buy filter" that keeps you out of the markets when trading conditions are unfavorable.
(b) The "Flying Bat Strategy" has "no index buy filter" & constantly trades the signals as they are generated.

*The real question*
Should you trade when the market is non-responsive?

*The answer *
At this stage "not" using an "Index Buy Filter" during these turbulent trading conditions has been "detrimental to my wealth".

Skate.


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## MovingAverage (27 May 2022)

Skate said:


> *Trading a Trend Trading  Strategy & how does an Index Filter operate?*
> An index filter is your safety net as it will keep you from trading when conditions are unfavourable. It can be as simple as you want it to be. A well-defined filter can lock in profits or stop you from losing more money if your position is underwater. In essence, when an index filter turns off it has the ability to protect your precious capital. When an index filter turns off you have a multitude of choices on what to do next with open positions & it's not limited by the next two examples. Example (a) you can exit all positions or (b) shorten up the "stop-loss" settings "generating" a sell signal sooner than when the index filter is on.
> 
> Skate.



The traditional index filters based on MA of closes work well when the market is in clear up or down trend, but are absolutely terrible when markets move sideways. Last twelve months for XAO has really highlighted weakness for this style of filter--getting whipsawed all over the joint. I wonder whether a more conservative breakout trader would be better off waiting for XAO to show a strong move above 7833 even if the index has closed above the MA at levels below 7833? XAO has had 4 prior attempts to breakthrough 7833 and failed every time. Interesting times ahead, that's for sure.


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## Skate (27 May 2022)

*The "Platinum Strategy" incorporates an "Index Buy Filter" *
When the Index Filter is off it prohibits new signals from being generated keeping you out of the markets when trading conditions are unfavorable. As the "Index Filter" is still off, there are no signals generated this week.





Skate.


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## Skate (27 May 2022)

Skate.


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## Skate (27 May 2022)

Skate.


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## Skate (27 May 2022)

MovingAverage said:


> The traditional index filters based on MA of closes work well when the market is in clear up or down trend, but are absolutely terrible when markets move sideways. Interesting times ahead, that's for sure.




*Is there something better than an Index Filter?*
An "Index Filter" is normally an SMA of a nPeriod of an Index. Looking outside the box you can elect to use the performance of the share price relative to the index to decide whether a position is taken or not bypassing an "Index Filter" as described by @MovingAverage. Using the Relative Strength of individual positions eliminates this concern raised. When a traditional "Index Filter" is used it discounts positions that are "jumping out of their skin" busting higher.

*Maybe an (RSL) might be an alternative*
The "Relative Strength Line" (RSL) is described here: https://forum.amibroker.com/t/ibd-relative-strength-line-within-or-not-within-a-consolidation/30863 might be beneficial to "some degree" for those who have Amibroker. Basically the (RSL) represents new highs within a consolidation period.

*Simply a stock's "Relative Strength Line" compares a stock's price performance versus the index*
Many charting services plot an RS Line along with the stock's price, moving averages, etc. The line is derived by dividing the stock price by the Index value. An upward sloping line means that the stock's price is outperforming the Index. 

*Using "IBD's Relative Strength Line" has an advantage*
One of the key uses of IBD's Relative Strength Line is when it makes a new high (three months, typically) within a consolidation, which shows unusual strength in a stock that can lead to a powerful breakout. Therefore it's a good idea to look out for them!

Skate.


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## MovingAverage (27 May 2022)

Skate said:


> *Is there something better than an Index Filter?*
> An "Index Filter" is normally an SMA of a nPeriod of an Index. Looking outside the box you can elect to use the performance of the share price relative to the index to decide whether a position is taken or not bypassing an "Index Filter" as described by @MovingAverage. Using the Relative Strength of individual positions eliminates this concern raised. When a traditional "Index Filter" is used it discounts positions that are "jumping out of their skin" busting higher.
> 
> *Maybe an (RSL) might be an alternative*
> ...



Not that my live trading uses it now, but a few years back I was using the gradient of the MA slope as an indicator of the index trend instead of whether the day's close was above or below the MA. Found the MA slope gradient worked well and provided better performance when the market was sideways. I should dig out that code and run a few sims to post here.


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## Skate (27 May 2022)

MovingAverage said:


> Not that my live trading uses it now, but a few years back I was using the gradient of the MA slope as an indicator of the index trend instead of whether the day's close was above or below the MA. *I should dig out that code and run a few sims to post here.*




@MovingAverage *let me beat you to the punch*
So there is no "cherry-picking" I've used a backtest comparison for this financial year (1/7/2021 to the end of trade today) My apologies to @qldfrog for the strategy name (it's the name of an old musical band).

*Important metrics*
I have highlighted a few metrics in red for comparison. I should also say "The Platinum Strategy" is not a slouch by any means, even though the performance of the last 22 weeks has been lackluster.




*Also*
The (Net Profit %) as well as the (P&L for closed trades) should not be discounted in those metrics. The use of an (RSL) is food for thought rather than using a "Traditional Index Filter". Without @peter2 realising his way of selecting "pullbacks" incorporates the idea of selecting positions within a consolidation period. Whereas the (RSL) selects positions that are making new highs within a consolidation period.

Skate.


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## MovingAverage (27 May 2022)

Skate said:


> @MovingAverage *let me beat you to the punch*
> So there is no "cherry-picking" I've used a backtest comparison for this financial year (1/7/2021 to the end of trade today) My apologies to @qldfrog for the strategy name (it's the name of an old musical band).
> 
> *Important metrics*
> ...



Well those frogs on toast are very intriguing--during this period the XAO has been completely directionless yet your sims show a very impressive 44% net profit, almost too good to be true. I've only quickly looked at your sim result but you've got very short hold time of about 4 bars. So many questions--what universe of stocks are you trading? Have you done any proper MC analysis on that system as I'd love to see the spread. With a 51% win rate I'm curious about the net profit because the avg win is about $1750 but the avg loss is $1190, but mind you the system has done a lot of trades at about 322. To be honest I was expecting to see a bigger spread between the avg win and avg loss for that net profit. Need to get my head around these numbers a bit more, but in the mean time care to share and details of your frogs on toast?


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## MovingAverage (27 May 2022)

MovingAverage said:


> Well those frogs on toast are very intriguing--during this period the XAO has been completely directionless yet your sims show a very impressive 44% net profit, almost too good to be true. I've only quickly looked at your sim result but you've got very short hold time of about 4 bars. So many questions--what universe of stocks are you trading? Have you done any proper MC analysis on that system as I'd love to see the spread. With a 51% win rate I'm curious about the net profit because the avg win is about $1750 but the avg loss is $1190, but mind you the system has done a lot of trades at about 322. To be honest I was expecting to see a bigger spread between the avg win and avg loss for that net profit. Need to get my head around these numbers a bit more, but in the mean time care to share and details of your frogs on toast?



correction--notice your system only did 138 trades...hmmmm


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## MovingAverage (27 May 2022)

@Skate what's the basis of your profit exit? Are you just using x% above entry price and are you also doing profit exits intra bar (not just exit on next days open)?


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## Skate (27 May 2022)

MovingAverage said:


> So many questions--what universe of stocks are you trading? Have you done any proper MC analysis on that system as I'd love to see the spread.




@MovingAverage those are all valid questions. I only trade the "XAO". In response to your idea of ditching a traditional "Index Filter" I posted an alternative demonstrating by using a stock's "Relative Strength" of a stock's "price-performance" versus the index means only new positions that are making new highs within a consolidation period are selected.



MovingAverage said:


> @Skate what's the basis of your profit exit? Are you just using x% above entry price and are you also doing profit exits intra bar (not just exit on next days open)?




*Profit exit *
I use a "take profit stop" using a weekly (ATR) multiplier measured bar-by-bar, simple & effective. The "Frogs on Toast" weekly strategy is a handy strategy that I have been trading for some time. The link I posted in the Amibroker forum is a way to plot the (RSL) which is handy to some degree but useless as a trading strategy. I'm just throwing ideas out there that I use as a way to answer questions or promote an old idea by making it new again.
*
Trailing Stop*
The fallback "trailing stop" that is traditionally used in most strategies is rarely hit in the "Frogs on Toast" weekly strategy. By only selecting positions with a close above an upward sloping (RS) line means that the stock's price is outperforming the Index which can lead to a powerful breakout. Also using a unique "Stale Exit Stop" helps in getting exiting a position quickly which is also a nice feature of this strategy.

Skate.


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## MovingAverage (27 May 2022)

Skate said:


> @MovingAverage those are all valid questions. I only trade the "XAO". In response to your idea of ditching a traditional "Index Filter" I posted an alternative demonstrating by using a stock's "Relative Strength" of a stock's "price-performance" versus the index means only new positions that are making new highs within a consolidation period are selected.
> 
> 
> 
> ...




Checking out relative strength has intrigued me for some time and is on my "to do list" to see what benefits it offers. I'm not a huge fan of traditional index filters as I think they are indiscriminate--yes they work but to me they are rough and a bit like using a sledge hammer to hit a nail. Interesting on your ATR profit exit--I've only ever messed with that on a stop loss so will have to look as that a little more. I use a profit exit in one of my live system but it is based on standard deviation. Always good to have a trailing stop in place, especially for breakout system which can often pull right back after taking the position--profit exit alone will not help you in that case . Good work @Skate. Would love to see proper MC done on frogs on toast.


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## peter2 (27 May 2022)

I really like the idea of incorporating a market sentiment indicator in our market filter rather than the popular moving average. As we've seen the MA is great when it's trending but near useless when the market stays in a range (typical accumulation or distribution zone). I'm a big fan of relative strength as you may have seen in my charts within the new weekly pullback strategy thread. I've always had the relative strength charts available, I've just not included them in most of my chart posts. 

Another sentiment indicator worth considering is the % of stocks above an MA. This one is useful but works better as a divergence indicator. 

I suppose it doesn't have to get complicated. It can be as simple as sell all the losing positions when the index falls 6%, sell all when the index falls 10%. 

I haven't worked out the best one for me yet. 

The name "Frogs on Toast" made me chuckle.


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## MovingAverage (27 May 2022)

Skate said:


> @MovingAverage *let me beat you to the punch*
> So there is no "cherry-picking" I've used a backtest comparison for this financial year (1/7/2021 to the end of trade today) My apologies to @qldfrog for the strategy name (it's the name of an old musical band).
> 
> *Important metrics*
> ...



@Skate let me come back to the point I raised earlier about using the MA slope gradient as an index filter...I may have missed it but does frogs on toast use that technique?


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## MovingAverage (27 May 2022)

peter2 said:


> Another sentiment indicator worth considering is the % of stocks above an MA.



Norgate provide a number of these indicators and I've been incorporating a few of them into my system to see what impact they have...very early days for my evaluations but they seem to have a very positive influence on my systems' performance. Definitely worth taking a close look at.


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## peter2 (27 May 2022)

Another idea to float here before it sinks out of consciousness.  

Relative strength could be quite valuable when used with a "stale" or timed based exit. I'd be happy holding rather than selling a position while the position remains relatively strong vs the index. Once this relative strength disappears then I'd be happy to sell it. 

A stale exit would have both a momentum component and a relative strength component.


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## Skate (27 May 2022)

peter2 said:


> I really like the idea of incorporating a market sentiment indicator in our market filter rather than the popular moving average.




*Frogs on Toast*
This strategy is simple in construction & design & is a nice long-term performer. I'm now talking about professional traders who are not hamstrung by a "SMA of the Index" that's crude at best & highly ineffective most of the time. Even when the market is "down/off" there are some positions making new highs that we can all capitalise on.



MovingAverage said:


> @Skate let me come back to the point I raised earlier about using the MA slope gradient as an index filter...I may have missed it but does frogs on toast use that technique?




*It's all about the (RSL)*
Forget all the other filters that I employ in this strategy, the most important hurdle for the "Frogs on Toast" to meet & beat is the individual stock's "Relative Strength price-performance" being well above the index & sloping upwards making new highs within a consolidation nPeriod.

*Simply a stock's "Relative Strength Line" compares a stock's price performance versus the index*
The (RSL) line is derived by dividing the stock price by the Index value. An "upward sloping line" means that the stock's price is outperforming the Index. It simply measures the price performance against the index, meaning there are some positions making an all-time high no matter how the index or market is traveling.

Skate.


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## Skate (27 May 2022)

peter2 said:


> Another idea to float here before it sinks out of consciousness. Relative strength could be quite valuable when used with a "stale" or timed based exit. I'd be happy holding rather than selling a position while the position remains relatively strong vs the index. Once this relative strength disappears then I'd be happy to sell it.
> 
> A stale exit would have both a momentum component and a relative strength component.




@peter2 uncannily you have nailed exactly two parts of the strategy that is incorporated in the "Stale Exit". Well done.

*The "Stale Exit" of the Frogs on Toast strategy works quickly*
When a "Trailing Stop Exit" takes out a position it's because an unfortunate event has caught the system wanting. Most of the time the "Trailing Stop Exit" rarely takes out a position.




Skate.


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## MovingAverage (27 May 2022)

peter2 said:


> Another idea to float here before it sinks out of consciousness.
> 
> Relative strength could be quite valuable when used with a "stale" or timed based exit. I'd be happy holding rather than selling a position while the position remains relatively strong vs the index. Once this relative strength disappears then I'd be happy to sell it.
> 
> A stale exit would have both a momentum component and a relative strength component.



Isn’t a risk with that approach that whilw the stock itself might be in a good up trend if the index momentum picks up (even though the stock’s trend remains solid) the relative strength will decrease forcing an early exit? Or am I missing something


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## Newt (27 May 2022)

Funny, I was almost going to re-write a couple of systems around Relative strength "just to see what happens" last weekend.  Fascinated and energised by the flurry of posts today.  There's no holy grail, but you never know when you might find a valuable fleck of gold to incorporate as a screening factor, filter etc to contain future risk, boost future returns......


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## peter2 (27 May 2022)

MovingAverage said:


> Isn’t a risk with that approach that whilw the stock itself might be in a good up trend if the index momentum picks up (even though the stock’s trend remains solid) the relative strength will decrease forcing an early exit? Or am I missing something



You've got it right.  The index could go up while the stock trade price remains steady. The combination of the paused momentum and the now weaker relative strength will trigger the stale exit. (@Skate has other criteria in his stale exit, eg ROC). The exit under these conditions isn't a forced early exit, rather a planned (enforced) correct stale exit. 

My understanding of skate systems is that trend strength isn't a criteria. The "soldier" is quickly redeployed when momentum pauses (ROC decreases) and the relative strength weakens (plus other criteria). 

Skate uses his trailing stop as a disaster exit that triggers when the price reverses quickly without stalling.


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## Skate (28 May 2022)

CityIndex said:


> All trading carries risk, but is the index potentially signaling an inability to hold above this key level over the near-term? - it will be interesting if it can put together a rally and breakout within the coming days, as *this would likely open the door to a strong move higher*. XJO seems unable to overcome the selling pressure around 7200, although *it isn't all that surprising to see such a strong resistance form at this key psychological level.*




*It's hard to keep up with the markets *
There has been some interesting banter in "the-official-asx-is-tanking-panic-thread" that goes to the very heart of trading. We all speak of bear & bull markets but rarely can pinpoint them accurately in the heat of trading. There are some experienced fundamental traders who tend to have the ability to discern the information accurately. Their conviction speaks volumes. Then there are those who use mathematics to calculate the market pivots using those to decide when to enter & exit a position, a combination of learned experience & gut feelings. Then there are system traders relying on pure mathematics.

*What we know about trading could be all wrong*
@CityIndex in the last few days made some great points that resonated giving rise to this post & a few others. Scattered throughout the "Dump it here" thread is a series of posts trying to explain risks & nuances with regard to trading. I remember years ago reading an article that goes on to explain that "what we know" about trading or the markets could be all wrong.

More to follow.

Skate.


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## Skate (28 May 2022)

peter2 said:


> I really like the idea of incorporating a market sentiment indicator in our market filter




*What keeps the markets sane?*
Let me give you the answer first & then add some context to underpin my answer. First up, the answer is simple with some finding it hard to believe that "Market Sentiment" keeps the market sane.

*As traders, we are all psychologically different *
Humane nature ensures that we all have differing levels of risk aversion "the fear of losing money" which goes a long way in keeping our own trading safe to some degree. Everything that lifts the markets (not individual stocks) is usually driven by "greed" or the "fear of missing out" (FOMO).  Everything that drops the market is FEAR.

More to follow.

Skate.


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## Skate (28 May 2022)

*Bull markets are not that easy to trade *
Some traders who enter this game, enter with a lack of caution about what the markets can do to their personal wealth (crypto comes to mind to reinforce the point I'm making, but let's not stir that hornet's nest). Now mix that "lack of caution" with "over-exuberance" & "wham-bam-thankyou-mam" the markets can be driven higher to dangerous levels. Now place those two traders (pessimists & optimists) in a trading room together & it's no wonder we have the markets whipsawing all over the place.

*By the way*
The combination of each of these participants drives "market sentiment" keeping the markets "sane" to some degree, which is debatable. Add fundamentals & technical analysis into the mix & it becomes "open slather" as there are no rules when it comes to trading. We might never be happy with our trading results, they may flounder at times but it has been proven if you stick with your system in the long run it will make money just by the very fact that "father time" lifts the markets. 

More to follow.

Skate.


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## qldfrog (28 May 2022)

I like this discussion: had some thoughts this week which are seen probably as pure heresy for a system trader.
Will hopefully have time to express these this weekend here or on my thread to avoid polluting Mr Skate 's thread.
Thanks for all the input here


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## Skate (28 May 2022)

qldfrog said:


> I like this discussion




*Sometimes I just want to have my say*
@qldfrog I resist making personal statements because most have read it all before either in this thread or somewhere else. Sometimes, when I read the words of others it's the catalyst to express my views. Sometimes, I'll add a view from my perspective to reinforce what I've read or to add an alternative view. At times I'll play the "devil's advocate" to keep the discussion going or for others to view the facts from a different angle or perspective.

*Does it really matter what drives a trading decision?*
There are those who believe that asset prices are all about the fundamentals that drive the price but that's only half the picture. The price is based on fundamentals that's for sure to some degree but in reality, the price is driven by traders who view those fundamentals. Traders see rising stock prices as a positive sign of things to come & as system traders that's what we are trying to achieve with all our mathematical gymnastics.

*You know, our perception really drives our reactions*
Whether we believe we are in a bear market or a bull market psychology drives our perception & our perception drives our reactions. To conclude most traders have trouble understanding that the gains & losses to date are forward-looking some 3 to 30 months into the future, some even longer. Meaning the profits & losses you are experiencing at the moment are from future returns.

*I've had my say*
I'll step off the soapbox now.



Skate.


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## Skate (28 May 2022)

Skate.


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## Skate (28 May 2022)

*"Index Buy Filter"*
The recent series of posts on the shootout between the "Flying Bat Strategy" & "Platinum Strategy" was solely an exercise to determine whether to trade with or without an "Index Buy Filter". Even though the "Flying Bat Strategy" looks unimpressive at the moment having a higher drawdown than the "Platinum Strategy" is not the reason these two strategies will be parked come the 30th June 2022.

*The real question*
Should you trade when the market is not trending upwards?

*Switching filter* (Using a "Sentiment Filter" instead of an "Index Filter")
I, like most, believe we have a more efficient "Index Filter" than most others who trade systematically only to realise by recent trading activity that a "market sentiment filter" rather than an “Index Filter” would give an increased or a greater edge when it comes to entering or exiting positions. 

*Trade with the trend*
The profitability & probability of success increases when we trade with the prevailing market trend, that's a given. It's my belief that we should only be buying when the overall market is rising or when an individual position are busting higher. 

*At times there is something better than an Index Filter.*
Using the Relative Strength of individual positions eliminates the concern for an Index Filter. Traditional "Index Filter" discounts that sometimes there are positions that are "jumping out of their skin" & busting higher & those are the ones we need to keep a lookout for. In order to filter trading opportunities, we need a range of efficient ways of determining the current market sentiment. The (RSL) filter that I've explained in a recent post goes some way to achieving the desired result of a "defined strategy" but as @Newt said, "there's no holy grail".

Skate.


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## Skate (28 May 2022)

*Do Beetles fart?*
I was wondering if beetles farted some while back & Mr "Google" was kind enough to supply the answer. All I'm saying is this "if you can think of a question" it's most likely already been answered. Meaning if you are unsure of what you have read & failed to grasp what you have read in this thread or any others, "Google it" to better understand it. Expanding your knowledge on any subject allows you the freedom to understand it from many angles.

*Index Filter, Sentiment Filter, or Relative Strength Filters is clutching at straws*
Each word in the paragraph heading has the word "FILTER" & that shouldn't be lost in the recent series of my posts. Contributors have their own unique way of expressing their line of thinking that shouldn't be discounted at any cost even when you don't agree. 

*Sharing (trading information) is caring *
It also should be noted, that those who are sharing the information are sharing information they already know. It's those follow-up responses that add incredible value & increased our knowledge & understanding.

Skate.


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## Skate (28 May 2022)

*Systematic trading*
They tell us everything can be answered by mathematics. The answer to the "Ultimate Question of Life, the Universe, & everything else" is (42) but unfortunately, no one knows what the question was. 

*The issue I have with trading systematically *
Is that I'm dealing with Human Nature, logical people making illogical decisions. I also believe the market is driven more by FEAR than anything else. Combine the last few posts & it becomes clearer why trading has been turned on its head since February 2020.  

Skate.


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## Skate (28 May 2022)

*Monthly trading won't work, will it?*
There are so many ways to trade & just as many time frames to trade in. First off, I should make a disclaimer that I prefer to trade weekly strategies over any other periodicity. Why? for the many reasons I've outlined in a multitude of previous posts.

*Well blow me down*
The exercise at the moment trading three strategies live being the (Platinum, Flying Bat & Monthly Strategy) only one of these is in profit after 22 weeks. You guessed correctly, it's the Monthly Strategy. I don't mind trading my new strategies live on the thread as an exercise because over a short period they will either make a few bob or lose a few, either way, it's irrelevant to my trading.

*What do I know?*
I knew for certain trading a "Monthly Strategy" wouldn't work or be profitable over a short time frame but at the moment it proving me wrong.

*What I do know*
I shouldn't jump to a conclusion without knowing all the facts. I also know "Beetle do fart".

Skate.


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## ducati916 (29 May 2022)

Skate said:


> *It's hard to keep up with the markets *
> There has been some interesting banter in "the-official-asx-is-tanking-panic-thread" that goes to the very heart of trading. We all speak of bear & bull markets but rarely can pinpoint them accurately in the heat of trading. There are some experienced fundamental traders who tend to have the ability to discern the information accurately. Their conviction speaks volumes. Then there are those who use mathematics to calculate the market pivots using those to decide when to enter & exit a position, a combination of learned experience & gut feelings. Then there are system traders relying on pure mathematics.
> 
> 
> ...




When bull markets, bear markets are discussed in context of fundamentals, what should be discussed are the big macro ideas and situation. This can largely be done quickly in a chart based format. These macros tend to move slowly, thereby (generally) providing plenty of time to prepare. The issue is more about being early than late.

One of the above is of course the Central Banks. Central Banks are political. Their monetary policies lead the political agenda of the current regime.

Markets will often adjust before Central Banks adjust monetary policy, particularly very large players who require lots of liquidity to enter/exit. Their footprints are seen in advance/decline charts.

The Bond market will usually lead stocks, starting with long duration end of the curve. Yield curves are important information as are credit spreads.




The issue with credit spreads is that it signals a contraction of liquidity. Markets of today, more than yesteryear are 'X' times more susceptible to contracting liquidity. This is because the derivatives markets are so much larger. The current derivatives market is $1.4Quadrillion in size. Of that number close to 60% are SWAPS. SWAPS are private market, unregulated, blind, contracts that settle in CASH. Given that the base money supply M2 is a fraction of the derivative market, never mind the cash requirements of everything else, and you can see it doesn't take much for a credit crunch to morph into a liquidity event.




Currently the commercial banks are seeking to earn a pittance on overnight loans to the Fed. That is now $2T/night. Banks are holding or hoarding cash. Why? Because as the Fed shrinks its Balance Sheet, cash will become the only thing that protects them from a liquidity event...and the Fed steps back in. Or not, think LEH.

Another way of looking at liquidity is demand for the dollar:




This bear for stocks only changes when the Fed capitulates and adds back (huge) liquidity. The issue then becomes a dollar survival issue.

The point being: to call big stock market conditions (bull/bear) requires looking not only at the stock market. Currencies, interest rates (credit spreads) commodities (inflation) and bond markets are all necessary inputs.

Then look at the major segments of the market. Financials are a good one. You can never have a bull market unless the financials come to the party. Also, conversely, when the financials (banks etc) are weak, the market is weak.




The writing was on the wall at the start of the year. This next chart echoes what @peter2 and @Skate have been saying about relative strength, just on a macro level:




You can also look at discretionary v staples.



Currently we have another bear market rally. It will fail by the end of next week. 

Why?

Because the Fed is still hawkish in their rhetoric. Until that changes, markets remain in bear mode as the Fed reduces liquidity. When they trigger the liquidity event and markets shed another 40%+, they will (late again) try to salvage the crisis. They are a 1 trick pony. Flood the markets with liquidity. That has been their only policy response since Greenspan in 1987.

jog on
duc


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## Mohammed Hazabig'un (29 May 2022)

ducati916 said:


> When bull markets, bear markets are discussed in context of fundamentals, what should be discussed are the big macro ideas and situation. This can largely be done quickly in a chart based format. These macros tend to move slowly, thereby (generally) providing plenty of time to prepare. The issue is more about being early than late.
> 
> One of the above is of course the Central Banks. Central Banks are political. Their monetary policies lead the political agenda of the current regime.
> 
> ...



You're talking another GFC. 
From the RBA:

"_... The initial post-crisis focus of the G20, the Financial Stability Board (FSB) and global standard-setting bodies (SSBs)[2] was on four core reform areas: building resilient financial institutions, mitigating the ‘too big to fail’ problem, and addressing risks in both over-the-counter (OTC) derivatives markets and the shadow banking sector. Substantial reforms were developed in each of these areas, with timelines set for implementation. There were also many reforms beyond these core areas, such as macroprudential frameworks and tools, credit rating agencies and accounting standards. ... "_









						A Decade of Post-crisis G20 Financial Sector Reforms | Bulletin – June Quarter 2019
					

The global financial crisis resulted in significant disruption to markets, financial systems and economies.




					www.rba.gov.au


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## qldfrog (29 May 2022)

Mr @Skate, I assume that Platinum has no Buy/Sell this week...or did I miss the post?
Now about heresy:
I start a post in my thread and will send a link when ready


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## Skate (29 May 2022)

Skate said:


> *The "Platinum Strategy" incorporates an "Index Buy Filter" *
> When the Index Filter is off it prohibits new signals from being generated keeping you out of the markets when trading conditions are unfavorable. *As the "Index Filter" is still off, there are no signals generated this week.*




Sorry @qldfrog for the confusion. 

I try not to make comments when posting the weekly results but made this comment on the post that has been missed.



qldfrog said:


> Mr @Skate, I assume that Platinum has no Buy/Sell this week...or did I miss the post?




Correct, the Platinum Strategy has no "buy or Sell" signals this week.

Skate.


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## qldfrog (29 May 2022)

Skate said:


> Sorry @qldfrog for the confusion.
> 
> I try not to make comments when posting the weekly results but made this comment on the post that has been missed.
> 
> ...



apologies, I fully missed it...
My heresy is published under https://www.aussiestockforums.com/threads/qldfrog-weekly-skate-inspired-system.34570/post-1178053


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## Skate (29 May 2022)

qldfrog said:


> apologies, I fully missed it...
> My heresy is published under https://www.aussiestockforums.com/threads/qldfrog-weekly-skate-inspired-system.34570/post-1178053




*The issue as I see it*
When trading is not going our way we tend to look for solutions when really they are not required or there really aren't any. At times for a variety of reasons, the market shift on fear & catches the best laid mathematical formulas wanting. 

*System Trading works some of the time*
It's a simple process, as we are constantly on the lookout for breakouts of repeatable (mathematical) patterns. Then when the ride fails or the momentum slows we try to jump off before the rush. Sometimes it works, sometimes times it doesn't, but that's trading. I'm not immune to losses but over the long run, the market has been very kind to me. I'll keep doing what I have been doing. (Trading multiple strategies helps smooth out my equity curve).

Skate.


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## qldfrog (29 May 2022)

Skate said:


> *The issue as I see it*
> When trading is not going our way we tend to look for solutions when really they are not required or there really aren't any. At times for a variety of reasons, the market shift on fear & catches the best laid mathematical formulas wanting.
> 
> *System Trading works some of the time*
> ...



The other way to see this is that losses trigger you to act.
If trends are shorter in a permabear market with market mini bull in an overall bear fall, it is obvious strategies designed during a 20 y permabull will fail.
If this perma bull is over due to demographics and geopolitics, we have to think outside the box.
I have no crystal ball, maybe our debt based western economie and the Reset will work and keep us moving forward for decades keeping the west ahead. But i have no clues and definitively no certitude.
A short feed back loop based system should/could be the holy grail


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## qldfrog (29 May 2022)

qldfrog said:


> The other way to see this is that losses trigger you to act.
> If trends are shorter in a permabear market with market mini bull in an overall bear fall, it is obvious strategies designed during a 20 y permabull will fail.
> If this perma bull is over due to demographics and geopolitics, we have to think outside the box.
> I have no crystal ball, maybe our debt based western economie and the Reset will work and keep us moving forward for decades keeping the west ahead. But i have no clues and definitively no certitude.
> A short feed back loop based system should/could be the holy grail



I wrote 20y, probably more 40y with a 1980ish start


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## Skate (29 May 2022)

DaveTrade said:


> The first step is to find the strongest sector in the index, then find the strongest sub-sector within the strongest sector. The final step is to find the strongest stock or stocks to invest in within this sub-sector.




@DaveTrade I have selected a passage from your last post in the "the-trading-world-according-to-dave" thread, which was a great read by the way. I just wanted to clarify the reason why I made a post about using a "Relative Strength Line" as a buy condition as an alternative to using a traditional "Index Filter".

*Index Filter versus a "Relative Strength Line"*
A traditional "Index Filter" is a simple measure of an index. If an index is below or above a Simple Moving Average (SMA) the index is either on or off. The disadvantage of using an "Index Filter" it keeps you out of the markets when obviously there are some positions making new highs. The advantage of a traditional "Index Filter" it keeps you from trading in unfavorable market conditions.

*An alternative that keeps you in the markets*
Using a "Relative Strength Line" rather than an "Index Filter" allows you to keep trading whilst a "Traditional Index Filter" places you on the sideline. Professional traders keep trading no matter what the market or an index of the market is doing.

*I was throwing it out there*
My suggestion of exploring the possibilities of using a "Relative Strength Line" that compares a stock's price performance versus the index was one such idea. Basically in a nutshell the "Relative Strength Line" (RSL) represents new highs within a consolidation period.

*The maths are simple*
The "Relative Strength Line" (RSL) is a simple mathematical formula to create a "line in the sand" as part of a buy condition. It's a simple relationship to an index. This "line" is derived by dividing the stock price by the Index value. An upward sloping line means that the stock's price is outperforming the Index.

*Using a "Relative Strength Line" has an advantage (at times)*
In summary, when the "Relative Strength Line" makes a new high within a consolidation period, shows unusual strength in a stock that can lead to a powerful breakout. Therefore trading those breakouts can be beneficial! (sometimes)

Skate.


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## SyBoo (29 May 2022)

Skate said:


> The "Relative Strength Line" (RSL) is a simple mathematical formula to create a "line in the sand" as part of a buy condition. It's a simple relationship to an index.




Would you have to use an Equally Weighted Index as base line? Because in a Capital Weighted Index, the bigger stocks that pushes and pulls the Index would a have smaller “Relative Strength” compared to that of a smaller stock (a bias perhaps, maybe).


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## qldfrog (30 May 2022)

SyBoo said:


> Would you have to use an Equally Weighted Index as base line? Because in a Capital Weighted Index, the bigger stocks that pushes and pulls the Index would a have smaller “Relative Strength” compared to that of a smaller stock (a bias perhaps, maybe).



Even as an index binary filter, this is a worthwhile though indeed or even a small cap index if your system is biased that way..


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## MovingAverage (30 May 2022)

SyBoo said:


> Would you have to use an Equally Weighted Index as base line? Because in a Capital Weighted Index, the bigger stocks that pushes and pulls the Index would a have smaller “Relative Strength” compared to that of a smaller stock (a bias perhaps, maybe).



This is why I hate using the All Ord's as a broad index filter--it really is just a proxy for the ASX20. A weighted index would be very interesting


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## Skate (30 May 2022)

MovingAverage said:


> This is why I hate using the All Ord's as a broad index filter--it really is just a proxy for the ASX20. A weighted index would be very interesting




*Let's review the facts*
You are only using a method to give you a clue about what the market is doing to decide if you should establish new positions. Using a moving average or a variety of moving averages can be used in combination with shorter & longer time frames to hone the entry. The index you elect to use doesn't really matter in the scheme of things.

*So what's the best one?*
Basically, indicators based on MAs are at best an after-the-event, broad brush, very imperfect indicator. For this very reason, I've mentioned a few alternatives that vary to some degree. Unfortunately what method you decide to use "it's really only a heads-up" about what the market is doing. There are some traders who spend an inordinate amount of time looking for the best "smoothing" filter/indicator should pause for a while as there is no one method that stands head & shoulders above the rest.

*Market Timing*
In an imperfect trading world, the best indicator/filter is the one you design yourself, where you choose the parameters that you like to identify when to buy a position. Using & persisting with the same indicator/filter "that you feel comfortable with" over time will pay dividends.

Skate.


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## MovingAverage (30 May 2022)

Skate said:


> The index you elect to use doesn't really matter in the scheme of things.



Not so sure I agree with that. 

Just as an example: XAO shown in the first pic below has been range bound and bouncing between 7200 and 7800 for around 12 months and is just tracking sideways.  On the other hand let's look at the other end of town and look at the smaller cap companies by looking at the performance of XSO, which is shown in the second pic. XSO tells a very different story to XAO--XSO has been is a serious downtrend for some time and is down around 15% from it's recent highs. XSO continues to retreat from its recent highs but XAO continues to have a go at breaking through its recent highs. If you were trading stocks that make up the XSO then using XAO as the basis of a market filter would be a mistake.


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## SyBoo (30 May 2022)

Skate said:


> The index you elect to use doesn't really matter in the scheme of things.



Good to know, 
because I just created my own Index, I call it the “MAD 10 Index”. I might expand it to the Mad 200 later (maybe, maybe-not (am bored, but, not that bored)).

The “MAD 10 Index” is calculated by summing the days % change for the top 10 stocks listed on the ASX, then adding the current days sum to the previous days sum (it's a cumulative thingy).  It's an Equal Weighted Index being unit less and all that jazz. Below is a screen shot.



(Just did it because I'm bored. I promise i won't dump anymore stuff here. Apologies for the mess.)


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## Skate (30 May 2022)

SyBoo said:


> I promise i won't dump anymore stuff here. Apologies for the mess.




@SyBoo a variety of opinions are welcome. The "Dump it here" thread is about the exchange of ideas & certainly "not a contest of ideas". Also in this thread, there is no "right or wrong" when views are expressed. Every member has the right to express their views without being challenged or ridiculed. 

*I should clarify*
When I said, _"The index you elect to use doesn't really matter in the scheme of things"_ I was referring to that you should compare "apples to apples" & not "apples to oranges". I should have said, whatever market or index you are trading "use that market or index" to give you a clue about what the market is doing.

*I suggested an alternative *
Using a "Relative Strength Line" rather than an "Index Filter" allows you to keep trading whilst a "Traditional Index Filter" places you on the sideline at times. Using a "Relative Strength Line" that compares a stock's price performance versus the "index being traded" was one such idea. Basically in a nutshell the "Relative Strength Line" (RSL) represents new highs within a consolidation period in relation to the index.

Skate.


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## SyBoo (31 May 2022)

Skate said:


> I should have said, whatever market or index you are trading "use that market or index" to give you a clue about what the market is doing.




I get it if your stock is part of the XJO clan use the XJO thingy. I do like the XJO thingy, it has fudge factors in it, I like fudge.
(I did have my fingers crossed when I made my above promise.)


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## Skate (31 May 2022)

*Final Update*
The final update will be on the 30th of June 2022 & it can't come quick enough.




Skate.


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## Skate (31 May 2022)

Warr87 said:


> Well, I was honestly a little pissed when I logged on this afternoon to check as its EOM.




*It's got to suit you*
To tell you the truth, trading a monthly strategy is not for me as I find myself checking how this strategy is going on a daily basis. The reason for this I believe is that I have little to no control over this strategy.



Skate said:


> But if the stress is too much to bear, the simple & effective solution to alleviate the internal discomfort is to exit the trade, solely to relieve this distress.




*I'm going to take my own advice*
I'm pulling the pin on this Monthly Strategy one month early to alleviate the stress this strategy is causing.

Skate.


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## Warr87 (31 May 2022)

Skate said:


> *It's got to suit you*
> To tell you the truth, trading a monthly strategy is not for me as I find myself checking how this strategy is going on a daily basis. The reason for this I believe is that I have little to no control over this strategy.
> 
> 
> ...




I may check once or twice during the month, but I'm pretty good at not checking it often. I'm tracking along similar terms to Cam who is trading a similar system. I'm just a little frustrated with compounding losers (multiple systems taking hits). The frustration will pass. It's all part of the trading game.

Monthly definitely isn't for everyone. I do cavet that my implementation of the system is also a riskier system as it's always in the market. You wouldn't be as annoyed if you were trading the default parameters that is more risk adverse (but you also dont get the same bounceback/gains!).


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## Newt (31 May 2022)

Could you put of the most recent graph of how the Monthly strategy performed, just out of interest please Skate?


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## Skate (31 May 2022)

Newt said:


> Could you put of the most recent graph of how the Monthly strategy performed, just out of interest please Skate?




@Newt, I posted it today & after reading @Warr87 post I have decided to stop the exercise.

*Found here*





						Dump it Here
					

Systematic trading They tell us everything can be answered by mathematics. The answer to the "Ultimate Question of Life, the Universe, & everything else" is (42) but unfortunately, no one knows what the question was.   The issue I have with trading systematically  Is that I'm dealing with Human...




					www.aussiestockforums.com
				




Skate.


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## Newt (31 May 2022)

Aha - should have checked the page before.  Ta.


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## qldfrog (31 May 2022)

Skate said:


> View attachment 142402
> 
> 
> View attachment 142401
> ...



Total performance not that bad at all IMHO


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## ducati916 (1 June 2022)

Skate said:


> View attachment 142402
> 
> 
> View attachment 142401
> ...




It was probably tested for, but my question is:

If you start a monthly strategy (long) at +/- the point that a bull market rolls into a bear market, does the strategy fail badly?

I don't have time this morning, in a bit of a rush to get to work, but is that the case here? Has the ASX rolled over (noticeable to all) into a bear market?

jog on
duc


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## Warr87 (1 June 2022)

ducati916 said:


> It was probably tested for, but my question is:
> 
> If you start a monthly strategy (long) at +/- the point that a bull market rolls into a bear market, does the strategy fail badly?
> 
> ...




Like all strategies, they do better if you have some time to build up some capital  before a DD. But a robust strat shouldn't fail (unless you happen to start immediately before a stock market crash lol).


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## Skate (3 June 2022)

*Reposted without permission*
The "Quote of the Day" posted by @ducati916 needs to be pinned in this thread.




Skate.


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## Roller_1 (3 June 2022)

I just thought that I would "dump this here" as a reminder of why it is important for a trend trader to take every available signal. This chart is of TER.au I can't remember the exact reason why I was not in the trade at the open I think I made an error with the order, this week also coincided around the time of the invasion of Ukraine. So I thought I self I won't bother about chasing it, as the rest of the market is crashing so I will just leave it… ouch.


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## MovingAverage (3 June 2022)

Roller_1 said:


> I just thought that I would "dump this here" as a reminder of why it is important for a trend trader to take every available signal. This chart is of TER.au I can't remember the exact reason why I was not in the trade at the open I think I made an error with the order, this week also coincided around the time of the invasion of Ukraine. So I thought I self I won't bother about chasing it, as the rest of the market is crashing so I will just leave it… ouch.
> 
> 
> View attachment 142493



Wow...they're certainly very nice when they come along like that.


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## Roller_1 (3 June 2022)

MovingAverage said:


> Wow...they're certainly very nice when they come along like that.



Not if you're not on board! DD would be half of current probably


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## MovingAverage (3 June 2022)

The importance of using Monte Carlo testing to understand how your system behaves can never be stressed enough. 

But not all Monte Carlo testing is the same--it is also important to understand the different types of MC testing and the limitations associated with the different approaches. I recently came across a very good article discussing MC testing. The article is probably not easily digested on a Friday night after a few beers, but if you're serious about testing your systems and want to better understand MC testing then set aside some time to read this article: https://quantpedia.com/introduction-and-examples-of-monte-carlo-strategy-simulation/?a=6080


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## Skate (3 June 2022)

*The Platinum Strategy incorporates an Index Buy Filter*
As the "Index Buy Filter" is still "off" there are no raw signals this week. The "Index Filter" is keeping this portfolio safe but sitting on your hands at times is hard to cope with. Trading a variety of strategies scratches this itch.




Skate.


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## MovingAverage (3 June 2022)

Roller_1 said:


> Not if you're not on board! DD would be half of current probably



Well I guess if it moves up like that it can also move down like that so maybe not being on board is a blessing    Volatility like that goes both ways


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## Skate (3 June 2022)

Skate.


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## Skate (3 June 2022)

Skate.


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## Roller_1 (3 June 2022)

MovingAverage said:


> Well I guess if it moves up like that it can also move down like that so maybe not being on board is a blessing    Volatility like that goes both ways



something pretty bad would have to happen for it to drop 70% in a week lol but anything can happen


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## MovingAverage (3 June 2022)

Roller_1 said:


> something pretty bad would have to happen for it to drop 70% in a week lol but anything can happen



it happens all the time...spare a thought for holders of AMS--just one recent example.


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## Roller_1 (3 June 2022)

MovingAverage said:


> it happens all the time...spare a thought for holders of AMS--just one recent example.
> 
> View attachment 142509



Yeah but look at the trend before that, it had already dropped about 60 to 70%. Rarely does something go from a strong trend to complete capitulation, but like I said anything can happen and no doubt it would have before.

That is just a good example of why you ride stocks up and not down


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## MovingAverage (3 June 2022)

Roller_1 said:


> Yeah but look at the trend before that, it had already dropped about 60 to 70%. Rarely does something go from a strong trend to complete capitulation, but like I said anything can happen and no doubt it would have before.
> 
> That is just a good example of why you ride stocks up and not down



Really, so ZIP is an outlier is it? I've got plenty of more examples if you need them--just let me know?


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## MovingAverage (3 June 2022)

Not sure if you're old enough to remember, but a personal favorite of mine--ABC child learning. Doesn't get any better than this does it?


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## Roller_1 (3 June 2022)

MovingAverage said:


> Really, so ZIP is an outlier is it? I've got plenty of more examples if you need them--just let me know?
> 
> View attachment 142511




I think you are missing the point, obviously stocks can go up and then they come down. But the whole point of trend following is that once the trend finishes you get out. So in my example if TER reversed I would get out, obviously I'm not going to get the top but it don't need to make a profit. But you are unlikely to lose on a trade that you are up over 200% in, that was my point. Unless it crashes 70% in a day or something like that.

Similar to the chart A2M below, did this trade catch the absolute bottom to peak, no, but that is not the point. Once the trend reverses I don't even look at the chart. (This is a hypothetical trade I did not trade it)


----------



## MovingAverage (3 June 2022)

Roller_1 said:


> I think you are missing the point, obviously stocks can go up and then they come down. But the whole point of trend following is that once the trend finishes you get out. So in my example if TER reversed I would get out, obviously I'm not going to get the top but it don't need to make a profit. But you are unlikely to lose on a trade that you are up over 200% in, that was my point. Unless it crashes 70% in a day or something like that.
> 
> Similar to the chart A2M below, did this trade catch the absolute bottom to peak, no, but that is not the point. Once the trend reverses I don't even look at the chart. (This is a hypothetical trade I did not trade it)
> View attachment 142512




Your own words were "rarely does something go from a strong trend to complete capitulation". I was simply highlighting that the market doesn't behave that way--plenty of stocks go from strong up trends to complete capitulation--happens a lot.


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## Roller_1 (3 June 2022)

MovingAverage said:


> You're own words were "rarely does something go from a strong trend to complete capitulation". I was simply highlighting that the market doesn't behave that way--plenty of stocks go from strong up trends to complete capitulation--happens a lot.



I think there has been some misinterpretation of "strong trend to complete capitulation". All good. 

Moral of the story is i f***ed up not buying TER


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## MovingAverage (3 June 2022)

Roller_1 said:


> Moral of the story is i f***ed up not buying TER



hahahahaha....agree. I was just trying to make you feel better about missing out on TER by suggesting the trade could have gone the other way just as easily


----------



## rnr (3 June 2022)

MovingAverage said:


> Not sure if you're old enough to remember, but a personal favorite of mine--ABC child learning. Doesn't get any better than this does it?
> 
> View attachment 142514



That's a yes from me....as that has to be the best short I have ever been on!


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## Skate (4 June 2022)

Skate.


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## investtrader (4 June 2022)

Skate, in case you didn't check - MYD and IFM both have takeover offers pending


----------



## Skate (4 June 2022)

investtrader said:


> Skate, in case you didn't check - MYD and IFM both have takeover offers pending




@investtrader thanks for the heads up. To tell you the honest truth, I didn't even check. All my efforts are currently been directed elsewhere, which is no excuse. I called an end to the Monthly Strategy last week & as the "Platinum Strategy" has currently no positions & the "Flying Bat Strategy" has only a few it's a good time to pull the pin on these strategies as well.

Skate.


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## MovingAverage (9 June 2022)

And here we are again folks...XAO back at that critical support level of circa 7233. 

I get the feeling that this time it may not hold...hope I'm wrong. Interesting week ahead of us.


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## Skate (13 June 2022)

MovingAverage said:


> I get the feeling that this time it may not hold...hope I'm wrong






peter2 said:


> The open positions in this portfolio continued to lose value as the market fell further.




*Risk Management When Trading *
Panic in the market creates the risk in trading. The real issue or question that we all should be asking is "how can I control my risk so the market doesn’t knock me out". Once you are on the canvass the game is just about over. Being defensive is how we protect ourselves from the knockout punch.

*It's been awhile*
Most of my comments are a repeat of what I've previously posted. But a refresher on how to construct a trading plan never goes astray. At the end of a series of posts, I'll supply a basic line of Amibroker code so you to run an independent backtest.

Skate.


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## Skate (13 June 2022)

*A short 6-minute video* 
To start. I'll attach a hyperlink to a short 6-minute youtube video that explains three categories of risks & how to minimise each of them. The video is not comprehensive but it summarises three categories giving you a grounding on why a "trading plan" is vital to trading successfully.

*Risks highlighted*
1. Catastophic-specific risk is where the stock completely collapses after entry.  
2. There is also the normal risk (if there is such a thing as normal) where a position turns against you, resulting in a loser.
3. Then there is the market/index risk where the market goes into free fall dragging everything in your portfolio down with it.

*It's worth a look*


Skate.


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## Skate (13 June 2022)

*We all need a trading plan*
But finding a trading method that actually works is not as simple as it sounds. Being methodical & consistent is the road to success in this game. I like to "bang on about system trading" as it reduces the amount of time your trading takes each day or week. With system trading, it even allows you to hard-coded rules that go in some way in making up your trading plan. But the real issue that faces us all is "determining" whether your trading rules are profitable.

*All trading is trend following*
A trend-following system is a relatively straightforward approach to system trading that can be readily developed & managed with little effort. Finding an "entry condition" isn't that hard as "getting in" has never been a problem. Getting out isn't an issue either, but getting out at the "correct time" is. 

*Rules-based exits*
In trend-following systems, the exit rule is based on some measure of whether the trend has ended. There are many ways to measure when you believe the trend has ended or the risk of remaining in the trend is no longer warranted. I must say, there are a lot of moving parts when it comes to trading that has no rules. With no rules, you can make them suit yourself.

Skate.


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## Skate (13 June 2022)

*Trend Following System Trading*
Combining my two favourite talking points (1) Trend Following & (2) System Trading (IMHO) forms a path to financial freedom if you can pull it off. Trend trading can have as few as five components based on your own objectives that I will touch on in the next post 

*Unfortunately, this is important*
It's a pity but it's a fact of trading. Everything about system development is always a tradeoff & there are no absolute ‘right answers’ to achieve a perfect system. What works once might not work again, so you always have to stay on top of your game. System development can have as few or as many moving parts to give you the confidence to trade it. The exit can contain just as many moving parts as the buy condition & in some cases, more. 

Skate.


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## Skate (13 June 2022)

*Parameters Filters & Triggers *
Let's start with the entry trigger or buy condition. Timing your entry is important that needs to be rulers based. When it comes to exiting a position "that's" when it becomes tricky. Exit too early or too late & you can kiss any potential profits good by. Every strategy must have an exit condition or conditions. A simple exit should have an initial stop at least as the bare minimum. 

*System design*
Every system must have an entry condition, an exits condition & money management (position size) to help you achieve your objectives. Let's list five components that should be the minimum in designing a trading system.

1. An entry condition that triggers a "buy signal"
2. An Initial Stop Loss that can be wide or narrow to determine the amount you risked on each trade.
3. Have a defined "exit rule" a "Stale stop" when momentum slows & especially a "GTFO" filter when it all goes horribly wrong.
4. Money Management has to be major consideration right off the bat.
5. Position Size Rules to manage the portfolio of trades generated by your trading system.

Skate.


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## Skate (13 June 2022)

*For those who have Amibroker*
The entry condition (one line of code) will be disclosed so others can evaluate the simple entry condition. The buy condition (the code) is nothing special by itself & I don't use it in any of my systems. The code "Buy condition" is used for the exercise that's all. As I remarked in many previous posts, getting into a trend is not that difficult. I'll supply the line of code with two backtests to demonstrate how the entry condition can affect the outcome of a system when wrapped in different "buy filters". 

*How do we use or incorporate a buy condition? *
The entry trigger will be the constant between the two systems. Wrapping the entry trigger in a series of "buy conditions" can completely change the backtest results. 

*Backest results*
1. The first backtest will have a stock standard "Index Filter" (buy filter) to keep you out of the market when the Index falls below its simple moving average of a nPeriod. 
2. The second Backtest will also have a buy condition that incorporates a "Relative Strength Line" in relation to the "Index" being traded. 

Skate.


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## Skate (13 June 2022)

*The buy condition used in the backtests*
Buy = EMA( C, 20 ) == HHV( EMA( C, 20 ), 200 ); //plus a series of other filters & parameters not disclosed.

*Index Filter versus a "Relative Strength Line"*
A traditional "Index Filter" is a simple measure of an index. If an index is below or above a Simple Moving Average (SMA) the index is either on or off. The disadvantage of using an "Index Filter" it keeps you out of the markets when obviously there are some positions making new highs. The advantage of a traditional "Index Filter" it keeps you from trading in unfavorable market conditions.

*An alternative that keeps you in the markets*
Using a "Relative Strength Line" rather than an "Index Filter" allows you to keep trading whilst a "Traditional Index Filter" places you on the sideline resulting in more trades over the same period. Professional traders keep trading no matter what the market or an index of the market is doing, it's only our type of trading that uses these as a matter of course.

Skate.


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## Skate (13 June 2022)

*20 EMA Strategy using an Index Filter*
A traditional "Index Filter" is a simple measure of an index. If an index is below or above a Simple Moving Average (SMA) the index is either on or off. 

*Backtest period 365 days*
Why 365 days? So there is no cherry-picking the backtest results. I've supplied the entry condition (Buy = EMA( C, 20 ) == HHV( EMA( C, 20 ), 200 ); that also has a series of other filters & parameters that have not been disclosed so others can do their own backtests.




Skate.


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## Skate (13 June 2022)

*Using the same "20 EMA Strategy" incorporating a "Relative Strength Line" as the Filter*
Using a "Relative Strength Line" has an advantage (at times). In summary, when the "Relative Strength Line" makes a new high within a consolidation period, shows unusual strength in a stock that can lead to a powerful breakout. Therefore trading those breakouts can be beneficial at times.

*Backtest period 365 days*
Why 365 days? So there is no cherry-picking the backtest results.




Skate.


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## Skate (13 June 2022)

*Side-by-side comparison*
There are some that use a "buy condition" to keep you on the right side of the markets whereas others forgo this piece of protection. To be perfectly honest, I fall into both categories as I trade with & without "buy filters" but that is not the point.

*Elon Musk*
To be fair I wish to make a comment (not a recommendation) about using a "buy filter" as part of your entry trigger. Elon Musk will only put a "rocket" into Space when conditions are optimal. 




*Summary*
These two backtest (the examples) are to demonstrate how using the same strategy performs with a slight variation of a "buy condition".

*Hopping down from my soapbox*
I've had my say & feel better getting that off my chest.




Skate.


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## MovingAverage (14 June 2022)

Anyone else around here happy to see today's sell off? I'm certainly happy--some good opportunities coming for us breakout long traders.


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## qldfrog (14 June 2022)

MovingAverage said:


> Anyone else around here happy to see today's sell off? I'm certainly happy--some good opportunities coming for us breakout long traders.



Happy, no as this will ensure a highly negative eofy result and no chance of quick bucks as most systems fully cash
30k in systems tonight..so all good in a way and options worked only lost 3k today overall for all of investment so no big drama but not happy as it is a given we are heading for more drama, misery, manipulation and Reset implementation/ probably war..
I see the ornding crash as indeed needed but a symptom of the west illness, not a cause.
My  SL trigered and only got evn for cheap. And a bit of yen 😊


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## MovingAverage (14 June 2022)

qldfrog said:


> Happy, no as this will ensure a highly negative eofy result



It's all about the long term, right?


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## qldfrog (14 June 2022)

MovingAverage said:


> It's all about the long term, right?



I still do not see any positive long term .own aim is and has been for a while limiting damages and saving some wealth, not expanding it.
Taiwan is going to fall soon now that the US gov liquify, 
the AUD...i was hoping for a kind of resource based saving but last couple of months are clear..we will be hit
And by RE mean and cash, this is my #1 exposure
AUD will fall first then the USD as fiats turn to sxxt..
And market collapse or are closed
i see no refuge.gold silver, i am heavy but once people are hungry in the street, our communists woke leaders will seize whatever is of value for the greater benefit,
Btc showed it is not digital gold.
Really we as the west are f***ed.
i know we deserve it but does not make it pleasant
we got told to preserve power today in qld,  Australia, world leader of coal and gas export FFS.
So still hope I will fare better that the average Super fund  but that is meagre comfort
I notice an inflation indexed  gov aud bond i own fell 10pc tofay, explain that...rate might increase but cpi is so much higher..
Anyway not in a cheerful mood even with 60 and 70% daily increase of some put options today
Strap the seat belts


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## MovingAverage (14 June 2022)

qldfrog said:


> I still do not see any positive long term .own aim is and has been for a while limiting damages and saving some wealth, not expanding it.
> Taiwan is going to fall soon now that the US gov liquify,
> the AUD...i was hoping for a kind of resource based saving but last couple of months are clear..we will be hit
> And by RE mean and cash, this is my #1 exposure
> ...



So I guess I’m correct to assume you have a bearish outlook 🤣🤣


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## DaveTrade (14 June 2022)

qldfrog said:


> I still do not see any positive long term .own aim is and has been for a while limiting damages and saving some wealth, not expanding it.
> Taiwan is going to fall soon now that the US gov liquify,
> the AUD...i was hoping for a kind of resource based saving but last couple of months are clear..we will be hit
> And by RE mean and cash, this is my #1 exposure
> ...




Qldfrog you can think on the bright side, some of these things may not happen. We all have our down days but like the markets, down days always turn into up days at some point. I'm going to try to be an optimist, I think that being an optimist might be fun.


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## qldfrog (15 June 2022)

DaveTrade said:


> Qldfrog you can think on the bright side, some of these things may not happen. We all have our down days but like the markets, down days always turn into up days at some point. I'm going to try to be an optimist, I think that being an optimist might be fun.



Being optimistic is fun but dangerous..on the other side life is short and there is a limit as to what individuals can do vs bigger than themselves forces.
You can not fight the feds,the market, the Reset or social media/propaganda so live with the flow.


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## MovingAverage (15 June 2022)

Greeting and Salutations Girls and Boys.

Index filtering is a particular interest of mine. I'm sure we are all familiar with the old faithful technique of using an index's close price relative to an MA of the index as a broad entry condition. For long systems the common approach is to take trades while the index's close remains above the MA. This technique isn't the most sophisticated and it certainly has it's short comings but it gets the job done and is easy to code.

I've been thinking about some easy alternatives to the commonly used technique described above, a recent post here from @peter2 prompted me into coding up some simple alternatives to see if they offer a viable alternative. In his earlier post @peter2 made reference to using the total number of stocks trading above their MAs. I've been contemplating exploring a similar technique but was focused on percentage of stocks making a new X week high. 

For my initial back-testing I focused on the percentage of XAO stocks making a new 13 week high. Why this, my main live trading is breakout trading of XAO constituents and my hold time is typically 12 weeks or less. So what you're looking at below on the far left is simulation results for a system using a standard index filer. In the middle is the same system with the index filter turned off. On the far right what you see is the system with the standard index filter replaced with a filter based on new XAO stocks making new 13 week highs. For the system with the new filter I basically used a threshold level. If the number of XAO stocks making new 13 week highs was above X percent then the system was on and would take trades. Below that threshold level the system was off and would not take any trades.

Let's look at the results--first pass simulations look promising. There is not a huge difference in the system profit with and without the standard index filtering. When considering the system DD doubled with no index filtering the additional net profit is not (in my opinion) worth chasing. However, with the new index filter (stocks making new highs) there is a very noticeable uplift in system profit. DD with the new filter is still double the standard index filter, but with an additional 120% profit the doubling in DD may well be worth it. I'm happy to take on more DD but the upside better be worth it.

Anyway, the results below speak for themselves so you don't need my detailed commentary on them. 

Norgate data provides a great range of broad market sentiment indicators and for these sims I just used their #XAO13WHI.au data in my Amibroker simulations--was very easy. Worth noting that I haven't done any further analysis on this other than an initial single run in AB so not sure if the improved performance is down to random trade selection difference, but preliminary AB sims suggest it is well worth further MC analysis to get a more detailed picture of this change.

Anyhow--if you're looking for an alternative to a standard index filter take a look at the market sentiment indicators offered by Norgate.

Stay classy ASF.


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## qldfrog (15 June 2022)

Thanks MA, that's very interesting


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## Newt (15 June 2022)

Yep, nice work and thanks for sharing MA.  Some thoughts (based off assumptions that may be incorrect):

- Looks like a pretty picky (err, elegant  ) system - is choosey when it enters as evidenced by 22% exposure filtered, 29%  unfiltered
- Gains ....might....  be better for systems with greater normal exposure level
- I really like Norgate 13week >MA150 values and watch them regularly - find is a valuable augment to pure XAO, XSO etc
- Personally prefer a small and long EMA crossover in addition to a threshold buy value (on #XAO13WHI.au) 
- In addition to a buy signal, also find some value in "going defensive" if #XAO13WHI.au is at historically high levels and XAO momentum failing

I've also learned how much I love the extra defensive stance and confidence to switch from offensive to defensiive index filters bring - this love affair seems to have begun in April 2020 for some reason.  Before then I wasn't a believer.....

p.s. #XAO13WHI.au has helped keep me in cash since early May, trying to weather the storm under a rock until the sun comes out for Long Only traders again.   #XAO4WHI.au is similarly useful, possibly bit more nimble.


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## MovingAverage (15 June 2022)

Newt said:


> - In addition to a buy signal, also find some value in "going defensive" if #XAO13WHI.au is at historically high levels and XAO momentum failing



Very interesting--will have to look at that more closely


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## Newt (15 June 2022)

Sorry MA, realise now I shouldn't have posted while hungry and smelling amazing smells wafting from the kitchen straight after work.   Had my wires crossed above:

- have found value in EMA crossover on 4 or 13 week CUMULATIVE new high/lows in Norgate (e.g. #XAO4WHL.au)
- Find value in % Stocks above MA150 (#XAO%MA150.au) for reinforcing market up periods, and suggesting topping markets with failing momentum


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## peter2 (15 June 2022)

Good to see that we're talking more about market internals rather than market indices.


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## peter2 (15 June 2022)

Like @Newt I was surprised by the low DD levels seen in the @MovingAverage  tables then noticed the low exposure %'s. I assume these parameters are highly correlated. This low exposure level allows some flexibility in the exposure to be included in the system. 

I would link the exposure level with current market conditions that are defined by market internals. Rather than an off/on system switch based on an index, the market internals would increase and decrease the level of exposure in the system. 

This wouldn't be possible if the system is fully invested most of the time like @Skate's systems. 

In this case I'd consider using the market conditions (types) that have been predefined to control the investments between several systems. Back testing would be useful to identify the best market types for each system. There would be an optimal market type for each system whether it's a break-out system, a pull-back system or a reversal system. 

Consider the current market, it's not going to provide many break-out setups for quite some time. Reversal setups will be forming first and if the market continues to rally we'll start to see more PB and BO opportunities form.


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## MovingAverage (16 June 2022)

Some here may relate to this


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## Skate (16 June 2022)

MovingAverage said:


> Some here may relate to this
> 
> View attachment 142932




@MovingAverage the beginner's cycle capture from "Alvarez Quant Trading" really sums up most of us who elect to trade systematically. The capture sparked a memory of one of my previous posts about how to beat the market, an article written by Matt Radtke.

*Beat the Market with a Simple SuperTrend Strategy*
Matt Radtke from “Quantforhire” wrote an interesting article allowing me to reference his work & hyperlink to his webinar presentation where he describes the process of creating & validating a simple trading strategy using the SuperTrend indicator.

*The post can be found here:*





						Dump it Here
					

I feel like a dump this morning ...about takeovers. Note my goal as a system trader is to simulate as close to actual trading as possible. Also, I’m not a short term trader.  There are two situations for takeovers, firstly holding a stock for a period then taken over (can’t avoid). Secondly, a...




					www.aussiestockforums.com
				




*In the next post*
I wish to discuss the work Matt Radtke has done on the "Market Meanness Index" (MMI). The (MMI) is based on the median value of a price series. The "Market Meanness Index" (MMI) is only used to detect whether a "trend is trending" & therefore whether the signal from your trading strategy has a good chance of being profitable or not. 

Skate.


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## Skate (16 June 2022)

*You can never tell*
I try not to post on subjects that are boring or dry that make little sense to those who elect to read this thread. Keeping the posts simple & short without going into too much depth allows others to do their own research.  

*The recent banter concentrates on the entry*
@MovingAverage, @peter2, @qldfrog & @Newt have all added to the discussion on when to enter the markets. When the topic of an "index filter" is raised it always sparks interest. Posts that stimulate discussion are so important to this thread as it allows others to add to the discussion or take something away from it.  

*What Indicator do we use to decide the trend?*
Cricky, there is a multitude of filters that handles this job perfectly but using the wrong parameter (the look-back period) of that filter you can go from "Hero" to "Zero" in a heartbeat.

*Do you want to know if a trend is really trending?*
How do we know if a trend is really trending? Signals from a trend trading strategy are one thing but which signals should be taken & which signals should be let go to the keeper? well, you can use a "Market Meanness Index" (MMI) filter.

Skate.


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## Skate (16 June 2022)

*The Market Meanness Index (MMI)*
Matt Radtke's version of the (MMI) filter is based on the median value of a price series. The only use of the (MMI) filter is to detect whether a "trend is trending" & therefore whether the signal from your strategy has a good chance of being profitable or not. Its purpose is to help detect whether the market is in a trending mode or range mode & is an excellent filter for trend-following strategies.

*Why use a Market Meanness Index (MMI) Filter*
For one simple reason, if the market is not trending the (MMI) allows you to skip the signal coming from your trend trading strategy, it doesn't get any better than that.

*More info can be found here*




__





						The Market Meanness Index – The Financial Hacker
					

Algorithmic trading with new methods. New indicators, machine learning, and statistical analysis for financial trading and quantitative investing. We use Zorro and R for our algo trading strategies.




					financial-hacker.com
				








__





						Boosting Strategies with MMI – The Financial Hacker
					

Algorithmic trading with new methods. New indicators, machine learning, and statistical analysis for financial trading and quantitative investing. We use Zorro and R for our algo trading strategies.




					financial-hacker.com
				












						Home - Quant For Hire
					

Strategy & Software Development * Quantitative / automated trading strategy development * Back-testing & statistical analysis * Strategy types: mean-reversion, momentum, trend-following, rotational, etc. * Position sizing: fixed, percentage of equity, risk parity, volatility-based, many others *...




					quantforhire.com
				




Skate.


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## Skate (16 June 2022)

*Concentrate on when to exit*
Watch this short 3:49 minute YouTube video as it demonstrates why exits are important in today's trading. Having an exit strategy should be part of your trading plan that helps you manage profits & minimise losses. Buying the correct stock is important but it's all to no avail if you do not know when to exit that position. In fact, having a definitive exit strategy is (IMHO) more important than defining your entry.



Skate.


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## Skate (16 June 2022)

*First off*
I want to say I use "heaps of filters" with my trading. At times the terminology we use like "market regime filters" & "Index Filters" means much the same to me but something different to others.  

*Perfection*
When trading we all should be aiming for "perfection" which means, doing everything to the best of our ability & anything short of that shouldn't be acceptable. (AFAIC)

*Timing the entry*
Everyone has heard the expression that a "tide lifts all boats" & in trading, they are referring to market timing. Basically, an "entry condition" changes into a "buy condition" when all filters & parameters have been met to "time the entry". 

*What filters time the entry?*
Well, there are heap & heaps, some better than others. Use the "search" feature as this forum is chock full of them. Google should be your second choice for information.

Skate.


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## DaveDaGr8 (18 June 2022)

*For anyone currently in drawdown*.


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## Skate (18 June 2022)

DaveDaGr8 said:


> View attachment 143001
> 
> 
> 
> *For anyone currently in drawdown*.




@DaveDaGr8, you used the word "anyone" did you mean to say "everyone"?

Skate.


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## Skate (18 June 2022)

*The market will rebound, won't it?*
The markets can be unkind at times & the recent poor run is no exception.

*Cricky, when should I have pulled the pin & exited those losing positions? *
In hindsight, it all looks perfectly clear but in the heat of trading, your mind starts playing tricks. No trader likes to lose so they start to make up stories to convince themselves that they are doing the right thing whereas that thinking is completely irrational & only leads to further disappointment.

*Have you ever had these thoughts? (I bet you have)*
(1) “I’ve held on to this stock this long, so I might as well continue to hold.”
(2) "I'm sure it will rebound"
(3) "It can't go any lower".
(4) ets, etc, the list is enormous.

*Poor thinking*
Ultimately, that logic leads to giving back big gains or incurring bigger losses. Traders are often paralysed into inaction by concluding that it is too late to sell a stock that is already down substantially. This way of thinking keeps you emotionally & financially tied to underperforming positions & can cost you substantially while you wait & hope for a recovery.

Skate.


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## Skate (18 June 2022)

*Nope, it’s never too late*
It's never too late to sell a stock in which you have a large loss. Being undisciplined & letting losses get out of hand on a regular basis won't last long because you won't have the required funds or the courage to keep trading.

*But what if I sell & then it goes back up?*
What if you don't sell & it keeps going down? Heck, if it rebounds, there is nothing stopping you from buying it back. One of the big benefits of selling a position in which you have a large loss is that it often frees you up mentally & allows you to gain a fresh perspective. When the misery of that big loss is suddenly removed you will feel a surge of energy & be surprised at how readily you can find other opportunities that will help you make up for your loss.

*Cutting losses quickly & protecting capital is the key to outperforming the market over the long run*
The market will always offer opportunities in which to profit, so we need to make sure we always have capital that isn’t tied up in underperforming stocks. We all know that drawdowns are part of the trading process, so take it on the chin and be the ‘best loser’ you can possibly be.

*In this game, perfection is required*
When I say "perfection" I mean doing everything to the best of your ability.

Skate.


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## Skate (18 June 2022)

*What makes traders doubt themselves?*
Frankly, the inexperienced traders that move into defensive mode when under stress tend to fall back on gut instinct, which quickly overrides the "perfection" required that I've spoken about before.

*Perception of the markets can cause emotional stress *
If you have not been through a full market cycle, including a bear market, it will be very difficult for you to properly assess your reaction in times like we are experiencing at the moment. I've found over time that we all tend to focus on the allure of recent past returns when conducting the evaluation of a trading system & downplay the risk because it isn’t in sight. Risk is all about surprises that can spoil the party.

Skate.


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## Newt (18 June 2022)

2 useful trading booster shots for me in recent weeks, from 2 very experienced traders:

The Chartist (Nick Radge):




We all know we have to keep chipping away at it.  But while Skate is talking about taking exits and sticking to your system, my eyes widened at how many deviations/mistakes are acceptable reading a post by Peter2 recently.  Albeit a discretionary systematic approach, but just a reminder that the system probably knows better than you in the long run if you're trying to "read" market noise:





			https://www.aussiestockforums.com/threads/p2-starts-another-asx-portfolio-wkly-dly.35039/post-1179324


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## Skate (18 June 2022)

Newt said:


> *We all know we have to keep chipping away at it*. Buy while Skate is talking about taking exits and sticking to your system, my eyes widened at home many deviations/mistakes are acceptable reading a post by Peter2 recently




@Newt, you make a valid point & @peter2 posts are always great to read as they are interesting & stimulating. When posting, we are only repeating what we know with the hope of helping others, hopefully without wasting everyone's time. Since joining this community back in December 2013 I've had the pleasure of reading posts from people I've found interesting & enjoyed reading why they hold those views. I like many others (who are self-opinionated) tend to live in our own world that is sometimes clouded because we view things through our own eyes & not as they really are.

*It must be an age thing *
I have met some interesting people in my time & found myself hanging on to their every word. Why? because what they had to say was interesting & stimulating. As I'm getting older I'm finding it more difficult to meet those who fit the criteria. Is it only me or are people just getting dumber?

*Today's society*
Tolerance & patience are the two missing ingredients in today's society, lack of respect for others is another one. It appears when I have nothing positive to say about trading, I start talking crap that tends to be meaningless or repetitive.

Skate.


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## MovingAverage (18 June 2022)

Skate said:


> Is it only me or are people just getting dumber?




To answer this question you only have to look at how many people are putting serious dollars into crypto—that alone should give you a clear answer to your question. 😂


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## Sean K (18 June 2022)

DaveDaGr8 said:


> View attachment 143001
> 
> 
> 
> *For anyone currently in drawdown*.




Geesh, I thought he used stops and didn't trade (or at least stopped posting trades) when the market was going down.


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## Skate (18 June 2022)

DaveDaGr8 said:


> View attachment 143001
> 
> 
> 
> *For anyone currently in drawdown*.






Sean K said:


> Geesh, I thought he used stops and didn't trade (or at least stopped posting trades) when the market was going down.






Skate said:


> *The markets can be unkind at times & the recent poor run is no exception.*




*Trading hasn't been kind*
If it's tough for Nick, it would be tough for the rest of us. For clarity, I'll post a timeline from the 1st of June to yesterday the 17th of his trading performance.

*It's worth remembering*
Trading is not easy & the simple truth is "markets are not logical or reasonable" they are emotional, volatile & downright unstable most of the time. Why? because the market is nothing more than a reflection of crowd behaviour - a crowd of people that has absolutely no regard for what anyone thinks. Sometimes it's just a bunch of 'rational' people making 'irrational' decisions.

*The markets screw us*
The market has the uncanny tendency to screw the most number of people "most of the time" in the shortest amount of time.

*Nick's trading results 1st of June 2022*
Profit & loss = (-$2,596)




*Trading results 2nd of June 2022*
Profit & loss = (-$47,403)




*Trading results 9th & 10th of June 2022*
Profit & loss = (-$33,216)




*Trading results 14th of June 2022*
Profit & loss = (-$115,517)




*Trading results 15th of June 2022*
Profit & loss = (-$13,824)




*Trading results 16th of June 2022*
Profit & loss = (-$183,153)




*Trading results 17th of June 2022*
Profit & loss = (-$63,049)




*Year to date *
Nick's YTD results (-$942,291) & with a week & a half to go, I don't think he will do a "Bradbury".

*Summary*
At times there is "nothing wrong", it's just how the cookie crumbles.

Skate.


----------



## ducati916 (18 June 2022)

peter2 said:


> Like @Newt I was surprised by the low DD levels seen in the @MovingAverage  tables then noticed the low exposure %'s. I assume these parameters are highly correlated. This low exposure level allows some flexibility in the exposure to be included in the system.
> 
> I would link the exposure level with current market conditions that are defined by market internals. Rather than an off/on system switch based on an index, the market internals would increase and decrease the level of exposure in the system.
> 
> ...







Correlated well pre-covid, not so well this time. The reason is exactly what happened in 2000. The shite (NASDAQ stocks) broke first. The AMZN's etc now.

However, whenever there is a divergence...extra attention needs to be paid because this bear started as a stealth bear (technically) and you needed to recognise it as such.

A basic scan of the fundamentals combined with the above, gave you ample time to prepare for the bear.

jog on
duc


----------



## MovingAverage (18 June 2022)

ducati916 said:


> View attachment 143033
> 
> 
> Correlated well pre-covid, not so well this time.




What??? He said my DD and exposure were highly correlated, which they absolutely are. My sims are from 1/1/2015 to the date of my post. What am I missing with your comment—why is it not correlated this time??? My sims are on the ASX and you put up a chart of the NYSE


----------



## moXJO (19 June 2022)

Skate said:


> *Trading hasn't been kind*
> If it's tough for Nick, it would be tough for the rest of us. For clarity, I'll post a timeline from the 1st of June to yesterday the 17th of his trading performance.
> 
> *It's worth remembering*
> ...



So many questions. 
Was he running a system and didn't adjust for the fact inflation has been a well known factor for months?

If the market stops making sense you should get out and find something that does. 

I've had profitable strategies just stop working during certain times of the market cycle. But this looks like a breakdown in trading discipline.


----------



## DaveTrade (19 June 2022)

moXJO said:


> So many questions.
> Was he running a system and didn't adjust for the fact inflation has been a well known factor for months?
> 
> If the market stops making sense you should get out and find something that does.
> ...



 In my mind it's proof that the guy doesn't know what his doing.


----------



## Skate (19 June 2022)

moXJO said:


> So many questions.
> Was he running a system and didn't adjust for the fact inflation has been a well known factor for months?
> 
> If the market stops making sense you should get out and find something that does.
> ...






DaveTrade said:


> In my mind it's proof that the guy doesn't know what his doing.




@moXJO they are all valid questions & I don't want to speculate why Nick's YTD results are what they are. Nick is a system trader & so am I. Speaking from my perspective as a system trader I don't lack "trade discipline" & believe Nick wouldn't either so I'm at odds with @DaveTrade comment. 

*At times bad things can & do happen before an exit signal is generated *
It's worth remembering that trading is not an exact science but a game of probabilities. Trading isn't easy for most of us & certainly not that easy for the best of traders. The simple truth is "markets" are volatile & downright unstable most of the time. Add fear to the mix & trading becomes unpredictable.

*Using analogies* 
I'm not a surfer but even the best (world champions) have trouble performing when the surf is less than optimal. But give them a decent wave & their performance is mind-blowing. What I'm fumbling to say is that the conditions (waves) either make them look professional or amateurish. 

*I like to use boxing analogies as I can relate to that sport more than most*
There have been times when it felt like I was fighting with more than one person in the ring but muscle memory keeps you firing punches. I can tell you with all certainly when you are in the ring you "get punched" a lot & some punches hurt more than others. Even when you win your body feels something different. 

*Just like boxing*
The markets have the uncanny tendency to screw with us & it can hurt in a short amount of time. Unfortunately, there are some times when you just have to suck it up.

*In summary*
Some waves can give you a real dunking. Other times you don't see the punch coming. As with everything in life, bad things do happen but how you handle them, is the measure of your mettle.

Skate.


----------



## DaveTrade (19 June 2022)

Skate said:


> @moXJO they are all valid questions & I don't want to speculate why Nick's YTD results are what they are. Nick is a system trader & so am I. Speaking from my perspective as a system trader I don't lack "trade discipline" & believe Nick wouldn't either so I'm at odds with @DaveTrade comment.
> 
> *At times bad things can & do happen before an exit signal is generated *
> It's worth remembering that trading is not an exact science but a game of probabilities. Trading isn't easy for most of us & certainly not that easy for the best of traders. The simple truth is "markets" are volatile & downright unstable most of the time. Add fear to the mix & trading becomes unpredictable.
> ...




To be fair I should expand on my comment, it was too short and direct. I give Nick credit as a system trader for sticking to the system but I think that the risk management aspect of his system was flawed.



Skate said:


> *Using analogies*
> I'm not a surfer but even the best (world champions) have trouble performing when the surf is less than optimal. But give them a decent wave & their performance is mind-blowing. What I'm fumbling to say is that the conditions (waves) either make them look professional or amateurish.




I also would say this actually works the other way round for surfing and trading, when the conditions are good it makes an amateur look like a pro and the professional shines through when conditions are bad.


----------



## moXJO (19 June 2022)

.


Skate said:


> @moXJO they are all valid questions & I don't want to speculate why Nick's YTD results are what they are. Nick is a system trader & so am I. Speaking from my perspective as a system trader I don't lack "trade discipline" & believe Nick wouldn't either so I'm at odds with @DaveTrade comment.
> 
> *At times bad things can & do happen before an exit signal is generated *
> It's worth remembering that trading is not an exact science but a game of probabilities. Trading isn't easy for most of us & certainly not that easy for the best of traders. The simple truth is "markets" are volatile & downright unstable most of the time. Add fear to the mix & trading becomes unpredictable.
> ...



Surely inflation was the shark in the water covered in flashing lights.
Sometimes the juice aint worth the squeeze. 

Did I read that right that he lost $360k in a week?
I'll stick to my gambling. That auto trading looks like a tough gig.


----------



## Newt (19 June 2022)

I think that's only his US day trading strategy, all other trend system in cash?  Guessing would be mean reversion, and markets unstable at the moment.  If you guys know more than Radge I'd be happy to read your books, or Twitter offering, or subscribe to your registered trading/training service, or hear about your extensive experience working for a financial institution or, hear of your trading records, or....

Not sure he ever said he had the trading Holy Grail, and sharing his results surely isn't a sin?


----------



## DaveTrade (19 June 2022)

Newt said:


> I think that's only his US day trading strategy, all other trend system in cash?  Guessing would be mean reversion, and markets unstable at the moment.  If you guys know more than Radge I'd be happy to read your books, or Twitter offering, or subscribe to your registered trading/training service, or hear about your extensive experience working for a financial institution or, hear of your trading records, or....
> 
> Not sure he ever said he had the trading Holy Grail, and sharing his results surely isn't a sin?




That's the amazing thing, a guy of his experience letting this happen. I have no answer.


----------



## moXJO (20 June 2022)

Newt said:


> I think that's only his US day trading strategy, all other trend system in cash?




The above is the only relevant thing in your post.
I'll write a book on: "when to stop trading and go on holiday". $50000 for you, it'll save you $310k in loses.

Let's not pretend that didn't look like doubling down. It's not his track record or saying "he sucks" that I'm interested in. I know he's skilled and been around a long time.
It's how and why these trades came about. And the reasoning behind continuing for so long.


----------



## Skate (20 June 2022)

DaveTrade said:


> You need different risk management rules to control portfolio losses
> 
> Anyway, I have incorporated another element of risk management into my system. The system will have a trailing stop which I have coded to have a maximum distance from the current market of a certain percentage. I’ve coded the stop-loss indicator to have an input for this value so I can set it to whatever I wish. The stop-loss indicator does not trail the market by this value, the percent value merely provides a limit. For example, in a long trade if the trail stop calculates a value that is 8% below the current close and the percent limit is set to 7.5% then the stop-loss indicator will print on the chart at 7.5% below the market for that period. This feature will give me good risk management at the trade level so that a single horrific trade can’t over influence the system effectiveness.






DaveTrade said:


> arguably the most important aspect of your investment success – proper risk management.






DaveTrade said:


> give Nick credit as a system trader for sticking to the system but I think that the risk management aspect of his system was flawed.




@DaveTrade first off let me congratulate you on your thread "the-trading-world-according-to-dave". Any thread or member who post educational information from their experience in the vein of helping others gets the big tick of approval from me. Also, I do enjoy reading what you have to say.

*Risk Management*
Dave, you have already made a post in this thread touching on "risk management" & said in another: 

_"The most important part of trading or investing is risk management, i.e. setting your level of exposure to risk. It can be done in a number of different ways, you can have exit levels in place to go in and out of the market as required or if want to hold a position it must be hedged. learning how to manage your risk is the number one key to success"._

*You have also remarked *
_"the most important aspect of your investment success – is proper risk management". 
"I think that the risk management aspect of (Nick's) system was flawed._

*Risk Management is not only an important subject but also an interesting read*
I realise people point out the flaws of others for different reasons & in your case, it was from a genuine concern to help others by highlighting this aspect of trading. I, for one, would be very interested to read more about what you have to say on the subject. 

*I have a request*
Would you be kind enough to do a detailed post on the subject of risk management & post it in this thread rather than your own for the benefit of those who check in here.

Skate.


----------



## Skate (20 June 2022)

divs4ever said:


> no it is the heart issue  that  is the  problem and the complication  ( no shoulder reconstruction   , because they are worried about  the  heart )  ,   and the various doctors  seem to be happy despite the stats declining




@divs4ever, I have read previously where you mentioned that your health is a concern. Unfortunately, it's in our twilight years that we tend to fall apart. I've been told many times that my "Dump it here" thread is getting oversized & too big of a commitment to read touching on as many subjects about trading as I possibly can. I remember making a few posts about age-based trading decisions that I may repeat.

*Investment decisions are normally based on your age*
Humans have been on earth for around 100,000 years & of all the humans who have ever lived to age 65, half are alive today. Average global life expectancy has doubled in the past 100 years, & Australia is one of the longest-living nations. Once you retire at 65 all the current advice is to invest conservatively but if you’re planning on living for another 30 years investing conservatively may not be the best advice.

*Official statistics underestimate longevity*
Many of us think we’ll live as long as our grandparents or parents did, which is a major perception problem. We don’t realise how long we’re going to live and we consistently underestimate our remaining years. This is the very reason why trading conservatively may not be the smartest move.

*Risk management*
I say if "risk management" is part of your trading plan "Trade like there is no tomorrow" as one day you will be right.

Skate.


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## Skate (20 June 2022)

*Verbal Diarrhea*
I've broken one of my own rules about posting in other threads. I find posting here keeps me in check for the very reason this guy explains. But gee, it feels good to fu¢k with some people.



*Summary*
Without being checked, there are times when I lack a filter.

Skate.


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## Skate (20 June 2022)

*Some traders lack discipline*
They’ll watch a position get destroyed without doing anything about it. The more they lose the more likely they will to persist with it. Most traders believe the things that make them "feel good" & "disregard the things that make them feel bad" (confirmation bias). They listen to everyone & will invest with the thinnest of evidence. It’s not rational, that’s boarding on crazy.  

*When will the markets recover?*
When all the scared money has left the building, with a lack of supply the "buyers will step back in”. Buyers will gradually return to the markets only after they perceive it to be safe to do so. It’s not "Rocket Science", it’s "Behavioural Science", predictable human behaviour of emotions. The objective of trading is to make a profit & to do this requires careful risk assessment, disciplined money management, & emotional control to execute a trading strategy flawlessly without hesitation. Sometimes we are our own worst enemy because we have a tendency to keep looking for confirmation after confirmation before ultimately making a decision.

Skate.


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## DaveTrade (20 June 2022)

Skate said:


> Would you be kind enough to do a detailed post on the subject of risk management & post it in this thread




Skate asked me to post something on ‘risk’ in his ‘Dump it here’ thread, well I had this subject in the back of my mind to post on anyway so I’m posting this in both threads. I can understand why I was asked to post this in ‘Dump it here’, the thread has a lot more people reading and commenting on topics and ‘risk’ is a topic that everyone has an opinion on.

From my life experience I’ve noticed that people vary greatly about how they assess risk in their lives. This variation can be extreme, some people find it hard to see risk while others see risk even when it’s not there. My guess is that anyone who has gone into trading and decided to keep going with it would have a risk assessment ability somewhere in the middle zone between these two extreams. All I can do is explain how I look at risk and how I manage it in a way that I’m comfortable with.

Skate has posted about the relationship between risk and age and I would like to say that I turn seventy this year and my tolerance for risk has changed from when I was a young man. Tolerance to risk implies that a person can see what risk is there and decides to take that risk with full knowledge of it.

I look at two types of risk, risk that I can control and risk that is out of my control. Most things that we do in our everyday lives have elements of both. I feel that I’m the type of person that is good at identifying risk and am able to remove it or reduce it to a level that I can live with. A good example of this is driving a car, I regard myself as a good driver because I have a good understanding of the risks involved and I know how to avoid nearly all of them, the outlier risk in driving is there but it’s about the same as the risk I have when going for a walk, so that’s just the default risk of living.

I do the same thing with the risk associated with trading, I identify each risk and adopt a procedure to remove or limit that risk.

In the past when I traded futures I was always aware of the risk of the market gapping over my stop-loss price, I tried to reduce it by staying out of markets that were too thin. This was not a very comprehensive way of addressing it and the presence of this risk weighed on my mind.

Now I’ve come back to trading after a long break and I decided to do it by changing everything about the way I trade, this decision was based on removing risk and finding consistency. In my mind these are two essential elements needed for long term success.

I like to look at risk by thinking about it as ‘how exposed I am’. There is broker risk, account risk, market risk and trading risk. Risk can be dealt with by spreading the risk, proportioning the risk and limiting the risk.

The trading risk of gapping past my stop that weighed on my mind in the past was something I had to remove this time around. I realised that the only way to achieve my goal was to learn to trade options. Options allowed me to have a ‘hard stop’ in the market thereby limiting my risk, giving me full control over this gapping risk that previously weighed on my mind. With options I am able to limit risk and achieve unlimited and leveraged profit potential.

The downside of my plan was the time and effort involved in reinventing the way I trade and learning options at the same time, but I’m a man with a mission. I want to be able to make a good profit from trading and be able to sleep at night while doing it.

Options also give me a number of different ways to use them for trading and my training is ongoing to work through these various applications of using them. When trading a directional move using options, the maximum that I can lose is the price that I pay for the options. This means that I have full control to define my maximum risk in the trade.

Options can also be used by stock traders to counter portfolio risk and lock in your portfolio profits. Stock traders can also use them to buy stock at a discount or create a regular income from stock they own.

The most important thing about managing trade risk is to have worked out exactly what you will do before entering the trade. Some traders put stops in the market when they enter a trade, some don’t, the important thing for both types of trader is to have the risk management for the trade pre-planned before entering the trade. By doing this it forces you to identify all the areas of risk in the trade and work out the best way to manage that risk without the pressure of a live trade.


----------



## Skate (20 June 2022)

@DaveTrade, what an excellent post, thank you. I’m positive your comments will encourage others to have their say. Sharing information is how we learn.

Skate.


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## Newt (20 June 2022)

Yep, thanks for sharing those insights DaveTrade
P.S.  Guilty of missing your trading thread - will go looking....


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## gartley (21 June 2022)

Looks like we have completed an impulse down here and a multi week rally about to start


----------



## Skate (21 June 2022)

DaveTrade said:


> From my life experience I’ve noticed that people vary greatly about how they assess risk in their lives. This variation can be extreme, some people find it hard to see risk while others see risk even when it’s not there.




*Everyone needs a trading plan*
You know, @DaveTrade is absolutely correct when he says that people's risk assessment can vary greatly. When it comes to trading most trade with their financial future in mind. There are some traders who are extreme risk-takers without even knowing it. Those who don't practice good money management techniques also fall into this category. 



gartley said:


> Looks like we have completed an impulse down here and a multi week rally about to start




*When trading is struggling*
We tend to revisit the amount of risk we are personally holding whilst trying to assess market risk going forward.

*A picture paints a thousand words*
Looking at the chart @gartley just posted gives me some solace with his interpretation of what the ASX200 may do next. I should also say the ASX200 & the All Ordinaries tend to mimic each other.

Skate.


----------



## Skate (21 June 2022)

*As traders, we are all different*
There would be some traders who couldn't stomach the way I trade. I'm positive, I couldn't trade as some do, even if the way they trade is profitable. Trading is an individual endeavour driven by their level of experience, risk tolerance & the level of funds in their trading account.

*Trading risk according to Howard Bandy*
It's been a while since Howard Bandy has posted & it's understandable why he doesn't anymore as there were some that challenged his views instead of presenting their own. I should also say his views came from a deep level of experience. Howard made a post some time ago about how to reduce the risk when trading. I'll do a search & post it shortly instead of going from memory.

Skate.


----------



## Skate (21 June 2022)

*Reducing risk according to Howard Bandy*
Howard made a few suggestions on how to reduce the risk when trading:

(a) holding a position for a few days at most and
(b) Hold any longer than about three days increases risk considerably.

Skate.


----------



## Skate (21 June 2022)

*Howard Bandy back in Dec 2016 made these comments*
“Stocks have a tendency to revert to the mean and breakouts usually do not last very long. I estimate the risk of drawdown based on recent performance, then trade in such a way that I can manage drawdown. That is, holding a few days at most whether long or short. Again and again. The sweet spot is high accuracy and short holding period. Holding longer than about three days increases the risk considerably, as does accuracy below about 65%”

*A short holding period is not for me*
Trading over a period of a day or three is easier said than done. I prefer to trade weekly as the joy of trading a daily strategy has eluded me. It's not for the lack of trying it's more to do with the constant workload which is not for me.

*Howard Bandy trades short term*
Howard Bandy has confirmed that he trades this method successfully. Howard knows what he talking about, he's smarter than the average bunny. Does any member currently trade this way who would like to share their experience?

Skate.


----------



## Skate (21 June 2022)

gartley said:


> Looks like we have completed an impulse down here and a multi week rally about to start




*We all wish we had a crystal ball*
I'm sure there will be some who will be totally blown away with @gartley recent chart he posted today of the ASX200 Index with his detailed price projection. There are those who will find his price projection interesting & wonder how he was able to make that projection. For those who are interested, you can refer to a couple of his previous "Dump it here" posts that he made back on the 24th & 25th of March 2020 just after the COVID-19 flash crash.

*Hyperlinks*
In these posts, @gartley explains in detail how to extrapolate price points into the future. The best part of the post other than an explanation of his methodology he "references" material for further research.





__





						Dump it Here
					

Hello Skate, None of what I use is based on Ehlers work or indicators. This is something that I have been working on for 15 years originally based on the work of Hurst and James Maggio and has undergone a lot of trial and error. As mentioned to  a reply in another thread about repainting. One...




					www.aussiestockforums.com
				








__





						Dump it Here
					

Hello Skate, None of what I use is based on Ehlers work or indicators. This is something that I have been working on for 15 years originally based on the work of Hurst and James Maggio and has undergone a lot of trial and error. As mentioned to  a reply in another thread about repainting. One...




					www.aussiestockforums.com
				




*Stepping up to the plate*
Each time we have had extreme market events Gartley has generously contributed to the "Dump it here" thread which has been appreciated.

Skate.


----------



## gartley (21 June 2022)

Whilst we still have lower projections for the ASX 200 at around 6200, this is the current one and it sort of lines up with the EW count.   The lower projections are a problem because it suggests more downside ultimately until invalidated.


----------



## gartley (21 June 2022)

Also although the following chart does not offer very good resolution being a monthly chart, long term cycles suggest cycle point 14 is due soon. (use time axis only)


----------



## Newt (21 June 2022)

Skate said:


> *Everyone needs a trading plan*
> You know, @DaveTrade is absolutely correct when he says that people's risk assessment can vary greatly. When it comes to trading most trade with their financial future in mind. There are some traders who are extreme risk-takers without even knowing it. Those who don't practice good money management techniques also fall into this category.
> 
> 
> Skate.




You only have to look out how many people still don't understand the mathematics of Covid infection, and vaccination value across the population versus the individual to see how poorly fundamentals of maths, science and risk are understood by many of the "Facebook scientific method" generation  

Sorry for Covid rant.  Back to trading......


----------



## qldfrog (22 June 2022)

Newt said:


> You only have to look out how many people still don't understand the mathematics of Covid infection, and vaccination value across the population versus the individual to see how poorly fundamentals of maths, science and risk are understood by many of the "Facebook scientific method" generation
> 
> Sorry for Covid rant.  Back to trading......



I would use the same example to share how propaganda can deform a truth "vaccine protects the population"  and use it with a non vaccine aka covid.
Or use selected numbers to hide mountains.
If you do not do your own research and blindly trust vested interests, be it your health or your money...you are screwed
Similarly you see:
 it is time in the market, not timing the market bla bla etc which lead to investors going nowhere for10 to 15y..cause they are in for the long term...
Sadly, in totalitarian regimes,even own research and knowledge is not enough as free will is blocked: mandatory super, bank account restrictions,rules on crypto or mandated jabs.
Destroying the Darwinian advantage....


----------



## Skate (22 June 2022)

Newt said:


> *Sorry for Covid rant*. Back to trading......




@Newt no apologies are necessary. As @qldfrog has posted a COVID story, so will I as this thread is not only about trading. There are some that enjoy the banter.

* The "Dump it here" thread was originally for those who wanted to have their say*
Getting something off your chest at times can be liberating. Reading a post always stimulates a memory for me & I guess it is similar for others as well. Banter or a free-flowing exchange can be at times a bonding experience by being able to contribute to the conversation.

*The COVID-19 pandemic*
At times when you read something, it automatically makes you want to contribute. A memory can float to the surface, like a simple meal I had back in 2016 at the iconic "Jumbo Floating restaurant". I was shocked to learn that whilst it was being relocated from Aberdeen Harbour "Hong Kong's Jumbo Floating Restaurant" capsized & sank to the bottom of the South China Sea less than a week ago whilst being towed away from the city. The pandemic forced the closure of this famous restaurant that never recovered & never reopened.

*The story & short video can be found here*








						Hong Kong's famous Jumbo Floating Restaurant leaves long-time home for new secret location
					

Hong Kong’s iconic Jumbo Floating Restaurant sailed away from its long-time home in Aberdeen Harbour after talks to save the tourist attraction failed.



					www.usatoday.com
				




*At least I have the memory*
Unfortunately, the floating restaurant is now 1,000 meters underwater which will make it extremely difficult to carry out a salvage operation of this beautiful restaurant.

Skate.


----------



## ducati916 (22 June 2022)

Skate said:


> *Howard Bandy back in Dec 2016 made these comments*
> “Stocks have a tendency to revert to the mean and breakouts usually do not last very long. I estimate the risk of drawdown based on recent performance, then trade in such a way that I can manage drawdown. That is, holding a few days at most whether long or short. Again and again. The sweet spot is high accuracy and short holding period. Holding longer than about three days increases the risk considerably, as does accuracy below about 65%”
> 
> *A short holding period is not for me*
> ...




Given that markets are fractal, it should be as easy to catch a trend in any time frame as any other.

I have found that this is not a true statement for most. The reason could be that it revolves around the amount of noise (defined as meaningless price movement) that require a decision to be made. The shorter the time frame, the greater the number of decisions that are required to be made in a given space of time. Humans are not particularly good at making many decisions under pressure, day in, day out.

Stretching the time frame reduces the number of decisions in any given time period as the noise is reduced.

Reducing the decisions made, almost invariably means cutting the decisions that are required to be made around cutting losses and/or closing out winners at profit targets.

Unless you have a high success rate in stock selection, the winner's % gains are not much higher than your losses and you will struggle to be profitable. You need probably an 80% hit rate of winners to make shorter term trading work.

Changing the subject slightly:

The big issue that seems to effect negative results on mechanical trend trading systems are the transition points of bull markets to bear markets. Which is pretty much where we have been since January this year. This seems to be reflected in re-entries into stock selections that were exited at some point and the bounce higher is interpreted as the resumption of the trend, rather than a 'new' counter-trend movement, ie. a bear trend.

Mechanical systems should eventually transition (historically speaking) into the truism: there is always a bull market somewhere. That is to say, certain industries will profit in a bear market and trend higher. These stocks will be scanned for, found and selected, thereby improving performance of the system.

There is of course more to it. But as this post is getting a bit long, that can wait for another day.

jog on
duc


----------



## MovingAverage (24 June 2022)

Happy Friday Y'All,

Well I bang on about making sure you use a statistically relevant number of trades before placing any faith in your simulation results--not enough trades and your results are worthless and too many trades can be a waste of CPU cycles, your time and unlikely to give you any further insight.

I was recently doing an analysis of a system and was reviewing some simulation charts and thought the below chart highlighted the importance of understanding what the relevant number of trades for your system simulations is. What you see below is the winning percentage of trades over time and I'm just using this as a simple example. This chart was generated using TradeSim and while I would like the X axis to show trade count and not date unfortunately TradeSim only allows me to show date. Nonetheless this is not a big deal as I explain below.

The important thing to note with the chart below is the date range of June to Oct 2018. Prior to this date the simulation has executed less than about 300 trades and obviously after that date the system has executed more than 300 trades. You can see that up to the 300 trade mark the winning trade % goes up than then slowly down to what is referred to as the "system steady state" (300 trade mark around June / Oct 2018) where is settles at around the 58% winning trade level.

What's the big deal I hear you say--well simulating this system with less then approximately 300 trades is a complete and utter waste of time and will only lead to misleading simulation results. Simulating this system with 1000 trades will be a complete waste of time and unlikely to yield any additional confidence in your simulation results. Personally, I think simulating this system with around 500 trades would be adequate to give you a reasonable level of confidence that the system has reached steady state and the simulation results are reasonably insightful.

Please do not make the mistake of saying using only 500 trades would not span different market conditions and therefor you must use 20 years of data--wrong! This is where walk-forward testing on OOS data is important so you can understand how your system performs across all market conditions and how robust (or not, as the case may be) your system is and what market conditions it performs poorly in.

Stay classy ASF.


----------



## Skate (24 June 2022)

MovingAverage said:


> before placing any faith in your simulation results




@MovingAverage I've cherry-picked 8 words out of your post (which was great by the way) to explain an anomaly that I find hard to accept. Let me explain, a trend trading system can produce a variety of results depending on filters & parameters used in your buy condition. For a second let's assume the backtests results were unfavourable. Now backtest the strategy with the same buy condition coded completely opposite as before. All logic would indicate that reversing the signals that generated a loss would now generate a win, but it's never the case.

Skate.


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## MovingAverage (24 June 2022)

Skate said:


> @MovingAverage I've cherry-picked 8 words out of your post (which was great by the way) to explain an anomaly that I find hard to accept. Let me explain, a trend trading system can produce a variety of results depending on filters & parameters used in your buy condition. For a second let's assume the backtests results were unfavourable. Now backtest the strategy with the same buy condition coded completely opposite as before. All logic would indicate that reversing the signals that generated a loss would now generate a win, but it's never the case.
> 
> Skate.



Hi @Skate: sorry, any chance you can elaborate a bit more--not sure I understand the point correctly.


----------



## Skate (24 June 2022)

MovingAverage said:


> Hi @Skate: sorry, any chance you can elaborate a bit more--not sure I understand the point correctly.




@MovingAverage let me explain further. I'll use a Simple Moving Average to better explain my point. I coded a strategy quickly to demonstrate the point I was trying to make. Nevertheless, if you reverse your buy condition (to one one you just used) meaning, the condition to be completely opposite it doesn't mean your results will be opposite. Both below are poor examples but you will be able to see the reversal of buy conditions being reversed but the results are not reversed. Just try reversing the buy condition of your strategy & see what the difference is.

*The two examples*
The first example is the backtest of (strategy 3) versus (strategy 3a)
The second example is the backtest of (strategy 3) versus (strategy 4)

*Example 3*
Buy = C > MA(C,200); Greater Than
Sell= C < MA(C,50);

# Reverse the buy condition

*Example 3a*
Buy = C < MA(C,200); Less Than
Sell= C < MA(C,50);

*The Backtest results (Strategy 3 versus Strategy 3a)*
The backtest capture for example 3 produces a profit where you would expect example 3a to display a loss.




*Example 4*
Buy = C > MA(C,200); Greater Than
Sell= C < MA(C,50);

# Reverse the buy condition with the sell parameters & vice versa

*Example 3a*
Buy = C > MA(C,50); Greater than
Sell= C < MA(C,200);;

*The Backtest results (Strategy 3 versus Strategy 4)*
The backtest capture for example 3 produces a profit where you would expect example 4 to display something totally different.





*Summary*
The coded examples don't display what was intended. I was trying to say if one strategy was a disappointment changing the buy condition to the opposite doesn't display what was expected. Let me think of another post that explains why you need to be able to think on your feet.

Skate.


----------



## Skate (24 June 2022)

Skate said:


> why you need to be able to think on your feet.




*A lost dog strays into a jungle*
A lion sees this from a distance and says to himself with caution, “This guy looks edible, never seen his kind before.”

*So the lion starts rushing towards the dog with menace*
The dog notices and starts to panic but as he’s about to run he sees some bones next to him and gets an idea. He says loudly, “Mmm…that was delicious lion meat!”

*The lion abruptly stops and says *
“Woah! - this guy must be tougher than he looks, I better leave while I can.”

*Over by the tree top, a monkey witnessed everything*
Evidently, the monkey realises that he can benefit from this situation by telling the lion and getting something in return. So the monkey proceeds to tell the lion what really happened and the lion says angrily, “Get on my back, we’ll go get him together.”

*So they start rushing back to the dog*
The dog sees them and realized what happened and starts to panic even more. He then gets another idea and shouts, “Where the hell is that monkey?! - I told him to bring me another lion an hour ago!!”

Skate.


----------



## MovingAverage (24 June 2022)

Skate said:


> if you reverse your buy condition (to one one you just used) meaning, the condition to be completely opposite it doesn't mean your results will be opposite.



I now understand your point, but to be honest I'm still missing the connection between my last post on appropriate trade count for system testing and using an opposite buy condition for entries--they call me an idiot for good reasons 

Back to your point--I wouldn't expect that using a completely opposite entry condition would necessarily lead to a completely opposite result. If I reversed my entry conditions it might do well for shorting


----------



## Skate (24 June 2022)

MovingAverage said:


> I now understand your point, but to be honest I'm still missing the connection between my last post on appropriate trade count for system testing and using an opposite buy condition for entries--they call me an idiot for good reasons
> 
> Back to your point--I wouldn't expect that using a completely opposite entry condition would necessarily lead to a completely opposite result. If I reversed my entry conditions it might do well for shorting




@MovingAverage, your post invoked a memory for me (that wasn't directly related to your post ) that allowed me to make a post out of eight words that you had used. Explaining what I have found doing a backtest was for those who like to play (fiddle) with their code looking for improvements. Meaning if this buy condition didn't work, doing exactly the opposite should, which is not the case.

*I was trying to think on my feet when you said "please explain"*
Well, as I was going from memory I couldn't code up something quickly enough that would explain what I was trying to get across. All it did was to "invoke another memory" about why it's so important to think quickly on your feet.

*Mike Tyson once said*
"Everyone has a plan till they get punched in the face". With boxing, if you don't think quickly on your feet you will be knocked off them.

*Thinking on your feet *
After making my post, it Invoked another memory of the joke about thinking quickly to get yourself out of a sticky situation. Posts are light on these days in the "Dump it here" thread so posting about "this & that" at least gives others something to read, keeping the thread active.

Skate.


----------



## Skate (24 June 2022)

MovingAverage said:


> If I reversed my entry conditions it might do well for shorting




*There is the point I was trying to make*
If the buy condition doesn't work one way it must work the other way, which is certainly not the case. I know your comment was "a facetious remark" making light humour that shouldn't be taken seriously.

Skate.


----------



## MovingAverage (24 June 2022)

Skate said:


> @MovingAverage, your post invoked a memory for me (that wasn't directly related to your post ) that allowed me to make a post out of eight words that you had used. Explaining what I have found doing a backtest was for those who like to play (fiddle) with their code looking for improvements. Meaning if this buy condition didn't work, doing exactly the opposite should, which is not the case.
> 
> *I was trying to think on my feet when you said "please explain"*
> Well, as I was going from memory I couldn't code up something quickly enough that would explain what I was trying to get across. All it did was to "invoke another memory" about why it's so important to think quickly on your feet.
> ...




Oh...got it. Was thinking what the hell am I missing in your post--was scratching my heading wondering what on earth a lion, a monkey and a dog could teach me about sample size


----------



## DaveTrade (24 June 2022)

MovingAverage said:


> Happy Friday Y'All,
> 
> Well I bang on about making sure you use a statistically relevant number of trades before placing any faith in your simulation results--not enough trades and your results are worthless and too many trades can be a waste of CPU cycles, your time and unlikely to give you any further insight.
> 
> ...




An informative post, thanks for giving us the benefit of your work.


----------



## MovingAverage (24 June 2022)

DaveTrade said:


> An informative post, thanks for giving us the benefit of your work.



All part of the service   

I spend a lot of time doing this and don't give it a second thought. Trying to make a concerted effort to stop and think, some of this stuff might make an interesting post for some.


----------



## MovingAverage (24 June 2022)

MovingAverage said:


> Happy Friday Y'All,
> 
> Well I bang on about making sure you use a statistically relevant number of trades before placing any faith in your simulation results--not enough trades and your results are worthless and too many trades can be a waste of CPU cycles, your time and unlikely to give you any further insight.
> 
> ...




Worth noting: this is why I don't have the stomach to trade monthly systems despite really wanting to. I've used 20 or so years of historic ASX data and I have never been able to develop a reasonable monthly system that will take enough trades to get to the steady state for my sims.


----------



## MovingAverage (24 June 2022)

Any one use an overbought filter for entries on their breakout systems?

I've been reviewing a number of my live trades over the past 18 months for my breakout system. When looking at the charts for those trades I noticed a number of those positions (not all) that closed out at a loss and they entered the position when most common overbought/oversold indicators clearly indicated those entries occurred when the stock was overbought.

Thought I'd have a look at the impact of adding an overbought filter to the entry conditions of a breakout system so run a few sims to get some better insight--the results look promising and definitely worth further review. What you're looking at below is the sim results of a breakout system with and without a breakout entry filter.

Some key initial observations from me about the difference:

- big improvement in net profit with the filter.
- less trades with the filter (much more efficient).
- increase in winning trades with the filter, approaching 60% with the filter which is pretty good for a breakout system.
- reduction in losing trades with the filter.
- if sharpe ratio is your thing (lot of system traders are obsessed with this, but me I'm on the fence about this metric) with the filter exceeds the "good" level of 1 and is a notable improvement on the no filter system.

The second image below is for the AB MC charts. Most notable thing about the MC charts is that without the filter the average is below 0.8M and with the filter the average is above 0.8M. Visually the with filter look tighter so possibility a better SD.

So overall this looks positive and definitely worth further investigation.

It's worth noting that I looked at a range of different overbought/oversold indicators and all seemed to perform better than without a filter, but some overbought/oversold indicators performed better than others so take a look for yourselves as see what you prefer.

Anyway, it is wine o'clock for me so I'll say "over and out" so I can ponder what a lion, dog and monkey can teach me about trading.

Stay classy ASF


----------



## Skate (24 June 2022)

MovingAverage said:


> Anyway, it is wine o'clock for me so I'll say "over and out" so I can ponder what a lion, dog and monkey can teach me about trading.




@MovingAverage it was a light-hearted way to demonstate why quick-thinking is an art, not a science.  When you are placed in a bind there is always an alternative. 

*It's worth repeating*
I've said multiple times "Don't React, RESPOND to every situation". Responding gives you time to think.

Skate.


----------



## MovingAverage (24 June 2022)

Skate said:


> @MovingAverage it was a light-hearted way to demonstate why quick-thinking is an art, not a science.
> 
> Skate.



and my reference was intended only as friendly banter and light-hearted break from the very dry and unfunny topic of system testing--nothing more and nothing less


----------



## Skate (24 June 2022)

MovingAverage said:


> Any one use an overbought filter for entries on their breakout systems?




*No joy for me*
I would say most system traders have tried many different varieties using this indicator. As you have started using the over brought side of the indicator I've added to the buy condition. I've not found it to be helpful & most times a hindrance. I should also say I trade many strategies & none use this indicator.

*For the Backtest example*
The comparison two-year backtest capture from 24/6/2020 to 24/6/2022 using this buy condition (BuyThisMA = C > MA(C,200) with & without using the filter. It's at odd to your findings. The example was using a simple moving average with a combination of filters.




Skate.


----------



## MovingAverage (24 June 2022)

Skate said:


> *No joy for me*
> I would say most system traders have tried many different varieties using this indicator. As you have started using the over brought side of the indicator I've added to the buy condition. I've not found it to be helpful & most times a hindrance. I should also say I trade many strategies & none use this indicator.



what indicator did you use?


----------



## Skate (24 June 2022)

MovingAverage said:


> what indicator did you use?



The “Over brought indicator”.

The better question would have been “how did you use the indicator?”.

@MovingAverage how did you use the indicator?

Skate.


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## MovingAverage (25 June 2022)

Skate said:


> The “Over brought indicator”.
> 
> The better question would have been “how did you use the indicator?”.
> 
> ...




Not rocket science and kept it simple. Kept all the system buy conditions the same but would only take a buy if the overbought indicator was less than a fixed threshold— below the threshold the stock was not overbought so trade taken above the threshold the stock was overbought so trade rejected.


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## MovingAverage (25 June 2022)

Skate said:


> The “Over brought indicator”.
> 
> The better question would have been “how did you use the indicator?”.
> 
> ...



I’m missing the point here—brought bought ?


----------



## Skate (25 June 2022)

MovingAverage said:


> I’m missing the point here—brought bought ?



Brought & bought are two words that are often confused, both in pronunciation & spelling. I understand your confusion as the error is on my end for not proofreading. I should have used bought as it implies an economic transaction whereas brought means transporting something.

Skate.


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## Skate (25 June 2022)

*Capturing momentum in a breakout is trend trading*
@MovingAverage raised an interesting topic of using the overbought indicator as part of his buy condition. His backtest report indicated the value in doing so. With trend trading, it's all about capturing the momentum of a breakout. First, I should say there are many ways in which to use these bands. One such way is to use it as described to keep you out of some signals to increase your chance of profitability.

*Overbought & oversold are upper & lower price bands*
When reference is made to the overbought or oversold zone it's an upper & lower price band. How you use these points or fluctuation between two points is up to you to work out. Movement between these two bands is what I try to use to capitalise on, whereas @MovingAverage uses the overbought as a confirming indicator. 

*To reiterate *
There are so many ways you can use this indicator to add value to your trading but as far as I'm concerned its value is lacking in what I'm trying to achieve. I’m not saying you can’t capitalise on the movement from one zone to the other but my preference is to use better indicators to capture this movement, the momentum.

Skate.


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## Skate (25 June 2022)

*There are many ways you can go about defining an overbought area*
Different applications or methods will produce varying results, although they attempt to catch the same market behaviour. It’s because of this differentiation the backtest results of @MovingAverage & mine are at odds. I take the view when a position is overbought, it means the price has bullish momentum a confirmation to take the signal.

*Buying pressure gets it to the overbought level*
Now, while this might not be the whole explanation, of why the market moves as it does but the point is this "should this indicator" be used as it was suggested to keep you in or out of a buy signal. How you use this indicator is not the point. The point I wanted to get across was to explain in order to make money in trading, the only thing we need to know is whether something works or not.

Skate.


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## Skate (25 June 2022)

*I have more to say*
Instead of leaving it there, I feel I should also make a few more comments. There are quite a few different methods to define when a market has become overbought. RSI & Bollinger Bands are other indicators that are often used to define this area (overbought). I'll concentrate on just using Bollinger Bands as an example. Bollinger Bands are simply the upper & lower band of a moving average. Both bands are deviations from the moving average that are as variable as you wish to achieve the result you are looking for. The upper Bollinger Band can be referred to as an overbought area.

*Volatility moves the market*
One benefit of using Bollinger bands as an overbought area varies quite a lot depending on the volatility. This means that a volatile market would have to move higher to issue a signal, while the opposite applies to a market with low volatility. Usually, this means a signal becomes more accurate when volatility is used to generate this signal. Using Bollinger Bands in this way can have a distinct advantage when used correctly in your trading strategy.

*Being close to an overbought level doesn't automatically mean the move is over*
When a position has a bullish bias, it will often ignore any overbought levels, & just continue to go up. In that sense, you could say that overbought levels usually don’t work that well as an indicator annexed to a buy signal. This bullish bias helps push prices higher & not the reverse.

*I should also say*
Reading alternative views is beneficial to what we learn. As with trading, there are so many variables. How I use an indicator can vary from the way someone else uses it. It's those variables that bring an indicator to life for your application. Now I'm done.

Skate.


----------



## Skate (25 June 2022)

*It's hard to explain something in a few words*
Sometimes repeating something can be exhausting. Now my mind is wandering trying to think of a joke to explain the point I'm trying to make.

*I have the joke*
I asked the bartender if he would like to hear a "blonde joke?"
He said before you do, you should know I'm blonde as well as four other staff members.
Okay, then I won't, as I haven't the time to explain the joke five times.

Skate.


----------



## Skate (25 June 2022)

*Here is another joke*
How to take advantage of a situation.

*Joke*
Upon seeing someone steal three cream buns & putting them in his pocket, I told him there is an honest way to get those buns without stealing.

*He said, how?*
Let me show you.

*I walked up to the counter & asked the server "do you want to see a magic trick"?*
Sure, was the answer.

*May I have three cream buns & I preceded to consume them in front of them both*
The server said, "Where is the magic in that?"

*I said*
"Check the guy next to me & you will find he has them in his pocket".

Skate.


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## Skate (25 June 2022)

MovingAverage said:


> light-hearted break from the very dry and unfunny topic




*That reminded me of a comment my wife once made to me*
"I love you & my new Doona for the bed, both keep me warm at night but one doesn't talk $hit".

*I reminded her *
"I have feelings you know"

*Mrs Skate replied*
"That's debatable"

Skate.


----------



## MovingAverage (25 June 2022)

Skate said:


> @MovingAverage & mine are at odds.



While looking at our raw sim results in isolation you can be forgiven for saying "we are at odds". But you only need to scratch a little beneath the surface of your sims and mine sims to realize you might be a little premature in suggesting we are at odds--not suggesting we are not at odds I'm just suggesting you might be jumping to that conclusion too early without enough questions. Personally I think you are comparing apples and oranges: there are so many significant differences between what I did and what you did that comparing the two is like saying Toyotas are a **** car because they do not go faster than a Ferrari.  
Here is why I think you are comparing apples and oranges--the major differences that do not make it a fair comparison: 
--First you have no idea whether we ran our tests on the same universe of stocks--some indicators work better or worse depending on the characteristic of stocks it is applied to. No my sims were not simply run on XAO constituents.  
-- Second your sims use a much smaller trade sample then mine (in fact your sims are only on about 20% of the number of trades my sims performed).
--Third, I ran my sims over the period 1/1/15 through to 24/6/2022--you only ran over a two year period.
--We probably used different overbought indicators--they are not all equal and some are much better suited to different stock characteristic. Don't assume I used RSI (which I'm not really a big fan of) or BB, which I don't necessary consider an overbought indicator anyway. I could go on for ages about why using a BB is as an overbought indicator is wrong but I'll leave that for another post.
Anyway, point I'm trying to make is before coming to a conclusion it is important to ensure we are comparing apples and apples and that Toyotas are great cars because they are reliable, cheap to run and easy to drive around the city.


----------



## MovingAverage (25 June 2022)

Skate said:


> *That reminded me of a comment my wife once made to me*
> "I love you & my new Doona for the bed, both keep me warm at night but one doesn't talk $hit".
> 
> *I reminded her *
> ...



We need to put the fun back into taking a dump


----------



## Skate (25 June 2022)

MovingAverage said:


> While looking at our raw sim results in isolation you can be forgiven for saying "we are at odds". But you only need to scratch a little beneath the surface of your sims and mine sims to realize you might be a little premature in suggesting we are at odds--not suggesting we are not at odds I'm just suggesting you might be jumping to that conclusion too early without enough questions. Personally I think you are comparing apples and oranges: there are so many significant differences between what I did and what you did that comparing the two is like saying Toyotas are a **** car because they do not go faster than a Ferrari.
> Here is why I think you are comparing apples and oranges--the major differences that do not make it a fair comparison:
> --First you have no idea whether we ran our tests on the same universe of stocks--some indicators work better or worse depending on the characteristic of stocks it is applied to. No my sims were not simply run on XAO constituents.
> -- Second your sims use a much smaller trade sample then mine (in fact your sims are only on about 20% of the number of trades my sims performed).
> ...




*There is no right or wrong in this thread*
There are just alternative views. Each reader I'm sure will take something different from each of our posts. It even might be the catalyst for them to think about the topic you raised on a deeper level, it might even encourage them to do a bit of their own research.

*But in saying this & to put the fun back in this thread*
I'm confirming I'm the winner of this exchange as I've taken fewer words to say the same thing.



Skate said:


> *I should also say*
> Reading alternative views is beneficial to what we learn. As with trading, there are so many variables. How I use an indicator can vary from the way someone else uses it. It's those variables that bring an indicator to life for your application




*Summary*
When others read both of our "quotes" I'm sure they will agree - I'm the winner.

Skate.


----------



## MovingAverage (25 June 2022)

BTW @Skate...I'm a big fan of the saying "the numbers don't lie".

Look back at my sim results. The logic I had behind applying an overbought indicator was to not take those trades that are often at the end of a longer term trend and would often have that final push up only to immediately have the sell off (trend exhaustion)--breakout traders are often caught out by these trades. Below chart illustrates what I was trying to filter out.

Coming back to my sim result, my expectation before running the sims is that the filter would reject certain overbought entry signals which would ultimately have a marked reduction in my losing trades. You can see that the number of losing trades experienced  approximately a 10% reduction with the filter (down to 258 from 291). A subtle but important point is that this filter is NOT about picking winning trades, but instead about rejecting losing trades so my expectation going into this was the filter would not dramatically increase winning trades, which it did not as you can see from the number of winning trades. So to me the logic would appear sound.


----------



## MovingAverage (25 June 2022)

Skate said:


> *Summary*
> When others read both of our "quotes" I'm sure they will agree - I'm the winner.
> 
> Skate.



You win   But devil is always in the detail when it comes to system trading and you can't put that into a few words. Folks who don't have an attention span to read my posts probably shouldn't be thinking about system trading anyway


----------



## Skate (25 June 2022)

MovingAverage said:


> BTW @Skate...I'm a big fan of the saying "the numbers don't lie".
> 
> Look back at my sim results. The logic I had behind applying an overbought indicator was to not take those trades that are often at the end of a longer term trend and would often have that final push up only to immediately have the sell off (trend exhaustion)--breakout traders are often caught out by these trades. Below chart illustrates what I was trying to filter out.
> 
> ...






MovingAverage said:


> But [the] devil is always in the detail when it comes to system trading.




*Okay, okay*
You win, but only because you prosecuted your case, better than I did.

Skate.


----------



## MovingAverage (25 June 2022)

Skate said:


> *Okay, okay*
> You win, but only because you prosecuted your case, better than I did.
> 
> Skate.



I want the last word--you win


----------



## Skate (25 June 2022)

MovingAverage said:


> I want the last word--you win




Okay.

Skate.


----------



## Skate (25 June 2022)

Skate said:


> Okay




*In my mind, I'm doing cartwheels *
Knowing that I had the last say.

Skate.


----------



## Skate (25 June 2022)

*After a while, I've become nonchalant when it comes to trading*
I've done the hard yards & now I take the view that sometimes you lose, sometimes times you win. There are days when trading goes against everyone, even the best have bad days, but the level of your trading funds & how they are geared depends on how drawdowns will affect you.

Skate.


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## MovingAverage (25 June 2022)

Anyone else find this funny or am I on my own?


----------



## Skate (26 June 2022)

*The power of watching YouTube videos*
I just finished watching a video that explained "how to get rich", the title got me hooked as a moth to a light. I tend to watch these types of videos to understand the power of click-baiting. Most often they are comical & a pleasant way to understand the methodology of their madness. I also enjoy the religious shows where they promise you great personal wealth, not through the power of prayer but rather by giving a donation, the more you give, the greater the wealth will be for you. I just don’t understand how some can be so gullible.

*The hyperlink below is a must watch*
Back to the video, Scott Galloway ponders everyone's favourite question: How do you get rich? I don’t want to give away too much of the content which was highly entertaining & educational BTW.

*Spoiler alert*
For those who don’t have 10 minutes to watch this top video, I’ll supply the answer to the question: "How do you get rich?" the answer is (slowly). But that’s not the only thing that will resonate with you.

*Scott touches on an important subject of "time in the markets versus timing the markets"*
So what is better?  "time in the markets or timing the markets" I’ve previously done a few posts on this subject, but a refresher wouldn’t go astray so I'll do another post on the subject in my next post. I would also like to say that there is nothing more liberating than expressing my point of view.

*Discipline pays off*
Purpose drives discipline & without discipline, you will never reach your full potential or financial freedom. Life is making one decision after another. Trading is similar to playing pool, it's not about sinking the ball, but more importantly "lining up the next shot".

*Just watch the video*
There is a mathematical formula for how to "get rich", & if you want to know the formula, watch the video, you won't be disappointed.

The Algebra of Wealth | The Prof G Show - YouTube

Skate.


----------



## Skate (26 June 2022)

*Timing the markets versus time in the markets*
It's often said that timing the market rarely works, however trading this way can be profitable. There is also an alternative that can be just as profitable "over time". I'm saying, having a combination of both can smooth out your returns. Staying invested instead of trying to time the market, particularly for those looking for long-term returns is a proven & effective option to grow your wealth. The biggest benefit of staying fully invested alleviates the pressure to consistently time the market. Timing the markets during difficult times is a big ask & nearly impossible to do all the time.

*Staying invested is less stressful*
Historically, over time the markets tend to rise, generating better than shabby returns. Being always invested means you can ride out the downward volatility of market corrections as quality companies tend to shine after periods like those at present. I’m not saying that you can take your eye off the ball but rather you can enjoy capital appreciation without worrying about every gyration the market throws at you to shake you out.

*Traders sell when investors hold*
Investors may be tempted to sell stocks during downward volatility where traders generally do, which in the long run may not be in a trader's best interest. While selling during downward volatility can reduce stress & hopefully avoid deeper losses, could mean locking in losses & missing the market’s inevitable rebound. Whether you elect to invest or elect to trade is one of those personal decisions. Personally, I tend to do both.

Skate.


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## ducati916 (26 June 2022)

Skate said:


> *Timing the markets versus time in the markets*
> It's often said that timing the market rarely works, however trading this way can be profitable. There is also an alternative that can be just as profitable "over time". I'm saying, having a combination of both can smooth out your returns. Staying invested instead of trying to time the market, particularly for those looking for long-term returns is a proven & effective option to grow your wealth. The biggest benefit of staying fully invested alleviates the pressure to consistently time the market. Timing the markets during difficult times is a big ask & nearly impossible to do all the time.
> 
> *Staying invested is less stressful*
> ...




@Skate 

The eternal question. Because my response was lengthy, I made it a blog post: https://mrromulus789137764.wordpress.com/2022/06/25/caught-my-eye/

For brevity however: if 'time in' the market, selection of class or classes is important. If 'timing' this selection should be part of the process, but would require (if mechanical) scanning all markets (if stocks are considered 1 market) so that you don't miss the bull and get caught in the bear.

jog on
duc


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## Skate (26 June 2022)

ducati916 said:


> If 'time in' the market, selection of class or classes is important.




*Also for brevity*
I've cherry-picked from @ducati916 article making it "Duc's Quote of the Day"




Skate.


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## Skate (27 June 2022)

*There are some youtube videos worth watching*
I'm sure most will know Jeremy Grantham or if they don't,  they should. In the video, Jeremy compares 2022 with similarities of 2008, 2000, 1929, & more. The short video covers much more than that as it's thought-provoking at the very least. As I've found it interesting it's worthy of a post.



Skate.


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## Skate (27 June 2022)

*If you found the last video interesting*
You will absolutely love Ray Dalio's video on how to prepare for what's coming next with the financial markets. Ray explains the economics at a philosophical level that's easy to understand. There is also a catchphrase that Ray uses "Cash is Trash" a topic @ducati916 bangs on about with the declining value of fiat currencies.

*The quote that resonated with me when it comes to trading*
"If you learn to play the game well, it pays well"



Skate.


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## ducati916 (27 June 2022)

And.....




Was a problem in 1998 for LTCM.

jog on
duc


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## Skate (27 June 2022)

*Whatever you do in life has to have meaning & it's the same when it comes to trading*
Doing something without meaning tends to be unproductive that adds no real value to your life or to the life of others. If you take that philosophy & attitude of doing the best for others as a guiding principle of behaviour the favour will ultimately be returned to you in spades. Doing the best for others is really doing the best for yourself. Showing kindness & having an attitude of gratitude never goes astray.

*Also, you should never forget the kindness of others*
@bigdog & @barney are such two members who kindly post information on a daily basis that's not only useful to me but I'm sure useful to others. I'm just saying, these two members post every day not for themselves but for the benefit of others. So, I want to take this opportunity to say publicly "thank you" to both of them.

Skate.


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## qldfrog (27 June 2022)

Skate said:


> *Whatever you do in life has to have meaning & it's the same when it comes to trading*
> Doing something without meaning tends to be unproductive that adds no real value to your life or to the life of others. If you take that philosophy & attitude of doing the best for others as a guiding principle of behaviour the favour will ultimately be returned to you in spades. Doing the best for others is really doing the best for yourself. Showing kindness & having an attitude of gratitude never goes astray.



There is a certain irony as i am currently in a dispute where i was closing a business relationship and invoicing less than half of the contractually signed due amount ..and it seems to have been seen as a sign of weakness and the invoice remains unpaid..so my post about debt collection...
Among proper people, @Skate words are wisdom.. among rotten one, it is just one more way to be exploited.
Luckily, we are among mostly good people here😊


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## barney (27 June 2022)

Skate said:


> @bigdog & @barney are such two members who kindly post information on a daily basis that's not only useful to me but I'm sure useful to others. I'm just saying, these two members post every day not for themselves but for the benefit of others. So, I want to take this opportunity to say publicly "thank you" to both of them.  Skate.




Thanks for the kind words @Skate 

My reason for posting a small amount of information that I hope may be helpful, is simply because; 

a)  There were ASF punters who helped me many years ago when I was in a bad way from some very poor trading (I use that term lightly, because it certainly wasn't trading what I was doing, lol) 

b) At this point in time, I often don't have the time to post like I used to (wish I did), so I find by throwing up a little daily info that may be useful,  I am hoping that I might still be adding to the site, even if my input is minimal.

On the flip side to your kind words, there is no doubt that the input/information/help you have provided to any who spend a little time "digesting" what you offer, is potentially "worth its weight in gold"

So therefore, my small contribution is of minimal importance, but I do sincerely appreciate your sentiment


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## investtrader (28 June 2022)

.  In 2014, Grantham provided this two-year outlook:



> And then around the election or soon after, the market bubble will burst, as bubbles always do, and will revert to its trend value, around half of its peak or worse, depending on what new ammunition the Fed can dig up.


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## Skate (28 June 2022)

@investtrader I couldn't open the hyperlink to GMO First Quartly Letter for 2014 for a full read, do you have another link to the PDF?

I often look back to see if predictions come true & admittedly most are widely off the mark even when they made perfect sense at the time.

*Never mind*
I found a copy here: https://documents.pub/document/gmo-qtlyletter-1q14-fullversion.html?page=2

*A general comment from the article (true then & true today)*
_"In truth, there is nothing much that we can do about this problem. Value investors must, as always, invest exclusively 
on long-term values and long-term risks. We must always build our portfolios from the best mix of these two 
characteristics. Therefore there is simply no alternative to standing our ground and taking it on the chin when crazy 
markets get even crazier"._

Skate.


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## Skate (28 June 2022)

investtrader said:


> . In 2014, Grantham provided this two-year outlook: And then around the election or soon after, the market bubble will burst, as bubbles always do, and will revert to its trend value, around half of its peak or worse, depending on what new ammunition the Fed can dig up.






Skate said:


> I often look back to see if predictions come true & admittedly most are widely off the mark even when they made perfect sense at the time.




*For those interested*
@investtrader made a post referencing Jeremy Grantham's two-year prediction in GMO First Quartly Letter for 2014 that I found interesting. Predictions are guesses disguised as fact when they come from someone within the industry. Whether they are right or wrong doesn't really matter as no one knows what the future holds but they are worth thinking about. It's very rare predictions are always 100% correct but at least they give rise to current thinking at the time. Let's revisit Jeremy Grantham's two-year prediction to see if he was correct. The graph below is a representation of how successful he was.

*Looking for Bubbles: A Statistical Approach by Jeremy Grantham *
_My Best Guesses for the "Next Two Years" with the repeated caveat that prudent investors should invest exclusively or nearly exclusively on a multi-year value forecast, my guesses are: 

1) That this year should continue to be difﬁcult with the February 1 to October 1 period being just as likely 
to be down as up, perhaps a little more so. 

2) But after October 1, the market is likely to be strong, especially through April and by then or in the 
following 18 months up to the next election (or, horrible possibility, even longer) will have rallied past 
2,250, perhaps by a decent margin. 

3) And then around the election or soon after, the market bubble will burst, as bubbles always do, and will 
revert to its trend value, around half of its peak or worse, depending on what new ammunition the Fed 
can dig up.


_


Skate.


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## Skate (28 June 2022)

*Our belief forms our identity*
@Dona Ferentes recently posted a snapshot from the Australian Census about the generational shift in religious affiliation in Australia. Keeping with tradition I prefer to keep my views & opinions in this thread.

*All Australians have come from somewhere*
Our Australian society is as diverse as it is culturally different that represents particular values & beliefs, which enable a sense of identity & meaning.

*Let's take our first people, as an example*
The Aboriginal & Torres Strait Islanders have their values & beliefs based on an understanding of the world that integrates the spiritual with the material & emphasises the individual’s relationship with their elders & their community.

*Diversity is a good thing*
Having lots of different beliefs in our society is a good thing, as a diverse range of beliefs whether they have a religious slant or not is something to feel good about. Different cultures benefit us all & should be respected, upsetting someone is the last thing that we should do. Having a different opinion from others should also be respected.

*After reading the statistics on religious beliefs*
It’s important to realise that this doesn’t mean everyone acts/thinks/believes the same thing. Just as not everyone you know has identical beliefs. Some groups may have different ideas about religion or faith simply because of their upbringing being taught different stories from our own.

*Summary*
IMHO, having religious beliefs or not doesn't determine if you are a good person or not. In saying this, what you believe forms how you will interact with others which is so important. If you demonstrate respect & tolerance towards each other is the measure of how you should be judged.

Skate.


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## Telamelo (29 June 2022)

Given where we are in the global central bank rate hiking cycle, Macquarie believes a global recession still won't hit until the first half of calendar 2023.​Macquarie reveals its 16-stock "recession-proof" defensive portfolio​

*Consumer Staples*: Coles Group (ASX:COL), Endeavour Group (ASX:EDV), Metcash (ASX:MTS)
*Infrastructure*: Transurban (ASX:TCL), Origin Energy (ASX:ORG), Amcor (ASX:AMC), Orora (ASX:ORA)
*Healthcare:* CSL (ASX:CSL), Ramsay Health Care (ASX:RHC), Resmed (ASX:RMD)
*Gold:* Newcrest Mining (ASX:NCM), Northern Star (ASX:NST)
*Food:* Graincorp (ASX:GNC), United Malt Group (ASX:UMG), Elders (ASX:ELD), and Costa Group (ASX:CGC)









						Macquarie reveals its 16-stock "recession-proof" portfolio
					

When America sneezes, the world catches a cold. The US is already halfway to a technical recession, with the most recent quarter recording a slight contraction. And while the next read is still a while away, some leading indicators already suggest prospects are not looking bright. Australia is by...




					www.livewiremarkets.com


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## Skate (29 June 2022)

Telamelo said:


> Macquarie reveals its 16-stock "recession-proof" defensive portfolio​
> *Consumer Staples*: Coles Group (ASX:COL), Endeavour Group (ASX:EDV), Metcash (ASX:MTS)
> *Infrastructure*: Transurban (ASX:TCL), Origin Energy (ASX:ORG), Amcor (ASX:AMC), Orora (ASX:ORA)
> *Healthcare:* CSL (ASX:CSL), Ramsay Health Care (ASX:RHC), Resmed (ASX:RMD)
> ...




*It pays to read what others think*
@Telamelo posted a link to an article where "Macquarie" reveals defensive stock that should be included in a recession-proof portfolio going on to discuss why asset allocation is important. 

*As a system trader *
There are times when I dismiss articles that hold little interest when they express alternative views to mine, reading them IMO would be a sheer waste of time AFAIC. Confirmation bias is a weakness all traders fall into without realising. At the moment two threads are holding my interest for a few reasons that are worth checking out. 

SYI - SPDR MSCI Australia Select High Dividend Yield Fund
VAS - Vanguard Australian Shares Index ETF

*So how can we take advantage of a portfolio of stock the big boys publish?*
The small list of Macquaries' defensive portfolio posted above has 5 sectors with a total of 16 companies. Under normal trading situations, these quality shares lack volatility without the power of percentages due to their price. Admittedly, they are not the positions I'm chasing to achieve better than average returns for those two reasons as well as others. Well, after saying this how can we capitalise on the positions Macquarie suggests?

Skate.


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## qldfrog (29 June 2022)

Skate said:


> *It pays to read what others think*
> @Telamelo posted a link to an article where "Macquarie" reveals defensive stock that should be included in a recession-proof portfolio going on to discuss why asset allocation is important.
> 
> *As a system trader *
> ...



The advantages of these big boys is they might fall by single digits whereas the volatile ones would play double digit or disappear .more a matter of survival than profit


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## Skate (29 June 2022)

Skate said:


> Reading alternative views is beneficial to what we learn. As with trading, there are so many variables. How I use an indicator can vary from the way someone else uses it. It's those variables that bring an indicator to life for your application.




*Timing the markets versus time in the markets*
It appears I have more to say on the topic of "timing the markets" versus "time in the markets". On closer inspection of Macquarie's recession-proof list, I'm at a crossroads on how to capitalise using that list. I could "buy & hold", or trade only their watchlist. But there is an alternative.

*It's often said that "timing the market" rarely works *
But AFAIC trading this way can be very profitable. System traders spend an enormous amount of time trying to time the market. Getting the entry & exit timing is the hardest part of trading this way but "with effort", it can be done.

*The alternative "time in the markets" *
Looking back on historical results spanning many years parking your money in the markets & let the magic of "time" can be just as profitable.

*Trading by the colour of the bar*
I'm just saying, having a combination of both "timing the markets" & "time in the markets" can smooth out your returns. But this is not the point of this series of posts. I would rather talk about something a little bit different of how to trade Macquarie's recession-proof list or any list of a similar ilk. Position rotation by the fund managers is how I believe they achieve the returns they do.

Skate.


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## Skate (29 June 2022)

*Macquarie reveals its 16-stock "recession-proof" defensive portfolio*
Admittedly, they are great companies worthy of an investment but as with all companies, they fluctuate because they are at the mercy of market sentiment that is influenced by so many variables.

*Consumer Staples*: Coles Group (ASX:COL), Endeavour Group (ASX:EDV), Metcash (ASX:MTS)
*Infrastructure*: Transurban (ASX:TCL), Origin Energy (ASX:ORG), Amcor (ASX:AMC), Orora (ASX:ORA)
*Healthcare:* CSL (ASX:CSL), Ramsay Health Care (ASX:RHC), Resmed (ASX:RMD)
*Gold:* Newcrest Mining (ASX:NCM), Northern Star (ASX:NST)
*Food:* Graincorp (ASX:GNC), United Malt Group (ASX:UMG), Elders (ASX:ELD), and Costa Group (ASX:CGC)
*We are all time poor when it comes to trading*
We can read too much, we can watch too much & we can even be wrong with the best of advice. But there is a simple way when to buy & sell each & every one of those positions that incorporates just two filters (volatility & volume). As traders, we don't need a fancy strategy to make money. I've explained this system before but for the exercise, I'll relate it to the list of stocks above.

*The question I'm struggling with*
How can I stand on the shoulders of giants & piggyback off their stock selection? Is there a method where we can try & mimic the timing of these positions in their portfolio? Picking great companies to invest in is not that difficult but with most of us, the question is "when should we buy", when should we sell?

*Before I explain*
Let's be honest, we have all been guilty of it, "being an expert after the fact". There are simple ways that a System Trader can trade
Macquarie's "recession-proof" list & I'm sure it would be profitable even though limited. Fundamentalists would have an advantage but their timing is the killer to their profitability. So is there a way to garner the "best bang" for your buck?

Skate.


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## Skate (29 June 2022)

*Macquarie reveals its 16-stock "recession-proof" defensive portfolio*
For the exercise, so there is no cherry-picking I'll use the first stock in each sector to explain the nuances of system trading. Chartists have a unique ability but rarely can they predict where the next bar will go. I'll display two methods one using Guppies Multiple Moving Averages "GMMA" & another where you can enter & exit a position using the colour of the bar.

*WTF*
What a list. Basically, each of those positions has done very little since the January 2020 COVID flash crash. Other than "Dividends" if you had invested in these companies since you would be disappointed with their capital appreciation. Graincorp (GNC) is the exception.

*Consumer Staples*: Coles Group (ASX:COL) 
*Infrastructure*: Transurban (ASX:TCL) 
*Healthcare:* CSL (ASX:CSL) 
*Gold:* Newcrest Mining (ASX:NCM) 
*Food:* Graincorp (ASX:GNC) 
Skate.


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## Skate (29 June 2022)

*Is there a way we can profit from these positions is the question?*
I think there is. It may not be as you would expect. Trading "GMMA" strategy would struggle to produce better than average returns. 

*Consumer Staples*: Coles Group (ASX:COL)
*Infrastructure*: Transurban (ASX:TCL)
*Healthcare:* CSL (ASX:CSL)
*Gold:* Newcrest Mining (ASX:NCM)
*Food:* Graincorp (ASX:GNC)
*"The Ducati Blue Bar Strategy" is my weapon of choice *
Why? because it uses (volatility & volume) to colour the bars of the chart. As traders, we don't need a fancy strategy to make money. I've made over 70 posts about the "Ducati Blue Bar Strategy" & if you use the search feature you will find them all. In the next few posts, I'll let you decide if trading just by the colour of bars could work for you.

Skate.


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## Skate (29 June 2022)

*Let's view a few charts*
Looking at individual charts will allow you to form a mental image but without the advantages of buy & sell signals, it all becomes a little bit confusing.

*Let's look at the charts for Coles Group (COL)*
One of Macquarie's "recession-proof" stocks is COLES GROUP but all of their suggestions have been a bit lackluster the last few years. I'll post a simple "line" chart & then a "Candle" bar chart, to see if the chart gives a clue when a position should be taken.

*A line Chart for Coles Group (COL)*
Are there any clues when you should enter? In hindsight, yes, but if you are like me you won't know where the next bar will go?





*A "Candle" bar chart,* *for Coles Group (COL)*
Any clues on when you should enter?





Skate.


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## Skate (29 June 2022)

Skate said:


> It pays to read what others think




*Are there any clues when you should enter? It's all in the timing*
@ducati916 is a regular contributor to this thread & one of his posts gave me the idea to create a simple visual strategy to see the results behind his words.

*The simplicity of this strategy *
"The Ducati Blue Bar Strategy", colours the bars (no matter the periodicity) in real-time telling you what to do next. We have all at one stage sung along to the bouncing ball above the words making it easy to say in tune. Well, it's the same way with this strategy. Put four traders in a room together & they will all have their reason why they "enter & exit" a position. Put four "system traders" in another room & their reasoning behind why they enter a trade can be just as dramatic & diverse.

*Trading is a basic process*
We all tend to overthink trading but when you strip back trading to the bare basics it's all about trading the price differential, catching trends, knowing when to get in & more importantly when to get out. Money management takes care of the rest. I'm not a fancy trader, I jump on confirmed trends & hop off in a timely manner looking for the next ride.

*A coloured chart for Coles Group (COL)*
Are there any clues when you should enter? yes, it is as simple as following the bouncing ball or in this case the colour of the bars.  If you are like me you won't know where the next bar will go but the strategy does. Even when the chart doesn't have any signals you buy blue bars & sell red bars. I should also say, the first blue bar is the signal bar the next bar is the entry bar. It's the same with the red bars, the first is the signal bar the next is the exit bar.





*Marked chart for Coles Group (COL)*
Now with the colors marked to show the progress of the bars





Skate.


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## Skate (29 June 2022)

*Is there a way we can profit from Macquarie's positions displayed below? *
I think there is a way to produce better than average returns. (Buy the blue bars & Sell the red bars)

*Consumer Staples*: Coles Group (ASX:COL)
*Infrastructure*: Transurban (ASX:TCL)
*Healthcare:* CSL (ASX:CSL)
*Gold:* Newcrest Mining (ASX:NCM)
*Food:* Graincorp (ASX:GNC)

*# Coles Group (ASX:COL)*





*# Transurban (ASX:TCL)*





*# CSL (ASX:CSL)





# Newcrest Mining (ASX:NCM)





Graincorp (ASX:GNC)





For full disclosure*
Guppies Multiple Moving Average (GMMA) is also a handy strategy.

*





*

Skate.


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## Telamelo (29 June 2022)

@Skate you mentioned earlier:
"Position rotation by the fund managers is how I believe they achieve the returns they do" 
... which I concur/agree with 100%


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## Telamelo (29 June 2022)

Came across below video - Is there any merit to primarily using CCI Indicator for determining trend along with entry/exit ?


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## DaveTrade (29 June 2022)

Telamelo said:


> Came across below video - Is there any merit to primarily using CCI Indicator for determining trend along with entry/exit ?





@Telamelo I've seen many video's showing how an indicator can be used, what they don't show you is how often it works or how often it doesn't work. You may be able to create a trading system using this one indicator but it would have to be tested in different market environments to prove it works and that it was a system that you would choose to trade. Maybe if you came up with some trading rules then one of the members with backtesting software might do a test for you.


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## Skate (30 June 2022)

Telamelo said:


> Is there any merit to primarily using CCI Indicator for determining trend along with entry/exit ?




@Telamelo I must admit I have not viewed the video yet but I have made umpteen posts about how to use the CCI indicator & even explained its use & the Amibroker code that forms part of the CAM Strategy. To save posting again if you are interested in what I have to say about this indicator do a search. Use the keyword [CCI] or [CAM Strategy] by [Skate].

*The (CCI) momentum oscillator identifies cyclical trends*
The issue that most traders have using the CCI momentum oscillator is that they believe it displays "excessive lag" making it an unreliable generator of buy & sell signals - well that's true to a certain extent but filtering can alleviate false signals to some degree. Also, each time I made a post on how to use the (CCI) indicator there was a distinct lack of interest.

*Check out this post *
It's a repository of three trading systems including the CAM Strategy that uses the CCI indicator.






						Dump it Here
					






					www.aussiestockforums.com
				




*Check what Trading Tuitions has to say about the CCI indicator*
A few posts back @MovingAverage gave a practical example of how he added an " Overbought" indicator as part of his buy condition. The backtest results he posted certainly resulted in a boost to the profitability of his strategy. 

*Why do I mention this? *
Well, for this very reason. The Commodity Channel Index (CCI) is an oscillator indicator that accurately identifies overbought or oversold levels, one way of many how you can use this indicator.

*Check this link out*








						A Simple and Efficient CCI Trading System: Amibroker AFL
					

In this post we'll go through a very simple CCI Trading System. The results of this system is quite impressive and consistent when backtested on Daily timeframe.




					tradingtuitions.com
				




Skate.


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## Willzy (30 June 2022)

Skate said:


> *Howard Bandy back in Dec 2016 made these comments*
> “Stocks have a tendency to revert to the mean and breakouts usually do not last very long. I estimate the risk of drawdown based on recent performance, then trade in such a way that I can manage drawdown. That is, holding a few days at most whether long or short. Again and again. The sweet spot is high accuracy and short holding period. Holding longer than about three days increases the risk considerably, as does accuracy below about 65%”
> 
> *A short holding period is not for me*
> ...



Hi Skate, 

I trade in this exact fashion, it is most definately not for the feint of heart. I would love to say it has been a raging success, but I've managed to turn on pretty much all my strategies at the precise moment the broader market takes a dump and so I cannot report any major success. In fact I think people could make a fortune if they just short the markets when I decide to get in...

For this type of strategy I use Howard's book Quantitative Technical Analysis as a guide. I've played with Machine Learning as well as Traditional systems and TBH the best one I've found to date is a simple RSI strategy.

I use python to search all tickers, for each ticker run a walk-forward analysis of the strategy, 2 years inSample, 1yr outOfSample. Generate a report for that analysis. Report contains an image of the equity curve as well as basic metrics Accuracy, W/L but most importantly CAR25 and safeF for my given risk statement.

For each ticker the python script also spits out the parameters for each outOfSample run in amibroker AFL, tradestation easyLanguage and metatrader MQL4 and 5.

I search through the reports manually (a report is only generated if it is at least profitable - reduces number of reports). One of the best I have found was MSFT, I've been trading it for a year or two now with this basic RSI strategy and it has worked well to date.

In order to run a strategy like this I think automation is a must and thus I use either Metatrader or more recently TradeStation.


----------



## qldfrog (30 June 2022)

Willzy said:


> Hi Skate,
> 
> I trade in this exact fashion, it is most definately not for the feint of heart. I would love to say it has been a raging success, but I've managed to turn on pretty much all my strategies at the precise moment the broader market takes a dump and so I cannot report any major success. In fact I think people could make a fortune if they just short the markets when I decide to get in...
> 
> ...



Just want to say it is a VERY interesting post.
Thank you


----------



## Skate (30 June 2022)

Willzy said:


> I have a system which trades specific US stocks such as MSFT or VISA etc. The system trades LONG only, holds positions for 1-10 days and is mean reverting in nature. It will trade between 150-250 positions per year. Positions must be taken at the close of the market when the signal for entry or exit is calculated. Currently I trade the system live using Admiral Markets Metatrader 5 platform trading CFD's on the stocks. Automation is important because of my irregular day job. Like all mean reversion strategies the system is highly susceptible to commission drag. Any suggestions or recommendations or past experence with IB or TradeStation would be greatly appreciated as this particular problem is doing my head in...




@Willzy thank you for a great thought-provoking post. I remember you making a post back in December 2020 referencing this type of trading. At the time I had no input as you mentioned software that I was not familiar with, using Amibroker exclusively in my trading.

*Howard Bandy's comments*
I spent more time than I can remember trying to code a system similar to what Howard was suggesting. I have traded a "Mean Reversion Strategy" with limited success & I found the same as you that "the commission drag" was enormous. Admittedly, stocks do have a tendency to revert to the mean. When Howard implied that breakouts usually don't last very long. I personally had trouble reconciling this "as fact" because it was at odds with my research & experience.

*Howard is very experienced *
I don't doubt Howard when he said holding only a few days, again and again, is profitable for him but that's his "Modus Operandi" (M.O) or in English "his way of doing things". His statement is at odds with my research of holding for about three days, he even goes on to remark that holding positions beyond three days increases the risk considerably, & accuracy goes out the window.

*A short holding period is not for me*
Trading over a period of a day or three is easier said than done. I prefer to trade weekly as the "joy of trading" a daily trend strategy or a mean reversion strategy has eluded me. It's not for the lack of trying it's more to do with the constant workload which is not for me.



Willzy said:


> TBH the best one I've found to date is a simple RSI strategy




*Now you are talking my language*
I have traded a "RSI Weekly Strategy" with success. It was around (2016 / 2018) that I was trading every profitable strategy I coded up. The last quarter of 2018 brought the house of cards crashing down, taking a complete day to exit all my open positions, it was an exhausting exercise that I never want to repeat. At the moment I trade a fist full of strategies that I find manageable.

*When you mentioned a "RSI Strategy" it got me thinking*
I was wondering if I was still trading this strategy these last two years (the last 730days) would it be still profitable? So there is no cherry-picking the results, I decided to do a backtest from 30/6/2020 to 30/6/2020 inclusive. The last two years haven't displayed consistent returns but have been consistently unkind at times.

*I thought it would be a good exercise to post the results*
Well on face value the results for this period aren't too shabby. But that period missed the COVID-19 Flash Crash, so I extend the backtest an extra 6 months to take in this period. Taking the COVID period into consideration the overall results become average at best.




Skate.


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## Willzy (30 June 2022)

qldfrog said:


> Just want to say it is a VERY interesting post.
> Thank you





Screenshot of the system as of last night.




This one looks great and hopefully will continue to work for a bit, but there have been many I traded in this manner that havent performed anywhere near as well, MPWR was one, MA and FISV are others that did well for a while then eventually failed. 
This system too will eventually fail, I'll use Bandy's safeF and CAR25 to tell me when to turn it off.

I believe these types of strategies can and do work, but they are hard to find / create / trade and monitor.

Feel free to PM me if you'd like any more info


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## Newt (30 June 2022)

qldfrog said:


> Just want to say it is a VERY interesting post.
> Thank you




Likewise.  Most appreciated thank you Willzy.  Very interesting.....


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## Willzy (30 June 2022)

Skate said:


> @Willzy thank you for a great thought-provoking post. I remember you making a post back in December 2020 referencing this type of trading. At the time I had no input as you mentioned software that I was not familiar with, using Amibroker exclusively in my trading.
> 
> *Howard Bandy's comments*
> I spent more time than I can remember trying to code a system similar to what Howard was suggesting. I have traded a "Mean Reversion Strategy" with limited success & I found the same as you that "the commission drag" was enormous. Admittedly, stocks do have a tendency to revert to the mean. When Howard implied that breakouts usually don't last very long. I personally had trouble reconciling this "as fact" because it was at odds with my research & experience.
> ...



I gave weekly RSI trading away when I backtested it over dot com and 2008, it needs an exit mechanism to get you out in those massive dips, but I couldnt find one... stoplosses do not work with mean reversion, at least in my experience. 

Perhaps something like using weeklyRSI as entry and then dailyRSI as exit ... food for thought


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## Skate (2 July 2022)

Skate said:


> *What a great quote*
> I have to agree with @BlindSquirrel "giving back profits - sucks"




*Giving Back Profits "Sucks"*
We all tend to be great traders in a roaring bull market & mediocre to lousy traders the other times. Personally, I'm with @BlindSquirrel, giving back profits sucks. Luckily I didn't give all my profits back but it still hurt like a bitch.

*I shelved my "Weekly PANDA Strategy" after the COVID-19 crash*
Before COVID struck "The Panda Strategy" was a consistent performer. With panic selling during the COVID-19 flash crash period, I considered the exit was too slow to react. At the time I truly felt that the exit strategy fell well short of my expectations. It can be difficult to stay the course during extended periods of drawdown, but in hindsight, that's what I should have done.

Skate.


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## Skate (2 July 2022)

*Uncertainty presents an opportunity *
I've come to realise that there was nothing wrong with the Panda Strategy, sure there was a slight tweak here & there that I have made since, but nothing too dramatic as the entry & exit conditions were & are still solid. @Willz even remarked sometimes his strategies failed to keep performing but does that mean we should shelve perfectly good strategies?

*Maybe following your system is the best course of action even when it doesn't seem like it is *
Like most, I've been hard working on a few new systems but it's a long process of evaluation to get comfortable trading a new strategy. Sure there are many of us that look for improvements as our knowledge grows but "not accepting" that sometimes bad things just happen is a fault we all tend to have. 

Skate.


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## Skate (2 July 2022)

Newt said:


> Most new traders probably also suffer from a dose of over-optimism and Dunning-Kruger effect.....




*Dunning-Kruger Effect *
The Dunning-Kruger effect that @Newt referenced is a cognitive bias in which people wrongly overestimate their knowledge or ability in a specific area, in our case, that would be "trading". This effect tends to occur because of a lack of self-awareness that prevents us from accurately assessing our own skills or abilities. I just hope, I'm not falling into this category.

*I'm better than this*
When trading gets difficult it makes us all more determined to trade sharper & smarter. At times we all get delusional thinking that "we are better than this" exhibiting the "Dunning-Kruger effect" as @Newt suggested. Over the last 12 months, I've been soul searching for the next new trading idea. There have been times when we have all tried to fix an issue with one of our strategies when one didn't exist. I certainly have.

*I've dragged the "Panda Weekly Strategy" out of hibernation *
Why? because "I've come to my senses". The Panda Strategy was a handy performer & still would be (IMHO). I'm just saying, sometimes we overreact. Thinking more about it, there was no good reason to trash this strategy that I'd spent countless hours coding because of a slight mishap two years ago. Frankly, I felt that this strategy didn't perform as expected when the going got tough. Yes, I was disappointed at the time but now realise it was an overreaction. When the "PANDA" turns back on, it will be put to work, meaning, there will be no more hibernation for this Bear.

Skate.


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## Newt (2 July 2022)

Holy C#@P Skate, I must be getting old and predictable.  Reading your first today on PANDA weekly getting a back seat really caught my eye.  Peter2 has said before what a great little strategy is seemed to be.  Didn't realise you'd shelved it in 2020.  Couldn't help but have a chuckle at 2nd post mentioning myself and DK.

Your musings today really go to the heart of the matter for a sole system trader.  When we're starting out every strategy looks like a secret sauce goldmine nobody has yet been smart enough to figure out.  Yep - good old Dunning Kruger.  As we get more experienced things getting even more tricky - we have enough knowledge earned from ourselves, or shared from others, so see shortcomings in older strategies that could be improved on.

However, Davetrade had a great post recently that with experience and hindsight he realised all too often he/we should possibly resist the temptation to layer too many clever indicators or code layers:



			https://www.aussiestockforums.com/threads/the-trading-world-according-to-dave.37026/post-1181260
		




DaveTrade said:


> This post will not be relevant to traders that trade on fundamentals alone. Traders that use fundamentals for stock selection and then use technicals to trade may have encountered some of the problems that I’ve encountered in the past.
> 
> I’m basically a technical trader, but I like to know about world and domestic issues that may affect the environment in which I’m trading. So these are the fundamental issues that help give me context to my trading, I don’t look at company fundamentals to make decisions. I will look at some basic information like the sector a company is in and the volume of shares traded.
> 
> ...




It does seem from what I've read and learned that very experienced traders "make it look easy" how they strip down their trading to the bare basics of what works for them.  We have to remember that trimmed down elegant simplicity is likely best suited for their skill and personality, not everyone else.  They spent the hard years playing with lots of things to be able to really hone down to what works for them.

So how to balance KISS and right layers of complexity to protect in a very difficult market.  No holy grail, no way to be sure....  

I  can't find it at the moment, but there was a great little cartoon some years ago comparing experienced fisherman to newbie.  Both in the boat out at see.  Newbie had 20 lines out, fisher finder, lures, fresh bait - you name it.  Empty bucket.   Experienced fisherman had one line out and half a bucket of fish  

p.s..  Nick Radge shared some work he's doing on his (MR?) day strategy on twitter recently.  Noted the market is many std deviations away from 10-20 years of past market activity and trying to work out if broken, or markets just "different" now.  Seems to be a much greater risk for very short (<3 days) trading systems over slow but steady trend trading.


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## Skate (2 July 2022)

*The PANDA Strategy versus the RSI Strategy results*
The Panda Strategy fared pretty well, all things considered. I was spooked when the COVID-19 panic selling hit this strategy & many others I was trading at the time. I was extremely disappointed at the time dropping around 19% of my open profits. I was most likely shell-shocked at the time but now realise it was an overreaction. Below is also a comparison of how the "PANDA Strategy" handled the COVID-19 flash crash compared to my "RSI Strategy" that I have reposted below. I should also repeat, that once the PANDA Strategy went to cash it was parked & hasn't been traded since.

*Resurrecting the "PANDA Strategy"*
I was wondering if I was still trading the PANDA Strategy these last two years (the last 730 days) would it be still profitable? I have decided to backtest the same periods from (30/6/2020 to 30/6/2020) as well as (1/1/2020 to 30/6/2020) inclusive to give a direct comparison between strategies.

*To my surprise*
The last two years haven't displayed consistent returns for most systematic trend traders but the "PANDA Strategy" has handled this troubling period (the last two & a half years) pretty well & to my surprise, the strategy has performed well ever since.





*The PANDA Strategy Portfolio Equity Curve*
The red circle shows the COVID-19 equity collapse that instigated parking this strategy.

*Parking the PANDAS Strategy was not my finest hour*
The red arrows on the right display the period when the Index Buy Filter switched off just after the start of the 2022 calendar year. The Equity Chart below shows the PANDA Strategy recovered nicely after the Index Buy Filter turned back on.




*Comparison results *
This is how the RSI Strategy performed during the same period. Reposting the backtest results again in this post saves searching back a few posts to compare it to the PANDA Strategy. The RSI Strategy demonstrates that it couldn't handle the COVID-19 Flash Crash.




*Summary*
Well, you live & learn.  In retrospect, there was no good reason to stop trading this strategy.

Skate.


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## Newt (3 July 2022)

Still looks like a bloody powerful long only strategy, that has enough smarts to avoid prolonged bear markets.  Another way of looking at 2020 might be suspicion if your long only strategy DIDN'T throw a >15% DD at such unusual market conditions.  Might be sign of too much "lipstick on the pig".  Don't see any lipstick out of place here.....


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## Skate (3 July 2022)

Newt said:


> "lipstick on the pig"




@Newt, that's a great expression. If we didn't trust the figures, backtests & strategy evaluation we wouldn't have the confidence to trade the system successfully. Having a half-decent strategy is only half the battle. Confidence really comes from how you react under trying conditions. The COVID-19 panic selling caused me to temporarily lose that confidence in the PANDA Strategy.  I firmly believe that the strategy is a small part of trading. In saying this, I wish to make a few observations & a few comments about the mushy stuff, stuff that I believe is not given due credit.

*How you handle yourself is more important than the markets*
Tough market conditions are based on the emotion of market participants & how you react in times like these will be a decider as to the trader you'll most likely be. Most times you will be your worst enemy, meaning it’s a lot less crucial how markets behave than how you behave.

*Emotions pull participants into the markets*
Instead of emotionally reacting to the market volatility, responding is a better option, as responding gives you the time to think. As the saying goes, "If what you learn leads to knowledge, you become a fool, but if what you learn "leads to action", you can become wealthy”.

*Uncertainty of the markets is a trader’s friend*
Thinking about it, all the information we receive comes to us through the framework of human emotions & fear generates the most news. If you can keep your head when all about are losing theirs can help you from hurting yourself by not panicking & selling out too early. As Howard Bandy said, "stocks have a tendency to revert to the mean"

*If you get the exit wrong, you're stuffed*
It's normally not the downturn that gets you, it’s getting out before the rebound that ultimately gets you in the long run. Once you get out waiting for clarity to get back is a killer. When clarity comes it’s normally too late as the boat has sailed. When prices rise, the value is gone, "in action" is another one of our worst enemies.

Skate.


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## JohnDe (3 July 2022)

Time to buy tech?​
_Focus on high-quality global technology companies benefitting from long-term industry disruption._

The Global Financial Crisis (GFC), between mid-2007 and early-2009, proved to be an exceptionally powerful macroeconomic headwind for stocks, resulting in a significant fall in sharemarkets. The past six months reflect the looming presence of a similar macroeconomic headwind. 
The drivers of this macroeconomic environment should be no secret: tightening monetary policy and supply-chain issues. The choice of investment to weather this macroeconomic environment should also be no secret: quality companies with secular uptrends (in their industry) and strong balance sheets.
Since the GFC, interest rates have been consistently and anomalously low by historical standards. Meanwhile, loose monetary policy during COVID-19 has been pushing inflation higher since early 2021. US inflation has accelerated from around 2.6% in March of that year to 8.5% in March 2022*.
The US Fed’s subsequent moves to raise interest rates should be regarded as nothing other than expected (although the extent to which rates will increase remains unknown).
Additionally, supply-chain disruptions abound with China’s patchwork process of reopening after COVID-19 lockdowns causing major, global supply chain pain.
Geopolitically, Russia’s invasion of Ukraine and subsequent trade sanctions placed on Russia have put a premium on prices for raw materials such as oil, gas, grain and fertiliser as exports from Eastern Europe are cut off.
Russia’s war and the pandemic have created some speculative bubbles, in Loftus Peak’s opinion. This is shown in the meteoric rise and fall of “lockdown darlings” – companies whose stock prices soared and dropped with the imposition and lifting of COVID-19 restrictions.

Focus on quality​In today’s macroeconomic environment, company quality is key. Companies with strong balance sheets, good cashflows and current earnings are poised to best tolerate the high interest-rate environment.
Quality in tech companies also distinguishes today's market from that of 2000 during the dot-com bubble. 
Capitalisation-weighted Price Earnings (P/E) ratios for US tech stocks in November 2021 were high, with prices cresting at 38 times greater than earnings, according to Loftus Peak analysis. But this does not go close to the cap-weighted P/E ratio of 94.2 in March 2000 for tech stocks.
Another great divide exists between November 2021’s price-to-cash flow (P/CF) ratio of 40.4 in tech stocks and the P/CF ratio of 113.1 during March 2000, Loftus Peak analysis shows.  
_[Editor’s note: price-to-cash-flow compares a company’s share price to its operating free cash flow per share, and is a common metric that analysts use to assess tech-company valuations. A low multiple can signal better value]. _
As monetary policy tightens and interest rates rise, economic growth will temper while the cost of capital for companies increases. This can be a lethal combination for smaller tech companies that have yet to establish their business models or a path to profitability, because plugging the funding gap with fresh debt and equity will become much more costly.
A similar story applies to supply-chain disruption. Quality companies will more easily pass on to consumers the cost increases caused by inflation and supply-chain disruption.
The chart below shows -17.8% underperformance of the Russell 2000 against the S&P500 over the past year. The Russell 2000 is an index of small to mid-cap US companies that generally exhibit much less financial strength than the larger companies that dominate the S&P500 in the US.



_Source: Bloomberg 
_
Where quality mitigates the effect of the inflation and supply-chain disruption, positive secular industry trends provide a path onwards and upwards. 
During the GFC, a number of key disruptive trends were working their way through the economy. Smartphones were becoming ubiquitous, the fledgling e-commerce sector was growing strongly, online advertising was taking shape and TV, movie and music streaming began to benefit from faster download speeds.
In the end, the disruptive secular trends benefiting these companies outstripped the macroeconomic headwinds. This resulted in stock outperformance.
The chart below shows performance of Apple, Alphabet (owner of Google) and Amazon against the S&P500 Index from September 2007 to now.



_Source: Bloomberg_

The secular trend in technology today is towards increased computational power - that is to say, semiconductor devices, solid-state storage and networking products. 
This need stems not only from growth in traditional end-markets like consumer electronics and enterprise information technology, but also from emerging end markets such as: cloud-enabled data centres, automobiles, 5G and edge computing [edge computing is a distributed computing architecture that bring computation and data storage closer to the data source].
In Loftus Peak’s view, semiconductor companies like Nvidia, AMD and the Taiwan Semiconductor Manufacturing Company, which form part of the Loftus Peak Global Disruption Fund (ASX: LPGD), are balance sheet and cash-flow strong, do not require additional financing and are buying back their stock. This view is of course subject to change over time and based on our own professional analysis.

Conclusion​The end result of tightening monetary policy and supply-chain issues remains uncertain. However, the promising outlook of quality global technology companies benefitting from secular trends remains a hard act to follow.
_[Editor’s note: Do not read the ideas in this story as recommendations. Do further research of your own or talk to a licensed financial adviser before acting on themes in this article. It is important to understand the features, benefits and risks of investing in global technology companies. Growth stocks, such as some technology companies, can be volatile during periods of rising interest rates. Industry disruption can have uncertain outcomes because it is hard to determine how innovation will transform existing sectors or create new ones. Currency movements are another consideration with global investing.]_


----------



## Skate (4 July 2022)

Newt said:


> Nick Radge shared some work he's doing on his (MR?) day strategy on twitter recently.







*Let's talk about when we should exit a position*
@Newt recently remarked that Nick Radge made a post on Twitter about one of his strategies. As I had a few moments I thought I would hunt that post down but I found something more interesting from Nick. Every time I mention or reference Nick's work it always creates interest.

*This is "The Chartist" post that sparked my interest*
When looking at Nick's chart of (LKE) the exit didn't seem right to me. I have a fair understanding of  Nick's "Weekend Trend Trader" Strategy even making a few posts about it. 

*Over time *
I've found Nick's WTT strategy was a little slow in exiting a position. Why? because of the generous 40% initial stop loss used in his strategy. Using a wide 40% stop loss always results in giving back some open profits & the chart below didn't. On the flip side having a generous 40% Stop Loss allows more time in a trend reducing the whipsaw effect.




*I have changed computers twice since coding my version of Nick's WTT*
There is so much written about this strategy it's not difficult to code. I've quickly set about finding the parameters once again to understand why the exit was so sharp, without giving back a chunk of open profits. 

*My mission was to arrive at the same signals*
Now, if I can do that, I'll be able to understand the stop loss used in the chart above. Moving on, I'll throw up some charts to (a) mimic the entry & exit for (LKE) that is disp[layed in the chart (b) display an alternative stop loss & (c) determine if the exit can be sharpened. The most important part of the exercise for me is to determine what parameters Nick is using in the chart above?

Skate.


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## Skate (4 July 2022)

*"Weekend Trend Trader Strategy"*
Using a google search led me to the "Think or Swim" website below. The hyperlink has a basic description of Nick's WTT strategy. There is also some "Think or Swim" code that can be easily converter to AFL. If you're inclined to purchase Nick's WTT ebook it's also referenced below.






						Weekend Trend Trader by Nick Radge Strategy for ThinkorSwim - useThinkScript Community
					

I stumbled upon this forum by searching for some of the momentum strategies by Nick Radge (thechartist.com.au), I found @Zachc 's brilliant post on the Bollinger Bands BReakout strategy which Nich wrote about in his book "Unholy Grails", I would like to thank @Zachc and the forum members...




					usethinkscript.com
				




*First some general parameters of the "Weekend Trend Trader Strategy" *
Details are in the book Weekend trend trader Ebook by Nick Radge

*This is a list of "some of the parameters" from the "Weekend Trend Trader" ebook*
1. Recommended allocation is 5% of the total account capital on each position. 
2. The strategy calculates & adjusts the trailing stops when the system is deemed to be "on or off" in relation to the (SMA) of the index.

*Criteria for trade entry*
1. Stock must be making 20 week High
2. Stock's Rate of Change must be >= 30%
3. Market Index close price must be higher than its 10 Week moving average (of the relevant index)
4. If all three conditions above are met, you may enter a trade on the Monday at market open. 

*Criteria for trade exit*
1. If the Index is above the 10-week moving average then the recommended trailing stop is 40% below the highest weekly close.
2. If the index turns negative below the 10-week moving average the trailing stop is moved to 10% below the highest weekly close.

Skate.


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## Skate (4 July 2022)

Skate said:


> *Criteria for trade exit*
> 1. If the Index is above the 10-week moving average then the recommended trailing stop is 40% below the highest weekly close.




*Now I'm confused*
I coded Nick's WTT Strategy using the parameters in the previous post & the exit didn't align. Maybe the parameters used by Nick are currently different from the ones posted on the "Think or Swim" forum back on the 21st of September 2019. 

*Admittedly all strategies tend to evolve over time *
After saying this, I was able to code my version of Nick's WTT Strategy to arrive at the same entry & exit for (LKE)









*What was the difference? *
It was simply the stop-loss percentage that had been used. 

*Originally, I used the initial stop loss of 40%*
As it was explained on the "Think or Swim" forum. I soon realised that Nick has used a 20% initial Stop loss in his Twitter post. 

*Next*
Can the exit of (LKE) be improved?

Skate.


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## Skate (4 July 2022)

*"Weekend Trend Trader Strategy"*
Before I look for improvements, I might revisit the original exit as described on the "Think or Swim" forum.

*When the WTT system is "on"*
The WTT Strategy is deemed to be on when the Index being traded is above its 10 Week moving average. When the system is "on" the initial stop loss is set at 40% below the highest weekly close.

*40% initial Stop Loss is not used in Nick's Twitter post*
Nick's WTT Strategy has used an initial stop loss of 20% below the highest weekly close (LKE)





*The Original Stop Loss for Nick's WTT Strategy*
On the "Think or Swim" forum back in 2019 the parameter quoted from Nick's "Weekend Trend Trader" eBook the initial stop loss was listed at 40% below the highest weekly close (LKE). There are arguments "for & against" using either stop loss percentage compared to the other. I believe this decision is better left for a trader to decide "depending" on his risk tolerance.




*The next question*
Can the exit be improved?

Skate.


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## qldfrog (4 July 2022)

Interesting reverse engineering


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## Skate (4 July 2022)

Skate said:


> *The next question*
> Can the exit be improved?




*The short answer is yes*
Using a "take profit stop" using a weekly (ATR) multiplier "measured bar-by-bar", is simple & effective in locking in profits when trading gets tough.

*Using a variety of stops certainly helps me in my trading*
A trailing stop is handy as a basic default stop & it should be the last line of defense. Relying solely on a "trailing stop" that's traditionally used in most strategies should rarely be hit in my opinion as it's guaranteed you will give back a level of open profits. Also using a unique "Stale Exit Stop" helps in exiting a position quickly which is also a nice feature. Using these simple three exits tends to work better than in isolation.





*Yes, a take profit stop has helped in this isolated example*
But how would each strategy compare over a 2-year or 3-year period? I'll leave that for another post.

Skate.


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## Skate (4 July 2022)

*Before I move on*
A "Trailing Stop" is nothing exotic & it's used by most traders with varying parameters with a varying degree of success. The "Take Profit Stop" is a simple (ATR) multiplier. Its primary function is to lock in profits when presented. Trading without a Take Profit Stops is setting yourself for a heartbreaking experience of "watching large open profits disappear". 

*The "Stale Stop Exit" is a little more complex *
The Stale Stop Exit does a mighty job & is a combination of 6 conditions. It's extremely difficult for me to explain how it works without revealing the complex coding involved.

*Rapid changes in price*
First off the "Stale Stop Exit Strategy" gauges when momentum is shifting, slowing, or reducing but that's not all that it does as it's time-dependent as well. There are multilayers to the "StaleStop Exit" as momentum needs to be calculated bar-by-bar in relationship to previous bars. Each position is only given enough time to confirm its worth. Positions that don't keep improving are not worthy of keeping.

Skate.


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## Skate (4 July 2022)

*Let's not look at the exit in isolation*
Posting an exit of one position (LKE) shouldn't be the judge of how an exit strategy performs.

*For the evaluation exercise*
I'll post a backtest over the last three years from 1/7/2019 to 30/6/2022 for you to judge.

*Backtest*
The backtest on the left has a 20% Stop Loss Exit -- whereas the backtest on the right has a 40% Stop Loss Exit.





*Blow me down*
I didn't expect those backtest results. Maybe someone who trades Nick's turnkey WTT Strategy might be kind enough to post the results from their system. I'm sure the Turnkey Strategy would perform better than this.



Newt said:


> "lipstick on the pig". Don't see any lipstick out of place here.....




*Let me put some lipstick on the pig *
@Newt made a remark a few posts back about how everyone thinks they have the "secret sauce". I'm the first to admit, that I fall into this category. Over the years you tend to believe your own bullsh!t when you start to see improvements with your coding.

*I'll put some "Lipstick on Nick's WTT Strategy" *
I'll be quickly trying to improve on his ideas. The WTT Strategy is a simple 20-period breakout, it's nothing fancy so it shouldn't take me long. Bloody hell I never prepared for this. If Nick's results were better I wouldn't have to do this. 

Skate.


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## peter2 (4 July 2022)

Skate said:


> *Next*
> Can the exit of (LKE) be improved?



No, absolutely, definitely not, if you stay with the weekly bars and the same trading strategy.
Sure you can use a profit target and save losing a little but then you're changing the system's trend following strategy. If you're changing the exit strategy then you're changing the system. Can the system be improved? Possibly.

Edit: Traders have to accept that $hit happens and our trade exit is triggered by a huge down bar.


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## Skate (4 July 2022)

peter2 said:


> No, absolutely, definitely not, if you stay with the weekly bars and the same trading strategy.




*Bugger, I've just finished coding the strategy & it's ready to post*
@peter2 we don't often disagree but this time I have a different opinion to the one you have expressed. All I did was code Nick's WTT Strategy more efficiently. 

*Now I have another challenge*
In the next post, I'll try to wring a little more out of the strategy, I won't have time to change much of the code so I'll add a bit more lipstick.

*Skate's Version of Nick's WTT Strategy*
First off, I want to make a disclaimer, the strategy is coded as per Nick's parameters of a 20-period breakout Strategy with a few bells & whistles thrown in for a direct comparison.





*Give me a sec*
I'll see if I can make more improvements.

Skate.


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## DaveTrade (4 July 2022)

Skate said:


> The most important part of the exercise for me is to determine what parameters Nick is using in the chart above?




The second question in the exercise is "why did he choose them?".


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## Skate (4 July 2022)

peter2 said:


> No, absolutely, definitely not, if you stay with the weekly bars and the same trading strategy.
> Sure you can use a profit target and save losing a little but then you're changing the system's trend following strategy. If you're changing the exit strategy then you're changing the system. Can the system be improved? Possibly.
> 
> Edit: Traders have to accept that $hit happens and our trade exit is triggered by a huge down bar.




*Okay, Let's compare*
I've made only a few adjustments to display how settings & parameters can make a difference. @peter2 is correct when he says that no matter how good your strategy performs it's always at the mercy of the markets.





*Well*
I'll post what work I've done. Quick extra improvements have eluded me. So I posting two extra charts. One with a 20% Stop Loss & one with a 30% Stop Loss. Both have a "Take Profit Stop" applied.

*I've managed to add a new colour *
It appears all I've done is apply a different coloured lipstick. But in saying this, the results aren't too shabby.

Skate.


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## Skate (4 July 2022)

DaveTrade said:


> The second question in the exercise is "why did he choose them?".



*
Poker Machines*
@DaveTrade when traders talk about their results they tend to do the same as those who play the "Poker Machines". They are the first to tell you about the wins but never talk about their losses. It's the same with those who push an agenda. The results displayed are normally cherry-picked to establish & add validity to the point they are trying to get across. When I post backtests I use the period each time so my results are not cherry-picked. 

*I'm sure Nick doesn't fall into this category *
From all reports, he is upfront & honest in all his dealings. What impresses me about him is this single point - "he has passed his knowledge on to others, not only with his paid subscription but the volume of free information he supplies"

*The Weekend Trend Trader*
In its original form, I'm sure with additional improvements over the last few years the WTT Strategy would produce better results than I initially achieved. Also, I should say I coded Nick's WTT Strategy using the information freely available. 

*I was thinking*
I'll make a quick post before entering my daily results only to realise the exercise turned into something that has been so time-consuming & unproductive.

 Skate.


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## Newt (4 July 2022)

peter2 said:


> No, absolutely, definitely not, if you stay with the weekly bars and the same trading strategy.
> Sure you can use a profit target and save losing a little but then you're changing the system's trend following strategy. If you're changing the exit strategy then you're changing the system. Can the system be improved? Possibly.
> 
> Edit: Traders have to accept that $hit happens and our trade exit is triggered by a huge down bar.




Peter2 said what I was thinking too have to admit.  But lipstick is so damned tempting! 

Actually Skate you've picked  a corker of an example trade (exit) with LKE for looking at different exit approaches.

Traditional WTT and long weekly trend trading would have to trade through the strong down bar, then exit next one or two bars depending on trailing or other exits. 

BUT, you could also get out after the strong bear bar (probably a significant down move against last 20 odd weeks in terms of size of bar, ATR, std dev of price bars).  Peter2 has called this "strong supply coming to the market" or  something similar if my grey brain recalls correctly.

AND, agree if you were going to be much more aggressive, then yes you could justify generating an exit on that very long strong bull bar before the smash down - again it would like be something like >3SD larger than previous price bars, or ATRs, or whatever measure you pick.  One way of doing this might be only exit on "take profit" if market momentum is waning or terrible, rather to modify all your exits globally.


----------



## Skate (4 July 2022)

Newt said:


> Actually Skate you've picked a corker of an example trade (exit) with LKE for looking at different exit approaches.




*It was Nick who picked (LKE)*
@Newt I didn't pick (LKE) for the example, I just run with it. If you read Nick's Tweet you will see he picked (LKE) in his tweet to explain why his system has an advantage when using a stop loss. 

*I've studied Nick's WTT long enough to spot that his chart, the one he posted on Twitter didn't look right*
Why? because it didn't follow the chart pattern that I have studied. I thought it would be a quick exercise to explain that something in his methodology has changed. To my surprise, it was a slight rework of the stop loss. Instead of using a 40% Stop Loss he has changed it to 20%.

*Was it intentionally done to demonstrate a point?*
Well, I don't know. The strategy may have changed. Improvements could have been found. Or it could be a case where he thought no one would notice.

*Changing the Stop Loss *
You can see from my charts you can get a better exit using a 20% Stop Loss, whereas in reality it may not be physically traded with that setting.

*I guess Nick is the only one who can explain why the Stop Loss was changed *
The change might be temporary or after further evaluation over the years, he has elected to change it permanently. Than again, the markets at the moment are not conducive of a wide 40% Stop loss




Skate.


----------



## Skate (5 July 2022)

Skate said:


> *The Weekend Trend Trader*
> In its original form, I'm sure with additional improvements over the last few years the WTT Strategy would produce better results than I initially achieved. Also, I should say I coded Nick's WTT Strategy using the information freely available.




*Hopefully, someone will post *
There are those (forum members) who would trade Nick's WTT Turnkey Strategy. I'm hoping that a backtest will be posted for a direct comparison.

*Backtest Details*
$100k portfolio with a backtest period from 1/7/2019 to 30th June 2022.

*My previous best effort*
The previous best effort of backtesting the WTT Strategy was acceptable. To be truthful, it was a struggle to improve on the previous results.

*With a little bit more time*
There were areas for improvement. I'll post my previous best effort then I'll post the backtest for my final version of Nick's WTT Strategy.





*Now my "Final Version" of Nick's WTT Strategy*
Improvements were hard to find in the final version. The next capture below this one is a side-by-side comparison between the two strategies with red highlights.





*Side-by-side comparison*
The upgraded version of Nick's WTT Strategy with a direct comparison to my previous best version. The upload unfortunately is a little smaller making it hard to read.

*There are improvements *
Not only with the Net Profit, but also increased winners. reduction in the number of trades, lower drawdown, & better Car/MDD metric. The improvements came from adding my "Ulcer Index Indicator" to the buy condition, & passing on those riskier trades.





*What is the Ulcer Index Indicator?*
The Ulcer Index Indicator attempts to estimate the “stress” of a position by estimating price retracements. The indicator is based on the notion that downward volatility is bad, but upward volatility is quite good. It increases in value as the price moves farther away from a recent high price & also falls as the price rises to new highs. I hope my explanation of how I use the "Ulcer Indicator" helps you better understand why some traders are luckier than others. Indicators play a big part in my trading & they have certainly helped me. The Ulcer Indicator's sole purpose is to control the drawdown risk (not eliminate the risk) without reducing the profit potential of a strategy.

*Metrics*
Two areas of a backtest that carry more weight for me in deciding whether to keep developing a system, a system that you could trust trading live. (1) "Maximum System Drawdown percentage" & (2) the "Ulcer Index". Both should be low. A low drawdown & low Ulcer index should go hand in glove to give you the confidence to trade the strategy. I've previously explained how I take advantage of the Ulcer Index Indicator even supplying the parameters that I elect to use.

*Finally*
# I can now put this exercise to bed.

Skate.


----------



## Willzy (5 July 2022)

Skate said:


> *Hopefully, someone will post *
> There are those (forum members) who would trade Nick's WTT Turnkey Strategy. I'm hoping that a backtest will be posted for a direct comparison.
> 
> *Backtest Details*
> ...



Hi Skate, 

I've noticed that with your backtests your only going back to 2019 to compare results, I'm curious as to how your systems compare since say 2000 to today with delisted stocks and index constituants considered.

Kind Regards
Matt


----------



## Skate (5 July 2022)

Willzy said:


> Hi Skate,
> 
> I've noticed that with your backtests your only going back to 2019 to compare results, I'm curious as to how your systems compare since say 2000 to today with delisted stocks and index constituants considered.
> 
> ...




@Willzy thank you for taking interest in my last series of articles concerning Nick's WTT TurnKey Strategy. The point of these posts was to understand & explain to others why "The Chartist" Twitter chart for (LKE) didn't look quite right to me. The exit displayed by Nick in his Twitter feed didn't display the normal tendency of a system that incorporates a wide 40% initial Stop Loss. 

*Backtesting*
Comparing a backtest from many moons ago isn't productive. It's even less productive & misleading when it comes to optimizing the parameters & settings. In my opinion, you can include too much historical data resulting in a series of false & misleading results. I've made multiple posts explaining the reasons why I prefer a shorter backtest period to a larger time frame. One of the major reasons is that the results are more reflective of changed trading conditions.

*I haven't the time to do a search *
@qldfrog articulated why he also preferred a shorter backtest period where he explained the reasons succinctly & much better than I ever managed to. In saying this there are those who have prosecuted the alternative view with vigor. I'm not stirring this conversation up again.

*In saying this*
I started trading on the 1st of July 2015, over that time I've traded like a mad man & traded more strategies than I care to remember. Coding my version of Nick's WTT Strategy is a recent endeavour but if the WTT was available back in 2015 I would have most likely traded it with all the others. Now I'm curious to see if it would have performed back then to now. For me to revisit a backtest any further back than 2015 is not on the cards,




Skate.


----------



## Skate (5 July 2022)

Willzy said:


> I'm curious as to how your systems compare




*How do they compare?*
Trading this calendar year has been a tough gig. I've done a backtest comparison of Nick's "Original WTT Strategy" from the information that is free off the web. Then I compared it to my Updated Version of the same WTT Strategy.

*Don't take it as gospel*
I'm sure someone who owns Nick's TurnKey WTT Strategy will post a more accurate backtest results to set the record straight.  The backtest below is from the 1st of January 2022 to today.

*Going from what I know*
The concept of trading a 20-period breakout system is a solid idea. I've managed to code the idea IMHO more efficiently with increases in the performance of the overall strategy.

*Net profit is not the metric you should be chasing*
We all tend to code a strategy to exhibit an increase in the Net Profit, but that's not the only metric that should be of interest. Coding is always a trade-off. When optimizing parameters it's so easy to fall into the trap of "curve fitting a system" if you don't have your wits about you.

*There are sometimes more telling metrics that need to be considered*
From the holdings period to increased winners with a reduction in the number of trades also needs to be considered. Most of all, I'm always seeking to achieve a lower drawdown that results in a better Car/MDD metric.

*The backtest comparison*
Between Nick's Original Parameters from the "Think or Swim" forum versus my "Upgraded Version" of the same strategy




*In Summary*
Neither version of the WTT strategy performed all that well but in my defense, my upgraded version of the same strategy didn't lose any money at all -- but rather snaffled a few dollars along the way.

Skate.


----------



## Sid23 (5 July 2022)

I started Nick's WTT (default parameters) beginning this year, down 2.3% (a lot better than my BBO which started 12 months ago & down 22%).

Below are 3 x backtests for WTT (default parameters as per Nick's code) of different periods that Skate used, . Even though stop loss starts at 40%, all my trades were stopped out at 10% once the index moved down (ribbon turns from green to red). As Nick has said, it is very rare to be stopped out at the initial 40% stop.  




Regards,
Sid


----------



## Sid23 (5 July 2022)

Just to confirm, the backtest reports are from Nick's TurnKey WTT Strategy and using XAO as the index filter, no modifications.

Regards,
Sid


----------



## Skate (5 July 2022)

Sid23 said:


> Even though *stop loss starts at 40%*, all my trades were stopped out at *10% once the index moved down* (ribbon turns from green to red).




@Sid23 thank you for stepping up to the mark & posting a comparison backtest for Nick's TurnKey Strategy.

*I'm now even more confused*
Sid confirmed that his "WTT TurnKey Strategy" initial stop loss starts at 40% & reverts to 10% when the index filter moves down. That was my understanding as well. So when the ribbon is "Green" the stop loss should be 40% below the highest weekly close. This means the Index filter has to be above its 10 Week moving average to be "on".

*WTT's initial Stop Loss is set at 40%, not 20%*
Just to be clear, when the WTT Strategy is "on" the initial stop loss is set at 40% below the highest weekly close.

*This raises some questions*
1. With the Index Filter being "ON" why is Nick's WTT Strategy in his tweet set at 20% & not 40%? (The Standard Setting)
2. What was the motivation to change the initial Stop from the standard setting of 40% back to 20%?
3. What was the motivation for making the tweet?



Skate said:


> those who push an agenda




*Why is Nick's (exit) initial Stop Loss at set at 20% in his Twitter post?*
So there is no confusion, Nick's chart for (LKE) trading the WTT Strategy has a buy & sell signal during the period when the index ribbon is green. Meaning when the Index Filter ribbon is green the system is "on". When the ribbon is green the initial Stop Loss should be set at 40%, not 20%.  (I've added the green verticle lines to the chart so there is no confusion that the Index filter is "ON")








*In my opinion *
Nick should have posted a chart for (LKE) using the standard initial Stop Loss setting for the WTT Strategy which BTW is set at 40% when the Index Filter is on. So why did Nick tweet using a lower initial Stop Loss of 20%?




*Summary*
Looking at both of the charts above, using the standard settings of the WTT Strategy the exit is not as good using the 40% setting. Was that the agenda (motivation) to revert the initial Stop Loss back to 20%?

# I'm sure there is a simple explanation for why the index filter was changed from 40% to 20%.

Skate.


----------



## Sid23 (5 July 2022)

Hi Skate,

The stop loss is from the highest high (not close), exits if Friday's close is below. Hopefully this now makes sense.




Regards,
Stewart


----------



## Skate (5 July 2022)

Sid23 said:


> Hi Skate,
> 
> The stop loss is from the highest high (not close), exits if Friday's close is below. Hopefully this now makes sense.
> 
> ...






*The parameter from the "Think or Swim" forum referenced the close*
@Sid23 thank you for clarifying the fact that the exit is from the high of the bar (not the close of the bar). 

*I wish to make some additional comments*
1. Nick's exit signal bar was on 8/4/2022 - the exit bar was on 11/4/2022
2. Your signal bar was on 22/4/2022 - your exit bar was on 25/4/2022
3. Nick's exit price was $2.08 whereas your exit was 2 weeks later at $2.04

*You were lucky*
With your signal bar being two weeks later it was sheer luck that the price didn't fall away. At face value, the difference between the two exit prices is not that far apart (in value). Two extra weeks in this market could have been catastrophic, to say the least. As I said "you were lucky" this time.

*Okay, now I'm standing firm*
After recoding the strategy using the (High) rather than the (Close) to exit a position I still maintain Nick has used a "20%" initial stop loss to get the results shown in the chart of (LKE) that he tweeted.

*Something to think about*
If I am wrong about this (Nick using 20% instead of the original 40% iSL) how do you explain the difference between his & your signal trading the same WTT Strategy?

*Nope*
I have to say, your explanation has not swayed me one iota, not one tiny little bit at all. I stand by every post I've made on this subject matter. (Nick's Twitter post)

*My question is still unanswered*
"Why did Nick change the strategies iSL from 40% to 20% when the index filter was definitely on?"

*Summary*
This tiny matter of Nick fiddling with the iSL to make a tweet wouldn't hold the interest of others that it does for me. 

Thanks for your input, Stewart.

Skate.


----------



## Skate (5 July 2022)

*It's nice to see *@Sean K* reading this thread*
Maybe it was the mention of Nick Radge that sparked his interest as he had his own issues when it comes to unaudited information of promotional material published by "The Chartist". Then again, the subject matter might hold his interest, who knows.

*For the effort *
Explaining something that I found at odds with Nick's tweet hasn't held the interest I was hoping for. Usually, at the first sniff of an ill word about Nick, some of his fans will dig in & defend him to the hills. I was not expecting a robust discussion but rather someone to enlighten me on why Nick would change the iSL & post a tweet about it. I was even expecting @MovingAverage to drop in & add his perspective on the matter I've raised. (it's not too late BTW)

*Don't get me wrong*
I'm not trashing Nick - rather I'm trying to understand why Nick change the original standard-setting for his WTT Strategy iSL from 40% to 20% when his own chart confirmed the index filter was definitely on?"

Skate.


----------



## Willzy (5 July 2022)

Skate said:


> @Willzy thank you for taking interest in my last series of articles concerning Nick's WTT TurnKey Strategy. The point of these posts was to understand & explain to others why "The Chartist" Twitter chart for (LKE) didn't look quite right to me. The exit displayed by Nick in his Twitter feed didn't display the normal tendency of a system that incorporates a wide 40% initial Stop Loss.
> 
> *Backtesting*
> Comparing a backtest from many moons ago isn't productive. It's even less productive & misleading when it comes to optimizing the parameters & settings. In my opinion, you can include too much historical data resulting in a series of false & misleading results. I've made multiple posts explaining the reasons why I prefer a shorter backtest period to a larger time frame. One of the major reasons is that the results are more reflective of changed trading conditions.
> ...



Thanks for the clarification


----------



## Sid23 (6 July 2022)

@Skate, I can't see how the trail stop would be measured from the close price, it is showing consistency from the high rather than the close on all bars.

I changed parameter of initial stop from 40% to 10% from the high and the trail stop seems pretty close to what Nick shows on Twitter. Nick has mentioned that he runs a tricked up version of WTT so I would expect the Turnkey with default parameters to have different signals to Nick's.

In regards to my signal being lucky that it didn't drop lower after 2 weeks, I don't see it that way. The index was still up so not as much market pressure, it did it's job.



Regards,
Stewart


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## Sir Burr (6 July 2022)

Skate said:


> Nick change the original standard-setting for his WTT Strategy iSL from 40% to 20% when his own chart confirmed the index filter was definitely on?"




This is interesting, first read it from a post by Aussie Firebug...





						Discussing financial products and services online  | ASIC
					






					asic.gov.au


----------



## Skate (6 July 2022)

Sir Burr said:


> This is interesting, first read it from a post by Aussie Firebug...
> 
> 
> 
> ...




@Sir Burr thank you for the hyperlink. I’m unsure of your intentions in doing so, but I did find a few paragraphs interesting.

Misleading or deceptive​_The law prohibits conduct that is misleading or deceptive, or likely to mislead or deceive, in relation to financial products or services. It doesn’t matter whether or not you intend to mislead people – it’s about the overall impression your post creates when it’s viewed._

Skate_._


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## DaveDaGr8 (7 July 2022)

Skate said:


> *Hopefully, someone will post *
> There are those (forum members) who would trade Nick's WTT Turnkey Strategy. I'm hoping that a backtest will be posted for a direct comparison.
> 
> Skate.




Unfortunately the NDA prevents us from posting or sharing/discussing signals generated from his turnkey code or the code itself. I have about 50 versions of WTT though and i've studied it for years as well.

Nick actually mentions that he runs WTT with "Radge tweaks" as opposed to running a vanilla turnkey. This is evident when you compare his EOY score cards with his turnkey backtests that is published on his site. His version of the WTT clearly beats the turnkey version. 

So NDA aside, i will say that your assessment of "LKE" is accurate.  On paper the vanilla strategy would NOT have sold LKE so early. The BUY seems accurate enough though.

I'm curious too now, so it would be interesting to get to the bottom of it.

Uuuurrrggghhh .... down the rabbit hole we go (tonight).


----------



## Skate (7 July 2022)

DaveDaGr8 said:


> Nick actually mentions that he runs WTT with "Radge tweaks" as opposed to running a vanilla turnkey. His version of the WTT clearly beats the turnkey version. So NDA aside, i will say that your assessment of "LKE" is accurate. On paper the vanilla strategy would NOT have sold LKE so early. The BUY seems accurate enough though.
> 
> *I'm curious too now, so it would be interesting to get to the bottom of it.*




@DaveDaGr8 thanks for dropping in to post your assessment of Nick's WTT. I don't have 50 versions of the strategy but I do have a few. There are those (like me) who try to code a strategy so that the signals align as a benchmark. 

*Benchmark Nick's WTT Strategy*
Back in August 2020 was the first time I tried to concentrate on aligning the signals from Nick's Twitter feed. For those just starting out, coding a 20-period breakout strategy is as simple as it gets.

*WTT comparison charts can be found here*





						Dump it Here
					

Thank you Skate for all your great work. Plenty to analyse and think about.




					www.aussiestockforums.com
				




*Nick's Twitter Feed*
I posted a series of charts from "The Chartist" Twitter feed at the time & inserted my version below uploaded for comparison. The signals are close. A strategy as basic as the "Weekend Trend Trader" would be a handy strategy to have. Simplicity sometimes works.

Skate.


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## Skate (7 July 2022)

DaveDaGr8 said:


> Nick actually mentions that he runs WTT with "Radge tweaks" as opposed to running a vanilla turnkey




*The WTT Strategy with a twist*
Breakout systems have been around forever & they work well as a trend-following strategy no matter the periodicity. I'm sure with a few modifications to Nick's "vanilla turnkey" strategy improvements can be found, slanting the odds of increased profitability.

*The WTT overview*
As a recap, the "Weekend Trend Trader" (WTT) is a simple 20-period breakout trend following strategy. The idea behind this strategy is solid but in "my version" of the WTT Strategy, the results are a bit lackluster & unimpressive. But in saying this the results are okay to some degree.

*With all sound strategies*
Improvements are difficult to find but with perseverance, it's not impossible to find some. I've found such improvements by adding a "Strength indicator" & an "Ulcer Index Indicator" as part of the buy condition. A "stale stop" predictor also helps in getting the exit sharper.

Skate.


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## Skate (7 July 2022)

DaveDaGr8 said:


> Unfortunately the NDA prevents us from posting or sharing/discussing signals generated from his turnkey code or the code itself




*Duly noted*
First off, I should say, there have been a word & expressions recently posted by others that I'm going to use in this post. 

(a) @DaveDaGr8 "vanilla" & 
(b) @Newt's "Lipstick on a pig". 

*Both are not to be construed in any particular way* 
They are just expressions, & I'm not using them in any derogative way. I want to make that very clear so others don't get upset.

*Compare & Contrast*
I'm guessing there would be some interest in comparing & contrasting my work to Nick's "vanilla version" of his turnkey WTT Strategy. All I'm saying, "vanilla" can be improved on, with a bit of "Lipstick on the pig".

Skate.


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## Skate (7 July 2022)

*I feel like I've been trading forever*
There are those who have traded much longer than I who could reminisce about the times trading has bitten them on the "bum" without warning. Since 2015, there have been two such periods that caught me by surprise. The last quarter of 2018 & the first quarter of 2020. Both times I was "pissed" giving back open profits.

*What I'm trying to say *
When I post charts concerning the WTT Strategy, they will be cherry-picked to make a point. Adding "Lipstick" IMHO can improve something that is considered "vanilla".

Skate.


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## Skate (7 July 2022)

*I'll let you be the judge*
As I said, the last quarter of 2018 was not kind to me & it was the first real shock when actually live trading. It was a big wake-up call. To be fair I wasn't trading the WTT Strategy, but one of my own.

*Results of Nick's Vanilla WTT Strategy*
I'm sure if the backtest results of my version of Nick's "Vanilla" WTT are off-kilter, I'm sure someone will take me to task.

*Backtest period 1/1/218 to 30/12/2018 *
This backtest period is short admittedly being the 2018 Calendar year. I've cherry-picked this period to demonstrate the last quarter of 2018 was a "bitch".





*Visual improvements*
Well, blow me down. That's not the results I was expecting from "vanilla"



Skate.


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## Skate (7 July 2022)

*I'll let you be the judge again*
As I said, in the first quarter of 2020 the COVID-19 Flash Crash wasn't kind to me, as I experienced a second major loss. It was a shock. I was extremely disappointed at the time as I believed some strategies fail me. Keeping in mind, that I had done extensive work on all my strategies after the 2018 episode to protect me from such events happening again. Believing those strategies had failed resulted in parking them.

#But I now accept as @peter2 said "sometimes $hit happens"

*Results of Nick's Vanilla WTT Strategy*
I'm sure if the backtest results of my version of Nick's "Vanilla" WTT are off-kilter, I'm sure someone will take me to task.



DaveDaGr8 said:


> Unfortunately the NDA prevents us from posting or sharing/discussing signals




*Okay, I accept this*
Bugger the "Non-Disclosure Agreement" (NDA), but there must be someone who would be kind enough to verify my results of Nick's "vanilla" WTT Strategy. I'm positive the "vanilla" version couldn't be that disappointing, so I'm hoping someone will put this matter to bed by indicating (a) or (b)

(a) The "vanilla" backtest results are "way off" or
(b) The "vanilla" backtest looks about right

*Backtest period 1/1/2020 to 30/6/2020*
This backtest period is shorter than before being only the first half of the 2020 Calendar year. I've cherry-picked this period to demonstrate why I haven't fond memories of this period. In fact, this period hurt like a "bitch" financially &  hurt others "medically".





*Visual improvements*
That's not the results I was expecting from my version of Nick's "vanilla" WTT Strategy. I hope someone corrects me by indicating (a) or (b)

(a) The "vanilla" backtest results are "way off" or
(b) The "vanilla" backtest looks about right




Skate.


----------



## DaveDaGr8 (7 July 2022)

Sid23 said:


> @Skate, I can't see how the trail stop would be measured from the close price, it is showing consistency from the high rather than the close on all bars.
> 
> I changed parameter of initial stop from 40% to 10% from the high and the trail stop seems pretty close to what Nick shows on Twitter. Nick has mentioned that he runs a tricked up version of WTT so I would expect the Turnkey with default parameters to have different signals to Nick's.
> 
> ...




Theoretically it should stop out at 29%

The High was 2.65 and the close was 1.86.  = 70.18%. 

So IF it was his iSL that triggered the sell then it was set below 29.8%.

His original strategy suggests that this is the only Stop


----------



## Skate (7 July 2022)

DaveDaGr8 said:


> So IF it was his iSL that triggered the sell then it was set below 29.8%.




@DaveDaGr8, that's the point I was trying to make.

*I now accept *
That you & @Sid23 confirmed that "Nick actually runs his own version of the WTT strategy with "Radge tweaks" as opposed to running a vanilla turnkey system". Finally, this clears the matter up.

Skate.


----------



## Skate (7 July 2022)

*I was looking for a new project*
Heck, I am mighty impressed with the backtest results so. The pig & I are seeing Dollars.

*This strategy could have legs *
It might just need a few minor adjustments to get the "Lipstick" in the correct position.

*I should check with* @Newt *where to put the lipstick*
Then again, I don't think the position would make much of a difference.

Skate.


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## investtrader (7 July 2022)

Skate said:


> *I'll let you be the judge again*
> As I said, in the first quarter of 2020 the COVID-19 Flash Crash wasn't kind to me, as I experienced a second major loss. It was a shock. I was extremely disappointed at the time as I believed some strategies fail me. Keeping in mind, that I had done extensive work on all my strategies after the 2018 episode to protect me from such events happening again. Believing those strategies had failed resulted in parking them.
> 
> #But I now accept as @peter2 said "sometimes $hit happens"
> ...



Skate,
How did you get your lipstick version to turn off so quickly? I am not that presumptuous to expect an exact answer with settings etc. Is at an market filter or extreme tightening stops etc? is all I would like to know.


----------



## Skate (7 July 2022)

investtrader said:


> Skate,
> How did you get your lipstick version to turn off so quickly? I am not that presumptuous to expect an exact answer with settings etc. Is at an market filter or extreme tightening stops etc? is all I would like to know.




@investtrader my "stale stop" predictor helps in obtaining a sharper (quicker) exit that forms part of my overall exit strategy. The secret of the "Stale Stop" exit is that all indicator measures "bar-by-bar". Doing it this way, it's easy to measure momentum or lack thereof of. Also, the "Stale Stop Exit" is time driven. Marry the stale stop with an "UlcerUp" Indicator & wham-bam-thank-you-mam the exit is as sharp as I can get it. 

*Recently, I was listening to one of Nick's podcast *
During one of Nick's podcasts, he remarked that a time-driven exit stifles the profitability of a strategy which is in disagreement with my research.  I should also say the performance increase is from having "additional buy conditions" before someone asks. 

*Qualifying signals*
Sure a 20-period breakout strategy is fine & those signals come along with great regularity but these breakouts needs to be qualified. Not all signals are of the same quality, some are stronger than others. Being choosy about which signals you take & which you elect to pass on can make or break any strategy, not only this one

*You need indicators to know what's going on*
I have made a stack of posts about my "Ulcer Index Indicator", & my "Bullish Indicator" that forms part of my version of the WTT buy condition. I should also say the strategy incorporates an Index Buy Filter. I've also made a few posts on a variety of filter that keeps you on the right side of trading.

Skate.


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## investtrader (7 July 2022)

Skate said:


> @investtrader my "stale stop" predictor helps in obtaining a sharper (quicker) exit that forms part of my overall exit strategy. The secret of the "Stale Stop" exit is that all indicator measures "bar-by-bar". Doing it this way, it's easy to measure momentum or lack thereof of. Also, the "Stale Stop Exit" is time driven. Marry the stale stop with an "UlcerUp" Indicator & wham-bam-thank-you-mam the exit is as sharp as I can get it.
> 
> *Recently, I was listening to one of Nick's podcast *
> During one of Nick's podcasts, he remarked that a time-driven exit stifles the profitability of a strategy which is in disagreement with my research.  I should also say the performance increase is from having "additional buy conditions" before someone asks.
> ...



Thanks for the explanation. I'll look up your comments on the Ulcer Index Indicator, though I think I read your posts at the time and couldn't really grasp it.
*Qualifying signals*
Absolutely agree with this 100%. There is always a line though in curve fitting and finding the middle ground to give enough reliable signals.
Thanks again.


----------



## investtrader (7 July 2022)

Following on from my question re market timing. I am sure I read about a 4% down day to exit the market ( was it Zweig?). Anyway, in March 2022 it would have saved your bacon. There is another signal recently. Ominously in Jan 2018 there was another signal before the long decline. I coded the percent weekly change as an indicator. 
I haven't tried yet to incorporate in a trading strategy but it looks interesting.


----------



## Skate (7 July 2022)

investtrader said:


> Following on from my question re market timing. I am sure I read about a 4% down day to exit the market ( was it Zweig?). Anyway, in March 2022 it would have saved your bacon. There is another signal recently. Ominously in Jan 2018 there was another signal before the long decline. I coded the percent weekly change as an indicator.
> I haven't tried yet to incorporate in a trading strategy but it looks interesting.




@investtrader I don't want to stop you from looking into any alternative exit strategy but what you have described, my research of this exit, (which I should say was done some time ago) unfortunately "I don't share the same enthusiasm" as you do.



investtrader said:


> Anyway, in March 2022 it would have saved your bacon.




*The "Lipstick on a Pig Strategy"*
I like your clever analogy of saving my "bacon" when referencing the "Lipstick on a Pig Strategy". If you study the chart below for March 2022 the protection was already in place.




*Summary*
I should also give credit to @rnr. Rob has previously made a great post on this exit, that is recommended for you to read.

*Find it here*





						Amibroker 20 percent flipper strategy
					

Hi everyone,  I have just started to learn and look into Amibroker to create a trading strategy that would suit me. I have read about the "20% flipper" strategy that sends a buy signal when a stock has bounced off a low by moving 20%.   I don't know how to write this in AFL language so I am...




					www.aussiestockforums.com
				




*A more detailed description can be found here*


			Zweig
		


Skate.


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## investtrader (7 July 2022)

Okay, thanks for the heads up. I did notice that you were out really. Here is the equity curve for that period for my best system. Caveat - I wasn't trading this then and it is a big improvement on what I have been doing for many years. I did crap over this period, but also stopped and started trading for a few years as I was tied up with other life stuff.


----------



## investtrader (7 July 2022)

So my drawdown was 17%. I am currently in a 17% drawdown now. But I figure that is the price to pay for bigger returns. 17% is actually a bit depressing if you look at the $. Nick Radges twitter posts kinda make you feel better though.
No more posts for now. Killing some time as I get over COVID and stuck at home.


----------



## Skate (7 July 2022)

investtrader said:


> Killing some time as I get over COVID and stuck at home.




@investtrader, I realise that Covid affects everyone differently & I'm sure I speak for everyone in the "Dump it here" community wishing you a speedy recovery.



investtrader said:


> Okay, thanks for the heads up. I did notice that you were out really. Here is the equity curve for that period for my best system. Caveat - I wasn't trading this then and it is a big improvement on what I have been doing for many years. I did crap over this period, but also stopped and started trading for a few years as I was tied up with other life stuff.




*Yes, drawdowns do scare us all*
I can see that your system exited during this period. If you compare both exits (mine & yours) you will notice that I've exited a little sooner. Sharpening the exit will be a worthwhile exercise. If you read enough of my posts you will notice a theme of me constantly banging on about exits, as exits are where you make the money. Entries are a dime-a-dozen.

Sjkate.


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## investtrader (7 July 2022)

Thanks for the well wishes, Skate. COVID knocked me around a bit for 4 days. Wouldn't like to be unvaxxed and get it.

Actually I give you credit for improving my exits, as your thoughts over the last few years have challenged my thinking. For this system I use a profit target, an overbought type exit to catch extreme moves, trailing stop and market type exit( not that sensitive).  No stale exit though. 
My entries are also a lot earlier  than I used to trade, so lot of smaller losses.


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## Newt (7 July 2022)

Skate said:


> *I was looking for a new project*
> Heck, I am mighty impressed with the backtest results so. The pig & I are seeing Dollars.
> 
> *This strategy could have legs *
> ...



I really should declare that "lipstick on a pig" was not my own but borrowed.  I can't find a link now, but 90% certain it was from a Better System Trader (or possibly Chat with Traders) podcast about the many dangers of over-improving basic trend trading logic.  The essence was be careful about degrees and freedom and extra variables and code added to improve.  The first one or two may well help, but iterative lipstick is likely to be very very bad.....

My Photoshop skills are appalling, but you get the idea.....


----------



## ducati916 (8 July 2022)

Not really my thing, but maybe for someone:



			Study and Backtest Of All 75 Candlesticks – Which One Actually Works And Which One Is Best? – Quantified Strategies For Traders And Investors
		


jog on
duc


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## Skate (8 July 2022)

ducati916 said:


> Not really my thing, but maybe for someone:
> 
> 
> 
> ...



Which Candlestick Patterns Actually Works And Which One Is Best?​For $1,165 AUD you can purchase the Candlestick Patterns with historical backtests and performance + Amibroker code.

*I’ll pass at this stage*
Back in 2015 I read a book called “ Candlestick Patterns”  it was around 700 pages, & a heavy read. To understand the book it took me about 3 weeks & many more weeks researching to qualifying if they could be useful in my trading . There was none that I found that gave consistent enough results to use.

Skate.


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## Skate (8 July 2022)

*I was out of the office when I made the last post*
So there is no doubt, don't waste your money on buying the "Amibroker" code that is freely available on the web. I spent 3 months of my life studying Japanese Candlesticks patterns (3 months of my life I’ll never get back BTW) only to find out that Candlesticks patterns "do repeat consistently" & work well "sometimes", whereas other times they don’t. 

*As with trading*
Japanese Candlesticks reading is not an exact science & it falls into the category of personal interpretation.

*Hidden meaning*
You tend to interpret the hidden meaning of the Candlestick in your particular way, sometimes you tend to see what you want to see & most times interpret the pattern as favourable which can lead you to take s trade with confidence.

Skate.


----------



## Skate (8 July 2022)

*Some Books are time thieves*
I wasted a lot of time reading many books over the years & each of those books takes a fair amount of time to read & much more time to understand what you have just read. 

*Reading a book & ticking it off, rarely works*
To be perfectly honest, most of the books I've read have turned out to be of little value "to me". I've wasted so much of my time reading books I wonder if it was really worth it. The two books below fall into this category as well.

*1. JAPANESE CANDLESTICK CHARTING TECHNIQUES *
A Contemporary Guide to the Ancient Investment Techniques of the Far East, by STEVE NISON

*2. PROFITABLE CANDLESTICK TRADING *
Pinpointing Market Opportunities to Maximize Profits, by Stephen Bigalow

Skate.


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## Skate (8 July 2022)

*Candlestick Pattern Training Course*
I should also say that have completed a full 2-day podcast training course with Steve Nison that turned out to be a complete waste of my time. During the course, Steve couldn't even answer some of the questions put to him. But one thing I did learn, Candlestick Patterns are not to be trusted. Why, because they "don't always work". 

*From my perspective*
Understanding "candlestick pattern setups" didn't enrich my trading life because they just didn't work for me. From my research, I should say "extensive research" & from personal experience, not one strategy was successful in making money on a "consistent" basis.

*Don't spend the money*
I could have said that in my first post, but I had to get a few things off my chest.

Skate.


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## DaveTrade (8 July 2022)

Skate said:


> I wasted a lot of time reading many books over the years & each of those books takes a fair amount of time to read & much more time to understand what you have just read.




My personal experience is that I gained more wisdom to be able to determine what works and what doesn't which has helped me going forward in my journey. But it's been a long journey.


----------



## DrBourse (8 July 2022)

Skate said:


> *Candlestick Pattern Training Course*
> I should also say that have completed a full 2-day podcast training course with Steve Nison that turned out to be a complete waste of my time. During the course, Steve couldn't even answer some of the questions put to him. But one thing I did learn, Candlestick Patterns are not to be trusted. Why, because they "don't always work".
> 
> *From my perspective*
> ...



Hi Skate,



Sorry M8 but I have to challenge you on your Candlesticks Posts.

_*I’m only posting the following with Newbies in mind – they deserve a contra view.*_



To be fair M8 I feel you are a little harsh in your condemnation of Candlesticks.

I may be wrong, but I presume from your recent posts, that you used, or referred to “Amni Broker along with extensive research” to base your comments on – Using some experts formulas from within a Software Program is fraught with danger – you are presuming that the software formulas are written by someone that you hope understands Candlesticks, and that those formulas somehow produce the correct & desired results – huge mistake IMO.

Brokers, Merchant Bankers etc do not solely rely on a Software Based Candlestick Program signals to make decisions, they might, as I do, use them as something worth investigating.

Not really sure if the Mathematicians of this world have come up with the ultimate Candlesticks Software Program yet.

Over the years I have bought various Software programs that claim to have accurate Candlestick predictions, at one stage many years ago I compared 5 such programs – every time, on every scan they would produce 5 different results, hence I don’t use any of them in my daily research, the one that I do use, purely as a lead in for *in depth Candlestick analysis*, is “Trading View”.

Anyhow, nobody should use just Candlesticks to trade with.

Candlesticks should only form a Small Part of anyone’s TA, to be more precise, IMO, Candlesticks should rate at about 4% or 5% at best of anyone’s TA Tools.

For most TA Types, Candlestick Construction, Candlestick Addition, Candlestick Patterns, Candlestick Formations, *along with* - Indicators, Waves, Fibb’s, ABC’s, *along with* Several different Charts like P&F, etc, and a dozen other TA Tools (total of about 20) should all be used to help form an individual’s TA Arsenal.



Even then TA should, at best, only form a Max 40% of a TA Traders decision making process.

I’ve helped thousands of newbies (yourself included) over many years, they have all eventually understood how to include Candlesticks in their decision making.



I feel your condemnation should be directed to Amni Broker & other Black Box Formulas within Some Software Trading Programs – Not towards Candlesticks in general.

I might also point out that most aspects of this Share Trading Profession "*Don't always work*" the way we want them to.

This post will probably attract a lot of uneducated and negative comments, which is usual for me, and it will probably get me banned.

I will return to my cave now.


----------



## qldfrog (8 July 2022)

DrBourse said:


> Hi Skate,
> 
> 
> 
> ...



I will just say that knowing mr Skate, I doubt he used a black box implementation on Amibroker..and so after programming the candle stick systems of interest , ended with the view that on his realm, in the time frequency and the period he ran his simulations, he could not find any statistically significant advantage.
I am sure @Skate can develop further.
And Dr Bourse, you are very welcome with different opinions 😊


----------



## Skate (8 July 2022)

DrBourse said:


> Sorry M8 but I have to challenge you on your Candlesticks Posts. Not really sure if the Mathematicians of this world have come up with the ultimate Candlesticks Software Program yet. Over the years I have bought various Software programs that claim to have accurate Candlestick predictions, at one stage many years ago I compared 5 such programs – every time, on every scan they would produce 5 different results, hence I don’t use any of them in my daily research. Anyhow, nobody should use just Candlesticks to trade with. Candlesticks should rate at about 4% or 5% at best of anyone’s TA Tools.




@DrBourse, your post, by the way, is a well-articulated article that's not a challenge in any way. Reading an alternative view is one of the great features of this thread. I've condensed your post (quoted above) in the hope others will take the time to read it as it confirms what I was saying.

*Candlestick Patterns didn't work for "me"*
When it comes to relying on "Candlestick Patterns" to trade systemically. I made the remark that "I was unable" to get the Candlestick Patterns to produce consistent returns after extensive research & coding. It's not hard to code Candlestick Patterns but I've found they rarely work in isolation or as an indicator.

*Technical Analysis*
I'm sure those who possess certain skills such as yourself could take advantage of Candlestick Patterns but I doubt in isolation. I'm first to admit, that I've learned a lot from the generous material you have supplied me over the years. I also recommend your educational material to everyone.

*To reiterate*
There was none that "I" found that gave consistent enough results for "me" to use.
Understanding candlestick pattern setups didn't enrich "my" trading life because they just didn't work for "me".

*For those who want to know more*
Thomas Bulkowski presents Candlestick Patterns with statistics, of the top 5 Candlestick Patterns (IHO) which you can apply to your existing trading strategy or form a trading strategy. Thomas Bulkowski in his short YouTube video explains the probability & reliability of using Candlestick Patterns in trading. After watching his video go to his site (hyperlink below) & it will give you another perspective on Candlestick patterns, which I highly recommend.



*Chart Patterns*
Thomas Bulkowski is one of the world's leading authorities on chart patterns. He is a successful investor and trader with almost forty years of market experience. This means he knows his stuff.






						ThePatternSite.com
					

ThePatternSite.com is internationally known author and trader Thomas Bulkowski's FREE website for research on chart patterns, candlesticks, and much more!



					thepatternsite.com
				






qldfrog said:


> Skate, after programming the candle stick systems ended with the view that he could not find any statistically significant advantage.




*Summary - from my perspective*
@qldfrog, yes you are correct when you said "I couldn't find any statistically significant advantage" & it wasn't for the lack of trying. To reiterate, from "my" extensive research & "personal experience", not one strategy was successful in making money on a consistent basis. But in saying this, I'm sure there are some who swear by "Candlestick Patterns" & their perceived value, but it's not for "me".

Skate.


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## investtrader (8 July 2022)

DrBourse posted -

_*I’m only posting the following with Newbies in mind – they deserve a contra view.*_

For most TA Types, Candlestick Construction, Candlestick Addition, Candlestick Patterns, Candlestick Formations, *along with* - Indicators, Waves, Fibb’s, ABC’s, *along with* Several different Charts like P&F, etc, and a dozen other TA Tools (total of about 20) should all be used to help form an individual’s TA Arsenal.

I think this is completely bad advice for newbies, or anyone for that matter. The great traders don't do all of this stuff, IMHO. The actual price action is all you need, with a couple of basic indicators. Look at Guppy's work, he is the real deal. Or Minervini. No 'magical' Elliott waves or Fibonacci's needed.


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## DaveTrade (8 July 2022)

investtrader said:


> DrBourse posted -
> 
> _*I’m only posting the following with Newbies in mind – they deserve a contra view.*_
> 
> ...




I agree that if you use candlesticks then you need a couple of indicators with them, and my interpretation of what DrBourse said was exactly the same thing. His list of choices was not well chosen IMO, eg no way that P&P goes with candlesticks.


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## Skate (9 July 2022)

peter2 said:


> These pull-backs in price form after break-outs and whenever bullish sentiment temporarily pauses inducing weaker holders and profit takers to sell in order to grab their short term gains.




*Trading pull-backs*
I'm not inferring that @peter2 trades the "Three Line Strike" candlestick pattern but rather I'll try & blur the lines between his method & the number one method using candlestick patterns. The number one candlestick pattern from the video was the "Three Line Strike" Candlestick Pattern.

*The colour of the candlestick or price bar is either green or red*
I personally don't chart with candlesticks as I prefer the look of a bar chart. Also, it would be prudent for me to mention that the colours of the bars can vary to the relationship of the previous bar or alternatively, whether the opening price is lower than the closing or vice versa. I'll later post a bar chart to demonstrate that trading pull-backs after a temporary pause can be a beneficial way of trading.

*But first a little about Technical Analysis*
At times it can be confusing when technical analysis (TA) & fundamental analysis (FA) is discussed. They both try to achieve that same result even though the path is different. But as usual, I'll be concentrating on the virtues (TA) as trading this way depends on finding mathematical repeatable patterns.

*"Why are  you making a series of posts on a pattern you have found no value in?"*
It's a reasonable question. Well, the simple answer is that there may be some who are interested & as I've spent so much time evaluating candlestick patterns & it allows me to post some of the findings of my research.

Skate.


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## Skate (9 July 2022)

*The Three Line Strike Candlestick Pattern *
For those who watched the YouTube video, I wanted to make a follow-up post about the best Candlestick pattern in the YouTube video which was the "Three Line Strike" candlestick pattern. In the video, the conclusion was (in their opinion) that the continuation three-line strike candlestick pattern was the most powerful of all the patterns. 

*In the video, it was the "Three Line Strike" Candlestick Pattern*
This particular they referenced is known as a "Bearish Three Line Strike Candlestick Pattern". They fail to mention that there is also a "Bullish Three Line Strike Candlestick Pattern" that gives better results as far as my research confirms. But, (IMHO), they both return dismal returns.

*The Three Line Strike Candlestick Pattern *
Both the "Bullish & Bearish Three Line Strike" patterns are both continuation patterns so let me get that straight out there, so there is no confusion. The bullish formation is composed of a big green candle, 3 up candles, & one down candle erasing the advance made by the prior 3 candles. The bearish formation is composed of a big red candle, 3 down candles, and one up candle erasing the decrease made by the prior 3 candles.

Skate.


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## Skate (9 July 2022)

*What is the Three Line Strike candlestick pattern?*
A Three Line Strike candlestick pattern is a continuation of a "group" of candlesticks (price bars) that has three bars in the direction of a trend, followed by a final candle that pulls back to the start point. I've tried my darnedest to take advantage of the three-line strike pattern some years ago & I won't be revisiting that research. 

*Sometimes it is not fair*
In my minds-eyes & logically thinking about it, candlestick patterns should work. They worked for the Japanese traders hundreds of years ago & we have come a long way since. On paper, there is an opportunity to buy within a current trend after a slight pullback that does make money but using candlestick patterns to achieve the same outcome doesn't make money for me. Well, to some degree it does, but in isolation, I've never found a way to profit from any candlestick patterns ever. There are hundreds of such patterns & frankly, my enthusiasm ran out after trying about 30 of them. 

*I did try the Three Line Strike candlestick pattern if any are wondering*
There are many patterns that can determine a trend & candlesticks patterns are another such methods. Candlesticks patterns can even assist traders as @DrBourse pointed out in helping to determine the direction of a trend that's likely to form. I'm first to admit candlestick patterns do help in determining the likely direction of the next candle. But finding long-term patterns that are tradable & likely to persist going forward, nah... I can't go that far.

Skate


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## Skate (9 July 2022)

*Continuation Patterns*
We have all seen it. Prices trend in an upward direction, only to pause before pushing higher. This is seen as a continuation pattern & is different from a reversal pattern. Forget the pattern in the video, as I want to concentrate on the Bullish Three-Line Strike candle pattern. I'll give a short summary of both patterns & then post a chart of both patterns together on the same chart. 

*Three Line Strike Pattern*
For a bit of background, the "three line strike" candlestick pattern can be a bullish or bearish pattern. The construction denotes whether it is a pullback or a continuation pattern. They are basically the same patterns of formation but in different directions from each other.

*Bullish Three Line Strike Pattern*
The first three bars must be "bullish" but the last bar in the group must be bearish. A bullish "three line strike" candlestick pattern is made up of four candles, the first three are strong bullish candles that progressively end higher followed by a final bearish candle. The fourth bar in the pattern disrupts the sentiment allowing positive sentiment to come back for those who believe the upward trend in the price is still intact.

*Bearish Three Line Strike Pattern*
The bearish "three line strike" candlestick pattern is basically the same pattern but in the reverse direction to a bullish one. The first three bars must be "bearish" & the last bar in the group must be bearish but the close is higher than the close for each of the prior 3-bars.

Skate.


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## Skate (9 July 2022)

*The final straw that broke the "camel's back" *
Well, that was when I realised neither the bullish nor bearish candlestick patterns worked in isolation. My next line of thinking is, what if I combine the best of both taking advantage of either direction. Well, that didn't go to plan. I coded the idea & using both in unison it was still a disappointment but useful to make a chart for educational purposes.

*I've cherry-picked this chart*
The chart below explains graphically how both the (a) Bullish Three Line Strike Pattern & (b) the Bearish Three Line Strike Pattern looks on the same chart. Both signals, no matter the methodology made money. It's taken a lot of words to explain how both "Three Line Strike" patterns work, I hope the colour coding explains their uniqueness.





*In summary*
The are several criteria that make up the three-line strike pattern. This pattern is as rare as hen's teeth & I would die of old age waiting for them to appear as their occurrence is a rarity. I believe this series of posts contains no value "whatsoever" in explaining why I've found no joy in this particular pattern & apologise to those who have taken the time & effort to read this far.

Skate.


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## DaveTrade (9 July 2022)

Skate said:


> *The Three Line Strike Candlestick Pattern *
> For those who watched the YouTube video, I wanted to make a follow-up post about the best Candlestick pattern in the YouTube video which was the "Three Line Strike" candlestick pattern. In the video, the conclusion was (in their opinion) that the continuation three-line strike candlestick pattern was the most powerful of all the patterns.
> 
> *In the video, it was the "Three Line Strike" Candlestick Pattern*
> ...




@Skate I'm sorry to say that somehow you have confused yourself when looking at this, the 'Three Line Strike' pattern is not a continuation pattern it's a reversal pattern. I have to go to the shops with my wife now but we can talk about it when I get back if you want too. I think when you view the video again that you will see it yourself.


----------



## frugal.rock (9 July 2022)

DaveTrade said:


> have to go to the shops with my wife now



Please accept my commiserations.

Thought I would dump this here.
Failing not following the general market for a suitable system timing entry/ exit, some might consider the historic data in this chart as a guide for market timing, either way.
A little old school perhaps?


----------



## Skate (9 July 2022)

Skate said:


> *Continuation Patterns*
> We have all seen it. Prices trend in an upward direction, only to pause before pushing higher. This is seen as a continuation pattern & is different from a reversal pattern. Forget the pattern in the video, as I want to concentrate on the Bullish Three-Line Strike candle pattern. I'll give a short summary of both patterns & then post a chart of both patterns together on the same chart.





DaveTrade said:


> @Skate I'm sorry to say that somehow you have confused yourself when looking at this, the 'Three Line Strike' pattern is not a continuation pattern it's a reversal pattern. I have to go to the shops with my wife now but we can talk about it when I get back if you want too. I think when you view the video again that you will see it yourself.




*There are times when my terminology can be confusing*
@DaveTrade I must admit I don't always get the terminology correct as per the textbook as most of the time I'm shooting from the hip using the terminology that makes sense to me. If it makes sense to me I'm thinking it will make sense to others. In no way do I try to mislead, or confuse others, it's not my intention. If you read enough of my posts I try really hard to speak in terms others would understand. 

*Continuation patterns & reversal patterns*
What I see as one pattern others could view as another. My explanation might be too simplistic but a "continuation pattern" to "me" is a pattern that continues the existing trend whereas "reversal patterns" change the existing trend. As their name suggests a "continuation pattern" is a temporary rest before it continues on its merry way. Reversal patterns, on the other hand, usually reverse "changing the direction" of the existing trend for a "few bars to many" before it decides to reverse & carry on.

*If I may*
To quote Thomas Bulkowski where he refers to the Bearish Three-Line Strike Candle Pattern as a "bearish continuation" pattern, his testing shows that it acts as a bullish reversal pattern. Admittedly, it's even confusing for me, I had to read that passage a few times to get my head around it

*The quote is found here*





						Bearish Three-Line Strike
					

Article describes the bearish three-line strike candlestick pattern, including performance statistics and rankings. Written by internationally known author and trader Thomas Bulkowski.



					thepatternsite.com
				




*Let me summarise*
To my understanding, a continuation pattern is normally found in the middle of a trend, when the price takes a small pause building up the strength for the next leg up. Whereas reversal patterns tend to take a lot longer before the next leg up. I'm sure if my interpretation is wildly off the mark I am sure you or another will correct the situation with a more concise description.






*What is a Three Line Strike Pattern?*
_"You can use candlestick patterns to help you determine a trend, that is likely to persist. After prices trend in a specific direction, prices will pause before refreshing higher. This is considered a continuation pattern and differs from a pattern that would signal a reversal.  

# The three-line strike pattern is considered a continuation pattern"._

*The above quote can be found here*


			https://www.warriortrading.com/three-line-strike/
		


Skate.


----------



## DaveTrade (9 July 2022)




----------



## rnr (9 July 2022)

Skate said:


> *There are times when my terminology can be confusing*
> @DaveTrade I must admit I don't always get the terminology correct as per the textbook as most of the time I'm shooting from the hip using the terminology that makes sense to me. If it makes sense to me I'm thinking it will make sense to others. In no way do I try to mislead, or confuse others, it's not my intention. If you read enough of my posts I try really hard to speak in terms others would understand.
> 
> *Continuation patterns & reversal patterns*
> ...



Hi @Skate,

The problem is that "warrior trading" describes one of the patterns and then uses the opposite pattern as an example.

Cheers Rob


----------



## Skate (9 July 2022)

DaveTrade said:


> View attachment 143905




*I’m unsure*
Was my explanation & reasoning for the terminology that I used acceptable?

@DaveTrade i also referenced Thomas (from the same website) where he was correcting his terminology of continuation verses reversal. 

*To quote Thomas Bulkowski *
The Bearish Three-Line Strike Candle Pattern as a "bearish continuation" pattern, but testing shows that it acts as a “bullish reversal pattern”.

*Maybe it would be helpful* 
If you could explain my error so others aren’t confused.

Skate.


----------



## Skate (9 July 2022)

rnr said:


> Hi @Skate,
> 
> The problem is that "warrior trading" describes one of the patterns and then uses the opposite pattern as an example.
> 
> Cheers Rob




Hi Rob

I referenced “Warrior Trading” because they had used similar terminology as I did in my series of posts today. I have tried to explain what I believe to be the terminology as I understand it. In my defence I was going from memory.

Skate.


----------



## DaveTrade (9 July 2022)

Skate said:


> *I’m unsure*
> Was my explanation & reasoning for the terminology that I used acceptable?
> 
> @DaveTrade i also referenced Thomas (from the same website) where he was correcting his terminology of continuation verses reversal.
> ...




I'm just going on the picture showing how it works and the statement that it was 84% successful as a reversal pattern, but the way it is talked about in the text is really confusing.


----------



## frugal.rock (9 July 2022)

*The market's  behave like horses.*

The "Retired Crazy Horse Strategy"
treats the markets like a horse... Sometimes that horse don't wanna play ball, sometimes it lets you off easy and other times it bucks you off, bronco style.
A trot is easier to control than a gallop...

To watch the link, put a *h* in front of the ttps://

ttps://youtu.be/L3dC3Z8pf5U

Not so tired but retired nonetheless...


----------



## Skate (11 July 2022)

*Trading is frustrating (musings while waiting for the markets to open)*
Until a few weeks ago, I never had the desire to read Twitter feeds as "quick quips" didn't really make much sense to me & they still don't. I also don't get the game of Golf. Hit a ball, look for it & hit it again. Even on TV, why do they have to show a replay (in slow motion BTW) of a ball dribbling into a hole, nope, I just don't get it. It's also been said, Golf is a game that you can never conquer. So, there are similarities between Golf & Trading.

*Losers quit when they fail. Winners fail until they succeed*
Always striving to do better is personally frustrating. My progress over the years is moving at a snail's pace. I'm a believer, that good is not good enough when better is expected. Also, being a perfectionist is unhelpful in this game of trading. I've found perseverance to be the only key to success.

Di on Twitter: "Losers quit when they fail. Winners fail until they succeed. New week, New chapter, happy Monday to all😘☕ #ASX Edges UP🍀 https://t.co/XnUuG6FLmO" / Twitter

Skate.


----------



## qldfrog (11 July 2022)

Skate said:


> Also, being a perfectionist is unhelpful in this game of trading



so true, and really going against what i initially thought;
Stick to a plan , a system as simple as you can do..the more layers not the better


----------



## Skate (11 July 2022)

qldfrog said:


> so true, and really going against what i initially thought;
> Stick to a plan , a system as simple as you can do..*the more layers not the better*




*I'm planning to trade "The Lipstick Strategy"*
A 20-week breakout system is such a simple idea but lends itself to many false signals. Qualifying those signals made great strides in having this strategy perform. After deciding to invest a few bucks, I've set aside time to improve, & enhance the concept even more. @Newt recently remarked, "the market finds that one little vulnerability, you think won't happen" that got me thinking.

*As "The Lipstick Strategy" is a direct spinoff of "The Chartist" Weekend Trend Trader (WTT) *
I've made it a mission to find those vulnerabilities first hand & put in place protections against them. The basic idea is sound but with every strategy, it can be improved to some degree. I'm sure we all have a momentum filter in place that measures short-term momentum. The short-term moment plays a large part in my "StaleStop" exit as the first sniff of a change in momentum it's a sign for me to exit.

*Long-term Momentum*
The "Lipstick on a Pig" strategy a (WTT) spinoff lacks a long-term momentum indicator to go hand in glove with a short-term momentum indicator. If both indicate momentum the signals are deemed to be stronger. Using this additional long-term momentum indicator & playing it off the short-term momentum indicator has allowed for improvements.

Skate.


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## Skate (11 July 2022)

*I've found perseverance to be the only key to success*
When my money is going to be on the line, I prefer the odds to be stacked in my favour. The last 6-months haven't been kind & it's the perfect example to make "displaying the results" using a long-term momentum indicator.

*"Skate's Lipstick on a Pig Momentum Strategy"*
Backtest period is very short (only 6 months) from "1st January to today" as an example. Unfortunately, there is no way around the issue of "giving back" a chunk of open profits trading this style of system.





*Restraining from trading when there is no positive momentum*
Extended periods of doing nothing, just might be the secret to the success of trading this strategy.





Skate.


----------



## Joe90 (11 July 2022)

Skate said:


> *Trading is frustrating (musings while waiting for the markets to open)*
> Until a few weeks ago, I never had the desire to read Twitter feeds as "quick quips" didn't really make much sense to me & they still don't. I also don't get the game of Golf. Hit a ball, look for it & hit it again. Even on TV, why do they have to show a replay (in slow motion BTW) of a ball dribbling into a hole, nope, I just don't get it. It's also been said, Golf is a game that you can never conquer. So, there are similarities between Golf & Trading.
> 
> *Losers quit when they fail. Winners fail until they succeed*
> Always striving to do better is personally frustrating. My progress over the years is moving at a snail's pace. I'm a believer, that good is not good enough when better is expected. Also, being a perfectionist is unhelpful in this game of trading. I've found perseverance to be the only key to success.



There is golf (the game that most weekend hackers play), then there is this other game...


----------



## Sir Burr (13 July 2022)

soren_lorensen said:


> nick doesn't give much away



....but likes to show his cherries


----------



## Skate (13 July 2022)

soren_lorensen said:


> @Skate FFX this time instead of LKE - nick doesn't give much away though
> 
> FFF+
> 
> ...







*Sorry* @soren_lorensen *but I have to call bullsh!t on this one*
For a start that's a "Daily Chart" so it's not Nick's WTT with a Radge tweak. Mate, I can tell you exactly what he has done to his code to achieve that results, it's not rocket science, boarding on being sloppy.

*I'm shouting !!!*
Nick has posted that chart with a motive.

*Proof *
This is my version of not Nick's (WTT) Strategy but a mongrelised Daily version (DTT) to replicate Nick's buy & sell signals. I believe Nick should be called out. I'm replying to your post so others can understand how he is manipulating the charts he's posting in his Twitter Feed. 

*Why is Nick doing it?*
Well, that's for him to explain. It's not the first time he has posted misleading information & charts. @Sean K called him out years ago for posting unaudited results & to be fair Nick is registered & in the industry.




Skate.


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## Skate (14 July 2022)

Sir Burr said:


> ....but likes to show his cherries







*Yes* @Sir Burr*, I have to agree*
Nick blatantly misled " 6Fanboi" when he replied that the signals were from his WTT, which stands for (Weekend Trend Trader) BTW & not (DTT) which stands for (Daily Trend Trader). Nick also said it was the (WTT) with a Radge twist. Nah, that's "Bullsh!t".

*I may be wrong*
But I don't think so. The chart Nick has posted is a mongrelised version of his WTT but trading on a daily periodicity. Just to be clear & their is no confusion, the chart Nick posted in his Twitter feed is a "DAILY CHART". You can also tell by his Index Filter Ribbon colour.

*ASIC is cracking down on those who mislead or deceive*





						Discussing financial products and services online  | ASIC
					






					asic.gov.au
				




Misleading or deceptive (from the hyperlink above)​_The law prohibits conduct that is misleading or deceptive, or likely to mislead or deceive, in relation to financial products or services. It doesn’t matter whether or not you intend to mislead people – it’s about the overall impression your post creates when it’s viewed._

Skate.


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## Skate (14 July 2022)

*My two biggest peeves*
1. Getting unsolicited emails.
2. Reading blatant sales information that is designed to deceive.

*Before anyone challenges me, it's not about Nick or any ASF member*
The comments below are not directed at anyone, in particular, they are general in nature. I'm making this post as a follow-up warning so others understand that not everything they read is to be relied upon to make a financial decision to purchase a product or service that they may later regret.

*Misleading or deceptive conduct *
Most of us would understand the term “misleading or deceptive” to some degree. Whether you use the phrase "misleading or deceptive" or "likely to mislead or deceive", is just splitting hairs. Those phrases will be used by ASIC to determine if follow-up action is required. Basically, it means ASIC wants those within the industry to clean up their act as well as financial influences

*It's clear to me*
There are some who try to influence others to buy financial products by posting questionable material. I'm just saying, those who post financial material have an obligation to ensure whatever claims they make are able to be substantiated. Don't forget it also has to be "true & accurate" information as well.

*Failing to provide correct information can also be misleading & deceptive *
Failing to provide correct information or simply answer a question "incorrectly" can be found to be "misleading or deceptive".

*Misrepresentation can influence purchasing decisions of products or services*
Incomplete or misleading information also contravenes ASIC guidelines as the information being posted can be mistaken for an accurate & true representation of financial services or products being offered for sale. It's also “misleading or deceptive” if you don't take the steps to correct the mistaken belief others may form while reading the material.

*In summary*
1. Apply common sense when buying financial products or services.
2. Ensure any claims are properly substantiated.
3. Never remain silent if there is any indication that the claim smells of "Bullsh!t".
4. Don’t be afraid to challenge a provider if you believe the information they are distributing is misleading or deceptive.
5. If you are concerned that posts are misleading or deceptive "report them".

Skate.


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## Skate (14 July 2022)

soren_lorensen said:


> @Skate FFX this time instead of LKE - nick doesn't give much away though
> 
> FFF+
> 
> ...




*I forgot to mention*
I usually respond quickly if posts reference me by name or make a reference to one of my posts.

*A slow response*
In my defense, I only read @soren_lorensen post after the "State of Origin", thus the delay in correcting the error "as I saw it" in respect of a repost of Nick's Twitter feed. I have put my case "why" I called the "repost" bullsh!t.

Skate.


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## qldfrog (14 July 2022)

Skate said:


> *I forgot to mention*
> I usually respond quickly if posts reference me by name or make a reference to one of my posts.
> 
> *A slow response*
> ...



It was getting late Mr Skate
As i read it @soren_lorensen who i do not really know,  just seem to repost this data to give you one more ticker  to compare?
So i am surprisingly kinder on that Soren'spost
Do not shot the messenger? 
But yes,if this can put ASF in trouble, let's remove it
Well spotted from you to detect the misleading statement from Nick Radge, and yes a bit saddened as i respect Nick as the author of the unholy grail book .
Note: i have no $ interest /feud with fellow local Nick Radge, nor am a customer of his online products.just bought his book.
His systems got hit severely recently by the market. He is not alone, i have been smashed..and he might maybe be in a PR overdrive. .overreached..
Human even if not excusable


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## Skate (14 July 2022)

Skate said:


> @soren_lorensen*, I'm calling for your post to be removed*
> @Joe Blow, I request @soren_lorensen repost of "The Chartist" Twitter feed be removed




*Resolution*
I have just been informed that the post in question has been removed.




Skate.


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## Skate (14 July 2022)

*For Comparison*
We all know capturing a move is hard, & getting off promptly when momentum changes is even harder.

*For this example*
I'm posting 3 Daily charts for (ASX:FFX) so you can be the judge. In saying this, the "Ducati Blue Bar Strategy" is uncanny in picking such moves.

*#1. WTT with Radge Tweaks *
In @ $0.374 - Out @ $0.514





*#2. Skate's DDT using the same Radge's Tweaks *
In @ $0.374 - Out @ $0.514





*#3. "The Ducati Blue Bar Strategy*
In @ $0.31 - Out @ $0.514




*Trading is all about profitability*
Let me walk you through two examples - the first two charts in order (#1. WTT with Radge Tweaks & #2. Skate's DDT using the same Radge's Tweaks) versus "The Ducati Blue Bar Strategy" - shown in Chart #3.

*Trade Profit*
1. For a $10,000 investment with (Charts #1 & # Chart 2) - the opening price would have purchased 26,737 shares @ $0.374 & selling those shares @ $0.514 - this would have netted a profit of *$13,742*
2. For a $10,000 investment with (Chart #3) - the opening price would have purchased 32,258 shares @ $ $0.31 & selling those shares @ $0.514 - this would have netted a profit of *$16,500

Summary*
I'm calling "The Ducati Blue Bar Strategy" the winner.

Skate.


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## peter2 (14 July 2022)

_*Note*_: *FFX* demerged a significant part of their business and floated *LLL* (Leo Lithium). Record date 6th June 2022.

The price bars do represent the historical price action but the values do not.
The prices shown in all the *FFX* charts (prior to 6 June 2022) in the prior posts have been adjusted DOWN as a result of this demerger. 
The percentage increases shown in the example trades are in fact misleading as the price of *FFX* at the time was much higher.


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## soren_lorensen (14 July 2022)

hey guys, just posted for comment on Nicks tweet for info/further comment etc - I though you guys would be interested.. 

if that post has broken any rules then i'm happy for it to be removed as necessary..

i read the posts here on nick's LKE post on twitter and thread here back a bit and was providing a screencap for a new comparison on FFX

my trading twitter handle is @6fanboi, that is me; i wanted 61.8fanboi but for some reason twitter doesn't like the period or lenght

I asked nick as  i follow him on twitter and very occassionaly ask him a question or comment on his posts there, in fact when i was reading the posts in here a few pages back, i was thinking why doesn't skate just tweet to Nick to ask him - rather that waste all that time reverse engineering - but some people love that, I guess skate is one of those people.

My question to N.Radge was in connection to whether his uses 20% stop based on highest high or close of weekly bar and my comment - 'he doesn't give much away' meant he only replied in general (which is fair enough) he calls his radge tweak.  Highest high was mentioned by one of the members in here, but i dont remember if that a part of the WTT book method?

fyi i don't sub the chartist or use any of their systems, though i have bought the wtt 20 or 30page ebook and created my own code.

incidentally nick posted today about LKE (same ride em up not down etc) as there's been some activity on that stock with JCAP short report and response by LKE this morning, LKE has been smashed recently with the director moving on and selling shares.

anyway apologies and carry on, look forward to future discussions.

i'm not on here often so sorry if delayed.


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## entropy (15 July 2022)

Thanks for the interesting discussion Skate!

As a newby I'm always appreciative of the time and effort put in contributors like you and others in this thread.

Apologies in advance if my ramble strays a bit from your central points.

I knew nothing of Nick Radge so Google led me to his site and then to an hour and a half Q&A podcast in a series "Chat With Traders" 178. The Blueprint: How To Create A Simple Trend Following System.

Nick came across as a pleasant personality and I took a few notes as he discussed his methods.
He thought share prices were "a fractal" and disclosed that he was a long-only equity trend follower whose goal was to beat the buy/hold strategy using an automated systematic approach.

His method he said did not look at any charts.

He said he used a "Regime Filter" so that he avoids trading if a broad index is falling.
He trades the smaller cap industrial stocks only: those stocks outside the top 100 list but within the top 500 list.
To be a trade the stock must meet some minimum volume criteria over the preceding 50 days.

Some discussion around "using linear numbers" as inputs was confusing for me.

A jarring note for me was when the interviewer asked him about how he used in-sample data and out-of-sample data
in establishing his model validity.
Nick's reply was that "was optimization" and he did not do this.
I found this a big worry.
Anyone doing basic statistics and machine learning knows the vital need to use hold out samples to check your model.
Industry standard in machine learning is two holdout samples one for model development (validation sample) and the other a final sample (test sample) that is completely quarantined from the rest of the data.

Harking back to my forensic days I like to poke about so the disclosures on his site:

THE CHARTIST PTY LTD, PO BOX 721 NOOSA HEADS QLD 4567

THE CHARTIST PTY LTD IS A CORPORATE AUTHORISED REPRESENTATIVE (CAR NO. 1282007) OF SHARTRU WEALTH MANAGEMENT PTY LTD ABN 46 158 536 871, AFSL 422409.

led me to

Shartru Wealth Management Pty Ltd (SWM) is licenced by ASIC with Australian Financial Services Licence Number 422 409.
If you are not inclined to operate your own licence, then SWM can authorise you to operate under its licence.

Dun & Bradstreet shows:
Shartru Wealth Management Pty Ltd
Address: 14 MACQUARIE STREET BELMONT, NEW SOUTH WALES, 2280 Australia

so it appears Nick does not have his own Australian Financial Services Licence but operates under SWM.


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## elbee (15 July 2022)

Skate said:


> *Trade Profit*
> 1. For a $10,000 investment with (Charts #1 & # Chart 2) - the opening price would have purchased 26,737 shares @ $0.374 & selling those shares @ $0.514 - this would have netted a profit of *$13,742*
> 2. For a $10,000 investment with (Chart #3) - the opening price would have purchased 32,258 shares @ $ $0.31 & selling those shares @ $0.514 - this would have netted a profit of *$16,500*



You should check your maths or your understanding of "profit".
Your post is somewhat misleading.


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## investtrader (15 July 2022)

@entropy wrote -

"A jarring note for me was when the interviewer asked him about how he used in-sample data and out-of-sample data
in establishing his model validity.
Nick's reply was that "was optimization" and he did not do this.
I found this a big worry.
Anyone doing basic statistics and machine learning knows the vital need to use hold out samples to check your model."

I think you are barking up the wrong tree here. You are implying Nick has no idea what he is doing in regards to system testing which is just misleading. I hung out on the old Reefcap forum many years ago and there is no way you are interpreting what he said correctly. I am sure @tech/a will back me up on this also.

I am concerned with Nicks tweets as @Skate has been discussing. But I don't like to see someone 'piling' on by writing clearly incorrect statements. I don't subscribe and I haven't bought any of his systems.

Being an authorised rep for another firm's AFSL is a standard practice in this industry.


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## Skate (15 July 2022)

elbee said:


> You should check your maths or your understanding of "profit".
> Your post is somewhat misleading.




@elbee thank you for bringing this to my attention, subtracting the initial investment would have been handy. I've remarked previously that I have a failing of not proofreading. I know if I get most of the posts correct, members will surely work out the rest.

*When I get it wrong*
There are plenty lining up to point out my shortcomings. I should proofread my posts but at my age, I don't have the time. As Sweet Brown famously said _"ain't nobody got time for that"_

*Why don't I proofread*
It's much better expressed by Ms Sweet Brown. I'm absolutely amazed how she made a ton of money from this one interview?


*The original interview*




*The mixed version of the interview*



Skate.


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## investtrader (15 July 2022)

@Skate - that gives me the perfect opportunity to post barking dog man and succulent chinese meal guy !


----------



## entropy (15 July 2022)

investtrader said:


> @entropy wrote -
> 
> "A jarring note for me was when the interviewer asked him about how he used in-sample data and out-of-sample data
> in establishing his model validity.
> ...



Thank you for your response investtrader.

I wrote:
"I knew nothing of Nick Radge so Google led me to his site and then to an hour and a half Q&A podcast in a series "Chat With Traders" 178. The Blueprint: How To Create A Simple Trend Following System.
Nick came across as a pleasant personality and I took a few notes as he discussed his methods."

Hardly "piling on". My comments about the podcast were mostly quite positive apart from the one you are upset by!
"Piling on" is a complete exaggeration.
And I took several pages of notes as well as he had some useful things to say.

I gave the location of the interview for anyone else to check the accuracy of my reporting and I listened to it more than once. 
Did you actually listen to the podcast?

I stand by my reporting, I did not write "clearly incorrect statements".
You are making reference to something elsewhere Nick Radge may have said whilst I referred to a very specific interview viz 178. The Blueprint: How To Create A Simple Trend Following System which is available online for all to hear hence I reject your assertions.


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## entropy (15 July 2022)

investtrader said:


> @Skate - that gives me the perfect opportunity to post barking dog man and succulent chinese meal guy !




Thanks for posting investtrader!

Brought smiles from me and some fond memories.

This Dozsa character's skit is sending up of course the original Dozsa, the late Paul Dozsa.

Older chessplayers on this forum may remember him as the notorious Hungarian chess master who emigrated to Australia and made a name for himself as a serial pest and freeloader who wanted to get into the Guinness Book of Records as the world's biggest freeloader. 
His specialty was to eat and drink at upmarket restaurants then decamp without paying. 
Did a few stints in jail for his actions. Had a few stints on television. 
Another guy I knew, Frank Lilly, was his manager in negotiations for fees to be interviewed, I kid you not!

I once played chess against him in a tournament at St George Leagues Club in Sydney ( he beat me).
A larger than life, bizarre, character with aristocratic pretensions. He told me that he did military service in Hungary and a chip was implanted in his brain by military intelligence as an explanation of his strange behaviour, he was being manipulated from Budapest!
The actor does a good impersonation of Paul.


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## Skate (15 July 2022)

investtrader said:


> @entropy wrote -
> 
> "A jarring note for me was when the interviewer asked him about how he used in-sample data and out-of-sample data
> in establishing his model validity.
> ...





entropy said:


> Thank you for your response investtrader.
> 
> I wrote:
> "I knew nothing of Nick Radge so Google led me to his site and then to an hour and a half Q&A podcast in a series "Chat With Traders" 178. The Blueprint: How To Create A Simple Trend Following System.
> ...




*The "Dump it here thread"*
We all learn when something is viewed through the eyes of others allowing us to see it from a different angle or perspective. @entropy, yes you certainly did detail your personal experience after Googling Nick Radge. In my opinion, your article was well written & a breath of fresh air.

*Perception equals reaction*
I've often been accused of getting it wrong, being completely off the mark. To me, it's refreshing when others take the time to express an alternative view or correct a point of view from their experience. @investtrader experience is different from yours & his perception caused his reaction. That in itself is a natural human trait.

*We are all in different stages of our trading journey*
When we play the point & not the person "everyone" gets along. Some posts may inadvertently cause an upset invoking an emotional or knee-jerk response as offending someone is the hardest thing to detect, simply because it really is in the eye of the beholder. What offends one the other finds amusing.

*It costs nothing to be nice*
For me, hitting the "Like" button doesn't mean you have to agree entirely with the poster but rather it displays an "attitude of gratitude". Kind words never go astray as it keeps a friendly atmosphere within our small community.



entropy said:


> Thanks for posting investtrader!




@peter2 *words below nailed it*



peter2 said:


> Use the "like" button. If there is a post that you really like or it contains some interesting or helpful information, please thank the poster by hitting the like button. The "like" button creates an alert that lets the poster know that someone likes a post that you did. It's a compliment and we all like to receive them. When I receive a few likes and I've been fortunate to receive many, I'm more likely to provide further information on the "liked" topic. To those new members, who don't want to post. Please thank the contributors that you like to read.




*In summary*
@elbee, @soren_lorensen, @entropy & @investtrader have added considerably today by making their individual post allowing them to express their point of view. A discussion that is sometimes robust makes interesting reading encouraging others to join in. I don't take sides as (IMHO) all posts have merit, even the ones you or I don't agree on. I'm just saying, if you perceive something as personal, your reaction will be the same. So, it's never wise to react personally to anything you read but rather respond as it gives you time to think about your reply.

Skate.


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## Roller_1 (15 July 2022)

I would have thought if anyone is worried about getting in trouble with ASIC it would be this thread basically running as a single service for a while there... 

I also just want to say that I think Nick's track record speaks enough for his ability to build and trade systems, so I don't think any of us should be questioning the way he goes about it or how he runs his business. I think multiple people in industry speak of his integrity and sound business practices so there is definitely nothing dodgy going on. I myself can speak to this and his character.

Who knows, he may have just looked at the daily chart and mistakenly posted that. Did anyone ask him?


----------



## Skate (15 July 2022)

Roller_1 said:


> I would have thought if anyone is worried about getting in trouble with ASIC it would be this thread




Nah, it's all good.



Roller_1 said:


> I also just want to say that I think Nick's track record speaks enough for his ability to build and trade systems, so I don't think any of us should be questioning the way he goes about it or how he runs his business. I think multiple people in industry speak of his integrity and sound business practices so there is definitely nothing dodgy going on. I myself can speak to this and his character.




*Let me qualify *
Nick doesn't build or code his own systems or TurnKey Strategies offered for sale, Craig does from memory. I also believe Nick is an honest & respectable business person.

*If I post something that you don't understand or agree with *
You certainly have the right to ask a qualifying follow-up question, we all have that privilege.

*If in your opinion *
I post something that you believe or know is "Bullsh!t" you have the right to call me out, but when you do, all anyone expects is that you explain why you have come to that conclusion or why you have made that statement "without" using defamatory language.

*With contestable ideas or alternative views*
Others will determine which view they will align with.

*Everyone likes to be heard*
@Roller_1, I hear you loud & clear as everyone wants to have their say, social interaction is to be cherished. In saying this, those who respond or make comments, help keep this thread alive.

Skate.


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## Roller_1 (15 July 2022)

Roller_1 said:


> I would have thought if anyone is worried about getting in trouble with ASIC it would be this thread basically running as a single service for a while there...




This comment was referring to posting signals ahead of time that you are entering, I think they may be paper trades im not sure. 

But if I was a Newby and then stumbled across this thread and saw that you have posted a 'backtested' strategy that shows a 90% annual return over two years. And then in the next post there is the signals that it is entering on the Monday, that may be enough to get me to buy some. That is all I was referring to.

Nick builds the systems, but Craig does the majority of the coding I believe. But like I said he's running a well-run business so he probably does not have time to do everything.


----------



## Skate (15 July 2022)

Roller_1 said:


> This comment was referring to posting signals ahead of time that you are entering




After reading the ASIC guidelines I have decided to cease this practice but thanks for the heads up.

Skate.


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## Roller_1 (15 July 2022)

Skate said:


> After reading the ASIC guidelines I have decided to cease this practice but thanks for the heads up.
> 
> Skate.




I am not saying that you do it but isn't that what the pump and dumpers do. Buy XYZ and then tell everyone else to buy and then sell into their liquidity.

Either way I highly doubt that asic reading these posts looking for someone to prosecute. If they are they should probably spend their time elsewhere I would imagine


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## Sir Burr (15 July 2022)

entropy said:


> so it appears Nick does not have his own Australian Financial Services Licence but operates under SWM.




Entropy, very interesting detective work but guess no difference to having a licence as far as ASIC is concerned.



Skate said:


> After reading the ASIC guidelines I have decided to cease this practice but thanks for the heads up.




Yes, I was thinking the same about providing signals here but think these guidelines are only recent.

Talking about the FFX chart, another one is the impossible 20M equity curve promoted excluding any tax and comparing it against the index.

The compounding effect of paying zero tax would be massive over 25 years.

Not even considering the pitfalls of a 25 year backtest, I wonder if this is something that could be taken as misleading. I doubt it would but that 20M equity is something to behold and suck in newcomers.


----------



## investtrader (16 July 2022)

entropy said:


> Thank you for your response investtrader.
> 
> I wrote:
> "I knew nothing of Nick Radge so Google led me to his site and then to an hour and a half Q&A podcast in a series "Chat With Traders" 178. The Blueprint: How To Create A Simple Trend Following System.
> ...



Thanks for your reply. I didn't listen to the interview and really don't have time to spend on listening. 
I have seen how easily criticism can spiral on forums and I was just trying to convey the correct information regarding Nick. Perhaps piling on was too emotive. There are very few traders who trade for real and are profitable and who survive for 25 years or more - Nick is one of them. There is no way he doesn't understand how to build and test a system and the proof is in the doing. 
Happy to move on.
Cheers


----------



## investtrader (16 July 2022)

entropy said:


> Thanks for posting investtrader!
> 
> Brought smiles from me and some fond memories.
> 
> ...



@entropy  Thanks for the background - very interesting. I just read about it on Wikipedia. 

Here's another impromptu interview for a laugh - chick chick boom girl. And it was absolute BS. She made it all up on the spot which is what makes it even funnier.


----------



## debtfree (16 July 2022)

Sir Burr said:


> Talking about the FFX chart, another one is the impossible 20M equity curve promoted excluding any tax and comparing it against the index.
> 
> The compounding effect of paying zero tax would be massive over 25 years.
> 
> Not even considering the pitfalls of a 25 year backtest, I wonder if this is something that could be taken as misleading. I doubt it would but that 20M equity is something to behold and suck in newcomers.




Makes a big difference @Sir Burr, I had a quick look at one of my spreadsheets. 
Below is the summary of the 2 different outcomes, without Tax and with Tax.

In a perfect world a 40 year old chap invested $100K for 25 years
*1st Box:* He got a return each year of *23.61%* / he didn't add anything to it each year / *and he paid NO TAX!
2nd Box: *Exactly the same conditions* BUT he paid 15% TAX *each year on his profits.



Tax was only 1.7 Million but his account dropped over $10 Million .


----------



## Skate (16 July 2022)

MovingAverage said:


> most folks focus on $$ not percentage of portfolio. A $500k drawdown doesn't get any easier to accept just because it might be 10% to 20% of your portfolio. Humans are humans and even Nick R is a retail trader so that's still tough.




*Nick's pinned Twitter capture*




*A drawdown of 20%, yeah, that's acceptable*
I've made a series of posts about talking about "percentages" & you quickly become desensitized to its real value. Relating a loss in percentage & converting it to dollars is sobering as your results will take on a new meaning, so don't let percentages fool you into a false sense of security.  
*
Posting anything about "The Chartist" sprukes interest*
Early in January this year, Nick decided to post his dollar Profit & Loss (PnL) to show the emotional pull that dollars have. Nick went on to say "you'll be a much better trader" if you can remove the emotional pull of those dollars. 

*In the next post *
I'll show Nicks's "Reported Twitter Results" for this calendar year since making a commitment of openness. Trading has been tough for most of us & Nick has not been immuned by trading a portfolio of strategies.

Skate.


----------



## Skate (16 July 2022)

*Trading has been tough for most of us *
Nick has not been immune from poor results even by trading a portfolio of strategies. As you read through a few posts in this thread, the amount of information can be overwhelming but you'll learn about different trading styles & strategies. By narrowing your focus you'll have a better understanding of what & what won't work when it comes to the performance of a strategy. When your money is at risk, you easily get fooled by your behavioral biases. Trading is about decision-making, & the more you understand the better decisions you will make.

*"The Chartist" trading results*
This calendar year after 26 weeks "The Chartist" trading results are in his Twitter feed today. I should also note Nick said, "If you can remove the emotional pull of dollars and focus on the process instead, you'll be a much better trader". Also, @MovingAverage said "trading doesn't get any easier to accept just because it might be 10% to 20% of your portfolio".




Skate.


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## Skate (16 July 2022)

*I was interested, so others may be as well*
In 26 weeks, how did Nick's trading results go from zero to a loss of (-$822,625)?  

*What's the point of the exercise?*
As Nick reports his weekly results I was curious how he fair from week to week. After completing the exercise I was taken back that his weekly cumulative reporting was so inaccurate. 

*It's easy to make a mistake*
@elbee recently pointed out a mistake in one of my posts, we all make mistakes, that's a human trait. All I'm saying is Nick's reported weekly "Twitter Results" at times were inaccurate. It's pleasing that in today's tweets the YTD cumulative is accurate.

Skate.


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## Sir Burr (16 July 2022)

debtfree said:


> Tax was only 1.7 Million but his account dropped over $10 Million .




Thanks debtfree (me too - debtfree)

Perhaps 15% is conservative, even if all trades are over 12 months. At some stage would be on the top tax rate so I'd guess slashing a few extra million off that remaining 9.6M.

Lets ignore death too.


----------



## Skate (16 July 2022)

*Looking at "The Chartist" Equity curve*
I've always found simple works for me but in saying this I'm one that likes to drill down to understand something a little better. That's why the chart is always at the top because it's a quick visual reference. As the saying goes, a "picture paints a thousand words". The equity chart below is the exact figures taken from Nick's Twitter feeds. Each week Nick posts his weekly & ongoing progress in a consistent format but unfortunately, the reported total aren't consistently accurate.

*What do I mean?*
Well, so there is no misunderstanding, the "cumulative results" posted today are "accurate" even if they aren't along the way.

*Let me explain the Equity Curve Report*
(a) The first column is "The Chartist" Weekly Trading Results.
(b) The second column is the "Cumulative Results" from my calculations.
(c) The third column is the "Actual Reported" amounts in Nick's weekly tweets.
(d) The fourth column is "Nick's Reporting Discrepancy" (in all fairness, he got there in the end)




*Summary*
As with any summary, the figures speak for themselves, so I'll just use points.

(a) 10 winning weeks
(b) 16 losing weeks
(c) The average weekly return (-$31,639) ouch...
(d) Nick's weekly (PnL) report was accurate 8 times out of 26 reports
(e) Nick's weekly (PnL) report was inaccurate 18 times out of 26 reports
(f) If you can remove the emotional pull of dollars & focus on the process instead, you'll be a much better trader

Skate.


----------



## Skate (16 July 2022)

*Trading has been tough*
It's been tough for some time now & even the best of traders struggle during these times.

*You win some you lose some, that's the trading game*
I've taken the liberty of posting "The Chartist" six-month results. 

*For comparison*
I'll post a chart of @peter2 twelve months performance of his "ASX Combined Portfolio" as a visual reminder.

*Reposted without permission*
After 12 months of trading, Peter's "ASX Combined Portfolio" is basically square. I've marked the equity curve with red circles to make the analysis of the chart even easier to understand.




Skate.


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## frugal.rock (16 July 2022)

Skate said:


> Reposted without permission



Not sure what's going on here, however, taking something from the private part of the forum and posting it in the public section?


----------



## rnr (16 July 2022)

Hi @Skate,

You might want to review and amend the table you posted (ref. post #7236).

The month of Feb is where the problem starts.

Cheers,
Rob


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## Skate (16 July 2022)

rnr said:


> Hi @Skate,
> 
> *You might want to review and amend the table* you posted (ref. post #7236).
> 
> ...




*It's easy to make a mistake*
@elbee & now @rnr have both recently pointed out mistakes in my posts. A cut & paste error was to blame. I've now applied the calculations to the individual cells & now I believe them to be accurate. This will be confirmed if no one else spots a mistake.




*There still must be an error*
The updated Equity Curve has a loss of (-$1,105,177) whereas Nick reports a loss of (-$822,625).

*There is a discrepancy of $282,552 between the results*
Rob might be kind enough to confirm if the amounts I've used as well as the calculations are correct as the discrepancy is huge.

*I checked the (PnL) for 18th June 2022*
This amount appeared character, but checking it appears to be correct







*# Summary*
Rob or I should say "Eagle eye Rob" spotted an error in the previous table & after making the amendments I've corrected the bullet points.

(a) 10 winning weeks
(b) 16 losing weeks
(c) The average weekly return (-$42,506) ouch...
(d) Nick's weekly (PnL) report was accurate 3 times out of 26 reports
(e) Nick's weekly (PnL) report was inaccurate 23 times out of 26 reports
(f) If you can remove the emotional pull of dollars & focus on the process instead, you'll be a much better trader

Skate.


----------



## DaveDaGr8 (16 July 2022)

Not that it makes too much of a difference in the long run, but his reported result on the 18th is incorrect.


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## Skate (16 July 2022)

DaveDaGr8 said:


> Not that it makes too much of a difference in the long run, but his reported result on the 18th is incorrect.
> 
> View attachment 144182




@DaveDaGr8 *well spotted*
My records were derived from the weekly reports & I missed that daily correction, thank you. The correction made no difference to Nick's final (PnL) as I assume he would have made the adjustment in his next weekly tweet to reflect his current (PnL).

*Final Balance Update*
I should point out that my final balance has been updated with additional information.

*The updated Equity Curve *
There was a difference of $110,999 reported by Nick as a typo, & I have corrected the chart to reflect a more accurate result. The average weekly return that Nick has achieved this calendar has also been adjusted to (-$38,237) ouch...




*# Summary*
@DaveDaGr8 spotted a correction Nick made in his 21st June 2022 tweet & after making the amendments I've corrected the bullet points.

(a) 10 winning weeks
(b) 16 losing weeks
(c) The average weekly return (-$38,237) ouch...
(d) Nick's weekly (PnL) report was accurate 3 times out of 26 reports
(e) Nick's weekly (PnL) report was inaccurate 23 times out of 26 reports
(f) If you can remove the emotional pull of dollars & focus on the process instead, you'll be a much better trader

Skate.


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## Newt (16 July 2022)

I still find it incredibly grounding and constantly grateful that Nick, Peter2, Skate and others share candid trading results through such a tough 12 months.  It would be so tempting for most traders to go back to the drawing board and fiddle in such tough times.  So great to see "pros" plugging away consistently.


----------



## qldfrog (16 July 2022)

Newt said:


> I still find it incredibly grounding and constantly grateful that Nick, Peter2, Skate and others share candid trading results through such a tough 12 months.  It would be so tempting for most traders to go back to the drawing board and fiddle in such tough times.  So great to see "pros" plugging away consistently.



Are they ploughing or plugging away?
..sadly i think they are plugging away with fresh banknotes..that is the story for me at least 😂


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## Skate (16 July 2022)

Newt said:


> I still find it incredibly grounding and constantly grateful that Nick, Peter2, Skate and others share candid trading results through such a tough 12 months.  It would be so tempting for most traders to go back to the drawing board and fiddle in such tough times.  So great to see "pros" plugging away consistently.






qldfrog said:


> Are they ploughing or plugging away?




*From my perspective*
@qldfrog, @Newt, trading is much easier when you are playing with their money. I often talk about being lucky in trading. In my opinion, I was lucky to have accumulated a healthy balance before the "$h!t hit the fan". I'm sure it's the same for Nick. My trading process has not changed & I believe Nick's hasn't either.

*In saying this Nick's "Growth Strategy" has recently had a "facelift" *
After reading the reports, improvements have been made but at the same time, Nick has confirmed he will still trade the original parameters.

Skate.


----------



## Skate (16 July 2022)

*What's the point of today's posts?*
Well, for one It proves none of us have a crystal ball or a strategy that works all the time. IMHO, @peter2 has nailed his style of trading as his main structure is built around capital preservation & his results for the last 12 months demonstrate how successful he has been.

*Death by a thousand cuts*
Nick on the other hand believes to be profitable you need to remain disciplined & focused on the long game. I'm sure Nick would be doing a bit of soul searching to establish if he could have done better while sticking with the long game. Nick focuses on percentages & goes to extreme lengths to explain the emotional pull concentrating on dollar figures can have on your trading. His advice is to focus on the process & you'll be a much better trader

*It’s tough to be a trend follower*
The truth is, most traders give up or don’t take the next signal after a series of losses whereas Nick keeps pulling the trigger even after a multitude of losing trades.

Skate.


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## Captain_Chaza (16 July 2022)

Back-testing to me  has always been a waste of time  as it can only be repeated in the exact same conditions
I did Chemistry in my Matriculation  year  and as any Chemist will tell you 
All testing can only be done in a vacuum
Ie:No Weather and Sea Variations
ie No Climate Change
No Political Changes / Wars
No Covid /Bird Flu and  Plagues etc
and  then 
Most importantly you have the Mental Health of each Captain ,his Crew their Wives and Children ,extended families and close friends

Come to think about it a lot more
"I don't think you could even do a respectable Back-test  on trading in a Vacuum"

Crikey!
I hear People in NSW and QLD are experiencing 100 year floods based on statistics and some have had THREE (3) 100 year floods* this year*

So much for making the same % gains/losses  as yesterday/ yester-month yesteryear/ and even decades ago

Has anyone here ever learnt anything  from Back-testing?


----------



## Skate (16 July 2022)

Captain_Chaza said:


> Has anyone here ever learnt anything from Back-testing?




@Captain_Chaza,I definitely have. All my trading strategies are built around the results. The correct procedure in carrying out a Backtest will make a great topic for another day

*For all others*
The Rugby is about to start. Go the wallabies. The opening was spectacular to say the least.

Skate.


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## rcw1 (17 July 2022)

Skate said:


> @Captain_Chaza,I definitely have. All my trading strategies are built around the results. The correct procedure in carrying out a Backtest will make a great topic for another day
> 
> *For all others*
> The Rugby is about to start. Go the wallabies. The opening was spectacular to say the least.
> ...



Good morning Skate,
Unfortunately Wallabies, lost to England 21 - 17.   Do note however, Ireland beat the All Blacks in a 3 test series on NZ soil. Unbelievable, doesn't normally happen.  Great effort to the Irish!!! 

Aussie, Michael Matthews claimed the 14th stage of the 2022 Tour de France.  

Kind regards
rcw1


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## entropy (17 July 2022)

investtrader said:


> Thanks for your reply. I didn't listen to the interview and really don't have time to spend on listening.
> I have seen how easily criticism can spiral on forums and I was just trying to convey the correct information regarding Nick. Perhaps piling on was too emotive. There are very few traders who trade for real and are profitable and who survive for 25 years or more - Nick is one of them. There is no way he doesn't understand how to build and test a system and the proof is in the doing.
> Happy to move on.
> Cheers



Thanks for the info, investtrader!
I'm a newby to trading and still have my trainer wheels on so happy to hear Nick is worth listening to.
I will check out his site and add what I can to my knowledge base.
I took quite a few pages of notes from the podcast and from these notes a ticked a few avenues to explore.
For example Nick's focus on "only industrials and not top 100 stocks but within top 500" is worth following up.

At present I am working my way through Dr Bandy's Quantitative Technical Analysis.
I like his rigorous scientific approach to building models and that he speaks from a lot practical experience and that he has high academic qualifications.
So far I have got two models up and running in Python, one that scans many stocks looking for possible candidates.
The other model has a Dashboard that displays some technical indicators and provides Buy/Sell/Do Nothing flags and allows me to focus on a particular stock.
It's early days and I can't brag about any spectacular results yet, just promising results.
If the model loses at least I can say I lost systematically rather than haphazardly!


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## Skate (17 July 2022)

rcw1 said:


> Unfortunately Wallabies, lost to England 21 - 17




It was a great game nevertheless. 



rcw1 said:


> Ireland beat the All Blacks




Yes, I nearly fell off my chair when I heard this. 



rcw1 said:


> Aussie, Michael Matthews claimed the 14th stage of the 2022 Tour de France




It was a gutsy effort, it was a lesson to us all to "never give up"

Skate.


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## Knobby22 (17 July 2022)

Captain_Chaza said:


> Back-testing to me  has always been a waste of time  as it can only be repeated in the exact same conditions
> I did Chemistry in my Matriculation  year  and as any Chemist will tell you
> All testing can only be done in a vacuum
> Ie:No Weather and Sea Variations
> ...



Is there a period in history similar?
Rising inflation, limited trade, shortages, covid disruption, European war.

Maybe the late 70s if you treat strikes as similar to covid, not really though.
Unique times.


----------



## JohnDe (17 July 2022)

_"This country is run by 46 dictators who run pension funds. I’ve got to conform my business practices to suit them – otherwise I get sacked."_

That quote is possibly the problem with the whole of the developed world these past 20 years.



> Blackmagic Design founder Grant Petty says he will consider a future listing on the Australian Securities Exchange for his trailblazing digital cinema firm, and has revealed for the first time his father’s decades of alcohol abuse that made him financially conservative in both his personal and business lives.
> 
> In a wide-ranging interview with The Australian, Mr Petty – who joined The List of the nation’s 250 richest people last year — also launched a broadside against the local funds management industry, which he said “freaked him out” because of its alleged inability to deal with creative businesses like Blackmagic.
> 
> ...


----------



## MovingAverage (17 July 2022)

G’day boys and girls—been out of the loop recently and just checking back in. Seems to be a few posts about Nick here. Coincidently I notice from Nick’s twitter feed tonight he  isn’t a happy Jan as someone on a “forum” has been slagging off at him…hope it isn’t ASF 🤞


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## MovingAverage (17 July 2022)

Skate said:


> View attachment 144070
> 
> 
> *Yes* @Sir Burr*, I have to agree*
> ...



I reckon this is the post @Skate 😩


----------



## Skate (17 July 2022)

MovingAverage said:


> G’day boys and girls—been out of the loop recently and just checking back in. Seems to be a few posts about Nick here. Coincidently I notice from Nick’s twitter feed tonight he  isn’t a happy Jan as *someone on a “forum” has been slagging off at him*…hope it isn’t ASF 🤞




*Nah, I read all the posts & there is no slagging him off*
There isn't anything in the posts that would have upset him. Nick is either a current or former member of this forum & I'm sure he would be the first to correct any misunderstandings or false perceptions of any member. When posting in cryptic ways it's hard to understand a question let alone a response. It doesn’t matter whether or not you intend to mislead people – it’s about the overall impression your post creates when it’s viewed.



MovingAverage said:


> I reckon this is the post @Skate 😩




@MovingAverage, I remarked that Nick answered "6Fanboi" who by the way is a member of this forum in a misleading way as his answer didn't bear scrutiny in my opinion. I believe the answer was misleading because his answer didn't make sense to me. If it didn't make sense to me, I'm sure it would confuse others. To avoid this I made a series of posts for others to under from where I was coming from.

*It's there for all to see*
The WTT is a weekly strategy displayed on a daily chart. So does anyone really believe his answer? I'm just saying if you post something on Twitter that's fine as long as what you claim can stand up to scrutiny.

@MovingAverage *please give me your take*
Looks at the chart & then read Nick's answer & tell me you understand it. I would love to hear your comments.

*Read my full explanation here*





						Dump it Here
					

@Skate FFX this time instead of LKE - nick doesn't give much away though  FFF+     Sorry @soren_lorensen but I have to call bullsh!t on this one For a start that's a "Daily Chart" so it's not Nick's WTT with a Radge tweak. Mate, I can tell you exactly what he has done to his code to achieve that...




					www.aussiestockforums.com
				








*Summary*
No, I don't think there are any posts that would upset him in any way. It's most likely another forum.

Skate.


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## Skate (17 July 2022)

Knobby22 said:


> Is there a period in history similar?
> Rising inflation, limited trade, shortages, covid disruption, European war.
> 
> Maybe the late 70s if you treat strikes as similar to covid, not really though.
> Unique times.




*This is a current chart for the ASX, All Ordinaries*
I could have picked any index or any individual stock & the chart will all resemble each other in such a way the bars fluctuate "the bars go up & they go down". Pick any chart, any periodicity, or any period in the past & the "bar fluctuations" would all look the same. I could have blacked out the information & one chart would look like all others. Taking advantage of the blue bars & passing on the red is a simple concept when applying your funds in the markets.






*Take this one*





*Or this*








@entropy *nailed it*
If you trade haphazardly you are gambling. Trading systematically gives you a fighting chance.



entropy said:


> If the model loses at least I can say I lost systematically rather than haphazardly!









*In Summary*
Trading is all about riding moves. Technical Analysis tries to time both the entry & the exit.

Skate.


----------



## Skate (18 July 2022)

Skate said:


> The correct procedure in carrying out a Backtest will make a great topic for another day




*Don't get fooled by those who post backtest results*
Unless the methodology is explained, "what's the use". Backtest results can confuse & mislead easily. Recently I've noticed graphical representation of backtesting of systems over 10 or 20 years & the satistical accumulated profit is around 20 million dollars if not more. @Sir Burr & @debtfree recently discussed the true value of the backtest results when Tax was factored in. It's a good read & the post can be found here.






						Dump it Here
					

This comment was referring to posting signals ahead of time that you are entering   After reading the ASIC guidelines I have decided to cease this practice but thanks for the heads up.  Skate.




					www.aussiestockforums.com
				




*But leaving that aside*
I would rather concentrate on why backtesting results are not to be relied on to make you extremely wealthy. Let's face it, we have all done these types of backtests & after a decade or so, it shows that by trading this system you would have accumulated an extreme amount, but in reality, it's rarely the case.

Skate.


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## Skate (18 July 2022)

*Backtest & how to backtest has been done to death*
I was intending to make a series of detailed posts on how to backtest correctly, then go on to explain how to analyse those results. Also, a separate topic would be to explain why "in sample & out of sample" testing is so important for the usefulness of their results as @entropy recently touch upon. Sometimes an explanation "why" out-of-sample (OOS) results are the only results worth taking notice of. 

*In saying this*
Making a few posts in this manner about system analysis would not only be exhausting to read but extremely boring at the same time. Society is now conditioned to have information presented to them in smaller chunks (sound bites), as it's less time-consuming & easier to absorb because of the short attention span we all tend to have these days.

Skate.


----------



## Skate (18 July 2022)

*Let's start off with "Position sizing" (Amibroker)*
Position sizing defines the method that will be used by the "Monte Carlo simulator" during backtest, so be careful with this setting. When backtesting you can use any variety of methods to position size (the size of your next bet) but as a word of warning you use should use the method you are actually intending to trade. 

*The biggest mistake when backtesting *
Is using a "percent of portfolio equity" to position the size of your bet. Why? because after a few years of profitable trading the next size of your next bets will accumulate to an unrealistic figure, an amount you wouldn't be able to execute. I'll post an Equity curve to demonstrate the results achieved using both methods later. 

Skate.


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## Skate (18 July 2022)

*# Fixed Dollar Size #*
Using a fixed dollar amount should be the standard when backtesting as it allows you to maintain a constant value across all bets when opening a trade. Doing it this way the results will be more realistic & achievable.

*# Percent of equity #*
This uses a defined percent of the current simulated equity value. Be careful when using this setting as it causes the position size to be dependent on profits on previous trades (compounding profits) & creates serial dependence. It may also lead to an extra compounding effect when you have overlapping trades in your original backtest as bootstrap performs trades sequentially (so they don't overlap). For this reason, its use is limited to cases when no overlapping trades occur.




*Same Strategy same Backtest*
The backtest is from 2015 to today, Why? It's the period I have been trading. It should be easy to spot the difference "Position Sizing" makes to the backtest results. One is realistic where the other isn't.  





*The Equity Curve comparison*
Since 2015, I would have accumulated millions in profit whereas, in reality, this figure would "slightly" differ.




Skate.


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## Skate (18 July 2022)

*Best practices*
To remove risks of serial correlation affecting the results of Monte Carlo simulation it is highly encouraged to use fixed position sizing (fixed dollar value of trades), so it does not affect the profit/loss due to compounding.

*Summary*
Just make sure that you use fixed-position sizing for the calculations when backtesting to eliminate the effect of compounding. Eliminating the compounding effect, the results will be accurate, constant, believable & achievable.

Skate.


----------



## investtrader (18 July 2022)

Skate said:


> *# Fixed Dollar Size #*
> Using a fixed dollar amount should be the standard when backtesting as it allows you to maintain a constant value across all bets when opening a trade. Doing it this way the results will be more realistic & achievable.
> 
> *# Percent of equity #*
> ...



I assume for the second run you have used Max Positions also? This also give unrealistic results. The drawdown in later years is wrong IMHO. You have 500k of capital and only investing 100k. Check the exposure figure to confirm.


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## Skate (18 July 2022)

investtrader said:


> I assume for the second run you have used Max Positions also? This also give unrealistic results. The drawdown in later years is wrong IMHO. You have 500k of capital and only investing 100k. Check the exposure figure to confirm.




@investtrader*, thank you for taking an interest in my posts today *
I just want to say, in today's posts I'm talking about backtesting, & strategy analysis. I also pointed out that you can fall into the trap of achieving inaccurate, overstated results through one option setting. 

*I prefer when backtesting to use a fixed dollar amount *
But when I'm live trading, I use another method to overcome the issues you have raised. I explained earlier that I would keep this series of posts short & snappy, without going into detail as it just turns people off reading them.

*I'm now talking about live trading & position sizing*
There are different ways to position size other than fixed dollar amounts when you are trading a live account. The benefits are there when you have a limited supply of trading capital. Like most, I have my way of "rebalancing my position size". Let's call it my next "bet size" as it's less confusing using this terminology. I've made over 20 posts on how I rebalance my next series of bets (with graphics) for those interested. All you have to do is search so I don't have to explain it again. 

*Amibroker "Exploration Analysis"*
Allows you to modify your next bet size with a simple line of code no matter the balance of your outstanding funds not in the markets. Rebalancing is simply calculating the dollar size of the next bet or series of bets & it works both ways, the bet will either increase or decrease according to the trading funds available.

 Skate.


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## Skate (18 July 2022)

*What is a trading system? *
Basically, when it comes to system trading using technical analysis it's simply your trading rules mathematically coded to help you time the entry & when to exit a position. As @investtrader just pointed out there is much more to consider when your money is on the line. But, the best part is you get to create all rules that fit your own risk profile.

*Blatant plug*
If you are a beginner take advantage of my free eBook if you are thinking about becoming a trader. The eBook, "Trading Fundamentals - Skate's Beginners Version" explains the dangers of trading & a lot more. Also, reading it might give you ideas before you begin your journey. If my eBooks get you excited, keep your interest & read this thread as I'm sure the additional tips from others will help you become a successful trader.

*Trading Fundamentals - Skate's Beginners Version (eBook link below)*
https://www.aussiestockforums.com/posts/1014728/

Skate.


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## Skate (18 July 2022)

*What is position sizing?*
For those who don't understand, I should have explained what "position sizing" is In its most basic form. There are those who have trouble with some of the technical terms & this follow-up post will clear this one up.

*How much do we bet?*
Well, that's a greaty question. The "Position Size" you use decides what your next bet will be in relation to your trading account balance. Position sizing can truly be a powerful tool used correctly. Ultimately, I forgot to say previously that it is up to you to decide what you want to accomplish & how much “portfolio heat” you want to incur as @peter2 would say. 

*Trading is all about "trying to secure your financial future"*
Remember you can’t make money without losing money. As with all trading tools they only work if you consistently use them. Confidence & consistency is the name of this game, as well as money management techniques of course.

Skate.


----------



## entropy (18 July 2022)

Captain_Chaza said:


> Back-testing to me  has always been a waste of time  as it can only be repeated in the exact same conditions
> I did Chemistry in my Matriculation  year  and as any Chemist will tell you
> All testing can only be done in a vacuum
> Ie:No Weather and Sea Variations
> ...



Interesting post Captain!

What you tackle is Decision Making Under Uncertainty.

An engineer tasked with building a bridge backtests many possible models and scenarios both physical models and computer generated test models. The alternative is....?

You mentioned "any Chemist will tell you", well, I was an industrial chemist in my early days, first for a company making superphosphate then in the movie film industry.

A bit of background.
We brought in sulphur (IIRC from Chile) and rock phosphate (from Nauru, fossilized bird poo, guano).
To make superphosphate we needed to first make sulphuric acid.
We burned the sulphur with excess air to form sulphur dioxide with further reacted under pressure and high temperature with a platinum catalyst  to form sulphur trioxide. This was further reacted with water and sulphuric acid to produce highly concentrated acid. All in lead-lined chambers with lead plumbing. The sulphuric acid then was reacted with the rock phosphate (water insoluble so useless for plant growth) to produce the soluble superphosphate which plants can uptake. After curing, mixing in trace elements and granulating, the "super" was bagged and shipped or sold in bulk.

There were many steps from start to finish and many variables to adjust (some of which you listed!).
We had to allow for variations in temperatures, pressures, raw material purity etc etc.
I can assure you that we backtested and backtested  and backtested to the nth degree before establishing a process or then modifying any of the processes.

Same in the processing of movie film: we ran test strips and backtested all the slightest variations in temperature and chemical replenishment levels several times a day, failure to do so would have been nasty, especially for colour film!

When you have a shower do you jump under the nozzle then turn hot and cold water on hoping not to get scalded or frozen?
Or do you first backtest the water temperature, making adjustments to hot/cold ratio before getting under the nozzle?

Glad you raised the backtest issue and hope it will generate some useful discussion.
Cheers, Entropy.


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## Skate (18 July 2022)

*Why Backtests Fail *
It might come as a surprise, but most backtests produce wrong or misleading results on a mass scale. This is why you get a big surprise that your trading systems fail when traded live. Even with out-of-sample data or walk-forward analysis, backtest results are often "over the top" optimistic when reporting their results. 

*Think about it*
If live trading mimicked the backtest results we would all be millionaires.

*So what does this all mean?*
In a nutshell, the majority of trading systems being backtested that exhibit positive results are in fact unprofitable. 

*Why so? *
For one simple reason, the strategy has no statistical edge. The real dilemma is, how do we fix it?

Skate.


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## Skate (18 July 2022)

*Strategy development*
During this stage, you have most likely followed all rules or maybe you were lazy & copied crap found on a variety of sites only to discover the strategy is worthless, or worse still, the results give you hope to keep persisting. You can take it from me, even dud strategies will produce the equivalent of random results. 

*With this false found hope*
You will most likely soldier on, changing this, then changing that, until the backtest improves. Doing it this way, the improvements are only on paper & won't be duplicated in the heat of the battle. 

*What is the driver of this action? *
Faulty thinking, thinking "financial success" is just around the corner. The problem is most coded strategies will produce positive results & it's most likely because of the randomness of the markets, the equivalent of a monkey throwing darts. 

Skate.


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## Skate (18 July 2022)

*The worst thing is that you will rarely get a poor backtest result *
A trading strategy with no statistical edge rarely produces a negative backtest result. In most cases, it will most likely produce a positive result that is in fact unprofitable in most cases. 

*Go figure*
Profitable backtest results that are unprofitable when traded live. Has anyone been there, & done that? (I'm guessing so)

*Does this mean that backtests are worthless?*
What do you reckon? you don't need to be a genius to work that one out. The real problem is that you don't know the strategy has no
statistical edge until it's too late. The penny usually drops when the strategy fails to perform.

Skate.


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## gartley (19 July 2022)

Hurst Projections suggested the possibility of a low in the ASX200 in this post : https://www.aussiestockforums.com/threads/dump-it-here.34425/page-352#post-1181512  back on the 21st June (Winter Solstice) and a multi week rally to follow. Thus far that look to be the case and these are my short term EW musings. The the count may not the best one but it looks like we are headed higher again and a low for wave e should terminte today or tomorrow.


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## wasp (19 July 2022)

G'day legends. 
I have been reading and now trying to code up a version of Laurens Bensdorp’s “Short RSI Thrust” system (from his book "Automated Stock Trading Systems"). 

There are some rules / conditions that I’m struggling with, I think looping code may be required. Are you familiar with this book or the system? It’s a short system and I'm trying to use amibroker. I think I’m ok to actually code up until entering the trade, but it’s the conditions once in the trade that I’m struggling with: 

Stop-Loss: The day after the (limit) short position is entered, place a buy stop of three times ATR of the last ten days above the execution price. 

Profit Taking: If at the closing price , the profit in the position is 4 percent or higher, get out the next day’s market on close. 

We also have a time-based exit: If after two days the trade has not reached its profit target, we place a market order on close for the next day.

I think looping is required because of the tricky exit rules. Any help or tips would be greatly appreciated!


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## Skate (19 July 2022)

@wasp your request for help should be directed to the Amibroker FQA thread - found here:





						Amibroker FAQ
					

This thread is for fellow Amibroker users to help each other out. If there is a very specific project you are carrying out which is likely to deviate from a general faq type thread then you are welcome to start a new thread.  There was some discussion of how to use Amibroker in one of the...




					www.aussiestockforums.com
				




*Alternatively*
Direct your question to the Amibroker forum - found here:


			https://forum.amibroker.com/
		


*To get a quick response *
When seeking help, from the Amibroker forum please include what you have done so far. They will need to see your work to offer any assistance. Make sure you explain "what you can’t get working", detailing the issue in depth. When you do this there will be someone who will help you out.

*On the Amibroker forum make sure you follow the rules, especially these two*
NOTE 1: Always use the Code Tags when posting code.
NOTE 2: Use the SEARCH feature (magnifying glass "top right" by your avatar) to see if something similar has already been discussed.

Skate.


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## wasp (19 July 2022)

Skate said:


> @wasp your request for help should be directed to the Amibroker FQA thread - found here:
> 
> 
> 
> ...



Thanks Skate, apologies for posting in the wrong thread. I’ll get some more info and code then post it there later in the week. Cheers.


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## entropy (20 July 2022)

Skate said:


> *Why Backtests Fail *
> It might come as a surprise, but most backtests produce wrong or misleading results on a mass scale. This is why you get a big surprise that your trading systems fail when traded live. Even with out-of-sample data or walk-forward analysis, backtest results are often "over the top" optimistic when reporting their results.
> 
> *Think about it*
> ...



Skate, nice post here along with your previous posts, you raise some interesting questions!
I admire the energy you bring to this forum, long may it continue!

Let's start with the comment of a legend:

“It is remarkable how much long-term advantage people like us have gotten by trying to be 
consistently not stupid, instead of trying to be very intelligent.” - Charlie Munger

How can we follow this advice, instead of trying to be too smart just try to be not stupid?
If a farmer is trying to sell off his geese that lay golden eggs are we stupid enough to buy them?
Even if the farmer is a top bloke: will he just sell us the eggs?

Where to start?

Stock prices are data presented to us in a time-series format.
From this data, and maybe combined with some other data, we want to make money.

What is the character of the time series data, this sequence of numbers we pore over?

Some people say the data alone are just random numbers and any attempt to make predictions using such a sequence of random numbers is futile: if you can predict random numbers just a little you would be the scourge of the casinos!

(Note: some people believe stock data is 'fractal', eg Nick Radge. Any discussion of random data could also include fractal data.)

If share prices data are randomly generated or a fractal then any mathematical operations applied to such time-series data such as addition, subtraction differencing etc etc will not be of any help to make the series.
Much of traditional statistics lore cannot be applied since the share prices are autoregressive ie a given value is highly correlated to the value at the previous time period.

Others say if the data are random how do you explain the obvious trends in the data that we see?

This question regarding randomness has been asked and also answered (sort of) here:








						Is it possible to prove, if a sequence is random?
					

Consider following inputs:  1,1,2,3,5,8 - it isn't random  2,4,8,16,32 - this neither  4,1,2,11,5,9- this one looks like random-sequence  I would like to ask if is there such algorithm to prove if ...




					stackoverflow.com
				




Basically, one can never prove a sequence of numbers is randomly drawn or not but one can get somewhere:





						Randomness test - Wikipedia
					






					en.wikipedia.org
				




Just when one thinks we are on top of things:








						Seven states of randomness - Wikipedia
					






					en.wikipedia.org
				




Start of quote:

The seven states of randomness in probability theory, fractals and risk analysis are extensions of the concept of randomness as modeled by the normal distribution. 
These seven states were first introduced by Benoît Mandelbrot in his 1997 book Fractals and Scaling in Finance, which applied fractal analysis to the study of risk and randomness.

This classification builds upon the three main states of randomness: mild, slow, and wild.

The importance of seven states of randomness classification for mathematical finance is that methods such as Markowitz mean variance portfolio and Black–Scholes model may be invalidated as the tails of the distribution of returns are fattened: the former relies on finite standard deviation (volatility) and stability of correlation, while the latter is constructed upon Brownian motion.

These seven states build on earlier work of Mandelbrot in 1963: "The variations of certain speculative prices" and "New methods in statistical economics" in which he argued that most statistical models approached only a first stage of dealing with indeterminism in science, and that they ignored many aspects of real world turbulence, in particular, most cases of financial modeling.

Wild randomness has applications outside financial markets, e.g. it has been used in the analysis of turbulent situations such as wild forest fires.

Using elements of this distinction, in March 2006, a year before the Financial crisis of 2007–2010, and four years before the Flash crash of May 2010, during which the Dow Jones Industrial Average had a 1,000 point intraday swing within minutes, Mandelbrot and Nassim Taleb published an article in the Financial Times arguing that the traditional "bell curves" that have been in use for over a century are inadequate for measuring risk in financial markets, given that such curves disregard the possibility of sharp jumps or discontinuities. 
Contrasting this approach with the traditional approaches based on random walks, they stated:

We live in a world primarily driven by random jumps, and tools designed for random walks address the wrong problem.

Mandelbrot and Taleb pointed out that although one can assume that the odds of finding a person who is several miles tall are extremely low, similar excessive observations can not be excluded in other areas of application. 
They argued that while traditional bell curves may provide a satisfactory representation of height and weight in the population, they do not provide a suitable modeling mechanism for market risks or returns, where just ten trading days represent 63 per cent of the returns of the past 50 years.



			https://fooledbyrandomness.com/FT-MandelbrotTaleb.pdf
		


The difference ten days make:
By removing the ten biggest one-day moves from the S&P 500 over the past 50 years, we see a huge difference in returns. 
And yet conventional finance treats these one-day jumps as mere anomalies.

End of quote.

Skate, your comments re failure of backtesting are valid in light of the last sentence!

I have attached the aforementioned pdf.


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## qldfrog (20 July 2022)

entropy said:


> Skate, nice post here along with your previous posts, you raise some interesting questions!
> I admire the energy you bring to this forum, long may it continue!
> 
> Let's start with the comment of a legend:
> ...



Great post @entropy. Thanks


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## Skate (20 July 2022)

Skate said:


> You can take it from me, even dud strategies will produce the equivalent of random results.




*"Past success does not guarantee future performance."*
You'll see this warning tacked onto everything from those wishing to sell you something trade-related. What exactly does it mean?

*Trading involves risk*
Trading is a risky process that centres around the process of making good decisions & managing risk. With systemic traders, it is about the methodology & process that counts. Past results can be helpful when analysing a strategy, as long as the time horizon is meaningful "to you". Also, the past returns can be a helpful metric when choosing to evaluate a strategy further. 

Skate.


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## Skate (20 July 2022)

*It's so confusing evaluating strategies*
When confronted with a backtest result, it's daunting to know if the results are any good let alone if it's a tradable strategy. Them whemn you compare two side-by-side backtest results can be doubly confusing, to say the least. So, how do you evaluate the results?. 

*First off*
You need to understand each of the metrics as they tell their own individual story. It's for you to decide what you are trying to understand & which metric will get you there. Doing so will be the metric to establish the baseline. Bloody hell, which metric is the best one to use?

*A signal backtest is not an evaluation*
In the next series of posts, there will be two backtest reports for consideration. It's a single backtest of a Random Strategy versus my recent "Lipstick on a Pig Strategy". The example is to show how nothing is easy when it comes to reading a backtest report. Trying to establish which strategy is the best is not as easy as it looks. 

Skate.


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## Skate (20 July 2022)

*Choosing a backtest metric for the evaluation & validation process*
The journey starts by researching a trading method that has been proven to work in the past. Once the idea turns into a process all that is left is to verify that the system will work today as it has in the past. 

*When choosing a metric for validation*
It's ideal to stay with the same metric because the comparison between results will be more consistent than jumping from one metric to another "consistency is what we are ultimately after". 

Skate.


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## Skate (20 July 2022)

*Even the best of us think "is the strategy any good?"*
We all struggle with the question of whether the strategy is good. Can the backtest report be relied upon? When we establish a basic trading strategy, the backtest should indicate if the strategy is any good, right? At this stage, what do the backtest results tell us?  What the hell do we do next? 

*Maybe a little fiddling is all that is required*
Faulty thinking now sets in. You know what? with a little tinkering, you start to believe this strategy is worthy of additional effort. You set about making "small refinements" after "small refinements" & Bob's your uncle it's the duck's guts. This is when you start dreaming, believing your own bull$hit. Yes, your mind confirms it, this is the best strategy so far, as all the others you traded just lost money. Then, with confidence, you will start to trade this strategy only to find it didn't perform as expected, thus the cycle starts all over again.

Skate.


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## Skate (20 July 2022)

*Let's talk about Metrics for a moment*
Metrics is one of the most academic topics for evaluating trading systems. There are so many of them we all find it difficult to know which one is more appropriate to evaluate a specific system. It's really quite frustrating at times.

*What is a good metric?*
I've seen it stated that "there is no better metric than your trading account balance". For a start, don't use that metric as it might be "all over red rover" before you know the answer. 



entropy said:


> By removing the ten biggest one-day moves from the S&P 500 over the past 50 years, we see a huge difference in returns.




*Outliers*
@entropy is on to something here because I've noticed in my testing a good part of the gains comes from a few stocks that move a lot but that's how a trend-following strategy works. Eliminating the outliers as suggested by a few others can skew the results going from persevering with a handy strategy to discarding a perfectly good strategy.

Skate.


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## Skate (20 July 2022)

*A large drawdown is acceptable*
Large drawdowns during backtesting are rarely given a second thought when the strategy displays a large profit. Faulty thinking is when you believe "profits" are more important than a 20, 30, or even a 40% drawdown. When you alert others that profits are not the benchmark or metric to use, it's like “water off a duck's back”. I've found over time no matter what you say, people "will do what they want to do".

*Drawdowns are an important metric *
And it's no more important when your money is on the line. The level of drawdown that you believe you can handle will be tested in ways that you would not have thought possible. From the holdings period to increased winners with a reduction in the number of trades also needs to be considered. Most of all, I'm always seeking to achieve a lower drawdown that results in a better Car/MDD metric & a few others.

Skate.


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## Skate (20 July 2022)

*Well, I finally got here*
Understanding a backtest report is hard enough. But when it comes to comparing two backtest reports, life becomes a little more difficult.

*Jumping to conclusions *
Making a "quick judgment call" might have kept us alive back in the good old days from being eaten by a tiger but  "jumping to a conclusion" is certainly not helpful when it comes to trading. 

*When comparing the backtest results *
I can tell you with all certainty that "you will form an opinion straight away" without using any effort.

*"Random" versus the "Pig"*
The backtest reporting period is from the 1st of July 2015 to today (the actual time I've been trading). I'll use those dates for all my examples so there is no cherry-picking. The "LH backtest" is from a random entry, nothing fancy just using the MACD. The "RH Backtest" is my latest creation (Lipstick on a Pig Momentum Strategy) coded up only a few weeks back. 









Skate.


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## Skate (21 July 2022)

*Amibroker Backtest Explanatory notes*
I got thinking. Maybe not everyone knows what the terminology means in the backtest report or how the figures are derived. The explanation is in no way comprehensive but a short description at times is all that is required.




Skate.


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## entropy (21 July 2022)

Skate said:


> *Well, I finally got here*
> Understanding a backtest report is hard enough. But when it comes to comparing two backtest reports, life becomes a little more difficult.
> 
> *Jumping to conclusions *
> ...



Nice presentation, Skate!
I don't subscribe to a trading platform so your superb display of statistics and graphics is beyond my home-made Python efforts. The metrics you indicate are important to you also make sense to me, except the 'Stale Stop', could you elaborate?
I will attempt to code up these metrics to see how my results compare.

Is it possible to re-run you code and report the backtest results for say the approx five years only 2018 to 2022?
I am interested to see how the more recent data pans out.

Because we are dealing with making decisions under uncertainty I prefer to look at distributions of outcomes rather than specific outcomes. That way I can get a feel for the range of possible outcomes and assess my risks.


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## Skate (21 July 2022)

entropy said:


> The metrics you indicate are important to you also make sense to me, except the 'Stale Stop', could you elaborate?




If you do a search, there would be at least 60 posts that I've made on the subject.



entropy said:


> Is it possible to re-run you code and report the backtest results for say the approx five years only 2018 to 2022?
> I am interested to see how the more recent data pans out.




Sure, no worry. I'll be out of the office for about an hour & will post them on my return

Skate.


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## Skate (21 July 2022)

entropy said:


> Is it possible to re-run you code and *report the backtest results for say the approx five years only 2018 to 2022*?
> I am interested to see how the more recent data pans out.




*Looking for long-term trends*
@entropy it's refreshing when others ask for a backtest over a shorter period. Backtesting over a long period & the report becomes ineffective (IMHO) to qualify any long-term trends. The longer the backtest period you use can just add complexities in evaluating the results as the returns could be down to sheer luck.

*Strategy evaluation*
I'm not convinced using a single backtest can really supply the information required without gathering more information on the side. Indeed, even strategies with nearly identical construction rules & long-run average returns can deviate meaningfully through time. The lesson for mechanical system traders is to remain cautious when interpreting past performance results.

*The backtest period is important*
At this stage, I should point out that there are two camps when the "time issue" of backtesting is raised. We have previously discussed what length should be used when backtesting to achieve meaningful results. There are some who prefer longer backtest periods & their opinion completely differs from mine. I believe more "meaningful" information is gathered using shorter-term backtests to evaluate the metrics. The effectiveness of those metrics can diminish when backtesting over a longer period.

*Longer the backtest doesn't always equal better*
Performance results can be like “chalk & cheese” when conducting an evaluation over massive time frames. Performance observed in the past may offer little insight into the strategy performance in the short term. All I'm saying, markets have changed over the last 14 years.








Skate.


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## Skate (21 July 2022)

entropy said:


> The metrics you indicate are important to you also make sense to me, except the 'Stale Stop', could you elaborate?




*After I buy when do I sell?*
@entropy, I've made plenty of posts explaining that selling is where the money is made. Successful trading is largely the art of selling. Buying a stock is easy. It is determining when to cut our losses or when to take our profits that is the hard part when it comes to trading. Because it is so hard to determine when it is the right time to sell, many just don’t do it. Successful selling needs to be timed. One timing method that I use is my "Stale Stop Exit". When a position is not performing as expected or stagnating due to the lack of momentum, I'm out.

*Stale stop exits*
A "stale stop exit" correctly implemented not only has the ability to make money but also keeps my strategies in rotation mode by disregarding the non-performers quickly freeing up a position & capital. There have been some who have tried to code & implement something similar to my "Stale Stop Exit Strategy" with limited success. For the "Stale Stop Exit" to be effective it needs to measure "bar-by-bar" necessitating it to be in a loop or it will fall short of expectations.

Skate.


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## JohnDe (21 July 2022)

_"The combination of inflation, higher interest rates and oil prices, the Ukraine war and Covid-19 are creating unprecedented challenges that will impact markets for months to come. This week these good results inspired a new wave of confidence in stock markets. But whether it be Australia, the US or Europe the challenges in the current half year are going to be very different."_​


> *The new stock market indicators that may surprise you*
> 
> JB HiFi led the way in showing that many Australian companies adapted brilliantly to the conditions in the half year to June 30. And the US is reporting similar corporate achievements because American companies also adapted well.
> 
> ...


----------



## Skate (21 July 2022)

JohnDe said:


> unprecedented challenges




@JohnDe, by highlighting the issue of "unprecedented challenges" allows me to make another post to explain why a smart wimp who runs & hides when the going gets tough generally produces better results. It also allows me to make a few comments about "stops". Using a combination of stops in my opinion is better than just using one. 

*Stops*
A "Take Profit Stop", & a "Stale Stop" combined with a "Trailing Stop" can be very effective in combatting the "unprecedented challenges" that Robert Gottleiebsen described in his article.

*Selling is a valuable tactical tool*
Selling is by far the most valuable tactical tool that any trader has at their disposal. Selling is cheap, easy & can be undone in the blink of an eye. Too many seem to think that if they sell, they are somehow prevented from buying it back again. Not so.

*Exits that work together are effective*
In fact, I’ll go so far as to claim if you sell at the correct time or when the going gets tough generally produces better results than brave souls who are proud of their ability to suffer great monetary pains while they wait for the position to recover.

*You can take this to the bank*
When you have a high number of "take profit" exits your strategy is doing something right. As the exits are so important (to me) I've added those metrics to the bottom of every backtest I carry out.




Skate.


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## entropy (21 July 2022)

Skate said:


> If you do a search, there would be at least 60 posts that I've made on the subject.
> 
> 
> 
> ...



Thanks Skate!
I had no idea how useful the Search facility could be.
Your comments caught my interest:

(Quote)
The "Stale Stop Exit" is a little more complex
The Stale Stop Exit does a mighty job & is a combination of 6 conditions. 
It's extremely difficult for me to explain how it works without revealing the complex coding involved.

Rapid changes in price
First off the "Stale Stop Exit Strategy" gauges when momentum is shifting, slowing, or reducing but 
that's not all that it does as it's time-dependent as well. 
There are multilayers to the "StaleStop Exit" as momentum needs to be calculated bar-by-bar in 
relationship to previous bars. 
Each position is only given enough time to confirm its worth. 
Positions that don't keep improving are not worthy of keeping.
(End quote)

Excellent idea re closing sluggish performers and redirecting the capital.


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## entropy (23 July 2022)

Skate said:


> *What is position sizing?*
> For those who don't understand, I should have explained what "position sizing" is In its most basic form. There are those who have trouble with some of the technical terms & this follow-up post will clear this one up.
> 
> *How much do we bet?*
> ...




Skate, you raise here some good points!
Position sizing has been discussed a lot by Bill Ziemba, sadly he has recently passed away but left behind a remarkable legacy.
He made a lot of money for himself and for clients using the Kelly Criterion for sizing.
Attached is a pdf that may be of interest, he tags Buffet as a "Full Kelly Investor".


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## Skate (23 July 2022)

entropy said:


> Position sizing has been discussed a lot by Bill Ziemba




@entropy thank you for the pdf. I'm set in my ways when it comes to position sizing.

*I have a procedure to take advantage of profits & losses*
Both profits & losses determine my next bet size or the dollar amount of my next series of bets. Closed profits mean the next bet or series of bets increases whereas losses decrease the next bet or the next series of bets.

*When backtesting*
The position size needs to be a fixed dollar amount so compounding doesn't skew the results.

*When it comes to "live trading" *
I use a pyramiding system (my terminology) to ensure that every dollar is placed in the market. I often call dollars soldiers & relate trading to fighting a battle. If I'm to have any chance of winning the war, I want every soldier in the battle instead of lounging around in the barracks.

*Let me explain further*
Pyramiding (my terminology) is simply increasing or decreasing the next bet size that my trading funds will allow. Pyramiding is a re-balancing technique coded into my trading strategy to calculate the next bet size & the number of shares to buy in the pre-auction. Position sizing this way allows every dollar/soldier to be put into the market/battle to fight the good fight.

*How? *
A Bank feed is sent to a parameter setting within the AFL strategy code & the formula is quite simple. It's simply a way of putting every dollar to work.

*Trading Bank Balance/outstanding positions = new "PositionSize" (formula)*
The formula above calculates the new bet for every pending new trade. The other part of the code calculates the "Buy Offer" & the "number of shares" to buy in the pre-auction.

*## Update ##*
I went off half-cocked believing the pdf uploaded related to position sizing, thus the instigation of my posts. Bill Ziemba doesn't touch on the subject of "Position Sizing" in the article but maybe he has in a previous publication. 

Skate.


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## entropy (24 July 2022)

Skate said:


> *## Update ##*
> I went off half-cocked believing the pdf uploaded related to position sizing, thus the instigation of my posts. Bill Ziemba doesn't touch on the subject of "Position Sizing" in the article but maybe he has in a previous publication.



His position sizing is the Kelly criterion. 
As it was for Edward Thorp of blackjack fame. 
Like Ziemba was, Thorp is a very successful stock trader with outstanding academic credentials. 
Ziemba was also a prolific writer on many things financial, he said writing helped to clarify his thoughts and actions.
Kelly sizing is simply investing a proportion of your bank in line with your edge. 
It is designed to maximize the long term log(wealth). 
It requires an accurate assessment of one's edge but has some features that are contentious.


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## Skate (24 July 2022)

entropy said:


> His position sizing is the Kelly criterion.
> As it was for Edward Thorp of blackjack fame.
> Like Ziemba was, Thorp is a very successful stock trader with outstanding academic credentials.
> Ziemba was also a prolific writer on many things financial, he said writing helped to clarify his thoughts and actions.
> ...




*How much money should we allocate to each bet?*
That in itself is an interesting topic for discussion but I would rather talk about something that actually makes "me" money. But before I move on I want to give a condensed version of what @entropy eluded to earlier about position sizing, using the Kelly criterion. 

*Generating interest*
I appreciate any discussion that sparks interest & my interest was certainly sparked learning that Bill Ziemba made a lot of money using the Kelly Criterion for bet sizing was worthy of further investigation.

Skate.


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## Skate (24 July 2022)

*So what is the Kelly criterion?*
Kelly criterion is a mathematical formula for bet sizing, which is frequently used to determine the optimal "theoretical size" for a bet to determine how much money should allocate to each trade. Theoretically, using the Kelly criterion it's reported that it "should" result in higher wealth "over time" compared to other types of strategies.

*The "better off" test*
I'm not that convinced "at this stage" using this method of position sizing (for the bulk of us) would grow your wealth any faster without increasing the risk of ruin. There are other methods I would be concentrating on before using the Kelly criterion position sizing calculations. 

*I would prefer you first try one of these first*
Use a fixed dollar amount or a fixed percentage of the portfolio allocated to each position, you can even use the ATR to decide the position size. By trying these methods first it allows you to see how each of those position sizing methods impacts the number of shares & dollar value attached to the trade. By doing it this way you'll get a feel for it. Also, with a backtest report you'll see the impact on the net results in a heartbeat.

Skate.


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## Skate (24 July 2022)

*How much of my trading funds should I bet if the odds are in my favour?*
Using this method of thinking can lead to an undesired outcome with your trading because the outcome is never known. Using Kelly's criterion is about maximizing long-term growth. I'm the first to admit that "position sizing" can & does have an effect on returns, but is insignificant in the scheme of things.

*There is a Kelly criterion calculator *
This calculator is freely available on the internet for you to work this stuff out. But be warned as the calculator depends on your "assumption" of the probability as a percentage you apply to the success of an individual trading decision. Frankly, this is where "position score" trumps "position sizing" at every turn. Also, mucking around with the "position size", the size of your next bet will results in a minuscule difference compared to the results you can achieve through using a correctly coded "position score".

*I should also say*
No matter what the Kelly criterion position sizing is, to be effective your trading strategy needs to have an edge. You cannot take a losing system & change it into a winning one through "Position Sizing". The system must be profitable to start with.

Skate.


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## Skate (24 July 2022)

*I want to discuss today Buy Filters, Index Filters, & Regime Filters* 
They are all the same using different terminology (IMHO) I want to make a series of posts to explain what filter you should use to keep you on the right side of the markets. This exercise is not to determine whether to trade with or without a "Filter", but rather a novel way to decide when to trade while still utilising the index you are trading.

*Let's name the Elephant in the room "Moving averages"*
I don't care which moving average you use they all have a varying degree of lag. So how can we decide on what method to use that gives us a fighting chance of getting it right without the lag. Using a lagging indicator such as a "moving average" to keep you in or out of the market at times is a "foolish idea" because it guarantees that you get into the trend too late & gets you out just as late. Both scenarios are not desirable as affect the returns you'll likely achieve. 

*The real question*
When should we trade? & is there a better alternative than using a moving average of the underlying index? I think there is. That's what I want to talk about, a subject that makes "me" money.

Skate.


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## entropy (24 July 2022)

Skate said:


> *I should also say*
> No matter what the Kelly criterion position sizing is, to be effective your trading strategy needs to have an edge. You cannot take a losing system & change it into a winning one through "Position Sizing". The system must be profitable to start with.



Skate, Absolutely! 

I would like this comment of yours tattooed on my forehead so that each time I looked in a mirror I get a reminder.

If one does not have a demonstrable positive expectation then Kelly says do not invest. 

Casinos know the exact edge they have on any game. 
If players find an edge eg card-counters in blackjack, the casinos introduce counter measures like bet restriction and automatic shuffling machines or just outright banning the player.

How to estimate your edge has perils and is a big subject in itself.

Full Kelly has some scary implications like huge swings in the proportion of bankroll invested, infinite divisibility of the amount invested, equal utility for the doubling of a 1K bankroll or a 1M bankroll.
There are ways of dealing with these issues, fractional Kelly being common. 

It was long ago shown mathematically that if there were say just two investors competing in a market, one using Kelly sizing and the other any other non-Kelly sizing method, and both using the exact same strategy to choose an investment, then "eventually" the Kelly one would end up with all the money.

I wrote "eventually" deliberately, it could take centuries!!


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## Skate (24 July 2022)

entropy said:


> How to estimate your edge




@entropy that's a great segue into explaining why trading with the markets rather than against the markets can give you an edge. Usually, filters are deployed to this job, some better than others & that's what I wanted to discuss today.

*I want to discuss the charts & the indicator below the charts*
First off, I'll use my version of the "Weekend Trend Trader" with "Skate Tweaks". There are those who own the "Turnkey WTT strategy" who can easily compare the results I've achieved as a benchmark. In a later post, I will upload when my backtests for (v1 & v2) of the WTT strategy for a comparison of the "Filters" used to keep you in & out of the markets.

*The ribbon tells the story*
If the ribbon is green the index filter is "On". When the ribbon is red index filter is "Off". But what I want to discuss is the colour of the lower ribbon on the chart "Skate's WTT Percentage Filter Strategy" (version 2). 

*The lower ribbon also tells the same story*
On the lower chart "Skate's WTT Percentage Filter Strategy" (version 2) the ribbon colour is derived a little differently. The colour coding is the same inasmuch that if the ribbon is green the index filter is "On". When the ribbon is red index filter is "Off". So what drives the colours? & is the "Filter" used in "Skate's WTT Percentage Filter Strategy" any better than the moving average filter used in the upper chart? 

*The answer in a nutshell *
I think so. 

*The indicator*
There is also an indicator at the bottom of both charts but it only relates to the chart directly above being "Skate's WTT Percentage Filter Strategy". I want to explain the indicator but to do so I will have to repeat the charts in each post so you don't have to refer back.   




Skate.


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## Skate (24 July 2022)

*Some Background*
The top chart "Skate's WTT Index Filter Strategy" (version 1) uses an "index filter", a 10-week moving average of the All Ordinaries (XAO). This means if the close is above the 10-week (SMA) the index filter is "On". Alternatively, when the close is below the 10-week (SMA) the index filter is "Off". 

*The ribbon is a visual representation*
The colour denotes if it's safe to trade. There are only two colours, green & red, meaning the filter is either "on" or "off". There is no in-between.






Skate.


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## peter2 (24 July 2022)

Pleased to see you start with a market "sentiment" indicator.

Your version 2 looks a bit spotty, too intermittent and it's more off than on even when the index is rising.
(edit: You may be planning on "smoothing" it. sorry if I posted early.)

A mkt filter based on your Ducati blue bars indicator on the XAO would look better.


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## Skate (24 July 2022)

peter2 said:


> Pleased to see you start with a market "sentiment" indicator.
> 
> Your version 2 looks a bit spotty, too intermittent and it's more off than on even when the index is rising.
> 
> A mkt filter based on your Ducati blue bars indicator on the XAO would look better.




@peter2, thanks for your input but today is an exercise in explaining that there are more ways to skin a cat than what is usually discussed.

*I did touch on this method some time ago *
But at the time there was little interest as most didn't understand the procedure I was discussing or they just didn't understand how it was implemented.

*I wanted to explain the different filters I use to get the job done*
Yes, the ribbon looks spotty but that's because of the percentage of advancing compared to declining positions converted to a "percentage" of the index. Let's wait to see the difference using another "Filter" can make to a strategy before passing a quick judgment.

Skate.


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## Skate (24 July 2022)

*Let's concentrate on the lower chart*
The ribbon on the lower chart "Skate's WTT Percentage Filter Strategy" uses the percentage of the index to drive the colour of the ribbon. As you can see the "spottiness" of the ribbon @peter2 is referring to but in reality, this means you are restricted in buying when the ribbon is red. I use this indicator as part of the "Stale Stop" exit strategy that ensures the open position is sold when the percentage of the index is below a certain value. Using this method concentrates on capital preservation. This indicator (filter) is perfect for those that "feel twitchy" or "nervous" when deciding to take a punt.

*The Indicator*
This indicator simply displays the number of advancing stock of the All Ordinaries compared to the number of declining stock as a percentage. Now the coding is not simple & there is a heavy drag when searching for signals or when doing backtesting (because of the looping required) but it's a small price to pay when you want to use an alternative to using a simple moving average of the index.

*At the moment*
As the All Ordinaries (XAO) is currently (67%) that's above the threshold of (50%), indicated by the red horizontal line. When this happens the ribbon turns green indicating it's "safe to trade", whereas the 10-week (SMA) ribbon indicates it is not safe to trade as the ribbon is displaying "red" keeping you out of an advancing market.





Skate.


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## Skate (24 July 2022)

entropy said:


> Is it possible to re-run you code and report the backtest results for say the approx five years only 2018 to 2022?




*So there is no cherry-picking*
All backtest going forward will be on the dates suggested above. Backtest period, 1/1/2018 to today. Using the number of advancing positions in the relationship of decliners converted to a percentage is an alternative.








*The only downside*
Slow execution of the "Percentage Filter" due to the heavy looping required.

* "Skate's WTT Percentage Filter Strategy" *



*"Skate's WTT Index Filter Strategy"*



Skate.


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## entropy (24 July 2022)

peter2 said:


> Pleased to see you start with a market "sentiment" indicator.
> 
> Your version 2 looks a bit spotty, too intermittent and it's more off than on even when the index is rising.
> (edit: You may be planning on "smoothing" it. sorry if I posted early.)
> ...



Hi peter2,

Do you mean something like this?

$XAO.au is the Norgate code for All Ordinaries, here for past 42 days, green line is the 'close' price.
The pink, blue and red lines being respective ALMA moving averages for 50, 20 and 9 days.
Bearing in mind I still have my trader's training wheels still on this graphic suggests the market started a positive move about six days ago.




Cheers, e.


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## JohnDe (25 July 2022)

> *Why it is too early to say the world economy is in recession*
> Growth in the rich world is slowing, but has not crashed to a halt
> 
> Everyone is a pessimist these days. Barely a day goes by without an economist downgrading their forecasts. On July 14th Steven Blitz of ts Lombard, an investment-research firm, said that he was now expecting a recession this year in the world’s largest economy, a day after Bank of America made the same call. Goldman Sachs, another bank, reckons Germany’s gdp shrank in the second quarter of the year and will also do so in the third. Americans’ Google searches for “recession” have never been so high, and by some distance. TikTok, a short-video platform, is full of clips telling Generation z how to budget as the downturn unfolds. Traders are selling copper (a proxy for industrial health), buying the dollar (a sign that they are nervous) and pricing in interest-rate cuts for next year.
> ...


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## Skate (25 July 2022)

@JohnDe, sometimes it's hard to work out what going on. Sentiment plays a big part in shifting the markets & any good poker player will tell you that "you can only play the hand you are given".

*This thread allows everyone to have their opinion heard*
It's handy to read the material you posted but you could have just posted a hyperlink to the article. Personally, I would have preferred to hear your take on the article, or at least you could have expressed your feeling about the article. You could have even posted a chart from the article, one that gets the message across.

*Frankly*
I'm more interested in what you have to say rather than the so-called experts.




*The RBA will not increase interest rates in 2022 despite inflation fears*
If Philip Lowe from the RBA couldn't get it right when he said “the latest data & forecasts do not warrant an increase in the cash rate in 2022” what chance anyone else will get it right. He went on to explain that Australia will not be sucked into a “perfect storm”. When people talk bull$hit they need to be called out.

*Confirmed as bull$hit*



Skate.


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## dyna (25 July 2022)

Skate said:


> It's handy to read the material you posted but you could have just posted a hyperlink



I didn't realise, when I started to read the post, that it'd be so long winded, but it was well worth it for me , personally.
Had it been a link, I  most likely wouldn't have bothered.
That's just me, I guess.
Glutton for info.


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## Skate (25 July 2022)

dyna said:


> I didn't realise, when I started to read the post, that it'd be so long winded, but it was well worth it for me , personally.
> Had it been a link, I  most likely wouldn't have bothered.
> That's just me, I guess.
> Glutton for info.




@dyna, thanks for making that observation, your comments are important.

*After you reading the article*
I’d be more interested to read your opinion about the content presented, also what was your main takeaway from the article?

*From my perspective *
1. Most members won’t take the time to read a lengthy article or post.
2. Most won’t detail their post, let alone take the time to explain a point from their perspective.
3. Cryptic posts & one liners are just as bad, as they leave the reader guessing.

Skate.


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## Captain_Chaza (25 July 2022)

Ahoy there Officer Skate

If you designed a Ship for Your Maiden Voyage on the ASX
or any other member of the Global Stock Exchanges
Would this Ship Design Look like a Good Start for you?


It was for me

I ask this as we all start  from somewhere
I had a beautiful  little red sports car  (Triumph Stag)

As life happens as it always does
I found myself needing another Car and It had be a Station Wagon

Life can be Truly Merciless on Land as she can be at Sea

I then came up with a Brilliant Idea to trade the little ship with only a 3 Max Sail area and get a bigger Ship with many more Masts and  Sails
"As the Prize Monies Rolled in"

What a Beautiful Ship Design  she was and  is to this day



Naturally, As Success breeds Success I designed another Beauty



There is no crime to "Trade Up"

There is also no crime to do it again and again if One wishes to form a fleet of Magnificent  Tall Ships


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## Skate (25 July 2022)

Captain_Chaza said:


> Ahoy there Officer Skate
> 
> If you designed a Ship for Your Maiden Voyage on the ASX
> or any other member of the Global Stock Exchanges
> ...




@Captain_Chaza, I know exactly what you mean.

Skate.


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## investtrader (25 July 2022)

Skate said:


> *Let's concentrate on the lower chart*
> The ribbon on the lower chart "Skate's WTT Percentage Filter Strategy" uses the percentage of the index to drive the colour of the ribbon. As you can see the "spottiness" of the ribbon @peter2 is referring to but in reality, this means you are restricted in buying when the ribbon is red. I use this indicator as part of the "Stale Stop" exit strategy that ensures the open position is sold when the percentage of the index is below a certain value. Using this method concentrates on capital preservation. This indicator (filter) is perfect for those that "feel twitchy" or "nervous" when deciding to take a punt.
> 
> *The Indicator*
> ...



#Skate . I am very interested in your Advance decline ratio. Is this a calculation using Norgate tickers e.g #XAOADV.au is no. of advancing issues. I can't get a calculation to match yours.


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## qldfrog (26 July 2022)

investtrader said:


> #Skate . I am very interested in your Advance decline ratio. Is this a calculation using Norgate tickers e.g #XAOADV.au is no. of advancing issues. I can't get a calculation to match yours.



I like the fact that this ratio is removing the weight of the asx monsters big banks bhp rio etc which are seldom relevant/used in our system but do not really understand how it could be more reactive than a moving average of same weightless asx or xao.
I previously trialled xnt MA instead of xao/asx200 MA filter with no real edge detected
Sadly too busy right now to investigate further but will ASAP


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## Skate (26 July 2022)

investtrader said:


> #Skate . I am very interested in your Advance decline ratio. Is this a calculation using Norgate tickers e.g #XAOADV.au is no. of advancing issues. I can't get a calculation to match yours.




@investtrader*, let me explain*
The calculations use Norgate Data, in particular, the All Ordinaries ($XAO.au). I hard code the mathematical calculations & placed the code in a "for loop" doing it this way I believe my results are accurate but the heavy looping slows the runs of the Exploration Analysis & Backtesting. The exercise was to explain a method I personally use to keep me on the right side of the market.

Skate.


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## Skate (26 July 2022)

qldfrog said:


> *I like the fact that this ratio is removing the weight of the asx monsters big banks bhp rio etc *which are seldom relevant/used in our system but do not really understand how it could be more reactive than a moving average of same weightless asx or xao.
> I previously trialled xnt MA instead of xao/asx200 MA filter with no real edge detected
> Sadly too busy right now to investigate further but will ASAP




@qldfrog,* you nailed it*
The All Ordinaries are driven by the top 4 banks & a few majors which slant the "Index". Take it from me if they, the Banks have a good day, the markets have a good day.

*All I'm saying, there are alternatives*
The other major issue using "moving averages" as an indicator is the "lag" factor. I explained there was an alternative method, one of many, to keep you on the right side of the market. I'm sure @entropy got it because in his reply to @peter2 he stated that "the market started a positive move about six days ago", & using the "percentage method" I explained takes advantage of this. Using "moving averages" as the indicator & you are guaranteed to miss an opportunity.

Skate.


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## JohnDe (26 July 2022)

Skate said:


> @JohnDe, sometimes it's hard to work out what going on. Sentiment plays a big part in shifting the markets & any good poker player will tell you that "you can only play the hand you are given".
> 
> *This thread allows everyone to have their opinion heard*
> It's handy to read the material you posted but you could have just posted a hyperlink to the article. Personally, I would have preferred to hear your take on the article, or at least you could have expressed your feeling about the article. You could have even posted a chart from the article, one that gets the message across.
> ...





Sorry that I annoyed you Skate. It was a very busy day, I had just read the article and thought that it would be handy for some investors here. Normally I would comment but it was my first born 25th birthday and I had to rush home because we were taking the family out for a celebratory dinner. 

Walking to the restaurant/bar that we had booked I saw that the cafes and restaurants above 50% capacity, not bad for a cold Monday night on the outskirts of the city. Our dinner was delicious, the place was at about 75% capacity, lots of laughter, food and drink being consumed.

I think that we are a fair way from a recession in Australia, our unemployment level is extremely low and people still have disposable income. Many places in the world are in the same situation, and as long as all the Reserve Banks don't push the interest lever too hard and too fast we all may miss a hard recession.

I'll refrain from posting anymore articles if I can't comment, which is most likely going to mean less articles. We are extremely busy, and have to turn away work so as not to burn out my team, and myself.


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## investtrader (26 July 2022)

Skate said:


> @investtrader*, let me explain*
> The calculations use Norgate Data, in particular, the All Ordinaries ($XAO.au). I hard code the mathematical calculations & placed the code in a "for loop" doing it this way I believe my results are accurate but the heavy looping slows the runs of the Exploration Analysis & Backtesting. The exercise was to explain a method I personally use to keep me on the right side of the market.
> 
> Skate.



Okay, so ýou are using a 'private index'.. 

I don't really use index filters, except in a very limited way. I have found they reduce performance quite a lot and don't really reduce drawdown that much. Within my systems I it pay attention to the number of buy and sell signals. For example, on 28/2/20 I had 167 sell signals. A record. I know what that said. On 10/4/20 I started getting quite a good numbers of buy signals over the next few weeks. A huge rally followed after that.
In the last 2 weeks there are have been quite a few buys . Not enough for me to go to 100% yet, even though there are enough signals to fill the portfolio. I also watch, but don't incorporate in my code #XSO26WHL.au .
I want to do more work on this when I have time but my system does not lag - when it is bullish I get buys. I can't think how how I could plot no of buys and no of sells over time without doing it manually.
So I combine these things with watching my equity curve over the three systems I trade.That is my GTFO filter, as you so aptly called it.


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## Skate (26 July 2022)

JohnDe said:


> Sorry that I annoyed you Skate.




@JohnDe, first off I should say I wasn't annoyed. I appreciate every post, even the ones that point out my shortcommings.



JohnDe said:


> *I think that we are a fair way from a recession in Australia, our unemployment level is extremely low and people still have disposable income. Many places in the world are in the same situation, and as long as all the Reserve Banks don't push the interest lever too hard and too fast we all may miss a hard recession.*




*Now you're cooking*
If you had posted a short description (as above) & a hyperlink to the article, in my opinion, would have made for better reading. When someone expresses an opinion it stimulates others to think about theirs. A few words can explain so much & your opinion on the article holds more value to me than the article itself. My preference is for you to keep posting as it helps others, the main purpose of this thread.

Skate.


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## Skate (26 July 2022)

investtrader said:


> Within my systems I it pay attention to the number of buy and sell signals




@investtrader, as traders we are all different. Any indicator that gives you an edge is the one to use. I also agree that the ratio of buys & sells gives an inkling of what the market is doing at any one time. I have mentioned this in a previous post.

*How do I know when my strategy is performing?*
On a regular basis, I take notice of the number of closed trades from a "Take Profit Stop", that one metric indicates (a) not only how the market is traveling but (b) how inline the strategy is with the index being traded.

Skate.


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## Skate (27 July 2022)

entropy said:


> (Skate Quote)
> The "Stale Stop Exit" is a little more complex
> The Stale Stop Exit does a mighty job & is a combination of 6 conditions.
> It's extremely difficult for me to explain how it works without revealing the complex coding involved.




*As they say, a* *picture paints a thousand words *
I have coded my version of the WTT from the material I've found freely on the web. If the chart is inaccurate I'm sure someone will point it out to me. The exercise today is to visually demonstrate why a "Stale Stop Exit" is important & the advantage of using one in any strategy. 

*Disregarding the non-performers quickly frees up capital*
The holding period of a position is critical to profitability. When a position goes stale, what's the use of staying with it, funds could be applied elsewhere. It's really hard to know when a position is stale, but not impossible. At times you can exit prematurely, but it's no biggy as you can re-enter at any time. 

*Staying too long when momentum slows is a recipe for pending disaster *
Sure trends can last a long time, & at times will take a break before heading higher. But the majority of the time they don't, they fluctuate with great regularity & at times just go sidewards, that is my area of concern that is shown on the chart below.




Skate.


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## Skate (27 July 2022)

Skate said:


> Staying too long when momentum slows is a recipe for pending disaster




*As they say, a* *picture paints a thousand words*
I have coded "my version" of the WTT from the material I've found freely on the web but now the strategy has an additional exit. Both the "Original" & "Skate's Version" of the WTT Strategy is subject to a "simple moving average" (SMA) index filter to generate signals.

*But here is the twist*
"Skate's WTT Version" incorporates a "Stale Stop Exit" whose sole purpose is to free up capital that's looking for a new home. Also, I've colour coded the trailing stop as a visual reminder when the "Index Filter" is on & when it is off. The "Red" portion of the trailing stop denotes that the "Index Filter" is on. The "Pink" coloured portion of the trailing stop denotes that the "Index Filter" is off.

*Disregarding the non-performers quickly frees up capital*
The holding period of a position is critical to profitability.




Skate.


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## Skate (27 July 2022)

Skate said:


> Both the "Original" & "Skate's Version" of the WTT Strategy is subject to a "simple moving average" (SMA) index filter to generate signals.




*Twisting the strategy*
Instead of using a "simple moving average" (SMA) to generate the signals, I use the percentage of the index to generate both signals. The only difference to "Skate's WTT Index Filter Strategy v1", version 2, uses the 50% ratio of advancing stocks compared to the number of declining stocks to generate the buy signal.

*Now here is the twist*
The sell signal is generated when this ratio falls below 25%. This is an additional "exit condition" annexed to the "Stale Stop" exit strategy. This "Percentage Filter" parameter forms part of the "Stale Stop" exit strategy that ensures the open position is sold when the percentage of the index is below a certain percentage value of 25%. Using this method concentrates on capital preservation & it's perfect for those that "feel twitchy" or "nervous" when deciding to have a punt.





Skate.


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## Skate (27 July 2022)

*The WTT Strategy is not too shabby *
No matter the version you elect to trade, the methodology is solid. Adding a few bells & whistles improves on the original idea. (IMHO)








*Recap*
Viewing the charts stacked allows for a better comparison.




Skate.


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## Skate (27 July 2022)

*When things don't make sense*
I'm new to Twitter & I've found it astounding that there is so much free trading information being distributed. When others post their trading results it can make you happy & sad at the same time. When good traders are generously displaying their own personal results it allows you to benchmark the results you are achieving. 

*But sometimes the figures are confusing*
The figures presented below don't make sense to me nor does it add up using my calculator. I recently compares the two most recent results posted & found myself confused. 

*Why am I confused?* 
1. On the 16th of July, the YTD PnL was reported to be -$822,625 
2. The weekly PnL was reported as +$2,361
3. The new weekly PnL is now -$822,573. 
4. I'm unsure how it makes sense 




*I'm sure there will be a simple answer*
It's most likely that only the daily figures posted have been used in the YTD PnL calculations & the other days not reported are not included. 

*This has led me to ponder other questions*
1. When our returns are patchy or disappointing, what is the cause?
2. When do we accept the strategy is not performing as before?
3. What system should we have in place to benchmark our strategy?
4. How much should we be prepared to lose before pulling the strategy from the markets?
5. Is it possible to retune your strategy when market conditions change?
6. How do we know the markets have changed?

*Summary *
I'm a firm believer that if you're not evolving you will quickly become like the Dinosaures, extinct.

Skate.


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## Skate (27 July 2022)

Skate said:


> *The WTT Strategy is not too shabby *
> No matter the version you elect to trade, the methodology is solid. Adding a few bells & whistles improves on the original idea. (IMHO)




*Is it time for a strategy update?*
Strategies can work well until they don't. At times you don't realise there is a problem until it's too late. It's often said, "there is no answer when you can't see the problem". 

*Like cars, strategies can get a bit old*
Sometimes a wash & a polish will get it looking okay, but without the required maintenance, it will soon become unreliable. Sure, any car in decent condition will get you to the supermarket & back but it's another thing to ask that car to win a race at Bathurst.  

*I've been playing with the WTT Strategy for ages*
The WTT strategy in its original form lacks the bells or whistles to be competitive these days even though the methodology is sound. These last few years the returns have been disappointing & patchy. This strategy has been well discussed, thus making it the perfect strategy to use for the example. 

Skate.


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## investtrader (27 July 2022)

Skate said:


> *Twisting the strategy*
> Instead of using a "simple moving average" (SMA) to generate the signals, I use the percentage of the index to generate both signals. The only difference to "Skate's WTT Index Filter Strategy v1", version 2, uses the 50% ratio of advancing stocks compared to the number of declining stocks to generate the buy signal.
> 
> *Now here is the twist*
> ...



@Skate. Great stuff. I  have never heard of using AD%  this way. Very imaginative and clever.


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## Skate (27 July 2022)

peter2 said:


> Pleased to see you start with a market "sentiment" indicator.




*How do we squeeze a little more performance out of a strategy?*
The easiest way that I've found is to make sure it's adaptive to the emotional state of the markets. When this method is discussed, those who don't know any better will call this curve fitting. Curve fitting is another topic for another day.

*Backtest (1 year)*
The last financial year's results display that the markets haven't been kind to the original WTT Strategy, The Version 1 & 2 displays improvements




Skate


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## Skate (27 July 2022)

*Longer backtest (2 1/2 years)*
Unfortunately, trading the original WTT Strategy would have been a struggle during the last 2 1/2 years, & the overall results are not that impressive "compared to the expectations" you would have had. 

*COVID changed the markets*
There were a few reasons for the markets going off-kilter. The sentiment of traders changed so quickly, that they were frightened out of the markets. To be perfectly blunt, they simply got cold feet. In comes, "new players" who pushed the market higher & when that money fizzled out the markets retreated causing panic selling. With panic selling & poor economic conditions, the markets are finding it hard to recover. 

*The markets haven't been kind to the original WTT Strategy since the COVID flash crash *
With a little re-tuning of the WTT Strategy as with Version 1 & Version 2, the improvements were there. Those still trading the original strategy, I believe, are starting to lose faith.




*Summary*
With a little time & effort, there are improvements to be found if the strategy has an edge. A strategy without an edge is like giving a dead racehorse to the best trainer & expecting him to do miracles. 

Skate.


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## Skate (27 July 2022)

*Trading successfully, the learning curve is steep*
You could read hundreds of books, watch the market for years & still not be profitable. It’s time-consuming just trying to figure out all this stuff but to be successful in this game it’s imperative that you put in the work before investing. The dollars you invest are the same dollars you can spend elsewhere.

*When is good enough, good enough? *
Trying to find out what works need to be done before one dollar is invested into the markets. Buying a strategy is a quick way to start trading as the setup costs are relatively low. 

*FYI*
Buying a strategy doesn't guarantee that you will make money. To me, education is the key.

Skate.


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## Joe90 (27 July 2022)

Market Breadth indicators...
El Sk8oh and Linus van Pelt both touched on this topic here in April last year.




Amibroker code for the above is in the Marsten Parker video in this post, starting around 1.47.00 in the video...

https://www.aussiestockforums.com/threads/dump-it-here.34425/post-1117599

Ha, I can hear the wailing already "what, free code, and I have to type it all myself" ??? Also asking myself how I ever managed to sit through that video, all three hours of it. I expect adequate supplies of Stella and smoked chilli mussels were involved 😁


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## qldfrog (28 July 2022)

Skate said:


> *Longer backtest (2 1/2 years)*
> Unfortunately, trading the original WTT Strategy would have been a struggle during the last 2 1/2 years, & the overall results are not that impressive "compared to the expectations" you would have had.
> 
> *COVID changed the markets*
> ...



Just a precision Mr Skate, for me and the followers:
Are these backtest results based on initial 100k, then investments on FIXED parcels of 20x5k 
or do you reinvests your wins using a parcel size of 1/20th of portfolio value and so increasing parcel $ amount?
Just to confirm.
I tend to develop using fixed size as it removes a bit of the starting date timing effect 
but it feels better to use the reinvested BT 😊
and as this is the way i trade, that is the default running code post development to compare actual vs BT.


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## Skate (28 July 2022)

qldfrog said:


> Are these backtest results based on initial 100k, then investments on FIXED parcels of 20x5k




@qldfrog* that's a great question & it's worthy of a qualification*
I'll answer your question directly & then explain my methodology to understand the minor differences in this regard. All my backtests have an initial $100k portfolio, making the results easy to understand using this amount. All my backtests have fixed dollar amounts so there is no compounding skewing the results.

*The "Original WTT" *
The information that is freely available on the internet the original positioning size is as you stated (20 x 5k positions). I couldn't find what "position score" is in the original strategy but from memory, I read once (that I can't now find) that the position score was set to "random". For a start using a "random" position score will tell you how effective the base code is, but very ineffective to get a baseline on all the metrics the backtest produces.  I should also say at this point, the backtest results will be meaningless doing it this way as the "Annual Return %" will go up & down like a yo-yo. This means you will get hugely varying results. I've settled on the same position score that I use in my updated versions of the same strategy.

*Skate's versions (v1 & v2)*
There are a few differences to improve the strategy that has worked in my opinion. My research indicated one of those improvements was to alter the position sizing to (10 X $10k) bets. Using a larger bet allows the winners, to be more effective when the signals are being taken more selectively.

*Similarities*
The "Original WTT" & "Skate's WTT v1" uses a simple moving average of the index to determine the generation of the signals whereas "Skate's WTT v2" uses a different method that has been previously explained.

Skate.


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## Skate (28 July 2022)

*"p2-starts-another-asx-portfolio-wkly-dly" *


			https://www.aussiestockforums.com/threads/p2-starts-another-asx-portfolio-wkly-dly.35039/post-1186326
		


*Making comments*
@peter2 recently made a few comments & observations in his private member's thread "p2-starts-another-asx-portfolio-wkly-dly" that is not freely available to all so I'll repost my reply in this thread, keeping my posts in one place.

*Peter nailed it*
When he said, I should "modify the current strategy to earn what we can from the current market conditions". I went on to say that I believe he is on the right course. Peter succinctly nailed it in one sentence where it's taken me a handful of posts & a few graphs to explain the same thing.

*The market will rebound, we just don't know when*
In hindsight, it all looks perfectly clear what we should have done but in the heat of the battle, it's not so clear. When traders are losing they usually make up stories to convince themselves that what they are doing is the right thing. (at the time)

*Poor logic*
Ultimately, that logic leads to giving back big gains or incurring bigger losses as Peter pointed out. His yearly equity curve does a good job of confirming this. Traders are often paralysed into inaction, keeping them emotionally & financially tied to underperforming positions that "have a cost" while waiting for them to recover.

*Selling is cheap & effective*
It's by far the best management tool we have in our toolbox.

Skate.


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## Skate (28 July 2022)

*What a buzz*
@Captain_Chaza posted a video clip of the promotional song used for the "America's Cup" challenge that brought back so many good memories. I believe, it was the first time the "Boxing Kangaroo" logo was used. 



*America’s cup challenge (1983)*
The crew signed the promotional poster for me that hangs proudly in my office to remind me that we Aussies are up to the challenge. (sadly not everyone who signed the poster is with us today)

*They had a plan*
Bertrand & his crew had a plan, a deliberate strategy, a psychological strategy not to refer to the all-conquering American team by their names ahead of the "America's Cup" challenge & it worked. Because they had a plan, a strategy coupled with the determination to win a yacht race shows nothing is impossible when you set your mind to it.




Skate.


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## Trendnomics (28 July 2022)

Happy my system hasn't forced an all cash scenario - current open positions flying nicely.


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## Skate (30 July 2022)

*Have you ever had one of those days, you feel like crawling under a rock?*
Being 69 in a few months I wanted to get my medical out of the way knowing I had to have a colonoscopy & a blood test.

*If any were wondering*
The doctor informed me I passed both tests with flying colours but suggested I have a sperm count done just to make sure I’m in perfect health. The doctor gave me a specimen cup & told me to fill it & bring it back the next day.

*The next day *
The Doctor seeing the empty specimen cup asked if there was a problem. Well, I said, this is embarrassing, I wanted to get the job done quickly, so as soon as I got home. 

*I got right to it*
I tried with my right hand (nothing).
So, I tried with my left hand (nothing).
My wife tried with her right hand (nothing), & her left hand (nothing). 
She even tried her mouth, teeth in, teeth out, (nothing).

*Then my wife's best friend tried*.
Right hand, left hand, mouth, still (nothing).
Under her armpit & between her knees (nothing)

*Doc, I'm so embarrassed *
There was nothing we did, that could get the lid off of the specimen cup.

Skate.


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## Skate (30 July 2022)

*Why do we let losses get out of hand?*
Whether you report a loss as a percentage or as a dollar figure, they both hurt like a bitch when they are stratospheric.

*Big losses are hard to recoup*
When you look at the returns required to get you back to "breakeven" after a stratospheric loss, simply highlights the damage your strategy has done to your portfolio. Recovering from a loss is painfully slow knowing that the markets always drop quickly & recover slowly.

Skate.


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## qldfrog (30 July 2022)

Skate said:


> *Why do we let losses get out of hand?*
> Whether you report a loss as a percentage or as a dollar figure, they both hurt like a bitch when they are stratospheric.
> 
> *Big losses are hard to recoup*
> ...



Indeed, i so wish you were wrong...but no..too true


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## Skate (30 July 2022)

*Amibroker backtesting can fool you*
Even the best software can give you a false sense of "security" to persist with a strategy when there really isn't an edge or an edge that hasn't been correctly established. Backtesting is not the be-all and end-all, as it's not the only important thing in strategy development or strategy evaluation but it does allow you an insight into how your strategy will perform when trading it live. 

*Backtesting uses historical data *
To achieve meaningful results make the backtest count. There are always some do's & don't when it comes to interpreting the results that I wish to touch on.

*For a start*
Don't fool yourself by backtesting using compounding. It may look good on paper & helpful to sell a strategy but "reality" goes out the window using this method. 

*As an example*
If you backtested a strategy with a starting balance of $100k with a position size of (20 X 5k bets) with compounding from 2012 to today your bets would have ballooned out to be $44k bets. Could you just imagine what they would be using $10k bets? 

*For a start*
One, you wouldn't stomach using this position size & two, you wouldn't be able to move large sums in & out of the markets without affecting the price. Amibroker takes none of this into consideration as the calculations are pretty simple.

Skate.


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## Skate (30 July 2022)

*What metric is the best to use when backtesting?*
To be honest, traders will use the metric that makes their strategy "look the best". Having blinkers on when choosing what metrics to use is never the best idea. Personal preferences will dictate the metrics they'll use. Sadly, it's usually the ones they "believe" is the most important. 
*
But there are some metrics that are constantly being overlooked *
Today I want to draw your attention to two important metrics that are often overlooked. Concentrating on just these two metrics will make you a better trader over time. (IMHO)

Skate.


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## Skate (30 July 2022)

*Let's face it, we all have our favourites*
The Ulcer Index is an important backtest metric (to me) but as I've discussed the "UI" previously It didn't make my final two today but it's still worthy of a comment.

*What Does Ulcer Index Mean?*
The Ulcer Index is a technical indicator that measures downside risk in terms of both the depth & duration of price declines. The index increases in value as the price moves farther away from a recent high & falls as the price rises to new highs. Simply stated, it is designed as one measure of volatility only on the downside. Don't get me wrong, this is a powerful metric that tells a powerful story.

Skate.


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## Skate (30 July 2022)

*Another great metric, but it didn't make the cut today*
The Sharpe ratio is getting close to what I want to discuss as it touches on R&R & this ratio is a really important metric.

*What is the Sharpe Ratio?*
The Sharpe ratio is the relationship between risk & return, the measure of risk-adjusted return. The ratio measures the performance compared to the performance of a risk-free asset. The formula allows you to understand the risk to generate a return. Above (1.0) is good, & more than (2.0) is very good.

Skate.


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## Skate (30 July 2022)

*A metric taken in isolation is never the best idea*
You know, if you backtest the same strategy over different time frames, the metric will tell you a different story each & every time. It's confusing to even the most senior traders. Confusion reigns supreme in this game, second-guessing yourself is one of the hardest hurdles to overcome as confusion will lead you to inaction. The K-Ratio elevates this confusion to some degree.

*What Is the K-Ratio?*
The K-ratio is a metric that detects an inconsistency in returns over time. The higher K-Ratio, the more consistent return you may expect from a strategy. The K-Ratio should be (1.0) or more. The higher K-Ratio, the more consistent returns you may expect from the strategy.

*Next*
Let me explain two metrics to add to your toolbox when assessing the likely hood of a strategy being profitable.

Skate.


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## Skate (30 July 2022)

*Well, it's taken a few posts, But I've finally got here*
There are two metrics that are simple to understand but often ignored when evaluating a backtest report. (1) The Risk Reward Ratio & (2) the Profit Factor are two metrics that we must always pay attention to. Concentrating on these two metrics will make you a better trader over time. They both tell the story we all should be listing to.

*# 1. The Risk-Reward Ratio*
Simply stated, this is the ratio of potential risk & potential reward of the trading strategy. You can take it from me, the "higher" is better. The risk/reward ratio, sometimes known as the R/R ratio, is a measure that compares the "potential profit" of a trade to its "potential loss". It is calculated by dividing the difference between the entry point of a trade & the stop-loss (the risk) by the difference between the profit target & the entry point (the reward).

*# 2. The Profit Factor *
The profit factor is a popular performance metric & is simply the ratio of the profit of winning trades divided by the loss in losing trades. As with the R&R ratio "higher" is also the better. A trading system is profitable if the profit factor ratio is above (1.0) whereas a factor of (2.0) or more is excellent. A profit factor higher is considered outstanding.

Skate.


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## Skate (30 July 2022)

*Let's for a second concentrate on the Risk-Reward Ratio *
When we start evaluating a strategy we are really seeking the answer to one simple question & that is "how do we measure" the success of a strategy? 

*As traders, we are all seeking consistent returns*
I’m not going to talk about those just starting out, who typically trade on news & gut feeling as "during this stage", they don't know any better. The major hurdle when starting out is "what to buy" without any consideration for selling. I've been there & I guess most others have as well. 

*Some trade on fundamentals, some trade on technicals*
I trade using 100% Technical Analysis as it’s the only way I seem to be able to make money. But I do believe if you are comfortable trading one method over the other & it gives you an edge, it's the right method for you. 

Skate.


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## Skate (30 July 2022)

*No matter what gives you an edge risk management has to be in the mix *
Adding prudent money management when you are trading with an edge, is imperative for long-term success. Capital preservation is ultimately your primary goal when it comes to investing your hard-earned cash.

*Understanding the significance of the risk-reward ratio*
Trend Trading has a low success rate. Personally, I think it should be higher, much higher, but what I think when it comes to trading is irrelevant. My trading success rate is no better than a coin toss, sometimes, well most of the time, it's even lower.  Having a low success rate of winners between 40% to 45%, means only 40 to 45 out of 100 trades end up in profit. This is why the “Risk Reward Ratio” is such an important metric. 

*When I first started "trend trading" *
I thought the results were "pathetic" but with the passing of time, my trading account doesn't agree, at all. 

Skate.


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## Skate (30 July 2022)

*The Risk-Reward Ratio*
Simply stated, this is the ratio of potential risk & potential reward of the trading strategy. You can take it from me, the "higher" is better.

*The Profit Factor*
The profit factor is a popular performance metric & is simply the ratio of the profit of winning trades divided by the loss in losing trades. As with the R&R ratio "higher" is also the better.

*The Risk-Reward Ratio & The Profit Factor*
By increasing both these two ratios, I'm confident strategy improvements will flow. 





Skate.


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## Skate (30 July 2022)

Skate said:


> To achieve meaningful results, "make the backtest count". There are always some do's & don't when it comes to interpreting the results that I wish to touch on. Don't fool yourself by backtesting using compounding. It may look good on paper but "reality" goes out the window using this method.




*Let's make a backtest accurate, constant, believable & achievable.*
We do this by making sure that you use fixed-position sizing for the calculations when backtesting to eliminate the effect of compounding. By eliminating the compounding effect, the results will be more believable & in my opinion achievable.

*The posted equity growth of the standard WTT*
The reported results from 2012, didn't look too shabby until I noticed the "Compounded Open Equity" disclaimer.




*Non-compounding results of my version of the "Original WTT Strategy"*
The backtest period is from 1/7/2012 to the end of trade yesterday (29/7/2022). It's very obvious that this strategy performed badly during the COVID crash & didn't perform all that well in 2021. The current results for this calendar year are also lackluster, (2022). But to be fair that's trend trading for you.

*Without compounding *
Using a fixed dollar amount for position sizing (20 X 5k positions) the results I achieve aren't too shabby being 13.92%. Admittedly it's a long way from 20.5% but overall "not too bad".




*Would someone kindly post their results?*
For those who have the WTT turnkey strategy, I would be interested to know the "real" non-compounded returns rather than the "hypothetical" non-compounded returns that I have posted just for comparison. The backtest period I've used is from 1/7/2012 to 29/7/2022.

Skate.


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## investtrader (30 July 2022)

@Skate   I don't actually agree that you can compare the annual return the way you have done here. I am sure I have mentioned this before. If you are using a fixed position size I also assume you are using fixed number of positions. So what happens is the equity grows but your exposure gets less and less over the years. The exposure figure shows this effect also.
For the fixed position size run, at the end of your test the equity is 370k but you will only invest 100k.
To see what I mean do a run say for the years 2020 and 2021 as single year runs. The annual return will show as a lot larger because you are fully investing.
I understand that compounding is unrealistic, but the longer term fixed sizes are as well.


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## Skate (30 July 2022)

investtrader said:


> I am sure I have mentioned this before. using fixed number of positions. So what happens is the equity grows but your exposure gets less and less over the years. The exposure figure shows this effect also. For the fixed position size run, at the end of your test the equity is 370k but you will only invest 100k.




@investtrader you have mentioned this before. During the strategy development phase, backtesting allows you to compare & contrast the metric with the changes made.

*I don't trade using the backtest portfolio*
In saying this some do, but it doesn't allow me to pyramid to overcome the exact scenario you have explained. I trade using the Exploration Analysis function that allows me to code in those calculations. Also, I can make the report as pretty or as detailed as I like.

*How do I rebalance?*
In a nutshell, rebalancing is a simple way to adjust the size of my next bet. Position-sizing (the bet size) uses my trading Bank balance feed to calculate the size of the next bet or series of bets. It's simply a way of putting every dollar to work by reinvestment the profits. 

Skate


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## Skate (30 July 2022)

*How I actually trade*
I use my "Trading Bank Balance/Outstanding Positions" = new "Position Size" the new bet size. This will now be the new bet for each & every pending trade. The new "Position Size" also calculates the number of shares to buy in the pre-auction. It couldn't be simpler.

*Parameters (example)*
The CBA Trading Bank Balance is $10k & I need one position





*The Exploration Analysis*
Using the parameters from the above produces the analysis below. All I have to do is follow along. Buy the number of shares @ the "buy offer" to be placed in the "pre-auction". The columns are in the same order as the CommBank order form. The colour coding denotes a buy or a sell. The exit colour denotes what generated the exit. In this case, it is a stale exit.





Skate.


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## Skate (30 July 2022)

*How do I allocate profits?*
By pyramiding my position sizing. The great part about this method it also calculates & adjusts the position size even when losses are incurred. The example below is simple & can be calculated in your head, ($30k/2 positions = $15k position size). But calculating the number of shares to buy in the pre-action isn't so easy.

*Parameters (example)*
The CBA Trading Bank Balance is $30k & I need "two positions"





*The Exploration Analysis*
Using the parameters from the above produces the analysis below. All I have to do is follow along. Buy the number of shares @ the "buy offer" to be placed in the "pre-auction".  The cost column denotes the "maximum investment cost" buying the number of shares at the "buy offer".





*Trading my way*
There is no thinking on my part, I just follow the signals. Being lazy comes easy to me & I believe I'm the master of this craft. 

Skate.


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## Skate (30 July 2022)

*In Summary*
@investtrader, I trust my explanation goes somewhat in explaining the way I use the Ambroker Backtest feature as well as the Exploration Analysis modes. There is a way I backtest when I'm in the strategy development phase, then there is another backtest procedure I use for strategy evaluation.

*Then there is the way I actually trade*
When I want to know what to buy or sell on Monday, I push one button & Amibroker does the rest. In the previous post, the uploaded capture displays everything I need to place my trades in the pre-auction. 

*But that's not all*
Other than generating the signals there is much more the Exploration can do & it handles it with ease. I coded all the reports generated by the Exploration mode for me to understand everything at a glance. The way I have coded the Exploration Analysis mode, not only does it add value to my trading but I can use it in so many different ways. 

*The Exploration analysis mode *
This mode can be as simple or as detailed as required. I have 5 separate Exploration modes that handle all my requirements. 





*I like charts that talk to me*
I must admit I like them pretty. They all have to have a two-stage header with all the details of the share on display. The stock ASX code & name is a must. The other information is vital so I don't have to move away from the chart.




Skate.


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## Trendnomics (1 August 2022)

XAO up and up. Most index filters switching on now?


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## qldfrog (1 August 2022)

Trendnomics said:


> XAO up and up. Most index filters switching on now?



probably mine on this morning but bitten hard by the fall of one of last week entry so not so rosy.
If not for system i would be running for the bomb shelter and liquidate all my profit toward  cash...


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## Trendnomics (1 August 2022)

qldfrog said:


> probably mine on this morning but bitten hard by the fall of one of last week entry so not so rosy.
> If not for system i would be running for the bomb shelter and liquidate all my profit toward  cash...




True systematic traders have managed to nullify most of their cognative biases. 

Helps not watching the news - the advice from the talking heads (with perfect hindsight) will not make you money.


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## qldfrog (1 August 2022)

Trendnomics said:


> True systematic traders have managed to nullify most of their cognative biases.
> 
> Helps not watching the news - the advice from the talking heads (with perfect hindsight) will not make you money.



That's why i am still following my systems..overall much better than me in determining when to get in or out.
FWIW , while my buy stops filter are now released , i remained relatively cash heavy system wise, and the systems playing the overall market volatility are still undecided: bear or bull.
Time will tell


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## Skate (2 August 2022)

*The markets giveth & the markets taketh away*
When you design a trading strategy, there are usually one to two key components that the strategy depends on for profitability If you do not know what they are, then you do not really know your strategy. With any project, you must have a desire & commitment for the process to have any chance of success.

*Discipline *
Emotions are to be considered the bad guy when it comes to trading. This villain will hijack your thinking, hindering your trading. When your money is on the line this is when trading gets real serious. Tough times are often the time a strategy is quickly abandoned. Commitment & focus on the long term is more important than focussing on the short term price volatility. 

Skate.


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## Skate (2 August 2022)

*The Strategy Development Process*
If we are to have any success trading, I maintain you will need a well-planned mechanical system to keep those pesky emotions in check. A mechanical strategy is nothing more than an idea, mathematically coded. 

*Backtesting* 
This testing is just the initial step in a long process to determine if the idea is good, bad, or indifferent. Being able to examine the metrics of a strategy is far superior to relying on your emotions when entering a trade. Trading a mechanical system will provide a much more solid foundation for successful trading. 

Skate.


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## Skate (2 August 2022)

*Mechanical trading will not overcome emotions*
Oh, what a day makes. Rolling in dough yesterday only to wave goodbye to it today. No matter how you trade there will always be an emotional side. However, after a period of trading, you will be able to gain confidence, the main ingredient needed in this game. Accepting price fluctuations & losing money is a natural part of this game & will go a long way in checking those emotions. There is nothing worse than doing the wrong thing at the wrong time. I know it's hard to keep following signals, but doing so has its merits in the long term. 

*Mate, you have to have the cash*
Those new to system trading, normally fail to have a degree of cash behind them starting out. Without an excess of cash, it will bring even the most committed to their knees. I’m just saying, you need a decent bankroll to endure the inevitable system drawdowns. It is not unreasonable to expect a perfectly robust trading methodology to exceed its maximum historical drawdown percentage by a factor of two. More often than not, this will happen sometime in the future & when you least expect it. 

Skate.


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## Skate (2 August 2022)

*Timing Implementation*
Timing is probably one of the most important factors when it comes to trading a mechanical system or re-entering after a short break. It is critical that the performance of the tested strategy accurately portrays backtesting as reasonably possible & if it doesn't it's your job to find out why.

*It serves no purpose *
To historically test a mechanical system & then not execute the strategy signals according to the same rigid standards when trading it live. Don’t concentrate on your emotions when placing a trade just execute the signals with precision.  You can take it from me, traders who focus on executing the signals in a nonbiased way will be able to handle what the markets give.

Skate.


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## gartley (2 August 2022)

Presently tracking the SPX on the daily chart. Price was just shy of the Projection Range. No sell signal presented yet, I suspect we might get one last move up before it is. Time will tell, but even if price enters projection range that is not justification to sell without confirmation first. If so is this the end of the rally? Not sure but it will present a good sell move down in any case.


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## Skate (5 August 2022)

*There is always an alternative to the original*
Covers of original songs are mostly disappointing as it's never the sound your mind is expecting.

*Roy Clark - Folsom Prison Blues*
This guy in his day was big because his performance always came with a "twist". Admittedly it's hard to think you could listen to one of Johnny Cash's songs sung by someone else & enjoy it. (forgive the quality)



*Roy Clark & Buck Trent - Dueling Banjos*
The first time I heard Dueling Banjos was from the movie Deliverance. I'll never forget that sight & sound. Well, once again Roy Clark is "twisting it up". I found it enjoyable to watch. (forgive the quality)



*But sometimes "twisting it up" can have surprising consequences*
It's the same when any of us try to improve on a solid trading system, sometimes the results are not what you were expecting. There are times when there are improvements but most times there aren't.

Skate.


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## Skate (9 August 2022)

*Amira Willighagen - 2014 *
This genre is not for everyone but the sound is so angelic.  It's hard to believe Amira who was 10 at the time, she has never had singing lessons, learning the song from listening to YouTube. Simply remarkable & soothing. 



Skate.


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## peter2 (9 August 2022)

Mate, R U OK?
The market is jumping. Stocks with no names are catching a bid. Even @frugal.rock 's barcodes are moving. Anything with a smell of lithium is going up. I'm currently looking for pegmatites in the backyard. All kinds of animals are appearing in the market, flying bats, blue wrens, pandas and many hybrids of all shapes and sizes. Your ROC indicator must have gone bonkers during the last few weeks indicating hundreds of new opportunities. The Combo portfolio is fully invested and there's still plenty more opps. Wow, was that a kingfisher zipping past my ear to grab that new entry that just popped up!

Edit: You can PM me if you just want to vent on any topic.


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## Skate (10 August 2022)

peter2 said:


> Mate, R U OK?




Yes @peter2, I'm okay. It's been a busy time for me, allowing less time on the thread.

*Trading has been going okay for me *
I assume it's been the same for everyone else. After reading a few posts it appears not to be the case. No matter what they say, there is always someone making money. I mentioned earlier in the thread that I was starting new strategies at the start of the new financial year. I have already started two of the three strategies & both are traveling along nicely "at the moment". 

*On Monday I'll be starting the third*
I've been looking for another simple strategy to trade & there is no simpler idea than a Bollinger Band Breakout Strategy. I have applied additional knowledge I’ve gained over the years to some of my earlier work. Surprisingly the new upgraded version of the BBO strategy isn’t too shabby at all. Having a few extra dollars to invest is a strong motivator to revisit this strategy.

Skate.


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## Skate (10 August 2022)

entropy said:


> Is it possible to re-run you code and report the backtest results for say the approx five years only 2018 to 2022?
> I am interested to see how the more recent data pans out.




*Published on the 20th July 2021*
_"One of the most popular strategies was the Bollinger Band Breakout (BBO) strategy named “One of the Top 10 Trading Systems of All Time” by Futures Truth and remains a popular trend following strategy"._

*Disclaimer*
The backtest results are from my version of the "Weekly Bollinger Band Breakout Strategy". The results aren't too shabby & the drawdown is lower than most trend trading strategies as I incorporate the Bollinger Bands as an additional exit strategy. We all tend to have our own unique version of John Bollinger's idea & it's at the "very heart" of my "BBO Strategy". Many will trade a variation of the BBO strategy because it's a trusted workhorse that works across all time periods. The BBO is a brilliant idea of John Bollinger. 

*So there is no cherry-picking*
All backtest going forward will be on the dates suggested by @entropy. The backtest period is from 1/1/2018 to today. 




Skate.


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## qldfrog (10 August 2022)

Skate said:


> *Published on the 20th July 2021*
> _"One of the most popular strategies was the Bollinger Band Breakout (BBO) strategy named “One of the Top 10 Trading Systems of All Time” by Futures Truth and remains a popular trend following strategy"._
> 
> *Disclaimer*
> ...



Hum, i should look back at my old bb strategy, got a bit more knowledge under the belly, and the previous version was run/tested on corrupt data.
I hope i will have the time to review that indeed


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## Skate (10 August 2022)

Skate said:


> I mentioned earlier in the thread that I was starting new strategies at the start of the new financial year. I have already started two of the three strategies & both are traveling along nicely "at the moment".




*For those interested*
Time Stamp 1:55 pm Today 10th August 2022

*WTT% Strategy  (10 x $10k positions)*
The WTT% uses the number of advancing positions in the relationship of decliners converted to a percentage as an alternative to using a simple moving average index filter. The issue I have using the garden variety (SMA) index filter is the tremendous amount of lag. This lag guarantees you will get in & out of a position late. I believe my alternative overcomes this issue.

*"Skate's Lipstick on a Pig Strategy"  (10 x $10k positions)*
First off, I should say @Newt's accidentally named this strategy "Lipstick on a pig". In a previous post, I was saying, "vanilla" strategies can be improved. These improvements, using additional buy conditions, parameters, & indicators, are the "Lipstick on the pig" he was referring to.














Skate.


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## peter2 (10 August 2022)

Skate said:


> The issue I have using the garden variety (SMA) index filter is the tremendous amount of lag. This lag guarantees you will get in & out of a position late.



Yep, totally agree that this lag is huge, especially after a panic dip in the market. The only purpose of a off/on market filter is to reduce the max DD. Once this has been activated and reduced the DD compared to the market, the portfolio manager needs to get back into the market quickly in order to take advantage of any rally. Moving averages and even volatility based indicators have too much lag for me after panic selloffs.


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## Skate (10 August 2022)

*Technical Analysis Explained*
In this YouTube video, Owen Rask interviews Nick Radge from The Chartist about his style of trading using technical analysis. The interview is well suited for those just starting out who are interested in system trading 

*Halfway through the interview, Owen asks two important questions*
1. If you were getting started in technical analysis today, which resources would you use to learn? 
2. Where do most technical analysts go wrong? 



Skate.


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## Newt (10 August 2022)

That Pig sure is looking quite attractive lately......


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## entropy (11 August 2022)

Skate said:


> *For those interested*
> Time Stamp 1:55 pm Today 10th August 2022
> 
> *WTT% Strategy  (10 x $10k positions)*
> ...




Nice set of trades there, Skate, well done!

Especially since you are adapting some long-established methods: I would have thought that the juice would be all squeezed out of those oranges so it is encouraging to me as a newby that the old ideas are worth re-investigating.
Amongst the noise you have detected some strong signals!

Your point about looking for signals other than ones like SMA's, which can be by their nature quite lagging, is a good one.

Do you consider it useful to pay attention to indices as an overall filter?
By that I mean if a candidate stock is in a sector whose index is flat or falling do you avoid it?
Say the index for all industrials in the All Ordinaries is declining would you automatically avoid these stocks until they move to an uptrend?


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## Skate (11 August 2022)

entropy said:


> Do you consider it useful to pay attention to indices as an overall filter?
> By that I mean if a candidate stock is in a sector whose index is flat or falling do you avoid it?
> Say the index for all industrials in the All Ordinaries is declining would you automatically avoid these stocks until they move to an uptrend?




@entropy thanks for taking an interest in my way of trading. 

*We all tend to have our own way of trading*
Before replying to your questions directly let me make a few points. Being a systematic trend trader I only have one job to do, which is to follow the buy & sell signals that are generated by my systems. It's even easier when "Position Sizing & Position Score" is part of the mix.

*It's a business market*
There are so many retirees being forced to look for better returns in their retirement, I was one of them back in 2015. The only option for me was to have a go at "trading" the stock market. Early on it was so confusing because I knew nothing about the stock market till the penny dropped. The stock market should be called the "Business Market" a place where you buy & sell small parts of a business. 

*Being a fact & figure guy*
Using technical analysis made more sense to me because the alternative "fundamental analysis" was time-consuming trying to decipher old data that is usually presented in such a way to shine only the brightest light on the company.

*Your question*
_ 1. Do you consider it useful to pay attention to indices as an overall filter?  -  _NO 
(a) I'm a basic trader (b) I trade the ASX All Ordinaries (c) I trade multiple Mechanical Trend Trading Strategies (d) I trade the ideas of others, as there is no reason to reinvent the wheel (e) I spend most of my time trying to improve on those ideas.

Skate.


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## Skate (11 August 2022)

*When others know you actually trade you get asked a lot of questions*
Over the years the majority of questions can be summed into one - How do you know what stock to buy?

*Trading is simple & uncomplicated*
Don't let anyone tell you it's not. It's not rocket science to buy & sell part of a company. The difficult part is finding (a) what to buy (b) when to buy it & most of all (c) when to sell it. 

*The market & individual stocks go up & down with such regularity*
Jumping on when they are going up & hopping off at the first sign of them going down is where the skill is. With system trading, it's easy to mathematically code these precise conditions, add money management to the mix & you're good to go.

Skate.


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## qldfrog (11 August 2022)

entropy said:


> Nice set of trades there, Skate, well done!
> 
> Especially since you are adapting some long-established methods: I would have thought that the juice would be all squeezed out of those oranges so it is encouraging to me as a newby that the old ideas are worth re-investigating.
> Amongst the noise you have detected some strong signals!
> ...



Fwiw, i tried such a system looking at trend per sector something initially qfsec in my journal.
To systematic traders like us, the issue is that the available sector definition is not precise enough via nortgate data for example bad luck if you want to target copper, or lithium, you will find mining, energy, it,etc but not much more.
Too vague in my opinion..from memory 10 or 11sectors for the xao
And the pure sector system that qfsec was , has morphed into a general trending system with wide whole sector areas weights in the ranking.

So a touch of sector preferences but not more to get some edge
Would be a different matter if you have a discretionary approach, such as @peter2 .and you can take then a finer approach....


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## Skate (11 August 2022)

qldfrog said:


> Fwiw, i tried such a system looking at trend per sector something initially qfsec in my journal.




*Trade anything going up*
That statement should be with a proviso. Buy only positions that are going up that meet precise conditions & sell them when precise conditions are met. The strategy will find those positions no matter the sector.



Skate said:


> (a) I'm a basic trader (b) I trade the ASX All Ordinaries (c) I trade multiple Mechanical Trend Trading Strategies (d) I trade the ideas of others, as* there is no reason to reinvent the wheel (e) I spend most of my time trying to improve on those ideas.*




*Improving on an original idea*
(LKE) has been mentioned on Twitter & in this thread so I'll use that as the example to demonstrate an improvement IMHO. The WTT strategy is a simple 20-period breakout. The original WTT strategy produces the buy & sell signals shown on the chart. The next chart is my recoding to take advantage of the exit. To reiterate, the exit is the money maker.





*Being more selective*
Strategy signals are generated when precise conditions are met. Being more selective makes sense when stronger signals are coming along at a great rate of knots. 






*I use a variety of buy filters*
Earlier I discussed that a garden variety "Index Filter" using a simple moving average is robust but the lag can play havoc with your strategy returns. It's worth remembering that there is always someone making money even if you are not.

*Index Filter versus a Buy Filter (the coloured ribbon)*
A simple moving average to keep you on the right side of the market is better than having none at all. The "WTT% Strategy" incorporates a simple buy filter. If 50% of the companies in the "All Ordinaries" is up over a week, it indicates "to me" it's safe to buy. Using the percentage method treats all companies "as equals" rather than being weighted by the top few. The "green" colour of the ribbon at the bottom of the chart denotes when it's safe to take a position. 

*The upper & lower chart*
In the upper chart, the original WTT strategy depends on a simple moving average to determine when a position can be taken, whereas the lower chart depends on the percentage value of all companies in the "All Ordinaries" to make that decision.




*Summary*
There is no reason to reinvent the wheel. I spend most of my time trying to improve the wheel, otherwise, we would still be using the wheels that were used on wagon trains all those years ago.

Skate.


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## Skate (11 August 2022)

Skate said:


> A simple moving average to keep you on the right side of the market is better than having none at all. The "WTT% Strategy" incorporates a simple buy filter. If 50% of the companies in the "All Ordinaries" is up over a week, it indicates "to me" it's safe to buy.




*A more recent example (ASX:CDD)*
In the original strategy, there were two positions taken. (1) The first just went sideways for around 18 weeks, tying up money that could have been put to better use. (2) Entering the second position using an (SMA) Index Filter "ensured" you entered late.





*In the WTT % Strategy*
There were also two positions taken. (1) The first entry went stale very quickly. Exiting this "stale" position means the money can be put to better use,  investing it elsewhere. (2) Entering the second position using a "Buy Filter" that's dependent on the percentage of advancing stock compared to declining stock "ensured you didn't enter" the position late.





*Direct comparison*
Comparing the signals on the charts should paint a thousand words.




Skate.


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## ArtMaster (11 August 2022)

Hi Skate - just getting my head around the filters mentioned above. I did join the Chartist a year or so ago, has not been particularly fruitful since the majority of the trend systems have been off for a while but I have enjoyed reading/watching some of Nick's educational content. He is certainly a level head and in terms of the psychology aspect there is plenty to take from him. I am not particularly for/against his systems as a whole. Saw some of the results and the ease of the momentum systems and possibly jumped the gun a little, I would imagine that is a fairly common theme with his subscribers. Possibly a little 'green' and something which appears profitable and relatively straightforward holds instant appeal. I do find the turnkey thing a little strange - selling a code but then using a modified version of this seems a little off particularly those who are buying it but without the necessary coding knowledge to make their own modifications, should those types of people exist. Maybe only those with coding knowledge to begin with would be advised to purchase but that of course raises the question of why such people would need it to begin with if they could just code a version for themselves as you have done yourself. He seems to have his own personal systems on top of the ones he sells so does become a little muddy to keep track of it all.

Anyway, back to the filters - was just intrigued how to referred to it as a 'Buy' signal. Is that to say that the red periods are not necessarily looked upon as 'sell' ones (apologies if I have missed this over the past few pages). I know with Nick's he starts with a farily large stop loss which moves up to 10% as soon as the filter turns on. I can see that yours is 'off' a lot more of the time in comparision but with the benefit of reducing the off/on lag from what I can tell.  I am clearly much more of a noob with all this than many in here so its something of an eye opener - to me the thought of the simple index filter in itself, as Nick uses, seemed somewhat prudent and even novel. Now reading around as to why the index filter may not be the best solution and seeing other perspectives feels like taking the next step up the ladder. Certainly there is no free lunch with these things and always more to consider.


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## Skate (11 August 2022)

ArtMaster said:


> something which appears profitable and relatively straightforward holds instant appeal.




Hi @ArtMaster, thank you for making your first post in this thread. It's half-time in the NRL so I'll quickly respond. 

*When others express their opinion *
It makes others think about their own. Admittedly, trading has been difficult but you can take this to the bank "there are others still going okay". 

*Before you buy anything just remember *
When others have something to sell, they will only sell the good points. Every good salesman knows "perception equals reaction". If the reaction you are after is a sale, all you have to do is set the correct perception, it's that easy.



ArtMaster said:


> I do find the turnkey thing a little strange - selling a code but then using a modified version of this seems a little off particularly those who are buying it but without the necessary coding knowledge to make their own modifications




*I have mentioned before that "no one sells a good racehorse"*
But with any racehorse, with a little time & effort, a good trainer can lift a racehorse if improvements to be found, even a dead racehorse has some value. I'll do a post on this in the next post.



ArtMaster said:


> Anyway, back to the filters - was just intrigued how to referred to it as a 'Buy' signal. Is that to say that the red periods are not necessarily looked upon as 'sell' ones (apologies if I have missed this over the past few pages). I know with Nick's he starts with a farily large stop loss which moves up to 10% as soon as the filter turns on.




*Deciding what to buy & when is important *
But timing when to sell is critical. Sell too early or too late & even the best buys turn quickly into duds. We all have our own unique ways of trading & I'm no different. Just because someone uses an index filter with a wide initial stop only to shorten it up when the index filter turns off is one way of doing it. 

*I prefer to do it a little differently*
I use buy filters, a take profit stop, a stale stop exit, as well as a simple trailing stop that is variable. Search any of those keywords to understand each a little better. Also, look at the recent charts for a comparison between trading methods. Check out the signals between the "original WTT versus Skate's WTT% Strategy"



ArtMaster said:


> can see that yours is 'off' a lot more of the time in comparision but with the benefit of reducing the off/on lag from what I can tell.




*Yes, the percentage method can look deceptive just by looking at the ribbon*
@peter2 also raised this in his recent post. Trends are always happening & there is no shortage of positions to take using the percentage method. 

*Think of it this way*
If there is a greater percentage of companies going up than retreating it's logical to assume it is safe to trade. If the majority of companies are declining, don't buy, it's as simple as that. When the ribbon turns red, it's not necessarily a signal to exit a position even though one of my strategies does.



ArtMaster said:


> Certainly there is no free lunch with these things and always more to consider.




*Everything I post is things that have helped in my trading*
Constantly talking about my own strategies & how they work "for me" might be the catalyst for someone to do further research.

Skate.


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## Skate (11 August 2022)

*Here is a story about a dead racehorse*
The story is about Chuck who bought a retired racehorse from a farmer for $100.00.
The farmer agreed to deliver the horse the next day.

*The next day he drove up & said*
"Sorry, Chuck, but I have some bad news, the horse died."

*Chuck*, "Well, then just give me my money back."
*The farmer*, "Can't do that. I went and spent it already."

*Chuck*, "Ok, then, just bring me the dead horse."
*The farmer asked*, "What are you going to do with him?"
*Chuck*, "I'm going to raffle him off."
*The farmer*, "You can't raffle off a dead horse!"
*Chuck*, "Sure I can. Watch me. I just won't tell anybody he's dead."

*A month later, the farmer met up with Chuck & asked*
"What happened with that dead horse?"

*Chuck*, "I raffled him off. I sold 500 tickets at two dollars each & I made a net profit of $898.00."
*The farmer*, "Didn't anyone complain?"
*Chuck*, "Just the guy who won, so I gave him his two dollars back."

Skate.


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## Sid23 (12 August 2022)

Hi @ArtMaster, 
I subscribed to The Chartist 4 years ago, I joined for two reasons. Firstly I needed to go cold turkey from a no plan, no idea, hope it works out style of investing, to let a professional tell me what and when to buy, so I started with the Growth Portfolio. Second was a site that provided resources  and a reputable teacher for my trading knowledge to grow. 

Growth Portfolio eventually proved itself (though first 4 months were tough with system drawdown -15%). Psychologically following the Growth Portfolio & listening to Nick has helped with the emotions of trading, though it did take a few years and with the drawdowns the portfolio has bounced back, I just need to stick to the signals.

Last year I decided to bite the bullet and build my own system for a second (small) portfolio, based on Nick's Bollinger Band Breakout in his book Unholy Grails. So bought Amibroker & Norgate data and spent a few months learning how to code, absolutely no previous coding knowledge but you have to start somewhere and if you start simple you can always build on it over time. 

In regards to the turnkey code, even if Nick does run a modified version, I still expected the "vanilla" version to be profitable over time and I also have access to quality base code even if I don't understand it just yet. So late last year (might have been Black Friday deal, half price) bought Weekend Trend Trader turnkey and ran this out of the box beginning this year as my third portfolio. 

Thanks to Skate, Peter2, qldfrog, Newt and many other quality posters on this forum, whether it be their answers or probing questions, along with perseverance in learning to code, knowledge improved and systems have slowly been improved. 

With the turnkey WTT you don't necessarily need to understand coding to improve on it. There are a bunch of parameters you can simply adjust to make changes, once you understand what they do you have a better idea as to what can be tweaked and how it affects the system. The few parameter changes I made greatly improved WTT's overall performance. 

For me The Chartist was a great place to start, became interested in systematic trading, just needed to give it some time, I gave it 3 years to prove itself  (end of subscription) as long as I stuck to trading the signals. You can trade one of Nick's portfolios, buy and trade turnkey code (improve it over time) or  even follow the discretionary portfolio, and as you mentioned there is plenty of educational content. 

SID.


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## entropy (12 August 2022)

Skate said:


> *Trade anything going up*
> That statement should be with a proviso. Buy only positions that are going up that meet precise conditions & sell them when precise conditions are met. The strategy will find those positions no matter the sector.
> 
> 
> ...



Skate, thank you for this detailed and instructive post!
I have collected "rises versus falls" data for a while in the belief that "winners keep winning, losers keep losing" but have not been sure how to implement a sensible strategy. Your examples are quite motivating!


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## Skate (12 August 2022)

entropy said:


> Skate, thank you for this detailed and instructive post!
> I have collected "rises versus falls" data for a while in the belief that "winners keep winning, losers keep losing" but have not been sure how to implement a sensible strategy. Your examples are quite motivating!




@entropy I'm not saying the results below are 100% attributed to the "Buy Filter" using the percentage method to enter & exit positions but I believe the percentage method is far superior to using an (SMA) Index Filter.

*A short 365 Day Backtestperiod Period (12/8/2021 to today)*
In the last 12 months, most trend followers are reporting that trading has been tough, some are still underwater. My UPDATED WTT% Version didn't suffer the same fate.




Skate.


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## Willzy (13 August 2022)

Hi all,

For those that were interested in the discussion about short term trading strategies, holding for only a couple of days etc. 

I thought I'd just post an update on the (basic) RSI system that I currently trade on MSFT, its the same one I used in the example.

*** The biggest drawdown is always just around the proverbial corner ***  but this last month has finally seen new equity highs in the sytem.

Moving forward if people are interested, I'll post the results of this system whilst I'm still trading it. I'll also show, if / when I stop.

Cheers


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## Skate (13 August 2022)

Willzy said:


> Moving forward if people are interested, I'll post the results of this system whilst I'm still trading it. I'll also show, if / when I stop.




@Willzy I for one would be very interested.

Skate.


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## entropy (13 August 2022)

Willzy said:


> Hi all,
> 
> For those that were interested in the discussion about short term trading strategies, holding for only a couple of days etc.
> 
> ...




Willzy, An excellent effort!

I'm interested in any updates and any further info on your methods.

Trading a single major equity like MSFT with such nice results, for me this is remarkable and motivates a little trading guy like me to keep going. 
Clearly you have found an inefficiency in the market to confound the EMH theorists!
You have avg profit per trade of $3612, avg loss -$4509 but the secret of you success seems to be the superb 79% win strike rate you achieve without a scary drawdown.


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## Willzy (13 August 2022)

entropy said:


> Willzy, An excellent effort!
> 
> I'm interested in any updates and any further info on your methods.
> 
> ...



Hi Entropy, just thought I'd pick up on something here that some may not be aware of with Amibroker.

This particular backtest invests all available funds on every trade, thus we see the compounding effect and in order to get a decent view I've used a logarithmic equity plot.

So when you've noticed the avg profit per trade of 3612, and loss of 4589 these figures are distorted by the compounding. 

However the average percentage profit and average percentage loss is not.

Thus this backtest shows an accuracy of 78.99% and an average pct win of 1.71% , avg pct loss 1.87%

Amibroker shows a payoff ratio of 3612 / 4589 ==> 0.79
Correct payoff ratio (if all trades were same value ie $100,000) = 1.71 / 1.87  ==> 0.914

This is a subtle difference and for most applications is not that important, however in some instances such as ranking one system against another it can cause issues. 

---- here is an example where it can cause problems ---

One of my favorite system metrics is from one of Kevin Davey's books. Its a derivation of expectancy...

Most would know the basic formula for expectancy E = probabilityWin * avgWin - (probabilityLoss) * avgLoss
Now this returns Expecatancy as ( $$$ ) if avgWin is in ( $$$ ) or (percentage) if avgWin is entered as a percentage so its not a unit-less metric.

But if we divide across both sides by avgLoss the formula becomes:

E / avgLoss = Accuracy * avgWin  /  avgLoss - (1-Accuracy) or 
E / avgLoss = Accuracy * payoffRato + Accuracy - 1

Because we are now dividing avgWin by avgLoss our units of measurement be it dollars or pct are cancelled out and we have a unitless measurement.

Kevin has a name for it I cant remember off hand but lets call it normalized expectancy... "e"

e = Accuracy * payoffRato + Accuracy - 1

now if we use Amibrokers original metric of payoffRatio (0.79) then my metric 

e = 0.789*0.79 + 0.789 - 1 == 0.412
but it should be
e = 0.789 *0.914 + 0.789 - 1 == 0.510

now if during an optimization we had two systems say one buys when RSI < 20 and another that buys RSI <10 if we dont remove the bias due to compounding from the backtests then our walkForward may select the wrong one...

--- Sorry that turned into a rather long example, hope its not too confusing, please ask if anyone wants more clarification ---


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## Willzy (13 August 2022)

entropy said:


> Willzy, An excellent effort!
> 
> I'm interested in any updates and any further info on your methods.
> 
> ...



Sorry forgot to put a thanks at the front of that… 

Cheers


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## investtrader (14 August 2022)

Willzy said:


> Hi Entropy, just thought I'd pick up on something here that some may not be aware of with Amibroker.
> 
> This particular backtest invests all available funds on every trade, thus we see the compounding effect and in order to get a decent view I've used a logarithmic equity plot.
> 
> ...



Absolutely nothing wrong with using compounding for Amibroker backtesting as long as you understand what you are looking at. I've been trying to get this across a few times. @Willzy You obviously don't need to be advised by me however. Excellent post.


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## martyjames (14 August 2022)

Thanks for sharing Willzy, very interesting. I notice no transaction costs - how does that impact the results?

cheers


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## entropy (14 August 2022)

Willzy said:


> Hi Entropy, just thought I'd pick up on something here that some may not be aware of with Amibroker.
> 
> This particular backtest invests all available funds on every trade, thus we see the compounding effect and in order to get a decent view I've used a logarithmic equity plot.
> 
> ...




Willzy, many thanks for the detailed reply and explanation of your metric.

This gives me plenty to work through.

I have been working through Howard Bandy's book "Quantitative Technical Analysis" and I gather he had quite a lot to do with how Amibroker works under the hood.

My interest is to build a trading method with machine learning algorithms using Python guided by some of Dr Bandy's material.  
A few hiccups to overcome due to changes within Python since the book was published in 2015.
There is an errata link at Blue Owl Press but my browser warns the link is unsafe and maybe has been hacked.

You wrote:
"now if during an optimization we had two systems say one buys when RSI < 20 and another that buys RSI <10 if we dont remove the bias due to compounding from the backtests then our walkForward may select the wrong one..."

This bit has me puzzled: do you mean that your method switches from one RSI indicator to a different RSI indicator due to some trigger in the market?


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## Willzy (14 August 2022)

martyjames said:


> Thanks for sharing Willzy, very interesting. I notice no transaction costs - how does that impact the results?
> 
> cheers



Hi Marty,

Excellent question, I was wondering if someone would pick up on that!

In short, it makes a world of difference. Standard commission rates available in Australia would kill this system and others like it.

There are alternatives though, low comission brokers do exist and it is possible to trade with zero commission.

Other traps to be aware of, if your using CFD's there will inevitably be a SPREAD and SWAP that needs to be put into the calculations.
When I run my backtests for use with CFD's I manually adjust for the SPREAD within the trading logic. ie

BuyPrice = Close * (1 + spread);

Thus it won't show up in the transaction costs of the summary but has been accounted for in the backtest.

I'm not recommending any broker in particular, but ones I have traded with include:

IC-Markets (CFD) 
Admiral Markets (CFD)
TradeStation 
Interactive Brokers

This type of system requires automation either in the form of a - (Metatrader Expert Advisor) or a (TradeStation easyLanguage Strategy) or an API for interactive brokers.

If anyone is interested I could start a new thread on what I've learnt with these over the last 5-7 years. I also do some freelance work programming Expert Advisors on MT4 and MT5 should anyone like some specific help in that regard.


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## Willzy (14 August 2022)

entropy said:


> Willzy, many thanks for the detailed reply and explanation of your metric.
> 
> This gives me plenty to work through.
> 
> ...



Hi entropy,

I too get the error with Howard's errata but have continued to it with no issue... that I know of at least...

With regards to this part....

_You wrote:_
_"now if during an optimization we had two systems say one buys when RSI < 20 and another that buys RSI <10 if we dont remove the bias due to compounding from the backtests then our walkForward may select the wrong one..."_
_This bit has me puzzled: do you mean that your method switches from one RSI indicator to a different RSI indicator due to some trigger in the market?_

In short no, I was refering to a basic optimization within amibroker such as RSI(2)<20 for one run vs RSI(2)<10 for another (ie we're optimizing the rsi(2) entry threshold). The compounding effect can give misleading results of some metrics if not accouned for (as discussed with normalised expectancy)

My interest is to build a trading method with machine learning algorithms using Python guided by some of Dr Bandy's material. 
A few hiccups to overcome due to changes within Python since the book was published in 2015.

This is an excellent exercise to go through, it'll teach you some python (always a great thing) and the exercise will show the power of machine learning. As with all things though garbage in garbage out... The other biggest trap I would say to be aware of is that ML by its very nature will overfit the data, you need to work out how to work around this. I recomend learning LogisticRegression, TBH its the only one I've had any measurable success with.

Cheers!


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## Joe90 (14 August 2022)

Hello Skate
Re your post #7300 and the loop processing time, I've noticed several threads in the Amibroker forum where headmaster Tomasz discourages the use of looping, in favour of much faster and efficient array processing commands. 




If you look at the afl code in the Marsten Parker video I linked to in an earlier post, you will see that he is using the addtocomposite function to aggregate his market breadth filter counts.

Cheers
Joe.


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## Skate (18 August 2022)

*Why is the BBO Strategy so frustrating? *
We all tend to have our own unique version of John Bollinger's idea & it's at the "very heart" of my "BBO Weekly Strategy". The rules are precisely coded & the idea is robust. Over the longer term, the results aren't too shabby but shorter-term volatility messes with this strategy. 

*I'm starting to fall into the “what if” scenario *
I'm starting to think most who trade this strategy would have to have "nerves of steel" as the results are patchy & there seems to be no happy medium that I've found. When the BBO is working it's on the money but other times it tests your resolve, well it does mine. I'm constantly monitoring my strategies but this one is starting to develop into a full-time job.

*The backtest period*
From the 1st of January 2022 to today the 18th of August 2022. Anyone trading this strategy would have had a tough 8 months. Red is not my favourite colour.




*In summary, I have a question*
Is there anyone actually trading a BBO Strategy?

Skate.


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## Skate (18 August 2022)

*Sometimes there is no answer when you can't see the problem*
The BBO Strategy should return consistent results, & the volatility bands should be doing all the heavy lifting. Admittedly, signals do lag which really shouldn't be the case. Sometimes the answer can be so simple but I'm missing it at the moment.

*Joke*
Why did the blind man fall into a well?
Because he didn't see that well.

*That level of a joke*
Displays my frustration with this strategy

Skate.


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## Cam019 (18 August 2022)

Daily BB BO strategy doing well.

*Back test period: 01/01/2022 to 18/08/2022*


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## Newt (18 August 2022)

I'm running a weekly modified BBO strategy on ASX Fully Paid Ordinary universe, and its been bumpy going this year for sure.  Nasty DD June/July, lower than usual % winners, lower returns than modelled.  Not a fun 12 months, but back in profit at least.


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## SyBoo (19 August 2022)

A guide to AddToComposite() with good examples can be found here Introduction to the AmiBroker AddToComposite() 
  [Links to PDF file size 122 kB]


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## Skate (19 August 2022)

SyBoo said:


> A guide to AddToComposite() with good examples can be found here Introduction to the AmiBroker AddToComposite()
> [Links to PDF file size 122 kB]




*From the horse's mouth*


			Calculating multiple-security statistics with AddToComposite function
		


Skate.


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## Joe90 (19 August 2022)

I tripped over this most excellent contribution (by @tech/a) again a few nights ago. As this is the beginners lounge I thought a re-post here was appropriate.

https://www.aussiestockforums.com/threads/the-best-ive-seen-on-any-forum.864/post-6201

Its a worthwhile read even for the more experienced and hardened traders among us who are suffering from a case of "cant see the forest because there are too many trees". 

Read before you go to sleep every night until it sinks in.

Cheers
Joe


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## martyjames (19 August 2022)

Hi Skate and system traders

Apologies if this is bit off topic. In system tests using Norgate data has anyone had any success to their systems by adding the stocks' sector strength:
Buy= (my system buy rules) + (and the sector of the stock (GICS classification, real estate, technology etc etc) has ROC(c,10)>x, or above its 200 ema etc etc)

If so, how do you code it?

Thanks
Marty


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## Skate (19 August 2022)

martyjames said:


> Hi Skate and system traders
> 
> Apologies if this is bit off topic. In system tests using Norgate data has anyone had any success to their systems by adding the stocks' sector strength:
> Buy= (my system buy rules) + (and the sector of the stock (GICS classification, real estate, technology etc etc) has ROC(c,10)>x, or above its 200 ema etc etc)
> ...




@martyjames I don't trade anything other than the All ordinaries as a whole. Picking winners as you suggested would be difficult as sometimes they go out of favor as quickly as they come in. 

Skate.


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## Cam019 (19 August 2022)

Skate said:


> @martyjames I don't trade anything other than the All ordinaries as a whole. Picking winners as you suggested would be difficult as sometimes they go out of favor as quickly as they come in.
> 
> Skate.



@martyjames maybe, but maybe not if you have a longer holding period like in a classic trend following system.


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## Sid23 (19 August 2022)

Great return @Cam019 & @Newt for this year. I had been running simple BBO as per Nick's Unholy Grails without filter. 

Back test period: 01/01/2022 to 18/08/2022, CAR was -23.44% and Max. system % drawdown -18.52%. Actual traded return for same period was CAR -18% (Filter version, drawdown performed no better). 

New BBO version includes tighter stop from bottom band when filter on and this has helped lower drawdown and improve CAR but backtest for this year still red. 

@Cam019, is your backtest from  "System Building and Idea Testing" thread?

Sid.


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## Skate (19 August 2022)

Sid23 said:


> Back test period: 01/01/2022 to 18/08/2022, CAR was -23.44% and Max. system % drawdown -18.52%. Actual traded return for same period was CAR -18% (Filter version, drawdown performed no better).




*I've resisted so far, fiddling with the BBO Strategy*
The methodology behind the BBO Strategy is robust & in theory, I shouldn't have to apply too much to make this strategy perform, but that's not the case. Bollinger Bands attempt to overcome the problems associated with trading envelopes as it combines the measurement of volatility (standard deviation) with a moving average. There are a set of two variable width trading bands (upper & Lower) that would automatically adapt to the volatility of the market. My question is, if this is so why don't the bands do all the lifting?

*Caution to the wind*
Heck, the BBO Strategy that I have in its standard form isn't worth the commission to have a go. Admittedly I've added a bit of lipstick (even though I shouldn't have with a strategy using volatility bands) but alas it was necessary. Adding an alternative buy condition with optimized parameters & filters, it started to grow an extra leg.

*#1 Backtest updates*
Backtest from - 1/1/2018 to today





*#2. Backtest updates*
A 365-day Backtest from 18/8/2021 to today (one calendar year)





*#3. Backtest updates*
1/1/2022 to today (The first 8 months of this calendar year)




Skate.


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## Skate (19 August 2022)

*Bollinger Band Background, for those who don't know*
Bollinger Bands are a technical indicator developed by John Bollinger. The indicator forms a channel around the price movement. The channels are based on standard deviations of a moving average. Bollinger bands can help you establish a trend's direction, spot potential reversals & importantly monitor volatility. All of this can help you make better trading decisions if you follow a few simple guidelines.

*Bollinger Band Basics*
Bollinger bands have three lines, upper, middle & lower. The middle line is a moving average of prices. The parameters of the moving average (the lookback period) are chosen by the coder. There is "no magic moving average number", so it's important that the moving average (the middle line) aligns with the techniques & strategy being traded. The upper and lower bands are drawn on either side of the moving average. The distance between the upper and lower band is determined by standard deviations. You can use the (HIGH price), the (CLOSING price), or any other variation you can think of, it is all up to you to decide.

Skate.


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## Linus van Pelt (20 August 2022)

martyjames said:


> Hi Skate and system traders
> 
> Apologies if this is bit off topic. In system tests using Norgate data has anyone had any success to their systems by adding the stocks' sector strength:
> Buy= (my system buy rules) + (and the sector of the stock (GICS classification, real estate, technology etc etc) has ROC(c,10)>x, or above its 200 ema etc etc)
> ...



I can't comment on its effectiveness, but here is how you code it:



			Separate ranks for categories that can be used in backtesting


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## Cam019 (20 August 2022)

Sid23 said:


> @Cam019, is your backtest from "System Building and Idea Testing" thread?



Hey @Sid23, yeah correct.

Trades the ASX200 constituents. No regime filter.


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## qldfrog (20 August 2022)

Linus van Pelt said:


> I can't comment on its effectiveness, but here is how you code it:
> 
> 
> 
> Separate ranks for categories that can be used in backtesting



I did it in another way but did not manage to find a great edge due to the fact norgate data has a quite vague and wide sector definition.
I indeed retained a small part of this idea by adding a small preference in the ranking of my qfsec still traded ..not a winner system so far


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## Linus van Pelt (20 August 2022)

qldfrog said:


> I did it in another way but did not manage to find a great edge due to the fact *norgate data has a quite vague and wide sector definition*.



I get that not many people here may be interested in small caps, but...

If anyone reading this knows Python and web scraping, and can give me some hints on scraping scraping this site:









						Sector tracker
					

The latest information on ASX listed stocks sorted by their given sector. See what announcements the companies have made and price movements.




					smallcaps.com.au
				




and the other sectors, please PM me.  I have scraped other sites, just having issues with this one.  BTW, you need to view frame source, not view page source.

Likewise, if there is a better source for stocks in a given sector, that is updated on a regular basis, please let me know.


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## qldfrog (20 August 2022)

Linus van Pelt said:


> I get that not many people here may be interested in small caps, but...
> 
> If anyone reading this knows Python and web scraping, and can give me some hints on scraping scraping this site:
> 
> ...



Interesting, obviously was talking about asx sector as defined in nortgate data, a dozen or so with not difference between a oil explorer or caltex, and mining can be gold mine, lithium or coal.
Doing your own sectorisation is a nice move @Linus van Pelt
Well done


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## Skate (20 August 2022)

*This was part of @ducati916 post today*
This goes a long way in explaining why our trading success (win rate) is no better than a coin toss.

*Sam Savage provides a great example of this in "The Flaw of Averages"*
_"An example concerns the statistician who drowned while fording a river that was, on average, only three feet deep". In this case, knowing the distribution of the river's depth or the (maximum depth) would have been far superior than knowing only the average depth.

Another common way in which data can be misleading is when that data is derived from a process that "changes over time". Anytime the underlying mechanism that creates a data series changes, "patterns tend to break down"._

Skate.


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## Skate (22 August 2022)

Joe90 said:


> Hello Skate
> Re your post #7300 and the loop processing time, I've noticed several threads in the Amibroker forum where headmaster Tomasz discourages the use of looping, in favour of much faster and efficient array processing commands.
> 
> View attachment 145426
> ...




*Slow execution of the "Percentage Filter" due to the heavy looping *
@Joe90, just a quick update. The irritation of a slow execution of a Backtest & Exploration Analysis issue has been overcome by saving the variables to "staticVars", retrieving them in the rest of the formula so they execute only ONCE.




*# Updated "Skate's WTT Percentage Filter Strategy"*



Skate.


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## Skate (25 August 2022)

*What do EC, EP, CX, CXXT, & NXXT transaction codes mean?*
There are times when transactions can occur outside the auction opening hours. The action is referenced without an explanation. Below is a quick explanation of what the abbreviations mean. (posted for a searchable reference)

*EP = exercise of a put option*
If an investor owns shares of stock & owns a put option, the option is exercised when the stock price falls below the strike price. Instead of exercising an option that's profitable, an investor can sell the option contract back to the market & pocket the gain.

*EC = exercise of a call option*
When you exercise a call option, you would buy the underlying shares at the specified strike price before the expiration. Compare the strike price of the call option to the current stock price.

*CX & CXXT = is a cross trade*
A cross trade is a trade that has occurred in ASX CentrePoint at the current midpoint price. The midpoint price is determined by ASX to be the midpoint between the current ASX bid/offer spread.

*XT & NXXT = is also a cross trade *
A cross trade occurs when a broker executes an order to buy & sell the same security at the same time, in which both the buyer & seller are clients of the broker. A cross trade is represented by XT in the course of sales. If your order has been cross traded, your contract note will state this. NXXT is a type of crossing or crossed trade that your broker reports to the ASX. An NXXT is a crossing that has occurred at the current NBBO Price (known as an “NBBO Crossing”).

*NBBO = National Best Bid & Offer Prices*
The national best bid price is the highest price that all buyers are willing to pay for a particular stock, regardless of what trading venue it is being published on. Similarly, the national best offer price is the lowest price that all sellers are willing to accept for a particular stock. This type of trade typically occurs when your broker has managed to automatically match your order with another client's order through the Crossing System.

Skate.


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## Willzy (27 August 2022)

Hi everyone,

Inspiration struck me this week. I was reading through a book I’ve read in the past by Larry Connors – High Probability ETF Trading. I’m sure many are familiar with his work, if not I highly suggest a google search for his books. I came across one of his strategies “Connors TPS – (time price & scale)” which I had previously tried to code in Amibroker. It was years ago and my coding skills weren’t the greatest. Today they are still are a work in progress, but with a bit of work this week I think I’ve been able to crack it and thought I’d share my results.

The book has been published since 2009 and so I hope I’m not breaking any copyright by posting them here but honestly a quick google search will find the rules:

Stock must be above 200 day SMA
RSI(2) < 25 for two consecutive days
1st entry 10% of total funds dedicated to this system
2nd entry if price closes below 1st entry and stock still above SMA buy 20%
3rd entry is same rules but buy 30%
4th entry same but buy further 40% - taking total position size up to 100%
Sell all shares any time RSI(2) > 70
All trades are taken at the close of the market – difficult to achieve without good tools – ie automation.
Short side is the reverse logic.

I first of all tested the strategy one symbol at a time, starting with ones I know work well with mean reversion – ( please note that there is a dangerous “SELECTION” bias here as I have already identified several symbols I like to trade in this way because they have proven to me they have a tradeable MR signal ( MSFT, V, MA, FISV, QQQ, SPYG, XLK to name a few ).

This was a simple viability test and given the system was published in 2009 I was pleasantly surprised with the results.

MSFT, ADBE and QQQ stood out. The only change I made to the rules was to trade LONG only and remove the 200day SMA – though I’ve left it in the amibroker afl. The other thing to mention is that the profit was quite low and in order to make it tradeable I coded in a Leverage of 2:1 so in reality you’d need CFD’s or a margin account.

I’m not sure if this way of trading is better than my current BASIC RSI system and so I’m now in the process of coding a MT5 Expert Advisor (trading bot) to test this trading style on a demo account for a few months. I’m a big believer of Beta testing, one to test the system and two to make sure I’ve got no bugs in my MQL code.

As with all mean reversion systems, it’s the stairs up and the elevator down… anyone running this make sure to test it on some other instruments to see what can happen if the stock tanks! Ouch … 

That being said, I’m yet to find a system, trend following or otherwise which doesn’t have nasty drawdowns, they just seem a bit slower I guess…

I’ve attached the Amibroker .afl code I put together, please feel free to play with, dissect and critique so we can all learn!

I’ll follow up with the MT5 demo results and if they’re any good I’ll make the EA’s available on the MQL store. 

I've already coded it in TradeStation EasyLanguage so if anyone wants the code for that - its like 20 lines just message me and I'll provide a copy

Cheers



```
//==================================
//     ConnorsTPS Long Only         ===
//     AFL By Willzy                 ===
//==================================

//     --- BackTest Settings --- //

// Set Trading Costs
SetOption("CommissionMode", 2); // Fixed $/Trade
SetOption("CommissionAmount",2); // $2 Commission
Spread = 0.0020; // Spread = 0.2% - may need adjustment based on instrument being traded               

// Account Finance Settings
SetOption("InterestRate",0);
SetOption("MarginRequirement",10); // Set For CFD type trading

// Trade Logic Settings
SetOption("AllowSameBarExit",False);
SetOption("ActivateStopsImmediately",False);
SetOption("AllowPositionShrinking",True);
SetOption("PriceBoundChecking",True);
SetOption("ReverseSignalForcesExit",False);
SetOption("UsePrevBarEquityForPosSizing",False);
SetOption("DisableRuinStop", True);

// --- Custom Functions --- //

// --- Backtest Method --- //
SetOption( "PortfolioReportMode", 0 );
SetOption("NoDefaultColumns",False);
SetOption("ExtraColumnsLocation", 1 );

// --- Monte Carlo Settings --- //
SetOption( "MCEnable", 2 );
SetOption( "MCRuns", 1000 );
SetOption( "MCStrawBroomLines", 10 );
SetOption( "MCNegativeDrawdown", 0 );
SetOption( "MCChartEquityScale", 0 );
SetOption( "MCUseEquityChanges", 0 );

// --- Position Sizing --- //
nPos = 1;
Leverage = 2;


SetOption( "InitialEquity", 10000 );
SetOption( "MaxOpenPositions", nPos );

// --- Variables and Parameters --- //
// Set maximum number of scale in trades - (original TPS logic - 1 2 3 4 )
maxScaleIn = 4;

// Indicator variables
maPeriod = 200;
rsiPeriod = 2;
rsiEntryLimit = 25;
rsiExitLimit = 70;

// --- Calcualte Indicators --- //
rsiIndicator = RSI(rsiPeriod);
SMA = MA(Close,maPeriod);

// --- Trading System Logic --- //
upTrend = 1;//C>MA(C,maPeriod);
buySignal = upTrend AND rsiIndicator < rsiEntryLimit AND Ref(rsiIndicator,-1) < rsiEntryLimit;
entryLong = buySignal;
entryPrice = Close * (1 + Spread);

sellSignal = rsiIndicator > rsiExitLimit;
exitLong = sellSignal;
exitPrice = Close;

// --- Combine Entries Exits and Stops --- //
Buy = Sell = Short = Cover = 0;
BuyPrice = entryPrice;
SellPrice = exitPrice;

// Initialize Arrays
PositionArray = Null;
LastEntryPriceArray = Null;
nBar = Null;

// Loop over all bars
for( i = 1; i < BarCount; i++ ){   
    if( EntryLong[i] ) // if entry signal on this bar
    {
        Position = PositionArray[i] = 1;
        lastEntryPrice = lastEntryPriceArray[i] = BuyPrice[i];
        
        for( j = i; j < BarCount; j++ ) // step forward one bar at a time to process the trade
        {
            // Remove Excess buySignals Until Exit is activated and i == j
            nBar[j] = j - i;
            if( nBar[j] > 0 )
            {
                buySignal[j] = 0;
                entryLong[j] = 0;
            
                // Check for ScaleIn First
                if( upTrend[j] == 1 && Close[j] < lastEntryPrice && Position < maxScaleIn )
                {
                    Position += 1;
                    PositionArray[j] = Position;
                    lastEntryPrice = BuyPrice[j];
                    lastEntryPriceArray[j] = lastEntryPrice;                   
                    continue;
                }
                
                lastEntryPriceArray[j] = lastEntryPriceArray[j-1];
                PositionArray[j] = PositionArray[j-1];           
                
                // If Exit Signal Sell on Current Bar
                if( ExitLong[j] )
                {
                    lastEntryPrice = lastEntryPriceArray[j] = Null;
                    Position = 0;
                    Sell[j] = 1;
                    i = j;
                    break;
                }               
            }
            
            // If No Exit Detected
            else
                if( j == BarCount - 1 )
                {
                    i = j;
                    break;
                }
        }
    }
}

takeAction = PositionArray > Ref(PositionArray,-1);
Buy = IIf((PositionArray == 1 AND takeAction), 1, IIf(takeAction, sigScaleIn, 0 ));

// Set Position Sizing here because it requries PositionArray input as variable
SetPositionSize( Leverage * PositionArray * 10, spsPercentOfEquity );

// --- Create Figures and Plots --- //

// Plot Price
PlotOHLC( O, H, L, C, "Price", colorBlack, styleBar );

// Plot Indicators
Plot(MA(Close,maPeriod),"SMA",colorBlue,styleLine);

//Plot Entry Exit and Setup Signals
PlotShapes( IIf( Buy == 1, shapeHollowCircle, IIf(Buy > 1 , shapeHollowCircle, shapeNone )), colorGreen, 0, BuyPrice, 0 );
PlotShapes( IIf( Sell == 1, shapeHollowCircle, shapeNone ), colorRed, 0 , SellPrice, 0 );

FirstVisibleBar = Status( "FirstVisibleBar" );
Lastvisiblebar = Status( "LastVisibleBar" );

for( b = Firstvisiblebar; b <= Lastvisiblebar AND b < BarCount; b++ ){
    if( Buy[b] ){
        PlotText( NumToStr( PositionArray[b], 2 ), b, Low[b]*0.99, colorBlack );
    }

    //if( Sell[b] ){
    //    PlotText( "Exit", b, SellPrice[b], colorBlue );
    //}
}

// --- END --- //

// --- Create Explore Filter for Error Checking --- //
Filter = 1;
AddColumn( Close, "Close", 1.2, IIf( C<Ref(C,-1), colorRed, colorGreen ) );
AddColumn( buySignal, "BuySig", 1 );
AddColumn( entryLong, "EntryLong", 1 );
AddColumn( PositionSize, "PosSize", 1 );
AddColumn( nBar, "nBar", 1 );
AddColumn( positionArray, "PositionArray", 1 );
AddColumn( lastEntryPriceArray, "lastEntryPriceArray", 1.2 );
AddColumn( sellSignal, "SellSig", 1 );
AddColumn( exitLong, "ExitLong", 1 );
```


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## Skate (5 September 2022)

*You don't need skills to be a profitable trader*
"You need luck", otherwise one reputable trader wouldn't be down (-$907,295) in 7 months. When your luck is out, it's out. Trading when the market is clearly unfavourable for a 100% long-only systematic trader is a quick way to go broke. System traders backtest their strategies to an inch of their lives & tend to rely heavily on those results. I don't care how good your system is because it won't perform when the markets aren't. When the markets are bullish all system traders look better than they actually are.

*We all think backtesting is a secret weapon in trading*
Throw up a backtest over many years & being positive most years doesn't automatically translate into being a profitable strategy to trade. All backtests seem to work most of the time because backtesting is built around randomness. Chance, luck, randomness whatever you want to call it shouldn't be ignored as some strategies will show good returns simply by chance. 

Skate.


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## Skate (5 September 2022)

*Unpredictable events drive the markets*
Markets constantly change & no backtest can accommodate for this as the future is unpredictable. Random events shape the direction of the markets & you can never backtest for such things. Quantifying a trading strategy is harder than you think because backtesting relies on knowing the past & it's this very reason we use the parameters that we do, to enhance the results.

*A simple strategy will most likely stand the test of time*
"Simple works" works in system trading because there is less to go wrong. If you can accept that live trading will never be as good as your backtest results & at times even worse you will be halfway to being a half-decent trader. It’s easy to make coding mistakes that can affect the accuracy of the backtest results. If the backtest results are exceptional the code is likely flawed. Trading a flawed strategy will damage your account quickly.

Skate.


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## Skate (5 September 2022)

*All traders exhibit a degree of behavioral mistakes*
The psychological aspect of trading is just as important as the strategy itself because if you can't handle drawdowns & continue trading the strategy all the development work will be for naught. The first question any new system trader should ask themselves is this, "can I actually follow the strategy religiously?" 

*It takes time to find out what works *
Anyone can (fine-tune) or fiddle with a strategy until the returns are brilliant but I doubt it will make money going forward. It's worth remembering, that your testing methodology is an important step in the development phase.  

Skate.


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## Skate (5 September 2022)

*Backtesting can limit your risk *
If you can lower your chances of losing your chances of winning can increase. Backtesting is all about finding buying opportunities that work giving you the confidence to trade the strategy in the future. But, here's the rub, If the backtest results aren’t positive straight away we tend to "fiddle & tweak" the strategy until it performs perfectly before ditching it altogether. 

*This is where most system traders go wrong*
Electronic backtesting has its limitations & at times very untrustworthy. The only backtest to take any notice of is a "physical backtest". Physical backtesting is called "paper trading". When it passes the physical (paper trading) it's only then you are good to trade.

Skate.


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## DaveTrade (5 September 2022)

Skate said:


> Trading when the market is clearly unfavourable for a 100% long-only systematic trader is a quick way to go broke.



Skate, why can't there be an indicator in a system that identifies when the conditions that the system was designed for are present and turn the system 'on' when they are there and 'off' when they aren't?


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## Skate (5 September 2022)

DaveTrade said:


> Skate, why can't there be an indicator in a system that identifies when the conditions that the system was designed for are present and turn the system 'on' when they are there and 'off' when they aren't?




Well, @DaveTrade that's a big ask as nothing works perfectly. 

*Working with unknown data is the issue *
Looking at a chart in retrospect it's easy to pick the optimal trading period but when we trade only the right-hand side of the chart in real-time it becomes a little more difficult to pick these points or trading periods.

*There are a few though*
First off, we need to be conditioned to trade only when the optimal periods have been established. 

*The next is timing*
Timing when to enter & when to exit. Those who buy & hold, simply ride the fluctuations without complaint. But to make serious money you need to ride the waves with precision with means to the best of your ability 

Skate.


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## Skate (5 September 2022)

DaveTrade said:


> turn the system 'on' when they are and 'off' when they aren't?




*Sure that sounds reasonable*
But doing as you have suggested is a great idea "but it limits" your profitability. A better way is to know when the system is "on" & only jump in when it is optimal to do so.

*There is a big "C" word to consider "Confirmation" *
As a systematic trend trader, timing is the keyword. "Confirmation" of a trend is the first critical part of the puzzle as not all trends are of the same value. To make serious money, timing the exit depends on "Confirmation". Waiting for confirmation can either keep you in the trade to squeeze the most out or it can lose a little for this confirmation to complete. Trading is always a trade-off.

Skate.


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## Skate (5 September 2022)

Skate said:


> As a systematic trend trader, timing is the keyword




*On - Off switch (Weekly XAO)*
If you only traded the blue bars you would be making money. The beauty of this strategy it works across all periodicities. The yellow ribbon is saying "Danger Will Robinson, danger" (Lost in Space quote) or for the younger generation it's a "Caution Period".





Skate.


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## DaveTrade (5 September 2022)

@Skate I was thinking along the lines of the bigger system picture, for example, if the system was designed to work in a trending up market then create an indicator to identify when an uptrend with the strength of trend required by the system is present and when the required conditions are not present then the system will stop trading until the right conditions return to the market.


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## Skate (5 September 2022)

DaveTrade said:


> @Skate I was thinking along the lines of the bigger system picture, for example, if the system was designed* (1) to work in a trending up market then create an indicator to identify when an uptrend with the strength of trend required by the system is present* and when *(2) the required conditions are not present then the system will stop trading until the right conditions return to the market.*




*Sure, I have that*
I have mentioned this more than once & posted about this indicator a few years back. At the time there was little interest in the indicator as everyone seemed to have their way of doing things. Without an open-mind consideration is never given to a new idea.

*Here is such an indicator*
Only buy when the "Percentage of advancing positions in the watchlist exceeds 50%" & sell when the percentage of advancing positions in the watchlist is under 25%. It's crude & dirty but highly effective.

*All I'm saying*
Don't trade when the ribbon is "RED". That means I would have had rocks in my head buying new positions in the last 4 weeks. You don't need to be a rocket scientist to work that one out.




Skate.


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## eskys (5 September 2022)

Skate said:


> *Sure, I have that*
> I have mentioned this more than once & posted about this indicator a few years back. At the time there was little interest in the indicator as everyone seemed to have their way of doing things. Without an open-mind consideration is never given to a new idea.
> 
> *Here is such an indicator*
> ...



Hi Skate, I take it that the red and yellow ribbons you refer to are the red and yellow bars down the bottom? And these colours indicate danger zones from what I understand?


----------



## eskys (5 September 2022)

eskys said:


> Hi Skate, I take it that the red and yellow ribbons you refer to are the red and yellow bars down the bottom? And these colours indicate danger zones from what I understand?



I should have quoted post no. 7,421

Oops, forgot my manners, hello Dave


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## Skate (5 September 2022)

eskys said:


> Hi Skate, I take it that the red and yellow ribbons you refer to are the red and yellow bars down the bottom? And these colours indicate danger zones from what I understand?




*Correct*
Those bars are referred to as "ribbons" in Amibroker. 

*The ribbons are similar to "Traffic Lights"*
Red = no go
Yellow = Caution (prepare to stop) as the position is currently "unloved"
Aqua = Green (good to go)

Skate.


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## Skate (5 September 2022)

*BHP*
Today the Australian dividend was declared, previously it was in USD & confirmation of AUD was declared today. As I have posted about BHP today I'll post a chart "with one of the indicators " that displays when it was optimal to buy IMHO. Most would hold BHP as a long-term investment for the dividends.






						BHP - BHP Group
					

28 dollars or so and i would take a small parcel, but always careful   my BHP owe me  just under $29 ( on average ) but they still included S32 and the petroleum arm  , and my last parcel  was bought in January 2016  ( so have gotten 5  plus years of divs out of them  so far )  yeah i will...




					www.aussiestockforums.com
				




*When would you buy & sell BHP as a trader? *
If you wanted to trade BHP instead of investing in BHP the "Ducati Weekly Blue Bar Strategy" would indicate when. You simply buy & sell the coloured bars. Buy the "AQUA Bars" & Sell the "RED Bars". Even if you didn't know anything about trading following the colour of the bars in real-time would have you in front.

*Timing the purchase of BHP*
Systematic Trend trading is all about capitalising on price movements. Buy when the price is going up & jump off when it isn't. If you had followed the colours (AQUA) bars you would be a winner in this position. The move (the profitable potential) is indicated with the "Green up-sloping lines" for a visual representation.

*The"Ducati Weekly Blue Bar Strategy" is not perfect *
But you would be tripping over yourself going to the bank. Applying your trading funds elsewhere whilst the bars are red means your funds could be invested more productively than simply buying & holding.

*If you were a "Buy & Hold" investor *
You would have had to experience the good (price increase) with the bad (price decrease).




Skate.


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## eskys (5 September 2022)

Thank you, Skate. I've learned something  tonight.

Despite the jump in BHP today, it's in the red zone looking at your chart above, but it's only a small ribbon. Does that mean it's less dangerous and a chance will be aqua tomorrow? BHP closed on the day's high, so hopefully there'll be good news tomorrow ........good luck to all holders


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## Skate (5 September 2022)

eskys said:


> *I've learned something tonight.*
> 
> Despite the jump in BHP today, it's in the red zone looking at your chart above, but it's only a small ribbon. *Does that mean it's less dangerous and a chance will be aqua tomorrow?*




*I'm just saying*
Pick your time to throw a punch. The good thing about trading is that "there are no rules". You can buy anything at any time. Making money consistently takes effort & precision.

*I trade systematically*
I won't speculate, guess or jump on hunches or gut feelings. To me, trading is pure mathematics. If you go back & look at the previous charts blind Freddy can see the advantages of timing the entry. The analogy of trading is very similar to boxing & it's all about the timing, making those punches count. If you are going to jump into the ring with a professional boxer or professional trader just be fit & ready otherwise you'll be flat on your back in no time.

*Read the highlighted parts of your post above*
Then look at the charts below & try to determine if it's the time to trade BHP.

*If you want to speculate *
Or invest in BHP, 3 years from now the timing makes no difference as all you will be doing is splitting hairs.

*Trading is different from investing*
Trading is just riding the price up, over & over & over & over. As traders, we buy a position in the hope that "sometime in the future" we will be able to offload the position to someone at a "higher price" than when we brought it. Trading is a very emotional experience & emotions can sometimes sabotage the best of plans. In the long run, it will be more profitable to trade the market rather than try to predict it. We as humans are really good at one thing, selecting only the evidence that supports what we want to believe, ultimately leading us to react.

*Remember this *
"If you can lower your chances of losing your chances of winning can increase.

*XAO Daily Percentage Filter*
What can I say, other than "trading BHP" on the Daily at the moment is less than ideal. Well, that's my opinion looking at the percentage indicator. Nope, it's not a good period to trade BHP at the moment IMHO.






*XAO Weekly Percentage Filter*
Nope, it's not a good period to trade at the moment IMHO. The percentage filter Indicates it's not ideal to buy at the moment. If you can lower your chances of losing your chances of winning can increase.





*XAO Monthly Percentage Filter*
Indicates it's not ideal to buy at the moment. If you can lower your chances of losing your chances of winning can increase.





*Hang on there*
This is a Daily Chart of BHP, that I must say isn't looking all that impressive at the moment





*Hold your horses*
This is a Weekly Chart of BHP, & it's not looking like a buy at the moment.





*Well, blow me down*
This is a Monthly Chart of BHP, & it's been out of favour for 3 months now. If I was going to enter on any periodicity I would rather time the entry as a trader. As a speculator, you could buy anytime.




*In summary*
Red, is not my favourite colour.

Skate.


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## ArtMaster (5 September 2022)

The XAO filter is literally just what % of the constituents are up or down over the last week, month etc? or it is more in depth than that? And from reading through the thread, it partly tackles the issue of a general index filter (i.e. as Radge uses) being somewhat lagging and also over-weighted to the bigger companies in the ASX? I have tended to use the general filter in the past so just interesting to see another alternative. Crazy the drawdown Nick is in - think already a couple of his systems that did use some sort of filter are back into OFF mode almost as soon as they were reactivated.


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## Skate (6 September 2022)

ArtMaster said:


> to me the thought of the simple index filter in itself, as Nick uses, seemed somewhat prudent and even novel.* Now reading around as to why the index filter may not be the best solution and seeing other perspectives feels like taking the next step up the ladder. *




Yes, I'm suggesting that there is another way to gauge when the market is buoyant that's not a lagging indicator. If there is 50% or more companies advancing then declining is a crude way to judge if the market or the index is buoyant. 



ArtMaster said:


> The XAO filter is literally just what % of the constituents are up or down over the last week, month etc? or it is more in depth than that?




*Index Filters versus a Buy Filter*
The common Index Filter you speak about is a moving average of a nPeriod, the longer the period the bigger the lag. Also, an Index as a whole is not equally weighted. Using the "Percentage Mode" takes that out of the equation.



ArtMaster said:


> a general index filter (i.e. as Radge uses) being somewhat lagging and also over-weighted to the bigger companies in the ASX? I have tended to use the general filter in the past so just interesting to see another alternative.




@ArtMaster *these are all valid points*
It's a common phrase that a "*rising* *tide* *lifts* *all* *boats*”. I'm not that convinced that a tide coming in & going out is all that relevant as I'm looking for the market to be buoyant. 



ArtMaster said:


> Crazy the drawdown Nick is in - think already a couple of his systems that did use some sort of filter are back into OFF mode almost as soon as they were reactivated.




*To make money the markets need to be on your side*
If the markets aren't kind it doesn't matter how good your system is, the strategy won't perform as expected. The Index Filter you have described may have added to his misery because of the lagging effect but who really knows? 

Skate.


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## Skate (6 September 2022)

*It's not rocket science*
Markets need to be bullish to make any trader look good. If you are a 100% Systematic & Long only trader there has to be a filter in place to limit your trading when the markets are not conducive to your style of trading. 

*No one has the right to tell anyone how to suck eggs *
Let alone tell anyone how to invest their money. I'm just saying when the market changes you need to adapt, doing the same thing over & over & expecting different outcomes borders more on the hope side of trading. Not limiting your drawdown & letting it get out of control is not acceptable in my books.

Skate.


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## Skate (6 September 2022)

*I'm just pointing out the obvious *
It's usually your strategy or trading style not adjusting to the market condition that usually does the damage to your trading account. I can't imagine how anyone could let their trading account go underwater to the tune of $900k in eight months. Oh, & I don't care about the size of the trading account, that's irrelevant.

*There is an old saying*
When things go wrong & you find yourself going down into a hole, the first thing you should do is stop digging. Look around long enough to figure out what just happened. Learning to stop digging is an important skill.

*Limiting drawdowns*
Having a tight & precise exit strategy goes towards keeping your losses in check. A stale exit strategy is another. When it all goes pear-shaped a "get-out-of-jail" card is always handy to have up your sleeve. I refer to that card as my GTFO filter. It's slang for (Get-TheFUCK-Out). Using a combination of these filters "I believe" would have alleviated the stress whilst trading when the markets turn unfavorable.

Skate.


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## frugal.rock (6 September 2022)

Skate said:


> Pick your time to throw a punch



Master the 1 inch punch, grasshoppers. 
Trade discretionary. 😹



Skate said:


> *It's not rocket science*
> Markets need to be bullish to make any trader look good.




I would think it's the chosen stocks that need to be bullish to make any old trader look good.
The markets as a whole, need to be mostly dismissed.


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## DaveTrade (6 September 2022)

frugal.rock said:


> View attachment 146390
> 
> 
> Master the 1 inch punch, grasshoppers.
> ...





@frugal your post is a good example of adapting to the market conditions. Not so easy for those starting out because you need to have a good selection of tools in your toolbox and know how to use them.


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## Skate (6 September 2022)

DaveTrade said:


> @frugal your post is a good example of adapting to the market conditions. Not so easy for those starting out because you need to have a good selection of tools in your toolbox and know how to use them.




*Yes, I have to agree*
@frugal.rock recent performance is impressive. Trading this year has been tough for some & I'm sure some soul searching is going on with many.



Ann said:


> Yes, I am sure converting a percentage that seems reasonable and within the bounds of a reasonable drawdown could become a sobering if not catastrophizing effect on someone by converting it to dollars. Once that is done the person will then begin to think of it in terms of what they could have bought with that money what pleasure they could have had and that will then lead to an unhealthy feeling of loss and even possibly planting the seeds of fear for the future. In other words, setting the trader up with an unhealthy perspective.




*Looking at percentages*
If you look at your trading results as percentages in isolation you’ll become quickly conditioned & accepting of that percentage. A drawdown of 22.5%, yeah, that's acceptable & let's face it, we have all made the same remark at one stage or another when backtesting. But do you really realise the dollar value of 22.5%?

*Percentages are relevant to the size of your portfolio.*
A 22.5% drawdown on a $4m trading account is $900k. In reality that's $900k of your trading funds "GONE". Relating a loss in percentage & converting it to dollars is sobering. Converting a percentage drawdown to dollars takes on a new meaning so don't let percentages fool you into a false sense of security. We all tend to accept a 22.5% drawdown in backtesting but could you stomach the dollar value when trading live?

*Getting back to breakeven*
After a stock market loss, the math of percentages highlights the true damage a loss of 22.5% can do to your portfolio. The returns needed to recover from a loss get more disheartening with the fact that the market tends to drop quickly & move up so slowly. What the math suggests is "that it's better" to protect yourself against losses "before" they get out of control.

Skate.


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## InsvestoBoy (6 September 2022)

Skate said:


> *On - Off switch (Weekly XAO)*
> If you only traded the blue bars you would be making money. The beauty of this strategy it works across all periodicities. The yellow ribbon is saying "Danger Will Robinson, danger" (Lost in Space quote) or for the younger generation it's a "Caution Period".
> 
> View attachment 146370
> ...






Skate said:


> *BHP*
> Today the Australian dividend was declared, previously it was in USD & confirmation of AUD was declared today. As I have posted about BHP today I'll post a chart "with one of the indicators " that displays when it was optimal to buy IMHO. Most would hold BHP as a long-term investment for the dividends.
> 
> 
> ...




@Skate I have marked your chart up for reality, apply a lag to your bars sir, this chart is pretending to know the close in advance when it doesn't.

Why not show the equity curve for these trades? Doesn't match the narrative? Can you actually see the future?


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## DaveTrade (6 September 2022)

Skate said:


> *Percentages are relevant to the size of your portfolio.*
> A 22.5% drawdown on a $4m trading account is $900k. In reality that's $900k of your trading funds "GONE". Relating a loss in percentage & converting it to dollars is sobering. Converting a percentage drawdown to dollars takes on a new meaning so don't let percentages fool you into a false sense of security. We all tend to accept a 22.5% drawdown in backtesting but could you stomach the dollar value when trading live?




@Skate this the reason why I have no problem putting a high percentage of my small account at risk when I'm trying out some new things, but this percentage risk is not in my trade plan for the big account.


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## eskys (6 September 2022)

Morning Skate and forum members, I'm working remotely and having a lot of trouble with connection at the moment. Will read the rest of the thread later tonight when I get back to base. 

Thank you, Skate for your reply. Cannot disagree with you; what was said makes a lot of sense to me. Thank you for your thoughts and help. Have a great day, and all........


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## Skate (6 September 2022)

InsvestoBoy said:


> @Skate I have marked your chart up for reality, apply a lag to your bars sir, this chart is pretending to know the close in advance when it doesn't.
> 
> Why not show the equity curve for these trades? Doesn't match the narrative? Can you actually see the future?




@InsvestoBoy thank you for taking an interest in my posts & for "marking the chart" to fit your narrative. To be perfectly honest we all do the same when replying to others. I try to keep my posts short so others will read them. Making lengthy posts & explaining everything in minute details turns readers off. Unfortunately, this reply post will fall into the latter, being on the lengthy side.

*The Chart*
The chart of "The Ducati Blue Bar Strategy" was a quick representation in "hindsight" to show how the strategy captures upward price movements, the whole purpose of the exercise, this time around. BTW, the colour of the bar change in real-time during the whole trading period, whether that be Daily, Weekly or Monthly periodicity. This means for me the bars can change every 20-minute intervals no matter the periodicity, meaning the bars can change colour quickly.

*A refresher - a simple strategy that uses volatility & volume*
I've made multiple posts on the advantages of "The Ducati Blue Bar Strategy" when it comes to a trading strategy that is simple in design & structure as it incorporates (volatility & volume). As traders, we don't need a fancy strategy to make money. It's exciting to experience how other traders & their methodology that decide when a position is to be entered. Coding of the "Blue Bar" strategy is pretty straightforward & it's easy to chart positions to understand the logic behind the selection.

*The simplicity of this strategy*
"The Ducati Blue Bar Strategy", colours the bars (no matter the periodicity) in real-time telling you what to do next. Put four traders in a room together & they will all have their reason why they "enter & exit" a position. Put four "system traders" in another room & their reasoning behind why they enter a trade can be just as dramatic & diverse.

*The Blue Bar Strategy*
This strategy has the unique ability to pick the confirmed momentum moves of any security in any time frame. It displays the entry & exit points on the corresponding chart. The first coloured bar is the "signal bar" & the "entry" is at the opening of the next bar no matter the colour.

Skate.


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## Linus van Pelt (7 September 2022)

Willzy said:


> All trades are taken at the close of the market – difficult to achieve without good tools – ie automation.



I've only skimmed your logic, so if this comment is incorrect just ignore it...

But, if your system has backtested market on close (MOC) orders, and if you can pre-calculate what the price action must be to enter the trade on MOC orders, and your broker is Interactive Brokers (perhaps others?), and your exchange is US, then investigate IB's Market on Close order type.






						Market-on-Close (MOC) Orders | Interactive Brokers LLC
					

A Market-on-Close order is a market order submitted to execute as close to the closing price as possible




					www.interactivebrokers.com
				




Make sure you click on "View Supported Exchanges".  MOC orders are not supported on the ASX .  

You could try to simulate a MOC order by setting the Good After Time order property on the ASX, but it gets tricky in determining the date portion of the GAT property:  are you running your code before midnight for tomorrow's orders, after midnight for tomorrow's (actually today's) orders, is tomorrow a weekend or holiday, etc, etc.


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## Skate (8 September 2022)

Skate said:


> When the market changes you need to adapt, doing the same thing over & over & expecting different outcomes borders more on the hope side of trading.




Reading @ducati916 posts each morning is how I start my day keeping me on top of what's happened overnight. His post today was thought-provoking about how markets are constantly changing. This is something we all know but like most put little effort into combating. I believe making a direct reference to Duc's post & adding a few words would be a worthy addition to this thread.
*
Nothing stands still*
How to adapt to the changing market environment & why we need to think a bit more about it. We all know the seasons change we dress accordingly. But when it comes to the “cyclical” or “secular” nature of the markets we expect as system traders that our strategies will work regardless. Pity fool us.
*
Where are we in the cycle?*
Being able to answer this question correctly can be a huge advantage. Blindly incorporating a specific type of strategy at all times, regardless of the market conditions seems awfully difficult. If we can first identify what type of market environment we’re in, then we can pick & choose which tools & strategies best fit the cycle.



DaveTrade said:


> @Skate I was thinking along the lines of the bigger system picture, for example, if the system was designed to work in a trending up market then create an indicator to identify when an uptrend with the strength of trend required by the system is present and when the required conditions are not present then the system will stop trading until the right conditions return to the market.




@DaveTrade, *hit the nail on the head*
Trade only after identifying the strength of an uptrend & exit when the conditions aren't right.

*The math behind how trends work*
How are trends born, & how do they die? To trade successfully we first need to identify where we are in the cycle & then decide how to approach the market from there. 

*First, we need to answer a few questions*
Are we in a high-volatility environment? Are we in a trending market environment? How do we know when a new bull market starts? How do we know when there is a new uptrend? The answer lies in the maths, numbers don't lie. This is why system trading is my method as all these questions can be precisely coded.

Skate.


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## qldfrog (8 September 2022)

Skate said:


> Reading @ducati916 posts each morning is how I start my day keeping me on top of what's happened overnight.



I usually wake up before US closing time around 5AM qld time, look at the market in the US , look at the USD AUD trend then Mr Ducati posts if any and act then on my US portfolio..pure discretionary.
US trend usually indicates the trend for the ASX, with acknowledgement of theshe'll be right Australian psyche which allow you some nice positions in down trend and quick good sell on divested shares


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## Skate (9 September 2022)

*Following trends, pursuing opportunities, & managing risk*
Since COVID there hasn't been an appetite for risk among traders even more so this calendar year. Making a profit is becoming harder. Frankly, it doesn’t matter what motivates anyone to enter a position regardless of their trading style or selection method as there are always stocks trending higher. 

*Some "market conditions" make it harder to make a profit*
In the current market conditions, trending companies are harder to find & harder to identify. On the flip side, the same can be said for weak stocks. Regardless of the environment, there are always stocks that are going down & they are the ones to avoid, it goes without saying. 

Skate.


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## Skate (9 September 2022)

*Let's buy it because it's cheap*
When a company's price falls it doesn't automatically mean it's good value, far from it. When companies go out of favour it is better to wait until the sentiment changes as fair value is set by others "moment-by-moment". Trading is so unpredictable & in the blink of an eye, one man's treasured stock can become trash. When this happens holding on to that position & waiting (praying) for a price reversal can be the undoing of any healthy portfolio.

*Chart patterns*
You can have a group of traders looking at the exact same chart patterns & most times they won't agree. System traders spend countless hours trying to remove that objectivity. The issue with system trading is that the data is constantly changing resulting in a poor strike rate, especially for my preferred method, trend trading. Trading systematically with the strike rate no better than a coin toss turns most off trading this way. 

*Simplicity has been proven to work*
Having a simple entry works most of the time but even the simplest entry condition is dependent on filters. For starters, selecting the right filter for the job is hard enough but the filters you do choose need to identify companies that exhibit bullish momentum, high liquidity & relative strength as we are only after the best of the best, no matter the trading environment.

Skate.


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## eskys (9 September 2022)

It seems to me there is a disconnect between VIX and market fundamentals, Skate. This has made it more difficult for me to gauge, whatever the cause may be........what is in favour today can quickly change without warning tomorrow. Once the cogs in my head become disconnected and misaligned, I find it difficult to trade even though I think I've identified sectors/stocks that are moving up. Today, it seems consumer staples, gold and black gold are stumbling blocks in my head. Lithium on the other hand, is doing the opposite but for how long? For the life of me, I can't help myself into getting in.........hope others are doing better


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## eskys (9 September 2022)

Skate, what does your system tell you about BHP today? Is it trending up or will it turn? Iron ore was up last night.


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## Skate (9 September 2022)

eskys said:


> Skate, what does your system tell you about BHP today? Is it trending up or will it turn? Iron ore was up last night.




@eskys please keep in mind there is a difference between "trading" BHP to "investing" in BHP. Trading is all about jumping on a confirmed trend & hopefully jumping off before the masses. Investing is simply longer-term trading. Investing for whatever reason can be done anytime because the hold period is longer. This longer hold period will be your edge.

*This is a daily trading chart *
I've already explained what the coloured price bars mean but you should take more notice of the yellow ribbon if you are an investor. The yellow ribbon indicates when the security (BHP) in this case is "unloved".





*This is a weekly trading chart *
Look at the yellow ribbon to establish when it is unloved, off the boil, simply out of favour, or not wanted during the yellow period.





*This is a monthly trading chart *
It's been a while since BHP has been desirable. As I said before trading is "timing the markets" whereas investing is "time in the markets".





*Summary*
There was a great Q&A recently conducted & was an eye opener on what is in the pipeline & their thoughts on M&A. I was surprised "Potash" could be online one year earlier than expected 2026 back from 2027.



			https://edge.media-server.com/mmc/p/q39yugir
		


Skate.


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## eskys (9 September 2022)

Thank you, Skate. Yes, I remember what you posted before, but was thinking if the colour ribbons are still the same on your system today.
You've answered my question, much appreciate that.


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## qldfrog (9 September 2022)

Skate said:


> @eskys please keep in mind there is a difference between "trading" BHP to "investing" in BHP. Trading is all about jumping on a confirmed trend & hopefully jumping off before the masses. Investing is simply longer-term trading. Investing for whatever reason can be done anytime because the hold period is longer. This longer hold period will be your edge.
> 
> *This is a daily trading chart *
> I've already explained what the coloured price bars mean but you should take more notice of the yellow ribbon if you are an investor. The yellow ribbon indicates when the security (BHP) in this case is "unloved".
> ...



ah Canadian potash, was supposed to be next big golden goose when I was there in 2008?yeap 14y ago got some colleagues who left Australia to go there..
yeap by the time, they are on line and producing, price will have crashed and BHP latest management guru will divest to focus on "whatever"..the usual BHP story  
as these fertilizers are polluting or extracted from Fist nation cultural heritage or whatever the woke story of the day
Do i detect some resentment here?


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## ducati916 (9 September 2022)

So BHP







Its books are probably clean at least.

Generally speaking, you buy cyclical resource stocks when their PE's are high anticipating the turn in profitability. Not when their PE's are low.

The Central Banks, to tame inflation are creating a recession. The problem is that they will actually create a liquidity event. Everything gets sold.

If you like it now, you should love it at a 65% discount.

jog on
duc


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## eskys (9 September 2022)

Hi ducati, BHP was up last night in the UK, +2.9%. Iron ore was up 3% last night US.

You mean it will drop 65% from today's price? That's gonna be a big drop if that's what you mean, and difficult for me to get my head around that at this stage......I don't have iron ore but don't want to miss the boat either..........so confused.........


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## qldfrog (9 September 2022)

eskys said:


> Hi ducati, BHP was up last night in the UK, +2.9%. Iron ore was up 3% last night US.
> 
> You mean it will drop 65% from today's price? That's gonna be a big drop if that's what you mean, and difficult for me to get my head around that at this stage......I don't have iron ore but don't want to miss the boat either..........so confused.........



16$ 6y ago and it had S32 and petrol then, it is not hard to fanthom how it can crash..even wo a depression
was at $45aud  in 2007..


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## ducati916 (10 September 2022)

eskys said:


> Hi ducati, BHP was up last night in the UK, +2.9%. Iron ore was up 3% last night US.
> 
> You mean it will drop 65% from today's price? That's gonna be a big drop if that's what you mean, and difficult for me to get my head around that at this stage......I don't have iron ore but don't want to miss the boat either..........so confused.........




As a stock, commodity producer I like it. It's financials look pretty good. It's located in the right part of the world. From all of those points of view it is a buy. Normally I would say its valuation, being cyclical is a little high, but commodities will be in a bull market for a while, so no real issues there.

The problem is not a problem with BHP per se.: it is a problem with rising rates worldwide and the level of debt worldwide. The rising rates will at some point, probably not too far away, trigger another liquidity crisis. In a liquidity crisis, everything gets sold. 

Typically the drawdown is anywhere from 30% - 50%+ and it is fast.

So if you like it here, you'll love it at $20 or less. Assuming they can maintain the dividend, you'll be looking at 25% yield +/-.

The real issue is that you "don't want to miss the boat". 

Ask yourself this:

If interest rates are rising and the US 10yr is the benchmark, then, what is the discounted price? It is lower. 

Never have markets risen into a rising rates environment.





Credit spreads are still (historically) low. But interest rates are still low. That is changing with every hike. When they go, they go fast almost overnight.

Real bear markets start slow and progressively get worse:




So although you think that you are running out of time to catch the 'lows', actually, you have plenty of time.

The 1940's had QE, although it was not called QE. Nothing new there. The difference is that each crisis has come faster on the heels of the previous crisis and there has been no time to work off the debt incurred at a sovereign level. Secondly, markets in the 1940's were at near historical lows. Currently we are only 15% or so off all time highs.




Once the liquidity crisis hits, the Fed will pivot. No doubt. QE will be turned back on with a vengeance. The question is then whether fiat actually survives that onslaught.

jog on
duc


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## eskys (10 September 2022)

Good morning ducati, I agree with what you said, and, I appreciate that. Such a lot of wisdom and knowledge.

Market fundamentals are different to TA....what's trending.  The market might go down more from here as you've pointed out. But what happens between now and then? Do we wait for that to happen? We don't stop work because it's a rainy day.........we adapt, plan and work our way around inclement weather, so we should around the market. I see   you are an intelligent person from what Skate posted quoting you.

It's clear to me that I am short sighted, with a short memory. My goal is to identify trending sectors and pick stocks within that and try to trade them on a daily basis..........call me an opportunist if you like. I'm also a scaredy cat.......a protectionist.....always too scared to venture into new territories, and will by pass through different venues. Eg, I like lithium but will try to get into proven companies with diversified minerals, just to be safe.........investing and trading to me is all about safety, got to be a calculated risk. 

Have a great weekend, ducati, everyone.

Frog, you have a memory as long as an elephant's, ) ........see you around


----------



## Telamelo (10 September 2022)

eskys said:


> Good morning ducati, I agree with what you said, and, I appreciate that. Such a lot of wisdom and knowledge.
> 
> Market fundamentals are different to TA....what's trending.  The market might go down more from here as you've pointed out. But what happens between now and then? Do we wait for that to happen? We don't stop work because it's a rainy day.........we adapt, plan and work our way around inclement weather, so we should around the market. I see   you are an intelligent person from what Skate posted quoting you.
> 
> ...



Hi @eskys RE: "My goal is to identify trending sectors & pick stocks within that & try to trade them on a daily basis......call me an opportunist if you like".

Looks like I'm not the only one then lol join the "opportunistic club".

Is there a thread on ASF for sharing daily trading opportunities? as keen to know & get involved with other like minded trader's here... thanks


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## Skate (10 September 2022)

eskys said:


> call me an opportunist if you like. I'm also a scaredy cat.......a protectionist.....always too scared to venture into new territories, and will by pass through different venues




*It's not easy*
Profiting from the stock market is exceedingly difficult to do consistently over a long period because the market is always irrational, for the simple reason it's a "reflection" of all the "emotions" of the participants. The market moves in a manner that has little appreciation for what we might think. When the markets react in a certain way I'm so glad I have a suite of tools that gives me a fighting chance when the unforeseen happens.

*Some traders don't minimise their risk well enough*
To minimise your risk you need to learn how to sell quickly & decisively at the first sign of trouble. In fact, @eskys I’ll go so far as to claim that a smart scaredy-cat like yourself who runs & hides when the going gets tough generally produces better results than the brave souls who are proud of their ability to suffer great monetary pains while they wait for their convictions to be rewarded as one Twitter poster is currently doing.

*The markets have a habit of making you look "good" as well as "bad"*
No matter how good "you think" your trading strategies are the markets ultimately decide. One respectable trader who reports his trading results on his Twitter feed has reported his losses so far this year to the tune of ( -$840,941 - Ouch!! ) while he waits for his convictions to be rewarded. You have to start to think about what hope is there for us when a trader of his caliber is struggling.

Skate.


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## Willzy (10 September 2022)

*Quick System Update....*

Rough couple of weeks for both the basic_RSI and connorsTPS on MSFT.




I'm leaning towards just sticking with my basic_RSI system, it produces a better return for the same amount of capital and risk. I think scaling into a position makes the equity curve smoother but ultimately it means your first entry was too early and you only commit your funds totally to the trade occasionally.

*                                                   BASIC RSI                                                                                                        ConnorsTPS*




Cheers


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## Skate (11 September 2022)

aus_trader said:


> I really like the _illusive_ idea of long-term investing. There is something attractive about the idea of finding undervalued/unloved companies and buying them low and selling them high once they appreciate in value and become overvalued.




*Inspiration for another series of posts*
I'm constantly amazed that some people throw thousands of dollars at the markets with zero education, money they have worked hard for only to read that in a few short years they have managed to lose most of their nest egg through investing. The reason we invest is to grow our nest egg over time, not the reverse.

*Only invest with the money that's idle & you can afford to lose*
This should be the number one rule never to be violated. Investing for me is a side hustle & it is the equivalent of watching paint dry. When it comes to investing it is preferable to have money sitting idle looking for a good home. Money that has no effect on your ongoing lifestyle.

*Investing can sometimes be a little easier to mentally handle than trading*
When there is a burn in the markets that's the time to invest rather than trade. Applying funds in this manner is purely to make a profit over a 3-5 year period or for no other reason than to enjoy the spending power of the dividends. Opportunities like these don't come around all that often.

Skate.


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## Skate (11 September 2022)

investtrader said:


> COV19 has hit but the company can still keep trading, which can't be said of a lot of businesses. Trade to the end of March has so far been unaffected, but the next few months are uncertain.




*COVID gave an opportunity*
On the 27th of March 2020, I made a post about the advantages of investing. At the time I reported that I had invested $800k equally in 4 positions ANZ, BHP, CBA & MQG. I still hold all these positions to this day. @Smurf1976 calls it investing in "beaten up large caps" which is a good analogy. 

*My thinking at the time*
The logic behind that investment was simple. If those 4 positions can reclaim their former glory over the next 2 years with dividends along the way they have the potential to represent a good risk/reward investment. 

*It's been two & a half years *
I'm thinking it would be a handy exercise to revisit that investment package. I'm lucky in this short period, the capital gains & dividends have been a wealth builder to a degree & it acknowledges that the decision at the time did have merit.

Skate.


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## Skate (11 September 2022)

Skate said:


> Everyone finds their own style of trading, or investing. *I personally choose to Trade and invest*. My investments are time driven, meaning minor blips don't really effect quality long term investments




*It's the perfect time for an investment update*
Investing is all about the time in the market. By investing in good quality companies that pay dividends you'll not only enjoy those dividends but the capital gains along the way.

*The capital gains over the last 2 1/2 years*
The dividends accumulated along the way & the spin-off from BHP are not included in the results below. Other than capital gains, I regard any other income from these investments to be the icing on the cake. In the five holdings below, an investment of a million dollars should generate approx 80k to 100k annually give or take a few dollars.

*FMG is a recent addition (it's early days)*
It doesn't take blind Freddy to work out that red is not my favourite colour but in the early stages of an investment cycle it's irrelevant. Investing in quality companies has always been proven to be a successful strategy. Market timing in the short term can affect your portfolio in the early stages of building such a portfolio but nothing to worry about until it gets out of control. 

*There is an old saying, "give it time"*
With Investing, short-term price fluctuations are meaningless throughout the investment cycle as "father time" is the edge. Wealth creation takes time so "give it time" to do its thing.






Skate.


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## Skate (11 September 2022)

Skate said:


> *Trade and invest*
> Everyone finds their own style of trading, or investing. I personally choose to Trade and invest




*To balance out my posts today I'll make a few posts about trading*
Being an investor as well as a trader gives me the ability to make a few general comments on the way I see the differences & nuances when it comes to both methods of wealth creation. Wealth creation can be generated either way or by a combination of both.

*Investing is a slow methodical *
Whereas trading generates wealth so much quicker. To me, trading & investing isn’t about getting rich, it's more about financial independence. Using both methods supports my lifestyle. Financial freedom should be the aim for everyone so you can live your life on your terms.

*Living life on your terms is what life is all about*
The only person who can make sure you’re able to live the life you desire "on your terms" is you.

Skate.


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## Skate (11 September 2022)

*Let's address the elephant in the room*
There is a big downside when it comes to trading because you're up against traders who will have more experience, more information & much more money than you, so you will need to concentrate on your survival. Your absolute first goal should be to "learn how to stay in the game", that's your number one job, it's your most "important job" by far.

*Successful trading*
Successful trading is like getting pregnant. Everyone congratulates you when you manage it but no one asks how many times you got fu¢ked first. You need to mentally prepare yourself to accept losses & on occasion prepared to accept a few larger losses as losing is part of the trading game. How you handle your emotions will ultimately decide if this game is for you.

Skate.


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## Skate (11 September 2022)

*It's complicated*
First off, when it comes to trading or investing there is a financial risk in chasing wealth creation. When you first "have a go" at trading or investing it won't take you long to find out the level of risk you are willing to accept. This level of risk is already built into your DNA & it varies between individual traders.

*There is a difference between Trading & Investing *
In both cases, evaluating whether a position represents a good level of "risk/reward" is essential before you jump into any position. There is a difference between buying into great companies & investing in great companies. Both go about capturing profit from a different perspective of a price trend. A lot of money can be made doing both regardless of the aspects of the ongoing businesses.

Skate.


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## Skate (11 September 2022)

*Traders try to capture the small price trends within a long-term trend*
Whereas investors "over-time" hopes to capture the full price trend discarding the minor fluctuations in price along the way. But with both styles "position management" is critical. Recent times highlight the importance of managing positions whether you are a trader or an investor. Without correctly managing your positions a "Set & Forget" strategy can sometimes be fraught with danger. The markets aren't kind it doesn't matter how good your preferred method of trading is, not limiting your drawdown using either method is not acceptable in my books.



peter2 said:


> To those who are reading this thread *due to the title*, may I suggest you look at the weekly systems in @Skate's "Dump it Here" thread. I fully endorse Skate's systematic trading style.




*I believe it's time for me to hop off the soapbox*
But before I do, I appreciate the recent kind words from @peter2 endorsing "systematic trading". If you can nail this style of trading consistently you'll be able to live a life of financial freedom. I know this is another meaningless catchphrase but I truly believe "if I can do it" anyone can do it. Education was my key, make it yours.



Skate.


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## Skate (14 September 2022)

Captain_Chaza said:


> Crikey!
> I don't know how any Mechanical System/ Formulae can Operate with large GAPS in either direction on the open. In my mind if all the Mechanical Statistics don't cover LARGE GAPS in either direction I think they should be thrown overboard without hesitation. The only solution as I see it is to Claim the Trade or Trades were a Medium Term Investment and maybe even a Long Term investment if the situation gets worse and say "I Never Lose"




*ASX plunges today wiping out $60bn *
The Australian share market had its biggest daily drop in three months after Wall Street got hammered yesterday. The news headlines correctly reported the loss traders experienced today but it wasn't the same for everyone. Sure today was emotional for some but as usual, there were positions that were relatively unaffected.

*System traders are not all the same*
As a matter of fact, we trade our own systems & strategies. I had made a comment in a "PM" that on Monday I had "28 Buys" & "8 sells" as all my indicators were pointing to better days ahead. 

*The "Frogs on Toast Strategy" *
On Monday this strategy had "10 buys" & on face value, this strategy has been relatively unaffected by today's rapid decline. I'll post the signals & a small Excel chart to plot its movement over the last 3 days.

*# This week Amibroker Exploration Signals *
Trading in this manner couldn't be any simpler. As it displays (a) what to buy, (b) the number of shares to buy & (c) the offer price in the pre-auction.





*# Some trade using the Amibroker Backtest Portfolio feature*
I'll post the Backtest Portfolio as some prefer to trade using this method. I prefer the Exploration Analysis method as it can be coded to give as much information as required. Both supply the same signals. The biggest difference is the way the calculation is performed.





*Excel Spreadsheet*
A snapshot of how this week's signals have performed.





*Summary*
Sure today was bad, but not for everyone.

Skate.


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## Skate (14 September 2022)

*Give trading the respect it deserves*
There are myriad reasons why someone would start investing or trading in the markets. Basically, those who enter the market can be categorised into two groups, (1) hobby traders & (2) those more dedicated. If you fall into the latter group your survival in this game is achievable. Those who fall into the hobby group usually believe trading will be easy & it's not. I'm just saying, if you keep treating trading as a hobby it will quickly become an expensive one.

*Consistency comes from having a plan and sticking to it*
Most of us start out trading knowing very little "which is a common trait" amongst new participants trying their hand at this game. When losses appear that's when the penny drops. Fancy taking on a new venture & risking your own money with something you know little about "that's why it pays to self-educate".

*You need to start out with a business mindset*
Trading success mightn't flow straight away but with additional knowledge, perseverance, hard work, & a lot of dedication (PHD) will help to "keep you in the game". Once you gain the knowledge, "discipline & mental toughness" is a prerequisite to give yourself any glimmer of success as trading is a tough gig.

Skate.


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## Skate (15 September 2022)

Skate said:


> *Amibroker Ranking is called - PositionScore*
> @peter2 acknowledges there are always more candidates than the available money & most times more signals than required to fill a portfolio. From my research alphabet ranking doesn't produce "bang-for-buck" neither does Radge's "Bang-for-buck" PositionScore.




*The change in Superannuation rules *
With these new changes from the 1st of July 2022 has allowed me to start a few more strategies. It must be a timing thing as they are all looking promising with the majority of them being in good profits. On Monday the "HighRoller Strategy" being a 10-position portfolio also had "10 buys" & to my surprise, it has been also relatively unaffected by yesterday's rapid market decline. I'll post the signals & a small Excel chart to plot its movement over the last 3 days.

*PositionScore - Ranking signals*
The "PositionScore" should be in line (tuned) with the results we are trying to achieve. "Skate's HighRoller Strategy" is one strategy that pumps out more signals than the system can take. The ranking just takes the lowest price security first, crude but robust with a breakout strategy.

*System Trading*
Coding a trading idea stands "head & shoulders" above all other tools that I have tried. Trading a "Mechanical System" is the simplest way I've found as it takes little skill & involves only minutes a week. If you can press one button you have the skill.

*# This week Amibroker Exploration Signals (HighRoller Strategy)*
Trading in this manner couldn't be any simpler. As it displays (a) what to buy, (b) the number of shares to buy & (c) the offer price in the pre-auction.

*The exit strategy*
The "reason" for the exit also paints a powerful story.





*Excel Spreadsheet*
A snapshot of how this week's signals have performed. The 10-positions entered are from the Amibrokers Exploration Analysis report. The simple idea of "PositionScore" means that you take the required number of positions from the top down.





*Summary*
Sure yesterday was bad, but not for all strategies.

Skate.


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## Skate (15 September 2022)

peter2 said:


> There's plenty of opportunities to get me fully invested but I'm a little skeptical as it's still a bear market overall.




*It's the nagging question*
What should we do? This question no matter the market outcome is never pleasant either way. If the markets perform disappointment sets in rapidly. Staying on the sidelines even though the market performs as expected (negatively) but the positions under consideration to buy took off, immediate anger raises its ugly head. No matter what decision you make "the law of averages" means you'll be wrong 80% of the time.



peter2 said:


> One common method to compound profits quicker (aggressively) is to allocate a portion (%) of the profits to the trade risk of the next trade. eg. If starting trade risk is $1000 and the trade makes $1500 profit, $150 (10%) is allocated to the trade risk for the next trade. Even a small sequence of winning trades will see the TR increase rapidly. This method needs to impose some limits, both on the upside in winning runs so that the TR doesn't become too large and on the downside in losing runs to reduce the amounts lost.




*How to reallocate trading profits*
This was the next topic on my list for discussion but after some thought, "I've done this topic to death" A quick search on "how do I allocate profits?" or "pyramiding my position sizing" will bring up more than a few posts on the topic if "new readers" are interested. There are also some graphics to explain how I accomplished this.

Skate.


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## Skate (15 September 2022)

*Musing while waiting for the markets to open*
I still feel that there should have been a better explanation about "PositionScore" as one PositionScore doesn't fit all strategies (they need to be in tune with the strategy). The PositionScore can be one of the deciding factors for the overall profitability of any strategy. 

*At all costs*
You need to get the ranking correct or you might just throw away a good strategy or trading idea. The PositionScore decides which trades should be entered if there are more entry signals than the maximum allowable number of open positions or available funds by ranking them in numerical order. In such a case, AmiBroker will use the absolute value of PositionScore to decide which trades are preferred.

*Backtesting alleviates the need to guess*
"PositionScore" affects only the backtest & optimization, this is the reason we need to add a filter, without an additional filter it wouldn't display the ranking in the Exploration Analysis. The "PositionScore" is important when it comes to the profitability of any strategy.

*Bye*
The markets are open.

Skate.


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## investtrader (15 September 2022)

Random thought. I recently read a trading book by Mark Minervini.  First trading book I have read in maybe 6 or 8 years. I followed him on Twitter for interest. Apparently he has made 30mill of something like that from nothing. Anyway he tells us he is a big deal.
The book was okay and focused a lot on risk, big bases and tight stops. 
The thing that struck me was he has 4 positions total unless a raging bull and then he uses margin to go to 8 positions (100%margin I think). I hold maybe up to 40 or 50 positions across three accounts when fully invested. You could only do this on the US market IMHO as there is much more liquidity (assuming a reasonable size account).


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## rcw1 (15 September 2022)

Good afternoon

_"Average trader make a trade and feels good, great trader make a trade and feels nothing."_

Ha ha ha ha ha

Kind regards
rcw1


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## Skate (17 September 2022)

investtrader said:


> Random thought. I recently read a trading book by Mark Minervini. First trading book I have read in maybe 6 or 8 years. I followed him on Twitter for interest.




*I'm starting to like Twitter*
I never really got Twitter as the format was not what I was expecting. I don't do social media but it certainly has its place to stay connected. I like to read tweets of Mark Minervini & The Chartist, an alternative way to stay motivated about trading.   

*An extract from Mark Minervini's Twitter Feed (17/9/2022)*
_"What a wonderful message to wake up to. My books and my work change lives around the world. Satisfaction beyond money"._

Skate.


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## Skate (17 September 2022)

rcw1 said:


> "Average trader make a trade and feels good, great trader make a trade and feels nothing."




*The Chartist (17/9/2022)*
"The Chartist" reporting their current drawdown in dollars rather than percentages adds a level of emotion to trading. Kudos for displaying their results in this manner as it highlights how difficult trading this year has been.

*Today's PnL:  *-26,178
*Week PnL:  *-45,069
*YTD PnL:*  -886,010

_"Investing manifests itself in different ways for different people—one person’s prized strategy may cause another investor to shake their head in disbelief. We do, after all, swim in our own pool of personal logic"._

Skate.


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## Skate (17 September 2022)

*Disclaimer*
The information below in this post is not a recommendation or endorsement in any form but posted as a matter of interest for others. 

*As a matter of fact*
I don't endorse any products or services that I may mention or have mentioned in any of my posts.

*The Chartist has 2 new products about to be launched*
There is one for those interested in system trading but don't have the skills or time to code a strategy, the other product is for those interested in having their funds managed.

*Further information about the Chartist turnkey system can be found by clicking on the hyperlink below*








						Turnkey Trading Systems Archives
					

Turnkey Trading Systems for Amibroker. Ideal for traders and investors who want to manage their own trading strategies on a daily, weekly or monthly basis.




					www.thechartist.com.au
				




Skate.


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## Skate (17 September 2022)

*Disclaimer*
The information below is not a recommendation or endorsement in any form but posted as a matter of interest for others. As a matter of fact, I don't endorse any products or services that I may mention or have mentioned in any of my posts.

*The Chartist has two new products that are about to be launched*
The first new product is a "Multi-Strategy Wholesale Managed Account Service", a high conviction, high performance managed account designed to provide clients with outsized returns.

*Impressive backtested returns*
+26.74% CAGR over the last 5 years net of fees

*The minimum Investment for the "Multi-Strategy Wholesale Managed Account Service"*
Is $250,000

Skate.


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## Skate (17 September 2022)

*Disclaimer*
The information below is not a recommendation or endorsement in any form but posted as a matter of interest for others. As a matter of fact, I don't endorse any products or services that I may mention or have mentioned in any of my posts.

*The Chartist has two new products that are about to be launched*
The second new product is an "ASX Swing Strategy". The ETA of the new ASX Swing Strategy turnkey release date is reported to be in a week or two for those interested & will be an addition to the turnkey line-up. 

*Multiple versions of the  "ASX Swing Strategy"*
There will be different versions of the strategy & the backtest results have been published. Also, it's interesting to read that "The Chartist" has already started trading a slight variant of this strategy. 
*
The reported stats of a leveraged version of the new "ASX Swing Turnkey Strategy"*
+31% CAGR with maxxDD -19.5%. (61% win rate)

*The reported stats of an unleveraged version of the new "ASX Swing Turnkey Strategy"*
+19.8% CAGR with maxDD -11%.  (no win rate stated)

*For additional information*


			https://twitter.com/thechartist
		


Skate.


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## Skate (17 September 2022)

Skate said:


> "The Chartist" reporting their current drawdown in dollars rather than percentages adds a level of emotion to trading.




*For balance *
"The Chartist" today reported their current calendar drawdown of ( -$886,010 ) highlights how difficult trading has been. In @ducati916 post today "Mr flippe floppe flye" put that figure into perspective.

_"This has been a very FORGIVING bear market and it has been quite mild in comparison to say 2002 and 2008. I barely know anyone who has blown up this year, just complainers bitching about 10-30% losses. If you’ve been long only and find yourselves down between 10-30% — that’s fairly benign is it not?"_

Skate.


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## Skate (17 September 2022)

*"Invest trading" from the mouths of others*
From @ducati916 post today "Mr flippe floppe flye" even remarked about the current “fu¢k you patterns” being experienced at the moment where one day the markets are surging ahead only to fall sharply the next.

*Well blow me down*
"Mr flippe floppe flye" has certainly a way with words, going on to explain one way he has found to trade these patterns. All you have to do is keep adding to your accounts into the dips & wait for the turn that he believes will eventually come.

*But then there are others who say this bear market is going to be worse than 2008*
Why? because the leverage is so much greater. It’s hard to reconcile it all & it’s especially hard to believe in the grimmest forecasts, mainly because the worst-case scenario rarely plays out.

Skate.


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## eskys (17 September 2022)

Hi Skate, wouldn't it be safer to trade on a daily basis and leave no capital exposure overnight because of the uncertainty? We never know what the night will bring nowadays (although we do get a sense of what is to come, but never any guarantees that our judgement/ assessment is right)


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## Skate (17 September 2022)

eskys said:


> Hi Skate, wouldn't it be safer to trade on a daily basis and leave no capital exposure overnight because of the uncertainty? We never know what the night will bring nowadays (although we do get a sense of what is to come, but never any guarantees that our judgement/ assessment is right)




@eskys, every word you have posted is valid & you won't get an argument from me "but finding a trading method" that actually works that you can consistently stick to is not as simple as it sounds. 

*Trading Consistently* 
Being Methodical & Consistent will put you on the road to success but the real issue that faces us all is "determining" whether your methodology or any other trading methodology will be profitable. Having no exposure overnight is beneficial to some but it's not me as a trend trader. Even trading a good system it is hard for me to tell when a trend starts & when it finishes. Grabbing the meaty part of the move over & over works for me.
*
It's a pity but it's a fact of trading*.
Everything about system development is always a tradeoff & there are no absolute ‘right answers’ to achieve a perfect system. What works once might not work again, so you always have to stay on top of your game. 

*Day trading*
If you are considering Day Trading then be "Very, Very, Careful" as there are sharks in them waters!

Skate.


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## Skate (17 September 2022)

eskys said:


> We never know what the night will bring nowadays




*We don't know what tomorrow brings but we act as if we do*
Even experienced traders don't have a clue most of the time & for that very reason, the markets are behaving as they are. "Mr flippe floppe flye" refers to these erratic overnight shifts as “fu¢k you patterns”.

*Howard Bandy is very experienced*
He has posted that "holding only a few days, again & again", is his methodology for being profitable. Doing it "his way" works for him. Howard even goes on to remark that holding positions beyond three days increases the risk considerably, & accuracy goes out the window. My research is at odds with his findings & his way of trading is not right for me.

*A short holding period is not for me*
Trading over a period of a day or three is easier said than done. I prefer to trade weekly. In summary, I should point out that Howard knows what he talking about, he's smarter than the average bunny.

Skate.


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## eskys (17 September 2022)

Skate said:


> @eskys, every word you have posted is valid & you won't get an argument from me "but finding a trading method" that actually works that you can consistently stick to is not as simple as it sounds.
> 
> *Trading Consistently*
> Being Methodical & Consistent will put you on the road to success but the real issue that faces us all is "determining" whether your methodology or any other trading methodology will be profitable. Having no exposure overnight is beneficial to some but it's not me as a trend trader. Even trading a good system it is hard for me to tell when a trend starts & when it finishes. Grabbing the meaty part of the move over & over works for me.
> ...



Agree, there are times when I've held when I was relatively confident that a particular stock was uptrending...that's where flexibility and judgement comes into trading. When I'm uncertain, I don't hold........my method is to get out and be safe......make less money and not live to regret. There was a time lately when I was so distracted and confused with what was going on around me that I didnt' take action.....won't repeat that again. One or two loses can stuff up a whole week's trading efforts!


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## Skate (17 September 2022)

investtrader said:


> Random thought




@eskys,* when others post it stimulates discussion*
I've made a lot of posts to stimulate members to open up & express their trading ideas as trading is confusing for the best of us. The good feature of this thread is that there is no right or wrong & everyone enjoys reading what others have to say. When others make a comment or express an alternative view makes others think "to some degree" about there way of trading as we are all searching for something better.

*As I make the most posts, I slant the thread*
When I comment it's always about me & my style of system trading, & admittedly others will hold a different view. I trade the All Ordinaries only, the top 500 companies listed on the ASX.

Skate.


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## Skate (17 September 2022)

eskys said:


> there are times when I've held when I was relatively confident that a particular stock was uptrending...that's where flexibility and judgement comes into trading. When I'm uncertain, I don't hold........my method is to get out and be safe......make less money and not live to regret.




*I make money from the markets, but I don't consider myself a true trader*
@eskys I don't enjoy the flexibility & judgment when it comes to trading as you have described. To be perfectly frank, as a system trader, "I don't even know what companies I'm buying" let alone the sector they belong to.

*I'm just buying ASX codes*
But what I do know is I buy positions that meet my buy conditions & sell those positions when the system says to do so. I do it "consistently" without hesitation. Trading this way, you win some & you lose some but for me it's profitable.

Skate.


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## eskys (17 September 2022)

We're very different there, Skate. I'm a sector watcher and stock picker within certain sectors. There's no right or wrong.......so long as we make money, whichever method we use is good. The most important thing is not to LOSE money. Happy you are are successful in your method, Skate. Congratulations.

I'm thinking about food again, dinner time soon. (went out for lunch and being a short sighted person, ate and come back, no take away) Now have to think about what to cook for dinner. Have a great evening, Skate. Thanks for your time today........have a great evening.


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## Skate (17 September 2022)

eskys said:


> I'm thinking about food again




*When others post it opens the floodgates*
I try not to post too much these days but responding to others is a perfect segue for me to lay down a few words. You are correct when you say "_so long as we make money, whichever method we use is good_" that's what I keep saying as well. I'm constantly saying in different ways that "Trading", requires planning, preparation, knowledge & experience.

*When others post it allows me to make some random comments*
At times I will stay on a topic whereas other times I'll post what I'm thinking. As this is a "beginner's thread" I try my hardest to point out that education is the key because the majority of those starting out will not accept how little they know. Without an education, they are in real danger because most are not capable of taking responsibility for their own actions.

Skate.


----------



## Gringotts Bank (17 September 2022)

Skate said:


> *We don't know what tomorrow brings but we act as if we do*
> Even experienced traders don't have a clue most of the time & for that very reason, the markets are behaving as they are. "Mr flippe floppe flye" refers to these erratic overnight shifts as “fu¢k you patterns”.
> 
> *Howard Bandy is very experienced*
> ...



Hi Skate, how's it going?  Seems like you're doing very well by the looks of the results posted here.

I think Howard trades EOD mean reversion, and time stops of 2-3 days are optimal for that.  Often combined with a profit target and no stop loss.  And a win rate of 66.666%.  For some reason, almost all MR systems have a WR very close to that figure.


----------



## Skate (17 September 2022)

Gringotts Bank said:


> I think Howard trades EOD mean reversion, and time stops of 2-3 days are optimal for that. Often combined with a profit target and no stop loss.





@Gringotts Bank I noticed you were back making a few posts which were great to see. Also, you are absolutely correct about how Howard trades. I made a few lengthy posts about his preferred method of trading a few years back that I've never forgotten.  Howard is well respected & competent. Any man who gives me one of his books for free is okay as far as I'm concerned.

Skate.


----------



## Skate (17 September 2022)

Skate said:


> Howard is well respected & competent




*Now I'm thinking about being competent* 
There are some highly skilled traders on this forum who trade differently from most. In trading terms, they no longer need to follow a set trading system but patiently wait for a setup, & then take the trade. These traders are "unconsciously competent". They appear to trade using their so-called 'intuition', but are in fact, applying their vast knowledge & skill to recognise low-risk, high-profit potential, trades.

Skate.


----------



## Skate (17 September 2022)

*Traders have a reason for trading*
Every trader has a reason for trading, & the Internet is a cheap & effective source of information, including articles on an almost infinite range of topics. Self-education is an ongoing process that you should be serious about it. The reasons why most traders fail to profit from their trading do so because they do not have a proven trading system when starting out. 

*I believe trading would be much easier using other people's money*
When you’re dealing with your own money, trading gets very complicated, very quickly. It has already been pointed out today emotions that can override a trader's determination to follow their trading exactly.

Skate.


----------



## investtrader (17 September 2022)

My second random thought this week. Had a bit of time to look at Real Test software. Initial reaction is I am really impressed. 
@Skate This would really suit you. The strategy combination feature is very powerful. There is a Real Test thread on ASF also.


----------



## investtrader (17 September 2022)

Just to clarify ... I have thousands of random thoughts which can be a problem. But this my 2nd for here.


----------



## Skate (17 September 2022)

investtrader said:


> My second random thought this week. Had a bit of time to look at Real Test software. Initial reaction is I am really impressed.
> @Skate This would really suit you. The strategy combination feature is very powerful. There is a Real Test thread on ASF also.




@investtrader thanks for bringing this to my attention. I have read the thread & look at the software, even sitting through one of their lengthy YouTube videos on how the software works. No matter the software it all depends on data & how we can glean information from it to make a trading decision. Amibroker works extremely well & it's working for me at the moment. Until I believe there is something better "for me", I'll stick to what I know.

Skate.


----------



## Skate (17 September 2022)

investtrader said:


> Just to clarify ... I have thousands of random thoughts which can be a problem. But this my 2nd for here.




*Dump it here*
Yes, if you are like me I can't get rid of some thoughts or ideas until I put them to paper. Expressing ideas is how we learn. Just because you know something doesn't automatically mean others do. If at any time you have an idea or a helpful comment, this is the perfect thread to dump it in.

Skate.


----------



## ducati916 (18 September 2022)

Morning chaps,

So yesterday there seemed to be quite a flurry of posts.




Bear markets are actually quite easy to see coming, after all, it is simply an inverse of the rule: never fight the Fed.




The US economy is still the largest in the world. The US economy is now and has been for some time the financial markets. Therefore when the US financial markets are in trouble, all financial markets are in trouble. Any number of economies will crash.

The FFR (black line) is the rate under the control of the Fed. You can see when it inverts, we have bad outcomes (black above the green). Currently the Fed is raising the FFR. We will get another 75bps and the chatter is for potentially 100bps. For stock markets, that is very bad.

As a comparison:






The US dollar strong. Why?









Because as the FFR rises, Eurodollars become increasingly burdensome upon their holders. ATM Eurodollars are a sell and will continue to be a sell until something breaks, similar to the upper chart. Why did the upper chart break in Oct/Nov 2019? Go back and look at the yield curve. A sell of Eurodollars is a buy for dollars.

SPY





Your market





Why will this bear get worse?

Very simple: inflation, as it has already demonstrated, upsets the peasants tremendously. The pitchforks and torches come out. Politically this is suicide. Therefore, Mr Powell has been tasked with lowering inflation fast.

One way to lower inflation is to create a recession. A recession dulls demand.

There can be no 'Volcker' moment as every 100bps rise in the FFR adds $300B to the interest burden on the US National debt, currently sitting at $31T. Never mind another $100T in Medicare/Medicaid/Social Security. Never mind you military etc.

Add in Mr Putin and China, who are now fully engaged in attacking the dollar and thereby ending the 1 tool that the US has relied on since 1971 to dig itself out of the shite. Imagine if the US had to pay for energy, rather than printing up some paper for it.

The Fed will pivot. At some point they have to. If they don't, then we will have a repeat, only worse of the 1930's. That market declined 89%. This of course is a DEFLATIONARY bust.

If/when Mr Powell pivots, the issue once again returns to an inflation issue. Stocks do not do well in an inflationary environment. Simply look at the 1970's. (1969 - 1982).

True bear markets save the worst for last:





This is a true bear market. It is so because, the Fed is now powerless. They raise rates, they kill the market, the economy and all the crony politicians. They lower rates, they kill the market, the dollar and all the crony politicians.

The next shoe to drop will be the liquidity crisis. Pressure is already building:




What is a liquidity crisis?

Simple: no buyers and lots of sellers.

In previous liquidity crises, the Fed has become the buyer of last resort (re-liquifying the market). Currently, the Fed has just increased the QT programme from $48B/month to $95B/month. That is to say the Fed is a seller, not a buyer. LOL.

Those that are awake will know that bank accounts in a number of countries have been frozen at some point. Cash in a bank account is not 100% risk free.

Markets have been closed on numerous occasions, sometimes for years. Capital in brokerage accounts/markets is not 100% risk free.

If you don't hold it, you don't own it is the maxim that today is critical to understand.

jog on
duc


----------



## Telamelo (18 September 2022)

eskys said:


> We're very different there, Skate. I'm a sector watcher and stock picker within certain sectors. There's no right or wrong.......so long as we make money, whichever method we use is good. The most important thing is not to LOSE money. Happy you are are successful in your method, Skate. Congratulations.
> 
> I'm thinking about food again, dinner time soon. (went out for lunch and being a short sighted person, ate and come back, no take away) Now have to think about what to cook for dinner. Have a great evening, Skate. Thanks for your time today........have a great evening.



You said eskys "most important thing in trading is not to LOSE money" which in principle I agree with but as a frequent short-term trader knowing when to cut a losing trade & accepting the odd loss here & there is part & parcel of the trading game (thing is when I decide to cut a losing trade I ensure to try have a backup plan/good potential rebound trade to get into soon thereafter... most times this method has worked out very well for me in getting ahead/recovering $$ quickly after a losing trade).

I learnt that cutting losses early & getting out/rescuing capital is one of the most important trading lesson's one can learn/implement in capital preservation. I don't fret anymore about hitting the "sell button" when necessary/required & don't regret it afterwards which helps me stay in control/sleep well at night


----------



## Skate (18 September 2022)

Telamelo said:


> I don't fret anymore about hitting the "sell button"




@Telamelo is basically saying that the market will always offer opportunities in which to profit, so we need to make sure we always have capital that isn’t tied up in underperforming stocks. 

*If you don't hit the sell button you will quickly turn a trade into a long-term investment*
With my style of trading (Weekly Trend Trading), it's a given that 50% of the signals taken will be duds, accepting this allows you to use the biggest tool in your trading toolbox, the "sell button". I've made plenty of posts explaining that selling is where the money is made. Successful trading is largely the art of selling. Buying is easy.

*Selling is a valuable tactical tool*
Selling is by far the most valuable tactical tool that any trader has at their disposal. Selling is cheap, easy & can be undone in the blink of an eye. When in doubt, I say "pull out". For most traders, the biggest stumbling block to selling is mental.

Skate.


----------



## eskys (18 September 2022)

Telamelo said:


> You said eskys "most important thing in trading is not to LOSE money" which in principle I agree with but as a frequent short-term trader knowing when to cut a losing trade & accepting the odd loss here & there is part & parcel of the trading game (thing is when I decide to cut a losing trade I ensure to try have a backup plan/good potential rebound trade to get into soon thereafter... most times this method has worked out very well for me in getting ahead/recovering $$ quickly after a losing trade).
> 
> I learnt that cutting losses early & getting out/rescuing capital is one of the most important trading lesson's one can learn/implement in capital preservation. I don't fret anymore about hitting the "sell button" when necessary/required & don't regret it afterwards which helps me stay in control/sleep well at night



That's the hallmark of a good trader, Tela, well done. Some traders find it difficult to cut loses and see herself getting into deeper water (speaking of someone I know) We cannot expect a certain price. The market will only give what it has to give..........ask for more when there's nothing more to give is only asking for trouble.


----------



## eskys (18 September 2022)

Skate said:


> *Traders have a reason for trading*
> Every trader has a reason for trading, & the Internet is a cheap & effective source of information, including articles on an almost infinite range of topics. Self-education is an ongoing process that you should be serious about it. The reasons why most traders fail to profit from their trading do so because they do not have a proven trading system when starting out.
> 
> *I believe trading would be much easier using other people's money*
> ...



Good morning Skate, sorry, i'm in a bit of a hurry this morning. Need to meet my tribe..........your second paragraph.....I find that harder to work with other people's money.........I am too anxious about losing their dough. When it comes to my own, I can take more risks (only got myself to answer to)   See you later...........


----------



## Gringotts Bank (21 September 2022)

I have an AB question, since most of you guys use AB.

What's a good way to recreate the ASX price increments?  I've been playing around with PREC() and ROUND() functions but can't quite get it.
Thanks.

<=.1 (3 decimal places)
>.1 and <=2, .005  (3 decimal places, but rounded to .005)
>2 (2 decimal places)


----------



## qldfrog (21 September 2022)

Gringotts Bank said:


> I have an AB question, since most of you guys use AB.
> 
> What's a good way to recreate the ASX price increments?  I've been playing around with PREC() and ROUND() functions but can't quite get it.
> Thanks.
> ...



I did that a while back, let me check


----------



## Sir Burr (21 September 2022)

Gringotts Bank said:


> What's a good way to recreate the ASX price increments?




function RoundTickBuy( Price )
{
    return
        IIf( Price < 0.1, ceil( Price * 1000 ) / 1000,
             IIf( Price < 2, ceil( Price * 200 ) / 200,
                  ceil( Price * 100 ) / 100 ) );
}
function RoundTickSell( Price )
{
    return
        IIf( Price < 0.1, floor( Price * 1000 ) / 1000,
             IIf( Price < 2, floor( Price * 200 ) / 200,
                  floor( Price * 100 ) / 100 ) );
}


----------



## qldfrog (22 September 2022)

Sir Burr said:


> function RoundTickBuy( Price )
> {
> return
> IIf( Price < 0.1, ceil( Price * 1000 ) / 1000,
> ...



Very similar to what i sent to GB.so must be working.thanks


----------



## Richard Dale (22 September 2022)

It should be noted that such price increments should only be applied to unadjusted data.  If you apply it to adjusted data you won't get the results you seek in the case of consolidations, adjustments for demergers/spinoffs, adjustments for special dividends etc.


----------



## Gringotts Bank (22 September 2022)

Thank you guys, much appreciated.  Yes, SirBurr's and Qldfrog's codes are very similar.

I was trying to figure out the follwing with Frog on DM.

Say my Buyprice = MA(C,10), and this is the number I want rounded.  How do I call the custom function please?


----------



## Richard Dale (22 September 2022)

Gringotts Bank said:


> Thank you guys, much appreciated.  Yes, SirBurr's and Qldfrog's codes are very similar.
> 
> I was trying to figure out the follwing with Frog on DM.
> 
> Say my Buyprice = MA(C,10), and this is the number I want rounded.  How do I call the custom function please?




See the AmiBroker documentation on calling functions:


			User functions / procedures


----------



## Gringotts Bank (22 September 2022)

Richard Dale said:


> See the AmiBroker documentation on calling functions:
> 
> 
> User functions / procedures



Thanks, I've read that but couldn't make sense of it.


Price = MA(C,10);

function RoundTickBuy( Price )
{
return
IIf( Price < 0.1, ceil( Price * 1000 ) / 1000,
IIf( Price < 2, ceil( Price * 200 ) / 200,
ceil( Price * 100 ) / 100 ) );
}
function RoundTickSell( Price )
{
return
IIf( Price < 0.1, floor( Price * 1000 ) / 1000,
IIf( Price < 2, floor( Price * 200 ) / 200,
floor( Price * 100 ) / 100 ) );
}

Filter =  V*C>500000;
Addcolumn(RoundTickBuy(Price),"rounded price");


----------



## Gringotts Bank (23 September 2022)

Can anyone correct this^ please?  When I run exploration, it doesn't give the desired result.


----------



## Richard Dale (23 September 2022)

Try using C instead of Price as the argument to the function RoundTickBuy()

Addcolumn(RoundTickBuy(C),"rounded price");


----------



## Gringotts Bank (23 September 2022)

Thanks Richard, but I think the formula must be for something else entirely.

This is where I'm at.  It just needs a tweak to get the second level of increments (P>.1 and P<2) rounded to 0.005.


P = MA(C,10);
function RoundTick(P)
{
return
IIf( P < 0.1, prec(P,3),
IIf( P < 2, prec(P,3),
prec(P,2)) );
}
Filter = V*C>200000;
Addcolumn(RoundTick(P),"rounded price",1.3);


----------



## Richard Dale (23 September 2022)

With all due respect, you really need to learn basic AmiBroker Formula Language (or any language, for that matter) programming.

The example code provided has 2 levels of nesting, which are hard(er) to understand - but if you don't understand nesting or how statements like If or IIf work at all then you can't understand any of the code.

Consider an if-else version instead to make your life easier, from an understanding perspective.  See both of these links:



			if-else Statement
		




			https://forum.amibroker.com/t/does-afl-support-else-if-statement/15377


----------



## qldfrog (24 September 2022)

Gringotts Bank said:


> Thanks Richard, but I think the formula must be for something else entirely.
> 
> This is where I'm at.  It just needs a tweak to get the second level of increments (P>.1 and P<2) rounded to 0.005.
> 
> ...



GB, when defining the function the parameter part does not have to have the same name as the variable (s) you use it with.it is confusing.
I am not sure 109% what you try to do reading at code snippet.
I assume it just dispay the MA value of all share agreeing with your filter..but then do you need to set your buy conditions?or display all pages of ma price..
Either i misunderstand or as Richard mentioned,you need to pkay with some example code to better understand AB coding.do not take that negatively,and feel free to DM me,sadly got huge family meeting this week end so no quick reply expected.


----------



## DaveDaGr8 (24 September 2022)

Basically you can just change your P<2 line so you end up with this.


```
function RoundTick(P)
{
return
IIf( P < 0.1, prec(P,3),
IIf( P < 2, round(P/.005)*.005,
prec(P,2)) );
}

Filter = 1 && Status("LastBarInRange");
AddColumn(ma(C,30),"Close",1.6);
AddColumn(RoundTick(ma(C,30)),"RoundTick",1.6);

// Show the rounding errors
AddColumn(C,"Close",1.6);
AddColumn(RoundTick(C),"RoundTick",1.6);
```

Note .. The prec function introduces rounding errors which you can see in the exploration. Nothing major, so if it works all good otherwise Amibroker forum is your friend https://forum.amibroker.com/t/rounding-of-ma-values-to-tick-size/11773/2.


----------



## Gringotts Bank (24 September 2022)

DaveDaGr8 said:


> Basically you can just change your P<2 line so you end up with this.
> 
> 
> ```
> ...



Dave, you've done it. Thank you, that's all I needed.

Thanks to everyone else too.  But consider - some people will never be able to hit a golf ball, no matter how much instruction or training they undertake.  It's simply not in them.  Well, when it comes to coding, that's me.  It's not in me, and I have no desire whatsoever to learn it (beyond the basics, I mean).  When I go on the AB forum, that's usually what I'm met with -  "Learn to code!".  I already have someone I pay for major projects.  For little things like figuring out how to round some numbers, really all I'm after is the answer.  I'd already tried to do it myself - in fact wasted many hours!  Why do that when an expert can whip up the answer in under a minute?  I share a *lot* of high quality information for free (on a different forum, unrelated to trading), and it's nice when someone reciprocates.  Cheers.


----------



## DaveDaGr8 (25 September 2022)

Sir Burr said:


> function RoundTickBuy( Price )
> {
> return
> IIf( Price < 0.1, ceil( Price * 1000 ) / 1000,
> ...



No worries.

I actually really like @Sir Burr  answer too and i think it would suit better for a lot of cases. Now that you have something working you should try implementing that one.


----------



## Skate (26 September 2022)

*Selling as a trader *
There are always three sides to an argument & trading is no different. The recent falls in the market have currently shaped the opinion of everyone. Tough market conditions are based on emotions & how you react shapes the trader you "have become" or "will become". 

Skate.


----------



## Skate (26 September 2022)

*A trading plan trumps a trading strategy*
Should I sell or hold on a bit longer? well, that question depends on your risk tolerance but for me, that question is answered by my trading plan.  One of my trading rules is "when in doubt, pull out". That means when trading doesn't sit well, or you are uncertain about how the markets will play out it pays to be cautious. 
*
Why?*
Because of my experience, there are some who are trading with capital they can't afford to lose.

Skate.


----------



## Skate (26 September 2022)

*Pulling out gives you time to think*
I'm not talking about those who can’t stomach losing & go on to make a habit of selling quickly (overriding their strategy) at the first sign of a market change. Those traders have a low-risk tolerance & normally risk-averse. I'm talking about those traders who have serious doubts about the current market trading conditions. As capital preservation is the name of the game, I'm suggesting, when in doubt "pull out", & give yourself time to think.

*On the flip side *
If you don't hit the sell button when you receive a sell signal you will quickly turn a trade into a long-term investment. In the next post, I'll talk about "investments" rather than "trading".

Skate.


----------



## Skate (26 September 2022)

*Reposted without permission*
The capture below is from Mark Minervini's Twitter feed displaying how it can go horribly wrong buying the dip. The problem with this strategy is that you never know where the bottom is. 

*How much lower can it go? *
Who knows. There are some investors who think there are companies that are impervious to a major decline thus they perceive they are buying big names at "bargain" prices. 




Skate.


----------



## Skate (26 September 2022)

*When buying "dips" turn_to_shit*
When you've made a "trading or an investing mistake", cut your losses quickly as you can have another go when the market turns around & when the price starts to increase. Selling doesn't mean you can buy it back.

*On the flip side*
It pays to remember, before you sell a quality company, you're giving up the "long-term growth potential" of your buying decision. At times, deciding what to do next or what to do for the best can be the excruciating side of trading. It's for this very reason you need a solid trading plan "you can stick to".

Skate.


----------



## qldfrog (26 September 2022)

Skate said:


> *When buying "dips" turn_to_shit*
> When you've made a "trading or an investing mistake", cut your losses quickly as you can have another go when the market turns around & when the price starts to increase. Selling doesn't mean you can buy it back.
> 
> *On the flip side*
> ...



Selling doesn't mean you can not buy it back.😉


----------



## Skate (26 September 2022)

qldfrog said:


> Selling doesn't mean you can not buy it back.😉





Skate said:


> Selling doesn't mean you *can’t* buy it back.




@qldfrog thanks for making the correction, a point I was trying to make. I have changed the word & made it bold in the quote above as the time has expired to make the change in the relevant post in question.

Skate.


----------



## Skate (26 September 2022)

*Long-term investors roll with the punches*
There is something to behold about long-term investors, those living off the dividends don't "give_a_shit" about the fluctuations of the markets. This style of investing is less stressful when you adopt this attitude.

*Big "Ben" looked like a genius*
Back in 2016, I was speaking to a large investor who recounted how his family regarded him as an investment genius "for not selling" at the bottom of the 2008 financial crisis where the rest of the family did. I'll never forget the reason "why he didn't sell". 

*Why didn't Big "Ben" sell?*
It was simply because "he didn't need the money" at the time. I've found those with money to invest, invest with "long-term growth" in mind & normally are unshakeable in their resolve.

Skate.


----------



## Skate (26 September 2022)

*Corrected repost*
As the time has passed for a correction I have made the correction & reposting the slight change.

*When buying "dips" turn_to_shit*
When you've made a "trading or an investing mistake", cut your losses quickly as you can have another go when the market turns around & when the price starts to increase. Selling doesn't mean you "can't buy it back".

*On the flip side*
It pays to remember, before you sell a quality company, you're giving up the "long-term growth potential" of your buying decision. At times, deciding what to do next or what to do for the best can be the excruciating side of trading. It's for this very reason you need a solid trading plan "you can stick to".

Skate.


----------



## Skate (26 September 2022)

*Muddling words*
I've posted about muddling words before & how they can totally change the meaning/message of what was originally intended. 

*It's a human flaw *
I often muddle words like "would & wouldn't" & now "can & can't". In my defense, which is no defense really, in my haste to post I'll make an occasional mistake because "I don't proofread", even though I should.

*From the mouth of a Rhodes scholar*
Tony Abbott - _"however smart, however well-educated, however experienced.. is the *suppository *of all wisdom."_

*Not quite the same as a repository *
Tony Abbott meant to say "the repository of all wisdom." but he was so close. We all do it from time to time.

Skate.


----------



## Richard Dale (28 September 2022)

Gringotts Bank said:


> Thanks to everyone else too. But consider - some people will never be able to hit a golf ball, no matter how much instruction or training they undertake. It's simply not in them. Well, when it comes to coding, that's me. It's not in me, and I have no desire whatsoever to learn it (beyond the basics, I mean). When I go on the AB forum, that's usually what I'm met with - "Learn to code!". I already have someone I pay for major projects. For little things like figuring out how to round some numbers, really all I'm after is the answer. I'd already tried to do it myself - in fact wasted many hours! Why do that when an expert can whip up the answer in under a minute?




Programming is best learned through trial and error.  It takes a lot of it get proficient.  For some, the penny drops quicker than others.  Intuition is a major part of programming.  It's like doing cryptic crosswords for the first time versus doing them every week for five years.

Of course, if you decide that your time is best spent elsewhere, you then need to take a skeptical view on any code provided to you since you have limited ability to even read/understand the code.

I recommend you budget for any external programming to be performed twice (or more) by independent parties in a "clean room" development process.

Develop a test suite that covers many varied inputs.  If the implementations all return the same results, you can have a lot more confidence that you've got what you've paid for.

I actually do this for my own trading systems - implement in multiple environments (eg. AmiBroker, Python and RealTest).  If my rules are robust they should all come out the same.  If they don't, it's time to find out why...  in my experience this shows various "gotchas".


----------



## Skate (3 October 2022)

Captain_Chaza said:


> I have always said "*Stop losses don't always work*"
> And
> " *They never work when you need them the most*"
> 
> Sorry Captain Skate and other Back-testers. That is why I don't trust any back testing that has not been done manually




@Captain_Chaza *is absolutely correct in making those two observations.*
(1) "Stop losses don't always work" & (2) " They never work when you need them the most"

*But in defense of a "Stop Loss"*
Mathematical "Stop losses" are better than nothing. Trading is unpredictable. Not knowing what's going to happen next is half the excitement of trading. Trading is a constant struggle & without a mechanical system in place, it would be near impossible for me to be profitable.

Skate.


----------



## Skate (3 October 2022)

*Admittedly trading has been tough this calendar year*
After reading Twitter one of the traders is down $1m (ouch!!) this calendar year. 

*System trading*
I've noticed in this game that even trading a robust strategy offers little protection when the markets are unfavourable. 

Skate.


----------



## Skate (3 October 2022)

*"Stop Loss" exit*
I consider the last line of defense is a "Stop Loss" exit. Depending on that exit "alone" to save your bacon is dangerous. As @Captain_Chaza explained, the "Stop Loss" will let you down when you need it most.

*Soccer is a team sport -10 players & a goalie *
I'm just saying for the ball to get into the net, it has to pass 10 players & a goalie. I consider the goalie as the "Stop Loss" in trading "the last line of defense" 

*Before the price hits a "stop loss" *
Consider applying additional protection to save your capital. Those who rely solely on a "Stop Loss" risk the chance of heavy drawdowns that could be much greater than they can stomach.

Skate.


----------



## Skate (3 October 2022)

*Trading has been tough this calendar year (2022)*
But at times there were glimpses of hope during that period that system traders were able to capitalise on.

*The HYBRID & PANDA Strategies*
They are two mature strategies that I've posted extensively about two strategies that I have traded over many years. Both are robust & perform well when the markets are being kind. When conditions are unfavourable they simply step aside, waiting for the next rise. Both are trend systems that are not correlated.

*It's been a struggle but both strategies have paid their way*
The charts & records for this calendar year will be posted in the next post to show when the positions were taken & sold. Also, there were a few drawdowns marked in red that exceeded my expectations. The Exit strategy is also on full display. Trading has been tough this year but there were some good results.

Skate.


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## DrBourse (3 October 2022)

Hi Skate....

May as well throw my thoughts on the topic of "Stop Loss"......

IMO, Traders should not get too involved with Stop Loss points - I do not use a Conventionally Accepted Stop Loss or Trailing Stop Loss System….I feel that those systems belong to the Longer Term Investors….

Once I have in my opinion, enough Signals/Signs from my Tools of Trade, I will act immediately….For example if a Bearish Candle Pattern and/or my Indicators suggest that a pullback or downtrend is imminent I will follow those signals and exit the Trade immediately....

If I were to use a % Stop Loss System (of say 2%) and my Tools of Trade gave me enough signals to exit for say 0.5%, I would be crazy to hold and watch any small loss be increased just because that “% Stop Loss System” told me I had to wait till my losses reached that magical 2% - it would be easier to just give some money away....Admittedly I sometimes exit a trade early – but I prefer to be cautious – and if my Tools of Trade suggest continued uptrend then I can easily re-enter the Trade....

The idea is to trade when there is a trade to be made, and even then you should 'Play the Trade' (like playing a Fish), you should not trade the $$$'s - get the trades right and the $$$'s will automatically follow.....

Most Traders use strict Stop Loss systems I primarily use my Indicators as my initial Stop Loss System, when they turn Negative, I jump - the other system is a "TSL" = Trailing Stop Loss of a $/c value - so had everybody been using some sort of Stop Loss they would have a small Trading Loss to use as a Tax Ded'n....

"You can assist whatever Stop Loss System you use by "Correct Stock Selection" & "Correct $$ Management" - for example - If you invest $50k in Penny Dreadful shares you will probably activate your Stop Loss System immediately, and if you are not quick enough you could lose the lot - On the other hand $50k invested in BHP shares would be a safer trade, less risk, probably less profit but better protection for your capital".

Suggest that you try this site http://www.incrediblecharts.com/ , lots of FREE Educational Info...On the Incredible Charts Home page, top right hand side, do a search for ‘Stop Loss’...
Also see my Manual pages 112, 116 & 160...Then do a Google Search for Stop Loss - dozens of good explanations there...

A lot of Day Traders prefer to use alarms rather than Stop Loss Triggers.....  Most of the Software Trading Platforms (Metastock, Incredible Charts, etc) have an alarm system that may be of use to you..... I have an average of 20-25 alarms that I review Daily....  You can usually set these alarms on a SP, an Open, a Close, a High, etc, some can be set for release of an announcement - lots of other parameters may be available depending on the program.... the obvious drawback with alarms is that you have to be online when the alarm is triggered for it to be of any value...

DrB


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## Skate (3 October 2022)

DrBourse said:


> I do not use a Conventionally Accepted Stop Loss or Trailing Stop Loss System




@DrBourse the point of my posts today was to display why depending on a "stop loss" in isolation is not the best course of action for a system trader. Relying on precise mathematical equations gives me the confidence to keep taking the signals, the strike rate is not high but it's a profitable way for me to trade. I try to explain how I trade to those who follow my post, & having the aspiration of trading this way. 

*It is hard to suck up a loss or a series of losses*
When trading is unkind it doesn't automatically mean there is no money to be made. As you reference BHP, you can either trade the fluctuations or invest in the company over a longer time frame, the choice is there to be made. 

*Investing in BHP since Jan 2021 *
The share price of BHP has not appreciated during this time but the dividends have been healthy. Admittedly trading BHP holds more risk but if done correctly the gains can be compounded over the same period.

Skate.


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## Skate (3 October 2022)

*The HYBRID & PANDA Strategies*
I've picked these two strategies to demonstrate the advantages of combining a few exit conditions to formulate an exit strategy rather than relying on a simple "stop loss". 

*The PANDA Strategy*
This calendar year, in 9 months the PANDA Strategy eked out a modest return. The low drawdown of the "PANDA Strategy" restricts this strategy at times when trading is not favourable. In a bull market, this strategy grows an extra leg.



*In the next post*
I'll drill down a little further with the "HYBRID Strategy" to better understand what positions were entered & when they were exited. I've also marked the drawdowns that exceeded my expectations.

Skate.


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## Skate (3 October 2022)

*The HYBRID Strategy*
This strategy is a proven workhorse. I pride myself on having a respectable exit strategy but there are times a few positions will go through to the keeper.

*At times "good enough" is "good enough" *
Coding precise mathematical formulas on "known data" doesn't always translate well when trading against "unknown data", that's the problem with systematic trading in a nutshell.

@DrBourse *touched on timing*
Timing when to enter & when to exit a trade is important but how you play the 'fish' in the meantime is where the money is made. Those who buy & hold, (invest) simply ride the fluctuations. But to make serious money you need to ride the waves (trade) with precision to the best of your ability.




*Drawdowns *
3 times the drawdown over the last 9 months exceeded my comfort level. (marked in red)




*There are times when you need to step out of the markets*
Capital preservation is the number one consideration in this game. Trading is hard even in the "best of times" but if you don't know "when to hold them" & "when to fold them" it's called gambling.




Skate.


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## marko53b (5 October 2022)

Thoughts on Nick Radge's new Turn Key Strategy the ASX Weekly Swing Strategy?


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## Sir Burr (5 October 2022)

marko53b said:


> Thoughts on Nick Radge's new Turn Key Strategy the ASX Weekly Swing Strategy?




I’d be interested if there is third party testing and results provided over multiple periods plus a guarantee if errors are found, updated code provided.

Maybe someone like Thomasz


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## Gringotts Bank (5 October 2022)

Skate said:


> *The HYBRID Strategy*
> This strategy is a proven workhorse. I pride myself on having a respectable exit strategy but there are times a few positions will go through to the keeper.
> 
> *At times "good enough" is "good enough" *
> ...



Do you do walk forward tests Skate?  Even just a basic optimization on the first half of your data, then apply to the second half?


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## Skate (5 October 2022)

Gringotts Bank said:


> Do you do walk forward tests Skate?  Even just a basic optimization on the first half of your data, then apply to the second half?




@Gringotts Bank all my strategies are tested within an inch of their lives.

I've had my HYBRID Strategy evaluated in the US (on the US markets) & in Europe (in their market) as I was curious if my HYBRID Strategy in its current form would be a tradable system.

*Overseas Strategy Evaluation *(evaluation email from Europe)
This is an (unaltered copy) of "one" email in a series that I'm prepared to share about the overseas testing of my Hybrid Strategy. I'm not prepared to discuss the results any further. The email returned to me is an unaltered summary of the Hybrid Strategy tested in Europe on a variety of markets around the world. Believing your own research is typically fraught with danger & when my money is on the line I try not to leave anything to chance.

-----------------------------------------------------------------------------------------------------------------------------------------
*# email START*

I found that in general, the strategy works well also in other international markets where there are a lot of inexpensive stocks. I tried some alternatives for the PositionScore but found that your criteria to be a very good fit for this system.

Thanks for the very detailed answer. Now I better understand your code and logic.

Your coding skill, in my opinion, is already pretty good since you implemented some features that are for sure far above the basics. While the original code could be refactored to achieve greater readability (something that in any case is opinionable), I did not find any major issues (the gfx part is pure aesthetics so it does not interfere with the actual trading system).

*#email END*
-----------------------------------------------------------------------------------------------------------------------------------------

*In Short to your question*
I've posted a long reply to say.. "Yes I test all my strategy constantly, testing never stops"

Skate.


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## Skate (5 October 2022)

marko53b said:


> Thoughts on Nick Radge's new Turn Key Strategy the ASX Weekly Swing Strategy?




@marko53b thanks for making your first post in the “Dump it here” thread. @Sir Burr gave you a great answer as it’s a brand new addition to “The Chartist Turnkey” stable. Realistically, being so new it’s far to early for other to make a comment. Further information & Backtest results can be found on the Chartist Twitter feed with a purchase link.

Skate.


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## Captain_Chaza (5 October 2022)

With great Respect?
Has anybody ever tested the reality of "Computer Fraud" in Back Testing

Please show me when you were GAPPED OUT in ANY of your data trades

How does the likes Nick Radge and others handle the  GAPS in either direction and in their reporting system 

Do they just ignore them as if they don't exist? ( GAPS)

It reminds me of a Wolf taking a Lamb for lunch and the  Lamb asks the wolf *"What's for Lunch"
	

		
			
		

		
	


*


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## Sir Burr (5 October 2022)

Skate said:


> Realistically, being so new it’s far to early for other to make a comment.



Yes and whilst you will agree to the responsibility for any losses using the code plus not to share the code, I don’t think it’s unreasonable to have a experienced third party report/audit/verify the code.


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## Skate (5 October 2022)

Sir Burr said:


> Yes and whilst you will agree to the responsibility for any losses using the code plus not to share the code, I don’t think it’s unreasonable to have a experienced third party report/audit/verify the code.




@Sir Burr as usual you have hit the nail on the head. When you are required to sign an NDA it’s not too much to expect to have verified audited results disclosed before making a purchase. Posting Backtest results is not good enough when personal finances are on the line. In my opinion, when you sell a Turnkey Strategy it should be the very best version, "but no", the master trades them with Radge Tweaks, go figure. Also, I'm with Sir Burr on this one, when issues or improvements are found they should pass on to the purchaser.

Skate.


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## Trendnomics (5 October 2022)

Skate said:


> *The HYBRID Strategy*
> This strategy is a proven workhorse. I pride myself on having a respectable exit strategy but there are times a few positions will go through to the keeper.
> 
> *At times "good enough" is "good enough" *
> ...




Please post the graphs (entry + exit marked) for the top 3 profitable trades of the system, over the testing period.

I'm curious......


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## Skate (5 October 2022)

Captain_Chaza said:


> With great Respect?
> Has anybody ever tested the reality of "Computer Fraud" in Back Testing
> Please show me when you were GAPPED OUT in ANY of your data trades
> How does the likes Nick Radge and others handle the  GAPS in either direction and in their reporting system
> Do they just ignore them as if they don't exist? ( GAPS)




@Captain_Chaza, I understand where you are coming from with your reservations about the accuracy of backtesting results. I'm not sure if you can rely on any backtest results if you can't or don't trade the same methodology to arrive at the final figure (result). With backtesting in Amibroker, Gaps in prices are taken whereas my trading rules prohibit taking those positions. I'll explain shortly my basic trading rules.

*As system traders*
We have one job & one job only & that is to follow the signals religiously without exception. I put a tremendous amount of work into my trading strategies & I'm confident all the hard work has been done. Gaps, either way, are not a concern as I don't chase a price & $hit just happens with it Gaps down past an exit point.

Skate.


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## Skate (5 October 2022)

*Which is better - Discretionary or rules-based trading?*
The answer might depend on your understanding & definition of "discretionary" as opposed to "rule-based trading". For me, it’s really simple, because "technical analysis" can be backtested to decide if the rule-based trading has an edge. Discretionary trading is subjective trading whereas mechanical "rule-based" is objective trading. I'm not going to start a debate as to which is better as it's been done to death. Having the conversation revolve around one type of trading versus another only invokes emotions. Having a robust discussion is not my intent but it's a very interesting subject.

Skate.


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## Skate (5 October 2022)

*Gut trading*
The problem with overriding a trading strategy is that you'll never be sure if it's the rules or if the overriding of the rules was the driver of a losing streak. Poor trading can be attributed to poor execution. The more "inexperienced" traders will bend the rules to suit their mood & wonder why live trading fails to replicate their backtest results. Mechanical system trading is a method for trading where all trade decisions are made according to an exact set of rules (a trading system). Traders do exactly what their system tells them to do, without deviating in any way based on instinct.

Skate.


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## Skate (5 October 2022)

Trendnomics said:


> Please post the graphs (entry + exit marked) for the top 3 profitable trades of the system, over the testing period.
> 
> I'm curious......




@Trendnomics I have previously posted that information. I'll show the first two & you can find the others.

*The previous post can be found here*





						Dump it Here
					

When buying "dips" turn_to_shit When you've made a "trading or an investing mistake", cut your losses quickly as you can have another go when the market turns around & when the price starts to increase. Selling doesn't mean you can buy it back.  On the flip side It pays to remember, before you...




					www.aussiestockforums.com
				




*Go to the second chart in the hyperlink above (Trades sheet)*
This chart displays all the trades, entry & exit points for all positions taken. The Charts below are a visual display of those positions. (CXO & AZL)





*Chart for CXO*






*Chart for AZL*





Skate.


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## Gringotts Bank (5 October 2022)

Skate said:


> *Which is better - Discretionary or rules-based trading?*
> The answer might depend on your understanding & definition of "discretionary" as opposed to "rule-based trading". For me, it’s really simple, because "technical analysis" can be backtested to decide if the rule-based trading has an edge. Discretionary trading is subjective trading whereas mechanical "rule-based" is objective trading. I'm not going to start a debate as to which is better as it's been done to death. Having the conversation revolve around one type of trading versus another only invokes emotions. Having a robust discussion is not my intent but it's a very interesting subject.
> 
> Skate.



Whatever suits your character.

imo, character should also determine time frame, number and type of instrument(s) traded, desired amount of screen time, automation (or not), etc.

No point trying to make a computer scientist trade on discretion, or a Gordon Gecko learn to code and follow pre-determined rules.

There's successes and failures in both camps, obviously.


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## rcw1 (6 October 2022)

Skate said:


> *Corrected repost*
> As the time has passed for a correction I have made the correction & reposting the slight change.
> 
> *When buying "dips" turn_to_shit*
> ...



Good evening Skate,
rcw1 comments:

*Corrected repost*
As the time has passed for a correction I have made the correction & reposting the slight change.
_nice_

*When buying "dips" turn_to_shit*
When you've made a "trading or an investing mistake", cut your losses quickly as you can have another go when the market turns around & when the price starts to increase. Selling doesn't mean you "can't buy it back".
_mostly

_*On the flip side*
It pays to remember, before you sell a quality company, you're giving up the "long-term growth potential" of your buying decision. At times, deciding what to do next or what to do for the best can be the excruciating side of trading. It's for this very reason you need a solid trading plan "you can stick to"
_rcw1 don't worry about 'potential growth', frankly couldn't care less, priority only to hold shares minimal amount of time and sell for a profit at some stage at rcw1 discretion, regardless of 'noise'.  Hold for as minimal time to reduce risk and move quickly onto the next trade.   Plan is quite simple really, target / carefully watch, a handful (not many) of stocks, to allow rcw1 100% ability to react promptly to buy and sell shares at the right time in any market.  You win some and lose some, on the balance the overall challenge is win more ... ha ha ha ha_

Have a very nice day today.

Kind regards
rcw1


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## Skate (6 October 2022)

rcw1 said:


> *priority only to hold shares minimal amount of time and sell for a profit at some stage at rcw1 discretion, regardless of 'noise'.* Hold for as minimal time to reduce risk and move quickly onto the next trade. Plan is quite simple really, target / carefully watch, a handful (not many) of stocks, to allow rcw1 100% ability to react promptly to buy and sell shares at the right time in any market. You win some and lose some, on the balance the overall challenge is win more .



*Being competent*
@rcw1 there are some highly skilled traders on this forum who trade differently from most & it appears you are in this category as well.

*Exiting late*
As a system trader this is the anchor around our neck, not having the ability to exit quickly or at times not quick enough. System traders need to follow their trading rules waiting patiently for a precise setup, & only exit a position when the strategy provides that signal.

*You need to be competent to trade successful *
I refer to your style of trading as those who are "unconsciously competent" in their methodology to enter & exit those positions. These types of traders appear to trade using their so-called 'intuition', but are in fact, applying their vast knowledge & skill to recognise low-risk, high-profit potential, trades.

Skate.


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## ducati916 (8 October 2022)

Skate said:


> *Gut trading*
> The problem with overriding a trading strategy is that you'll never be sure if it's the rules or if the overriding of the rules was the driver of a losing streak. Poor trading can be attributed to poor execution. The more "inexperienced" traders will bend the rules to suit their mood & wonder why live trading fails to replicate their backtest results. Mechanical system trading is a method for trading where all trade decisions are made according to an exact set of rules (a trading system). Traders do exactly what their system tells them to do, without deviating in any way based on instinct.
> 
> Skate.




Some observations and then a question.

Observations:

From following this thread and seeing the various computer generated backtests, one thing stands out for me. That is the immediacy of the feedback. That is to say, you input your strategy, a few seconds/minutes later, the computer spits out the result.

The reality: 

You implement a mechanical strategy and it progresses 1 day at a time. It is hard to equate the big picture of your backtested results comprising of 10yrs or whatever, to a 1 day plod with all the hits and misses entailed therein.

Question:

How many will go back to the periods identified as drawdown periods in the backtest and research the period in question, from both a qualitative and quantitative basis? Only by doing this will you know whether your current drawdown is subject to similar market conditions rather than simply a monitoring of price.

Non-systems traders:

Build up over time an internal market history. I have been trading now everyday, for in excess of 20yrs. Over that time period I have obviously 'experienced' the market with the qualitative inputs revealing themselves in real time. What that has led to is a two fold mechanical basis of interacting with the markets.

My point:

That trading price alone, especially in the early days of a trading career, can be very deceiving. Context is important. Lived experience is good. Second best is extensive historical research. Best is a combination of both.

jog on
duc


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## Skate (8 October 2022)

ducati916 said:


> Observations:
> 
> From following this thread and seeing the various computer generated backtests, *one thing stands out for me. That is the immediacy of the feedback.* That is to say, you input your strategy, a few seconds/minutes later, the computer spits out the result.




*Let's talk about Amibroker*
What makes AmiBroker so fast? @ducati916 I can't speak for other trading software but as a long-term user of Amibroker, I can report that this software executes extremely fast. Without getting too technical it's because the AFL code is array-driven allowing maximum execution speed. The AFL language can process as much as 166 million data bars per second on a very modest CPU. The "Professional Version" runs on 64bit systems & takes advantage of running multiple cores, achieving blistering speed on steroids.

*Amibroker is optimised for speed*
AmiBroker uses native code optimised to gain maximum speed. In a nutshell, Amibroker is a professional technical analysis & charting tool that traders can use for (a) market analysis, & (b) chart analysis & is perfect for (c) backtesting simple to very complex trading strategies. Overall the backtest feature is extremely fast allowing you to gain information quickly to compare & contrast changes made to a strategy.

Skate.


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## Skate (8 October 2022)

ducati916 said:


> The reality:
> 
> You implement a mechanical strategy and *it progresses 1 day at a time*. It is hard to equate the big picture of your backtested results comprising of 10yrs or whatever, to a 1 day plod with all the hits and misses entailed therein.




*You missed it by this much (( -->||<-- ))*
Actually, Amibroker has the ability to recalculate the (AFL) code every time new data arrives. Amibroker drives the code, whereas data is delivered by a data supplier. Data is delivered in time-chunked intervals from minutes up to "end-of-day" packets. Amibroker processes the data grouped into periodicity time frames, allowing you to trade within your risk tolerance level.

*Precise coding*
There are issues with the Amibroker backtesting feature is that it falls foul of my expectation, simply because of my lack of advanced coding skills. The other issue is that the strategy can generate more buys than your funds will allow, this is why getting the "PositionScore" right is so important. PositionScore is simply a ranking system as all signals are not equal in their value. Getting this part of the code wrong will alter a perfectly good strategy that can result in it being discarded.

Skate.


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## Skate (8 October 2022)

ducati916 said:


> Question:
> 
> *How many will go back to the periods identified as drawdown periods in the backtest and research the period in question*, from both a qualitative and quantitative basis? *Only by doing this will you know whether your current drawdown is subject to similar market conditions *rather than simply a monitoring of price.




@ducati916 *what a great question*
I can only speak for myself. After developing a strategy, backtesting can decide if you are on the right path, taking it to the next level. First off, I should make a disclaimer in saying that I don't trade using the same methodology as Amibroker software uses. It is so easy for Amibroker to do all its calculations after the fact "at the end of the day" (EOD) whereas I place my trades in the pre-auction "before the market opens". This will make a big difference in the overall results you will achieve. 

*Doing it my way*
I take my backtesting a little further requiring additional coding. Why? so I don't overtrade or be caught short not having enough money when the opening price "GAPS" as @Captain_Chaza has previously mentioned. 

Skate,


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## Skate (8 October 2022)

*Knowing the opening price to do your backtest calculations *
What does this matter? Amibroker fudges the backtest results as it knows the opening price because it uses (EOD) opening prices to do the calculations of the number of shares to buy with the strategy "PositionSizing". 

*Not knowing the opening price *
I need to handle these calculations quite differently to ensure (a) that I do not overspend in relation to my "PositionSize" & (b) to limit my exposure to price gapping at the open. A minor point of difference but to me it's massive. Using the same code using both methods the individual results achieved can be like chalk & cheese.

Skate.


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## Skate (8 October 2022)

*After backtesting, the hard work starts*
The generated backtest signals are then traded theoretically using my trading methodology to evaluate the actual returns. It's an important step in my system development & evaluation before comparing any metric of the testing. Explaining my method further would become a dry boring subject. 

*I'm amazed* 
There are some who would invest funds without thoroughly evaluating a strategy within an inch of its life. I place a high value on my money where others simply don't, trading the alternative way to me IMHO is called gambling.

Skate.


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## qldfrog (9 October 2022)

Skate said:


> *Knowing the opening price to do your backtest calculations *



A big difference with backtest.
It is very interesting, at least for me, to backtest a strategy currently being run against the actual performance.
That allows me to detect:
Error in code or data
Highlight the importance of 2 other differences between backtest- real world:
1 
i do place , as Mr Skate, my orders before the open.and am limited by my platform in my order price range which needs to stay quite near the last closing value.
Bad gaps either way make me miss both sell and buy actions, usually negatively impacting the portfolio 
2 
that order total amount, as specified before open will at most be reached.more often than not,will not and you buy a smaller parcel often
3 
trading halts are not bothering the backtest which will buy another candidate on open, no such chance in the real world where you will act manually after the open and at best buy another parcel during session
Item 1 especially can affect results significantly,especially for very dynamic systems and this is enough to change a backtest or paper system from positive to loss maker.
Experienced in the past year.
These backtests checks usually trigger me to add a few tweaks to strategies ..and so restart the clock for  BT actuals checking .which is not good
Hope it helps.


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## Gringotts Bank (9 October 2022)

Skate said:


> *After backtesting, the hard work starts*
> The generated backtest signals are then traded theoretically using my trading methodology to evaluate the actual returns. It's an important step in my system development & evaluation before comparing any metric of the testing. Explaining my method further would become a dry boring subject.
> 
> *I'm amazed*
> ...



I think everyone values money, since it's essential to life.  However not everyone is technically adept enough to go through all the steps that you do.  I often think I'm not smart enough for this game, but I also think of what a family friend said.  He was a very wealthy guy, and when I was young and stupid I asked him 'secret'.  He said "You don't have to do everything right.  You just have to do the few right things right".  Meaning - figure out what is essential and do those steps as well as you can.

In relation to trading, I think this is true.  Of course everyone would _love_ to have a straight-line 45 degree walk-forward equity curve over 10,000 bars.  But it's not within everyone's reach.  I don't think that means 'game over'.  There's hundreds of ways to skin a cat.


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## Skate (10 October 2022)

*Lifted from Twitter*
1. Bad risk management destroys a great trading edge.
2. Remaining calm in market situations that once used to stress you out is a sign of maturity as a trader.
3. Without self-discipline, your success is forbidden.
4. In the beginning, you have to work hard to learn. In the end, you have to learn to work smart.
5. There is a vast chasm between being smart and being wise.  May we be smart enough to seek Wisdom.
6. It's so difficult to walk away from a winning trade, and even more challenging to leave a position when you're on a losing one.
7. Every pro trader was once an amateur.
8. Trading is a mental game.

Skate.


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## Skate (10 October 2022)

Skate said:


> *Muddling words*
> I've posted about muddling words before & how they can totally change the meaning/message of what was originally intended.




*Lifted from the Chartist Twitter feed (9:11 PM · Oct 9, 2022)*
_Negative lead from the US into the new weak._

*Reminds me of this play on words*
Seven days without Jesus makes one "weak".

*There are so many similarities between religion & trading *
In my case "I tend to pray a lot"

Skate.


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## Skate (10 October 2022)

*"The Chartist" Twitter feed (7:52 AM · Oct 8, 2022)*
The Chartist calendar year's results. (Totalling 9 months & 8 days)
Today's PnL: *-7,096*
Week PnL: *-7,305*
YTD PnL:* -966,208

I like "The Chartist" positivity*
_With a robust and proven strategy, losing money is not a problem that needs to be solved._

Skate.


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## Skate (10 October 2022)

*For those who are interested*
Twitter is a great resource for those who want to keep up-to-date with trading news.

*The Chartist Twitter feed (8:03 AM · Oct 7, 2022)*
_The managed account service is very close to being officially launched. This is a high-conviction, high-performance strategy that relies on dual momentum on two-time frames and in two separate equity markets.

CAGR (net of fees)  +25.3% vs +8.4% 
Correlation to benchmark 0.55_




*Displaying information in this manner is so common these days*
When promoting information about a service "Backtest" results (sometimes "compounded" backtest results) are generated theoretical results only. When someone is selling a product or service they always add a disclaimer to cover their ar$e. It's all so common these days to easily gloss over all these disclaimers when making a purchasing decision. (Don't let that be you)

*Please read "The Chartist" disclaimer (condensed)*
_"Past performance is no guarantee or reliable of future returns" 
"Performance figures are NET of Harbourside Captial Management fees & commissions charged"_

Skate.


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## Nick Radge (10 October 2022)

> When someone is selling a product or service they always add a disclaimer to cover their ar$e




Because its the law. The specific wording guidelines are required by ASIC.



> _CAGR (net of fees)  +25.3% vs +8.4% _





Returns provided are real-time and validated by a third-party, namely Harbourside Capital.


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## MovingAverage (10 October 2022)

Nick Radge said:


> Because its the law. The specific wording guidelines are required by ASIC.
> 
> 
> 
> Returns provided are real-time and validated by a third-party, namely Harbourside Capital.



Don’t know why you’d waste your time responding to defend yourself Nick.


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## Newt (10 October 2022)

But, while you're are/were here - thanks Nick for your many inspiring posts here at ASF many years ago, your fantastic resources and podcasts shared with the community over many years, and the thought provoking and fantastically helpful info in your books (especially Holy Grails).


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## qldfrog (10 October 2022)

@Nick Radge indeed, Un-holy Grail started the whole process of systems trading for me. Kudos 
I owe you a coffee if we meet along the river...


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## rcw1 (11 October 2022)

Good afternoon
When I first saw this, rcw1 laughed and laughed... still laughing


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## Skate (13 October 2022)

Skate said:


> *If you don't hit the sell button you will quickly turn a trade into a long-term investment*







Skate.


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## Skate (13 October 2022)

Skate.


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## ducati916 (14 October 2022)

So I'm going to transfer the discussion to this thread so as not to clutter @peter2 thread:





There have been a number of discussions on 'edge' on this thread. A very important topic. In fact, probably the single most important factor or variable in trading full stop.

What is an edge?

It is a quantifiable arithmetic or mathematical certainty. 100%

It is not a 'probability'. If you are talking about probabilities, you are not actually talking about edge at all.

The issue for many/most is that edges come in 2 varieties: (a) visible and (b) hidden

An example of a visible edge: arbitrage

The backwardation in the silver market recently is an example of a 100% guaranteed profit. Buy the future, sell the spot. 100% guaranteed profit.

A hidden edge is far more difficult to find. The reason (and this is why it is often confused with a probability) is that it cannot be quantified as a 100% outcome ahead of placing the trade. It will only be known to have existed when the trade is closed.

I know that sounds a bit like gobblygook.

There exists (for an edge) a continuum: A.......Z. An edge can be calculated. So we calculate "H". If H....Z occurs we profit on an ever increasing scale the closer to Z that we get. If A.......G then we lose, on an ever increasing scale to A.

Obviously, if we can obtain the trade position at A or B, we are highly probable to have our edge be engaged and then the profit is 100% guaranteed.

Here is the thing: the continuum is consistent. It has mappable boundaries. They can be calculated ahead of time.

The difference in the use of probability is subtle, but vital.

Clearly this is simply the tip of the iceberg as far as discussion goes.

jog on
duc


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## qldfrog (14 October 2022)

ducati916 said:


> So I'm going to transfer the discussion to this thread so as not to clutter @peter2 thread:
> 
> View attachment 148016
> View attachment 148015
> ...



But isn't an edge always based on a context, a variable context as the world is not static.
As such,can only be determined/. confirmed posteriorly .
You know that whatever trade you would have taken last year, last week using that policies/system would have had that benefit.
But in no way can you be sure using it today will reward you similarily.
My point being that even the best edge can see a change in context making it obsolete diseappear.
We in systems trading want to assume that the overall context will remain similar so that any edge perceived or true will remain.
During the last qe, everything was going up .(more or less.)
I considee any long trade during that period was already having an edge then.
a timing edge..


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## Skate (14 October 2022)

ducati916 said:


> Clearly this is simply the tip of the iceberg as far as discussion goes.




*If you are a profitable trader, I believe you have an edge *
So, what is a trading “Edge” when it comes to trading & how do we go about developing a trading edge? All traders believe they have an edge or else they wouldn’t risk money trading. But depending on your definition of an edge varies from one trader to another. Simply put, you need a trading "edge" or otherwise, it's called gambling.

*The most accepted definition on this forum*
An "edge" is a simple process of “winning more when you win than you lose when you lose” & "letting your winners run & cut your losses short". When you do that, you tend to incur many more little losses, but since your gains are essentially unbounded, they usually make up for those many small losses & drive a profit.

Skate.


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## Skate (14 October 2022)

*Trading is a game of probabilities*
But there are ways to stack the probabilities in your favour. One of those is to "Cut your losses short & let your winners run". Just doing this one small thing stacks the probability of success in your favour & is the hallmark of all great traders. Having the ability to incur those many small losses & hold out for the big winners is solely dependent on your ability to execute your trading plan flawlessly to maintain your edge. 

*When your own money is on the line, trading gets very complicated, very quickly! *
Whatever definition you apply to your "edge" can come in many forms but for me maintaining your edge is all about consistency of execution. It is just plain foolish to think that it is an even playing field when it comes to receiving valuable information. There is absolutely no way small traders like us have superior knowledge about a company. But the good news is technical traders don’t need an informational edge as we trade price patterns, the real driver of the markets.

Skate.


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## ducati916 (14 October 2022)

qldfrog said:


> 1. But isn't an edge always based on a context, a variable context as the world is not static.
> As such,can only be determined/. confirmed posteriorly .






qldfrog said:


> 2. You know that whatever trade you would have taken last year, last week using that policies/system would have had that benefit.
> But in no way can you be sure using it today will reward you similarily.
> My point being that even the best edge can see a change in context making it obsolete diseappear.






qldfrog said:


> 3. We in systems trading want to assume that the overall context will remain similar so that any edge perceived or true will remain.
> During the last qe, everything was going up .(more or less.)
> I considee any long trade during that period was already having an edge then.
> a timing edge..





1.  No. A true edge is quantifiable. It conforms to arithmetic or mathematical treatment. A visible edge, eg. an arbitrage is viewable and can be calculated prior to placing the trade.

A hidden edge can also be calculated prior to placing the trade. What you are working with is a variable that cycles through a range that generates a derivative price. This derivative price is then calculated into the market price. This result is your mathematical edge. If it is high you take the trade. If low, you pass.

The original comment from peter2 was in regard to a YT video and A, B and C trades. This is what the video was referencing. It most certainly was not referencing 'chart patterns'.

2. Yes you can. That is exactly the point.

3. Systems are not trading a true arithmetic or mathematical edge at all.

Systems traders are trading a money management system, nothing more.

The Chartist results caught my eye a few days ago:




This is exactly what you are talking about: the system is optimised I believe for conditions whereupon in a falling market, Central Bank intervention via increased liquidity is the underlying assumption.

Of course, currently, that is not the case. We have the opposite. CBs are withdrawing liquidity.

Now a 'true edge' (what I'm talking about) is unaffected by a fundamental change in liquidity.

jog on
duc


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## ducati916 (14 October 2022)

Skate said:


> *1. If you are a profitable trader, I believe you have an edge *
> So, what is a trading “Edge” when it comes to trading & how do we go about developing a trading edge? All traders believe they have an edge or else they wouldn’t risk money trading. But depending on your definition of an edge varies from one trader to another. Simply put, you need a trading "edge" or otherwise, it's called gambling.
> 
> *The most accepted definition on this forum*
> ...





1. I agree, definitions vary widely. Which is fine. But strictly speaking, they are misguided. Most, are not trading an edge at all. They are trading a money management system.

2. Again, I agree, but incorrect. This is not a true edge.

jog on
duc


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## Skate (14 October 2022)

ducati916 said:


> 1. I agree, definitions vary widely. Which is fine. But strictly speaking, they are misguided. Most, are not trading an edge at all. They are trading a money management system.
> 
> 2. Again, I agree, but incorrect. This is not a true edge.
> 
> ...




*Alternative view*
@ducati916 has raised an alternative view & explanation of why system traders have no mathematical edge. But the edge is the risk & money management techniques of the strategy. This has now got me thinking that the edge we think we have is really just a series of random events. Duc might be onto something here.

*Are system traders fooled by the randomness?*
System trading is based on a mathematical approach & my way of thinking has always been the belief that a precise mathematical coded strategy defined the edge. Also, this edge can be tested & defined through backtesting because system trading is rules-based. Having a great entry alone will not assure profitability, this is why Duc mentions money management. Now, I'm wrestling internally with the question "are system traders fooled by the randomness of the markets".

*System trading is similar to buying a home*
When buying a home you have a plan of what you want & what you can afford. You have a list of the requirements that the house has to meet or it's excluded from the list of candidates. It's the same with system trading, you have a plan, a list of requirements that the company has to meet or it's excluded from the list of candidates. The only difference between buying a house or a market position is that you don't have a sell strategy when buying a home whereas with trading you do.

Skate.


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## ducati916 (14 October 2022)

Skate said:


> *1. Alternative view*
> @ducati916 has raised an alternative view & explanation of why system traders have no mathematical edge. But the edge is the risk & money management techniques of the strategy. This has now got me thinking that the edge we think we have is really just a series of random events. Duc might be onto something here.
> 
> *2. Are system traders fooled by the randomness?*
> ...




1. Also addressed numerous times on this thread is/are the importance of psychological and emotional inputs to the system: ie. do not second guess the system. The system is predicated on money management. You mess with the MM and the system breaks down.

An arithmetical or mathematical edge has no emotional component, or maybe I should say a far reduced emotional component. In an arbitrage, there is no emotional component. It is a 100% outcome.

Now with a 'hidden' edge, there is a smaller emotional content. The probability, once all the calculations are completed will likely work out to a 90% probability of profit. Trust me when I say a 90% probability leaves you calm and unworried.

2. Most definitely. This year is the first year in 42 years that it truly is 'different'. Systems traders, unless they tested on data from 1940 through 1980, have not seen these market conditions. As I said, I think Mr Radge's results are a direct result of this fundamental change. We have also had this discussion: how far back to back test.

3. Now I may be mistaken here, but: systems traders (by-and-large) do not factor macro-fundamentals (or micro for that matter) into their backtests. This, for the first time in a long time is a fundamental error. A (true) quant. based edge is unaffected by this.

jog on
duc


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## Skate (14 October 2022)

qldfrog said:


> During the last qe, everything was going up .(more or less.)
> I considee any long trade during that period was already having an edge then.




*You need to be a lucky trader to be profitable*
@qldfrog hits on a very important theme when trading & that is trade when the market is going up & making money becomes that much easier. Luck in trading is all in the timing & that timing can be your edge.



ducati916 said:


> Now with a 'hidden' edge




*Defining a hidden edge*
A "hidden edge" can simply be defined as being a competent trader. Those who are competent no longer need to follow a "set trading system" but patiently wait for a setup, & then take the trade. These traders are "unconsciously competent" having a hidden edge that is hard to quantify. I also believe there are many highly skilled traders on this forum who appear to trade using their so-called 'intuition', but in fact, they are applying their vast knowledge & skill to recognise low-risk, high-profit potential, trades while unconsciously applying their "hidden edge".

Skate.


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## ducati916 (15 October 2022)

Skate said:


> *1. You need to be a lucky trader to be profitable*
> @qldfrog hits on a very important theme when trading & that is trade when the market is going up & making money becomes that much easier. Luck in trading is all in the timing & that timing can be your edge.
> 
> 
> ...






Skate said:


> *1. You need to be a lucky trader to be profitable*
> @qldfrog hits on a very important theme when trading & that is trade when the market is going up & making money becomes that much easier. Luck in trading is all in the timing & that timing can be your edge.
> 
> 
> ...




1. Timing can be broken down into 2 separate components: (a) macro-timing and (b) technical timing. Both can benefit from luck obviously. However (b) technical timing does not actually require any luck, only tight money management. We are back again to money management, which requires little to zero skill. What it does require is ironclad discipline over emotional responses. There is far too much focus on the former rather than the latter.

2. Set-ups are largely irrelevant. Far more important (if not trading in a true quant fashion) is again MM. Everyone has their favourite technical set-up. Why? Because you feel 'confidence' in that set-up and confidence soothes the emotional responses, which, allows better MM.

Most of Mr Skates systems have win/loss ratios hovering around 50% from memory. What is the highest system win/loss ratio on these boards? Anything sitting at 90%+?

That 'unconscious' competency is nothing more than very tight MM and potentially recognising extended moves that are ready to reverse for a period or longer. There are any number of technical indicators that can help with this. An appreciation of the macro-environment also helps. Historical experience is the third. So yes, good traders tend to be old traders almost by definition.

Can the above be defined as an 'edge'? Sure it can. Do most/many define edge this way? I'm not so sure. Reading the posts through the years and particularly on this thread an edge seems to considered a variable that can be discovered through extensive backtesting of chart patterns/indicators/exits/etc. That in my opinion is a chimera. The edge is MM. Mr Skate has demonstrated that a 50% hit rate can be very profitable with tight disciplined MM.

A true edge is not affected by a change in market environments, liquidity issues, bull/bear markets, news flow, earnings reports, etc. If anything, they are enhanced by all the above. The reason being a true edge approaches an arbitrage. An arbitrage is 100%. A good edge may be 90%. 

So with the risk so low...are the returns lower? Yes they are. They are capped to an extent. They are not open ended in the same way that a mechanical system is.

Of course, at 90%, you can afford to leverage much higher than you might otherwise. But that leverage obviously increases the risk to the underlying capital, if you have it slightly off. Trade offs.

So my question is: with the current systems operating in the market (on these boards and we have seen Mr Radge's results to date) do their authors 'feel' that their initial backtested system is still appropriate for the current market conditions? That assumes a system that has been in operation prior to Jan. 2022.

jog on
duc


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## qldfrog (15 October 2022)

Being long only,the weekly systems i still trade are all fully cash and that can be seen as MM.
Out of the 3, i trust 2 for the current period, the one i do not trust is aimed at a dynamic approach to catch the expected bear false rebounds we will see.
I have no proper test period for this as i believe context has changed and any test period more than 10y old is a waste of time just my opinion
The 2 daily ones are more discretionary choice helped by syatems: i switch them on off based on time availability and risk aversion.
Even if i have just a switch on off and money management system, it may not be an edge but it is better than putting money in a super fund.
More work and setup issues thru and this has a cost.
I just hope i will have something stable in a couple of years..or just gained experience...


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## Skate (15 October 2022)

ducati916 said:


> Can the above be defined as an 'edge'? Sure it can. Do most/many define edge this way? I'm not so sure. Reading the posts through the years and particularly on this thread an edge seems to considered a variable that can be discovered through extensive backtesting of chart patterns/indicators/exits/etc. *That in my opinion is a chimera.*




*There is value in backtesting*
But I tend to fall further to the explanation that the Duc has given but not entirely. I don't consider backtesting to be illusory but rather "most times" the backtest results are impossible to achieve. 

*Even a poorly coded strategy will backtest nicely to some degree*
Is there any value in thoroughly backtesting a system? In my opinion yes. Backtesting allows you to compare & contrast between runs & between different strategies of development. At times backtesting is the only means a system trader has to fine-tune parameters & filters. Relying on the backtest results these days "not so much". In my case, backtesting is the start of the process & a long way from the finish.

Skate.


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## Skate (15 October 2022)

ducati916 said:


> So my question is: with the current systems operating in the market (on these boards and we have seen Mr Radge's results to date) do their authors 'feel' that their initial backtested system is still appropriate for the current market conditions? That assumes a system that has been in operation prior to Jan. 2022.




@ducati916 *thank you for all the insightful comments*
I tend to not refer to Mr. Radge directly these days as in the past I've hurt his feelings & a few other members as well. I'll speak about what I have found over the few years I've been trading since 2015. I was "lucky" in the beginning to have a great mentor, without that initial help I  wouldn't have understood the culture of trading in an auction or what was expected of me in doing so.
*
The last quarter of 2018*
This was the first turn where my strategies started to "underperform". At the time I was confused about why. "When in doubt, pull out" is an affirmation that has served me well throughout my business life. At that time, I went to 100% cash until the system was sorted. 

Skate.


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## Skate (15 October 2022)

*The real issue with system traders is "changing markets"*
At the end of 2018 markets changed which meant my trading results had changed & I didn't understand why. Reverting to 100% cash, & placing all my systems on the sideline "at that time" saved my bacon. Eventually, I realised as the markets evolved my strategies had to as well. Since that time (touch wood) I've never been caught off guard.

*Along comes 2020*
With strategy improvements, February/March of 2020 instead of being a frightful time, became a period of opportunity. If you think you can trade a strategy year after year without aligning it to the markets you are in for a great deal of pain as one trader is experiencing & reporting at the moment on his Twitter feed. Trading breakouts (trend trading) have been kind to me this calendar year but obviously not for all.

Skate.


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## Skate (15 October 2022)

*Another affirmation*
If you find yourself in a hole, the first thing to do is stop digging.

*Another*
If you can't see the problem, there is no answer.

Skate.


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## Skate (15 October 2022)

qldfrog said:


> I have no proper test period for this as i believe context has changed and any test period more than 10y old is a waste of time just my opinion




@qldfrog, *I'm in the same camp*
Backtesting needs to be conducted on current market conditions to garner valuable, meaningful results. Others will disagree but that's okay. In a nutshell, you need to discover paraments & filters that work today, not decades ago. 

*COVID struck*
With the event of COVID new entrants appeared, fresh meat, & new money. Then when we became complacent with COVID, the world went into turmoil. Those who believe their current system/strategies would do the job without correcting for these changes have quickly been taught a lesson. 

*Let me say once again* 
"If you can't see the problem, there is no answer".

Skate.


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## qldfrog (15 October 2022)

Skate said:


> @qldfrog, *I'm in the same camp*
> Backtesting needs to be conducted on current market conditions to garner valuable, meaningful results. Others will disagree but that's okay. In a nutshell, you need to discover paraments & filters that work today, not decades ago.
> 
> *COVID struck*
> ...



For your last point, i am not blind either and do not like the idea of sailing blindfolded.
I know that last system is highly risky, it has lost money overall and may still do, so i will apply MM and reduce parcel values should it ask for entries in the current conditions
Emotional responses or risk management, if confidence in a system is low, i reduce that system overall cash.i also plan to reduce cash left with the brokers and not invested should we have a financial crisis coming


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## Skate (15 October 2022)




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## Skate (15 October 2022)

@ducati916* in his post today commented *
_"I am astounded by the number of bulls calling a bottom and the (resumption) start of a new bull market. Unreal. Historically bear markets end in apathy, low volume and a removal from media of headlines etc. Currently there are many trying to catch the ‘bottom’ in the market. This pretty much guarantees we are nowhere near"._

*Bottom fishers*
For those who are trying to catch the bottom, just be very mindful that there are sharks in them waters.

Skate.


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## DaveTrade (15 October 2022)

*Frog's quote of the day;*


qldfrog said:


> i reduce that system overall cash.i also plan to reduce cash left with the brokers and not invested should we have a financial crisis coming


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## Trendnomics (19 October 2022)

Skate said:


> @qldfrog, *I'm in the same camp*
> Backtesting needs to be conducted on current market conditions to garner valuable, meaningful results. Others will disagree but that's okay. In a nutshell, you need to discover paraments & filters that work today, not decades ago.
> 
> *COVID struck*
> ...




Hey Skate.

Please provide some examples of how the markets have or are changing (particularly for long term trend-following).

I'm curious...


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## Skate (19 October 2022)

Trendnomics said:


> Hey Skate.
> 
> Please provide some examples of how the markets have or are changing (particularly for long term trend-following).
> 
> I'm curious...




*In a nutshell "COVID struck"*
With the event of COVID new entrants appeared, fresh meat, & new money. Then when we became complacent with COVID, the world went into turmoil. Those who believe their current system/strategies would do the job without correcting for these changes have quickly been taught a lesson.

*2 Bullet points*
* Covid &
* Bloody Russia

*Another 2*
* Cash Rate increase
* Rampant Inflation

*Let me ask you the reverse question*
@Trendnomics - Please provide some examples of how the markets "have not changed" (particularly for long-term trend-following).

Skate.


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## frugal.rock (19 October 2022)

Trendnomics said:


> some examples of how the markets have or are changing (particularly for long term trend-following).



Market participants up.
Volume up. Self explanatory.
Volatility up. IE; bigger swings or ranges.

Can't get volumes on the XVI VIX, but both charts are 5 years, weekly bars, so it marries up top to bottom.


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## Trendnomics (19 October 2022)

Skate said:


> *In a nutshell "COVID struck"*
> With the event of COVID new entrants appeared, fresh meat, & new money. Then when we became complacent with COVID, the world went into turmoil. Those who believe their current system/strategies would do the job without correcting for these changes have quickly been taught a lesson.
> 
> *2 Bullet points*
> ...




I must be doing something wrong....

My system that was developed in 2012, backtested using 1985-onwards US market data, backtested using 1992-onwards AUS market data, is still being profitably traded to this day (2020 was -9% closed profit, current year is +8% open+closed profit).....

Not seeing much change....just cruising....

(Luckily for me, I dont need to try and guess what current market regime we are in to curve fit my system to, I just follow the same old rules over and over...)


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## qldfrog (19 October 2022)

Trendnomics said:


> I must be doing something wrong....
> 
> My system that was developed in 2012, backtested using 1985-onwards US market data, backtested using 1992-onwards AUS market data, is still being profitably traded to this day (2020 was -9% closed profit, current year is +8% open+closed profit).....
> 
> ...



Good on you, just do not fall asleep at the bar.
Have you done a 2012 to now analysis of your performance vs relevant index returns XNT for example if this is your realm, year by year.
I doubt it will be a straight line.
If it is, you have found the holy grail in my opinion and should head to the Bermudas 😁


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## Skate (19 October 2022)

Trendnomics said:


> Not seeing much change....just cruising....




@Trendnomics, well done. If you have not experienced any difference in your trading results indicates to me that (a) your system is robust or (b) you have been lucky. Trend trading has been tough & I'm sure "your trend trading experience" is not the norm.

*The Chartist Twitter - Calendar YTD PnL: -927,760 (15th October 2022) *
The Chartist being down to the tune of $927k I believe something has changed & I'm sure it wouldn't be from fiddling with his strategy.



Skate said:


> There are some brave souls who are proud of their ability to suffer great monetary pains while they wait for their convictions to be rewarded.




*The Chartist Twitter (10th October 2022) *
_"With a robust and proven strategy, losing money is not a problem that needs to be solved. Losing money, aka drawdowns, are a staple part of the journey. Roll with it." _

Skate.


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## Skate (19 October 2022)

*It's not easy to maintain consistently*
Profiting from the stock market is exceedingly difficult to do consistently over a long period because the market is irrational & reflects the emotions of all the participants. The markets keep evolving when there are major events.

*The market moves in a manner that has little appreciation for what we might think*
It's handy having a suite of tools to give you a fighting chance when the unforeseen happens. Some traders don't minimise their risk by selling quickly & decisively. Being quick & nimble to act when the "proverbial hits the fan" & being quick to retreat & sell at the first sign of trouble really helps. 

Skate.


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## Skate (19 October 2022)

*A smart exit makes the money*
I’ll go so far as to claim that a smart wimp who runs and hides when the going gets tough generally produces better results than brave souls who are "proud of their ability" to suffer great monetary pains while they wait for their convictions to be rewarded.

*"When in doubt - Pull out"*
There will be times when things don't feel right when trading, that's the time to respond, rather than react. Responding gives you time to think. At times we all need a bit of breathing space to assess what the markets are doing at any given period in time. 

Skate.


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## Skate (19 October 2022)

*After certain events, the markets will change & sometimes they change permanently*
The world has certainly changed after the 11th September 2001 (911) & after February 2020 (COVID) to name two recent events, & there are more than just those two shaping the markets. Those who believe "stationarity" is the name of this "trading game" might be missing the bigger picture.

*If you believe the markets haven't changed *
There is no need for your strategy to change or evolve. But if you believe world events shape the markets, I'm simply suggesting that you revisit your systems to make sure they are still "fit for purpose".

Skate.


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## Trendnomics (19 October 2022)

qldfrog said:


> Good on you, just do not fall asleep at the bar.




I'm as awake/asleep as Mr. Dunn (Dunn's system remains unchanged since 1975 - yet I hear the markets have changed due to a few recent events?): Dunn Equity Graph to 2022

But I'm certainly not playing (Play), unlike some....


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## Trendnomics (19 October 2022)

Trendnomics said:


> I'm as awake/asleep as Mr. Dunn (Dunn's system remains unchanged since 1975 - yet I hear the markets have changed due to a few recent events?): Dunn Equity Graph to 2022
> 
> But I'm certainly not playing (Play), unlike some....



Dunn's words (he *may* have a little more experience than some on this forum):

_We only have two systems. The first system is the one I started with in 1974. The other system, we developed and launched in 1989. The major strategic elements of these two models—how and when to trade, how much to buy and sell—have never changed in almost 30 years. We expect change. None of the things that have happened in the development of new markets over the past 30 years strike us as making the marketplace different in any essential way. The markets are just the markets. I know that is unusual. I know in the past five years a lot of competitors have purposefully lowered the risk on their models i.e., they are deleveraging them or trying to mix them with other things to reduce the volatility. Of course, they have also reduced their returns._


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## Gringotts Bank (19 October 2022)

Trendnomics said:


> Dunn's words (he *may* have a little more experience than some on this forum):
> 
> _We only have two systems. The first system is the one I started with in 1974. The other system, we developed and launched in 1989. The major strategic elements of these two models—how and when to trade, how much to buy and sell—have never changed in almost 30 years. We expect change. None of the things that have happened in the development of new markets over the past 30 years strike us as making the marketplace different in any essential way. The markets are just the markets. I know that is unusual. I know in the past five years a lot of competitors have purposefully lowered the risk on their models i.e., they are deleveraging them or trying to mix them with other things to reduce the volatility. Of course, they have also reduced their returns._



Can you explain your Sharpe ratio comment in your subtext thing please?  Sounds interesting.


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## KevinBB (19 October 2022)

Trendnomics said:


> _We only have two systems. The first system is the one I started with in 1974. The other system, we developed and launched in 1989. The major strategic elements of these two models—how and when to trade, how much to buy and sell—have never changed in almost 30 years. We expect change. None of the things that have happened in the development of new markets over the past 30 years strike us as making the marketplace different in any essential way. The markets are just the markets. I know that is unusual. I know in the past five years a lot of competitors have purposefully lowered the risk on their models i.e., they are deleveraging them or trying to mix them with other things to reduce the volatility. Of course, they have also reduced their returns._



Nice quote. Dunn is doing very well this year. It has been a very, very, good year for trend followers.

One thing, though, Dunn has plenty of funds. For me as a small(ish) trader it is very important to stick within risk limits, otherwise I'd be looking for someone to donate their shirt.

KH


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## aus_trader (19 October 2022)

One of the toughest years to make money, so far this year. Got out with a couple of bear market rallies with small profits luckily on some positions. The rest are losses, in some cases bigger than planned with gap downs with no buyers to sell into i.e. thin liquidity ! Just sold another losing trade today in the Speculative Stock Portfolio, which I will update later.

It's been horrible this year with buy and hold strategies, i.e. longer term portfolio, so I won't even go there


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## Trendnomics (19 October 2022)

Gringotts Bank said:


> Can you explain your Sharpe ratio comment in your subtext thing please?  Sounds interesting.



Almost all investors (retail in particular) are unable/unwilling to experience any investment pain (draw-downs/losses).

Most investment managers cater to these strong loss aversions (in order to receive sufficient funding) - hence, deploying low-risk/low-return strategies (aiming for high sharpe-ratios).

Funds (strategies) with high past sharpe-ratios are rewarded, funds (strategies) with low current sharpe-ratios are punished (i.e. sharpe-ratio chasing).

This results in a huge market opportunity in the financial eco-system, for those able/willing to experience investment pain (draw-downs/losses) - reward being overall market outperfomance.

Thus, thanks to all the high sharpe-ratio chasers, I'm set to retire when I turn 40...

(****_Sharpe-ratio_ stated above is based on _risk-free rate of return_****)


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## qldfrog (19 October 2022)

Trendnomics said:


> Almost all investors (retail in particular) are unable/unwilling to experience any investment pain (draw-downs/losses).
> 
> Most investment managers cater to these strong loss aversions (in order to receive sufficient funding) - hence, deploying low-risk/low-return strategies (aiming for high sharpe-ratios).
> 
> ...



It is definitive clear you are below 40 indeed.so 15y experience in a perma bull market and i assume in Australia so a perma bull country during that time.
So i can assume you have a great system in a perma bull market in a perma bull country.
Anyway, good on you i do not pretend i have anything like that


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## Trendnomics (19 October 2022)

qldfrog said:


> It is definitive clear you are below 40 indeed.so 15y experience in a perma bull market and i assume in Australia so a perma bull country during that time.
> So i can assume you have a great system in a perma bull market in a perma bull country.
> Anyway, good on you i do not pretend i have anything like that




I started trading in 2008.... went as well as expected.

Perma bull indeed when looking at the index, but the index itself is a trading system which will only go higher in the long term (stock selection is based on relative market-cap strength, rather than absolute price strength).

Also one of the reasons why I based my system's back-testing on *long* term data-sets (lots of *market events *included in the 1992-now AUS dataset).


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## Captain_Chaza (19 October 2022)

Trendnomics said:


> I started trading in 2008.... went as well as expected.
> 
> Perma bull indeed when looking at the index, but the index itself is a trading system which will only go higher in the long term (stock selection is based on relative market-cap strength, rather than absolute price strength).
> 
> Also one of the reasons why I based my system's back-testing on *long* term data-sets (lots of *market events *included in the 1992-now AUS dataset).



Well Done!


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## Gringotts Bank (19 October 2022)

Trendnomics said:


> Almost all investors (retail in particular) are unable/unwilling to experience any investment pain (draw-downs/losses).
> 
> Most investment managers cater to these strong loss aversions (in order to receive sufficient funding) - hence, deploying low-risk/low-return strategies (aiming for high sharpe-ratios).
> 
> ...



The way I interpret this is that you create strategies and optimize for % return rather than smoothness (like most of us).  And that the set ups relate to functions of the market that occur when the Sharpsters are out of the market.  Thanks, it's worth thinking about.  Although I have no idea how it might work.  Any clues?


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## Trendnomics (19 October 2022)

Gringotts Bank said:


> The way I interpret this is that you create strategies and optimize for % return rather than smoothness (like most of us).  And that the set ups relate to functions of the market that occur when the Sharpsters are out of the market.  Thanks, it's worth thinking about.  Although I have no idea how it might work.  Any clues?




Trading hard to follow systems = less competition. All of us have to find our little spot in the eco-system.

(Be like the snake, watching all those tax/effort inefficient day traders etc...)


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## ducati916 (20 October 2022)

Trendnomics said:


> 1. Almost all investors (retail in particular) are unable/unwilling to experience any investment pain (draw-downs/losses).
> 
> 2. Most investment managers cater to these strong loss aversions (in order to receive sufficient funding) - hence, deploying low-risk/low-return strategies (aiming for high sharpe-ratios).
> 
> ...




Mr Trend;

Interesting post.

1. I would agree. Probably with good reason. To endure a 'price' drawdown you would have to be pretty confident that your investment/trading thesis had merit/legs to make you whole and eventually profitable. The number of significant drawdowns in his system are staggering.

2. 'Most'. Probably agree. But what is 'low risk' and how do they measure risk? If you are employing a Sharpe Ratio, there are 2 issues: (a) risk is defined as volatility and (b) the standard deviation part of the calculation implies price is normally distributed. Both of course are false.

As to volatility and normal distribution:




Risk of individual stocks as opposed to an index, say DIA, is very different. If you are buying an ETF (index) then I agree that you are actually coming far closer to defining risk as a function of volatility (closer but still not 100%) and therefore a mechanical backtest (could) have validity in its conclusions. With individual stocks forming your own individualised portfolio, this would be theoretically incorrect. It may work out in practice. That would be good luck.

3. That could be true. Is there data to support the assertion?

4. And here we come to the crux of the matter. The assumed risk free return is far from risk free. In fact it is being crushed as we speak. The macro-environment is fundamentally different from when this chap started his testing:





Which potentially will change significantly the way his system will perform. Now I accept I don't know his methodology, but we are truly in a 'this time is different' environment and markets are going to be different moving forward.

Clearly the 'risk' being traded here is not volatility. It is something else. Which is fine as long as you can identify or are told what that risk is. To manage risk, you must be able to identify that risk.

An issue with Mr Dunn's system is that drawdowns are steep and very common. How can you tell if the system is broken? If you can tell, just how deep of a drawdown would you be in at that point? If you can't, is that not a risk that is un-managed?

With such a low correlation (-0.04) are stocks the only asset class included or is that a function of the actual strategy?

Hopefully you can elucidate on some of this without necessarily giving away your secret sauce!




jog on
duc


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## Skate (22 October 2022)

*Observations from (CNBC & CNN)*
Paul Tudor Jones recently said: "It's so hard to take what we've learned from investing for the past 12 years & put it behind you, but you really have to. The market changes. It's a completely different environment we're in right now".

*Back in March 2020, the world shut down because of Covid-19*
Those bored & stuck at home, turned to the markets as a source of entertainment while others attempted to fix their money worries. Using the stimulus money & taking advantage of new technology they entered the markets riding the wave of enthusiasm.

*New market participants are cashing out*
The initial enthusiasm started to waver in 2021. As a bear market prevailed during the second half of 2021 with increasing inflation & the onset of higher living costs, have been gradually leaving the markets.

*Some traders have had enough*
There have been some traders who have finally decided that they've had enough, pulling up stakes & moving on. Those once eager to buy the dip are now fleeing the markets with steep declines in activity over the past three months. Even those traders who have gradually been going to cash have added to the market downturn this year.

*It's not panic stations yet*
A loss of traders is concerning as it could spell a longer, deeper market downturn with higher volatility. Admittedly there are some pulling out of the market, but there are others rotating into more stable, dividend-paying stocks keeping some of the new money in the markets.

Skate.


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## Skate (22 October 2022)

dyna said:


> Old mate Nick Radge , too , has been fearless in his honesty. More power to him for that.
> That six figure number with a minus sign in front of it, just turns my stomach over.




*Looking at that minus figure makes me shiver*
@dyna, I'm with you on this one & that's why I made a few comments in this thread in relation to those experiencing ongoing constant losses. I'm not telling anyone how to suck eggs, rather my comments were aimed at those who find themself in any stressful situation when trading.

*There is always a solution when trading gets out of your control *
The first solution to consider is to stop trading & reassess the issue. It's always better to respond to stress rather than react when trading. Responding gives you time to think.



Skate said:


> If you find yourself in a hole, the first thing to do is stop digging.






Skate said:


> There are some brave souls who are "proud of their ability" to suffer great monetary pains while they wait for their convictions to be rewarded.






Skate said:


> If you can't see the problem, there is no answer.




Skate.


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## Skate (22 October 2022)

ducati916 said:


> An issue with Mr Dunn's system is that drawdowns are steep and very common. How can you tell if the system is broken? If you can tell, just how deep of a drawdown would you be in at that point? If you can't, is that not a risk that is un-managed?




@ducati916 *makes some valid observations about "Dunn's Performance" since 1970*
First off, I should say the rate of return is impressive & even more impressive knowing the average return of 16.63% has been achieved over a long period of time. 

*Compounded returns*
When "compound returns" are touted & proudly displayed, I tend to switch off. I should also say, I couldn't stomach his equity curve & I believe the majority couldn't either.  

*How can you tell if the system is broken?*
The Duc is opening a segue for another topic in my opinion. For me, the answer to this question is pretty simple, "you only realise a system is broken" when it's too late. 

*How do you know when the market conditions have changed? *
As a system trader, it's our responsibility to keep in sync with the markets, doing so allows us to capitalise on what most don't. Allowing losses to accumulate, is certainly not the solution IMHO.

Skate.


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## ducati916 (22 October 2022)

Skate said:


> @ducati916 *makes some valid observations about "Dunn's Performance" since 1970*
> First off, I should say the rate of return is impressive & even more impressive knowing the average return of 16.63% has been achieved over a long period of time.
> 
> *Compounded returns*
> ...




Before we even get to a 'change' in the market:




This statement really requires some thought.

(a) the index itself is a trading system; and
(b) which only goes higher in the long term; and
(c) with the reason given as : stock selection based on relative market-cap strength, rather than absolute price strength.

(a):
	

		
			
		

		
	







So indices replace members on a fairly regular basis, making an index a 'trading system'.

(b) only goes up




So far, so good.



jog on
duc


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## Skate (22 October 2022)

Trendnomics said:


> Perma bull indeed when looking at the index, but the index itself is a trading system which will only go higher in the long term (*stock selection is based on relative market-cap strength, rather than absolute price strength*).




*Interesting comment*
Stock selection based on "relative market-cap strength". There must be something in this as @Trendnomics reported that his trading has not been affected in the last few years using this method of trading.

*Further reading here*








						Relative Strength By Market Cap
					

Whenever you talk about which sectors of the market are working, market cap is one aspect that is usually overlooked.




					seekingalpha.com
				






Trendnomics said:


> *All of us have to find our little spot in the eco-system.*




*I would love to hear more*
Explaining how to find that sweet spot would make an interesting read.



ducati916 said:


> *This statement really requires some thought.*




*Stock selection is based on relative market-cap strength*
In answering @Gringotts Bank, @Trendnomics made this statement & I was expecting follow-up questions in this regard. As this is an educational thread of sorts a fuller explanation of how you go about trend trading using this method would be a great topic in itself. I'm a bit lost for words as it's all about "price action" for me.

Skate.


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## MurariMikeTrader (22 October 2022)

Skate said:


> *Hopefully, someone will post *
> There are those (forum members) who would trade Nick's WTT Turnkey Strategy. I'm hoping that a backtest will be posted for a direct comparison.
> 
> *Backtest Details*
> ...



Hi Skate. Could I trouble you to share the code for *your "Final Version" of Nick's WTT Strategy?*


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## Skate (22 October 2022)

MurariMikeTrader said:


> Hi Skate. Could I trouble you to share the code for *your "Final Version" of Nick's WTT Strategy?*




*Hi,* @MurariMikeTrader *welcome to our community*
Thank you for making your first post in this thread, minutes after joining. Over time I have made a series of posts on a 20-period breakout-out strategy commonly referred to as the "WTT Strategy".

*To save me from posting repetitive information again *
Use the search feature (RH Top corner of the menu bar) & you will find approximately 140 posts using the WTT keyword. I'm sure reading a few of my posts will answer questions you have about the strategy.




*Enjoy looking around*
If a thread interests you, read it slowly, don't fall into the trap of "speed reading" as it doesn't give you time to fully understand the post let alone the time to memorise all the important stuff. Also, make the search feature your best friend as "if you can think of a question", I'm sure it has already been answered.

Skate.


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## ducati916 (22 October 2022)

Skate said:


> *Interesting comment*
> Stock selection based on "relative market-cap strength". There must be something in this as @Trendnomics reported that his trading has not been affected in the last few years using this method of trading.
> 
> *Further reading here*
> ...




So from @Skate 




So a little look:











There are far too many to post them all, but you get the gist.

Today there are so many ETFs available, you could build a selection based on market cap/sectors quite easily.

The last question can at least now be asked and answered with a little more accuracy.

Has the market fundamentally changed? And if so in what time frames?

jog on
duc


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## Skate (22 October 2022)

*What Investor Sentiment Means for Markets Going into 2023*
Ken Fisher from Fisher Investments, Founder, Executive Chairman, & Co-Chief Investment Officer discusses how investor sentiment may affect markets in 2023. Ken believes today’s pervasive negative investor sentiment isn’t indicative of a world falling apart, but instead consistent with a world that’s already seen a market bottom & is very likely a precursor to higher stock prices ahead.

*Warren Buffett once said *
That it is wise for investors to be “fearful when others are greedy, & greedy when others are fearful.” Deeply negative sentiment, stoked by doom-and-gloom headlines about Russia-Ukraine, stubbornly high inflation & potential recession, is one of the most bullish features for investors, according to Ken.

*Ken Fisher has a knack for making sense of market conditions*
As one said "I always feel better & a little smarter after listening to Ken. When Ken speaks, I listen.



Skate.


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## Skate (23 October 2022)

InsvestoBoy said:


> @Cam019 Imagine if he had let himself be influenced by the people on this forum to stop trading, or tweak his system or whatever, at pretty much the lows.




@InsvestoBoy made a great comment in "cam019-asx100-monthly-superannuation-portfolio" today about not being influenced by others. There were comments made at the time when his trading system was well underwater, raising the question, "when do you stop trading your system"?

*When do you stop trading your system?*
When @Cam019 was asked this question, he was steadfast in his reply:
"I_ can only speak for myself, but my answer to "When do you just Stop!" is; I don't." _

*Cam went on to say: *
"_Now would be the worst time to stop executing trades in this system, however it is probably the most likely time for someone to do so."_

*This allows me to make a few general comments*
1. When you have a trading system that really suits you it is very easy to follow the system’s signals. 
2. A trading system that fits you allows you to focus on trading it with conviction & doing it well.
3. The hold time in Cam's case "monthly periodicity" I'm sure it feels natural to him in a unique way.
4. If you believe your strategy has an edge, you will trade with confidence.

*Summary*
Kudos to Cam for sticking with the strategy & achieving good trading results since August this year.

Skate.


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## Skate (23 October 2022)

*Strategy development, Backtesting & Optimization*
This topic has been done to death but I still have the feeling that most traders optimize their systems & select the wrong metric to work with. In reality, you will make faster progress in the development phase if you keep your trading system code simple at first & learn how to correctly optimize your trading system to avoid curve fitting.

*Let's address the Elephant in the room (Backtesting)*
If your trading idea "does not work" in a simple backtest then "it will not work in real-time trading". Backtesting's unique feature is that it eliminates the bad ideas you can come up with that have no edge or the likely hood of being profitable.

Skate.


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## Skate (23 October 2022)

*When a strategy backtests well*
This is the time to start the optimization process. IMHO, the smartest way to start optimizing your strategy is to optimize a "single parameter" at a time so you can really see how stable the parameter value is as you vary it. 

*Curve fitting*
"Optimization" is what gets most traders into trouble with curve fitting. My advice is to keep it simple, baby steps at first. The stability of the optimized process is more important than going straight for the best backtest result. So don't fall into that trap of immediately going for the best, "stability of results" is what you are after.

Skate.


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## Skate (23 October 2022)

*It's extremely important to "step up" the optimization process *
This means carrying out one optimization at a time because we want to ensure every parameter value is stable before moving on. 

*Position Size*
When backtesting your system ensure that you select a constant position size (to remove the impact of compounding) ensuring your edge is stable.

Skate.


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## Skate (23 October 2022)

*Let's talk about the maximum historical drawdown of a system*
This metric "historical drawdown" is not given the importance it deserves & at times overlooked. The maximum historical drawdown is simply the percentage drop from a high in the equity curve to a subsequent low at any point throughout the whole backtest for every single bar.

*Drawdowns are what cause your emotions to spiral*
This percentage drop from the high point to the low can take on a new meaning after your backtesting is completed. I'm just saying, make sure you can handle this percentage when trading your system live as it takes on a new meaning when you do. Just don't be flippant with this backtest metric. If you do, you'll quickly find out that drawdowns will cause your emotions to spiral out of control. So don't let this genie out of the bottle, if you do, you won't stay in this game very long.

Skate.


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## Gringotts Bank (23 October 2022)

If using fixed profit and loss stops (and no regular or trailing stops), you can also position size in order to standardize the loss on each trade.  eg. If you want to risk $500 per trade, the PS formula is:

   Positionsize = ($500 / points from entry to stop) / $ per tick.

It's a nice way to do it because some trades can have targets/stops way off in the distance.  You don't necessarily have to skip them.  Just use a scaled down position size.  Vice versa for trades with a nearby target/stop.


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## Skate (23 October 2022)

dyna said:


> Old mate Nick Radge , too , has been fearless in his honesty. More power to him for that.
> That six figure number with a minus sign in front of it, just turns my stomach over.






Trendnomics said:


> I must be doing something wrong....
> 
> 2020 was -9% closed profit, current year is +8% open+closed profit
> 
> Not seeing much change....just cruising....




@Trendnomics it appears over the last two years your portfolio has gone nowhere being down -9% in 2020/21 & up +8% for the current year which is on par with the "The Chartist" equity curve for the same period.

*Being 8% up for the current year is impressive*
During this period, "this year & the last" has been a tough slog even for the best of traders. Posting your returns in "percentages" is a true indication of how your system/s has been traveling during that period. Reporting dollar amounts are only relevant to the total funds of a trading account. Even so, @dyna & I thought "The Chartist" PnL for this calendar year to the tune of -$927,760 was stomach-churning.

*"The Chartist" main account has gone nowhere over the last two years*
No growth for two years puts real trading into perspective for most of us, meaning if it's been tough for "The Chartist" it certainly has been a tough year for us mere mortals. I'm just saying if "The Chartist" main account growth has gone nowhere over the last two years "something has changed". My guess is, "it's not the strategy" being traded.




Skate.


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## Skate (23 October 2022)

Gringotts Bank said:


> If using fixed profit targets and profit stops (and no regular or trailing stops), you can also position size in order to standardize the loss on each trade.  eg. If you want to risk $500 per trade, the PS formula is:
> 
> Positionsize = ($500 / points from entry to stop) / $ per tick.
> 
> It's a nice way to do it because some trades can have targets/stops way off in the distance.  You don't necessarily have to skip them.  Just use a scaled down position size.  Vice versa for trades with a nearby target/stop.




@Gringotts Bank *thanks for the input*
Your alternative position size is a practical solution for trading. In my previous post, I was making the point of the value of using a constant position size when backtesting (to remove the impact of compounding) ensuring your edge is stable. Using compounding skews the results making the backtest results less than useful. 

*I'm amazed at how much we think*
Being a wet day, I have been looking at a series of backtest reports on how having additional parameters affects the exposure percentage of a strategy. For me, protecting my capital is the prime objective. 

*My mind quickly shifted to excessive drawdowns*
Sometimes excessive drawdowns can be stomach-churning, which gave way to my last post. Ensuring you don't suffer from a large drawdown, allows you to stay in this game. Keeping drawdowns in check always "comes at a cost". Keeping drawdowns to a "stomachable level" is hard to achieve but not impossible. 

*Being selective about when to take a signal*
That was going to be my series of posts today until I was sidetracked by the comments of @Trendnomics concerning @Cam019's fabulous strategy turnaround. In my opinion, when market conditions change as they have in the last two years you simply have to be more selective about what & when to trade or your returns will suffer as shown in my previous posts.

Skate.


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## MurariMikeTrader (23 October 2022)

Skate said:


> *Hi,* @MurariMikeTrader *welcome to our community*
> Thank you for making your first post in this thread, minutes after joining. Over time I have made a series of posts on a 20-period breakout-out strategy commonly referred to as the "WTT Strategy".
> 
> *To save me from posting repetitive information again *
> ...



Thanks for the response Skate. 
If you don't have or don't want to share the Amibroker code for your "Final Version" of Nick's WTT Strategy (with Lipstick applied) then just say so. I'm a big boy, I can take it.  
But please don't ignore the question and instead send me on a wild goose chase through your posts merely discussing the subject.


----------



## Skate (23 October 2022)

MurariMikeTrader said:


> If you don't have or don't want to share the Amibroker code for your "Final Version" of Nick's WTT Strategy (with Lipstick applied) then just say so. I'm a big boy, I can take it. But please don't ignore the question.




@MurariMikeTrader, sorry, I should have said that I don't give, sell, swap, or divulge any of my systems. As you are a new member of our community I merely suggested that you use the search function as my way of helping you try to find additional information about the strategy elsewhere. This way you help yourself by stretching your mind & research abilities allowing you to learn things more thoroughly. 

Skate.


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## ducati916 (23 October 2022)

Skate said:


> *Let's talk about the maximum historical drawdown of a system*
> This metric "historical drawdown" is not given the importance it deserves & at times overlooked. The maximum historical drawdown is simply the percentage drop from a high in the equity curve to a subsequent low at any point throughout the whole backtest for every single bar.
> 
> *Drawdowns are what cause your emotions to spiral*
> ...




Would you agree that the timing of the drawdown (maximum) is also an issue?

To turn the system on and encounter a maximum drawdown cannot inspire much confidence. Do you keep going?

jog on
duc


----------



## Skate (23 October 2022)

ducati916 said:


> 1. Would you agree that the timing of the drawdown (maximum) is also an issue?
> 
> 2. To turn the system on and encounter a maximum drawdown cannot inspire much confidence. Do you keep going?
> 
> ...




@ducati916 they are two important issues you have raised. 

*Issue (1) *
With Amibroker the maximum historical drawdown from a high in the equity curve to a subsequent low at any point throughout the whole backtest for every single bar the timing is irrelevant during backtesting. (a) The timing would be an issue if the maximum drawdown happened just after deciding to actually trade the strategy. (b) If a strategy established a profit buffer (closed profits) it becomes less of an issue. (c) Mature strategies are unaffected to a certain degree by the timing. After giving you those 3 scenarios the timing issue would hold 3 different levels of emotional variations. So yes, you are correct, the timing of the maximum drawdown can certainly be an issue.

*Issue (2) *
To be honest the maximum drawdown must be at a level that you can tolerate & tolerate easily. I'm not in any way being flippant but rather it depends on your tolerance for risk. If I may make a reference back to my boxing days, I'm sure there were some I fought who "felt no pain" & it's the same with trading, the pain threshold for losing money varies from one trader to another.

*This calendar year backtest (2022)*
I pride myself on coding strategies that exhibit drawdowns within my pain threshold. I also remarked that I couldn't trade "Dunn's Equity Curve" because of his "Average Maximum Drawdown" of 36.2%. I don't think there would be anyone who would be comfortable trading that system. 

*Don't kid yourself 2022 calendar year has been tough*
The Hybrid Strategy Backtest is from one of my seasoned performers. It's stuck around a long time because it's a handy performer with a low maximum drawdown. Trading these metrics is easy because they are well within my comfort zone. When you are confident with a strategy "it's comfortable to trade". 



Skate.


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## rcw1 (23 October 2022)

Good evening
Discovery / ex ante, inextricably interwoven, and the process may well have identified a threat (s), for example, mergers.
Real time testing, watch and wait and wait and wait some more, then spend, has merit for mine too.  Get to know the beast you want to make coin from.  Patience.   Milk the cow, so to speak.

Have a very nice week.

Kind regards
rcw1


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## qldfrog (23 October 2022)

ducati916 said:


> Would you agree that the timing of the drawdown (maximum) is also an issue?
> 
> To turn the system on and encounter a maximum drawdown cannot inspire much confidence. Do you keep going?
> 
> ...



So the luck part in a system trading, even for a system with an edge.
If your drawdown comes at the start of your investment period, and that DD coukd be higher, even higher than your backtest runs
And the problem is : how do you know if your system is failing and so you should stop, or this is just a timing issue.
So far the only way i can get some idea is a comparison between relatively similar systems, both between my own systems and reading the experiences of fellow ASF system traders


----------



## qldfrog (23 October 2022)

qldfrog said:


> So the luck part in a system trading, even for a system with an edge.
> If your drawdown comes at the start of your investment period, and that DD coukd be higher, even higher than your backtest runs
> And the problem is : how do you know if your system is failing and so you should stop, or this is just a timing issue.
> So far the only way i can get some idea is a comparison between relatively similar systems, both between my own systems and reading the experiences of fellow ASF system traders



I should also add that based on your system, there can be a ramp up phase, the initial sorting of the whey which generally results in underperformance in the first few weeks of starting a strategy..duration variable based on the ramping speed of your code


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## ducati916 (24 October 2022)

Skate said:


> @ducati916 they are two important issues you have raised.
> 
> *Issue (1) *
> With Amibroker the maximum historical drawdown from a high in the equity curve to a subsequent low at any point throughout the whole backtest for every single bar the timing is irrelevant during backtesting. (a) The timing would be an issue if the maximum drawdown happened just after deciding to actually trade the strategy. (b) If a strategy established a profit buffer (closed profits) it becomes less of an issue. (c) Mature strategies are unaffected to a certain degree by the timing. After giving you those 3 scenarios the timing issue would hold 3 different levels of emotional variations. So yes, you are correct, the timing of the maximum drawdown can certainly be an issue.
> ...





1(a). It is the drawdown that occurs at the start of a trading strategy that (I would think) carries the most impact because putting aside any emotional issues, the loss of capital will start to impact the number of trades that can be taken.

From what I have seen from systems, this is an issue. The 'edge' (it would seem) relies on a minimum number of trades taken, which allows the numbers generated by your backtests to play out. Part of the 'edge' is the number of bets laid. N'est pas?

2. I agree that 'drawdown' is a major emotional issue and can play havoc with compliance to a system. I don't think that too much can be added to comments already made. You'll only really know what you can live with once you have lived with it a few times. So the 'Hybrid' at 5% is certainly tradable in the real world.

I'm sure there are systems traders that have different systems for different market conditions: big picture stuff, bull market, bear market? Or is the nature of building a system, a system for all market conditions?

jog on
duc


----------



## qldfrog (24 October 2022)

ducati916 said:


> 1(a). It is the drawdown that occurs at the start of a trading strategy that (I would think) carries the most impact because putting aside any emotional issues, the loss of capital will start to impact the number of trades that can be taken.
> 
> From what I have seen from systems, this is an issue. The 'edge' (it would seem) relies on a minimum number of trades taken, which allows the numbers generated by your backtests to play out. Part of the 'edge' is the number of bets laid. N'est pas?
> 
> ...



On your last point, while i dream of a fit for all system..holy grail.., realistically I see that as a set of systems each good for specific market phases and un clunching reengaging when the conditions changes.
Ideally one optimised system per market condition at a time.
Semantically speaking, it could be a giant single code with
If market condition 1 then subsystem code 1
Or
If market condition 2 then subsystem 2
Etc
But truly different potentially:
Long trending, short trending, reversal, etc
That's my current aim..still an aim, not an outcome.
And the reason i currently have 3 active weekly systems.. but only one engaged


----------



## Skate (28 October 2022)

Trendnomics said:


> I can see alot of effort being put into trading a lot of different strategies, but not much reward.
> 
> Maybe time to consolidate and re-assess? Or blame it on the market changing?




*I can't entirely agree with this statement *
I believe system traders spend an enormous amount of time trying to hone this craft. I do accept that the amount of effort put in doesn't automatically correlate to the reward side of the equation. 

Skate.


----------



## Skate (28 October 2022)

Trendnomics said:


> Maybe throw in some Jim Cramer quotes as well? We all know CNBC is a very reliable market reporter...




*The role the media plays in trading is actually an interesting topic *
Even Twitter is now viewed as a defacto media outlet. Traders when they are trying to understand the markets turn to market commentators, & news outlets. We can all have an opinion about why the market moves as it does but media outlets are simply better at making all this stuff up. The story is packaged in such a way you tend to believe it as gospel. 

*Media outlets & commentators do this on a daily basis to keep readers*
Every time there is a move in the markets, suddenly stories get published explaining the reason. As @Trendnomics eluded to these media outlets vary in their quality of information & there's nothing wrong with that. I find different media outlets have completely different objectives. As traders, we're trying to make money in the market while the media outlet is trying to get people to watch or read their content.

Skate.


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## Skate (28 October 2022)

Trendnomics said:


> I can see alot of effort being put into trading a lot of different strategies, but not much reward.
> 
> Maybe time to consolidate and re-assess? Or blame it on the market changing?






ducati916 said:


> I'm not sure if you are legitimately trying to be helpful. Your ending comment however is most definitely not helpful.




*Nobody cares what others think*
At the end of the day, it will make little difference what you say because if the information is outside one's belief it will be rejected. Some members have open minds & display varying degrees of openness accepting some views while rejecting others & that's healthy. But, I've found there are a few members who have a closed mind to new information rejecting everything that's contrary to their own. One thing I do know is "if something resonates" it can make a big difference.

*Quality posts*
When members make quality posts it really does influence how others think to some extent. Expressing alternative views in detail is more valuable than just making one-line statements.

Skate.


----------



## Skate (28 October 2022)

*It's easy to start trading *
I was listening to a Twitter podcast explaining how easy it is to start trading. 

*The podcast went on to say*
(1) You may want to fly a plane tomorrow, but no one's going to let you do that. You're not going to be allowed to just get a plane & fly it, right? You're not allowed to do that. You have to go through extensive training.

(2) You might want to perform open heart surgery on someone tomorrow, but no one's going to let you do that because you have to go through many, many, many years of extensive training in order to be allowed to do that.

*But you can trade the stock market on a whim*
You can go & trade tomorrow all you want, & you could do all the technical analysis you want. But it doesn't mean that you're going to be good at it. Some say technical analysis doesn't work. No, maybe your technical analysis doesn't work. But maybe if you work at it for 5 or 10 years, maybe you'll suck at it less. Maybe you're not going to be great at it, but experience really helps. At the end of the day, some are "better at it" than others.

Skate.


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## Skate (28 October 2022)

*What metrics drive a strategy & how do you learn which technical metrics to follow?*
Well, that's the question we all ask ourselves as system traders at one stage or another. It's a human trait to see patterns when at times there are none. Manually assessing the markets take a great deal of time & skill. Using this method it's prone to misinterpretation at times. Not to mention it's extremely difficult & complicated trying to work out if there is a trend or a shift in market behaviour. Even slight shifts in sentiment, are hard to pick, even with hindsight. 

*The weight of the evidence*
Using technical analysis with precise mathematical formulas, the strategy will pick even the slightest of moves.
Technical analysis is very much sentiment psychology driven. When trading trends it doesn't matter what you are trading. With technical analysis, you don't even need to know why there is a price movement rather understand why the signals are important & why they matter. 

Skate.


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## Skate (28 October 2022)

*Markets evolve but the one constant is us, human nature never changes*
Our own makeup will decide what type of trader we will ultimately turn out to be. Our appetite for risk will be the driving force behind strategy development, or it should be. Those just starting out, trading systematically will go through a fast learning curve of disappointment if they believe their backtest results will be replicated trading live. 

*Being eager to trade is a killer in this game*
The enthusiasm of new entrants never ceases to amaze me. I've yet to talk to someone new to trading that isn't eager to have a go. Education is normally dismissed as it's too time-consuming. We all tend to take shortcuts to speed up any new process we undertake to learn but trading is one process we shouldn't take shortcuts with. When your money is on the line trading will take on a new meaning. New traders concentrate more on how much money they will make not what they can lose.

Skate.


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## Skate (28 October 2022)

*The bigger risk, the bigger the rewards*
After a string of losses emotions will drive your trading. So, how do you go about protecting what you have? The simple answer is to control how much you are prepared to lose & stick to your guns. 

*It takes time to build experience & confidence *
Until that happens trade lightly, the small losses will be the cost of your education.

Skate.


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## Skate (28 October 2022)

*We all struggle*
There is always constant doubt about whether the strategy we build will be up to the job. We all accept that we need to win more than what we lose to keep in the game. But how do you know the correct level of risk right that allows you to sleep at night?

*Two goals in building a system*
In building a trading system there are three goals you should have in your sights, (1) The ability to detect a trend as early as possible. (2) Your system must also be able to distinguish "false signals", so you can avoid taking the wrong position. (3) Get out when the going gets tough. 

Skate.


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## Skate (28 October 2022)

MurariMikeTrader said:


> Thanks for the response Skate.
> If you don't have or don't want to share the Amibroker code for your "Final Version" of Nick's WTT Strategy (with Lipstick applied) then just say so. I'm a big boy, I can take it.




*I'm going to call *@MurariMikeTrader*, Nick from now on*
New members are joining our community every day & if their expectations are not met they will not hang around. When they don't get what they want they simply nick off. Nick was interested in my version of the 20-period breakout strategy (The Lipstick on a Pig Strategy) but there is a better version I wish to discuss.

*"The Lipstick on a Pig Strategy" is nothing fancy *
As @MurariMikeTrader was more interested in my final version of Nick's WTT Strategy I thought it would be the perfect strategy to display why it's important to be selective with signals. Concentrating on the WTT Strategy hopefully will encourage Nick back to the forum.

*In the next post*
I'll point out why being selective with signals can be an advantage in all trading conditions.

Skate.


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## Skate (28 October 2022)

*Amibroker Backtest Report*
The backtest period for the 3 separate versions of Skate's WTT Strategy is from the 1st of January 2022. They were all in profit with varying results.

*Skate's 3 WTT Strategies*
(#1) The 1st version is basically the WTT strategy in its purest form (Left Backtest Report)
(#2) The 2nd version has a bit of LipStick applied to the purest version with increased results (Middle Backtest)
(#3) The 3rd version is the LipStick strategy being more selective with signals (Right Backtest)

*Version (#2) & version (#3) *
The results of version (#3) have been improved by simply being more selective in the signals it takes. Being more selective results in lower transaction costs, increased winners, lower drawdowns & increased expectancy. Being selective of the signals makes a difference. The red boxing highlights the difference in the backtest results.




Skate.


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## MovingAverage (28 October 2022)

*I'm going to call *@MurariMikeTrader*, Nick from now on*
New members are joining our community every day & if their expectations are not met they will not hang around. When they don't get what they want they simply nick off. Nick was interested in my version of the 20-period breakout strategy (The Lipstick on a Pig Strategy) but there is a better version I wish to discuss.


It is such a shame this thread has dissolved into a disingenuous pissing contest....oh well I guess it is easier to elevate your own prowess by bringing into question the credibility of others.


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## Skate (28 October 2022)

*Clouds*
I find some people are like clouds. When they go away, it's a brighter day.

*Happiness*
There are some members who have the knack for making me happy, some when they arrive & some when they leave.

Skate.


----------



## DrBourse (28 October 2022)

Skate said:


> *Nobody cares what others think*
> At the end of the day, it will make little difference what you say because if the information is outside one's belief it will be rejected. Some members have open minds & display varying degrees of openness accepting some views while rejecting others & that's healthy. But, I've found there are a few members who have a closed mind to new information rejecting everything that's contrary to their own. One thing I do know is "if something resonates" it can make a big difference.
> 
> *Quality posts*
> ...



I like your quote M8, Great Content.......
Resonates well to a lot of post......
It explains a lot about human nature.....

Going on a few cruises during NOV & DEC.....
Might be back after Xmas.


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## Captain_Chaza (28 October 2022)

The Great Test / Back Test 
How do you handle / record the GAPS

EG:  Today's Iron Ore Futures Down ~ 14%
Where were you and all the other Back testers Stopped out?
What price and  at What a % Loss?






NB: These Time Frames stamps do not allow for Daylight Savings


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## Skate (28 October 2022)

@DrBourse there have been some great contributions made in this thread, yours included. When members make quality posts it really does add tremendous value. With new knowledge it makes us re-evaluate what we believe or think. 

*Lucky bugger*
Enjoy your cruise, it's a very relaxing way to have a break.

Skate.


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## Skate (28 October 2022)

Captain_Chaza said:


> How do you handle / record the GAPS




Hey Captain, gaps to a systematic trader are like potholes to a car driver. No matter the quality of the roads you are certain to experience one or two of them over time. When you hit a pothole you tend to swear at the time "but that's about all", they are quickly forgotten.

*A Gap-up*
These are not an issue for system traders as coding eliminates them completely. I for one have a set buy limit & I don't chase a price. Meaning gap-ups are eliminated from my trading.

*A Gap-down*
With prudent money management, they still tend to hurt, but gap-downs that catch you by surprise rarely take you out of the game. Both price gaps "up or down" are simply a part of trading. As a system trader, you just follow your signals. Some gap-downs hurt more than others but just like hitting a pothole I swear & move on.

Skate.


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## Captain_Chaza (28 October 2022)

What I am Asking is

With large gaps *Down  *Who guarantees your Stop Loss Order in real $'s is *REALIZED*
  IE :   If there is no Buyer for your Falling Knives in sight
Who takes the Loss?
*How do Back Testers log   $'s  lost  into their Logbooks or do they?

"Have  you Covered the 3 Day Rule  Strategy?" *
How do you escape the Margin Calls?
Or
Are you left Dragging a Wet Sail  in your logs ?
Or
Do you assume your Stop losses were filled by an Angel?

*Sailing the FGM in the Last 2 Days    ------- 5 Minutes at a Time*




Also What about

*Sailing the Great AMZN in NY  -----5 Minutes at a Time*


To just mention a couple


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## Skate (28 October 2022)

Captain_Chaza said:


> What I am Asking is
> 
> 1. With large gaps *Down *Who guarantees your Stop Loss Order in real $'s is *REALIZED*
> IE : If there is no Buyer for your Falling Knives in sight
> Who takes the Loss?




@Captain_Chaza let me answer these questions one by one, as in my style of trading. I'm a systematic trend trader that has filters & parameters that have to be met before entering a trade. First off all stock has to have great liquidity, & trading volume over a weekly period as that's the periodicity I trade. Getting out of these positions must be just as easy as getting in.



Captain_Chaza said:


> *How do Back Testers log $'s lost into their Logbooks or do they?*




*Amibroker backtesting *
You may not have read my series of posts today where I explain what you are asking in these few questions. System trading has three main goals & they are built into every system. The three goals are (1) The ability of your system to detect a trend as early as possible. (2) The system must also be able to distinguish "false signals", so you can avoid taking the wrong position & (3) Get out when the going gets tough. To answer your question simply "it's all in the mathematics" & it's done after the fact on known data (data from the past). PositionSize & PositionScore in conjunction with your buy formula determines the trade that is taken. 



Captain_Chaza said:


> *"Have you Covered the 3 Day Rule Strategy?" *
> (a) How do you escape the Margin Calls?
> Or
> (b) Are you left Dragging a Wet Sail in your logs ?
> ...




*Your question -* *"Have you Covered the 3-Day Rule Strategy?" *
I don't trade daily strategies, I have in the past but I prefer the slowness of trading longer time frames. There are advantages as well as disadvantages to trading longer periodicities. I trade weekly strategies these days on the ASX All ordinaries only. Getting into a trend is easy, getting out at the right time is in my opinion the hardest part of trading systematically. The exit makes the money "trading my way". 

*Now to answer question (a*) - *How do you escape the Margin Calls?*
I don't trade on margin, 

*Your question (b) - Are you left Dragging a Wet Sail in your logs?*
Losses are a part of trading & being the best loser you can possibly be, allows you to able to trade without emotions. 

*Your question (c) - Do you assume your Stop losses were filled by an Angel?*
When you are trading highly liquid securities there is always someone looking for a bargain. Exiting is always easy. Stock with low volume or low liquidity, penny stock, I don't entertain these at all. Basically, I trade in a narrow range of the ASX All Ordinaries.

*Historical drawdown of a system*
The maximum historical drawdown is simply the percentage drop from a high in the equity curve to a subsequent low at any point throughout the whole backtest for every single bar. This metric is one of the most important metrics when developing a strategy.

*Drawdowns are what cause your emotions to spiral*
Gap-downs is percentage drop from the high point to the low & they can take on a new meaning after your backtesting is completed. I'm just saying, make sure you can handle this percentage when trading your system live as it takes on a new meaning when you do. Just don't be flippant with this backtest metric. If you do, you'll quickly find out that drawdowns will cause your emotions to spiral out of control.  

*Trading my way is simple*
If you can press a button you can trade systematically. The coding does all the heavy lifting.

*Let's show a chart of FMG*
In the last two years, The Panda Strategy nibbled twice at (FMG) for two wins. I'm sure if there is perceived value in the future, the PANDA Strategy will be all over it.




Skate.


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## Captain_Chaza (28 October 2022)

Apologies I forgot the Greatest Loser of them All

*Sailing the once Great META /FB ---- One Day at a time
Down 24% in ONE Day*



*Do any Stop losses work here and How are they written up in the Logbooks in any Back Testing by ANYONE?
I mean Every One of Them

Nothing personal here Officer Skate
I  Love your work  and
I Love a Good Read*

*But I Hate GAPS*


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## Skate (28 October 2022)

Captain_Chaza said:


> Do any Stop losses work here.




@Captain_Chaza *they certainly do *
A trailing "Stop" is the exit of last resort. Looking at your chart you were given multiple signals to exit this position that you neglected to action. 






Captain_Chaza said:


> *How are the written up in the Logbooks in any back testing by ANYONE?*




*As requested*
The PANDA Strategy "Excel log" of trades for the last two years.


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## Skate (28 October 2022)

*What's trading all about?*
Trading is like playing pool, it's not about sinking the ball, but lining up the next shot. Traders are often paralysed into inaction by the way they are thinking about the markets at any given moment. This way of thinking keeps you emotionally & financially tied to "that line of thinking". Without new ideas, the cycle won't be broken.

*There is a fine line between enough information & information overload*
The series of posts today were designed to encourage others to think of alternative ways to gauge market sentiment. By filtering those sentiments we can take advantage of trading opportunities in a more efficient way. 

*Most people really aren't smart enough to deal with the overload of information that now exists* 
Even intelligent people with good critical thinking skills, suffer the same fate. It's even exhausting trying to keep up with the volume of posts made in this forum each day, even lengthy posts can be a turn-off. Trying to grasp how others trade can be a minefield of information to absorb & understand.

Skate.


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## Captain_Chaza (28 October 2022)

Skate said:


> @Captain_Chaza *they certainly do *
> A trailing "Stop" is the exit of last resort. Looking at your chart you were given multiple signals to exit this position that you neglected to action.
> 
> View attachment 148565
> ...



I have only ever been a spectator On Meta/ FB
But that last Yellow  Trailing Stop you pointed to is the Day the Ship Sank and Opened  Down 24%
How would you log this entry?
It GAPPED Down AFTER HOURS 
EVERY ONE LOST 24% if they Sold


----------



## Skate (28 October 2022)

Captain_Chaza said:


> How would you log this entry?




@Captain_Chaza I don't understand your question. Since August there have been many exit signals.

Skate.


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## Skate (28 October 2022)

*This is how I trade*
(CDD), was a position taken in August. In this case, a profit target stop took me out of the position. The PANDA Strategy got in on a confirmed trend & exited just at the right time.





*Another Chart *
(EGL) is another included in the Excel log of trades. Both trades were taken out by a "Take Profit Stop" which is always a healthy way to exit a position.




*Summary*
Trading this way is simply jumping on a confirmed trend & hope or wish or pray for the best. When you place a bet all you can do from here on is wait to execute a sell signal, which can come in many forms. I should also point out that if you look closely at the signals they are executed precisely. Other than those two moves you wouldn't want to be in this position at any other time. Trading this way, "doing this over & over" is boring but profitable.

Skate.


----------



## ducati916 (29 October 2022)

Skate said:


> *The role the media plays in trading is actually an interesting topic *
> Even Twitter is now viewed as a defacto media outlet. Traders when they are trying to understand the markets turn to market commentators, & news outlets. We can all have an opinion about why the market moves as it does but media outlets are simply better at making all this stuff up. The story is packaged in such a way you tend to believe it as gospel.
> 
> *Media outlets & commentators do this on a daily basis to keep readers*
> ...




The media is 1 arrow in the quiver. I have read the stories about traders trading in blackened rooms, ignoring all media, blah, blah.

In my opinion an error.

News flow interpretation is a skill, like any other. It can be learned and improved. Which is not to say that you rely on it 100%. News flow, gossip, commentary, etc are dots or footsteps in the snow. If/when you can join them, you can reach conclusions that are very informative, profitable.






						WordPress.com
					






					wordpress.com
				





As a cherry picked example:




This chap is THE Fed insider (works for WSJ) and is always the chap who 'leaks' the news that the Fed wishes to communicate.

Now this blog post was on Sunday 23. Markets have been rising all week on the back of (hopes) that the Fed this coming Monday will start to use 'pivot' language.




The other articles reinforced this view because the Treasury market was/is unstable.

Now while you may not have wanted to be long...you would not have been short.

jog on
duc


----------



## rcw1 (29 October 2022)

Skate said:


> *What metrics drive a strategy & how do you learn which technical metrics to follow?*
> Well, that's the question we all ask ourselves as system traders at one stage or another. It's a human trait to see patterns when at times there are none. Manually assessing the markets take a great deal of time & skill. Using this method it's prone to misinterpretation at times. Not to mention it's extremely difficult & complicated trying to work out if there is a trend or a shift in market behaviour. Even slight shifts in sentiment, are hard to pick, even with hindsight.
> 
> *The weight of the evidence*
> ...



Good morning Skate
For mine, you have covered off on several quality trading constructs.  Know exactly what you are saying. 

The good Dr Bourse provided rcw1 with some good learnings *on TA and ADRs* in Commsec Community.  Whilst not proficient in TA, understand it, adds another string to the bow of decision making.  So then:

*What metrics drive a strategy & how do you learn which technical metrics to follow?  *

The question of all questions ha ha ha ha 
rcw1 laughs as this does rcw1 head in …. 

Keep it simple stupid - the  KISS  test … runs in conflict with the question.  Learn to run them both parallel to create an evidence base, case by case, is how rcw1 manages this question… rightly or wrongly 

The other risk mitigation technique, the rcw1 adopts re aforementioned, is not to hold for long, buy and sell same day if you can, take the profit and move on to the next lot of profit makers.  Closely ‘watch the numbers’ , don’t diminish concentration by looking at too
many stocks and overly complicate process.  

Not everyone’s cup of tea, yes, each to our own. 

Have a very nice weekend skate.  Tis that other passion for rcw1 today, horse racing.  Oh the joy of it.  Funnily use the same processes to choose the right horse …. Good thing don’t put rcw1 house on a horse 🐎 ha ha ha 

Kind regards
rcw1


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## ducati916 (29 October 2022)

Skate said:


> *1. What metrics drive a strategy & how do you learn which technical metrics to follow?*
> Well, that's the question we all ask ourselves as system traders at one stage or another. It's a human trait to see patterns when at times there are none. Manually assessing the markets take a great deal of time & skill. Using this method it's prone to misinterpretation at times. Not to mention it's extremely difficult & complicated trying to work out if there is a trend or a shift in market behaviour. Even slight shifts in sentiment, are hard to pick, even with hindsight.
> 
> *2. The weight of the evidence*
> ...




1. In the 'Way of the Turtle' Mr Faith spends some time discussing random entries/selections. Which many years ago had me thinking. I like trading 'random' as without any expectations, bias, or needs, trading becomes effortless. When you modify random, with the ability to place many bets through time, you have the foundations of a very low risk, yet profitable system. The low risk allows significant higher leverage than might otherwise be comfortable or prudent.

2. I suspect you mean 'quantitative analysis' as technical analysis (apart from if you include money management) has nothing remotely mathematical about it.

Technicals, I agree are largely sentiment based, voodoo even if you include in there Gann and other systems based on planetary movements etc. That being said, I do use charts, technical indicators to look at what others are looking at. They are also useful in the US because the US is a market maker system and heavily manipulated by the MMs. There are various ways of seeing their trades in the market to 'divine' their intentions.

jog on
duc


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## Willzy (30 October 2022)

Hi all, It’s the end of another month, though I’d post a quick update on the basicRSI system I’ve been trading on MSFT.






The system has plodded along not doing a whole lot TBH, of concern though is the CAR25 metric fell below zero. For this reason I have disabled the strategy and will continue to monitor and see if it recovers moving forward. I’ve found a couple of other stocks to trade this strategy with in the mean time though, hopefully they perform better moving forward.

I gave up on the concept of using Larry Connors TPS strategy on stocks, I was only trading LONG positions and I wasn’t using the SMA200 Filter. This was just a quick experiment to see if it was worth pursuing.

Not to be deterred though I went back to Larry’s book and decided to see how his original strategy, has performed since its publication ( circa 2008 ) and more recently given the market turmoil of the last 12 months. Larry’s original strategy trades ETF’s only and trades both the long and short sides of the market. QQQ was by far the best performer, but SPY wasn’t terrible and XLV and few others performed very well too.

*QQQ backtest*






*SPY backtest*




*XLV backtest*




I decided to give this strategy a go with some cash $$$ trading the QQQs to see how we go, not too much as I’m still testing the waters with it… At the end of the day, these strategies dont produce massive returns, but the equity curves seem to be moving in the right direction (not an easy feat these days). 

If anyone wants to follow along with a demo account, I’ve coded up the system for Metatrader4 and Metatrader5 – they’ve been added to the store and you can use them on a demo account for free.

I'll keep posting updates if people are interested.

Cheers!


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## Skate (30 October 2022)

Willzy said:


> I'll keep posting updates if people are interested




*Kudos *@Willzy *for developing your own system*
I enjoyed reviewing the trading stats of your trading method. I've been thinking about your "detailed post" most of the day for a few ideas on how others could go about formulating a strategy as you have. 

*How do we go about formulating a strategy?*
To be profitable in this game only one thing matters & that is to understand "why markets trend" the way they do. Trading is complex, so how do we go about seeing the market without the complexity? 

Skate.


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## Skate (30 October 2022)

*Here’s a fun fact*
Most traders don't trade with their "serious money". Serious money is always allocated to "dividend-earning investment”. Meaning, most who have serious money will select an investment strategy over a "trading strategy" every day of the week. Admittedly investing can be seen as a long-term trade but that’s where the similarity ends. 

*Investing allows you to ride the emotional rollercoaster *
Doing so allowing "Father-time" to do all the heavy lifting whereas trading relies on timing the market with precision. Timing the markets admittedly is much harder to do.  When investing, "timing of the purchase" becomes less of an issue. If you can pull it off (trading rather than investing) you will have the ability to upscale the "profit factor" by multiples.

Skate.


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## Skate (30 October 2022)

*Buying a strategy is a starting point*
But here’s the kicker. You’ll never hear that their system will only work well when the market is in an uptrend. They don't make you aware of this fact because if they did, you wouldn't buy their system. You can take this to the bank, "any trend trading system" will work in an uptrend.

*If you learn how to code your own stuff, your trading will improve dramatically*
Doing it for yourself, rather than buying a ready-made system off the shelf will allow you to have a better understanding of "trend indicators" & how to take advantage of them or simply how to use them. It might come as a surprise but most starting out on their trading journey don't understand how trends really work, & how they impact a system, both during development & trading.

Skate.


----------



## Skate (30 October 2022)

*What works?*
I get my share private messages & they revolve around trying to find a system that works. They are especially concerned about entries. They want to hit the entry as close to the turning point of a trend as possible. The reality is, it really doesn't matter much what you are using for entry conditions as long as you are entering in the direction of the trend. When you tell them this fact, it dampens their enthusiasm because they have this notion that there is a magical solution waiting to be discovered, which there isn't. 

*A few simple trend indicators are all you need to see when to enter a trade*
Entries during trends are a no-brainer. Once you have an entry, the problem becomes one of having an exit strategy combined with money management. It all sounds simple but putting it into practice is where the difficulty starts.

Skate.


----------



## Skate (30 October 2022)

*To start the process of systems development*
It all starts with baby steps. Throw a few trend indicators on a chart & see how they perform when the market is in an uptrend. The issue I find is most "new to system trading" is that they will fall into the trap of backtesting across a broad range of market conditions (don't do this). The reason most will fall into this trap is that they have heard this is the way to test systems. It pays to remember this one fact "When the market isn't cooperating," nothing works well when you are trend trading. 

*You can believe this or not *
A trailing stop is your last line of defense. You should always develop an exit strategy that works separately from a trailing stop. Exit strategies are too numerous to discuss in a single post but a search will bring up many variations that I use. However, in saying this, there is no such thing as the "best exit" because the timing of the exit is always compromised to some extent. There are exits that work for your style of trading & there are others that won’t.

Skate.


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## Skate (30 October 2022)

*The misconception about trading*
We all think we know how trading works but do we really? With education, it allows you to start understanding how trading actually works. Understanding how the market moves will allow you to change what you are doing according to market conditions. When that's the case, trading will be easier & a bit more profitable.

*First, you have to accept - "good enough is good enough"*
The first thing you need to understand is that you can't maximise everything. So don't even try. It took me a long time to figure this out, "if you are comfortable with the strategy" you can trade it, & you'll learn to improve it over time. Having a half-decent strategy, that you understand will give you the confidence to trade it. This means that you'll be less likely to throw this strategy out because trading a system like this "won’t" mess with your emotions.

Skate.


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## Skate (30 October 2022)

*Trends are everything when it comes to trading*
First, how do we go about figuring out if there is a trend? There are several ways to do this & they're all easy. On a weekly chart, you can use a 10 & 40-week moving average. When the index, the "All Ordinaries" is above the 10-week moving average the market is in an uptrend. When the index is in between the 10 & 40-week moving average, it's normally whipping around consolidating, & screwing you out of money. That's what it's doing. 

*How do we pick a downtrend?*
As a rule of thumb when the closing price is below the 40-week moving average it's in a downtrend. That's an easy explanation, a starting point on how to define things.

*Okay, now we know how to determine the trend, what comes next?*
It's as easy as sticking a couple of trend indicators on a chart & see how they look "but" only when the market is in a definitive uptrend. At any other time, other than an uptrend the indicator will become less than useful. Use the same trend indicator formula as "on your chart" for the entry condition. Don't worry at this stage about exits, that will come later. If the trend indicator returns a reasonable amount of money, then you're in business, you have a base to work with.

Skate.


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## Skate (30 October 2022)

*Next, develop your exits (this is the most important part of your strategy)*
Exits need to fit your risk tolerance more than entries. This means, how much are you prepared to lose without cracking it? What I mean by that is too many people look at what makes the most money & then they can't trade it because the drawdowns, & trade frequency, cause them a great deal of anxiety. 

*Pick exit strategies that you are comfortable with & look at them on a chart*
If you feel good about what you are seeing, put them in the backtest. If the backtest results are reasonable even if they're less profitable you're in business.

Skate.


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## Skate (30 October 2022)

*If you’re going to trade a trend strategy*
Only trade the system when the market is in an uptrend (this is a no-brainer) because if it performs during up-trends, then you've got yourself a handy trend trading strategy. If you test your strategy when the markets are in a downtrend, & it performs poorly, this is a sure indication that you’re on the money. 

*Now, think about this*
Why would anyone want to trade during a downtrend? But there are many who do. I'm sure there would be some traders who would take this risk without knowing the down risk associated with doing so, Then there would be others who just have a death wish. 

Skate.


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## Skate (30 October 2022)

*There are some better strategies better than others*
You may find some systems, works better than others but that’s not the point. Constantly searching for something better will drive you to distraction Once you have a strategy that feels comfortable to trade, that’s the one to stick with. 

*Swapping from one strategy to the next*
Changing or swapping a strategy isn't encouraged as you will quickly realise the results of swapping one strategy for another will be marginal at best. Most times there will be little or no improvement at all, resulting in you starting the whole process over again. All I'm saying, from my experience it's better to stay with the devil you know & try for improvements.

*When you test a strategy, test it again & again*
If you take your trend strategy & backtest it when the market is in a downtrend, it's going to look very, very bad, & it should. If it didn't, it wouldn't work in an uptrend so don't struggle trying to fix something that's not broken.

Skate.


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## Skate (30 October 2022)

*Before I step off my soapbox*
Any half-decent trend indicator will work when the market is trending, so you don't have to worry about the perfect setup, you simply take the trades when the trend indicator tells you to take them. Trading a trend strategy in this way you're only going to make some money. You will, however, recognise that almost every indicator is right "part of the time".

*It's your job to figure out which indicator to use*
Use the indicators that you understand or simply use the indicator that you “like”. Backtesting will let you know when the indicator is likely to be right. You will also understand which market conditions will cause your favourite indicator to decline or increase its predictive abilities. Having this understanding will allow you to adjust it to the market bias.

*I’ll conclude on this point *
“Money management & a solid exit strategy is everything” when it comes to being profitable in this game. And finally, it is “not possible” to maximise or minimse everything regardless of how much you learn. Just don't be a perfectionist.

*Stepping down off my soapbox*


Skate.


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## Gringotts Bank (30 October 2022)

Skate said:


> *Before I step off my soapbox*
> Any half-decent trend indicator will work when the market is trending, so you don't have to worry about the perfect setup, you simply take the trades when the trend indicator tells you to take them. Trading a trend strategy in this way you're only going to make some money. You will, however, recognise that almost every indicator is right "part of the time".
> 
> *It's your job to figure out which indicator to use*
> ...



“Money management & a solid exit strategy is everything”

More on this please?


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## Captain_Chaza (30 October 2022)

Gringotts Bank said:


> “Money management & a solid exit strategy is everything”
> 
> More on this please?



*"We All Learn The Hard Way"*
Unfortunately
*"There is No Other Way"

*


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## Skate (30 October 2022)

Gringotts Bank said:


> “Money management & a solid exit strategy is everything”
> 
> More on this please?




It appears @Captain_Chaza gave you a quick & dirty answer without wasting words.



Captain_Chaza said:


> *"We All Learn The Hard Way"*
> Unfortunately
> *"There is No Other Way"*




*I don't want to be rude*
But with one-liners, I feel like responding "like for like" as far as "_more on this please_" I should respond by saying, "I've covered your questions many times previously, don't be lazy "do" a keyword search" before asking a simple repetitive question.

@Gringotts Bank,* I'm surprised you have asked such a basic question*
I have made over 140 posts on this subject alone & detailed exactly how I pyramid into positions taking advantage of every dollar accumulated or lost. The next bet is mathematically coded from the balance of my trading funds. 

Skate.


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## Skate (30 October 2022)

*For everyone else (less experienced)*
I make a few general comments concerning "Money Management". Concerning a solid exit strategy, I have detailed that also in just as many posts. Today I even mentioned that a "Trailing Stop" is an exit of last resort. I've posted about my various exits & my GTFO filter. All it requires is searching a few keywords posted by "Skate". 

*It's frustrating & time-consuming*
To answer questions I've already made multiple posts on. It's the one-liner that gets to me the most with the answer requiring a detailed answer. 

*Parameters & settings*
Also, I should say money management & parameter setting give any strategy a fighting chance. A Stale Stop, Trailing Stop & TakeProfit Stop sharply applied allows money management setting to do its thing & that is to manage the size of the next bet.

Skate.


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## Skate (30 October 2022)

*The other side of the equation is to capitalize when your luck is good*
Designing good money management principles to a degree helps but our "success or failure" is having an aggressive approach toward selling but that isn’t enough. In designing a money management system, your first consideration should be how well it protects your capital should your run of bad luck continues. This should have been the next topic of the conversation.

*Trading is a basic process*
We all tend to overthink trading but when you strip back trading to the bare basics it's all about trading the price differential, catching trends, "knowing when to get in & when to get out".  Money Management is how we divide our funds to make a series of bets. It also requires careful risk assessment, with the ability to execute a trading plan flawlessly.

Skate.


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## Skate (30 October 2022)

*Putting it bluntly to trade successfully you have to develop a level of skill*
Unfortunately, it takes effort & time to develop these skills but if you are an excellent risk manager you have a high probability of trading successfully. There are some traders who are extreme risk-takers without even knowing it. Those who don't practice good money management techniques also fall into this category.

*Prudent "Money management" *
Other than using a mathematical formula to decide the next bet level to some degree relies on a sharp "PositionScore" or in "English", a ranking method to decide which position to be entered. The objective of trading is to make a profit & to do this requires careful risk assessment, disciplined money management, & emotional control to execute a trading strategy flawlessly without hesitation.

Skate.


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## Skate (30 October 2022)

*System design*
Every system must have an entry condition, an exits condition & money management (position size) to help you achieve your objectives. 

*There are five components that should be the minimum in designing a trading system*
1. An entry condition that triggers a "buy signal"
2. An Initial Stop Loss that can be wide or narrow to determine the amount you risked on each trade.
3. Have a defined "exit rule" a "Stale stop" when momentum slows & especially a "GTFO" filter when it all goes horribly wrong.
4. Money Management has to be major consideration right off the bat. (the size of your next bet counts)
5. Position Size Rules to manage the portfolio of trades generated by your trading system.

Skate.


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## Skate (30 October 2022)

*I thought my time on the "soapbox" was finished for the day*
I know if I excessively post or talk about Nick Rage it turns some readers off. So I try to limit the number of posts I make, otherwise, there would be no stopping me. As I've said numerous times before, reading only my views on trading can be unhealthy at times, that's why I appreciate when others make a contribution. An alternative point of view is always welcome, but being a "smart-arse" & making provocative comments, isn't.

*I'll leave the last word to Nick *
_"It takes time to work on a trading plan & develop a strong trader's psychology. It is essential for every successful trader to learn more about money management, create & test other trading ideas thoroughly."_

Skate.


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## Gringotts Bank (31 October 2022)

Captain_Chaza said:


> *"We All Learn The Hard Way"*
> Unfortunately
> *"There is No Other Way"*
> *
> ...



Oh God, you're still on with your negativity, Chazza!  

@Skate , I'm doing a search now for 'money management'.  Haven't found a definition yet, but I'll keep looking.

In post #7,683 you say money management is the same as position size, and I remember you saying your position size is fixed.  Therefore, money management = $15000?  Got to be more to it.  Serious question - I'm not being fecetious.


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## Gringotts Bank (31 October 2022)

ok, here we go.  Post *#983* on this thread if anyone else is interested.  I have to say 'money management' is a phrase I've never used.

Seems people mean different things by it, but basically it means "everything you do other than finding the bar you're going to enter on!". Money management basically equates with system design.  ie. Position size, max number of positions, stops, targets, scaling in/out and so on.


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## Skate (31 October 2022)

Gringotts Bank said:


> ok, here we go. Post *#983* on this thread if anyone else is interested. I have to say 'money management' is a phrase I've never used.




*The post* @Gringotts Bank *is referring to can be found here*





						Dump it Here
					

The common old index filter An index filter is your safety net as it will keep you from trading & it can be as simple as you want it to be. Example, when the index you are trading falls below a pre-set simple moving average the filter will turn off - your strategy should now stop generating any...




					www.aussiestockforums.com
				






Gringotts Bank said:


> [Money Management] Seems people mean different things by it




@Gringotts Bank you are absolutely correct when you say "money management" seems to mean different things by it. But what I do know about money management is that it's vitally important to keep you in the game. 

*The importance of money management*
In a nutshell, money management is a critical tactic that all traders must employ in order to preserve their capital. 

Skate.


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## Skate (31 October 2022)

*The problem with reading so many books*
After a while, they all seem to blend into one. I remember reading this quote "Even a poor trading system could make money with good money management". As money management is so important in keeping you in the game I'll make a series of posts to explain what money management means to me. 

Skate.


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## Skate (31 October 2022)

*The impact of money management*
It's hard to know where to start to explain why money management is so important. This one feature of a trading plan is partly responsible for keeping you in the game. For a better understanding of money management, it should not be viewed in singularity, because it's not just one function but a series of functions. Meaning, there are a few components that make up or go hand in hand using this terminology, so I'll just put things down as they come to me. 

*Money Management makes an impact on the bottom line*
When starting out such things as the size of your account, allocation of funds & the amount of money committed to each trade (bet) impact the final result you will achieve. By managing risk & position size appropriately, traders can ensure that they are able to stay in the game for the long haul by capitalising on profitable trading opportunities.

Skate.


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## Skate (31 October 2022)

*The objective of money management *
Prudent position sizing (the number of bets in relation to your trading funds) will limit the risk to some degree while allowing you to aim to achieve as much growth as possible. 

*How do we do this? *
It's simply increasing or decreasing the amount of each bet, I call this "pyramiding", others might call it by another name but in simple terms, it means all my available funds are allocated. The formula code that I use is the balance of my trading funds divided by the number of outstanding positions. That's my first option. Option (b) is to increase or decrease the number of bets allocated. (position size)

Skate.


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## Skate (31 October 2022)

*Another aspect of money management is risk control*
Setting a series of exit conditions with an initial trailing stop limits exposure, protecting your trading funds from large losses in short periods of time as @Captain_Chaza has highlighted in a recent post. Gaps down do catch you on the wrong side of the trade but that's just a fact of trading. But with the correct money management techniques, they can be reduced but not completely eliminated. 

*Varying the bet size*
Additionally, by altering the next bet size you can take advantage of market conditions. At times the markets will give you lemons & at other times its lemonade. When the markets are going against you it is as simple as altering the size of your next trade ensuring you risk only a small percentage of your account. By doing this, traders can ensure that they don't lose too much money if their trade goes against them. But when the markets are roaring it's the reverse. Increasing the value of the next trade in the good times enables you to allocate all the closed profits, giving you a chance to compound the results.  

Skate.


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## Skate (31 October 2022)

*It's a fact of trading*
Being presented with unlimited trading opportunities while having limited trading capital, obviously, something has to give. This means traders need to have a system of allocating trading capital to each market condition or market bias. (position sizing)

*This brings me to "Position Sizing"*
Position sizing is deciding how many bets you will have in relation to the funds available. Some use a series of different methods for this allocation but as @Gringotts Bank eluded to, I use a "fixed number" of positions when starting out using an equal dollar amount allocated to each bet. 

Skate.


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## Skate (31 October 2022)

*With open or closed profits the bet amount varies*
The number of bets isn't altered just the dollar amount. Using this variation in my trading increases or decreases the amount allocated to the next bet. Doing so ensures every dollar (soldier) is put into the markets to fight the good fight. Using this method works for me as I find the correct position size (bet size) has the ability to lift trading to another level. 

*Position sizing techniques *
This involves deciding how much to allocate per trade which determines how much risk that trade takes on. Position sizing is important because it allocates how much money is put into each position. It can be a fixed dollar amount that I use or it can be a "fixed fractional risk" a "fixed percentage of the portfolio equity" or any other allocation you can think up, it's really up to you & your appetite to risk.

Skate.


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## Skate (31 October 2022)

*Being proportional*
It's wise to keep the size of trades proportional to the amount of capital you have. If losses happen then as a trader you should think about reducing either the size of the next bet or altering the number of positions you are carrying to ensure your trading account doesn't deplete to zero.

*A strategic money management plan *
Having a plan allows you to exit a position when trading isn’t working & maximise the opportunities when it is. One of the most important skills is knowing how much to place on each bet. When on a losing streak, reduce. When on a winning streak, press harder but only when the odds of trading are in your favour. If you "cut your losses & let your profits run" is simple & effective.

Skate.


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## Skate (31 October 2022)

*Money management rules are essential*
It doesn't matter how you trade, money management rules are critical to the correct implementation of every trade. The profitability of a strategy depends on it.

*You hear it all the time*
"Don't drive through flooded roads" but to people listen? 
"Traders should never invest more money than they can't afford to lose" but do they listen? 

Skate.


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## Skate (31 October 2022)

*In this game, it's critical that traders don't overreach*
When profit targets are hit, close the trade & enjoy the gains. When in a losing trade follow the sell signals, don't try to outsmart your strategy. Just learn to be the best loser you can possibly be.

*Accept the risks that come with trading*
Nobody likes to lose money but traders must understand that it's all part of the journey.

*Alternatives views are welcomed*
When it comes to "money management" we all tend to do something different & this thread is the perfect place to voice an alternative, from your perspective.

*When trading*
Trade to the best of your ability. Don't "fuck_it_up".





*It's time to hop off*


Skate.


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## Gringotts Bank (31 October 2022)

Skate said:


> *The objective of money management *
> Prudent position sizing (the number of bets in relation to your trading funds) will limit the risk to some degree while allowing you to aim to achieve as much growth as possible.
> 
> *How do we do this? *
> ...



Glad you said that, because I think of 'pyramiding' as scaling-in.  I was reading all your posts with a different understanding.  Not sure what term I'd use for that process.  I think Howard uses the term 'dynamic position sizing', although that may be something else entirely.


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## Skate (31 October 2022)

Gringotts Bank said:


> Glad you said that, because I think of 'pyramiding' as scaling-in




*PositionSizing pyramiding*
Okay, if @Gringotts Bank was confused with the terminology an explanation is in order. In essence, when I use the term "PositionSize Pyramiding" it is a way to calculate the size of my next bet. The weekly re-calculating takes advantage of the closed profits & accounting for closed losses.

*"Pyramiding Explanation" *(positionSize)
Pyramiding my positionSize is a re-balancing technique to vary my position sizes (my next series of bets) with the reinvestment of profits. By "Pyramiding (re-balancing) my PositionSizes" every dollar is put into the battle to fight the good fight.

Skate.


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## Skate (31 October 2022)

*Position-sizing uses my trading cash balance*
A Bank feed is sent to a parameter setting within the AFL strategy code. The re-balancing formula that I use is simple as it takes the cash balance of my trading account divided by the number of outstanding positions = my new "PositionSize". This will now be the new bet for each & every pending trade (the new PositionSize also calculates the number of shares to buy in the pre-auction)

*What are the benefits of Pyramiding my PositionSizing*
What metric do I use?, How do I measure how effective a strategy is using this method? Which of my systems will generate the most return? Which is better for real trading? These are very important questions that I need answers to because I'm a numbers man. I'm happy to report there’s a metric that helps answer all those questions.

Skate.


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## Skate (31 October 2022)

*Deploying 100% of my trading funds*
Pyramiding "PositionSize" is a re-balancing technique that I use for reinvestment of profits while at the same time reducing the size of my bets to acknowledge the losses. I value every dollar & you wouldn't expect me to deploy those dollars into the heat of battle without knowing the odds of winning the war, would you? When I put my funds into the markets I need to know the odds of them returning. 

*All my available funds need to be put to work*
I should have also mentioned previously that "commission drag" has to be in this calculation to determine the next bet size. No one wants to be caught with their pants down by having insufficient funds to cover those purchases.

Skate.


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## Skate (31 October 2022)

*On the flip side*
"Position Size" is important & the methodology you use to determine it is also important. Trading small amounts over a short period using a "percentage-based" position sizing beats a fixed dollar position size hands down. But when you start to trade larger amounts over a longer period, it becomes very hard to move those amounts into the markets without a large amount of increased slippage. All I would like to say is the system I use works for me.

*Most fail to realise pyramiding works both ways*
Pyramiding position sizing works for me as all my available funds are constantly in the markets. Most fail to realise pyramiding works both ways. When trading is not going well, position sizing decreased because of the compounded losses, even a string of losses is reflected. But, when the times are good why shouldn't I take advantage of these conditions & increase my bet sizes? It's the "make hay while the sun shines" theory.

Skate.


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## Skate (31 October 2022)

*The issue with making so many posts*
At times, I start to sound like a broken record. Also, when members check in to catch up with this thread finding that there is a large number of posts to read becomes a turn-off as it's exhausting. For me, there is a bright side as it gives me a platform to "have my say".

*Back to pyramiding (summary)*
There are 2 options for pyramiding taking advantage of deploying 100% of your trading funds which can be used in conjunction or in isolation with each other.

1. Increase/decrease the bet size.
2. Increase/decrease the number of positions in a portfolio.

Skate.


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## Gringotts Bank (31 October 2022)

It's weird how trailing stops always seem to degrade backtest performance.  When you eyeball a chart, they look great.  Whether a system is trend following or mean reverting, we're usually entering a position when it's most volatile.  Maybe having the trailer turn on n bars after entry (or after volatility has settled) would work.  Anyone experimeted with this?


----------



## Gringotts Bank (31 October 2022)

Or maybe a better idea would be to identify the entry signal, but wait until volatility has settled before actually entering.  Wouldn't work for MR, but would it for trend following?


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## Skate (1 November 2022)

*"Duc's Quote of the Day"*
I've cherry-picked a passage from @ducati916's article today that resonated with me.




Skate.


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## ducati916 (1 November 2022)

Skate said:


> *What works?*
> I get my share private messages & they revolve around trying to find a system that works. They are especially concerned about entries. They want to hit the entry as close to the turning point of a trend as possible. The reality is, it really doesn't matter much what you are using for entry conditions as long as you are entering in the direction of the trend. When you tell them this fact, it dampens their enthusiasm because they have this notion that there is a magical solution waiting to be discovered, which there isn't.
> 
> *A few simple trend indicators are all you need to see when to enter a trade*
> ...




@Skate 

I'm sure in all of these most recent posts it is included somewhere.

If you are a systems trader, trading bull trends, then it's not rocket science:







Which 1 of these sectors looks the most promising to be long?

Energy: what a shocker!

Why even look?

Because in a rally, as we had last week, all manner of shite will start to rally. They will be short term and dangerous. If they prove themselves otherwise, fine, add them in.

A 'marginal' chart:




This sector, you would either set a tight stop or wait for proof.

While I'm a buyer (on the fundamentals) a system trader would avoid for the moment:




So you are simply using a sector's trend to include or exclude individual stocks, you don't need to trade the sector per se.

jog on
duc


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## Skate (1 November 2022)

ducati916 said:


> If you are a systems trader, trading bull trends, then it's not rocket science: So you are simply using a sector's trend to include or exclude individual stocks, you don't need to trade the sector per se.




*How to stay on the right side of the markets*
The markets are changing, driven by world events, interest rates & inflation. They are also driven by emotions of emotions. Basically, what I'm saying, is it's the emotions overlayed on top of other emotions. So what do I use to keep me safe when trading while markets are erratic, trying to find a solid level? 

*Using a lot of protection, that's how*
In these trading conditions parameters, filters & settings all make up a set of stringent rules for my buy condition. It has never been more critical than today to be more selective in generating buy signals. The exit has to act quicker than it has ever done before in being more responsive to any slightly deviate from what is expected.

Skate.


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## ducati916 (1 November 2022)

Skate said:


> *How to stay on the right side of the markets*
> The markets are changing, driven by world events, interest rates & inflation. They are also driven by emotions of emotions. Basically, what I'm saying, is it's the emotions overlayed on top of other emotions. So what do I use to keep me safe when trading while markets are erratic, trying to find a solid level?
> 
> *Using a lot of protection, that's how*
> ...




But if we are talking 'trending stocks' (going up) then why would you trade stocks in a sector that is going down. You only trade stocks in a bull sector, in this case energy and possibly commodities.

Why fight the market?

While 'emotions' certainly come into play, it is the fundamentals driving this market.

jog on
duc


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## Skate (1 November 2022)

ducati916 said:


> Because in a rally, as we had last week, all manner of shite will start to rally. They will be short term and dangerous. If they prove themselves otherwise, fine, add them in.




*Being selective with buy signals*
@ducati916 is absolutely correct when he said "short term [rallies] are dangerous". These are the rallies to avoid at all costs, they always end in heartbreak. Incorporating a few filters to keep you out of the markets when they are not trending is vitally important because these short-term rallies are false breakouts setting you up for failure. 

*Breakouts need to be confirmed in strength & quality *
Otherwise, you'll buy one week only to dump them the next. I was going to make a post about how I go about keeping myself on the right side of trading but I've previously made a series of posts on the subject.

Skate.


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## Skate (1 November 2022)

ducati916 said:


> But if we are talking 'trending stocks' (going up) then why would you trade stocks in a sector that is going down. You only trade stocks in a bull sector, in this case energy and possibly commodities.
> 
> *Why fight the market?*
> 
> ...




@ducati916 that is a great post. "No", it's better than great, it's an excellent post.

*Why fight the market, you ask?*
The simple answer is if you do, you're boarding on being a stupid trader. If you trade when the general market is going up & the index you elect to trade is in an uptrend, it's time to go "hell for leather". If you trade at any other time, get ready to be burnt.

*But how do you know when the market & Index are both up?*
Let me step you through what I do to make sure both are confirmed before a buy signal is generated. To keep myself on the right side of the market I first use a "percentage filter" of the index being traded as part of the buy condition. Using the percentage method to enter & exit positions IMHO is far superior to using an (SMA) Index Filter in isolation.

Skate.


----------



## Skate (1 November 2022)

ducati916 said:


> While 'emotions' certainly come into play, it is the fundamentals driving this market.




*Sure that's a fair enough assessment of the markets*
I believe emotions drive the markets in the short term & fundaments over the longer term.

*What I see looking at charts*
I don't believe the same stocks that are gyrating daily are being driven by the fundamentals. I accept what I believe means "diddly squat" when it comes to the markets but I need to code a strategy to handle my way of thinking, that is (a) when should I enter a trade & (b) why would I exit that position? 

*Not having a trading background*
I'm not restrained by doing what all the books tend to suggest. Trading their way may work for them, but when my money is on the line, there is no one who has a higher interest than me to make sure my trading is profitable. Blind Freddy can see how the markets are reacting, so it's my job to code a strategy to take advantage of the fact.

Skate.


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## Skate (1 November 2022)

@ducati916 *said: "Don't fight the markets"*
To be a profitable trader the first thing you need to learn is  "why markets trend" the way they do. Trading is complex but with the right tools, the job or seeking out a profit is much easier than the alternative. Trading on tips, media reports, hunches, or gut feelings, even though they sometimes work in the short term they tend not to work in the long term.

*Indicators*
They are called indicators because they indicate what's happening at a certain point in time. There are many ready-made indicators that you can elect to use or you can simply make one to display the information that you believe will give you an edge. One such indicator that I find useful is my "Advancing stock percentage indicator". The concept is simple but it's really tricky to code as it needs to make the calculations bar-by-bar. Doing so, the results accurately display the number of advancing stocks of the "All Ordinaries" in my case, compared to the number of declining stocks as a percentage.

Skate.


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## Skate (1 November 2022)

*Twisting the strategy*
Instead of using a "simple moving average" (SMA) to determine when a buy signal is generated, I use the "Percentage of the index Filter" in conjunction with an "Index Filter" before a buy signal can be generated. Meaning, both signals need to be "on" as a way to be more selective with buy signals. The indicator uses the 50% ratio of advancing stocks compared to the number of declining stocks to generate the buy signal.

*Now here is the twist*
The sell signal is generated when this ratio falls below 25%. This is an additional "exit condition" annexed to the "Stale Stop" exit strategy. This "Percentage Filter" parameter forms part of the "Stale Stop" exit strategy that ensures the open position is sold when the percentage of the index is below a certain percentage value of 25%. Using this method concentrates on capital preservation & it's perfect for those that "feel twitchy" or "nervous" when deciding to have a punt.

Skate.


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## Skate (1 November 2022)

*Trading & Gambling*
It's only fitting that I post something about the differences between "Trading & Gambling" on Melbourne Cup Day. Nontraders, those who don't trade will muddle the words using "gambling" to express their feelings when it comes to trading. In @ducati916's article today he supplied a hyperlink to this week’s *Lund Loop Podcast *that goes on to explain in a light entertaining way the nuances between the two.

*The podcast is worthy of a listen*
If you want to skip the light-hearted introduction you can pick up the "nitty gritty" from the 10:20 minute mark, but I would suggest you listen to the whole podcast. I wholeheartedly recommend this podcast as Brian Lund has been an active trader for over 35 years, using mostly technical analysis.









						Ep. 29: Managing Your Trading Bankroll
					

Listen now | A look at the "stop and sweep" method for cash management.




					www.thelundloop.com
				




Skate.


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## Skate (1 November 2022)

*Logical Thinking*
We often hear something & quickly dismiss it as we believe it has no value. In this lecture-style Youtube presentation, John Cleese claims that creativity is not a special talent. People are either in an ‘open’ or ‘closed’ state of mind.

*A "closed mind" versus an "open mind"*
A closed mind enables people to apply themselves to tasks with vigour & concentration whereas having an open mind is more relaxed & conducive to creative thinking. Creative thinking is how we stay ahead of the markets. 

Skate.


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## qldfrog (1 November 2022)

If i understand well, Mr @ducati916 mentioned doing trend following but only in up trending sectors.
I agree indeed, sadly the asx and the data i use, are not very supportive, the sector definition being limited.
One of my current strategy qfsec (for sector) tries to implement this, not a great result so far and backtest so so, but this is a strategy which allows me to invest earlier than other general index exit/invest stops.
It was initially designed using wrong misleading data and has been twisted after a review for proper data.
But it might be worthwhile redeveloping that concept from scratch, with proper data.
The idea of being sector dependent is that there are more likelihood of finding niche trending sectors even in general market down or going nowhere, and so keep being invested more often 
Hope it helps


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## Skate (2 November 2022)

*Systematic trading helps you handle the pain of decision making*
Trading systematically removes the guesswork & the decision-making process from trading. Trading systematically helps you avoid (a) closing a losing trade too soon, (b) closing a winning trade too soon & (c) it also avoids you from holding a winning trade too long. 

*Being at the mercy of your emotions*
You’ll be destined to make repeatable mistakes. At times your emotions will cause you to make the wrong decision or no decision at all, even though you should.

Skate.


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## Skate (2 November 2022)

*(a) Why do we close a losing trade too soon?*
For one simple reason, of being “fearful”. At times we all get the feeling, of “knowing” a position will keep falling only to hit our stop loss eventually. Exiting early, & cutting the losses seems to be the best course of action "at the time" because doing so will save you money & end the anguish of being fearful. But the real pain begins when after selling the position the price reverses, proceeding higher & higher, turning a losing trade into a profitable trade. Ouch, this one really hurts.

*(b) Why do we close a winning trade too soon?*
For one simple reason, to lock in profits, being fearful that you'll lose them. You mistakenly “believe” there is a chance it will reverse at any moment. There is nothing "more painful" than exiting a position only to see it continue higher, & higher. This is the precise time when your emotions quickly turn to anger.

*(c) Why do we hold a winning position too long?*
For one simple reason “greed’. Believing the price will go higher you simply want more. But here's the kicker, when the price reverses you’ll continue to hold & hold. There's nothing worse than turning a profitable trade into a loser, a feeling "that you can't do anything right" is one of the worst feelings you can possibly have. Holding a loss & hoping for a rebound is a trait we all seem to have.

Skate.


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## Skate (2 November 2022)

*You can't control what happens in the market*
But you can control everything else. What to buy & when to exit. You even get to control your initial position size, & any information you desire to drive your system/strategy/portfolio.

*“Cut your losses short, & let your profits run" *
The commonly repeated mantra for trend traders is attributed to David Ricardo from the early 19th century. This maxim forms the very basis for why trend trading is very profitable. It simply means if a position is losing money, exit. But when a position is making money, let it run. The problem, we aren't wired this way. Human nature is the driving force behind our "compulsion to act" as in the 3 examples I mentioned above.

Skate.


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## Skate (2 November 2022)

*Why didn't I think of that*
“Buy low & sell high” like anything that might seem obvious, no one ever tells you how to go about doing it as it's much harder than it sounds. It's like telling someone the best way to lose weight is to eat less & exercise more. Thanks, I didn't think of that.

*A trading plan*
Having a plan means you have a trading methodology, & a solid foundation for trading. A sound foundation gives your confidence. Confidence knowing if you do everything right, you’ll never lose more money than you can afford or an amount you are comfortable losing. A trading plan also helps to develop some perspective about what you’re doing & what trading is all about.

Skate.


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## Skate (2 November 2022)

*The timeless words of Buddha when it comes to trading*
"Inflamed by greed, incensed by hate, confused by delusion" 

*1. Greed *
Is an insatiable longing for more & more. Greed is a damaging emotion, especially in trading volatile markets. During these times traders need to control their urges or instincts. When left unmanaged, greed can expose you to high-risk situations.

*2. Hatred *
The symptoms of hatred can show up as anger. Trading when angry never ends well. Once the feeling of anger raises its ugly head, trading skillfully goes out the window.

*3. Delusion *
Basically, delusion separates good traders from all the rest. When you haven't got a grip on reality, you don't have a clear-cut path to positivity. Those who display delusional tendencies would do well to remember that "trading performance is a measurement of doing all the little things well". 

Skate.


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## Skate (2 November 2022)

*Two reasons why we make so many mistakes in trading*
(1) By allowing our emotions to get out of control (being unchecked) is the reason we tend to make so many mistakes. (2) The other reason is trying to elude the pain of losing. At some stage, we all have the urge to sell positions that have increased in value, while keeping positions that have dropped in value.

*I'll leave that last words to Daniel Kahneman*
Daniel Kahneman once stated that “losses generate more emotional feelings which affect individual than the effects of an equivalent amount of gains”.

Skate.


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## Gringotts Bank (2 November 2022)

Skate said:


> *The timeless words of Buddha when it comes to trading*
> "Inflamed by greed, incensed by hate, confused by delusion"
> 
> *1. Greed *
> ...



I agree, emotions are the fundamental driver in the creation and destruction of wealth.  I think the real function of a tested system is to give us confidence, then we use that confidence to power the actual trading.  Seems very backwards way to do it though.  Why not develop confidence without a system?

[edited+++]


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## rcw1 (2 November 2022)

Skate said:


> *The timeless words of Buddha when it comes to trading*
> "Inflamed by greed, incensed by hate, confused by delusion"
> 
> *1. Greed *
> ...



Good afternoon
Intoxication can be a worry too ...  

Kind regards
rcw1


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## Gringotts Bank (3 November 2022)

Gringotts Bank said:


> I agree, emotions are the fundamental driver in the creation and destruction of wealth.  I think the real function of a tested system is to give us confidence, then we use that confidence to power the actual trading.  Seems very backwards way to do it though.  Why not develop confidence without a system?
> 
> [edited+++]



What are you thinking on a psychologically-based approach to trading, @qldfrog? To me it seems an obvious truth, but I know the majority of traders are not on board.


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## qldfrog (3 November 2022)

Gringotts Bank said:


> What are you thinking on a psychologically-based approach to trading, @qldfrog? To me it seems an obvious truth, but I know the majority of traders are not on board.



I believe this is THE key but i am so not in line with the majority that i can not even understand the thinking of the majority.
Contrarian by nature is my definition, and my first reaction to anything is Why?
Got me in trouble with CC, Covid scam, Ukraine analysis,etc,workplace and education and obviously trading
This is costing me dearly with RE and discretionary trading.
The way it would work IMHO is trading as a result of mathematical analysis of media headlines, SM chats: analysis to determine the psyche/mood of both retail investors and the mood of the key fund managers etc playing with others money.
Put the lot in a tumbler and shake (AI) and Bob is your uncle.
I do not have the ability to do that so stick to price action/volume as a late sign,and use this in syatems


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## Gringotts Bank (3 November 2022)

qldfrog said:


> I believe this is THE key but i am so not in line with the majority that i can not even understand the thinking of the majority.
> Contrarian by nature is my definition, and my first reaction to anything is Why?
> Got me in trouble with CC, Covid scam, Ukraine analysis,etc,workplace and education and obviously trading
> This is costing me dearly with RE and discretionary trading.
> ...



I don't think such a system would need to be complex.  Under Musk, the new Twitter will offer paid subscribers a lot of powerful analytical tools.  Not available yet, but that would be one option.  Contrarianism makes perfect sense because the vast majority of traders lose (90% of them).  If they're losing consistently, why would anyone follow the crowd?  There is a time to follow the crowd, and that's when it's stampeding in a certain direction (trend following).  Since 2020, the markets have stampeded, both up and down.  They behave completely differently to pre-2020.

When I mentioned psychology, I had something different in mind altogether.  If you give 100k to 100 different people, and tell them to pick one stock that they will hold for 12 months, the results won't be a random distribution.  I think it can be predicted ahead of time what sort of person will win/lose.


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## Skate (3 November 2022)

Gringotts Bank said:


> What are you thinking on a psychologically-based approach to trading






qldfrog said:


> The way it would work IMHO is trading as a result of mathematical analysis






Gringotts Bank said:


> There is a time to follow the crowd, and that's when it's stampeding in a certain direction (trend following). *Since 2020, the markets have stampeded, both up and down. They behave completely differently to pre-2020.*




*I'm surprised*
That there has not been more interest in a topic that makes money trading & good money at that. With the lack of input, "I'll have my say & make a few comments in the affirmative of "why" systematic Trend Trading works & works well.

*I'll demonstrate that Systematic Trend Trading actually works*
The first half of this year killed the spirits of most trend traders. Even "The Chartist" results posted on Twitter have been less than impressive, showing how hard it was to "eke out a profit" during this period.

*The HYBRID Strategy*
Anyone that has followed this thread for a while would realise that "The HYBRID Strategy" is one of the mature strategies that I have traded since 2015. I have posted extensively about this strategy, meaning it's not a splash-in-the-pan strategy, but rather a proven profitable strategy

*The first half of 2022*
The All Ordinaries, over this period, has been a shocker, but with the correct strategy, it didn't have to be all that bad. I want to throw up a chart for the (XAO) for a visual representation of how tough it has been trading this index. I'm also going to post a backtest of "The HYBRID Strategy" from the 1st of January 2022 to the 30th of June 2022.

*Looking at the chart below confirms it was a tough "first half" to this year*
From the 1st of January to the 30th of June 2022, it's been a slippy slope as the "red line" indicates.





*"The HYBRID Strategy" Backtest Result*
The backtest result for this strategy has not been too shabby. The backtest period is from the 1st of January 2022 to the 30th of June 2022.



*Then in the next few posts *
I want to explain why systematic Trend Trading works.

Skate.


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## Skate (3 November 2022)

*Combining my two favourite talking points *
(1) Trend Following & 
(2) System Trading  

*Systematic Trend Trading forms a path to financial freedom if you can pull it off*
In essence, all trading is trend trading. A trend-following system is a relatively straightforward approach to system trading that can be readily developed & managed with little effort or time.

*Entries during trends are a no-brainer*
Trading has been tough this calendar year (2022) but there were glimpses that traders were able to capitalise on as shown in my previous post. Even trading a robust strategy offers little protection when the markets are unfavourable. Frankly, any trading system will perform well when the markets are being kind. When conditions are unfavourable, strategies “worth their salt” will simply step aside, waiting for the next rise. Trading has been tough this year but there were some good results for some. 

Skate.


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## Skate (3 November 2022)

*Trend Trading isn’t easy*
Trend following might look easy in backtests, but it’s far from easy to trade this style of system "flawlessly" without behavioural mistakes. The main advantage of trend trading is its simplicity of jumping on & off trends. Trading this way doesn’t require a lot of time or work either.

*"When the market isn't cooperating," *
You guessed it, nothing works well. Trading a quality system allows you the freedom from second-guessing the strategy & that's worth your weight in gold. In the end, it comes down to the confidence you have in your work, allowing you to have the correct mindset, so your decision-making process will be unaffected.

Skate.


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## Skate (3 November 2022)

*Trend following always looks easy*
That’s because the principles are very simple. The secret to success is staying “focused”. Trend Trading creates its own unique set of "problems", problems that don't need to be solved but rather to be accepted.

*Profitability *
Comes from "selling the losers quickly" & knowing "when to sell the winners" is the secret to trading profitably no matter the style or system you elect to trade.

Skate.


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## Skate (3 November 2022)

*Trading is such an uncertain endeavour*
Having "sound risk management", & "money management", with correct "position sizing" will be for naught if you don’t have the discipline to stay focused by "consistently" executing your trading plan.

*Sometimes trading doesn't work*
With "Trend Trading", you need to be able to accept that some trades just "don't work" & that's why you need to stay "focused & disciplined". There's no sugarcoating the fact, that at times "Shit_happens" so when it does, suck it up.

Skate.


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## Skate (3 November 2022)

*Before someone asks*
I have posted additional information for those who want to drill down further on the statistics. The time period has been cherry-picked (Jan 2022 to June 2022) as the markets were in free fall during this period. The issue that most trend traders experienced was jumping on false hope only to have their hearts broken when they held during the pullback.  





*Completed Trades*
These are the twenty trades from the 1st of January 2022 to the 30th of June 2022. Below I have posted the chart for (CXO) the position marked by the yellow box. 





*Chart for the first trade in the trades list (CXO)*
Of the three trades, the last trade is the one under review. The previous two trades were also winners. Trend trading is all about jumping on trends & riding them. Also, the execution on the buy & sell side was "sharp" resulting in all the trades being profitable. 




*I rest my case*
Systematic trend trading works & works well (for me), taking a small bite out of a confirmed trends is the name of the game. 

*The old adage *
"Little fish are sweet".

Skate.


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## DaveTrade (3 November 2022)

Skate said:


> "Little fish are sweet"



@Skate I can see from your chart that your jumping onto the first sign of expansion but not hanging around for the inevitable contraction that follows.


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## Skate (3 November 2022)

*Nostalgia (a post from the 28th of January 2019) *
@divs4ever just "like" one of my my posts going back to 2019 in the (BVS) thread. It's a perfect example of how riding a selected trend makes money. I remarked at the time (BVS) had been good to me in the past, but it's totally out of favour at the moment.

*The ROC indicator (yellow ribbon) *
The yellow ribbon at the bottom is screaming to be cautious, remarking that nobody is loving this stock at the moment. At the time I was posting charts for an alternative perspective.

*The yellow searchlight *
Highlights the exit bar & the reason why the position "had to be exited". If you look at my charts long enough, there is no need for an explanation, as the chart graphics do all the talking.

*Backtesting metrics*
Even my backtests gives additional metrics, "metrics that are important" to me.

*Out & back in*
Notice my 'stale stop' kicked me out of the first trade, only to get back in on the next bar.

*Selling is the best tool we have*
If you follow your signals religiously you'll never be afraid to sell "because" you can always buy it back again. (small commission charge) that isn't a big deal.

*This is the link to the post I'm referring to*





__





						BVS - Bravura Solutions
					

Bravura Solutions provides software products and services to clients operating in the wealth management and funds administration industries, with the majority of clients in Australia, New Zealand and the United Kingdom. Bravura's software products and services support the front-office...




					www.aussiestockforums.com
				




*Here is the chart for (BSV)*




Skate.


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## Captain_Chaza (3 November 2022)

I think these figures only work when there is a Buyer or a Seller at THAT POINT of TIME that you are referring to

What do  you  think  of a  "Forward Testing"  for say the next 3 months exercise

Do you think it could work?

I would be prepared to help witness a few  transactions in my real time
Maybe others could witness other time zones in their real times?

At least we will then be exposed to the Naked Truth IMHO

*" Does Back Testing Work" in the future?*


PS ;  I understand that your strategy is BORING and that there may be nothing  to  do  "At The Moment"
But there may also be a Bottom forthcoming?

Salute and Gods' speed


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## Skate (3 November 2022)

Captain_Chaza said:


> What do you think of a "Forward Testing" for say the next 3 months exercise



@Captain_Chaza *that's called paper trading *
Paper trading is a prerequisite before trading any system live. The minimum time to paper trade a new strategy in my view normally starts at 6 months & goes up from there. The reason to paper a strategy is to evaluate how the strategy performs on new (Out Of Sample) data. This is conducted to make sure there is no curve fitting of the strategy. Comparing the two, (1) the backtest results trading on "historical data" (in-sample data) versus (2) paper trading the strategy on (OOS) data. Taking the time & "not rushing this step" ensures the strategy will perform when under the pressure of live trading. 

*Amibroker beacktesting is informative*
But paper trading the actual “Exploration Analysis” signals is more reflective of the strategy's worth. The Exploration Analysis spews out the ASX code to buy, the number of shares to buy at an offer price to trade in the pre-auction. This is the genuine test.

*Paper Trading*
Paper trading allows you to evaluate the strategy's true performance over a 6 month period or longer trying to capture the different moods of the market. Doing it this way & the actual results would be more reflective of the strategy's true performance.

*The "Dump it here" thread is to inform, educate & stimulate*
As you have been a member since 2007 you should be aware that what you are suggesting has been done to death over the last 4 years. A simple search will uncover not only simulated Backtests but actual live trades in real-time. All the information had been posted well in advance with buy confirmations (something we are restricted from doing these days). It should also be noted, there were other members who traded alongside me.

Skate.


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## Skate (4 November 2022)

*Some wives can be bitches at times*
Being "frisky" this morning, all I said was that her "bum" was starting to look like an "old washing machine".

*Then she said to me:*
"I'm not starting up the old washing machine for such a small load, you'll have to do it by hand"

Skate.


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## eskys (4 November 2022)

Congratulations to Mrs Skate, well done,


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## ducati916 (5 November 2022)

Skate said:


> *Luck*
> To a great degree, our success or failure in the market is a function of our luck. We like to think that our results are a direct consequence of our insight and efforts, but the reality is that luck plays a big part in how we do.
> 
> *Punching Bag*
> ...




From one of your earlier posts, a variable not often discussed.

Luck is/are the tail events in a Gaussian distribution. They are often, the source of tremendous profits or losses (@Captain_Chaza  gaps etc). There are 'systems' built/designed to profit from 'luck'. Taleb's ex-business partner, Mark Spitznagel runs that particular Hedge Fund (truly a hedge fund).

Therefore we have the type of system advocated by @Skate, which is a long, trend following system, with a highly defined exit or profit taking system as against a 'luck' based system.

As I tend to follow this thread and through the years 'mechanical systems' (TechTrader) I have noticed the shift in time frames of the exit parametres. TT was a system that sought to capture long trends. @Skate systems seem to catch very short trends within established trends.

This is interesting (to me) as I would characterise this as 'swing trading'. Swing trading is a short term trade with a highly defined profit target.

The question that should be being asked on this thread, I don't actually see (quite possible that I missed it in 350 pages) is: how do you calculate/define/probability/whatever an 'accurate' profit target?

Mr Skate has already provided the answer, albeit in his usual oblique manner. It is there however. Now of course there are any number of ways to do this, Mr Skate's is simply one way to do so.

Some charts that may be helpful:
	

		
			
		

		
	







The duc loves luck.

jog on
duc


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## Skate (5 November 2022)

rcw1 said:


> look please at Newcrest, as it is doing thy head in.




*The message was directed to *@DrBourse
We all have differing opinions & I wish to throw up a chart that tells "me" a story as I know the Doctor is currently kicking back "cruising".

*The Ducati Blue Bar Weekly Chart*
1. The "Yellow" ribbon means the position is unloved
2. The "Aqua" bars mean the position is trending up
3. The "Red" bars mean the position is trending down
4. Even though NCM is in an uptrend the position is currently unloved
5. The red & aqua ribbon reflects the bar colours to denote uptrends & down trends





*Summary*
1. When a position is unloved there is not enough buying pressure to push the price higher.
2. Also, the dividend yield for NCM is "piss-poor", that's if you are investing for dividends.

Skate.


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## rcw1 (5 November 2022)

Skate said:


> *Trend following always looks easy*
> That’s because the principles are very simple. The secret to success is staying “focused”. Trend Trading creates its own unique set of "problems", problems that don't need to be solved but rather to be accepted.
> 
> *Profitability *
> ...



Good morning Skate,

Nice comments, true that.  

As time progressed and rcw1 got older and wiser ... knowing when to sell became easier, because selling to early no longer raised rcw1's heartbeat.  Difficult thing to measure.  How much profit you make over and above waiting for more profit from the sale of one stock, when the earlier lesser profit sale was used to leapfrog into other stocks and subsequently make incrementally more profit.... even before the initial stock had time to vastly increase in share price.  

Very interesting really.


Kind regards
rcw1


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## rcw1 (5 November 2022)

Skate said:


> *The message was directed to *@DrBourse
> We all have differing opinions & I wish to throw up a chart that tells "me" a story as I know the Doctor is currently kicking back "cruising".
> 
> *The Ducati Blue Bar Weekly Chart*
> ...



Nice work, thanks for that Skate.

Kind regards
rcw1


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## Gringotts Bank (5 November 2022)

ZIgzag is a beautiful indicator, underused imo.  Of course lookahead bias must always be considered, but that can be negotiated easily enough.

I have one coded for TV which highlights zigs that are particularly sharp in angle.  Whoever is in charge of the price (bulls or bears) will tend to move the price more sharply (higher angle) in their favoured direction.  Yellow is a sharp bullish angle, red the opposite.  Similar to the "speed of tape" style of indicator.

If you think about it from the insto pov, it makes sense.  When liquidity appears, you want to *grab* it quickly then return the price to roughly where it was so that no one notices.  These can be seen as sharp angled moves.


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## Skate (6 November 2022)

Gringotts Bank said:


> ZIgzag is a beautiful indicator, underused imo. *Of course lookahead bias must always be considered*, but that can be negotiated easily enough.






DaveDaGr8 said:


> *Whenever someone mentions Zig Zag and building a trading system around it, i get a cup of coffee because i know it's going to be messy.*






Skate said:


> *Summary*
> Do not trade using the ZigZag indicator.




*The ZiGZag Indicator*
Straight off the bat, I should say the ZigZag function is useful during the strategy development phase as it graphically presents the main trend with great clarity.

*The ZigZag function *
Should never be used in trading or backtesting as the signals keep repainting when more data is received. The repainting is due to the dynamic nature of this function, therefore, the backtest results can be highly misleading. 

*Beginners trap*
It's important to remember when backtesting a strategy great care should be taken to exclude any revisable parameters ensuring the backtest results are valid & accurate.

*One advantage of the ZigZag indicator *
It can be used to graphically reveal the profit potential as a guide to how accurate your signal is in relationship to the pivot points.

*Pure Gold*


Lone Wolf said:


> Every time I try to communicate with others I’m reminded of why I don’t do it often.




Skate.


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## Skate (6 November 2022)

DaveTrade said:


> @Skate I can see from your chart that your jumping onto the first sign of expansion but not hanging around for the inevitable contraction that follows.




*The main advantage of "System Trading" *
System trading is all about timing, & doing the right thing at the right time. The way to achieve this is by allowing traders the freedom to create their own rules & methods for (a) identifying, (b) buying, & (c) selling positions for maximum profit.

*Traders can derive useful metrics to formulate trading rules*
Traders use robust metrics to establish the rules to identify positions, & determining entry & exit conditions are extremely useful for identifying trending stocks that also help in predicting the reversal of a trend

Skate.


----------



## Gringotts Bank (6 November 2022)

Skate said:


> *The ZiGZag Indicator*
> Straight off the bat, I should say the ZigZag function is useful during the strategy development phase as it graphically presents the main trend with great clarity.
> 
> *The ZigZag function *
> ...




   With a standard zz, I use a period of say 0.0001.  The low period means it's just the same as ROC(C,1).  If 5min is too choppy, just go up one or more timeframes.  The advantage over ROC(C,1) is that it's easier to compare peaks and troughs for pattern ID, but always SetTradeDelay to (1,1,0,0) if you want to buy troughs and sell peaks.  Backtesting is no problem this way.

Or use a custom zig zag that does not re-paint like  https://www.tradingview.com/script/gY4ilk5N-Momentum-based-ZigZag-incl-QQE-NON-REPAINTING/

Easy way to assess if there's problems is to use 'bar replay' or AB's code check.


----------



## Skate (6 November 2022)

Gringotts Bank said:


> Or use a custom zig zag that does not re-paint.




@Gringotts Bank there is no ZigZag indicator that does not repaint due to the dynamic nature of this function. If you use this indicator whilst backtesting the results will be highly misleading & trading will be heartbreaking.

*Validating Trends by Spyros Raftopoulos*
Spyros Raftopoulos wrote a great article for the "Stocks & Commodity" magazine some years back where he described the problem of the dynamic last leg. In the "S&C" article he presented his version of the ZigZag indicator as a  "ZigZag Validity Indicator", which he believes can be used to validate the last leg.

*This "Stocks & Commodity" article introduces the "zigzag trend indicator"*
Spyros believes his "zigzag trend indicator" handles the dynamic nature of the zigzag indicator more efficiently, something that I have not been able to replicate. Spyros believes his "zigzag trend approach" solves the validity problem of the dynamic last leg by incorporating zigzag into a clearly tradable indicator. This may be so, but I can't agree with him "at this stage" because in all of my research I can't validate this & "it's not for the want of trying".

*The Zigzag Trend Indicator is a powerful noise filter*
I can somewhat agree with this but it's not without its problems. Simply his technique incorporates the power of zigzag into a more valid indicator but IMHO it's still not tradable. The popularity & usefulness of the zigzag indicator never seems to die. I'm with @DaveDaGr8 on this one where he grabs a cup of coffee, I grab the popcorn because we both know it's going to be messy.

Skate.


----------



## Gringotts Bank (6 November 2022)

Skate said:


> @Gringotts Bank there is no ZigZag indicator that does not repaint due to the dynamic nature of this function. If you use this indicator whilst backtesting the results will be highly misleading & trading will be heartbreaking.
> 
> *Validating Trends by Spyros Raftopoulos*
> Spyros Raftopoulos wrote a great article for the "Stocks & Commodity" magazine some years back where he described the problem of the dynamic last leg. In the "S&C" article he presented his version of the ZigZag indicator as a  "ZigZag Validity Indicator", which he believes can be used to validate the last leg.
> ...



Did you read my post?  I explained how it can be used safely with backtesting.


----------



## Skate (6 November 2022)

Gringotts Bank said:


> Did you read my post?  I explained how it can be used safely with backtesting.




Yes, I did. 

*Opinions will differ*
If you are happy using your method, kudos to you. All I'm saying is I don't agree & gave you a valid reason why. I also have great respect for Spyros Raftopoulos but from my extensive research I have found no value in his "ZigZag Validity Indicator". I went on to say "not to use his indicator" as a trading system where he indicates that you can. 

Skate.


----------



## Skate (6 November 2022)

*"ZigZag Validity Indicator" *
Using additional indicators to confirm signals have merit but Spyros Raftopoulos's "ZigZag Validity Indicator" to "me" has limited value. As "system trading" is rules-based additional indicators can be used to identify trends, & confirm trends, to determine the timing of the entry, exit, & profit target points is a better use of your time. It is essential for every trader to be aware of the limitations of each indicator before using them in trading.

*Trend confirming indicators*
Although some indicators help identify a possible trade, it is likely to provide some false signals. That's why traders should use multiple indicators to confirm trends, & filter signals, thus reducing errors. Traders should also use stop loss & profit targets when trading. Doing so determines the risk-reward ratio before taking a trade which means there is a better chance of being profitable. Combining multiple trading systems is another of my favourites as it helps to reduce risk by building more robustness into the strategy.

Skate.


----------



## Gringotts Bank (6 November 2022)

Skate said:


> Yes, I did.
> 
> *Opinions will differ*
> If you are happy using your method, kudos to you. All I'm saying is I don't agree & gave you a valid reason why. I also have great respect for Spyros Raftopoulos but from my extensive research I have found no value in his "ZigZag Validity Indicator". I went on to say "not to use his indicator" as a trading system where he indicates that you can.
> ...



It's not about opinions though.  In most cases, zz will look ahead.  It's a simple matter of reducing the period, then using a tradedelay.

Takes 2 secs to test.  Tell me if there's a problem.  Note that AB code check will say it references future data, but there's no problem.  You're simply buying 1 bar after a trough, and seeling 1 bar after a peak.



> PositionSize = 10000;
> pr = .00001;
> zzHiLo = Zig( c, pr );
> pk = zzHiLo>Ref(zzHiLo,-1) AND zzHiLo>Ref(zzHiLo,1);
> ...


----------



## DaveTrade (6 November 2022)

*Trading Trends*
When trading trends it's not good enough to just establish if there is a trend or not. It's important to identify where you are in the trend and what is the strength of the trend. Also it's important to know the context of the trend.


----------



## Skate (6 November 2022)

DaveTrade said:


> *Trading Trends*
> When trading trends it's not good enough to just establish if there is a trend or not. It's important to identify where you are in the trend and what is the strength of the trend. Also it's important to know the context of the trend.




@DaveTrade, you are starting to sound like me.

Skate.


----------



## DaveTrade (6 November 2022)

Skate said:


> @DaveTrade, you are starting to sound like me.



I thought I'd jump up onto the soapbox, nudge you to move over, grab your megaphone and rev up the crowd myself.


----------



## Skate (6 November 2022)

Gringotts Bank said:


> It's not about opinions though.  In most cases, zz will look ahead.  It's a simple matter of reducing the period, then using a tradedelay.
> 
> Takes 2 secs to test.  Tell me if there's a problem.




It's okay.

*There is a multitude of other topics I would rather canvas*
There are topics that interest me more. 

Skate.


----------



## Skate (6 November 2022)

DaveTrade said:


> I thought I'd jump up onto the soapbox, nudge you to move over, grab your megaphone and rev up the crowd myself.




*Now you want to use my soapbox as well*
Unfortunately @DaveTrade there is no crowd. I have a multitude of ideas for future posts as I don't like to rehash or canvass something I have posted extensively previously. 

*I prefer to canvas new ideas or post about what interests others *
I think it's a forgotten point, but when someone posts they are posting stuff they already know. That's why it's important for others to have their say. @Gringotts Bank prosecuted his case of how he takes advantage of the ZigZag function very well & I've given the other side to the discussion. No matter how much we banter it will not change our stance on the matter. Playing tennis with someone in this matter is not only tiresome but a waste of both our time & effort.

Skate.


----------



## Skate (6 November 2022)

*I would prefer to post about topics of interest*
I have a list of ideas that would make good reading but I firmly believe the enthusiasm has fizzled out. Simply the content matter in this thread is not what others want to read or participate in.

*Off the top of my head*
1. Behavioral mistakes when trading & what they are
2. Post about what Is an acceptable maximum drawdown
3. Why is the max drawdown metric so important In trading
4. How does combining multiple buy conditions in a strategy filter out false signals 
5. Why does "Portfolio Construction" leads to more profitability 
6. What Is The Holy Grail In Trading? 
7. Why is the Sharpe Ratio a handy metric & what is it?
8. Why "Trading Strategies" don't work
9. How to know when trading strategy stops performing before it's too late
10. Which time frame is best for trading? 
11. What is the best profitable method to trade - is it Day trading, Swing Trading, or Trend Trading
12. How reading books don't make you a smart trader
13. How do we go about being a smart trader
14. How to deal with trading biases  
15. How do we overcome trading biases?
*
Summary*
These are some ideas, but are they really worth canvassing?

Skate.


----------



## ducati916 (6 November 2022)

Skate said:


> *I would prefer to post about topics of interest*
> I have a list of ideas that would make good reading but I firmly believe the enthusiasm has fizzled out. Simply the content matter in this thread is not what others want to read or participate in.
> 
> *Off the top of my head*
> ...




For sure.

Highlighted are the topics I would take the other side on.

On any number of the others, I may or may not agree. We'll just have to wait and see.

jog on
duc


----------



## DaveTrade (6 November 2022)

Skate said:


> I firmly believe the enthusiasm has fizzled out



@Skate I think that the current market conditions have got something to do with this. People see traders struggling in these conditions and maybe start to think that it's all too hard for them to master. This can be a time to learn what needs to learnt in order to be ready for the next bull run.

One important thing for all traders is to know when it's safe for them to go into the water, do they have the skill to handle a big hard breaking surf or should they stick to calmer conditions until they are ready for the hard stuff.


----------



## Captain_Chaza (6 November 2022)

DaveTrade said:


> @Skate I think that the current market conditions have got something to do with this. People see traders struggling in these conditions and maybe start to think that it's all too hard for them to master. This can be a time to learn what needs to learnt in order to be ready for the next bull run.
> 
> One important thing for all traders is to know when it's safe for them to go into the water, do they have the skill to handle a big hard breaking surf or should they stick to calmer conditions until they are ready for the hard stuff.



This Smells like "CAPITULATION" to me
This is when everybody who was ever going to Sell has Sold and the ownership of shares have been transferred from the Weak Holders to the Strong Holders

The Trick as I have learnt the Hard way and am Still Learning to this very day is that This Sport is all about SEAMANSHIP with all its Disciplines and Ship Design
  EG : How many Sails would you present to the wind  at Dawn tomorrow
X, Y or Z  or NONE?
 This was my Very First Ship Design  (DIVERSIFIED)
1 Industrial
1 Diverse Miner
1 Bank

Unfortunately I found this Diversified Ship  Design Unsatisfactory


----------



## Skate (6 November 2022)

*Interesting quote by* @JohnDe 




Skate.


----------



## Skate (6 November 2022)

*Listen to the YouTube*
It will be the funniest 3 minutes you will ever hear & I can guarantee - you will never forget Mark from Greenacre. I always cheer for the underdog but not, in this case. I'm hoping Mark didn't win the Harley. 

*How smart do you have to be to be a profitable trader?*
Brains are an overrated attribute when it comes to trading but you do need a certain level of grey matter to play this game.



Skate.


----------



## Skate (6 November 2022)

*Brains*
Brains are overrated mainly because smart people tend to think logically & have a hard time dealing with a market that ignores what should be painfully obvious. The market is full of emotional participants making illogical decisions most of the time. Also, from personal experience, if you are too analytical, you will be surprised often. Using logic to figure out what the market might do on any given day is a waste of time.

*Irrational & moody*
One of the key advantages we have is knowing that the stock market is irrational, moody, & prone to doing unexpected things. We recognize that we can take steps to profit when the mood is unusually good or run and hide when things become dark and gloomy. As @DaveTrade alluded to, like most other worthwhile things in life, if it were extremely easy to learn & do well, it wouldn’t be so potentially lucrative.

Skate.


----------



## Skate (6 November 2022)

*Mediocre when it comes to trading*
Being mediocre sometimes has its place, even the best traders have plenty of lousy picks along the way, but it is the manner in which you handle those positions that ultimately determines your level of success.

*The market is fascinating*
One of the reasons that the market is so fascinating is that it combines elements of psychology, business, mathematics, & numerous other disciplines. I don't know of any other profession that is so lucrative with little or no effort. The only negative I see is that you need a decent bankroll to start with.

*Like they say*
If you want to have a million dollars at the end of the trading year, start with two million dollars.

Skate.


----------



## DaveTrade (6 November 2022)

Skate said:


> Brains are overrated mainly because smart people tend to think logically & have a hard time dealing with a market that ignores what should be painfully obvious.



Well @Skate I think that you at least have to have enough smarts to spell AC DC when someone tells you how to spell it before asking you.


----------



## Skate (6 November 2022)

*Respect others & their way of thinking*
6+3=9
But so does 5+4

*Healthy exchange*
Given a certain point of view, others (including @ducati916) will take a position that they don't necessarily agree with for the sake of debate or to "explore" the thought further, which is healthy. There is always a range of views & just as many different ways of thinking about them.

Skate.


----------



## Captain_Chaza (6 November 2022)

Skate said:


> *Respect others & their way of thinking*
> 6+3=9
> But so does 5+4
> 
> ...



I assume you are only throwing 2 dice?


----------



## DaveTrade (6 November 2022)

@Skate has put out an open invitation to join him up on stage and I've taken him up on it today;

*What is most important*
When learning to trade is it most important to learn how to trade or when to trade? Even the simplest of trading techniques, a moving average crossover, can be very profitable if it's used at the right time. Most traders when learning spend most or all of their time focused on trading techniques but reading the market movement as a whole, the big picture, is just as important; and what I'm saying here is, it is more important if you want to make money from the markets sooner rather than later in your learning journey.


----------



## Gringotts Bank (6 November 2022)

Skate said:


> *Now you want to use my soapbox as well*
> Unfortunately @DaveTrade there is no crowd. I have a multitude of ideas for future posts as I don't like to rehash or canvass something I have posted extensively previously.
> 
> *I prefer to canvas new ideas or post about what interests others *
> ...



"Playing tennis with someone in this matter is not only tiresome but a waste of both our time & effort".

I didn't find it tiresome or a waste of effort at all.  All I said is that you can use zigzag in backtesting if you have certain settings.  Then gave some code to prove it.   I didn't even raise the topic; all I did was respond.  It's not a big deal.


----------



## Skate (7 November 2022)

Gringotts Bank said:


> All I said is that you can use zigzag in backtesting if you have certain settings. Then gave some code to prove it.






Skate said:


> *The ZigZag function *
> Should never be used in "trading or backtesting" as the signals keep repainting when more data is received. The repainting is due to the "dynamic nature of this function", therefore, *the backtest results can be highly misleading*.




*The experiment*
After swapping the buy & sell conditions of the "HYBRID Strategy" using @Gringotts Bank code snippet I backtested both strategies for a side-by-side comparison. The backtest period is this calendar year from the 1st of January 2022 to the 7th of November 2022. It's important to remember when backtesting a strategy great care should be taken to exclude any "revisable parameters" ensuring the backtest results are valid & accurate.




*When it's too good to be true*
It usually is. 

Skate.


----------



## qldfrog (7 November 2022)

Skate said:


> *The experiment*
> After swapping the buy & sell conditions of the "HYBRID Strategy" using @Gringotts Bank code snippet I backtested both strategies for a side-by-side comparison. The backtest period is this calendar year from the 1st of January 2022 to the 7th of November 2022. It's important to remember when backtesting a strategy great care should be taken to exclude any "revisable parameters" ensuring the backtest results are valid & accurate.
> 
> View attachment 148916
> ...



For clarity,
I did work with a supposedly not repainting zigzag a while back, somehow, the real world did not match the backtest.to this day, i am not aware where the looking forward was as the code was supposedly fool proof..i even wonder if it was not hidden in some casual MA or simiar use.
I gave up so just beware.
But i was also using shitty data as i discovered later so a lot of that "experience"during that period is down the drain
Actually tempted to give it a go again ..and see if i can find the flaw.even paper run after...


----------



## Gringotts Bank (7 November 2022)

Skate said:


> *The experiment*
> After swapping the buy & sell conditions of the "HYBRID Strategy" using @Gringotts Bank code snippet I backtested both strategies for a side-by-side comparison. The backtest period is this calendar year from the 1st of January 2022 to the 7th of November 2022. It's important to remember when backtesting a strategy great care should be taken to exclude any "revisable parameters" ensuring the backtest results are valid & accurate.
> 
> View attachment 148916
> ...



That's just wrong.  I don't know what else to say.

Others can test it.  It takes literally 2 seconds.  

Here's FMG.  I'm testing my code *as posted*, and I'm not substituting snippets from some other code to confuse things.


----------



## Skate (7 November 2022)

qldfrog said:


> Actually tempted to give it a go again ..and see if i can find the flaw.even paper run after...




@qldfrog please do not waste your time. 



Gringotts Bank said:


> That's just wrong. I don't know what else to say.
> 
> Others can test it. It takes literally 2 seconds.




@Gringotts Bank disputes my findings of substituting his base ZigZag code as the buy & sell criteria of my "HYBRID Strategy". 

@qldfrog it will only take you seconds, would you be kind enough to run a simulated backtest using GB's buy & sell conditions of his non-repainting ZZ code? 

*GB's simplified code*
This is the code I used to run the backtest from the 1st of January to the 7th of November 2022

    _SECTION_BEGIN( "NonPainting" );

    pr = .00001;
    zzHiLo = Zig( c, pr );
    pk = zzHiLo > Ref( zzHiLo, -1 ) AND zzHiLo > Ref( zzHiLo, 1 );
    tr = zzHiLo < Ref( zzHiLo, -1 ) AND zzHiLo < Ref( zzHiLo, 1 );
    Plot( zzHiLo, "", colorYellow, styleLine );

    Buy = tr;
    Sell = pk;

    _SECTION_END();

*Let me say it once again*
The ZigZag's indicator of its many forms has a major issue being its dynamic nature which is a real disadvantage. Furthermore, the indicator cannot be used in mechanical systems, since the backtesting of such systems should exclude any revisable parameters in order to be valid and accurate.

Skate.


----------



## Skate (7 November 2022)

*Why do trading strategies stop working?*
I won't be talking about poorly-constructed strategies because all strategies will shine at times even without having a discernable edge. 

*Why do well-constructed strategies stop working? *
There is a multitude of reasons & the reason only becomes apparent after suffering substantial losses. Curve fitting, market changes, survivorship bias, behavioral mistakes, & commissions slippage all play their part to some degree. 

Skate.


----------



## Skate (7 November 2022)

*When strategies are well constructed *
I'm saying even good strategies need to be well constructed having optimized parameters, settings & filters. Once those requirements have been completed the strategy needs to be extensive backtesting, forward testing, & paper traded over a variety of market conditions to establish its profitability. When you have a robust strategy the issue is most likely attributed to "behavioral mistakes" & or "market changes". Remember, the forces that change the markets are the emotions of the participants driven by events.

*When developing a trading strategy*
Some of the most difficult considerations that will affect profitability are when to take profits & when to cut losers. Get one or both of these conditions wrong & you are doomed to fail as a system trader. One of the most common mistakes traders make is the inability to correctly detect & define price trends, the very heart of trading.

Skate.


----------



## Gringotts Bank (7 November 2022)

Skate said:


> @qldfrog please do not waste your time.
> 
> 
> 
> ...



That is *NOT* the code I posted.  What on earth are you doing cutting out half of it?  If anyone wants to test it, test the code that *I* posted.


----------



## Skate (7 November 2022)

*What's trading all about*
As traders we buy a position in the hope sometime in the future we will be able to offload our position to someone else at a higher price than we brought it. Traders make money in the markets by exploiting changes in prices. Most traders put all their effort into buying whereas successful traders put most of their effort into selling.

*The main effect of profitability*
Is knowing when to take profits & when to cut losers. Trading is worse than a zero-sum game when commission is accounted for. Nothing works all the time when trading & you need to accept that some trading strategy at one point or another will & can stop working. By keeping accurate records of ongoing performance you'll better be prepared to spot the changes, giving you ample time to respond. When in doubt, I say, "pull out".

Skate.


----------



## Skate (7 November 2022)

Gringotts Bank said:


> That is *NOT* the code I posted.  What on earth are you doing cutting out half of it?  If anyone wants to test it, test the code that *I* posted.




#* GB' non-repaint ZigZag code*
The changes & omissions are highlighted

PositionSize = 10000; *// already in the HYBRID Strategy (position size used $10k) *
pr = .00001;
zzHiLo = Zig( c, pr );
pk = zzHiLo>Ref(zzHiLo,-1) AND zzHiLo>Ref(zzHiLo,1);
tr = zzHiLo<Ref(zzHiLo,-1) AND zzHiLo<Ref(zzHiLo,1);
SetTradeDelays(1,1,0,0);
BuyPrice=SellPrice=C; *// redundant *
Buy = tr;* // my buy condition (tr)*
Sell = pk; *// my sell condition (pk)*
Plot(zzHiLo,"",colorgreen,styleLine); *// changed to yellow for better visability*
SetChartOptions(0,chartShowArrows|chartShowDates); *//Charting below*
_N(Title = StrFormat("{{NAME}} - {{INTERVAL}} {{DATE}} Open %g, Hi %g, Lo %g, Close %g (%.1f%%) \n{{VALUES}}", O, H, L, C, SelectedValue( ROC( C, 1 ) ) ));
SetChartBkColor(ParamColor("Background Color",ColorRGB(0,0,0)));
SetBarFillColor(IIf(C>O,ParamColor("Candle UP Color", ColorRGB(33,69,129)),IIf(C<=O,ParamColor("Candle Down Color", colorbrown),colorLightGrey)));
Plot(C,"",IIf(C>O,ParamColor("Wick UP Color", ColorRGB(128,128,192)),IIf(C<=O,ParamColor("Wick Down Color", colorbluegrey),colorLightGrey)),64,0,0,0,0);

*# Skate's condensed code*
Other than Plotting it's basically the same code

_SECTION_BEGIN( "NonPainting" );

pr = .00001;
zzHiLo = Zig( c, pr );
pk = zzHiLo > Ref( zzHiLo, -1 ) AND zzHiLo > Ref( zzHiLo, 1 );
tr = zzHiLo < Ref( zzHiLo, -1 ) AND zzHiLo < Ref( zzHiLo, 1 );
Plot( zzHiLo, "", colorYellow, styleLine );

Buy = tr;
Sell = pk;

_SECTION_END();

*Non-painting ZZ code Code *
@Gringotts Bank there is no discernable difference between your code & my simplified code.

*NB*
As you (GB) didn't specify a periodicity I backtested your Non-painting ZigZag code using "weekly parameters"

Skate.


----------



## Gringotts Bank (7 November 2022)

Skate said:


> #* GB' non-repaint ZigZag code*
> The changes & omissions are highlighted
> 
> PositionSize = 10000; *// already in the HYBRID Strategy (position size used $10k) *
> ...



You conveniently cut out the trade delay.  Try again, and be honest this time.  The period of testing (D/W/M) makes no difference.


----------



## Skate (7 November 2022)

Gringotts Bank said:


> You conveniently cut out the trade delay.




No, I didn't.

*How about you post a backtest*
For the period from the 1st of January 2022 to the 7th of November 2022.
10-position $100k portfolio. (using your ZZ code) to evaluate your results during that period.

Skate.


----------



## Gringotts Bank (7 November 2022)

Skate said:


> No, I didn't.
> 
> *How about you post a backtest*
> For the period from the 1st of January 2022 to the 7th of November 2022.
> ...



I wasn't expecting this.  Is it really that hard to admit you're wrong about something?  I feel like I'm talking to a politician!

It's there in black and white:

*SetTradeDelays(1,1,0,0);*

You removed it in an effort to prove me wrong.  Why would you do that?  How can you say you didn't remove it when you did?

This whole thing about zigzag in backtesting is such a non-issue.  Everyone knows that in most cases zz can be problematic.  All I ever said was that if you make the period of the zigzag very small, it essentially becomes identical to ROC(close,1).  If you then combine it with a 1 day trade delay, you can safely buy the following day's close.  You mitigate the lookahead bias with the delay.


----------



## Skate (7 November 2022)

Gringotts Bank said:


> I didn't even raise the topic




Yes, you did.



Gringotts Bank said:


> ZIgzag is a beautiful indicator, underused imo.




@Gringotts Bank you raise the issue of the ZigZag Indicator & as I've canvassed this indicator many times before it was not an indicator that I wanted to play tennis with, you or anyone else.



Gringotts Bank said:


> *You removed it in an effort to prove me wrong*. Why would you do that? How can you say you didn't remove it when you did?






Skate said:


> *No, I didn't.*




No, the trade delay is embedded in my strategy, meaning it wasn't removed, I had previously said that. I didn't set out to prove you wrong but to explain why this indicator is useless in backtesting & trading.



Gringotts Bank said:


> *Takes 2 secs to test. Tell me if there's a problem. *Note that AB code check will say it references future data, but there's no problem. You're simply buying 1 bar after a trough, and seeling 1 bar after a peak.




You asked if I would test your code. I did, & I reported my findings.

*Let me say it once again*
The ZigZag's indicator of its many forms has a major issue being its dynamic nature which is a real disadvantage. Furthermore, the indicator cannot be used in mechanical systems, since the backtesting of such systems should exclude any revisable parameters in order to be valid and accurate.




Gringotts Bank said:


> The advantage over ROC(C,1) is that it's easier to compare peaks and troughs for pattern ID, but always SetTradeDelay to (1,1,0,0) if you want to buy troughs and sell peaks. *Backtesting is no problem this way.*




*I have an alternative view *
I maintain "backtesting is a problem". I've said the ZigZag indicator in any form cannot be used in mechanical systems, since the backtesting of such systems should exclude any revisable parameters in order to be valid and accurate.



Skate said:


> *How about you post a backtest*
> For the period from the 1st of January 2022 to the 7th of November 2022.
> 10-position $100k portfolio. (using your ZZ code) to evaluate your results during that period.




*Finally*
Are you going to do a backtest & post it for me, as you said, "*Backtesting your way is no problem"* If not, this concludes this exchange. If you find use in this indicator & you can trade it with an edge, kudos to you. Whereas the ZigZag indicator has "limited" value to me. In a previous post, I explained how to take advantage of this indicator, there are benefits but none that you have described to me.

Skate.


----------



## Gringotts Bank (7 November 2022)

Skate said:


> Yes, you did.
> 
> 
> 
> ...



I'm disappointed.  I thought you knew what you were doing.  Anyone with the most basic understanding of coding can see that *you made an error and are afraid to admit to it.*  Either that, or you're just being blatantly dishonest.  My code, as posted, is the most simple thing to test.  Instead you've decided to twist my words, change the code that I posted into something else entirely, and post an irrelevant wall of words to defend yourself.


----------



## Skate (7 November 2022)

Gringotts Bank said:


> I'm disappointed.  I thought you knew what you were doing.  Anyone with the most basic understanding of coding can see that you made an error and are afraid to admit to it.  It's the most simple thing to test, and you're hiding behind words, words, words.




Okay, this concludes our exchange.

Skate.


----------



## DaveTrade (7 November 2022)

@Gringotts Bank maybe it would be a good idea to test it in order to prove it to yourself, I understand that for some things it's hard to believe someone else's results and we just have to prove it for ourselves. @Skate did say that the delay line of code was included in his existing software, but I can see how you may have thought it wasn't because @Skate only clarified this point after his test.


----------



## Gringotts Bank (7 November 2022)

DaveTrade said:


> @Gringotts Bank maybe it would be a good idea to test it in order to prove it to yourself, I understand that for some things it's hard to believe someone else's results and we just have to prove it for ourselves. @Skate did say that the delay line of code was included in his existing software, but I can see how you may have thought it wasn't because @Skate only clarified this point after his test.



What do you mean "prove it to myself"?  I don't just make random claims without testing them!  I've done it, and so I know it's legitimate.

What good does a backtest achieve?  That doesn't constitute evidence of *any* kind.  It's completely unrelated to my point.  Skate asked for a backtest as a 'strawman' that he knew he could burn (oooh, see?  It's not profitable!).  He knew I was right, and he knew that if I fell for the strawman, it would give him ammunition.  Anything to admit being wrong.  I know a politician when I see one.

Rather than just accept what I say (or what Skate says), test it yourself.  For all the people that claim to use AB and code up systems, there's a remarkable lack of input from others on this topic.  Makes me wonder who's fake.


----------



## Captain_Chaza (7 November 2022)

*Did Any One  of Your  Tests  do anything TODAY! ??????*
 This answer is Critical IMO?

eg; Did you buy  BHP, today?

Did you Buy Anything else today?

Did you do Anything Today?

What I am asking is that 
"Did your back-testing system do anything today"

Well, IMHO
Doing NOTHING in REAL Time is Doing NOTHING! In Real Time

Sorry to say this BUT it is TRUE!

 Back-testing is all about  what you did YESTERDAY !!!!! and all the Yesterdays beforehand
But 
*What does your Today's data say  for the  NOW?
Or 
Do we have to wait 3 months to find out what your Data said about "This day's Readings and ACTION?"

*


----------



## Skate (7 November 2022)

Captain_Chaza said:


> *Did Any One of Your Tests do anything TODAY! ??????*
> This answer is Critical IMO?




*Not me*
I'm sitting on my hands at the moment as the "buy filter" is OFF. As a system trader, it is all about probabilities & not trading knee-jerk reacting to what happened in the last US trading session. The major advantage of system trading is that all patterns (signals) can be coded in “precise terms” removing the human intervention & all forms of judgment calls that can result in poor decisions.

*It's all explained in the charts*
My buy conditions incorporate a "Percentage Filter" meaning, I only buy when the "Percentage of advancing positions in the watchlist exceeds 50%" & sell when the percentage of advancing positions in the watchlist is under 25%. It's crude & dirty but highly effective & profitable.







Captain_Chaza said:


> I won the 1st Prize in October (Tipping Competition)




*Winner, winner, chicken dinner*
Hey, @Captain_Chaza by winning the tipping competition in October, no one has the right to tell you how to suck eggs. There are so many ways to trade but when you boil it down, we are all trying to do the same thing & that is to make money trading. How we go about it, is up to the individual.

Skate.


----------



## Skate (7 November 2022)

*Trading is simple & uncomplicated*
Don't let anyone tell you it's not. It's not rocket science to buy & sell part of a company. The difficult part is finding (a) what to buy (b) when to buy it & most of all (c) when to sell it.

*We all seek a profitable way to trade*
The journey starts by researching a trading method that has been proven to work in the past. Once the idea turns into a process all that is left is to verify that the system will work today as it has in the past.

Skate.


----------



## Skate (7 November 2022)

*When do I buy a position?*
When a series of "buy conditions" are met & the index & percenter filters are both on. Instead of using a "simple moving average" (SMA) to determine when a buy signal is generated, I use the "Percentage of the index Filter" in conjunction with an "Index Filter" before a buy signal can be generated. Meaning, both signals need to be "on" as a way to be more selective with buy signals. The indicator uses the 50% ratio of advancing stocks compared to the number of declining stocks to generate the buy signal.

*When do I sell a position?*
When the exit strategy is activated. The sell signal is generated when this ratio falls below 25%. This is an additional "exit condition" annexed to the "Stale Stop" exit strategy. This "Percentage Filter" parameter forms part of the "Stale Stop" exit strategy that ensures the open position is sold when the percentage of the index is below a certain percentage value of 25%. Using this method concentrates on capital preservation & it's perfect for those that "feel twitchy" or "nervous" when deciding to have a punt.

Skate.


----------



## ducati916 (8 November 2022)

Skate said:


> *1. Brains*
> Brains are overrated mainly because smart people tend to think logically & have a hard time dealing with a market that ignores what should be painfully obvious. The market is full of emotional participants making illogical decisions most of the time. Also, from personal experience, if you are too analytical, you will be surprised often. Using logic to figure out what the market might do on any given day is a waste of time.
> 
> *2. Irrational & moody*
> ...





An analogy:

1. You want to build out of lego a sign that says 'profitable system'.

You the individual are an empty box.
Into this box, from reading, studying, YouTube, talking, observing, whatever-it-takes, you fill your box with lego.

From that, you can build your sign.

2. So Benjamin Graham had a quote: 'In the short term the market is a voting machine, in the long term a weighing machine.'

So once you have studied the market, you will accept the above statement as being broadly true. Being broadly true, is an excellent starting point for assembling your lego. When the (a) short term is at odds with the (b) long term, there is opportunity.

Of course the trick is to be able to identify when (a) exists in truth compared to (b). Not as easy as it looks.

Why?

Because of many reasons:

(a) macro factors (completely independent);
(b) micro factors (usually under control);
(c) psychological factors;
(d) structural factors (see micro factors).

There are likely many more and these categories can be further broken down into many smaller sub-categories.

Most probably know what the first 3 refer to. Structural factors are how the big players that control the markets (as much as you can control a market) play the game: the Investment Banks (politically connected) the big Hedge Funds (also politically connected) and the Internationals via SWFs (also politically connected). We'll call these chaps the 'Masters of the Universe. This stuff is usually buried deep in legalese if written down at all. These chaps heavily manipulate the micro factors.

The importance, if you even consider it important, is that when you think that (c) is operative, ie. people have lost their ******* minds, they may well not have: they are simply playing a different game on a field that you are not even aware that exists. A good example of this currently is physical gold/silver as against paper gold/silver.

Your strategy, should tick as many of the 4 boxes as possible. If they tick them all, you will be profitable. 

Many of the bigger market participants (in capital terms), we'll refer to them as 'Brawn' follow strategies that are successful in certain market environments. Their brawn however is not linked to brains and they can blow-up spectacularly when the MotU lose control of the markets due to macro factors.

Brains can beat brawn. You simply have to play a different game. You can beat the MotU (although it usually pays to piggyback them) when, as currently, they lose control of the markets due to fighting the macro factors.

jog on
duc


----------



## qldfrog (8 November 2022)

@Skate @Gringottsbank Will try to BT GB code but busy making an offer on a property,  and workshops all day on a socially busy week as well
Could take me weeks but will try


----------



## rcw1 (8 November 2022)

qldfrog said:


> * but busy making an offer on a property*



Good fortune.

Kind regards
rcw1


----------



## qldfrog (8 November 2022)

rcw1 said:


> Good fortune.
> 
> Kind regards
> rcw1



Hum we will see but thanks.it is a long saga ahead


----------



## rcw1 (8 November 2022)

Hi Skate, hoping find you well.  Absolutely beautiful evening in the north... glorious night

Kind regards
rcw1


----------



## rcw1 (8 November 2022)

The moon coming up from the horizon


----------



## Skate (8 November 2022)

rcw1 said:


> The moon coming up from the horizon
> 
> View attachment 148953



Yep, there is going to be a blood moon tonight.

Skate.


----------



## Skate (8 November 2022)

@rcw1 here is a bit of silo art that should tickle your fancy.




Skate.


----------



## rcw1 (8 November 2022)

Skate said:


> @rcw1 here is a bit of silo art that should tickle your fancy.
> 
> View attachment 148954
> 
> ...



ahhhhhhhhhhh gotta be the greatest Australian Thoroughbred; made more coin than care to image on that one mate, 100%  
It didn't know how to lose that one.  Bookies cringe everytime Winx is mentioned ha ha ha ha ha ha ha


----------



## Sir Burr (9 November 2022)

qldfrog said:


> @Skate @Gringottsbank Will try to BT GB code but busy making an offer on a property,  and workshops all day on a socially busy week as well
> Could take me weeks but will try




Looking forward to your thoughts Frog as someone who sold a system using this type of indicator (modified from the known future leak of the AB zigzag indicator) was removed from purchase. Although saying that, I've no idea if it was removed because of zigzag directly or some other reason.


----------



## qldfrog (9 November 2022)

Sir Burr said:


> Looking forward to your thoughts Frog as someone who sold a system using this type of indicator (modified from the known future leak of the AB zigzag indicator) was removed from purchase. Although saying that, I've no idea if it was removed because of zigzag directly or some other reason.



When i personally tried using a zz indicator based system of my ownyears ago, i was well aware of the looking forward issue and so worked on it and was expected to have solved it..but my short trial was a failure, after 3 runs aka 3 weeks, some signals diseappear new ones popped up in the past month..you give some room for human error .maybe i mistyped or was confused but issue kept repeating
 that was a while back but even if not obvious or detected by ab check , there was still a future leak 
I will give GB code a fair go as i am obviously interested 
 I have not been able to spend dev time for weeks as far too busy it will be done but be patient please
Cheers


----------



## Nick Radge (9 November 2022)

> Looking forward to your thoughts Frog as someone who sold a system using this type of indicator (modified from the known future leak of the AB zigzag indicator) was removed from purchase. Although saying that, I've no idea if it was removed because of zigzag directly or some other reason.




Glad to see you're still rabbiting on about it...what's it been? 10+ years?

FYI, my code does not have a future leak. All strategies from Unholy Grails were removed from the site several years ago, mainly for liquidity reasons. Below is an updated equity chart of the 20% Flipper.

And as a goodwill gesture, here is how you code the ZZ (20% Flipper) without a future leak

//-------------
function flipper_func(trail)
{
    trailArray[ 0 ] = C[ 0 ];
    for( i = 1; i < BarCount; i++ )
    {
        prev = (round(100*(trailArray[ i - 1 ])))/100;

        if (C[ i ] > prev AND C[ i - 1 ] > prev)            
        {
            trailArray[ i ] = Max(prev,0.8*H[ i ]);
        }

        else if (C[ i ] < prev AND C[ i - 1 ] < prev)    
        {
            trailArray[ i ] = Min(prev,1.2*L[ i ]);
        }

        else if (C[ i ] == prev AND C[ i - 1] < prev)    
        {
            trailArray[ i ] = 0.8*H_;
        }

        else if (C[ i ] == prev AND C[ i - 1 ] > prev)    
        {
            trailArray[ i ] = 1.2*L[ i ];
        }

        else if (C[ i ] < prev AND C[ i] > 1.2*L [ i ])    
        {
            trailArray[ i ] = 0.8*H;
        }

        else if (C[ i ] > prev AND C[ i] < 0.8*H [ i ])    
        {
            trailArray[ i ] = 1.2*L;
        }

        else if (C[ i ] < prev AND C[ i - 1 ] > prev)    
        {
            trailArray[ i ] = 1.2*L[ i ];
        }

        else if (C[ i ] > prev)                                
        {
            trailArray[ i ] = 0.8*H[ i ];
        }

        else if (C[ i ] < prev)                                
        {
            trailArray[ i ] = 1.2*L[ i ];
        }

        else
        {
            trailArray[ i ] = 1.2*L[ i ];                    
        }
    }
    return trailArray;
}

trail = 1;
trailArray = flipper_func(trail);_


----------



## Skate (9 November 2022)

Nick Radge said:


> Below is an updated equity chart of the 20% Flipper




@Nick Radge, thanks for supplying the updated equity chart for the 20% Flipper.

*The Weekend Trend Trader *
The (WTT) Turnkey Strategy backtest results I've posted below have not been optimized or "Radge Tweaks" applied. The backtest results are based on the original book settings.

*My question is *
Would you be kind enough to update the backtest results for the 2022 calendar year (up until today) for those interested in your "Turnkey Strategy"




Skate.


----------



## Sir Burr (9 November 2022)

Nick Radge said:


> Glad to see you're still rabbiting on about it...what's it been? 10+ years?




Must be close to it!

Remembered it was fixed with the above and think code by Gringotts Bank using zig() has a leak but interested if Frog finds it too 

Cheers.


----------



## Skate (9 November 2022)

Sir Burr said:


> Gringotts Bank using zig() has a leak




It certainly does.

Skate.


----------



## Skate (9 November 2022)

*FYI*

I've just asked Nick to update his WTT backtest for this calendar year. 

I for one would be interested in his reply.

Skate.


----------



## Gringotts Bank (9 November 2022)

Nick Radge said:


> Glad to see you're still rabbiting on about it...what's it been? 10+ years?
> 
> FYI, my code does not have a future leak. All strategies from Unholy Grails were removed from the site several years ago, mainly for liquidity reasons. Below is an updated equity chart of the 20% Flipper.
> 
> ...



Well isn't that interesting, a ZZ code with no future leak.  Skate spent 10 posts arguing that it was impossible, too good to be true, danger!/beware!  And yet it can be used, as I said.

Test mine if you would.


----------



## Skate (9 November 2022)

Gringotts Bank said:


> Well isn't that interesting, a ZZ code with no future leak. Skate spent 10 posts arguing that it was impossible, too good to be true, danger!/beware! And yet it can be used, as I said.




I guess we will agree to disagree on this point.

Skate.


----------



## investtrader (9 November 2022)

I remember now why I gave up on these forums years ago...back to real life


----------



## Sir Burr (9 November 2022)

investtrader said:


> I remember now why I gave up on these forums years ago...back to real life




Haha pretty much real life but face to face makes things so much easier.
Just takes a bit more time


----------



## Skate (9 November 2022)

investtrader said:


> I remember now why I gave up on these forums years ago...back to real life




Many people don't post because they don't feel like they have anything to contribute. 

Skate.


----------



## Skate (9 November 2022)

*Pure Gold*
This sums it up in one sentence.



Lone Wolf said:


> *Sigh. Every time I try to communicate with others I’m reminded of why I don’t do it often.*




Skate.


----------



## DaveDaGr8 (10 November 2022)

This system has no future leaks AND i have tradeDelays implicitly set !!!!
AND i didn't use that nasty ZIGZAG indicator, which automatically brings up future leaks regardless of settings.




The optimum period for this system is 1 day.

NOTE: This system has 2 serious issues.
1 - 7% Drawdown.
2 - 22.13% losing trades.

*For a mere bitcoin, I'll send you an optimised system where i eliminate BOTH of those 2 MAJOR flaws.*


----------



## DaveDaGr8 (10 November 2022)

Ok .... i cheated, but so does ZIGZAG. 

Amibroker, MetaStock and others have it in their core set of indicators to use (and abuse). I'm only talking about these ones, not other implementations.

*ZIGZAG Locates the exact pivot points* by either looking ahead or looking back, but also changes previous pivots based on new data. Always has and always will and It's probably the only indicator that does this. It's used in many systems like wave counting and it does it's job perfectly. 

Both AB and MS have strong caveats about using it.

https://www.metastock.com/customer/resources/taaz/?p=127
http://www.amibroker.com/guide/afl/zig.html


----------



## Skate (10 November 2022)

DaveDaGr8 said:


> *ZIGZAG Locates the exact pivot points* by either looking ahead or looking back, but also changes previous pivots based on new data. Always has and always will and It's probably the only indicator that does this. It's used in many systems like wave counting and it does it's job perfectly.




@DaveDaGr8, I hope they listen to you



Skate said:


> *The ZiGZag Indicator*
> Straight off the bat, I should say the ZigZag function is useful during the strategy development phase as it graphically presents the main trend with great clarity. The ZigZag function should never be used in trading or backtesting as the signals keep repainting when more data is received. The repainting is due to the dynamic nature of this function, therefore, the backtest results can be highly misleading. It's important to remember when backtesting a strategy great care should be taken to exclude any revisable parameters ensuring the backtest results are valid & accurate.




*The dynamic nature of the ZZ indicator means you will get unrealistic results when backtesting*
Amibroker's knowledge base makes a solid statement about using the Zig-Zag in trading systems. Using functions (Peak/Trough, PeakBars, Troughbars), inherently look into the future, as such they should not be used in trading system formulas.

Skate.


----------



## Nick Radge (10 November 2022)

I'm happy to post some examples of it working perfectly well.

*ANZ*
Buy Signal 9/6/202

and

Buy Signal 23/10/2020


Happy to be challenged on examples of the code I offered that show a future leak?


----------



## Gringotts Bank (10 November 2022)

DaveDaGr8 said:


> Ok .... i cheated, but so does ZIGZAG.
> 
> Amibroker, MetaStock and others have it in their core set of indicators to use (and abuse). I'm only talking about these ones, not other implementations.
> 
> ...



You should test *my* code, rather than quote what some website says.  Enter the argument fairly and honestly.  So far, I am the only one who has done that.


----------



## Skate (10 November 2022)

*Don't use the Amibroker ZigZag function for backtesting or trading*
It's important to remember when backtesting a strategy great care should be taken to exclude any use of revisable parameters in your strategy ensuring the backtest results are valid & accurate. I've been consistent in my messaging that "revisable parameters" inherently look into the future, & as such, should not be used

*Anything is possible*
But the desired results may not be.
















Skate.


----------



## Skate (10 November 2022)

*I couldn't have expressed it any better (From the Metastock site)*
"The Zig Zag indicator filters out changes in an underlying plot (e.g., a security's price or another indicator) that are less than a specified amount. The Zig Zag indicator only shows significant changes. The Zig Zag indicator is used primarily to help you see changes by punctuating the most significant reversals.

*The last leg*
"It is very important to understand that the last "leg" displayed in a Zig Zag chart can change based on changes in the underlying plot (e.g., prices). This is the only indicator in this book where a change in the security's price can change a previous value of the indicator. Since the Zig Zag indicator can adjust its values based on subsequent changes in the underlying plot, it has "perfect hindsight" into what prices have done. Please don't try to create a trading system based on the Zig Zag indicator" 

*In a nutshell*
"Its hindsight is much better than its foresight!"

Skate.


----------



## Gringotts Bank (10 November 2022)

I'm starting to wonder if anyone on this forum is legit when they can't run a backtest and bar replay.

Or perhaps it's just that people don't read properly.  The period is very low, p = 0.0001, and there's a 1 day delay.

Or maybe it's that some people can't admit being wrong.

Or maybe it's just a team sport.  Skate is my online buddy, so I will agree with everything he says, and not bother to check anything myself.

Is there anyone here who has run the backtest using my code?  If not, how can you argue that zz can't be used safely in a backest?  Just because some website says "don't use it!" doesn't mean that's the final word.  *DYOR* and stop believing what others say.


----------



## Skate (10 November 2022)

Gringotts Bank said:


> Skate is my online buddy, so I will agree with everything he says,




*Expressing our views respectfully*
When alternative views are expressed they shouldn't include ridiculing others as it serves no purpose, it's like masturbating in public, it may feel good to you, but it looks disgusting to everyone else and it just makes the other person work harder to find ways to disagree with you. 

*Whether your view is right or wrong isn't important*
What's more important, this thread gives you the ability to express your views without being ridiculed or challenged. If you disagree with someone rather than argue the merits of their points, post an alternative view, you don't have to belittle members to get your point across. Play "the point" not "the person" 

*We are all wordsmiths to some degree*
It's easy to incite an emotional, knee-jerk response, creating an emotional outburst that could undermine the friendly atmosphere we have taken so long to build.

Skate.


----------



## Gringotts Bank (10 November 2022)

Skate said:


> *Expressing our views respectfully*
> When alternative views are expressed they shouldn't include ridiculing others as it serves no purpose, it's like masturbating in public, it may feel good to you, but it looks disgusting to everyone else and it just makes the other person work harder to find ways to disagree with you.
> 
> *Whether your view is right or wrong isn't important*
> ...



You started this whole thing by rubbishing a useful indicator I posted for general interest.  Scroll back and you'll see what I posted was quite harmless.  You started hacking into it.  ok, you're allowed to do that, but you need to make sure you're correct.  Otherwise I'll defend my point of view.

You know what's disrespectful is thinking I wouldn't notice when you deliberately changed my code.  You tried to pull the wool over my eyes.  You must think I'm an idiot.  I respect people who are honest and fair.

_"What's more important, this thread gives you the ability to express your views without being ridiculed or challenged"._

If the idea of ASF is just to have friendly banter, then maybe I'm in the wrong place.  No one can be challenged??  Why did you challenge my harmless post then?


----------



## Skate (10 November 2022)

Gringotts Bank said:


> You started this whole thing by rubbishing a useful indicator I posted for general interest.




@Gringotts Bank you started this dialogue



Gringotts Bank said:


> ZIgzag is a beautiful indicator, underused imo. Of course lookahead bias must always be considered, but that can be negotiated easily enough.




I could have avoided playing tennis by "agreeing with you" but "that would mean we'd both be wrong"

*From my research *
I warned others about the dangers of using the ZigZag indicator when backtesting & trading. I've gone to great lengths to explain why in detail. I also explained the "usefulness" of this indicator & when it should be used.



Gringotts Bank said:


> You started hacking into it. ok, you're allowed to do that, but you need to make sure you're correct. Otherwise I'll defend my point of view.




*I've expressed my opinion of the ZigZag indicator & so have you*
Readers will decide which they accept. If you read my last post it's not about defending your view it has more to do with posting an alternative view.



Gringotts Bank said:


> You must think I'm an idiot. I respect people who are honest and fair.




*No, far from it*
@Gringotts Bank you have my deepest respect.



Skate said:


> As I've said numerous times before, reading only my views on trading can be unhealthy at times, that's why I appreciate when others make a contribution. *An alternative point of view is always welcome, but being a "smart-arse" & making provocative comments, isn't.*




*Not everyone agrees with me*
I've made 4,172 posts & in that time I've copped some harsh criticism even harsher criticism in private messages but never have I been disrespectful to anyone. Every post I make is made with the sole purpose of helping someone else. Also, it should be noted, I've never called anyone a "fucknuckle" even when I've been tempted.

Skate.


----------



## DaveTrade (10 November 2022)

@Skate and @Gringotts Bank, can you guys just kiss and make up.


----------



## MovingAverage (10 November 2022)

Wow...this thread just keeps getting better.


----------



## Willzy (10 November 2022)

Hi all, I have a question someone may be able to help me with (completely off the current topic) 

I am trying to trade low volume / turnover stocks in the US with a very basic mean reversion strategy. The strategy uses limit orders for entries. Now in Australia with the ASX as I understand it, if a limit order is submitted to the market before the open, the openg auction will consolidate the orders and should the OPEN price be less than my limit price I would be filled at the OPEN price.

Now I seem to have foolishly assumed the same thing happens in the USA.

Here is a chart from tradestation. I submitted a limit order (via TS automation) to enter at a limit price of $145.97.

The OPEN of the candle was $143.39. 

My order was filled at my limit price of 145.97, which both TS and Norgate data both say the high of the day was $145.00

So how was I filled at a price which is outside the candle?

Have I missed something ridiculously obvious???

Cheers
Matt


----------



## Captain_Chaza (10 November 2022)

DaveTrade said:


> @Skate and @Gringotts Bank, can you guys just kiss and make up.



With great respect to all
It seems very obvious to me  here
*"We never know how much we need to learn"

"Enter the Teachers"*
As we used to say  in the olden days
*"If you can't do it?'   "Teach it!"*

Crikey! It was a very good way of Making a Living

*Probably still is Today!*


----------



## wasp (10 November 2022)

Willzy said:


> Hi all, I have a question someone may be able to help me with (completely off the current topic)
> 
> I am trying to trade low volume / turnover stocks in the US with a very basic mean reversion strategy. The strategy uses limit orders for entries. Now in Australia with the ASX as I understand it, if a limit order is submitted to the market before the open, the openg auction will consolidate the orders and should the OPEN price be less than my limit price I would be filled at the OPEN price.
> 
> ...



Depends on your broker. Unfortunately this happens sometimes on ASX too.


----------



## Captain_Chaza (10 November 2022)

wasp said:


> Depends on your broker. Unfortunately this happens sometimes on ASX too.



Lots of Charting Packages CLOSE at $4.00PM 
Not the Real CLOSE which is at 4.10 PM

I have always found that it is best to be  "Johnny on the Spot" when it comes to Real Monies at the Close ?????????


----------



## wasp (10 November 2022)

Captain_Chaza said:


> Lots of Charting Packages CLOSE at $4.00PM
> Not the Real CLOSE which is at 4.10 PM
> 
> I have always found that it is best to be  "Johnny on the Spot" when it comes to Real Monies at the Close ?????????
> ...



Post #666. Hail Satan


----------



## Captain_Chaza (10 November 2022)

wasp said:


> Post #666. Hail Satan



I have removed you from any of my future posts
Good Riddens! IMHO


----------



## qldfrog (10 November 2022)

Captain_Chaza said:


> I have removed you from any of my future posts
> Good Riddens! IMHO



A bit harsh captain, you mean some of the data..as used then in BT might not be accurate.
Do you happen to know if Northgate data package is accurate and include these aftermarket last fill?


----------



## wasp (10 November 2022)

qldfrog said:


> A bit harsh captain, you mean some of the data..as used then in BT might not be accurate.
> Do you happen to know if Northgate data package is accurate and include these aftermarket last fill?



Some brokers will execute a trade between their own clients that may be outside the day's candle as per ASX. I don't know why / how etc, but I have been told this by high frequency traders. I've been told its not common but it does happen occasionally


----------



## Nick Radge (10 November 2022)

@Willzy Just check your TradeStation is set to execute during regular hours only. I'd suggest your limit order was fillef in the pre-market.


----------



## Skate (10 November 2022)

Skate said:


> *My question is *
> Would you be kind enough to update the backtest results for the 2022 calendar year (up until today) for those interested in your WTT "Turnkey Strategy"








__





						Dump it Here
					

@Skate @Gringottsbank Will try to BT GB code but busy making an offer on a property,  and workshops all day on a socially busy week as well Could take me weeks but will try   Looking forward to your thoughts Frog as someone who sold a system using this type of indicator (modified from the known...




					www.aussiestockforums.com
				




*It's nice to have* @Nick Radge *back on the forum being active*
Nick might have missed my question so I'll refer to it again. I'm sure those who follow the WTT Strategy would be interested in how the strategy has performed since July 2022.

Skate.


----------



## Willzy (10 November 2022)

Nick Radge said:


> @Willzy Just check your TradeStation is set to execute during regular hours only. I'd suggest your limit order was fillef in the pre-market.



Many thanks Nick, I'll look into that right now, not sure where to look for that setting, I was using Daily candles on the regular session. 

The EL code I was using is
////////////////////////////////////////////////////////////////////////////
if marketposition = 0 then 
    buy numShares contracts next bar at entryLimit limit;

if marketposition = 1 then
    sell all contracts next bar at exitLimit limit;
///////////////////////////////////////////////////////////////////////////

Is what your refering to a setting or perhaps should I start operating on the intraDay bars say 5 minutes... (quite tedious but possible I guess)

The other thing I thought it might be is that the order routing is using TradeStation's proprietary "Intelligent" routing for a lower comisison perhaps I might need to specify the NASDAQ or AMEX routing...

Cheers,
Willzy


----------



## Willzy (10 November 2022)

Willzy said:


> Many thanks Nick, I'll look into that right now, not sure where to look for that setting, I was using Daily candles on the regular session.
> 
> The EL code I was using is
> ////////////////////////////////////////////////////////////////////////////
> ...



Just following up, it seems the order was filled at the OPEN 09:30:01 - I'm at loss with this, my other limit orders with TS have worked flawlessly for the last 6 months using Nick's Day Trade Strategy, but I have to enter those trades manually... maybe thats the key dont rely on their automation?


----------



## qldfrog (11 November 2022)

Trying to put a balancde view and ensuring everyone is expressing his her view here:
I did include code graciously provided by @Gringotts Bank  in a *weekly *system setup ;with the trade delay..as all my systems do:
using it in the 2022 calendar year->this is good 
There is one change vs GB, my price for buy sell are* at the open* (only implementation I can performed) and *not at close* but *i do not believe this should affect the issue*






Yeah..Dream machine
 so the real question is :*too good to be true?  is there a future looking?*


As the Zig function is used , the AB check will say yes..*so no surprise here but is the diagnostic right using GB sauce?*
We can not blindly trust AB as we are not aware of the internal and if Zig is marked internally as future, this is maybe a hasty conclusion.
Is the looking forward restricted to 1 bar ahead and then removed by the added delay
I usually include this snippet in my code to detect [visually] future looking

//future leak detection     
EnableNulling = ParamToggle( "NULLing of Data", "DISABLED|ENABLED", 0 );     
RM = Param( "NULL Bars L<-R", 0, 0, 1000, 1 );     

if( EnableNulling )     
{     
    Z = Null;      //or 0 if you want easier to read graph
    LB = LastValue( BarIndex() ); //this triggers a future looking alert     
    O = IIf( BarIndex() > ( LB - RM ), Z, O );     
    H = IIf( BarIndex() > ( LB - RM ), Z, H );     
    L = IIf( BarIndex() > ( LB - RM ), Z, L );     
    C = IIf( BarIndex() > ( LB - RM ), Z, C );     
}     
By switching this on:
 as you move back and forth along the date axis,
the area outside the displayed is zeroed and in normal circumstances, all calculations based on data in the future of the displayed area will have no knowledge of the future values.
With the parameter, you can even pushed backward the zeroed data before the end of the displayed timeline

When I create future leaks (obvious ones) in my code, it is reflected by seeing buy or sell signals disappearing as they approach the last displayed dates
I will carry on now to show the results of GB's code for RED on the asx: (RED was one of the last buy requested by the system BT)


so the week before week 9/09 I have a buy triggered (green arrow) which  is implemented on the 9/09 at 22c and I have zeroed all data past that 09/09 date
Next step:
now I wipe out the week 9/09 data values (knowledge) so that *we are now in the real world situation we were at  on the previous week* 02/09 when the buy was triggered


no signal anymore so we will not buy on the 9/09 at open 22c and lose that early entry.
=>That does not work for me so as is , it is future looking and I can not rely on BT

Remember that I buy and sell on open and not close,  on Monday morning and not Friday night at 4PM
If we could pass order then, would this work better?
What if I do my run on Friday at 3PM, I assume that I have a similar value then as at close and then "gain an extra week" [or day bar on a daily ]knowledge.
Maybe
So even if I can not implement it, I change buy and sell price to be the ones at close instead of open , and only change that
(BuyPrice=SellPrice=C, and rerun my BT
Not good.at all with 77% losers


only if I remove the trade delay do I get great results->
 so I suggest run on Friday close including the week knowledge [and with BT not a true accurate image of possible run]

I am afraid that code, at least for a weekly , while great to display historical trend inflection points does not help me in the actual RT order triggering.
Obviously, I might have made a mistake, etc but I am afraid this is no holy grail yet.
I will have to check @Nick Radge  entry to get to understand his code and see if I can learn further
Thanks GB for your code and openness .Trends are multi days so if you run a system daily and maybe miss the first bar of a trend, it is no big deal, you still get a quick signal but BT will not be very representative

Remember all this is just a reflection on my searches tonight and biased toward weekly systems, orders at open.
DYOR
I can not categorically say it is useful, I suspect it could be good for day traders or week close traders
@peter2 could maybe tell us if he considered or uses a ZZ twist  to get some indicators for trading toward the week close?
have all a great night, let's keep the conversation flowing and the posts polite and positive


----------



## DaveDaGr8 (11 November 2022)

@qldfrog

Did you use this code ?

_PositionSize = 10000;
pr = .00001;
zzHiLo = Zig( c, pr );
pk = zzHiLo>Ref(zzHiLo,-1) AND zzHiLo>Ref(zzHiLo,1);    <==== testing tomorrows Zig(close,pr)
tr = zzHiLo<Ref(zzHiLo,-1) AND zzHiLo<Ref(zzHiLo,1);      <==== testing tomorrows Zig(close,pr)
SetTradeDelays(1,1,0,0);
BuyPrice=SellPrice=C;
Buy = tr;
Sell = pk;_

I don't believe you can use the open as pk and tr are actually testing against the next days close. It's possible to trade this using the close as you could theoretically calculate the values and place orders just prior to the close.

Oh and yes i rewrote the code this morning and zig seems to automatically generate that error. Swapping it out with ROC can get rid of it.


----------



## Gringotts Bank (11 November 2022)

qldfrog said:


> Trying to put a balancde view and ensuring everyone is expressing his her view here:
> I did include code graciously provided by @Gringotts Bank  in a *weekly *system setup ;with the trade delay..as all my systems do:
> using it in the 2022 calendar year->this is good
> There is one change vs GB, my price for buy sell are* at the open* (only implementation I can performed) and *not at close* but *i do not believe this should affect the issue*
> ...



[edited]
Buyprice = Sellprice = close;

Skate removed the buy and sell price from my code, saying the were redundant (!!!), because he didn't understand what I was doing.  He also removed the trade delay.  Took my code, ruined it, then tries to tell me it's nonsense!

The code I posted is not profitable.  I never said that, and nor did I even hint at it.  I said it was safe to use zz in a backtest.  The *picture* I posted (the very first post) uses zz to identify sharp angles in the zz code, colouring the swings yellow.  This *can* be used to identify reversals.


----------



## qldfrog (11 November 2022)

Willzy said:


> Just following up, it seems the order was filled at the OPEN 09:30:01 - I'm at loss with this, my other limit orders with TS have worked flawlessly for the last 6 months using Nick's Day Trade Strategy, but I have to enter those trades manually... maybe thats the key dont rely on their automation?



Maybe your broker did an inside trade between its own customers wo reaching the exchange.you were ready to buy up to that price,one other client was ready to sell at that price done deal.. every one is happy...kind of ...and the broker saves some fees and execution time.
Obviously you lose as you only played in the dreaded dark pool.that is one explanation i can see.
On the asx, this has happened a few time with CommSec where my max limit on buy seems to often be my purchase price when trading during the session whereas on bell direct, i tend to be luckier and buy a few cents below here and there, as would be expected.
I blame that on CommSec dark pool 
Hope this helps.


----------



## DaveTrade (11 November 2022)

Gringotts Bank said:


> [edited]
> Buyprice = Sellprice = close;
> 
> Skate removed the buy and sell price from my code, saying the were redundant (!!!), because he didn't understand what I was doing.  He also removed the trade delay.  Took my code, ruined it, then tries to tell me it's nonsense!
> ...



@Gringotts Bank I'm not saying that you're wrong about your code, it seems like a lot of effort is required to prove it one or the other, but is this indicator really worth the effort. The yellow and red zones in your original post look to be a bit unreliable, I think that what you are trying to do with with indicator can be done with other more reliable and more easily tested methods. I respect the way that people on the forum are willing to put the work into this indicator to find out what is really going on with it but how deep will they have to go to uncover all that needs to be known.


----------



## DaveDaGr8 (11 November 2022)

qldfrog said:


> //future leak detection
> EnableNulling = ParamToggle( "NULLing of Data", "DISABLED|ENABLED", 0 );
> RM = Param( "NULL Bars L<-R", 0, 0, 1000, 1 );
> 
> ...




This is awesome. I was trying to do something similar yesterday morning using looping ( or double looping) and doing it via an analysis. ie, run an analysis, then turn this on and run another one to see if there are any differences.

I have code to test looping, but i think this method would test both looping errors and future leak testing. In fact, it could be worthy of breaking out the Amibroker API.  but that's a last resort.

Grrrrrr damn you Frog !!!!        My rabbit hole for the day had already been planned     Now i have to choose.


----------



## qldfrog (11 November 2022)

DaveDaGr8 said:


> This is awesome. I was trying to do something similar yesterday morning using looping ( or double looping) and doing it via an analysis. ie, run an analysis, then turn this on and run another one to see if there are any differences.
> 
> I have code to test looping, but i think this method would test both looping errors and future leak testing. In fact, it could be worthy of breaking out the Amibroker API.  but that's a last resort.
> 
> Grrrrrr damn you Frog !!!!        My rabbit hole for the day had already been planned     Now i have to choose.



Glad it helps, this is a generic and very useful  piece of code, great for visual feed back too :i am not the coderand got it somewhere so all credit to that person, sadly i forgot who it was as i have used it for so long.
I was just trying to give a fair go to GB code, and we all agree it has some advantage to use ZZ if only to compare other methods or check things past the event.
Hope it helps and let posts stay fair.


----------



## Willzy (11 November 2022)

qldfrog said:


> Maybe your broker did an inside trade between its own customers wo reaching the exchange.you were ready to buy up to that price,one other client was ready to sell at that price done deal.. every one is happy...kind of ...and the broker saves some fees and execution time.
> Obviously you lose as you only played in the dreaded dark pool.that is one explanation i can see.
> On the asx, this has happened a few time with CommSec where my max limit on buy seems to often be my purchase price when trading during the session whereas on bell direct, i tend to be luckier and buy a few cents below here and there, as would be expected.
> I blame that on CommSec dark pool
> Hope this helps.



Thanks mate, something very fishy going on here, I checked all settings and forced the broker to use the AMEX exchange instead of their "Intellingent" order route and yet its happened to me again.

This should have been a ripper trade (going from OPEN to OPEN but was a loss due to what ever is causing this.I'm not sure where to go from here, might have to bin the strategy until I find a work around.




Its a pity because the backtest looks pretty nice :-(




At the end of the day, a strategy that cant be executed is nothing more than a fantasy...


----------



## qldfrog (11 November 2022)

Willzy said:


> Thanks mate, something very fishy going on here, I checked all settings and forced the broker to use the AMEX exchange instead of their "Intellingent" order route and yet its happened to me again.
> 
> This should have been a ripper trade (going from OPEN to OPEN but was a loss due to what ever is causing this.I'm not sure where to go from here, might have to bin the strategy until I find a work around.
> 
> ...



Or change broker
?


----------



## Gringotts Bank (11 November 2022)

DaveTrade said:


> @Gringotts Bank I'm not saying that you're wrong about your code, it seems like a lot of effort is required to prove it one or the other, but is this indicator really worth the effort. The yellow and red zones in your original post look to be a bit unreliable, I think that what you are trying to do with with indicator can be done with other more reliable and more easily tested methods. I respect the way that people on the forum are willing to put the work into this indicator to find out what is really going on with it but how deep will they have to go to uncover all that needs to be known.



It's important to know, don't you think?  Anyway, it's been verified as safe to backtest, so long as it's done the way I describe.

You say: _ "I think that what you are trying to do with with indicator can be done with other more reliable and more easily tested methods"._

This is IVZ with my indicator switched *off.*  Looks unremarkable in the lead up to big announcement, wouldn't you say?  Would anyone seriously buy this?  It's a 1 min chart.




Second pic is the same chart with the indicator switched *on.*  You can't see insider trading any other way.  Maybe a cumulative delta would do it, but no ASX platform has a true delta indiactor.  So I use this. 

Yes, it's cherry picked example, but all I'm saying (and all I ever said to begin with) is that it can be quite useful.


----------



## rcw1 (11 November 2022)

Good afternoon
Interesting

The Hang Seng Index up 6.1 per cent to 17,059.44 while the Shanghai Composite Index rose 1.7 per cent to 3088.66.

The Shenzhen Composite Index on China’s second exchange was up 1.7 per cent to 2025.82 in early trade.

Earlier, Tokyo’s key Nikkei index jumped 3 per cent.

The Nikkei 225 index was up 3.1 per cent at 28,296.36, while the broader Topix index rose 2.2 per cent to 1979.58.

Have a very nice day, today.

Kind regards
rcw1


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## DaveTrade (11 November 2022)

Gringotts Bank said:


> It's important to know, don't you think?  Anyway, it's been verified as safe to backtest, so long as it's done the way I describe.
> 
> You say: _ "I think that what you are trying to do with with indicator can be done with other more reliable and more easily tested methods"._
> 
> ...



@Gringotts Bank one isolated example of something working is totally meaningless, this can be done with any indicator. For your own sake and that of any inexperienced readers please don't use examples like this.


----------



## Skate (11 November 2022)

Gringotts Bank said:


> You... are an idiot.




@Gringotts Bank emotional outbursts such as the above undermines the friendly atmosphere we have taken so long to build in this thread.

Skate.


----------



## Skate (11 November 2022)

*It's time to move on*
As @Nick Radge is now an active member of our community once again with a new product on offer it's only fitting to evaluate that offering. As I have said before disclaimers & the wording of the offer are important.

*This paragraph forms part of the offer*
It should be noted that this program is open to wholesale investors & why is the wording so important?

*Do you qualify as a wholesale investor?*
In Australia, there is a range of investment products that are only available to wholesale investors. A wholesale investor is generally a "more experienced investor" in financial products and "does not need the regulatory protections that are provided for retail investors".

*For a quick explanation *
If you are wondering what clarifies a wholesale investor & what criteria have to be met, click on the hyperlinks below to get a basic understanding of why "The Chartist" new product is only offered to the wholesale investor:





__





						Do you qualify as a wholesale investor? | RC Global Funds Management
					

The requirements to qualify as a wholesale investor to investing in wholesale financial products within Australia.




					rcglobalfm.com.au
				












						What is a wholesale investor? - Momentum Wealth
					

While some investment syndicates are offered to all investors, other syndicates are only offered to ‘wholesale investors’. So what exactly is a wholesale investor? If you’ve looked into investing in a residential property development syndicate, you might have seen the phrase, ‘available for...




					momentumwealth.com.au
				







Skate.


----------



## Gringotts Bank (11 November 2022)

DaveTrade said:


> @Gringotts Bank one isolated example of something working is totally meaningless, this can be done with any indicator. For your own sake and that of any inexperienced readers please don't use examples like this.




Nasdaq futures, NQ


1 contract.
Period: hourly.
Stop: 2%  Profit: 5%.
I've barely tweaked it.
Works with ASX 50 stocks just as well, but I can't be posting proof of every statement I make on here, ok?


----------



## Skate (11 November 2022)

*Twitter can be unkind at times*
When anyone is challenged they immediately go on the defensive. New financial products constantly appear & Twitter is a platform where new products or services can be pushed. No one likes it when your credibility is challenged or belittled, something I try to keep in check in this thread. In saying this everyone is entitled to make a comment or to ask a question. If you keep to the facts, even if it is uncomfortable for others it gives them the right to reply to correct the facts.

*It's never a good look to use "noncommittal words"*
Noncommittal words are normally used to be evasive, answering questions without clarity. Using phrases & words to not answer a question directly is, what I call, ‘noncommittal’ words, & they make a story less active. There are reasons why someone would use ‘noncommittal’ words & phrases & most of the time it's because the question became uncomfortable to answer.

Skate.


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## Skate (11 November 2022)

*Twitter*
So many questions are asked but few are answered. Some questions are statements whereas others aren't. The good thing about Twitter is that it's a platform for you to push an agender. How you respond to detractors builds a solid foundation, a perfect opportunity to respond, rather than react to uncomfortable questions or comments.

*It's disappointing when questions go unanswered* 
I get lots of questions & I make it a practice to answer each & every one. I've asked Nick twice if he would be kind enough to fill in the backtest for his WTT Strategy, not only for myself to compare & contrast but for others who read this thread. Silence is never a good look.




Skate.


----------



## Skate (11 November 2022)

Skate said:


> Silence is never a good look.




*Answering questions*
Responding in the correct manner builds relationships by being responsive. If you have read my two posts requesting the backtest of the "Turnkey WTT Strategy" be updated & you don't want to that's okay. It appears even one of your followers @Bigun_mo would like to know as well.





*The response was not what I expected*
How you respond to detractors builds a solid foundation, a perfect opportunity to respond, rather than react to uncomfortable questions or comments.




Skate.


----------



## Nick Radge (11 November 2022)

Jeez, sorry Phil, I didn't realise this was a support desk...

The staff member responsible for updating that data has been extremely busy on other projects. He'll update at month end.


----------



## Skate (11 November 2022)

Nick Radge said:


> Jeez, sorry Phil, I didn't realise this was a support desk...
> 
> The staff member responsible for updating that data has been extremely busy on other projects. He'll update at month end.




Thanks for that.

*Twitter*
I would like to take the opportunity to say thank you for keeping your "Twitter" feed up to date with your ongoing trading results for this calendar year. Displaying your results in dollar terms is sobering. A large dollar loss has led two of your followers @Bigun_mo & @HussmanBanjan to make statements about your new project from their perspective. I've previously posted @Bigun_mo comments but not @HussmanBanjan comments. I've found @HussmanBanjan comments to be more amusing.

*The hypothetical statement doesn't cut through *
Using percentages seems to put values into perspective & I respect the reason why you don't display them.




*The banter below cracked me up*
Nick was asked a question by @HussmanBanjan.

@HussmanBanjan Replying to @thechartist
Mate arent you down $1m this FY?

@thechartist Replying to @HussmanBanjan
YTD, yep

@HussmanBanjan Replying to @thechartist
I'm more than competent at losing my own money

*"The Chartist" Twitter account*
For those who want to follow "The Chartist" Twitter account: https://twitter.com/thechartist

Skate.


----------



## Skate (11 November 2022)

*Carrying large losses*
Mark Minervini is another worth following on Twitter. Today Mark explains the problem with holding big losses which I found interesting.




Skate.


----------



## Skate (11 November 2022)

*Mark Minervini*
This should have made it to the quote of the day.




Skate.


----------



## Skate (11 November 2022)

*Mark Minervini*
Million Dollar quote of the day.




Skate.


----------



## Captain_Chaza (11 November 2022)

Skate said:


> *Mark Minervini*
> Million Dollar quote of the day.
> 
> View attachment 149097
> ...



I can understand how to* Control Risk *
But
How do we control *Potential Reward?

He must be Joking!*
Does he think this is like "Horse racing?"

It is only a Loss if you haven't learnt anything this week
Lessons are so very expensive in "This Greatest Sport of Them All"


----------



## rcw1 (12 November 2022)

_rcw1 thought for the weekend:

*"It is not about adding on, but taking away. The less technique, the better you are." - *_Bruce Lee

Have a very nice day, today.

Kind regards
rcw1


----------



## Skate (13 November 2022)

rcw1 said:


> _*"It is not about adding on, but taking away. The less technique, the better you are." - *_Bruce Lee




@rcw1 *is quoting "Bruce Lee" *
There is something that can be gleaned from the remark as it can be applied to system trading. As coders, we all tend to bloat the idea of what makes a great buy condition. The one-liner is all about not adding but taking away, basically keeping the strategy simple. This has me thinking, can a strategy be coded using one indicator as a buy condition?

*Well I think I've found one in my toolbox*
The Volume-Weighted Moving Average (VWMA) is the indicator of choice, it's powerful yet simple. The Volume-Weighted Moving Average (VWMA) is very similar to a standard Moving Average but it includes volume. The neat thing about this indicator is that each price is weighted with its volume. Another thing, this indicator can be applied to any timeframe. I'll make a series of posts on the benefits of the (VWMA) indicator & highlight some disadvantages so it's balanced. In conclusion, I'll backtest the strategy to evaluate its effectiveness.

Skate.


----------



## Skate (13 November 2022)

*The volume-weighted moving average indicator *
The (VWMA) main advantage is that it helps identify solid points of entry in a trend. In a nutshell, you don't have to use the (VWMA) in conjunction with any other indicator. The (VWMA) indicator can stand on its own two feet as each price is weighted with its volume.

*In simple terms*
The volume-weighted moving average (VWMA) gives the moving average (SMA) greater importance to "volume" by weighing prices with respect to "trading activity" in a predefined period of time. Define the time period & you are halfway there.

*Here's the crunchy bit*
The value of this indicator increases when the goldilocks, length, & offset, are sharply coded. Define those two preferences & it's all over red rover. Here's the kicker, during periods of low trading activity, the values of simple moving averages (SMA) & the volume-weighted moving average (VWMA) are almost similar. Knowing this can be used to your advantage.

Skate.


----------



## Skate (13 November 2022)

Skate said:


> during periods of low trading activity, the values of simple moving averages (SMA) & the volume-weighted moving average (VWMA) are almost similar. *Knowing this can be used to your advantage.*




*The VWMA indicator (bearish trend)*
When the (VWMA) is below the (SMA) refers to a "bearish trend". Why is this so important? It's because the trend lacks the support of the volume. This lack of volume leads to the weakening of the bullish trend. 

*The VWMA indicator (bullish trend)*
Trending markets are somewhat the reverse. When the (VWMA) is above the (SMA) indicates a bullish trend, a trend we can take advantage of. The main advantage of "volume" in combination with a simple moving average (SMA) adds significant importance for trend identification. It's worth remembering not all trends have equal value.

Skate.


----------



## Skate (13 November 2022)

*Markets make a difference when it comes to profitability*
Some indicators work better in certain market types but the volume-weighted moving average (VWMA) works in all types of markets. How does it do that? The (VWMA) picks its time to punch, meaning it's very selective when entering a position. Being selective means the indicator will only take "signals in trends" that are "confirmed to be bullish". As I said in my previous post a "bullish trend" is confirmed when the (VWMA) is above the (SMA). Using the same length of both indicators is critical for this confirmation.

*Historical data *
Using historical data is crucial when it comes to understanding the different types of market phases. When backtesting a (VWMA) strategy, great care should be exercised to note when the "VWMA Strategy" perform well. This step is important during the strategy development phase because this will indicate what has worked in the past & what's the probability it will work in the future.

Skate.


----------



## ducati916 (13 November 2022)

Skate said:


> *Markets make a difference when it comes to profitability*
> Some indicators work better in certain market types but the volume-weighted moving average (VWMA) works in all types of markets. How does it do that? The (VWMA) picks its time to punch, meaning it's very selective when entering a position. Being selective means the indicator will only take "signals in trends" that are "confirmed to be bullish". As I said in my previous post a "bullish trend" is confirmed when the (VWMA) is above the (SMA). Using the same length of both indicators is critical for this confirmation.
> 
> *Historical data *
> ...




An issue:





Can sometimes runaway on you.

Just for general interest, this is the strategy that the US MMs use to fill big orders for Mutual Funds etc. It is early in a trend a pretty safe entry point as it usually means there will be big buyers alongside.

jog on
duc


----------



## Skate (13 November 2022)

ducati916 said:


> Just for general interest, this is the strategy that the US MMs use to fill big orders for Mutual Funds etc. It is early in a trend a pretty safe entry point as it usually means there will be big buyers alongside.




@ducati916 *you beat me to it. *
I was just writing about this very subject of how big players use this simple indicator. The takeaway I hope readers understand is how we can take advantage of the (VWMA) unique properties. I've managed to code the indicator to avoid positions that exhibit low volume in relation to the movement in price 

*Use the search feature*
If others want to search, @ducati916 has made a series of posts about why "volume+price" in combination reveals an important story. That is the basis of what I've written about today

Skate.


----------



## Skate (13 November 2022)

*It's easy to take advantage of (VWMA) indicator*
This indicator is simple yet powerful & as there are many ways to skin a cat, & there are plenty of "potential ways" to use the (VWMA) indicator to your advantage. It is a little-known fact that some of the biggest traders around incorporate the (VWMA) indicator in their own particular trading. 

*Using the (VWMA) indicator in isolation *
The bigger traders I'm referring to wouldn't use this indicator in isolation as I have. The brief from @rcw1, confirmed by "Bruce Lee" was to have a simple strategy with next to no moving parts. I've discussed earlier that if you can get the goldilocks parameters implemented the (VWMA) will not only be a breeze to trade but you will end up having a simple handy strategy to add to your collection.  

*Optimizing (VWMA) parameters is critical*
If you put the effort into using optimizing the parameters the odds are greatly increased allowing you to get the maximum benefit from this indicator. I'm absolutely positive with more time I could improve this strategy, but for today, time is important as I want to conclude this series of posts.

Skate.


----------



## Skate (13 November 2022)

*The (VWMA) Strategy*
I backtested the strategy from the 1st of January 2020 to cover the COVID-19 period. The results aren't too shabby. Exposure is low, & so is the drawdown. Overall this strategy has a good expectancy which is always a bonus.



*In Summary*
At face value, this would be a handy strategy. Out of curiosity, I might backtest this over a few different time frames. This calendar year has been tough, no doubt about it, even the "Turnkey WTT Strategy" has struggled with a simple 20-period breakout. I'll do a few backtest to confirm how it performs.

Skate.


----------



## Skate (13 November 2022)

*The (VWMA) Strategy*
I backtested the strategy for this calendar year from the 1st of January 2022 to the 11th of November 2022. The results are okay. Exposure is still low, but so is the drawdown. Overall this strategy has a good expectancy which is always a bonus.




Skate.


----------



## DaveDaGr8 (13 November 2022)

I finally got around to playing with the ZigZag indicator to end this matter once and for all.

I used GB's percentage of .00001.

Below is a snip of BHP. The Orange line is the Vanilla zigzag, The Green is zigzag with modified future data. In general the signals are delayed by a day when future data is modified.

I wrote the current bar to all future bars and calculated the current zig, in my code it's nullify_condition=1. The horizontal sections in the green are where zigzag is using future data and doesn't know where the turning point is, so it's horizontal and not sloping. In some cases it's up to 6 days away before the turning point is detected and always with a lag. So even with such a low percentage it can still make a significant impact.





And here is the code i used It could prove usefull to others one day.


```
//*************************************************************
// Run an optimize on nullify_condition.
//    All 4 tests should show exact same results. If they don't, then there is a leak.
//    At the end, do a quick check to see if buy, sell signals have been messed with.
//
//    NOTE = This is just a quick helper. It does NOT prove there are problems, or prove your formula is safe.
//
//
//*************************************************************


_TRACE("Starting Test ");

futureLeakTest = True;    // use this to turn off the inner loop.

nullify_condition = Optimize("Future Null",1,1,4,1);     
                        // 1 = Future quotes == Current Close
                        // 2 = Future quotes == 0 (Zero)
                        // 3 = Future quotes == NULL
                        // 4 = Future quotes == unchanged.               

Buy = Sell = 0;

pr = .00001;
zzHiLo_test = Zig( c, pr ); // create an Original array to test against.

cc = Close;    // cache the close
for( i = 0; i < BarCount-1; i++ )
{
    C = cc; // Set the C back to the original.   
    
    //==============================================================================================
    if (futureLeakTest) // Inner loop
        for( t = i+1; t < BarCount; t++ )     // Loop through all future values From tomorrow onwards
        {                                    // Note we ONLY modify future values, which shouldn't be known or used.
            switch (nullify_condition)
            {           
            case 1:
                C[t] = C[t-1];    // Make future values non changing. ie, copy the last value. Usually the most stable.           
                break;
            case 2:
                C[t] = 0;        // Sometimes we want it to be zero, although this will upset calculations. This might be what you want
                break;
            case 3:
                C[t] = NULL;    // Sometimes just NULL it.  NOTE .. NULL and 0 are different in Amibroker, however most of the time produce the same results !!!
                break;
            case 4:
                break;            // C remains unchanged ie, do nothing. Will be the same as if
            }
        }       
// Put your base arrays, or other formula for looping here to be calculated and tested for future leaks.

    zz = Zig( C, pr ); // <== Note this is a modified Close array which Modifies future data.
    zzHiLo[i] = zz[i];
}

C = cc;

// zzHiLo = Zig( c, pr ); <= Doing in the loop now to modify future data
pk = zzHiLo>Ref(zzHiLo,-1) AND zzHiLo>Ref(zzHiLo,1); //<==== testing tomorrows Zig(close,pr)
tr = zzHiLo<Ref(zzHiLo,-1) AND zzHiLo<Ref(zzHiLo,1); //<==== testing tomorrows Zig(close,pr)
SetTradeDelays(1,1,0,0);
BuyPrice=SellPrice=C;
Buy = tr;
Sell = pk;

Filter = 1;
AddColumn(C,"C",1.6,IIf(C==C,colorBlack,colorRed));
AddColumn(zzHiLo_test,"ZZ1",1.6,IIf(zzHiLo_test==C,colorBlack,colorRed));
AddColumn(zzHiLo,"ZZ2",1.6,IIf(C==zzHiLo,colorBlack,colorRed));
AddColumn(zzHiLo - zzHiLo_test,"Delta ZZ",1.6,IIf(zzHiLo_test==zzHiLo,colorBlack,colorRed));

Plot(zzHiLo,"",colorgreen,styleLine);
Plot(zzHiLo_test,"",colororange,styleLine);

_TRACE("Completed test");
```


----------



## Gringotts Bank (13 November 2022)

DaveDaGr8 said:


> I finally got around to playing with the ZigZag indicator to end this matter once and for all.
> 
> I used GB's percentage of .00001.
> 
> ...



Since you're using BHP daily, what would be a date where you'd argue it references future data and affects a backtest result?  Just so I can run bar replay and check for myself.


----------



## Skate (13 November 2022)

*To set the record straight*
Someone "Fucknuckle" has lifted the avatar from my ASF profile page & made a Twitter profile to make it "look like it's me". I can assure everyone it's not me & I don't have a Twitter account.

*Twitter*
I have just started reading Twitter recently. If I find something of "interest" I'll post it in this thread as I'm always on the lookout for new content. If a topic interests me it might interest others.

*For a start*
1. I don't have a Twitter account
2. I don't post on Twitter
3. I don't know Mo Bigun
4. I don't have any social media accounts




*I have no idea what's going on*
Twitter doesn't make much sense to me as it appears to be full of fluff with self-promotion. The content is not all that valuable IMHO but I'm sure it's an inexpensive way to sell goods & services.

*I have no association with any of these posts*
I have lifted the screenshots from Twitter to display how childish some can be. In essence, you have no control over false information being tweeted.




Skate.


----------



## DaveDaGr8 (13 November 2022)

Gringotts Bank said:


> Since you're using BHP daily, what would be a date where you'd argue it references future data and affects a backtest result?  Just so I can run bar replay and check for myself.



Any date period.

If you do an optimize, it will run all 4 backtests. Each of the first 3 tests modifies the future data, the 4th test doesn't modify the future data.

The 1st and 4th test will tend to be close because it copies the current bar to all the bars in the future. Hence the straight lines.

EDIT:
I think a bar replay will take a VERY long time with a 2 nested loops.


----------



## Gringotts Bank (13 November 2022)

Skate said:


> View attachment 149180
> 
> 
> *To set the record straight*
> ...



Your coding will take me a while to understand, if I even get to that point.  So that's a bit of a difficulty for me.

If tomorrow's close is higher than today's (by any amount), then today is a trough...and vice versa.  In what situation would this not be the case?  Like a specific date where a trough occurs on BHP and it's not possible to safely buy the following day's close.


----------



## Captain_Chaza (13 November 2022)

Do you remember I barred  "The  ------bigun "
after one post months ago
I thought *" it"* was gone forever

I am now  starting to think that "Twitter is Dead"  DYOR


----------



## Skate (13 November 2022)

Skate said:


> *To set the record straight*
> Someone "Fucknuckle" has lifted the avatar from my ASF profile page & made a Twitter profile to make it "look like it's me". I can assure everyone it's not me & I don't have a Twitter account.




*Responding to a Twitter question*
 Just to clarify, I do not intend to open a Twitter account. 

*Responding to another Twitter question*
Yes, I'm currently having a good year. Trading good strategies help in this regard. 

Skate.


----------



## rcw1 (13 November 2022)

Skate said:


> *Responding to a Twitter question*
> Just to clarify, I do not intend to open a Twitter account.
> 
> *Responding to another Twitter question*
> Yes, I'm currently having a good year. Trading good strategies help in this regard.






Skate said:


> *To set the record straight*
> Someone "Fucknuckle" has lifted the avatar from my ASF profile page & made a Twitter profile to make it "look like it's me". I can assure everyone it's not me & I don't have a Twitter account.
> Skate.



Good afternoon/evening Skate,
Twitter may not be able to afford the Royalities for your mullet going across the planet ha ha  ha ha ha ha ha 
Hate that when that happens.... ha ha ha ha  ha

Have a very nice night.


Kind regards
rcw1


----------



## DaveDaGr8 (13 November 2022)

Gringotts Bank said:


> Your coding will take me a while to understand, if I even get to that point.  So that's a bit of a difficulty for me.
> 
> If tomorrow's close is higher than today's (by any amount), then today is a trough...and vice versa.  In what situation would this not be the case?  Like a specific date where a trough occurs on BHP and it's not possible to safely buy the following day's close.




I have done all i can

This topic is closed.


----------



## Skate (14 November 2022)

*Well, someone not happy*
It appears I've offended someone who is on Twitter. Someone is making up fake Twitter accounts. What does it achieve? it doesn't make any sense?

*My ASF avatar has been lifted from my profile page*
It is a simple procedure to find out who has accessed my profile page. I'll request this information from @Joe Blow. 




Skate.


----------



## cynic (14 November 2022)

'tis a curious thing, that there exist some, oblivous to the fact, that, they have publically declared their personal ignorance, by thinking they've delivered an insult, when what they've actually delivered, is, in reality, an unintended compliment in disguise.


----------



## Nick Radge (14 November 2022)

@DaveDaGr8 Have you looked at my code yet?


----------



## Gringotts Bank (14 November 2022)

Nick Radge said:


> @DaveDaGr8 Have you looked at my code yet?



Nick, have you looked at mine?  What do you think of Dave's analysis?


----------



## Nick Radge (14 November 2022)

@Gringotts Bank 
I'll take a look now.


----------



## DaveDaGr8 (14 November 2022)

Nick Radge said:


> @DaveDaGr8 Have you looked at my code yet?




I did look at it last week, but I haven't run anything on it to actually TEST for future leaks. It's still a work in progress and i'm trying to see how to make it work the best with looping code.

The 2 main actors inside loops are


```
x = y[i+1];
```
_// Calculating data using tomorrows ( unknown ) data. This is also something you can do outside loops using ref(c,1);_


```
Buy[i-1] = 1;
```
_// Changing a previous value in an array based on todays data. Something you can really only abuse in loops.
_
However, your code isn't doing either of those 2 things. So provided you' have some sort of trade delays it looks good to me.

The only 3 errors i found were

_


		Code:
	

trailArray[ i ] = 0.8*H;   <=== I assume this is H[ i ]


But I'm guessing the forum software did that.  If you click on the 3 dots ( more options ) and wrap code up in code blocks it won't try and format it._


----------



## Nick Radge (14 November 2022)

ahhh...got it. Thanks. Here it is again.


`function flipper_func(trail)
{
    trailArray[ 0 ] = C[ 0 ];
    for( i = 1; i < BarCount; i++ )
    {
        prev = (round(100*(trailArray[ i - 1 ])))/100;

        if (C[ i ] > prev AND C[ i - 1 ] > prev)            
        {
            trailArray[ i ] = Max(prev,0.8*H[ i ]);
        }

        else if (C[ i ] < prev AND C[ i - 1 ] < prev)    
        {
            trailArray[ i ] = Min(prev,1.2*L[ i ]);
        }

        else if (C[ i ] == prev AND C[ i - 1] < prev)    
        {
            trailArray[ i ] = 0.8*H[i];
        }

        else if (C[ i ] == prev AND C[ i - 1 ] > prev)    
        {
            trailArray[ i ] = 1.2*L[ i ];
        }

        else if (C[ i ] < prev AND C[ i] > 1.2*L [ i ])    
        {
            trailArray[ i ] = 0.8*H[i];
        }

        else if (C[ i ] > prev AND C[ i] < 0.8*H [ i ])    
        {
            trailArray[ i ] = 1.2*L[i];
        }

        else if (C[ i ] < prev AND C[ i - 1 ] > prev)    
        {
            trailArray[ i ] = 1.2*L[ i ];
        }

        else if (C[ i ] > prev)                                
        {
            trailArray[ i ] = 0.8*H[ i ];
        }

        else if (C[ i ] < prev)                                
        {
            trailArray[ i ] = 1.2*L[ i ];
        }

        else
        {
            trailArray[ i ] = 1.2*L[ i ];                    
        }
    }
    return trailArray;
}

trail = 1;
trailArray = flipper_func(trail);`


----------



## Skate (14 November 2022)

Skate said:


> *It's easy to take advantage of (VWMA) indicator*
> This indicator is simple yet powerful & as there are many ways to skin a cat, & there are plenty of "potential ways" to use the (VWMA) indicator to your advantage. It is a little-known fact that some of the biggest traders around incorporate the (VWMA) indicator in their own particular trading.




*Stimulating ideas*
As a member found my last series of posts on the (VWMA) indicator interesting I posted the results of today's trading to motivate him to look at this indicator in more depth. The "Dump it here" thread allows me to post to stimulate interest in systems that make money or have the potential to make money. I've used the VWMA indicator in some of my strategies with outstanding performance. As the percentage buy filter was on with the Index Filter also on, the strategy was worthy of a flutter today.

*Today was a flat day but profitable*
The reason I'm posting actual results is to display that the "VWMA % Strategy" has potential. Even though today was flat, there were positions worth pursuing.





*Fridays VWMA signals*
These are the signals from the VWMA Exploration Analysis from Friday. They are posted so anyone can chart the positions. Having the analysis displayed in the manner below makes trading effortless. Meaning it displays the (a) ASX code to buy, (b) the number of shares to buy, (c) the pre-auction buy offer price with (d) the total (maximum) investment to buy that position. The trading plan is just as lean having few rules.





*Today's net profit*





*VWMA Open Positions*
Positions condensed for clarity.





*VWMA Open Positions*
VWMA open positions expanded.





*In Summary*
I've posted today's results because a member found interest in my recent series of posts on the "VWMA indicator".

Skate.


----------



## Skate (15 November 2022)

*The posts below somewhat highlight the dangers of systematic trading *
Just these two posts alone explain why system trading at some stage will fail. The information they hold belongs in the pure gold category. When you read posts by experienced members it's time to prick your ears & listen. After reading these comments it should be a wake-up call in making sure "the systems" that you are currently trading are still fit "for purpose" otherwise you may experience heavy losses & a world of pain until the penny drops. 



ducati916 said:


> The issue that I have with mechanical systems and I suppose by extension the people that design them is that they, for the most part, seem to be blind to the intrinsic flaw that lies at the heart of mechanical based trading. Certain strategies will do well in certain market environments and potentially outperform their initial code. Markets change. Sometimes that change is subtle and the system still returns a profit, sometimes it is radically different and a period of underperformance will ensue.
> [tossing] many systems currently being traded on the scrap heap.






Lone Wolf said:


> One trap about out-of-sample testing that's easy to fall into is repeatedly using the same data sets. You test your system on in-sample data, looks great. You test it on out-of-sample data, it falls apart. What do you do? You go back to the system and make some adjustments. Test it again on the same data and it looks much better this time. But really, you've just made your out-of-sample data part of the in-sample data set. You can't keep making adjustments until the same out-of-sample test comes good.




*In summary*
If you believe the markets haven't changed, the trading environment certainly has.

Skate.


----------



## Skate (15 November 2022)

*For those interested in all things Crypto*
This short  8-minute YouTube video explains why the FTX collapse is a very expensive lesson for the crypto ecosystem. Michael Saylor explains how instability in the crypto space could add to bitcoin’s strength. It should also be noted that Michael Saylor is never short of an answer to progress Bitcoin. 



Skate.


----------



## Gringotts Bank (15 November 2022)

Skate said:


> *The posts below somewhat highlight the dangers of systematic trading *
> Just these two posts alone explain why system trading at some stage will fail. The information they hold belongs in the pure gold category. When you read posts by experienced members it's time to prick your ears & listen. After reading these comments it should be a wake-up call in making sure "the systems" that you are currently trading are still fit "for purpose" otherwise you may experience heavy losses & a world of pain until the penny drops.
> 
> 
> ...



To me, robustness means having a system that:

1.  Identifies different market regimes and trades accordingly, (eg. on/off index filter or dynamic position sizing)
2.  Identifies factors in the market that are _so deeply fundamental to the market_ that they must always function.  eg. volatility expansion and contraction following each other like day and night.

I think if you have one or both of these, especially the second, you can mitigate the problems ducati mentions.  Although exampes of the second are hard to find.  What would be some other deeply fundamental factors that will always be functioning in the market?


----------



## peter2 (15 November 2022)

Gringotts Bank said:


> What would be some other deeply fundamental factors that will always be functioning in the market?



Price movements in the short term will always reflect the current sentiment (emotions) of the collective crowd that's currently involved in the market. Extreme emotions such as fear and greed will produce the largest price swings.


----------



## ducati916 (15 November 2022)

Gringotts Bank said:


> To me, robustness means having a system that:
> 
> 1.  Identifies different market regimes and trades accordingly, (eg. on/off index filter or dynamic position sizing)
> 2.  Identifies factors in the market that are _so deeply fundamental to the market_ that they must always function.  eg. volatility expansion and contraction following each other like day and night.
> ...







What I think what we are talking about are tail events if you utilise a gaussian distribution.

Do I agree? Absolutely. In fact I would go further and state that not only withstand, but move to the enhanced position of profiting from the tail events.

Bedrock fundamentals: they are changing.





In 1971, the US went off of gold and onto the petro-dollar system. This provided a huge (unimaginable) advantage to the USD. The USD is managed by the Federal Reserve (a private bank) enabled by US legislation in 1913.

Since 1971 the market adage: 'Don't fight the Fed' has been the way to success in the markets.

So the Russian/Chinese and assorted allies, which are now de-dollarising, are breaking that US monopoly that has held world currencies in thrall and by extension (and most importantly) capital flows.

Given that the Arab world despise P. Biden, the move of OPEC+ to de-dollarise, removes the advantage that the US has enjoyed through the ability of the Fed. to dictate world monetary policy through the USD and Fed policy.

Markets (seem) not to have noticed fully, that the Fed. is finished. Paper, which has dominated since 1971, is about to be supplanted by real commodities, pre-dominantly energy.

From the above charts, you can see that there were 2 failed attempts at creating a Central Bank for the US. When they finally succeeded, of course it wasn't called a bank at all.

A free market, is a far more rangebound market (on aggregate) than a manipulated or controlled market. A controlled market is always inflationary as governments are profligate wasters of our paid taxes and always require more funding. 

So the situation today is that the US must inflate. Or default. They will inflate (default over time) and to such an extent that they could actually destroy the USD as a currency, much as did the Weimar Republic, again, due to debt levels being unmanageable.

Inflation destroys the ability of businesses to efficiently allocate capital. Take 1 example: FIFO v LIFO accounting. In an inflationary environment, FIFO gives the impression of significant profitability. LIFO can result in losses or reduced margins. Of course the FIFO is illusion. Capital is likely being consumed.

So you say, well a mechanical system ignores financial statements, leaves that boring task to others and we just follow our model. Well of course the model is badly broken and results in tail events increasing as expected results are not even close to reality.

This results in a 1970's style market:




Rangebound.

Of course, eventually Triffin's paradox took hold, allowing the Fed via the USD and UST reserves world wide, to take control of capital flows. There have been different primary providers: Europe (abdicated by creating the Euro) Japan and most recently China. The last resort is now the Fed itself, which is of course the end game for USD.

jog on
duc


----------



## Skate (15 November 2022)

peter2 said:


> Price movements in the short term will always reflect the current sentiment (emotions) of the collective crowd







Skate.


----------



## Captain_Chaza (15 November 2022)

Sailing the Good ship HMAS Skate

Well Done Captain Skate
I have updated and Verified  each and every Starting Price----------------------  Friday 11th Nov 2022 OPEN logs

Well Done!
Apologies for the Logs below
I am hopeless with Computers , Copy and Paste



CodePurchase DatePurchase Price ($)Last ($)UnitsMarket Value ($)Profit / Loss ($)Change (%)



ActionsWGO​11/11/2022​0.180​0.215​52547​11,297.605​1,839.145​19.44​
​
​BUY | SELLAGY​11/11/2022​0.620​0.700​15127​10,588.900​1,210.160​12.90​​​BUY | SELLQPM​11/11/2022​0.170​0.180​55466​9,983.880​554.660​5.88​
​​BUY | SELLSTA​11/11/2022​0.435​0.455​22691​10,324.405​453.820​4.60​​​BUY | SELLBGL​11/11/2022​0.875​0.890​10735​9,554.150​161.025​1.71​​​BUY | SELLRNU​11/11/2022​0.265​0.265​36977​9,798.905​0.000​0.00​​​BUY | SELLTNG​11/11/2022​0.090​0.090​99840​8,985.600​0.000​0.00​​​BUY | SELLALG​11/11/2022​0.580​0.570​16640​9,484.800​-166.400​-1.72​​​BUY | SELLTIE​11/11/2022​0.760​0.745​13136​9,786.320​-197.040​-1.97​​​BUY | SELLSYA​11/11/2022​0.255​0.235​38400​9,024.000​-768.000​-7.84​
​
​BUY | SELL*Total*​*98,828.565*​*3,087.370*​*3.225*​
  As I see it
She was extremely kind to you on the open Friday the 11th Nov 2022
I have seen this before many times



	

		
			
		

		
	
BUT almost never for ME!


----------



## qldfrog (15 November 2022)

Captain_Chaza said:


> Sailing the Good ship HMAS Skate
> 
> Well Done Captain Skate
> I have updated and Verified  each and every Starting Price----------------------  Friday 11th Nov 2022 OPEN logs
> ...



Dear Captain,
as i understand it, the system analysis is performed on Friday and the actual purchase performed at open on Monday.
As such, the purchase date should be the 14/11 with the matching price: so for example SYA opened at .25 and TIE opened at .74->  the latter being a win so far, etc
Sorry ...


----------



## Skate (16 November 2022)

*Well, this is interesting *
The crypto exchange FTX saga continues. According to the Financial Times, FTX had less than $US1 billion in liquid assets against $US9 billion in liabilities before it went bankrupt. With the collapse of the FTX exchange customers scrambled to withdraw around $US5 billion in funds amid rumours of a liquidity crisis. This is the equivalent of a run on a bank.  

*Alameda Research*
Regulatory probes in the US have now turned their attention to the central role of Alameda & its 28-year-old CEO Caroline Ellison. The YouTube video below has gone viral because of the flippant response from Caroline Ellison. In the interview about Alameda’s trading, Caroline Ellison said she could “absolutely pull it off without my math degree”. “You use very little math, you use a lot of, like, elementary school math,” she said.

*Risk management*
Caroline Ellison goes on to say, “Being comfortable with risk is very important. We tend not to have things like stop-losses, I think those aren’t necessarily a great risk-management tool. I’m trying to think of a good example of a trade where I’ve lost a ton of money … well, I don’t know, I probably don’t want to go into specifics too much.”

*Yield farming*
Caroline Ellison said jokingly she was sceptical of yield farming which was a risky trading strategy that became one of Alameda’s biggest moneymakers. For those who don't know, Yield farming involves investing in cryptocurrencies that pay interest-rate-like rewards. Such tokens often have an initial run-up in price before crashing. For me, a lot of it was just about readjusting my expectations & being open to whatever happened. I think like every week or so something weirder than the previous week would happen.”

*This YouTube video is a real eyeopener*
When watching this short video clip, I'm sure you'll laugh along with Caroline unless you have money involved with the exchange.



Skate.


----------



## Captain_Chaza (16 November 2022)

This  is a Mystery to me
What did Friday the 11th Pre-Market Calls mean on Captain Skates logs?
Did he Suggest opening price on Friday 11th or Monday 14th?

Only the Captain Skate himself can answer!


----------



## Skate (16 November 2022)

Captain_Chaza said:


> *This is a Mystery to me*
> What did Friday the 11th Pre-Market Calls mean on Captain Skates logs?
> Did he Suggest opening price on Friday 11th or Monday 14th?




@Captain_Chaza over the last 4 years I've explained exactly how I trade as well as my trading rules. 

*I should have made this clearer from the get-go*
I trade weekly systems with no manual interference. The buy & sell signals are triggered "after the close" on Friday. These signals are then placed in the pre-auction at the offer price that has a 3% premium to Friday's closing.

*Just to confirm*
All the signals are generated on Friday after the close. The signals are entered into Monday pre-auction. The date in the Amibroker Exploration Analysis is the date the report is generated. I generate the reports after the close on Friday & both, Buy & Sells are entered over the weekend waiting to snag the opening price on Monday. If the price "gaps" above the added premium of 3% I won't get settled. I don't chase the price.

*Why after the close*
All my research has been conducted under these test conditions. Trading the pre-auction using the (-/+ 3%) premium takes all the guesswork out of trying to time the purchase. Even with my conditional order placed in the pre-auction, you still run the risk that the position may fail to execute because of a gap-up. Something you have asked before.

*I often repeat myself to reinforce a point*
Sometimes reading it once it's hard to understand how I trade. Both entries & exits are always placed for Monday's pre-auction using the (+/- 3% premium). The 3% premium will either secure the opening price or it won't. A "buy order" not being executed has no consequence or bearing on the profitability of long-term strategy holding 10 or 20 positions in the portfolio. 

Skate.


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## Skate (16 November 2022)

*Skate's Trading Rules*
# If positions aren't executed at the open "the position stays open during the day" & purged after the close.

*Important*
"Never buy at the market", the position needs to be executed at the "Offer" or not at all.

*The Buy Rules*
1. The "Buy offer" is good for one day only
2. Never chase the price.
3. There are some positions that you will miss because of a gap-up
4. Positions not executed during the day need to be purged after the close
5. Do not "carry over" orders (positions need to be executed on the same day)
6. The buy rules are not flexible

*The Sell Rules*
1. Never sell before a signal is given
2. Sell in the pre-auction at the "Offer"
3. If the position is not sold in the pre-auction wait till 10:30 am for the market to settle
4. If the position is still open after 10:31 am - sell immediately "at the market"
5. The sell rules are not flexible

Skate.


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## Skate (16 November 2022)

*The Exploration Analysis*
Using the parameters from the above produces the analysis below. All I have to do is follow along. Buy the number of shares @ the "buy offer" to be placed in the "pre-auction". The cost column denotes the "maximum investment cost" of buying the number of shares at the "buy offer".




*The Exploration Analysis*
Using the parameters from the above produces the analysis below. All I have to do is follow along. Buy the number of shares @ the "buy offer" to be placed in the "pre-auction". The columns are in the same order as the CommBank order form. The colour coding denotes a buy or a sell. The exit colour denotes what generated the exit. In this case, it is a stale exit.





*Today's exit signal*
As a chart example, (ASX:ANN) wasn't purchased because it was excluded by "PositionScore". The (VWMA Strategy) is a 10-position, $10k PositionSize Strategy"




Skate.


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## Skate (16 November 2022)

*Gambling*
I say go for it if you can handle the worst-case scenario.

*

*
Skate.


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## DaveDaGr8 (16 November 2022)

OMFG

That is going into my next safety meeting !!!


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## Skate (17 November 2022)

*"Jeremiah was a prophet" *
Was a new song pitched by "Three Dog Night" but frankly no one liked it. A member of the band said that we needed a "silly song" to help bring the band back together & that's how "Jeremiah was a Bullfrog" came about.

*Let's feel good, before the markets open*
After reading @bigdog's post a short while ago, a feel-good song might be the order of the day to cheer me up considering we are looking at a down day.



Skate.


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## qldfrog (17 November 2022)

Skate said:


> *"Jeremiah was a prophet" *
> Was a new song pitched by "Three Dog Night" but frankly no one liked it. A member of the band said that we needed a "silly song" to help bring the band back together & that's how "Jeremiah was a Bullfrog" came about.
> 
> *Let's feel good, before the markets open*
> ...




How should I take that song?


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## Skate (17 November 2022)

qldfrog said:


> How should I take that song?




@qldfrog as a trend trader, I'm expecting to feel some pain today & listening to a great song will put me in the right mood to accept whatever comes my way. I'm having a good week & a big November, giving back some is expected. Basically, the song was to start my day on a positive note, putting me in a positive mood, that's the power of listening to a feel-good song.

Skate.


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## qldfrog (17 November 2022)

Skate said:


> @qldfrog as a trend trader, I'm expecting to feel some pain today & listening to a great song will put me in the right mood to accept whatever comes my way. I'm having a good week & a big November, giving back some is expected. Basically, the song was to start my day on a positive note, putting me in a positive mood, that's the power of listening to a feel-good song.
> 
> Skate.



I just like the frog video with the wine bottles and was kidding there.
I felt the pain yesterday actually on the system and do not expect a great day today either but that is part of the game


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## Skate (17 November 2022)

*"Hey Dad, can you do anything with $20k"*
The phone call last night started out well but with my reply, his enthusiasm started to wane. Trading such a low amount & expecting a decent return is nearly impossible. Even the markets are having trouble finding a direction.

*Without ideal conditions "trend trading" struggles. *
_"Okay, I'm sure the money will have a better chance with you than throwing it into the bank". _
Don't be so sure, at least in the bank it won't devalue.
_"Nah, do your best, I'll be happy, no matter the outcome"._

*So what do you want to trade?*
_"I'll leave it up to you". _
As I've been posting recently about the (VWMA) indicator & the (20-period breakout strategy) I'll combine both strategies, adding a strong selective buy filter.
_"That'll be the go"_
Just to be clear, this strategy will only take positions when trading conditions improve, it may be a while before we buy anything.
_"That's okay"_
With so little money, the portfolio will be restricted to 4 positions.
_"Whatever you think, I'll do the transfer" _

*If it's okay with you *
I'll post your results in this thread as others starting off with a similar amount might be interested in how the trading pans out.
_"Sure no problem, thanks Dad"_
(call ended)

Skate.


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## qldfrog (17 November 2022)

T







Skate said:


> *"Hey Dad, can you do anything with $20k"*
> The phone call last night started out well but with my reply, his enthusiasm started to wane. Trading such a low amount & expecting a decent return is nearly impossible. Even the markets are having trouble finding a direction.
> 
> *Without ideal conditions "trend trading" struggles. *
> ...



The big issue i see is the 4 positions only.you add a lot of "luck" in the game 
One black swan specific to one of your 4 positions and 25% of your assets go in smoke because of an explosion in a mine, or a revolution in 1 overseas assets..you see what i mean, something outside the market expected fluctuations
What about 8 positions but a cheaper broker?


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## Skate (17 November 2022)

qldfrog said:


> The big issue i see is the 4 positions only.you add a lot of "luck" in the game




*The Value Weighted Trend Trader Strategy (VWTT)*
@qldfrog I understand where you are coming from but I'll stick with (4  X  $5k) positions otherwise trading anything less & the commision becomes a strategy killer.

*The VWTT Strategy*
The Equity curve below is from a backtest since COVID-19 (1st of January 2020 to the 17th of November 2022)




Skate.


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## Skate (17 November 2022)

qldfrog said:


> "luck"




@qldfrog, I've also slipped the word "luck" into a few of my posts as well but after reading a recent Twitter exchange, I'll reconsider doing so.

*One of our members mentioned "Luck" in his Twitter post*
He was quickly taken to task for using the word "Luck" in trading.

*Trading psychology *
Paula Webb is highly respected in the field of trading psychology & specialises in the field of "mental thought processes" & how they can be put into practice for those who want to create & sustain a rising equity curve.









						Instill the Winning Trader's Mindset | Paula T Webb
					

See why having the right trading mindset is the key to sustained success with tips and pointers from Paula T Webb.




					paulatwebb.com
				






			https://twitter.com/_MarkDouglas_?lang=en
		


*This is how the exchange panned out*
It started with a simple statement, that I personally agree with, by the way.



















Skate.


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## Skate (17 November 2022)

*Mark Minervini*
Quote of the day.




Skate.


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## ducati916 (17 November 2022)

Something for the systems chaps to test:




jog on
duc


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## Gringotts Bank (17 November 2022)

ducati916 said:


> Something for the systems chaps to test:
> 
> View attachment 149360
> 
> ...



Reminds me of Bulkowski.

For a long time he has maintained a collection of stats related to what he calls "busted patterns", and even "double busted patterns".  So a falling wedge breaks out to the upside, adds a few ticks then starts falling - that's a busted pattern.  He reckons a lot of busted patterns have better stats than normal patterns.

Also reminds me of "a failed sell signal is a good buy signal".

It makes perfect sense.  If 90% of traders fail in the long term, then you can't afford to be buying the same patterns that the 90% are buying.  If it's obvious, it's likely to bust.


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## ducati916 (17 November 2022)

Skate said:


> @qldfrog, I've also slipped the word "luck" into a few of my posts as well but after reading a recent Twitter exchange, I'll reconsider doing so.
> 
> *One of our members mentioned "Luck" in his Twitter post*
> He was quickly taken to task for using the word "Luck" in trading.
> ...




This lady is a victim of naive empiricism or the induction problem. She is confusing the seeing of white swans with the nonexistence of black swans.

Luck (bad luck) exists, hidden by the errors of confirmation, narrative fallacies, the distortion of silent evidence and the over focus on well-defined sources of uncertainty (probability).

jog on
duc


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## Skate (17 November 2022)

ducati916 said:


> Luck (bad luck) exists, hidden by the errors of confirmation, narrative fallacies, the distortion of silent evidence and the over focus on well-defined sources of uncertainty (probability).




*With System Trading*
We use precise mathematical formulas to enter a position & from that point on "everything is out of our control" with what happens to the price going forward. 

*Words & expressions*
We use certain words to convey our emotions & feelings, such as "happy", sad, lucky, unlucky, angry & the list goes on. Paula Webb failed to realise that the word "Lucky" can also apply to emotions or actions during trading. The attack was directed because she perceived it was a failure of not having the correct trading mindset whereas it was used to describe things that happen outside of our control "when trading". 

*I now want to make a quote about being Happy*
When having a bath, all the dwarves were feeling "Happy", so "Happy" got out.

*I'll make this my "Quote of the Day"*




Skate.


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## Trendnomics (17 November 2022)

Skate said:


> *Skate's Trading Rules*
> # If positions aren't executed at the open "the position stays open during the day" & purged after the close.
> 
> *Important*
> "Never buy at the market", the position needs to be executed at the "Offer" or not at all.




Are your systems really so senstitive (i.e. non-robust), that not following these ultra-strict rules would have a significant negative impact? Have you measured the impact of not following these rules?


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## Skate (17 November 2022)

Trendnomics said:


> Are your systems really so senstitive (i.e. non-robust), that not following these ultra-strict rules would have a significant negative impact? Have you measured the impact of not following these rules?




@Trendnomics, these rules work for me, instead of criticising, you have the right to express an alternative view.

Skate.


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## Skate (18 November 2022)

Skate said:


> @Trendnomics, these rules work for me, instead of criticising, you have the right to express an alternative view.
> 
> Skate.




*Weekly Results*
It's early days for my "Value Weighted Moving Average Weekly Strategy" (VWMA Strategy). I'm not planning on posting weekly updates as @qldfrog & @peter2 have that area covered.

*I started 3 new strategies on Monday*
As I decided to trade the "VWMA Weekly Strategy" it was the perfect time to start trading two of my other strategies at the same time. All three strategies are uncorrelated with $100k invested in each.

*The weekly results*



*What I want to discuss *
Is why "PositionSize" recalculation is so important to me, which I call "Pyramiding" my next bet size.

*Closed profits & the odd dollars left over*
The $7,383 left over from this week represents the "dollar stragglers" that have now been "allocated" to the next round of buys, equally dispersed, of course, divided into the number of outstanding positions required to fill the portfolio.

*The VWMA Strategy weekly results*
The stats below explains how this portfolio is traveling. The results at the moment look good but over time the stats will normalise as they settle down.








*Simplicity works for me*
My trading plan has only a few rules & "Pyramiding position sizing" is one of them. My trading method works for me by ensuring all available funds are constantly in the markets. Most fail to realise "pyramiding" works both ways. When trading is not going well, position sizing decreases because of compounded losses. In a nutshell, when times are good, being in profit I take advantage of these conditions & increase my next bet size.

*"Pyramiding" refers to PositionSizing*
Pyramiding "PositionSize" is my re-balancing technique for the reinvestment of profits & odd funds. "Pyramiding (re-balancing) my PositionSizes" every dollar (soldier) is put into the battle to fight the good fight. Of the $100k (10 X $10k) bets allocated to trading the "VWMA Strategy" last Monday, $7,383 was left over. Why?, because the "Offer Price" was in excess of the opening price.

*I need to get settled at the opening price*
Not knowing the opening price, the price I need to snag, it's critical that the investment, which includes commission never exceeds the $10k bets, as nobody wants to be caught short of funds.




*In conclusion*
These are the current 10 open positions




Skate.


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## Captain_Chaza (19 November 2022)

Sorry Captain Skate but I have noticed  Your Good Ship has sprung a Leak
*Your Beloved WGO failed to open on Monday *


I have placed the Vertical Line on Friday 11th to accentuate Monday's GAP
I have also noted that your 3% rule has not been activated in your opening price limits
	

		
			
		

		
	




Salute and Gods' speed


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## Skate (19 November 2022)

Captain_Chaza said:


> I have placed the Vertical Line on Friday 11th to accentuate Monday's GAP




Thanks, Captain for having an eagle eye, it's been adjusted.




Skate.


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## Skate (19 November 2022)

*From* @ducati916* post today*
I found this to be an interesting comment from Alameda's 28-year-old CEO Caroline Ellison who Sam Bankman-Fried’s blames for the failure of FTX.




Skate.


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## Skate (19 November 2022)

*I knew I was smarter than most people* (Alameda's CEO Caroline Ellison)
If you say it, you tend to believe it. Intellectual honesty, let alone accountability, is increasingly in short supply these days. Even celebrity endorsements come across as economic statements.

*The internet is supposed to be a leveler*
Having unlimited amounts of knowledge at our fingertips, the technology of the internet was supposed to facilitate a level playing field. Only to discover we have become passive consumers of the worst kind of content. In the process, of absorbing information we are still influenced by celebrities & even those we call journalists.

Skate.


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## Skate (19 November 2022)

*The collapse of the crypto exchange FTX*
Reminds me of a story about how someone like Sam Bankman-Fried’s (FTX) made it to the top & failing to stay there.

*A bull & a pheasant was talking in a paddock*
The pheasant said: _"years ago we could fly to the top of the tree & eat the new shoots"_
The bull replied: _"you still can "if" you eat my dung"_
The pheasant: _"eat your dung & I can fly to the top of the tree"_
The bull replied: _"yes"_

*The pheasant ate a little dung for the next week *
Sure enough, he flew to the top of the tree, eating the new foliage.

*Along came the farmer* *& shot the pheasant

The moral of the story*
"_Bullshit_" might get you to the top, but staying there is next to impossible.

Skate.


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## Skate (19 November 2022)

*I recently met a guy from the USA*
Striking up a conversation I asked why he was in Australia.
_"To talk to the government about nuclear power"._
I thought this will be interesting.

*Before I could start the conversation *
He said: _"let me ask you a question first". 
"A horse, a cow & a rabbit all eat the same stuff, grass. Yet a rabbit excretes little pellets, while a cow turns out a flat patty & a horse produces clumps of dried grass. Why do you suppose that is?"_

*I said*
_"Hmmm, I have no idea," _

*To which he replied*
_"Do you really feel qualified to discuss nuclear power, when you don't know _shit_?"_

*I quickly responded*
_"Do you know why human _shit_ is always tapered on one end?"_

*He responded*
"Hmmm, I have no idea."

*To which I replied*
_"So your bum doesn't close with a bang, so don't be a smart ar$e"._

*You guessed it*
The conversation went no further.

Skate.


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## Skate (19 November 2022)

*Before I get off my soapbox*
I enjoy reading Twitter feeds but when they throw in personal non-related _shit_ "that no one gives a rat ar$e about" is a real turn-off. Do you want others reading this crap? stay on point. It appears to be a Twitter theme of infatuation with oneself. (No one cares)








Skate.


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## Garpal Gumnut (19 November 2022)

Here at the hotel, I find, like you @Skate that I am the most modest man in the room/conversation.

So when a yahoo like the American above appears in the bar I get him to organise a committee and report back to me the following day the results of the committee's deliberations e.g on nuclear power, on One Printed A4 Sheet.

Life is short, too short to be tolerant. 

gg

ps I tend to light a match to printed A4 sheets of paper to light a Cohiba, it provides a more satisfying smoke from the get go.

gg


----------



## Skate (19 November 2022)

Skate said:


> *The collapse of the crypto exchange FTX*
> Reminds me of a story about how someone like Sam Bankman-Fried’s (FTX) made it to the top & failing to stay there.
> 
> *The story about a bull & a pheasant.*




*Tense situation Mike Tyson and Sadhguru*
The story I told earlier was from memory. I found the YouTube that tells the story much better. Mike Tyson was interviewing Sadhguru with hard-hitting questions. Sadhguru had to tell a joke as the situation got tense.



Skate.


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## Willzy (19 November 2022)

Willzy said:


> Hi all, I have a question someone may be able to help me with (completely off the current topic)
> 
> I am trying to trade low volume / turnover stocks in the US with a very basic mean reversion strategy. The strategy uses limit orders for entries. Now in Australia with the ASX as I understand it, if a limit order is submitted to the market before the open, the openg auction will consolidate the orders and should the OPEN price be less than my limit price I would be filled at the OPEN price.
> 
> ...





Hi all, For those who contributed to my post above, a very sincere thankyou!

I believe I have worked out what went wrong and I thought I'd post it here just incase this helps someone in the future 

When using the TradeStation Strategy Engine, when an instruction is sent using EasyLanguage code:

“buy nContracts contracts next bar at entryLimit limit;”

At the close of the bar generating the order, the TradeStation Strategy Orders tab shows the order as 'HELD' due to time. I have subsequently found out that these orders are 'Day' orders in that they expire at the close of the trading day and critically they *cannot be submitted until the market is open.*

So I believe what has happened is that I missed the opening auction all together and the exchange is received the order 3 seconds after the Open of the day (confirmed by order ticket).

When submitting orders for my other trades on  a different strategy, I have been using 'GTD' - "good till date". These orders may be submitted to the exchange when the market is closed. These orders do not show as ‘HELD’ but rather ‘QUEUED’ and I believe they are submitted directly to the exchange and thus participate in the market open.

Last night using this strategy I submitted my orders manually using the GTD order type and they worked flawlessly, the market gaped in my favor and my trades were executed at the open price.

Again, sincere thanks for those who contributed, I hope this helps someone in the future 

Cheers 
Willzy


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## Captain_Chaza (19 November 2022)

I have traded  shares *On the Open* for over 2 decades
4 decades if you count those decades with little funds
 and I have learnt *"ONE THING"

Good  Buying on the Open  "Cannot be Automated!"*
It is all Smoke and Mirrors marketing IMHO

Nobody has ever lived through 2-4 weeks in real time in front of us 
All they talk about is how it worked in the Cinderella years  a few years ago

Do the Hard yards for yourself  if you doubt me and say that I am wrong

*What a Joke! 

I see Holes Every where! In "AI"  buying on the open*

Salute and Gods' speed


----------



## Willzy (19 November 2022)

Captain_Chaza said:


> I have traded  shares *On the Open* for over 2 decades
> 4 decades if you count those decades with little funds
> and I have learnt *"ONE THING"
> 
> ...



Sorry was this directed at my post?

I'm not quite sure what you're getting at here?

The question came about because I found a descrepancy between my amibroker backtest and what I was able to achieve in actual market trading conditions. Being that if I submit a limit order tonight and the market gaps in my favor on the next trading day, should I not expect to be filled at the OPEN price.

The strategy in question buys using limit orders not specifically at the open...

FWIW I'd actually argue from experience that buying and selling at the CLOSE is significantly harder!


----------



## Gringotts Bank (19 November 2022)

Willzy said:


> Sorry was this directed at my post?
> 
> I'm not quite sure what you're getting at here?
> 
> ...



In the US you should be able to place a MOC (market-on-close) order, yes?  An order that will be filled at the official closing price.


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## Captain_Chaza (19 November 2022)

Nothing Personal!
Just the facts of Buying on the "Open Auction"
IMHO
The Good Ones always Getaway
but  it is really Funny how  we always seem to get the Dregs

*2 Goodies > 20 Dregs  (ie; Dragging Wet Sails)  IMHO
Luck seems to  have no Boundaries*


and *A.I.  is not your friend on the Dawn's Open Auction

That's all I am Saying*


----------



## ducati916 (20 November 2022)

Skate said:


> *From* @ducati916* post today*
> I found this to be an interesting comment from Alameda's 28-year-old CEO Caroline Ellison who Sam Bankman-Fried’s blames for the failure of FTX.
> 
> View attachment 149449
> ...




It just keeps getting worse:

​
​
FTX commander-in-chief Sam Bankman-Fried remains at large after steering the cryptocurrency trading platform into a bankruptcy so hideously tangled that the assigned liquidator in court proceedings, one John Ray III, who oversaw the Enron aftermath years ago, was boggled by what he’s found so far (and it’s early in the game):

Namely, a company run by a handful of twenty-something drug freaks with no idea what they were doing, no record-keeping and a slime trail of misappropriated investors’ funds leading to Kyiv and Geneva through various crooked American political action committees, and the halls of Congress — with echoes in ballot harvesting shenanigans which shaped the outcome of this month’s U.S. elections.

Mr. Bankman-Fried is still scheduled as a main speaker for Accenture’s Nov. 30 DealBook Conference in New York ($2,499 for a ticket), along with Ukrainian President Volodymyr Zelenskyy and U.S. Treasury Secretary Janet Yellen. Odds on him showing up? Or even being alive elsewhere on this planet then?​


​
​
*The Woke Aristocracy*
The Bankman-Fried extended family is the quintessence of Woke aristocracy. Dad Joe Bankman and mom Barbara Fried are both law professors at Stanford. She also acted as a money-bundler for the Democratic Party and ran two nonprofit “voter registration” orgs (against the IRS laws which only permit _nonpartisan _organized voter registration).

Brother Gabe Bankman-Fried headed a nonprofit named Guarding Against Pandemics (funded by Sam), which lobbies Congress to construct new platforms for medical tyranny.

Aunt Linda Fried is dean of Columbia U’s Public Health School, and is associated with Johns Hopkins, which ran the October 2019 Event 201 pandemic drill (sponsored by the Gates Foundation) months before the COVID-19 outbreak.
Sam’s girlfriend, Caroline Ellison, ran the Alameda Investments arm of the FTX empire (that is, FTX’s own money laundromat). Her dad, Glenn Ellison, is chair of MIT’s Econ School.

His former colleague on the MIT Econ faculty, Gary Gensler, who specialized in blockchains there, is now head of the Securities and Exchange Commission, an agency that Sam Bankman-Fried was attempting to rope into a regulation scheme to eliminate FTX’s cryptocurrency competitors.

Caroline’s mom, Sara Fisher Ellison, is an MIT econ prof specializing in the pharmaceutical industry (fancy that!). Caroline Ellison is currently on the run.​




jog on
duc


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## Willzy (20 November 2022)

Gringotts Bank said:


> In the US you should be able to place a MOC (market-on-close) order, yes?  An order that will be filled at the official closing price.



Yes a MOC order can be submitted, and in certain circumstances it works fine ie a nBarExit. 

For any rule based exit however, such as  C > MA(C,5)  or RSI >55 etc, then you won't know for certain that the close is above the moving average or the RSI has crossed 55 until the actual close is made. Hence you have to pick a time before the close to 'draw the line in the sand' where the indicators are finalised and you still have enough time to submit the order. In some cases I use 5 mins before the close, in others I've shaved it down to under a minute.

Limit orders however have an advantage in that you can submit the order when the market is closed and hence have hours to run the calcs and submit your orders for the next session. The downside however, is that everyone now has 12+ hours to see the same signal that you have and market edges seem to disapear over time.

Horses for courses I guess...


----------



## Nick Radge (20 November 2022)

> The downside however, is that everyone now has 12+ hours to see the same signal that you have and market edges seem to disapear over time.




Use hidden orders or, if available, some of the execution algo's like Dark Ice


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## Captain_Chaza (20 November 2022)

What sort of money are we talking about here? 
At what size of Bet/ Investment  does Personal Involvement become Important/ PARAMOUNT
in lieu of *A.I.

I say NEVER!

*
 Salute and Gods' speed


----------



## Skate (21 November 2022)

*Chasing Breakouts will send you broke*
I'm just musing while I'm waiting for the markets to open. I know trading is a simple endeavour, but making money is becoming increasingly more difficult. Yesterday I was discussing privately some of the ways I trade. I appreciate my way of trading is not for everyone, even my views on trading can at times be just as confronting. Most times I talk about the abundance of ways I enter the market but rarely explain why staying out of the market can be just as beneficial while the overall profitability increases.

*I prefer to get on early when a breakout is confirmed*
That statement is as stupid as "buy low & sell high" without explaining the catchphrase in more detail. I won't recanvass what I spoke about yesterday but I want to include some of the things I neglected to say at the time. Over the years we gain trading knowledge & to explain that knowledge in a linear way becomes near impossible when you are reciting from memory. It's even harder when the knowledge is mixed with research. 

Skate.


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## Skate (21 November 2022)

*My research confirms there is momentum before a breakout*
Why is this important? for the very reason why chasing, every breakout will send you broke. Breakouts with momentum & market volatility stack the odds in your favour when trading. As a trend traders, we profit from price movements to the upside. Taking a breakout with momentum, the easier it is to hold onto your winning trades. This really means, momentum is the driving force behind profitable trades.

*Breakouts happen with high-frequency*
Being selective & looking for momentum before breakouts simply defines the strength of the breakout. Unfortunately, all breakouts don't hold the same value. Basically, I'm always on the lookout for momentum so you could refer to me as a "momentum, volume & volatility" hunter. 

Skate.


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## Skate (21 November 2022)

*How I approached finding good trade entries*
Momentum measures how quick & strong a price move is. When trend trading we need to be constantly looking for momentum before a breakout. If you go too early or too late I believe a world of pain awaits. Confirmation is required before you make a move & at times waiting for confirmation can be the hardest part of trading my way.

*Entry confusion*
Most traders are constantly obsessing about where & how to get into the market. Entry confusion happens to us all & it's for this very reason that trading systematically works. Why? because all your rules can be precisely coded for optimal performance. With so many entry styles to choose from many "trading gurus" will tell you what supposedly works but they rarely tell you what doesn’t. I start to wonder if these trading gurus ever follow their own _bullshit_. My piece of advice today is to forget about focusing on when to get into the market but rather figure out "when to stay out" of the market. 

*Summary*
Using momentum as a forerunner to a breakout works, it's as simple as that. Anytime there is a significant move in the markets, momentum is a part of it. Without momentum, it will end up being a false breakout, these are the breakouts you need to avoid.

Skate.


----------



## DaveTrade (21 November 2022)

Skate said:


> forget about focusing on when to get into the market but rather figure out "when to stay out" of the market



@Skate your statement makes the point that a lot don't think about but to be more accurate, you know and I know that traders must focus on both 'when to get in' and 'when to stay out', they are two sides of the same coin. I know that you were highlighting the side that people tend to neglect but personally I think that it's important for traders to cement in the complete picture of understanding right from the start. Maybe I'm being a bit 'tomaato'/'tomarto' here but that's just what works for me.


----------



## Skate (21 November 2022)

DaveTrade said:


> @Skate your statement makes the point that a lot don't think about but to be more accurate, you know and I know that traders must focus on both 'when to get in' and 'when to stay out', they are two sides of the same coin.




@DaveTrade that's the very point I was trying to make, some system traders don't know that staying out at the markets at the precise time can be beneficial to trading performance. I was going to conclude my short series of posts today but I believe I should concrete what I'm saying with another post with an expanded description of how to achieve this. I'll also post a graphic so visual confirmation to explain what I've been talking about.

Skate.


----------



## Skate (21 November 2022)

*Figuring out "when to stay out" of the market*
This year has been a difficult trading year but if your strategy is selective knowing when to stay out & when to enter makes a difference. Being very selective in which positions to buy, those that have momentum & volume nearly always ensure that you will keep most of the bumps in profits. It's unavoidable that "exit confirmations" necessitate giving back some open profits but in saying this my trading methods are simple & repeatable.

*Combine ROC & ADX & you have a momentum hunter*
Blend these two indicators with the correct parameters & Bob's your uncle. Both ROC & ADX are essentially momentum-based indicators that measure the velocity of price movements. The ROC is a momentum-based indicator. Combined the ROC with an ADX indicator & you have a perfect indicator for measuring momentum & trend strength. Also, I use the ADX as a directional indicator as well.




Skate.


----------



## Skate (21 November 2022)

*Mark Minervini*
Quote of the day.




Skate.


----------



## Captain_Chaza (21 November 2022)

Skate said:


> *Figuring out "when to stay out" of the market*
> This year has been a difficult trading year but if your strategy is selective knowing when to stay out & when to enter makes a difference. Being very selective in which positions to buy, those that have momentum & volume nearly always ensure that you will keep most of the bumps in profits. It's unavoidable that "exit confirmations" necessitate giving back some open profits but in saying this my trading methods are simple & repeatable.
> 
> *Combine ROC & ADX & you have a momentum hunter*
> ...



*Too much information for me!!*

All I need is a couple or a few Buys and/or  Sells this Month or  this Quarter
In advance

All these past tables IMHO is full of *Smoke and Mirror*s and are meaningless to me 

I invite / challenge anyone here in this thread/site   with Automated Intelligent Trading experience to do a few simple exercises

Let's log say ~6-10-15  trades in a quarter and see how she goes

I know this will fall on Deaf Ears
*But that is exactly my point


Ban Voyage and Gods' Speed*


----------



## Skate (21 November 2022)

Captain_Chaza said:


> *Too much information for me!!*
> 
> All I need is a couple or a few Buys and/or Sells this Month or this Quarter
> In advance




@Captain_Chaza *it's too much information because you don't understand*
Also what you are asking I've done many times before, trading my strategies live, and submitting (posting) the buy & sell signals before they had been entered into the market. There have also been members of this forum who actually traded along with me. With the new government rules, it's no longer possible.

*May I suggest, you do a search *
I've traded multiple strategies live in real-time in this regard so others could follow along without smoke or mirrors. Also, the actual trade results & ongoing information has been listed week after week, on an ongoing basis.

*Here are two hyperlinks to get you started*
They are the "HappyCat Strategy", the strategy has been fully discussed.






						Dump it Here
					

It's worth noting that Amibroker Backtest can't be overridden to compensate for missed (not purchased) positions.   That's not correct.  Use a buystop as part of your entry condition, adjust your trade delays and set the buystop entry condition to false if the low of the entry day gaps up...




					www.aussiestockforums.com
				









						Dump it Here
					

Skate.




					www.aussiestockforums.com
				




Skate.


----------



## Captain_Chaza (21 November 2022)

Crikey!
I am not interested in what happened in "The Cinderella Years"
By you or by anybody  
From what I understand EVERYONE Won in those days

Proves Nothing!

 I am only interested in the NEXT 3-6 month sea trials in real time

"I knew this will fall on Deaf Ears Again
*But that is exactly my point"*

I have had my say on A.I. Trading and let that be my last on this matter !
Except for
*"I knew this will fall on Deaf Ears Again
But that is exactly my point"*


----------



## Gringotts Bank (21 November 2022)

Captain_Chaza said:


> Crikey!
> I am not interested in what happened in "The Cinderella Years"
> By you or by anybody
> From what I understand EVERYONE Won in those days
> ...



I think you're misunderstanding.

Markets move because people have emotions that drive desire - the desire for gain, and the desire to avoid loss.  These desires cause behaviours that are predictable (buying and selling).  TA (or AI as you call it) works because of this predictability.  People aren't 100% predictable, but they're predictable enough that you can find an edge to exploit.

You're interested in the next 3-6 months.  IMO, the best way to know the future is to look at the past.  Human nature has barely changed in the last 100 years, and it's humans who move the markets.

Trend following works because people feel safe when they're part of the crowd.  The bigger the crowd, the more the SP appreciates. The more it appreciates, the safer holders feel about down days which means less selling,... which feeds more upwards momentum.

Mean reversion works because when strong trends occur, people tend to overreact, causing a 'spring back' effect.  Greed-fear-greed-fear, over and again.

You're implying TA is junk, and it's not.  It doesn't appeal to everyone, and it's not the only way to trade, but it is legit.  Use whatever method you like.


----------



## ducati916 (22 November 2022)

Skate said:


> *Figuring out "when to stay out" of the market*
> This year has been a difficult trading year but if your strategy is selective knowing when to stay out & when to enter makes a difference. Being very selective in which positions to buy, those that have momentum & volume nearly always ensure that you will keep most of the bumps in profits. It's unavoidable that "exit confirmations" necessitate giving back some open profits but in saying this my trading methods are simple & repeatable.
> 
> *Combine ROC & ADX & you have a momentum hunter*
> ...





Possibly there is a fundamental misunderstanding with regard to Mr Skate's trading style.

Mr Skate is a 'Swing Trader', which is 1 step up from a 'day trader'.

Entries are CRITICALLY important as evidenced from the highlighted text. The exits are CRITICAL, which are simply the loss of the entry conditions. The bit in the middle is the expansion of volatility. When volatility expands, things move.

Bear markets have higher vol. than do bull markets. You can, if trading vol. make better money in a bear than a bull.

There was a comment from @DaveTrade: "both 'when to get in' and 'when to stay out', they are two sides of the same coin".

This is probably correct. There is either a vol. expansion or there is not. No vol. expansion you stay out. A vol. expansion, you enter. A vol. expansion trumps technical considerations, although, will often occur at technical points, as stated by many, due to psychological reasons.

Where confusion twixt the 2 may exist is:

Vol. expansions move differently to price (most of the time, there are some exceptions but beyond the scope atm). Price can continue to expand for a short period as vol. starts to collapse. These are the failed B/O trades at technical resistance points. This is the 'stay out' side of the coin, confused, often with the 'get in' based on price, rather than a vol. expansion.

jog on
duc


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## Skate (22 November 2022)

Captain_Chaza said:


> All I need is a couple or a few Buys and/or Sells this Month or this Quarter
> In advance
> 
> All these past tables IMHO is full of *Smoke and Mirror*s and are meaningless to me
> ...




*THIS IS AN EXERCISE *(requested by the Captain)
In no way is this a signal service but an exercise in the highs & lows that can be experienced when trading systematically.

@Captain_Chaza, If you are okay, I'll take up your challenge but will only reveal the signals in advance for the first of the three strategies my "HighRoller Strategy". All my strategies take time to find the correct timing when to enter trades.

*On the 1st of October 2022 *
I decided to trade three new strategies. Since then, it had taken 6 weeks for the first signals to appear so if it's okay I'll post the results as the "HighRoller Strategy" has already started & it's early days of this exercise.

(1) The HighRoller Strategy
(2) The Pirate Strategy
(3) The VWMA Strategy

*This will not be a signal service *
The first Buy signals from ("The HighRoller Strategy") appeared at the end of close Friday the 11th of November 2022. The Amibroker Exploration Analysis buy signals for my "HighRoller" Strategy is below. I've just done another scan minutes ago to give an updated analysis.





*As of today*
(QPM) has not performed as expected & it's currently a sell in the pre-auction Monday morning. Between now & the next   Amibroker Exploration Analysis scan at the end of close on Friday the 25th of November that can change. But at the moment it's a sell.

*Chart for (QPM)*
Hang on, (QPM) is in profit, why the sell signals? Unfornaturely, the signal has already gone stale & has not performed as expected.





*Second update at 12 noon today*
Today is week 8 of the three strategies but week two of trading.





*Open Positions*
These are currently the "Open Positions" for the "HighRoller Strategy"





*Updates *
As I will be concentrating on the "HighRoller" strategy, reporting of the ongoing progress & signals will be displayed at the "end of trade" Fridays. There will be no "smokes & mirrors" with this exercise.

Skate.


----------



## Skate (23 November 2022)

Captain_Chaza said:


> *Too much information for me!!*
> 
> All I need is a couple or a few Buys and/or Sells this Month or this Quarter
> In advance




@Captain_Chaza, at times I need to produce enough information so others can understand & follow along. It's better to explain my way of trading so when you see the information it's easily understood. 

*First off*
There are only 3 pieces of software for me to trade systematically

*#1. Norgate*
Data supplier.

*#2. Amibroker*
Manages all my trading strategies. (Yes, Amibroker manages the open positions, stale stops/trailing stops & much, much more)

*#3. Share Trade Tracker*
Share Trade Tracker is my portfolio manager, keeping a record of all trades. Share Trade Tracker is also an analysis program to boot.

*Chunking*
If I post all the information at once, it will turn off readers, that's the reason I "chunk" my posts.

Skate.


----------



## Skate (23 November 2022)

Captain_Chaza said:


> I am only interested in the NEXT 3-6 month sea trials in real time




*Nobody knows what the next 3 months will bring*
This example of reporting "live" of one of my newer strategies ("The HighRoller Strategy") allows me the opportunity to explain how I trade using the three pieces of software posted above. (1) Norgate Updater supplies ASX "End Of Day" (EOD) data "delayed 20 minutes". (2) Amibroker requires data to produce up-to-date charts & reports. (3) Share Trade Tracker, does exactly as the name suggests "tracks all the information" to do with the purchase & reporting the movement of shares in & out of the portfolio. 

Skate.


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## Skate (23 November 2022)

CityIndex said:


> Of course, all trading carries risk, and there are a variety of factors driving market direction.




*DISCLAIMER*
The reporting of the "HighRoller" Strategy is for educational purposes & signals are theoretical & signals displayed shouldn't be misinterpreted as a signal service.

*The "HighRoller Strategy"*
This strategy has exactly 1,194 lines of code to produce three pieces of information for me to trade. It should also be noted of those 1,194 lines of code, there are 4 lines of code that produce the Buy & Sell signals. The rest of the code precisely defines parameters & settings, to produce the charts & reports.

*At the end of the week when the market has closed*
After 6 pm at the end of the trading week with the push of one button, Amibroker produces the "Exploration Analysis Report" that tells me 3 things in column order 

*Exploration Analysis Report Order*
This analysis report is generated in the same order that I use to place an order in Commsec

(1) What ASX code to buy & sell
(2) How many shares to buy & sell
(3) What price to offer in the pre-auction.

*Trading doesn't get any simpler*
All orders from the "Exploration Analysis Report" are placed in the markets over the weekend waiting to snag the "opening price" on Monday.

Skate.


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## Skate (23 November 2022)

Captain_Chaza said:


> Too much information for me!!




Yes Captain I know, but these explanatory notes will help others follow along when I post my report on Fridays after the market closes.

*The Exploration Analysis Report ("1 recent bar(s)")*
For actual trading I use the "Exploration Analysis Report", using the filter range set to "1 recent bar(s)" so only the current signals are displayed, whereas if you use the "From-To dates" it produces all the raw between those dates.





*How to display all the raw signals ("From-To dates")*
Using the "From-To dates" produces all the raw between the dates used for the report




Skate.


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## Skate (23 November 2022)

*Before I end this series of post*
I trade using the "Exploration Analysis Report" a report where I can write code to filter the information in the order I require. Trading in the pre-auction the opening price is the "unknown part of trading" using this method. Using a (+3%) premium to the last closing price allows me to snag Monday's opening price 99.99% of the time "without" exceeding my budget for each position executed. No one wants to be caught short of having "egg on their face" of not having enough funds to cover the positions purchased.

*There are some who trade using the Portfolio Report*
But it's not for me. Why? Because the original report displays one set of figures & another set of figures after the opening on Monday. Amibroker recalculates the report when the opening price is known,




.Skate.


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## Skate (23 November 2022)

Skate said:


> *Disclaimer (condensed)*
> "Past performance is no guarantee or reliable of future returns"




*The hard work has been done*
Disclaimers such as "Past performance is no guarantee or reliable of future returns" are in my opinion the hardest part of any Trading endeavour. System traders such as myself spend a tremendous time before one dollar is invested in a new strategy. You can take it from me, even though the "HighRoller Strategy" is a new strategy it's been through the wringer to make it this far. I'm just saying if I can't rely on past results to make decisions for the future what can I do?

Skate.


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## Skate (23 November 2022)

*"The HighRoller Strategy"*
Portfolio Starting balance: $100k
Number of positions in the portfolio: 10
PositionSize: 10 X $10k equal positions
Starting Date: 14th November 2022
End Date: End of February 2023

*Living up to expectations*
No matter how smart we think we are, or how hard we work, we will regularly be hit by news, circumstances & developments that will be unforeseeable in the next three months. I'm sure during this 3-month exercise the "trading gods" will periodically use me for their entertainment & there is nothing I can do to prevent it. One thing for sure, I'll be mentally prepared knowing that drawdowns & losses are part of the trading process, so I'll take it on the chin & accept the outcome by being the ‘best loser’ I can possibly be.

*This calendar trading year has been tough*
Below is the backtest report for "the HighRoller Strategy" for this calendar year from the 1st of January 2022 to noon today (23rd of November 2022). I'm sure if the "trading gods" look favourable on the markets for the next three months this strategy will hold its own. With unfavourable market conditions during the next three months, as with all trend-following strategies, this strategy will suffer.








Skate.


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## Skate (23 November 2022)

*Reports can be generated as desired*
As of noon today the "Open Summary" & the "Exploration Analysis" of the "HighRoller Portfolio" are both listed. There are two positions earmarked for sale at the moment but that could all change in a heartbeat.

*Amibroker Exploration Analysis current report*
The analysis report displays all the raw signals, but there are only two that are in the "HighRoller Portfolio"





*Share Trade Tracker*
The "Open Summary of the HighRoller Strategy displays those two positions, earmarked for sale "at the moment". At the moment are the optimal words. One is currently a winner & the other is currently a bit behind. Rest assured, both positions have gone stale "at this point" in time.





*Current chart for (ASX:IPD)*





*Current chart for (ASX:QPM)*





*When will the avalanche of information stop?*
About now. I wanted to display information on how I see trading so you can follow my thought process. Displaying the information goes a long way with my desire to help another trader, "trade profitably", which is the name of the game.

Skate.


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## rcw1 (23 November 2022)

Good afternoon Skate,

Hoping find you well.  Been meaning to touch base much sooner regarding your posts re: Volume-Weighted Moving Average' (VWMA) and other matters.   Also, had a chance to go through this thread, nearly 4 years of posts, some marvelous stuff documented, a credit to yourself and those that have contributed along the way.  Awfully difficult to keep people happy all the time, as everybody has an opinion on things.  It is the nature of our business.  Yes, and a good thing too.

The concept of VWMA has been adopted as a trading benchmark embraced by rcw1 for many years.  rcw1 applies this concept too swing and day trading methodologies, arduous, but yet rewarding in so many ways.  rcw1, for mine, is a swing trader that likes to fast trade, daily and does not use any software other than charting and trading platform.  3 screens and a computer, for old times sake...   Have built highways and over passes around /through VWMA so that it is more efficiently executed within scope of personal methodologies.  rcw1 broadly defines this process/system as, *'numbers'.*  It goes well beyond the formula of VWMA.  It's all about what is happening real time with depth of the stock and its volume at any point in time.  Knowing the why's !! ...  Demand v Supply, essentially.  Contemporary times of 'computer invasion' of stocks, large shorting issues and super funds grabbing sh-t loads of shares, let alone the world economies and the Dow, makes things most interesting indeed, for the trader, the 'mosquitos' of the market.  rcw1 will only target a handful of stocks at any one time so that maximum attention can be drawn in real time as to what they are doing... and trade accordingly.

When the price is above an open, it is up, conversely, when the price is below an open, it is down. No hidden agendas or rocket science here.  But these are the start points.  This is when the game starts and ends each day.  Traders, mostly, look for reversals but can be impatient and 'trigger happy' thus buying when they shouldn't and holding / selling ultimately for a loss. Traders must limit this risk; it is a given.  Again, no rocket science here.   Traders also need to drink plenty of concrete to toughen up, to do battle again, after a few rounds in the 'trading ring' 

Charts obviously play a major role, there are many available, an incredibly valuable resource/tool given the right circumstances.  Charts are an excellent indicator, nothing more or for that matter nothing less.  A chart cannot guarantee to the trader the stock will go up or go down, it simply provides data in a format for the eyes to easily read and interpret by the brain.  Patterns and behaviours present, past and future ... perhaps.  All traders will watch carefully for telltale triggers/signals, a mere slight trace of reversal could be enough.

Interestingly, may well pick up perceived different signals watching conjointly a one-minute chart and a 5-minute chart of the same stock movement.  ha ha ha ha does one's head in...  Also perceived different signals watching the live feed of sales of any particular stock as opposed to chart interpretation.  There could well be a block of traders jump in at once, or out ...  Who knows unless your on line watching.  Then the questions are why??  What for?

rcw1 primary chart is the one-minute chart.
Other evidence-based concepts include, ADR equivalent analysis, TA, research of publications which may reveal valuable information to help make / forecast trading decisions and comments made within chat / community forums.

rcw1 at times performs his own 'numbers' calculations manually, particularly with the first 3 minutes of the trading day (happy to explain this better another time) and maintain 'numbers' records, on a case-by-case basis.  As data comes in, it gets added and divided by total volume to that specific point in time in line with the 'numbers' formula.  Benchmarking, but not always,  time may well not allow to jump in or out, but aligned towards two trades a day, per stock, one off the low of the day and one off the high of the day.  What will be the low and what will be the high??? Whatever the trader wants it to be, but it must support and be directly aimed at an earn transaction, profit.  Trade what is before you, off the pitch.  Could be any number of trades for any one stock, could be none too.  Depends.

This is nothing new or for that matter original.

Traders often fail not knowing for sure where price is going; enter when it's not valid for fear of missing out (herd / sheep mentality); over size for the size of the a/c; get greedy and try for more profit outside trading scope.  A profit is a profit.  rcw1 considers only an accumulative effect of earn both with the sell transaction and then the earn compounded with other trades by the leap frogging immediately into other trading stocks with profit and capital, round and round and round we go.

rcw1 does not abide by rigid rules, as for mine, it can restrict one's own natural ability, however, want to be clear, that rules are in place to mitigate against risk.  Rules are good.  On the balance rcw1 is a big supporter an advocate of one's own natural ability and being able to work unimpeded or without undue restriction of trading process. Somewhat contradictory I know.  The use of your own cultural traits, emotion and application of life's learnings, 'tricks of the trade' are for mine most important.  They cannot be taught; they are acquired whilst 'on the tools' where loss and sorrow and 'bloodshed' have been experienced.  Experiences, occurrences which all 'value add' towards decision making considerations of when to move on a stock or not!!

During the passage of time rcw1 has become more flexible in the methodologies applied, with emphasis on 'gut feeling' ; déjà vu; making some plays with the numbers presented.  Sometimes there is a fine line between utter stupidity and a balanced patient approach to earn.    Difficult to define, provide an evidence base for, but nevertheless, rcw1 will rely upon past experiences to trade.
For mine it takes decade*s *to make for a complete trader and even still, there are gaps.

When things don't go well, rcw1 will change trading account, over to a separate and completely different account.  95% of the time is it borrowed cash (Trading Loan) which is used but when trades are not going well, will change over to savings account.  Found that this quietened the enthusiasm... a new lease of life so to speak, like a 'smoko break', stemmies the tide... Marvelous how a simple thing like changing an account, steady's the ship.

_Perfection is not when you have nothing more to add, but when you have nothing more to take away_ -  Antoine De Saint Exupery.

Perfection requires 'absolute resolve and discipline' in real time.  For mine, simplicity in a practical sense helps generate perfection. Perfection cannot be judged over a snapshot of time, it is infinite, it is required to be ongoing, open ended, as applied to the task at hand, in this case, trading.  Perfection is a 'state of mind' what rcw1 strives to achieve and remain in 'that zone', when trading.  To be perfect.  Laugh you may, but that is rcw1 objective every single day that a trade takes place.  Once gaining the requisite level of perfection, standard, confidence builds, it snowballs, the mind becomes overwhelmingly full of positive thoughts, clearer mind, clearer picture an enhancement of judgement duly follows.

Setbacks come and go all the time. Landslide setbacks, but traders need to pick oneself off the floor dust oneself off and get back onto the saddle, smarter and wiser, building on the other remarkable traders' trait, that of resilience.  True traders run the market over decades. To survive, is a privilege.

rcw1 opinions.  There is no script.

Be perfect and trade whatever system the trader is comfortable with.  Together in the sandpit to earn, there can be no other motivation.

Have a very nice day, today.
edit: change to read good afternoon

Kind regards
rcw1


Skate said:


> Sometimes you feel like dumping stuff & this thread might be the perfect place.
> 
> *Helping Others*
> You might want to dump stuff here to help others
> ...


----------



## Skate (23 November 2022)

rcw1 said:


> Good afternoon Skate,
> 
> Hoping find you well.  Been meaning to touch base much sooner regarding your posts re: Volume-Weighted Moving Average' (VWMA) and other matters.   Also, had a chance to go through this thread, nearly 4 years of posts, some marvelous stuff documented, a credit to yourself and those that have contributed along the way.  Awfully difficult to keep people happy all the time, as everybody has an opinion on things.  It is the nature of our business.  Yes, and a good thing too.
> 
> ...




@rcw1 your post is pure gold.



rcw1 said:


> Been meaning to touch base much sooner regarding your posts re: Volume-Weighted Moving Average' (VWMA) and other matters.




The open challenge @Captain_Chaza put out was intended to see if you can profit from the markets using just technicals rather than the fundamentals of a company. @Gringotts Bank explained it perfectly when it was insinuated that it's "herd trading" which is 100% correct. System trading is not for everyone but it has been very profitable for me over the years. From my point of view, I've tried to explain how I trade, a trading system that is repeatable.



rcw1 said:


> The concept of VWMA has been adopted as a trading benchmark embraced by rcw1 for many years. rcw1 applies this concept too swing and day trading methodologies, arduous, but yet rewarding in so many ways.




*Reporting on the "VWMA Strategy"*
When challenged to trade live with all signals in advance I used the "HighRoller Strategy" as it was the first in the charts. I won't be displaying signals for the other two strategies (1) "The Pirate Strategy" & (2) "The VWMA Strategy" but I will include those ongoing results as part of the Equity Curve for the "HighRoller Strategy" being on the same chart. Leaving the two strategies as part of the "Equity Curve" might encourage others to look for information that we already know.



ducati916 said:


> Possibly there is a fundamental misunderstanding with regard to Mr Skate's trading style.
> 
> *Mr Skate is a 'Swing Trader', which is 1 step up from a 'day trader'.*
> 
> Entries are CRITICALLY important as evidenced from the highlighted text. The exits are CRITICAL, which are simply the loss of the entry conditions. The bit in the middle is the expansion of volatility. When volatility expands, things move.




*Well who knows*
I'm not going to argue with the Duc's assessment of my trading style as I'm smarter than that. I regard myself as a "Mechanical Weekly Trend Trader" who concentrates on getting into confirmed trend & flee like a wimp at the first sign things are not panning out as expected.

Skate.


----------



## Skate (23 November 2022)

Captain_Chaza said:


> I have had my say on A.I. Trading






rcw1 said:


> rcw1 does not abide by rigid rules, as for mine, it can restrict one's own natural ability




*There are so many ways & styles to trade*
I'm made remarks before that they are some members who are just great at what they do. They have skills that we mere mortals can only dream about. When you read back a few pages you find those posts by members who are simply brilliant at what they do. These members are "unconsciously competent".

*Now I'm thinking about being competent*
There are some highly skilled traders on this forum who trade differently from most. In trading terms, they no longer need to follow a set trading system but patiently wait for a setup, & then take the trade as @peter2 does. These traders are "unconsciously competent". They appear to trade using their so-called 'intuition', but are in fact, applying their vast knowledge & skill to recognise low-risk, high-profit potential, trades.

*I'll leave the last word to* @rcw1
As it pretty well sums it up.



rcw1 said:


> *Be perfect and trade whatever system the trader is comfortable with. Together in the sandpit to earn, there can be no other motivation.*




Skate.


----------



## DaveTrade (23 November 2022)

rcw1 said:


> Good afternoon Skate,
> 
> Hoping find you well.  Been meaning to touch base much sooner regarding your posts re: Volume-Weighted Moving Average' (VWMA) and other matters.   Also, had a chance to go through this thread, nearly 4 years of posts, some marvelous stuff documented, a credit to yourself and those that have contributed along the way.  Awfully difficult to keep people happy all the time, as everybody has an opinion on things.  It is the nature of our business.  Yes, and a good thing too.
> 
> ...



@rcw1 I love the way that you express yourself, you sound like a hybrid between a philosopher and a poet. I'm a technical analytical type of person but I also love philosophy. I think that you wound be great company to have a drink with. Your doing it your way and your going deep with your thought processes, and I respect that. All the best mate.


----------



## qldfrog (23 November 2022)

DaveTrade said:


> @rcw1 I love the way that you express yourself, you sound like a hybrid between a philosopher and a poet. I'm a technical analytical type of person but I also love philosophy. I think that you wound be great company to have a drink with. Your doing it your way and your going deep with your thought processes, and I respect that. All the best mate.



+1 DT,
Not as well how @rcw1 always applies a coat of feel good basic psychology to his entries.
It would be very hard to disagree nastily with any of his posts


----------



## ducati916 (24 November 2022)

Changing tack ever so slightly:








jog on
duc


----------



## Skate (24 November 2022)

peter2 said:


> *Speculative Momentum Portfolio* (SMP):
> The edge in this system is buying what others are buying regardless of the company outlook and selling after the first signs of sellers (supply) appear.




*New projects*
@peter2 new project should make interesting reading as his method when entering & exiting the market is different from my way of trading. Peter's posting style is refreshing as he explains his thoughts & methodology as his trading progresses, just not his results. Without new ideas, thinking is not stimulated.



peter2 said:


> The big difference is that I don't use Amibroker and my trade selections and exits will be discretionary, not system generated.




*Trading Skills*
I would place Peter in the "unconsciously competent" type of trader as he uses his knowledge & experience when entering & exiting a trade. 

Skate.


----------



## Skate (24 November 2022)

*I feel like a fake*
Last Christmas a department store Santa approached me & said "I feel like a fake, looking at your beard". Buying & selling generated signals without knowing what a company does makes me "feel like the fake". Don't get me wrong, I may not know what a company does but I certainly know a lot about human nature, something my coding aims to capture.

* Research & system testing is all-consuming *
That's where all my efforts lay. Trading takes up only minutes per week as I rely on the work I've already done. I must admit I don't feel as though "I'm a real trader" but nevertheless it's rewarding making a few dollars trading the way I do.

Skate.


----------



## Skate (24 November 2022)

*Our Community*
Without something new to learn we tend to use this forum as a place to hang out, which is okay. The forum over the last few years had a surge of new members eager to learn more about trading. A portion of those has left disillusioned because of the recent treacherous trading conditions. 

*At the same time*
We have been fortunate enough to pick up the best & brightest from the closure of the CommSec forum. New members bring a new perspective when it comes to all things trading, something I appreciate.

Skate.


----------



## Skate (24 November 2022)

*Information Overload*
The experiment @Captain_Chaza has requested involves trading a strategy for 3 months to establish if a Mechanical Trading System has any merit. I've displayed information previously about how I trade & before reporting tomorrow I wanted to explain three important chart features. I've just run an Exploration Analysis & have a group of raw signals. Of those signals, only the positions currently in the portfolio need to be actioned. The other signals are redundant but good for this explanation.

*These are all today's raw signals for the "HighRoller Strategy"*
At the end of the close today, there are 8 sell signals. (ASX:GOR) is not in the portfolio but as it's the first position in the list I'll chart it up. In doing so I'll make three comments that are important to understand how the strategy operates.




*The marking on the chart*
(a) The "Take Profit Stop" the "Stalke Exit" & the "Trailing Stop" are all noted that should be self-explanatory.

(b)  What I want to highlight is two ribbons at the bottom of the chart. Unless both ribbons are green, the strategy won't generate buy signals. But it can generate sell signals.

(C) Next below the chart is a "Percentage Up Indicator". For a buy signal to be generated the "Percentage Up Indicator" needs to be 50% or above. Below the 50% level, only sell signals will be generated. If the "Percentage Up Indicator" falls to 25% or below it's an immediate exit.






Skate.


----------



## Skate (25 November 2022)

*"The HighRoller Strategy" Trading Results *
Uploading screen captures should supply enough information to follow along each Friday. All the information other than the expanded Equity Chart pertains to the "HighRoller Strategy" only.





*The Equity Curve of all three strategies*
Each strategy name & equity line is colour coded. The "HighRoller Strategy" is RED, the "Pirate Strategy" is BLUE & The VWMA Strategy is ORANGE.

*All three strategies have had a win this week*
This exercise is all about the trading results of "The HighRoller Strategy". The Equity Curve below displays the ongoing trading results of the other two strategies the "Pirate" & the "VWMA" strategies.

*I made a series of posts about the "VWMA Strategy"*
As there was interest shown in the "VWMA Strategy", it's included for others who want to follow its weekly progress at the same time.





*The "HighRoller Strategy" current open positions*
There are two sells  (IPD) & (QPM) that will need to be placed in the pre-auction over the weekend.





*Amibroker Exploration Analysis*
The Exploration Analysis displays all the raw signals (even those not in the portfolio). There are two positions that need action over the weekend. (IPD) & (QPM). Both positions went stale early. Selling is where the money is made. (IMHO)







Skate.


----------



## Skate (25 November 2022)

peter2 said:


> We have to be patient while waiting for better conditions






qldfrog said:


> VWMA as inspired by Mr Skate posts started..but is not engaged yet




*Boxing analogy when it comes to trading*
It's all about knowing when to throw a punch.

Skate.


----------



## Skate (26 November 2022)

Skate said:


> *Boxing analogy when it comes to trading*
> It's all about knowing when to throw a punch.




*We all fall into the trap of overtrading*
When trading, timing is everything. I don't care how good you think a company is, but if you buy it at the wrong time, you're in for a world of pain & misery.

*We have all seen the Superannuation commercials (compare the pair)*
Well, that's what I've done to display why the timing of buying a position is so important. If you get this one feature wrong your "Hero strategy" can go to a "Zero Strategy"

*Compare the pair*
This backtest displays the difference a timing filter can make to your trading performance. Both strategies are exactly the same strategy, with the same parameters. The only difference is the "buy filter" has been removed from the strategy on the right-hand side.

*The "VWMA Strategy" Backtest results*
Backtest period is from the 1st of January 2022 to the 25th of November 2022.


Skate.


----------



## Skate (26 November 2022)

Skate said:


> I've asked Nick if he would update his WTT backtest for this calendar year.









Nick Radge said:


> The staff member responsible for updating that data has been extremely busy on other projects. He'll update at month end.




*Not long now*
The end of November is quickly approaching so the results should be updated shortly thereafter.

Skate.


----------



## Captain_Chaza (26 November 2022)

*Still Too Much information for me*

All I just like to know is your *Opening Buying Limit* each Monday on each stock
and  then ?
If any of them Buying or Selling orders got *CONFIRMED in real time 

This is all I would like to Check on your tables!
This should not have to be "Rocket Science"

Otherwise 
"It's All Smoke and Mirrors"

Love your work and many thanks*
You may have something and maybe you have not?

Salute and Gods' Speed


----------



## Skate (26 November 2022)

Captain_Chaza said:


> Still Too Much information for me




Okay @Captain_Chaza, I hear you loud & clear.

I'll cease the exercise.




Skate.


----------



## peter2 (26 November 2022)

I was thinking about the profit take exit for my spec momentum portfolio. At the moment it's discretionary, based on my opinion if price has gone up too fast and is now overbought and likely to drop with significant profit selling. The concern with all profit taking (scaling out) methods is the cost of lost profits. However the speculative sector has many instances of pump & dumps due to pure speculation. 

I was wondering about the average trade wins and losses posted in the many back tests in this thread. Compiling a table as I scanned through this thread I noticed that the average trade win during 2022 (19%) is much lower than previous years 2018 - 2021 (32%). We can agree that 2022 has been a risk off year and we can see confirmation in this stat. 

If the ave trade win varies so much and it's impossible to predict what it'll be in the future. How do we estimate what the profit take target should be? Past results are little guide to future results. 

If we use market filters to govern the market exposure then perhaps a market filter (or market internal) may help to estimate a profit take value that's suited to the current market conditions. We understand that in bullish markets we shouldn't scale out, but when conditions are not so bullish taking partial profits can prevent losing too much of the open profit. 

It may be as simple as monitoring the XSO index to guide our scaling out (profit taking) in the spec sector.


----------



## Skate (26 November 2022)

peter2 said:


> I was thinking about the profit take exit for my spec momentum portfolio. At the moment it's discretionary, based on my opinion if price has gone up too fast and is now overbought and likely to drop with significant profit selling.




@peter2, a profit stop can be coded precisely, getting this parameter right allows you to lock in profits before a retracement.

*I'll stay with the "VWMA Strategy" for the example *
The charts below are from the backtest this calendar year*. *If you look at the 4 charts below you will see that after a "Take Profit Stop" is taken out (the aqua dash line) the price soon retraces.

*The "Take Profit Stop" *
The chart displays that the "Take Profit Stop" (the aqua dash line) is precisely coded with no discretionary input required. Coding the "Take profit Stop" correctly as part of an exit strategy adds value to your portfolio. Exits, make the money, IMHO.

*Backtest metrics are important*
These 4 "Take Profit Stops" are from the "VWMA Strategy" that was reported a few posts back. The "Take Profit Stop" is the first line of the extended metrics. Two of the 4 charts below have been expanded for a better view.

*After the "Take Profit Stop" (Green down arrow)*
You will notice the price retraces after a "Take Profit Stop" is hit. It should be noted that the "Take Profit Stop" locks in profits.

















Skate.


----------



## frugal.rock (26 November 2022)

peter2 said:


> I was wondering about the average trade wins and losses posted in the many back tests in this thread. Compiling a table as I scanned through this thread I noticed that the average trade win during 2022 (19%) is much lower than previous years 2018 - 2021 (32%). We can agree that 2022 has been a risk off year and we can see confirmation in this stat.



Thanks for sharing this stat. I appreciate that it probably took a while to compile. 👍
It matches my move to accept smaller margins from earlier this year. (I love bias confirmation..😬)
Slim pickings and leaner times for sure.


----------



## farmerge (27 November 2022)

rcw1 said:


> Good afternoon Skate,
> 
> Hoping find you well.  Been meaning to touch base much sooner regarding your posts re: Volume-Weighted Moving Average' (VWMA) and other matters.   Also, had a chance to go through this thread, nearly 4 years of posts, some marvelous stuff documented, a credit to yourself and those that have contributed along the way.  Awfully difficult to keep people happy all the time, as everybody has an opinion on things.  It is the nature of our business.  Yes, and a good thing too.
> 
> ...



Morning to you rcw1 just finished reading your thoughts and processes on how you decide to trade. Very informative acticale. My trading is a bit less than yours but we both espouse to the same theory and end result.....A wallet filler if possible with each and evey sell


----------



## Skate (27 November 2022)

Skate said:


> *We all fall into the trap of overtrading*
> When trading, timing is everything. I don't care how good you think a company is, but if you buy it at the wrong time, you're in for a world of pain & misery.




*In this game, it's critical that traders don't overtrade*
When profit targets are hit, close the trade & enjoy the gains. When in a losing trade follow the sell signals, don't try to outsmart your strategy. Just learn to be the best loser you can possibly be.

*When you have one job to do*
Don't "fuck_it_up".




Skate.


----------



## farmerge (27 November 2022)

Skate said:


> *In this game, it's critical that traders don't overtrade*
> When profit targets are hit, close the trade & enjoy the gains. When in a losing trade follow the sell signals, don't try to outsmart your strategy. Just learn to be the best loser you can possibly be.
> 
> *When you have one job to do*
> ...



classic case of an almighty stuff-up


----------



## Skate (27 November 2022)

*Life is beautiful*
This photo has just been taken. Sometimes words are not enough.





Skate.


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## farmerge (27 November 2022)

Skate said:


> *Life is beautiful*
> This photo has just been taken. Sometimes words are not enough.
> 
> View attachment 149806
> ...



almost would say its a painting but a great shot


----------



## DaveTrade (27 November 2022)

Skate said:


> *Life is beautiful*
> This photo has just been taken. Sometimes words are not enough.
> 
> 
> ...



@Skate yes this photo is one of best I've seen. Do you know the location?


----------



## Skate (27 November 2022)

DaveTrade said:


> @Skate yes this photo is one of best I've seen. Do you know the location?




Umina Beach 
Central Coast NSW 2256

Skate.


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## rcw1 (30 November 2022)

Good morning Skate,
Hoping rcw1 finds you well.

Might have an easy day today .... ha ha ha not likely.... umbilical cord still attached to the market ha ha ha ha ha.
Beautiful clear morning in the north.

High hopes with LYC today.  Its ADR and OTC nice gains in the US of Aaaaaaaaaaaa.  Not that this is the authority, but liked the AGM report yesterday.   Thinking shareholders will embrace.  Time will tell... tick tock, bring on the bell.

Have a very nice day, today.

Kind regards
rcw1


----------



## Rabbithop (30 November 2022)

rcw1 said:


> Good morning Skate,
> Hoping rcw1 finds you well.
> 
> Might have an easy day today .... ha ha ha not likely.... umbilical cord still attached to the market ha ha ha ha ha.
> ...



Good morning. Likely BHP, RIO, LYC n PLS will be ridding high today. I don't hold all these stocks...


----------



## Skate (30 November 2022)

rcw1 said:


> High hopes with LYC today






Rabbithop said:


> Good morning. Likely BHP, RIO, LYC n PLS will be ridding high today.




*Stimulating posts*
I always enjoy it when others put their thoughts into words. Posts such as these stimulate my thinking. I'm now off to view these charts before the open. 

Thanks, guys.
Skate.


----------



## Skate (30 November 2022)

rcw1 said:


> High hopes with LYC today






Rabbithop said:


> LYC n PLS will be ridding high today




*Charts*
Over time both of these positions (LYC & PLS) have been kind to me.








Skate.


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## rcw1 (30 November 2022)

LYC opened red ha ha ha ha ha  Share holders probably still asleep ha ha ha ha  

Kind regards
rcw1


----------



## rcw1 (30 November 2022)

Shareholders having a coffee  Awake there are becoming...


----------



## Rabbithop (30 November 2022)

rcw1 said:


> LYC opened red ha ha ha ha ha  Share holders probably still asleep ha ha ha ha
> 
> Kind regards
> rcw1



I will check after this Forum. Buy Low Sell High 😁


----------



## Rabbithop (30 November 2022)

rcw1 said:


> Shareholders having a coffee  Awake there are becoming...



Just finishing some garden work, having coffee n toasts, checking Forum then to Market..to Market ..to buy a big fat pig🐰🤩


----------



## Skate (30 November 2022)

rcw1 said:


> Shareholders having a coffee  Awake there are becoming...




*Updated 11:25am (30/11/2022)*
LYC is moving in the right direction




Skate.


----------



## rcw1 (30 November 2022)

Skate said:


> *Updated 11:25am (30/11/2022)*
> LYC is moving in the right direction
> 
> View attachment 149906
> ...



Good ol LYC inertia ... Out rcw1 goes. 
Will still watch closely though.



Kind regards
rcw1


----------



## farmerge (30 November 2022)

Skate said:


> *Stimulating posts*
> I always enjoy it when others put their thoughts into words. Posts such as these stimulate my thinking. I'm now off to view these charts before the open.
> 
> Thanks, guys.
> Skate.



Good morning Skate. Now I am not bragging as has been suggested bt I do day trade and the name of the game is maka da monee. Sold BRN and PLS for a tidy sum, only to see than PLS had jumped a further 10c up after my sell. Does that make me stupid !!!!


----------



## Skate (30 November 2022)

farmerge said:


> *the name of the game is maka da monee.* Sold BRN and PLS for a tidy sum, only to see than *PLS had jumped a further 10c up after my sell. Does that make me stupid !!!!*






Skate said:


> *"Take Profit Stop" is always a healthy way to exit a position.*




Skate.


----------



## farmerge (30 November 2022)

Skate I'm not into charts or charting. I have a very valuable "adviser" the bloke in the mirror who is usually right on the money


----------



## rcw1 (30 November 2022)

farmerge said:


> Good morning Skate. Now I am not bragging as has been suggested bt I do day trade and the name of the game is maka da monee. Sold BRN and PLS for a tidy sum, only to see than PLS had jumped a further 10c up after my sell. Does that make me stupid !!!!



Hello farmerge, have you got another entry point in mind?  re PLS?

Kind regards
rcw1


----------



## Skate (30 November 2022)

farmerge said:


> Skate I'm not into charts or charting. *I have a very valuable "adviser" the bloke in the mirror* who is usually right on the money




*I've said it once so I'll say it again*
There are some highly skilled traders on this forum who trade differently from most. In trading terms, they no longer need to follow a set trading system but patiently wait for a setup, & then take the trade. These traders are "unconsciously competent". They appear to trade using their so-called 'intuition', but are in fact, applying their vast knowledge & skill to recognise low-risk, high-profit potential, trades.

Skate.


----------



## farmerge (30 November 2022)

rcw1 said:


> Hello farmerge, have you got another entry point in mind?  re PLS?
> 
> Kind regards
> rcw1



Have a buy in but way under the present SP Just sitting at the bus stop waiting for the 4.41 this arvo !!!!!


----------



## Skate (30 November 2022)

Skate said:


> *Helping Others*
> You might want to dump stuff here to help others






rcw1 said:


> High hopes with LYC today. Its ADR and OTC nice gains in the US of Aaaaaaaaaaaa. Not that this is the authority, but liked the AGM report yesterday. Thinking shareholders will embrace. Time will tell... tick tock, bring on the bell.




*Great summation found here* (before the markets opened)
Hearing how others trade, is a privilege.






						LYC - Lynas Rare Earths
					

=AZVSOm3kzInsau5RHw49NwYQ3WW0E72d3TZfJq4sEW3zxNMWuIbYPbTaZLvOz4BBXhwYDqOpIFRf0p4Z3JTuKn54ZKNM5G8Z4Ah94sbZZGvZrerBsiJfxoLGmVD_qKWJl4rcKsxSlqZ666nnD3f1k7icJAuwOEdhr4_c_WupxqAE-Jlxd-WMhVzXroqqb1OfnbQP770YprVHOJ6QAZFvSfNr&__tn__=-UC%2CP-R']Lynas Western...




					www.aussiestockforums.com
				






rcw1 said:


> Good ol LYC inertia ... Out rcw1 goes.




*Trading is simple & uncomplicated*
Don't let anyone tell you it's not. It's not rocket science to buy & sell part of a company. The difficult part is finding (a) what to buy (b) when to buy it & most of all (c) when to sell it. @rcw1 has exercised all three today which is very impressive. Jumping on when they are going up & hopping off at the first sign of them going down is where the skill is. Taking profits on offer is another as @farmerge has indicated by locking in a "Take Profit Stop". Exiting doesn't mean you can't buy back in because that option is always open.

Skate.


----------



## Rabbithop (30 November 2022)

farmerge said:


> Good morning Skate. Now I am not bragging as has been suggested bt I do day trade and the name of the game is maka da monee. Sold BRN and PLS for a tidy sum, only to see than PLS had jumped a further 10c up after my sell. Does that make me stupid !!!!



🤣😂mate, u ein some n u lose some
 Other wise  we r all millionaires or Billionaires


----------



## Skate (30 November 2022)

farmerge said:


> Sitting and waiting patiently for the market dip so I can get back in !!!!!




*We are all different*
While one person sees an opportunity, others see something completely different. Thus, it’s our perception that creates value at any given time.

Skate.


----------



## farmerge (30 November 2022)

Skate said:


> *We are all different*
> While one person sees an opportunity, others see something completely different. Thus, it’s our perception that creates value at any given time.
> 
> Skate.



Skate whilst enjoying a mug of coffee and biscuits I started thinking about your replies. What a breath of fresh air with your thoughts  when you post. I put you in the same league as His Lordship, not sure if you were ever in the commsec community, but I bestowed this title to Mahail  a couple of years ago. Another true gentleman.


----------



## Joe Blow (30 November 2022)

farmerge said:


> Sitting and waiting patiently for the market dip so I can get back in !!!!!




Just wondering if this trading banter might be better suited to your ASX Trading thread?


----------



## farmerge (30 November 2022)

Joe Blow said:


> Just wondering if this trading banter might be better suited to your ASX Trading thread?



will change tack Joe


----------



## Skate (1 December 2022)

Skate.


----------



## Skate (2 December 2022)

Skate.


----------



## Gringotts Bank (2 December 2022)

*EOD mean reversion on ASX speccies is dead!*  Has been since covid struck in 2020.  They way these stocks move nowadays is just unbelievable.  Completely different to pre-covid.

Gives me the irrits because momentum trading is something I've never figured out.


----------



## Skate (2 December 2022)

Sean K said:


> Gents, this is Skate's Dump it Here thread. If you would like to talk about PLS or BD1 or have some random chit chat please post comments in the relevant threads. Thank you kindly. Sean K






farmerge said:


> I'm still holding a couple of buys with PLS just sitting and waiting at the station, watch the trains go by. Must a no stops these trains .




@farmerge* if I may make a few comments & post a weekly chart for (PLS)*
@Sean K & @Joe Blow are absolutely correct that trading banter might be better suited to the ASX Trading thread. But, as you are a relatively new member of our community I'll post a chart when positions are mentioned. To understand why a position is mentioned I pull up a chart using the "Ducati Blue Bar Strategy". This strategy has the unique ability to pick the confirmed momentum moves of any security in any time frame just by recolouring the price bars. 

*Yellow means caution*
The ribbon at the bottom of the chart denotes if the position is currently unloved by turning yellow (caution should be exercised) similar to traffic lights. BTW, the colour of the bar changes in real-time during the whole trading period, whether that be Daily, Weekly or Monthly periodicity. 

*A simple strategy that uses volatility & volume*
I've made multiple posts on the advantages of "The Ducati Blue Bar Strategy" when it comes to a trading strategy that is simple in design & structure as it incorporates both "volatility & volume". As traders, we don't need a fancy strategy to make money. It's exciting to experience how other traders & their methodologies that decide when a position is to be entered. Coding of the "Blue Bar" strategy is pretty straightforward & it's easy to chart positions to understand the logic behind the selection.

*Simply, colours tell the story*
Blue bars are good, red not so much. A yellow ribbon means the position is unloved & caution should be exercised.

*Weekly Chart (PLS)*




*In summary*
The recent banter may be shited to the ASX Trading thread. 

Skate.


----------



## Sean K (2 December 2022)

@farmerge and @Rabbithop just moved some of your banter to the ASX Trading thread. Thanks for all your posting, keep it up.


----------



## Skate (2 December 2022)

Skate said:


> Okay @Captain_Chaza, I hear you loud & clear.
> 
> I'll cease the exercise.




*Weekly results*
Before ceasing the exercise of weekly reporting of the "HighRoller Strategy" I remarked the next update would be today. After this post, there won't be any further updates or ongoing progress of the three strategies.

*Combined results*
All three strategies are performing at the moment which is pleasing. Most traders are constantly obsessing about where & how to get into the market. At times waiting for signals for the "percentage filter" to kick-in can be the hardest part of trading my way.





*Equity Curve*
It should be noted that the three strategies were idle for 6 weeks before the first signal. The "HighRoller Strategy" was selected for this exercise & currently, it's the worst performer of the three. I select the "HighRoller Strategy" for no other reason than it was first on the list of three in the "Dashboard Filter".




Skate.


----------



## Skate (3 December 2022)

*Mechanical System Trading*
In today's daily post @ducati916 gave a slight concession.




Skate.


----------



## Skate (3 December 2022)

Captain_Chaza said:


> Everyone loves a Loser
> I feel for you!
> You are not alone!




*Sometimes the truth can be brutal*
At times posting information in such a way can have a detrimental effect than those that were intended. We all like to read interesting & stimulating information. But I guess it's only human nature to enjoy watching a train wreck in motion. 

*Twitter*
One of our members has a pole on Twitter asking others who would like the format of displaying dollars wins/losses to continue into the New Year. I'm sure the pole will be an astounding "yes" for two reasons. 

1. To see if they can get out of the hole they have dug for themselves
2. To keep experiencing the pleasure of "Schadenfreude". 

*Strangely enough, pleasure comes in different forms*
It always feels better when it's happening to someone else.

*Schadenfreude (German)*
There is no equivalent English word for "Schadenfreude" but the feeling of this unique form of pleasure does exist even if we don't realise it. 

*At one time or another*
We have derived some pleasure & satisfaction from the failures or misfortunes of others. We tend to giggle when someone trips over, that's "Schadenfreude", the whole premise of the television show "Funniest Home video".

*Draw a line in the sand*
If I had a vote. I would vote to change the format at the end of the year & start the new year off fresh. I'd also suck up the loss & move on. Others will quickly forget. Also, I don't get the point of why someone would post about others being in a similar boat to them, does that make the situation any better?



Nick Radge said:


> The staff member responsible for updating that data has been extremely busy on other projects. He'll update at month end.




# Not long now to have the WTT backtest records updated to the end of November.

Skate.


----------



## Captain_Chaza (3 December 2022)

Skate said:


> *Sometimes the truth can be brutal*
> At times posting information in such a way can have a detrimental effect than those that were intended. We all like to read interesting & stimulating information. But I guess it's only human nature to enjoy watching a train wreck in motion.
> 
> *Twitter*
> ...



Is it possible for you and your 1st mate to document your Missed out Buys / Gaped  Out  in your Mechanical  A.I.
*
"Let's be Cruel"*

As I have always said
*" The Best Ones always GAP*" and are missed  out by more than ~80% of participants
All I suggest is that all A.I. Mechanical Entry points   miss out 100%  of the time when the Good Ones GAP up or Down


----------



## Skate (3 December 2022)

Captain_Chaza said:


> *" The Best Ones always GAP*" and are missed out by more than ~80% of participants




@Captain_Chaza, *you make a great point*
Missing an odd trade here or there due to the opening price exceeding my (premium loaded) pre-auction "offer price" is nothing in the scheme of how I trade. Trading isn't dependent on one or a handful of trades but it is dependent on executing your strategy perfectly in accordance with your trading plan.

*Why do we need a trading system?*
Trading is not an exact science & it's my belief that to succeed in the financial markets you need to have some kind of trading system in place as @ducati916 referenced in his daily post today. The level of complexity of your strategy has almost no bearing on performance, but your execution matters immensely. If you have a great trading system, one that consistently makes you money, it is mostly that "you" are the one that’s making the system work.

Skate.


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## Skate (3 December 2022)

*Trading is a game of perfection*
When I say "perfection" I mean doing everything to the best of "your ability". At times "good enough" is "good enough" to be profitable. Trading for me is a solitary endeavour & I tend to trade in my own little bubble. At times, I often wonder if my trading results mirror the trading results of others. Basically, it allows me to gauge if my results are in the normal range (if there is such a thing). Admittedly comparing trading results will vary from one trader to another but that's not the point. We all look for an affirmation that our trading results are within the ballpark of others.

*There are times when you need to step out of the markets*
Capital preservation is the number one consideration in this game. Trading is even hard in the "best of times" but if you don't know "when to hold them" & "when to fold them" it's called gambling.

*Known & unknown data is an issue for system traders*
Coding precise mathematical formulas on "known data" doesn't always translate all that well when you actually start trading the strategy live against "unknown data". That's the problem with system trading in a nutshell & it's the reason, we come unstuck, so often.

Skate.


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## farmerge (4 December 2022)

Skate said:


> *There’s No Time Like Today*
> 
> “The best time to plant a tree was 20 years ago. The second best time is now.” — Chinese proverb
> 
> ...



Just came across this old post of yours Skate What a beauty


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## Skate (4 December 2022)

farmerge said:


> Just came across this old post of yours Skate What a beauty




@farmerge, the "Dump it here" is coming up to its 4th anniversary on the 17th of December. Over that period I've made a stack of posts repeating what I already know “but’ it's the contribution of others that I enjoy.

*Sharing is caring*
When others post they are also passing on knowledge from their experience that allows us the privilege of experiencing something new. I read a powerful post in the Amibroker forum & with permission, I reposted it in this thread.

*My original post can be found here*





						Dump it Here
					

@jbocker - "A lacky-band gun removed from an algebra class because it was a weapon of math disruption" After many years I have finally changed my tag @Skate. You can read it below in my sign off. I changed it to this as I feel a greater realisation of it, the older I get.




					www.aussiestockforums.com
				







*The article below has been written by: NextLevelForex (AmiBroker forum member)*
I've been given kind permission by "NextLevelForex" a member of the "AmiBroker forum" to repost his article. The article below has been succinctly written by an experienced trader in the hope of helping others. IMHO the short article covers it all & is very worthy of a few reads.

*"NextLevelForex" original article can be found here:*
https://forum.amibroker.com/t/what-is-the-most-profitable-trading-strategy/16227/25

_Hi everyone,

"I started trading in 2002, and till 2013 I switched from one thing to another (from funds to stocks, then to options, next to futures, then to forex, and finally real estate). Probably the biggest mistake was not recognizing what I was doing wrong, for each market and “system”, and instead thinking that the "next thing" would solve whatever issues I encountered. I put system in quotes because I never really had a system, but it’s only much later that I learned that

In hindsight, I am very happy I persisted, and I'm also glad I did not know how long and hard the journey is. Had I known that, I might have not even started it (or, who knows, maybe I would have started it with more preparation and discipline).

Why am I very happy I persisted? Because, in the end (after about 5 years), not only I changed many things about myself for the better (like being more accepting of the unknowns of life, thanks to lessons learned from a trading perspective), but I also seem to (finally) have a system that I trust to trade for the long run.

As a few people pointed out, the best system is one that you can stick with (and it is assumed that it does have an edge). Looking back, many of the things I tried in my pre-2013 era did have an edge, but I did not stick with those systems through the drawdowns... Plus, as mentioned above, I did not really have all the pieces in place, so they were incomplete systems, which made matters worse.

Am I consistently profitable? That totally depends on so many things, it's genuinely difficult to answer. For example, what is consistent? Not having a losing day, or week or month? If that's the meaning you give it, than I'm not in that bucket, and I may very well never be. Does it mean not having a losing year? Again, not my definition and does not apply to me. Losing small when you have a yearly loss, and making nice returns when you have a winning year, that's the meaning I give to "consistently profitable". (and here, "small loss" and "nice returns" are again what you say they are, not some universally accepted values)

Also, what is the size (depth) and duration (length) of the drawdowns you are willing to go through? A good exercise, in my opinion, is to download SP500 daily data from Yahoo, or any other broad index that you like, and calculate some of its metrics, using Excel. I guess a lot of people are happy with the returns SP500 delivered after March 2009, but they seem to be of the opinion that the index cannot go through another deep drawdown like it did in 2008. But, if it does, would you be ok with that drawdown, for the annual performance it delivered?

In closing, if someone wants to trade only because of the promises of easy money, I would advise that person to find another reason, or, better yet, reasons. I love numbers and programming more than I love making money. If it was only for the money, I would have quit this journey a long time ago..."

Hope this helps!_

-------------------------------------------

*Conclusion*
In this game - help from others is the key to success

Skate


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## Skate (4 December 2022)

*Drawdowns will take you out of the game quick smart*
At times you read a post that ends up being a lightbulb moment like the one @Nick Radge posted below. The level of drawdown that you believe you can handle will be tested in ways that you would not have thought possible. Faulty thinking is when you believe "profits" are more important than a 20, 30, or even a 40% drawdown.

*Each line is pure gold*
I've found over time no matter what you say, "people will do what they want to do".



Nick Radge said:


> So in summary, what is usually seen on the surface will in reality be a lot worse, which is why I tell people to think of a maxDD they think they can handle, then halve their risk.
> 
> That said most people can't handle what they think they can anyway, so its best to halve it from the outset.
> 
> Remember the idea of successful trading is to never get taken out of the game, monetary wise or psychologically.




Skate.


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## martyjames (4 December 2022)

From Nicks's latest email out:

Premium Portfolio
*2022 Performance*
Premium Portfolio   -24.80%
S&P 500                  -14.57%

Not sure i could tolerate that DD. However he has an article where he indicates the best time to get into a strategy is during a DD - so now must be the time to start trading the Premium Portfolio!








						When is the Best Time To Invest?
					

A question for the ages. When is the best time to invest? With the information we have today there is an easy answer and a hard answer.....




					www.thechartist.com.au
				




cheers


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## Skate (4 December 2022)

martyjames said:


> From Nicks's latest email out:
> 
> Premium Portfolio
> *2022 Performance
> ...




*Backtesting*
A drawdown of (-24.8%) on face value seems on par with backtest results we all tend to get every now & then. But when you read that "The Chartist"  YTD P&L is underwater to the tune of -$879,032, "Holey Moley" is the two words that come to mind.

*The exercise *
"The Chartist" posting the ongoing dollar P&L on Twitter shows the emotional pull of Dollars is stronger than percentages. The goal of the exercise was to remove the emotional pull of dollars & focus on the process instead, which is fair enough.



martyjames said:


> Not sure i could tolerate that DD. However he has an article where he indicates the best time to get into a strategy is during a DD - so now must be the time to start trading the Premium Portfolio!




*Faulty thinking *
I'm with you on this one @martyjames. A (-24.8%) drawdown is unacceptable as far as I'm concerned. Frankly, I don't know anyone who would find this drawdown acceptable either. If you believe a (-24.8%) drawdown is acceptable, then you'll start to fall into the trap of "faulty thinking" believing "profits" are more important than an excessive drawdown. Marty, personally I couldn't accept a -24.8% DD & when did anyone think this level of drawdown is okay when trading live?

Skate.


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## Skate (4 December 2022)

Skate said:


> *"NextLevelForex" said: "*_Looking back, many of the things I tried in my pre-2013 era did have an edge, but *I did not stick with those systems through the drawdowns"*_




*Converting percentages to dollars *
I'm just saying, by concentrating on percentages you’ll be quickly conditioned to accept them. At first glance "The Chartist" Premium Portfolio drawdown of 24.8%, seems acceptable. Let's face it, we have all made the "same remark" at one stage or another. Converting percentages to dollars will take on a new meaning because dollars are what you can spend. Focusing on the process of trading is a given, but at the same time don't let percentages fool you into a false sense of security.

*Percentages are relevant to the size of your portfolio.*
(a) On a $20k portfolio, -20% DD is bearable but trading a larger portfolio can be devastating & hard to swallow.
(b) On a $100k portfolio, -20% DD takes on a new meaning.
(c) Trading a $1m portfolio, -20% DD becomes very relevant indeed. That's $200k "GONE".
(c) Trading a $2m portfolio, -20% DD is in the "Holey Moley" WTF category, that's $400k down the drain.

Skate.


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## ducati916 (5 December 2022)

Skate said:


> *Backtesting*
> A drawdown of (-24.8%) on face value seems on par with backtest results we all tend to get every now & then. But when you read that "The Chartist"  YTD P&L is underwater to the tune of -$879,032, "Holey Moley" is the two words that come to mind.
> 
> *The exercise *
> ...




The purpose (obviously) in trading is to make money. The way to make money trading is to leverage. A 24% DD is not compatible with leverage. To really use leverage, you need < 5% and even that is high. Probably < 2% is the way to go.

The many ways to leverage: Margin account, CFDs, Futures, Options, Prop. Capital.

None are compatible with a 24% DD.

Assuming a < 2% DD, what sort of upside could you reasonably expect? On an annual basis, +/- 20% on total capital used. That is the sort of return that you need to provide to access Prop. capital and they are not tolerant of drawdowns. On the upside however, you can leverage x100+.

This thread is generally talking about using un-leveraged capital, ie. your own capital and possibly using a margin account, buying stocks in a vanilla strategy, again generally long only (which since 1982) has been a winning strategy. There have been a handful of brutal drawdowns, but for the most part, the market has, on secular declines in interest rates, combined with falling/low inflation, recovered to new highs.

Poof. Gone.

The market is (has) fundamentally changed.

Therefore my question would be: if you are currently in a DD, just how confident are you (as suggested adding capital to the DD) that the strategy will come back?

Increased volatility (significantly) will be the order of the day. Increased vol. will take your calculated DD and increase it. Unless of course you backtested it through the 1966-1982 period.

jog on
duc


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## martyjames (5 December 2022)

The other interesting idea to debate is: "is best time to get into a strategy is during a large DD"

Portfolio Capsule Summary​# Trades / Year:       16 – 40
Avg Hold Time:        96 days
CAGR:                      29.8%
Max Drawdown:     -31.45%
Win Rate:                 59.5%
Win/Loss Ratio:        2.82
Avg Win:                  28.87%
Avg Loss:                 -8.76%

The largest DD in past 14 yrs is -31.45%, currently -24%. Has anyone tested (using existing systems), starting trading a system near its historically max. DD?


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## Skate (5 December 2022)

martyjames said:


> The other interesting idea to debate is: "is best time to get into a strategy is during a large DD"




*Sorry* @martyjames *your question makes little sense when it comes to system trading*
First, there is a difference between a backtest drawdown & the drawdown your portfolio is currently experiencing. Also, using the metric of a large drawdown to enter a trade, or start trading a strategy is not only silly, but it's also downright stupid.

*Defining a large drawdown in real-time is nearly impossible*
Your question opens a can of worms for me. I consider an -8% drawdown to be large, whereas a -24.8% drawdown to me is extreme. A drawdown of -31.45% is in the WTF category.

*They go up & they go down*
The markets are jumping around all the time & I've previously explained why they do. In one of your previous posts, you added a hyperlink to an article written by @Nick Radge on that very subject. I'm assuming you would either like clarification of the article or you are seeking a range of alternative views.



Skate said:


> *There’s No Time Like Today*
> “The best time to plant a tree was 20 years ago. The second best time is now.” — Chinese proverb




*It's often said that "timing the market" rarely works*
System traders spend an enormous amount of time & effort trying to "time the market". Timing the entry & timing the exit is hard but "with effort", it can be done.

*The alternative "time in the markets"*
Looking back on historical results spanning many years - parking your money in the markets & letting the magic of "time" do its thing can also be just as profitable.

*It should also be noted *
Most traders don't trade with their "serious money". Serious money is always allocated to "dividend-earning investments”. Meaning, most who have serious money will select an investment strategy over a "trading strategy" every day of the week. Admittedly investing can be seen as a long-term trade but that’s where the similarity ends.

Skate.


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## martyjames (5 December 2022)

not sure what i was asking now


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## Skate (5 December 2022)

martyjames said:


> not sure what i was asking now




*Okay *@martyjames,* let me make a couple of extra comments*
Doing so allows me to add more clarity to my last post. I'll ask a few rhetorical questions & then answer them in such a way as to round off why "keeping drawdowns in check" is so important to profitability.

*Why is the maximum drawdown in trading important? *
For the simple reason, it influences your trading behaviour, that's it in a nutshell. The question we all should be asking ourselves is what is an acceptable drawdown percentage. As traders, we all have a different tolerance to risk so there is "no definitive" answer, but preferably the drawdown should be as low as possible. If it gets too big, as "NextLevelForex" referenced in his well-written article where he explains that traders will lose hope & stop trading a perfectly good strategy.

*Do large drawdowns impact anything else?*
Trading a strategy that has a large drawdown impacts your "compounded liability". Other than the obvious, huge drawdowns will force you to stop trading at some stage. If you don't stop what you are doing, it can lead you to total ruin. Stopping a strategy "just in time" allows you to "re-evaluate" whether your strategy is still fit for purpose. So focus on your drawdowns, preferably before they get out of control.

Skate.


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## Skate (5 December 2022)

*Don't be fooled*
Just because the markets appear to be having a good day, don't let the numbers fool you.

*I prefer a better indicator*
It's not "all rosy" for a lot of traders, they will be asking "why aren't I feeling the joy" 



Skate.


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## Gringotts Bank (5 December 2022)

martyjames said:


> The other interesting idea to debate is: "is best time to get into a strategy is during a large DD"
> 
> Portfolio Capsule Summary​# Trades / Year:       16 – 40
> Avg Hold Time:        96 days
> ...



I did something similar a while back.  A simple RSI reversion system.  Only bought if previous trade was a loser.  If the trade wins, skip the next trade.  I can't find the code now, but it didn't work too well from memory.  Anyone else tried this?


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## Skate (5 December 2022)

Gringotts Bank said:


> I did something similar a while back.  A simple RSI reversion system.  Only bought if previous trade was a loser.  If the trade wins, skip the next trade.  I can't find the code now, but it didn't work too well from memory.  Anyone else tried this?




*This strategy has been done to death*
If you do a Google search there would be hundreds of articles spruiking how good trading this idea is. My research indicates that this trading strategy has no edge. Others may have an alternative view.

Skate.


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## Skate (5 December 2022)

Greynomad99 said:


> Anyway I jumped back trying to buy some solid stocks that weren't speculative and seemed to have room to move higher- *ALU*, *ALX*, COL, CSL, CXO, FPH, PLS.




*What about this strategy*
Buying at support & selling at the resistance level. Now at face value, this strategy looks like a rip-snorter. But alas not so, "as far as I'm concerned". Let's look at the weekly chart of (ASX:ALU).

*How could this strategy possibly fail?*
Looking at the chart below you would start to believe this idea has legs. But unfortunately, not so.





*Here is another (ASX:ALX)*
Looking at the chart below you would start to believe this idea for a strategy has legs. But unfortunately, not so.




Skate.


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## Gringotts Bank (5 December 2022)

Skate said:


> *This strategy has been done to death*
> If you do a Google search there would be hundreds of articles spruiking how good trading this idea is. My research indicates that this trading strategy has no edge. Others may have an alternative view.
> 
> Skate.



I've never seen it online.  What search term would you use?


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## Skate (5 December 2022)

Gringotts Bank said:


> I've never seen it online.  What search term would you use?




Well, if you read enough articles online you will find this idea thrown about with similar variations. I'm saying your idea is nothing new as I've read & tested many variations. My results were "all for naught", by the way.

Skate.


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## Gringotts Bank (5 December 2022)

Skate said:


> Well, if you read enough articles online you will find this idea thrown about with similar variations. I'm saying your idea is nothing new as I've read & tested many variations. My results were "all for naught", by the way. DYOR.
> 
> Skate.



DYOR!  lol.


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## Skate (5 December 2022)

Gringotts Bank said:


> DYOR! lol.




*DYOR*
Removed, so as not to offend.

*Here is a crazy idea*
Trend following has more losers than winners. So, what if we reversed the signals? What this means is, if we buy the "sell signals" & sell the "buy signals" our profitability will soar, won't it?

*Buy the "sell signals" & sell the "buy signals"*
Reversing your thinking can't hurt, can it? Talk about "faulty thinking", now I'm being silly. I've been there & done that experiment & the results are worse than you can imagine by a country mile. Switching the strategy approach leads to worse performance making any strategy very unprofitable. As with any new ideas, they are all worthy of testing.

Skate.


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## Sir Burr (5 December 2022)

martyjames said:


> not sure what i was asking now




Maybe you are thinking of equity curve trading.




__





						Trading the Equity Curve - Amibroker
					

Hi Howard,  In regards to your code below (thank you for sharing this). Do I run my normal system to produce the equity curve, then run your code below?  OR do I add normal Buy and Sell signals to your code below and then backtest the lot?  I think maybe the first one as you wrote "This...




					www.aussiestockforums.com
				




It's been a long time but remember playing with ideas using this software.
Gives quick results to see if ideas might be worth perusing. I didn't find equity curve trading was a brilliant idea


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## Skate (5 December 2022)

*40-year track record of David Druz*
"The Chartist" on Twitter posted David Druz "trading results" for the last 40 years. There were a lot of negative months & a few negative years showing that the best traders have good & bad months, even the odd few bad years - but that is all part of the trading game.

*I have a story about David Druz*
Back in 2012, I attended a trading seminar with Andrew Abraham as the guest speaker. During the seminar, Andy put it out there that whoever contacted him would be privy to his trading method. As it turned out I was the only one that reached out to him. Over a series of emails, he was true to his word & gave me the indicator that he uses "trading" for some of the biggest investors in the U.S. 

*On his website, he had two books for sale*
I was interested in his book "The Bible of Trend Following", not only did he give me that book he also gave me "The Bible of Compounding Money". All I can say is that you can never underestimate the kindness of others. 

*My library now has both books*
1. The Bible of Compounding Money- The Complete Guide to Investing with World-Class Money Manager  
2. The Bible of Trend Following - How Professional Traders Compound Money & Manage the Risks.

*Well blow me down*
The Bible of Trend Following Foreword was written by none other than David Druz from Tactical Investment Management a CTA / CPO since 1981. The powerful & glowing forewords, by David Druz a well-respected trader, made the books even more enjoyable to read. These two books pointed me in the direction of "Trend Trading", the method I've been trading since 2015.

*I remember this one passage from a series of email*
_"Here you go. Please bare in mind...indicators and systems are just the beginning of building your trading plan. It is all about risk management and trading psychology. If I can assist you please let me know..Thank you. Andy._

Skate.


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## Skate (5 December 2022)

Sir Burr said:


> Maybe you are thinking of equity curve trading.
> 
> 
> 
> ...




@Sir Burr what a great find, not for the "software" of course but the words used in their spiel. (that are worthy of a re-post)






						Adaptrade Software: Market System Analyzer (MSA)
					

Improve your trading results with a position sizing and money management application for traders.




					www.adaptrade.com
				




*Position Sizing and Money Management Software for Trading*
_"Once you've found an "edge" in the markets – a profitable trading system or method – the greatest opportunity for profit lies with methods for trading your system or method more successfully. These so-called money management methods, such as position sizing, are the core of Market System Analyzer (MSA), a money management software application from Adaptrade Software".

"MSA is designed to help maximize the performance of trading systems and discretionary trading methods. MSA can uncover tradable profit/loss patterns, optimize trade sizes, and avoid trades and strategies that have a low likelihood of success. The result is a higher percentage of winning trades, lower drawdowns, more consistent returns, and greater profitability."_

Skate.


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## Captain_Chaza (5 December 2022)

Yep! That palaver would probably appeal to the Novice Landlubber! 
Well Done!

It is not until you go to sea that you can appreciate the seamanship skills of Hoisting the Correct sail classification but also the Size of that sail

For Example
If you thought FGM and MGX were a good BUY as they are 
Would you buy $100,000 FMG 
or $100,00 MGX

What I am saying here is that  a Sail say XYZ is not always weighted the same as another sail say ABC

How do you handle the conundrum of the  heavyweight and the  Lightweight Sails

I am also lost in finding anywhere on Earth that is the same Today as it was Yesterday!

So how can any Back-testing be relevant in studying say the  Last 4 Weeks?

*Do you rate the weights of each sail*
Or are your heavy-weight sails  the same as your middle weighted sails  ETC ETC

As you can see in any Ship Design fully presented to the WIND

Not all the sails you hoist are always equally weighted as in the Olden Day Tall Ships
Some are much larger than others
and Some storm sails are very small

Are all your sails Equally Weighted?


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## Skate (5 December 2022)

Captain_Chaza said:


> Yep! That palaver would probably appeal to the Novice Landlubber!
> Well Done!
> 
> It is not until you go to sea that you can appreciate the seamanship skills of Hoisting the Correct sail classification but also the Size of that sail
> ...




Huh?

skate.


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## Gringotts Bank (5 December 2022)

Captain_Chaza said:


> Yep! That palaver would probably appeal to the Novice Landlubber!
> Well Done!
> 
> It is not until you go to sea that you can appreciate the seamanship skills of Hoisting the Correct sail classification but also the Size of that sail
> ...



_"So how can any Back-testing be relevant in studying say the  Last 4 Weeks?"_

The very same way sailors know that trade winds will blow at a certain time and certain direction.  Say it's a late afternoon summer day in Perth, and you're out at sea playing pirates in your minnow, will you make it back to shore?  Yes, the Freemantle Doctor will almost certainly land you on shore.  You can bet on it.

Charts move because people are greedy and fearful.  Human nature repeats just like the trade winds.


----------



## Skate (6 December 2022)

Skate said:


> Trend trading strategies have a habit of producing *large drawdowns in bearish markets*. It's just a (bummer) trading in all market conditions.




*It's so true*
Ask any trader who has traded during a bearish market & they will confirm they have suffered larger than normal drawdowns, larger than they even expected. There is plenty of reports currently on Twitter where they are posting about their drawdowns & losses.



ducati916 said:


> Both discretionary traders and systematic traders should react to market signals. If you are reacting to something else, news, economic numbers, etc. that is a very tough game to play. Market signals are reliable in that you know if you are wrong/right/late/early/whatever very quickly. In summary: to a man armed only with a hammer, gradually everything starts to look like a nail.




*Keeping drawdowns to manageable levels*
Capital preservation is the key to the longevity of a trader. I believe every statement I make is true but at times not to others as they hold an alternative view. That's why I always encourage others to express alternative views.

*I would also like to make these statements *
(1) "We all see the world through our eyes" &
(2) "Our perception forms our reality".

*What's annoying with trend trading (IMHO)*
It's more of an irritation than annoying as no matter what I do (code-wise) it usually ends in (a) greater returns or (b) lower drawdowns & at times I achieve both "at the same time" but the ultimate strike rate never changes to any degree.

Skate.


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## Skate (6 December 2022)

*Understanding drawdowns*
lets me start off with a statement "If you have a strategy that's working, keep working on it. Drawdowns make us fearful & have the ability to drive our emotions. When the market starts going down, those new to trading & knowing very little about how to preserve profits will sit there & watch their profits quickly disappear. Eventually, the pain becomes too great & sell at a substantial loss. 

*Little fish are sweet*
Chasing high returns always goes hand-in-glove with higher risk. When chasing respectable returns it's a lot easier to handle the lower drawdowns. Trading aggressive strategies may give you eye-watering returns but it usually means large drawdowns because you can't have it both ways. 

Skate.


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## DaveDaGr8 (6 December 2022)

How I analyse drawdowns.

MDD - The largest drawdown over a time period.
Average Drawdown = The average of all drawdown values for every day over a time period

Days in DD + % = How many days in drawdown
Days > 2.5% = How many days was the drawdown >2.5% and the percentage of days
etc.

system 1, system 2, system 3, system 4 are individual systems
system 1234, system 1,3 and system 1,4 are averaged from the equity tables of the individual systems.

*Note how the drawdown halves when the right systems are merged.*

Also system 2 has better drawdown figures ( to me ) than system 3 even though it's MDD is worse


----------



## Skate (6 December 2022)

DaveDaGr8 said:


> Note how the drawdown halves when the right systems are merged.




@DaveDaGr8 *what an excellent post*
Posts such as these give practical examples of how one should go about managing drawdowns in the "development phase". Your methodology, with those calculations (at first glance) seems a perfect way to evaluate any new strategy ensuring the drawdown is within your own risk tolerance, a level you can handle.

*How do we achieve a low drawdown?*
The first place to concentrate on is getting the exit strategy just right which is not easy but possible. In saying this "exits" need to fit your personality more than entries. What I mean by that is too many people look at what makes the most money & then they can't trade it because of the drawdowns, trade frequency, or other problems that cause them emotional angst. One of the first steps to becoming a good trader is to understand that you can't perfect everything, so don't even try. Strategy improvements come over time.

*Preventive action is for self-preservation*
I'm just saying, concentrating on the drawdowns metric ensures the risk is acceptable & manageable. Assuming you have a profitable strategy, one with a distinct edge, there are ways you keep drawdown under control. Honing your exit strategy is the first step & the next should be proper position sizing. Large drawdowns are often a side effect of traders losing control of their emotions intelligent.

Skate.


----------



## Skate (6 December 2022)

*Posting to excess*
@DaveDaGr8, sometimes I'll read an article on the internet or a Twitter post & think to myself, that would make an interesting post for someone just starting out on their trading journey. The difficulty for me is knowing when to stop. Members get exhausted reading a series of posts, one after the other, so I try to keep them to a minimum these days, which is hard for me.

*Drawdowns - this beast needs to be controlled*
As @martyjames broached the subject of entering a strategy during a drawdown gave me the perfect segue to express my views on the subject. Explaining along the way why this metric is so important to the profitability of any strategy. Yesterday & today, allowed me to expand on a subject/metric that others pay little attention to when developing a trading strategy. Knowing the truth about how large drawdowns affect the performance of every strategy gives an understanding of why there are some traders who perform better than others.

Skate.


----------



## rcw1 (6 December 2022)

Skate said:


> *Understanding drawdowns*
> lets me start off with a statement "If you have a strategy that's working, keep working on it. Drawdowns make us fearful & have the ability to drive our emotions. When the market starts going down, those new to trading & knowing very little about how to preserve profits will sit there & watch their profits quickly disappear. Eventually, the pain becomes too great & sell at a substantial loss.
> 
> *Little fish are sweet*
> ...



Good morning Skate,
Great days in the north, very hot and very humid with clear skies ... gotta be some Monsoonal storms coming soon.
Cool down and freshen the place up a bit.  Flush the river systems out...  Brings on exercise, gotta cut the grass allot more often ha ha ha ha.

Back to business:

Trading in a bear market is challenging, yes true that, but it is not as difficult to overcome, for day and to a certain degree swing traders. Stock selections are made during the actual bear market, in real time.  Depends, obviously the stock can retrace further ... the selection of the stock and the actual timing to move, has been discussed previously. Suggest in 'bad times' signals are required to be clearer and more compelling.  Higher threshold of 'common sense', if there is something around like it...    

rcw1 can certainly comment though, for mine, when an evidence base selection pendulum for stocks to trade is swinging towards a bare minimum, rcw1 will increase the amount of spend on stock selected.  Why?  Never let an opportunity pass a trader by... where there is an opportunity, when circumstances arise where opportunities are limited, embrace it, target it and go for it.  
Be perfect.

Hoping this makes some sense.
Anyways, back into the sandpit.

Have a very nice day, today, Skate.

Kind regards
rcw1


----------



## Skate (6 December 2022)

rcw1 said:


> rcw1 can certainly comment though, for mine, *when an evidence base selection pendulum for stocks to trade is swinging towards a bare minimum, rcw1 will increase the amount of spend on stock selected.* Why? Never let an opportunity pass a trader by... where there is an opportunity, when circumstances arise where opportunities are limited, embrace it, target it and go for it.
> *Be perfect*.






DaveDaGr8 said:


> *How I analyse drawdowns*.




@rcw1 I don't believe you or @DaveDaGr8 realise the importance you guys have made today passing on snippets in your respective posts. In my opinion, both posts hold information that is pure gold. Thank you.

Skate.


----------



## Rabbithop (6 December 2022)

rcw1 said:


> Good morning Skate,
> Great days in the north, very hot and very humid with clear skies ... gotta be some Monsoonal storms coming soon.
> Cool down and freshen the place up a bit.  Flush the river systems out...  Brings on exercise, gotta cut the grass allot more often ha ha ha ha.
> 
> ...



Like it....

"rcw1 can certainly comment though, for mine, when an evidence base selection pendulum for stocks to trade is swinging towards a bare minimum, rcw1 will increase the amount of spend on stock selected. Why? Never let an opportunity pass a trader by... where there is an opportunity, when circumstances arise where opportunities are limited, embrace it, target it and go for it.
Be perfect".

😁 Easy money if you have the time to keep watchful eyes...done it a few times...comments I received from others when sharing the trick...you are playing with fire or you are gambling..I simply smile..Day Trading...


----------



## Skate (6 December 2022)

Skate said:


> I've asked Nick twice if he would be kind enough to fill in the backtest for his WTT Strategy, not only for myself to compare & contrast but for others who read this thread. Silence is never a good look.






Nick Radge said:


> The staff member responsible for updating that data has been extremely busy on other projects. He'll update at month end.




*Be careful what you wish for*
@Nick Radge, thank you for having the "WTT Strategy" backtest results updated. Comparing the before & after results have now opened another "can of worms" because the updated results have been completely repainted making the point of the exercise less than useless.

*If you are going to post results*
Let's make a backtest accurate, constant, believable & achievable. I've made a series of posts explaining the importance of conducting a backtest correctly so they are accurate & repeatable. I even go into great detail about how this is achieved. If you do a backtest the correct way the results will be more believable & in my opinion achievable.

*Compare the pair*
Frankly, I'm shaking my head. When backtest results are posted they need to be believable & achievable.




*In summary *
I suggest you read "The Chartist" Disclaimer in relation to the results posted above.

*Disclaimer*
NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM. ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS.

Skate.


----------



## Gringotts Bank (6 December 2022)

I have no idea what a repainted backtest is.


----------



## qldfrog (6 December 2022)

Gringotts Bank said:


> I have no idea what a repainted backtest is.



I assume 2 different results for the supposedly same system/period?
Aka undeclared code change?


----------



## Skate (6 December 2022)

Gringotts Bank said:


> I have no idea what a repainted backtest is.




@qldfrog *explanation is simple & concise*
@Gringotts Bank, I'll use a screen capture so you have a better understanding using the ZigZag reference. Repainting means with every push of the backtest button the information constantly keeps changing. It's a rookie mistake & it can be eliminated. I've made a ton of posts on this very subject, a simple search will find them all.

*Compare the pair*
The original backtest before the update is the top line of the report below. I've placed the most recent "updated" backtest report under the original so you have a direct comparison that the results have changed. Both results are from the same strategy & the returns are like chalk & cheese. If you didn't know they were the "same strategy" & you were shown two separate backtest results one being (41.98%) for the year 2000 & then shown another backtest result for the same year displaying a yearly result of (19.60%) which strategy would you be inclined to purchase?

*Repainting *
With each backtest "using the same code", if the results keep changing, that's repainting.

*Look at this*
1. Original Yearly % backtest result = 41.98% 
2. The updated Yearly % backtest result drops back to = 19.60% (WTF)

*If you still are unsure about the term repainting*
1. Imagine each month's percentage results are on a canvas. 
2. Take Feb, the original had 20.10% painted as the result 
3. With another backtest run the picture was repainted to display not (20.10%) but (6.50%)

*All I'm saying *
If you can't trust the backtest, could you imagine trading your hard-earned dollars on that strategy as each backtest would tell you something different.  




*A simpler answer*
Imagine if you asked someone the exact same question & each time they gave you a different answer, would you trust them, I don't think so. When you do a backtest it needs to be accurate, reliable & repeatable otherwise how could you trade on those backtest results?




Skate.


----------



## Gringotts Bank (7 December 2022)

I'm familiar with repainting indicators, having been through the zigzag drama on here.  By the way Nick DM'd me and said my zigzag code was fine and that it didn't have a future leak.

Regarding 'repainting backtest', how could that possibly happen?  I know PositionScore = Random() will do that, but when else?  Are you suggesting he actually changed the code?


----------



## qldfrog (7 December 2022)

Gringotts Bank said:


> .
> 
> Regarding 'repainting backtest', how could that possibly happen?  I know PositionScore = Random() will do that, but when else?  Are you suggesting he actually changed the code?



That's a good point.even a future leaking code will usually have limited effect on  past results..As i can understand it..i am no guru .if i run 2 backtests along time, have a deterministic Position score, and get 2 different results, i have either changed data feed, realm or code especially for 2000 run as not many codes will look at 2022 realtime market data to take decision 22y earlier.
This would not be future leaking but crystal ball coding😁.
I am no expert but i would say something has changed.
I finetune my systems regularily and keep code versions.my code is alive..after all, aim is making money not checking how hurtful are errors of the past
Version management is an art and this is probably where Nick result failed..or just human error in data processing.i am not the one to throw the stone after losing 12% last week on a trade due to input typing error🥴


----------



## qldfrog (7 December 2022)

qldfrog said:


> That's a good point.even a future leaking code will usually have limited effect on  past results..As i can understand it..i am no guru .if i run 2 backtests along time, have a deterministic Position score, and get 2 different results, i have either changed data feed, realm or code especially for 2000 run as not many codes will look at 2022 realtime market data to take decision 22y earlier.
> This would not be future leaking but crystal ball coding😁.
> I am no expert but i would say something has changed.
> I finetune my systems regularily and keep code versions.my code is alive..after all, aim is making money not checking how hurtful are errors of the past
> Version management is an art and this is probably where Nick result failed..or just human error in data processing.i am not the one to throw the stone after losing 12% last week on a trade due to input typing error🥴



And BTW, good on @Skate for spotting the discrepancy 👍.
Issues can not be fixed if undetected.


----------



## Skate (7 December 2022)

Gringotts Bank said:


> I'm familiar with repainting indicators, having been through the zigzag drama on here.  By the way Nick DM'd me and said my zigzag code was fine and that it didn't have a future leak.
> 
> Regarding 'repainting backtest', how could that possibly happen?  I know PositionScore = Random() will do that, but when else?  Are you suggesting he actually changed the code?






Skate said:


> I've made a ton of posts on this very subject, a simple search will find them all.








__





						Why do backtest results change?
					





					www.amibroker.com
				








__





						Monte Carlo simulation
					





					www.amibroker.com
				




*Read this, it's important*
_"Position sizing
defines position sizing method used by MC simulator in "trade list" mode:

Don't change - uses original position size as used during backtest. Keep in mind that it always uses original dollar value of the trade (or whatever currency you use), even if your formula is using percent of portfolio equity.

Fixed size - uses fixed number of shares/contracts per trade

Constant value - uses fixed dollar amount for opening any trade

Percent of equity - uses defined percent of current simulated equity value. Be careful when using this setting - it causes that position size of one trade depends on profits on previous trades (compounding profits) and creates serial dependence. It may also lead to extra compounding effect when you have overlapping trades in your original backtest as bootstrap performs trades sequentially (so they don't overlap). For this reason its use is limited to cases when no overlapping trades occur"._

Skate.


----------



## Sir Burr (7 December 2022)

Guessing results provided are from a monte carlo backtest.

Edit: both of them and suppose no two customers will have the same results so maybe why.


----------



## Nick Radge (7 December 2022)

If any of our clients has a question, they may contact me directly via phone, our support page or my email address. I'm happy to personally discuss with any client.

Nick


----------



## Skate (7 December 2022)

Skate said:


> *Education is something that is done to you. Learning is something you do for yourself.*
> You should continually seek further knowledge. You can read almost any trading book that has been written and discover gems in them. Yet most people fail to follow them because they forget or are undisciplined to action them. If what you learn leads to knowledge, you become a fool - but if what you learn leads to action, you can become wealthy.




*Before we move on*
I've said it before & I'll say it again, "backtesting is only part of the equation" when it comes to system development. What matters is out-of-sample system performance. It is the realistic estimate of how the system would work in real trading & will quickly reveal any curve-fitting issues. If out-of-sample performance is poor then you should not trade such a system.

*Walk forward test *
This is an Amibroker built-in function that validates system design, I'm suggesting everyone use it.



			Walk-forward testing and optimization
		


*Amibroker questions*
When you are unsure or have a question, Amibroker has a well-documented "User Guide" with an extensive "Knowledge Base".



			AmiBroker 6.40 User's Guide
		


*Summary*
When it comes to trading, "don't be lazy". When your money is on the line this is when trading gets really serious. Tough times are often the time a strategy is quickly abandoned. Commitment & focus on the long term is more important than focusing on short-term price volatility.

Skate.


----------



## Willzy (7 December 2022)

Larry Connors TPS, just plodding along on NAS100 index, only problem is due to the scaling in, these trades are only small winners...






Here's the tradeStation easyLanguage code for anyone who wants it:


```
inputs:
    fullPosition(1000),
    TradeLong(true),
    tradeShort(true),
    useMovingAverage(true);
    
    
variables: 
    
    // Indicators
    sma200(0),
    osc(0),
    
    currentPos(0),
    totalPos(0),
    lastEntryPrice(0),
    
    // Position Sizing Variables
    numShares(0);

// Turn Off IntrabarOrderGeneration   
[Intrabarordergeneration = False]

// Run Main Calculations

sma200 = Average(Close,200);
osc = RSI( C, 2 );

// Calculate PositionSize

numShares = round( fullPosition * 0.1 / Close[1], 0);

// Long Only
if tradeLong = true then Begin
    if( useMovingAverage = false or close > sma200 ) then begin
        if osc<25 and osc[1]<25 and currentcontracts = 0 then begin buy numShares*1 contracts this bar at close; currentPos = 1; totalPos = 1; lastEntryPrice = close; end;
        if close<lastEntryPrice and currentPos[1] = 1 then begin buy numShares*2 contracts this bar at close; currentPos = 2; totalPos = 3; lastEntryPrice = close; end;
        if close<lastEntryPrice and currentPos[1] = 2 then begin buy numShares*3 contracts this bar at close; currentPos = 3; totalPos = 6; lastEntryPrice = close; end;
        if close<lastEntryPrice and currentPos[1] = 3 then begin buy numShares*4 contracts this bar at close; currentPos = 4; totalPos = 10; lastEntryPrice = close; end;
    end;       
    if currentPos > 0 and osc >= 70 then begin Sell all contracts this bar at Close; currentPos = 0; totalPos = 0; lastEntryPrice = 0; end;
end;

// Short Only
if tradeShort = true then Begin
    if( useMovingAverage = false or close < sma200 ) then begin
        if osc>75 and osc[1]>75 and currentcontracts = 0 then begin sellshort numShares*1 contracts this bar at close; currentPos = -1; lastEntryPrice = close; end;
        if close>lastEntryPrice and currentPos[1] = -1 then begin sellshort numShares*2 contracts this bar at close; currentPos = -2; lastEntryPrice = close; end;
        if close>lastEntryPrice and currentPos[1] = -2 then begin sellshort numShares*3 contracts this bar at close; currentPos = -3; lastEntryPrice = close; end;
        if close>lastEntryPrice and currentPos[1] = -3 then begin sellshort numShares*4 contracts this bar at close; currentPos = -4; lastEntryPrice = close; end;
      end;
    if currentPos < 0 and osc <= 30 then begin Buytocover all contracts this bar at Close; currentPos = 0; lastEntryPrice = 0; end;
end;
```


----------



## Gringotts Bank (7 December 2022)

Skate said:


> __
> 
> 
> 
> ...



I still don't get it.

When I do a backtest, AB prints only one equity curve and one backtest report.  When I look at the MC chart, there's say 1000 other runs (based on shuffling the order of trades), but I don't see what that has to do with anything.  There's a piece of the puzzle I'm missing...what is it?


----------



## Skate (7 December 2022)

Gringotts Bank said:


> There's a piece of the puzzle I'm missing...what is it?




*This is it in a nutshell*



Skate said:


> If you can't see the problem, there is no answer.




I suggest you ask @Nick Radge why the two backtests are so different.




*Or ask Nick a simpler question*
Why have the results for the year 2000 changed so dramatically?




*To make it a little easier for you to understand*
Look & compare the information contained within the red circles, particularly February, March & year to date. If things are still unclear go back & slowly read what I have written previously.



*Don't post one-liners*
Most members ask questions or post a response making a statement as a one-liner, (not all but some) & sometimes their responses are the same, it's unhelpful. If you skim-read my post you'll learn nothing & at times you will "completely miss the point" of what I was trying to get across by jumping to the wrong conclusion.

*It takes time*
It takes a lot of time & effort to give a "measured response" so all I'm asking is "if you have a question detail it precisely", let me understand why you don't understand as constantly going back & forward with others is tiresome, boring & more importantly, it wastes our time.

Skate.


----------



## qldfrog (7 December 2022)

Skate said:


> *This is it in a nutshell*
> 
> 
> 
> ...



One point which is slightly confusing and needs confirmation:
when you put a dataset like this:



What you mean as I understand it :
before the latest backtest results provided this month for Nick system, the 2000 BT results were the first row 41.98% annual profit?

whereas at the last update report  this month, for the same year and system:
 we got the second row results 19.6% annual profit?
As this is probably what puzzles Monsieur @Gringotts Bank
Am I right GB?


----------



## rcw1 (7 December 2022)

Good evening Skate
rcw1 went fishing today.  Hot and humid as … 36 C mercury hit… reckon was even hotter out there amongst it in the mangroves.  

 Just rcw1 and his boat. 

Took an IPhone, better half makes rcw1 take it these days, makes her happy in mind should anything happen rcw1 would able to ring for help…  Happy partner happy life .., Nice touch, just beautiful , but wouldn’t make any difference mostly no signal.  Ha ha ha ha

Foolish pig headed ???

For mine rcw1 knows the tides, the river, the country, the boat and moves and thinks steady Freddy    Like ‘football has been good to me’ ha ha ha ha

The thing is Rcw1 had a plan, before he left where he was gunna get bait and where rcw1 was gunna anchor up and float the livies out  …  recreational fishing oh the joy of it.

rcw1 told another fisherman exactly what he was doing and that fisherman knew exactly what rcw1 was saying.  Important as … 

That person knew exactly where to find rcw1 should he fail to rock up 2 hours prior to dusk.. 

Traders need a plan every day along with a hand full of contingencies to combat our dynamic market.

Easy as going fishing.

Perhaps you are wondering  whether rcw1 caught anything? 

Yep of course rcw1 did, the plan worked today 

Have a very nice evening.

Kind regards
Rcw1


----------



## Skate (7 December 2022)

qldfrog said:


> *What you mean as I understand it :*
> before the latest backtest results provided this month for Nick system, the 2000 BT results were the first row 41.98% annual profit? *CORRECT*
> 
> whereas at the last update report this month, for the same year and system: we got the second row results 19.6% annual profit? *CORRECT*




*This is "The Chartist" original Backtest of the "WTT Strategy"*
Let's be clear, I'm only uploading information "The Chartist" has supplied. The ORIGINAL backtest was only current up to the end of June 2022, I kindly asked if the backtest report could be updated. Nick said he would have the backtest chart updated at the end on November 2022, which was fair enough.




@Nick Radge *was good to his word & had the "WTT Strategy" backtest results updated*
But on inspection, the two backtests reports before being updated & after being updated the backtest results have "completely changed" making the point of the exercise less than useless.

*Uploading reports*
I made the remark a "few posts back" that if you are going to post results make sure the backtest results are accurate, constant, believable, achievable & repeatable. That is not too much to ask from a business with something to sell.

*This is "The Chartist" UPDATED Backtest of the "WTT Strategy"*
To show the performance difference between the two backtests, being the ORIGINAL backtest compared to the "LATEST UPDATED" Backtest. The results IMHO are laughable.




*Compare the pair*
So you understand what I'm talking about, look at the side-to-side comparison of the two backtest results. I even went to the trouble of pasting the "CHANGE" YTD results so you could see the screaming discrepancies. If the capture is too small to read, click on the graphic to expand it.



Skate.


----------



## Sir Burr (7 December 2022)

Gringotts Bank said:


> There's a piece of the puzzle I'm missing...what is it?



Don't think anything to do with the built-in Amibroker charts.
I'm guessing AB code using optimise to create multiple monte carlo runs and data dumped in a spreadsheet with a nice front end


----------



## Skate (7 December 2022)

Sir Burr said:


> Don't think anything to do with the built-in Amibroker charts.
> I'm guessing AB code using optimise to create multiple monte carlo runs and data dumped in a spreadsheet.




*I'm  sure* @Nick Radge *will want to clarify why there are discrepancies between the two backtests*
I've written a series of posts on the different ways to backtest with screen captures uploaded to explain why only one method is acceptable. The screen captures that I uploaded in that series of posts display practical examples of why backtesting any other way skews the results.  
*
There is only one method that achieves consistent, accurate & believable backtest results *
I even supplied the Amibroker hyperlink as to why backtest results vary between runs. Amibroker explains in plain English how to achieve consistent results. To understand this better refer back to my previous post today & don't speed read or you won't memorise the important bit.

Skate.


----------



## Skate (7 December 2022)

*What a great quote*
@rcw1 made a statement in his recent post that deserves to be the "quote of the day"




Skate.


----------



## DaveDaGr8 (8 December 2022)

rcw1 said:


> Good evening Skate
> rcw1 went fishing today.  Hot and humid as … 36 C mercury hit… reckon was even hotter out there amongst it in the mangroves.
> 
> Just rcw1 and his boat.
> ...




WAY off topic BUT

You NEED one of these

https://www.bcf.com.au/p/acr-resqli...-EWankLod7q1FPgcAoIaAq4sEALw_wcB&gclsrc=aw.ds


----------



## DaveDaGr8 (8 December 2022)

While I'm off topic.

Has anyone else played with this ?

https://chat.openai.com/auth/login

It's not often that i'm impressed with something new, but* this thing is Freaking insane.* It's a chat bot that's built on AI, but you can honestly have a conversation with it about any topic in the world, Including trading.

I started putting in some c++ code, it analysed it and told me where some optimizations would be. I then asked it to modify my code to allow it to do something else and it did it for me. It understood my needs and could update my c++ code for me.

I asked it if it could trade, It told me it couldn't because it doesn't have access to market data. ( guess the developers are keeping that to themselves). After a few dozen questions it told me that it could successfully teach itself to trade if it had access to the correct data.

If anyone wants to see what the next decade will look like. This is it !

*And I am scared !!!*


----------



## DaveDaGr8 (8 December 2022)

I just logged into the AI chat again.

The difference now since this mornings update is like day then night, it seems as though the developers have toned it down massively. Where it would analyse and guess what you wanted, with precision, now it just says i don't know and gives big verbose answers telling you it's just a program. Totally different and really boring. It's like pulling teeth to get a response now.

Guess the developers got a little scared too !!!


----------



## Greynomad99 (8 December 2022)

Skate said:


> *What about this strategy*
> Buying at support & selling at the resistance level. Now at face value, this strategy looks like a rip-snorter. But alas not so, "as far as I'm concerned". Let's look at the weekly chart of (ASX:ALU).
> 
> *How could this strategy possibly fail?*
> ...



Skate, what's your problem with ALU?
I accept it could (and has) fallen back a little from resistance but my view was that while the stock is quite volatile  and has been trading in a range of about $20 or 50% of its recent highs and should (but doesn't have to continue up to the top of the shaded channel as it has previously. The recent rise to resistance at $38, a pull back and then another try at $38 suggests to me a good chance it will break through - in which case it should make $43. In July the stock broke above a weekly downtrend line and since then it has been generally making higher weekly troughs and peaks and confirmed a new weekly uptrend - all of which are buy signals in my book. These are still volatile/difficult times for trading and whether my decision to buy ALU now was good, bad or indifferent - only time will tell. As we both know there is no magic strategy in share trading. All the best for the Silly Season by the way.
PS: I thought a Santa rally might be happening but interest rate and energy concerns seem to have poked the Ol' Fella in the eye for now.


----------



## Greynomad99 (8 December 2022)

Skate said:


> *What about this strategy*
> Buying at support & selling at the resistance level. Now at face value, this strategy looks like a rip-snorter. But alas not so, "as far as I'm concerned". Let's l
> 
> *Here is another (ASX:ALX)*
> ...



Skate, You might be right with ALX but it is a stock that has shown good growth in past years and there's a possible price channel that suggests a rise back to the low $8 mark is possible. The oil price could be the problem for this stock.


----------



## Skate (8 December 2022)

Greynomad99 said:


> Skate, what's your problem with ALU?




@Greynomad99 you misunderstood the point of the post, it was all about explaining a simple "Support & Resistant Strategy". I explained that buying between the lines is not all it's cracked up to be. The idea was about buying at one line & selling at another. Looking at the lines in the chart you would believe the strategy would have legs, but it doesn't.

*There is no problem with ALU, that is not what the post was about*
So I don't get accused of cherry-picking (when I post) I will use companies that are being talked about. If the first two were ANZ & BHP I would have used those two companies to display the "Support & Resistant" lines. It was never about ALU. It was just convenient to use that company

*NCM has been bandied about recently *
So I'll post a chart of NCM that displays both lines. Buying at one & selling at the other was the premise for the "S&R Strategy".

*RECAP: What about this strategy*
_Buying at support & selling at the resistance level. Now at face value, this strategy looks like a rip-snorter. But alas not so, "as far as I'm concerned".


_

# Sorry for the confusion

Skate.


----------



## Rabbithop (8 December 2022)

DaveDaGr8 said:


> WAY off topic BUT
> 
> You NEED one of these
> 
> https://www.bcf.com.au/p/acr-resqli...-EWankLod7q1FPgcAoIaAq4sEALw_wcB&gclsrc=aw.ds



Excellent gift idea for son loves camping in the Bush.


----------



## Skate (10 December 2022)

*Ever so true*
From @ducati916 daily post.




Skate.


----------



## Rabbithop (10 December 2022)

Skate said:


> *Ever so true*
> From @ducati916 daily post.
> 
> View attachment 150305
> ...



I couldn't work this quote out.
If Sell, loss of capital, Gain the opportunity to Buy.
If Preserve the capital, ( with paper loss) there is no guarantee of another opportunity.
So which is first... egg before chicken or chicken before egg?


----------



## KevinBB (10 December 2022)

Rabbithop said:


> there is no guarantee of another opportunity



There is always another opportunity.

KH


----------



## Skate (10 December 2022)

Rabbithop said:


> I couldn't work this quote out.
> If Sell, loss of capital, Gain the opportunity to Buy.
> If Preserve the capital, ( with paper loss) there is no guarantee of another opportunity.
> So which is first... egg before chicken or chicken before egg?






KevinBB said:


> There is always another opportunity.




@KevinBB is absolutely correct but let me expand on his answer.

*In simple terms*
There are three possibilities when trading. You win. you lose or you break even.

*LOSS OF CAPITAL (1 of 2)*
For a clear explanation. If you buy at one price & sell at a lower price that's a "loss of capital". We all know this. That is the "FIRST LOSS" in @ducati916 "Quote of the Day."





*LOSS OF OPPORTUNITY (2 of 2)*
For a clear explanation of a "Lost Opportunity". Imagine if you didn't follow the buy signal because your inner self said "IT WILL GO LOWER". Not buying this position when a signal is generated means it's a "LOST OPPORTUNITY". That is the "SECOND LOSS" in @ducati916 "Quote of the Day"




*Now this is it in a nutshell*
The first loss = Loss of capital (in English - loss of your money)
The second loss = Loss of opportunity (in English - you lost the opportunity to make money)




*What the quote really means is this*
1. A capital loss is the only loss where you lose money. 
2. Lost opportunity is not a real concern as opportunities are always coming around.

Skate.


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## rcw1 (10 December 2022)

Good morning
If rcw1 might be so bold as to say this, rcw1 hates losing very very much (yes, that means pucking heaps ... ), so when rcw1 misses an opportunity to earn... that is what it is all about, then that opportunity is missed ... to bad how sad, no going back, an uppercut to rcw1, but yes sure, capital is maintained and there will be plenty of other opportunities that arise during the traders day.... 

Thats what makes traders so great and all inspiring.    What if?  Traders can deliver on each and every trade each and every opportunity...  To be perfect, why the hell not!!!  Oh, the joy of it, the thought of it.
rcw1 thoughts.  

Have a very safe and happy Christmas and prosperous 2023.

Kind regards
rcw1


----------



## Skate (10 December 2022)

rcw1 said:


> rcw1 hates losing very very much




@rcw1, lets talk about losses & the destuction of capital

*Trading P&L as posted on Twitter*
In the last couple of days, there have been further losses of capital to the tune of (-$47,119) ouch.

*The YTD P&L results are now demoralising*
The loss of* (-$926,151) *has to take its toll, no matter what the drawdown percentage is.




*Destruction of capital*
When you lose so much money trading, it usually comes down to one main reason. That reason is normally the lack of understanding of the maths behind "capital destruction". The more capital you risk per trade, the quicker you will lose it in losing trades. Once your capital depletes, it takes a larger return to get back to even than what you initially lost.

*The simple maths*
A 10% loss requires an 11% return to get back to even
A loss of 20% of your capital requires a 25% return to get back to even
A 50% loss of capital needs a 100% return just to get back to where you started
Risking 1% of your capital per trade puts you down 10% after 10 trades
Risking 5% per trade puts you down 50% after 10 trades

Skate.


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## Skate (10 December 2022)

*No matter how good a trader you think you are*
You have to understand that you can’t keep trading the same way when large losses are starting to mount, doing so, a losing streak of this magnitude could ultimately be your last. If you risk too much of your trading capital, even a few losses in a 50% winning streak will destroy your capital. (that's something to think about)

*You need to curb your losses*
You’re not going to be a good trader if you don't play the defense "needed" to protect your trading capital from losing streaks.

*My question would be*
How long can you survive with your current risk exposure?




Skate.


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## rcw1 (10 December 2022)

Skate said:


> @rcw1, lets talk about losses & the destuction of capital
> 
> *Trading P&L as posted on Twitter*
> In the last couple of days, there have been further losses of capital to the tune of (-$47,119) ouch.
> ...



Good morning Skate,
Yes frightening scenarios, true that ... ; one cannot escape the cold and yet hard reality that awaits traders at times.  I may have covered off on this one in a previous post.  

Financial accountability, sure, a maker or breaker.  Exhibiting fit and proper control over finances, dead set requirement.

Sometimes one's own ability to overcome is really tested.

 Not for everybody.

Kind regards
rcw1


----------



## Skate (10 December 2022)

rcw1 said:


> Good morning Skate,
> Yes frightening scenarios, true that ... ; one cannot escape the cold and yet hard reality that awaits traders at times.  I may have covered off on this one in a previous post.
> 
> *Financial accountability, sure, a maker or breaker.  Exhibiting fit and proper control over finances, dead set requirement.*
> ...




*It's a pity*
@rcw1, I've used my "Quote of the day" quota for today, otherwise your quote "would have made it". So bolding will have to do.

Skate.


----------



## rcw1 (10 December 2022)

Skate said:


> *No matter how good a trader you think you are*
> You have to understand that you can’t keep trading the same way when large losses are starting to mount, doing so, a losing streak of this magnitude could ultimately be your last. If you risk too much of your trading capital, even a few losses in a 50% winning streak will destroy your capital. (that's something to think about)
> 
> *You need to curb your losses*
> ...



Skate, You are too quick for rcw1.

*No matter how good a trader you think you are*
You have to understand that you can’t keep trading the same way when large losses are starting to mount, doing so, a losing streak of this magnitude could ultimately be your last. If you risk too much of your trading capital, even a few losses in a 50% winning streak will destroy your capital. (that's something to think about)

_On the other side of the coin, that one last effort or efforts may well be the saving trade that renews confidence and ability to focus and exhibit better judgement.  But yes, certainly a statement rcw1 would agree with._

*You need to curb your losses*
You’re not going to be a good trader if you don't play the defense "needed" to protect your trading capital from losing streaks.

_Agreed, 100%.  Modify trader behaviour in accordance with financial hurdles are becoming more prevalent. _ _Positivity and reality are two completely separate constructs ha ha ha ha ha.  However, rcw1 view has always been one needs to be positive but at the same time realistic about traders competence and judgement, this is a continual 360-degree self-assessment.  Therein lies an answer.  If you cannot be honest with yourself time to give up the game._

*My question would be*
How long can you survive with your current risk exposure?
_
How long is a piece of string??  Nice one.  ha ha ha ha_

Skate, rcw1 gotta go, have some punting duties to perform, lovely talking with you today.

Kind regards
rcw1


----------



## Skate (10 December 2022)

rcw1 said:


> *How long is a piece of string?? *Nice one. ha ha ha ha




*I can tell you, there is a mathematical formula to answer your question*
This question always comes up. And my answer is always the same.

# Get the piece of string "fold it in half", measure it, then double it.

Skate,


----------



## Skate (10 December 2022)

*Dr. Flippe Flye about recency bias*
_"This is a mental disorder that greatly afflicts mostly low IQ market participants, who regularly soil themselves when markets trade down. As soon as it trades up, these submentals jump up and practically smash their heads against the ceiling — so excited by the market's resolve. Truth is, the market’s true resolve is to go lower. Any brief period of time that elapses with actual gains should be considered something of a gift that should be taken, POST HASTE."_

Skate.


----------



## rcw1 (10 December 2022)

Skate said:


> *Dr. Flippe Flye about recency bias*
> _"This is a mental disorder that greatly afflicts mostly low IQ market participants, who regularly soil themselves when markets trade down. As soon as it trades up, these submentals jump up and practically smash their heads against the ceiling — so excited by the market's resolve. Truth is, the market’s true resolve is to go lower. Any brief period of time that elapses with actual gains should be considered something of a gift that should be taken, POST HASTE."_
> 
> Skate.



Good afternoon Skate,
This is a few times now in one day, people will talk.... let em rcw1 says.  Reckon Dr. Flippe Flye could learn from us... ha ha ha ha ha

Have a very nice day today.

Kind regards
rcw1


----------



## Skate (10 December 2022)

rcw1 said:


> This is a few times now in one day, people will talk.... let em rcw1 says. Reckon Dr. Flippe Flye could learn from us




*Dr. Flippe Flye has a unique style of getting his message across*
In an earlier post, I explained why traders miss opportunities even when they happen to hit you in the face.

*LOSS OF OPPORTUNITY - FEAR*
"Lost Opportunity" mainly comes from fear, from being fearful of making the wrong decision. Overriding a strategy is one of the worst fears you can have as a system trader.




*Have a watch of this informative YouTube video*
It explains how we miss opportunities waiting for clarity.



Skate.


----------



## Rabbithop (10 December 2022)

Skate said:


> @rcw1, lets talk about losses & the destuction of capital
> 
> *Trading P&L as posted on Twitter*
> In the last couple of days, there have been further losses of capital to the tune of (-$47,119) ouch.
> ...



Fully agree on your last paragraph.
That was what I am trying to convey.
Bear with me for my explanation..
If I loss 30% and hoping the next trading day will be up but instead it gone further down to 40% loss while there are opportunities to buy cheap on my intended entry price. If I don't sell, I don't have any moolah to purchase n if I exit with 40% loss, its gonna take me much longer to recover or get my balance back.
I am speaking for myself.
 A retiree playing with hard saving pocket/ pension money. No one answer fits all types of players.


----------



## Rabbithop (10 December 2022)

Skate said:


> @KevinBB is absolutely correct but let me expand on his answer.
> 
> *In simple terms*
> There are three possibilities when trading. You win. you lose or you break even.
> ...



Thks for the explanation of Loss of opportunity 2 of 2. I got it. My mind was wrapped up with the last 4 weeks stuffed market environment. 
Suffered heavy paper loss on BHP ( and a couple of other energy stocks)  even with the last couple of good days, still trying to catch up. 
Its a solid company and I am aware it would come good in med to long term.


----------



## Skate (10 December 2022)

Rabbithop said:


> If I don't sell, I don't have any moolah to purchase n if I exit with 40% loss, its gonna take me much longer to recover or get my balance back.




@Rabbithop, you are absolutely correct. If you don't hit the sell button you will quickly turn a trade into a long-term investment. Selling is a valuable tactical tool &  is by far the most valuable tactical tool that any trader has at their disposal. Selling is cheap, easy & can be undone in the blink of an eye. When in doubt, I say "pull out". For most traders, the biggest stumbling block to selling is mental.

*Why do some traders lose so much money?*
For one simple answer, they fail to sell at the right time. You could call it the "it will come back - faulty thinking syndrome". Some traders don’t understand what causes capital destruction.



Rabbithop said:


> Suffered heavy paper loss on BHP ( and a couple of other energy stocks) even with the last couple of good days, still trying to catch up.
> Its a solid company and I am aware it would come good in med to long term




*A Chart of Faulty Thinking *
Buying into a position & when it sinks, there are some traders who will add to their position & convince themselves it's "cost averaging" because the "Trading Guru" said so.




Skate.


----------



## Rabbithop (10 December 2022)

Skate said:


> @Rabbithop, you are absolutely correct. If you don't hit the sell button you will quickly turn a trade into a long-term investment. Selling is a valuable tactical tool &  is by far the most valuable tactical tool that any trader has at their disposal. Selling is cheap, easy & can be undone in the blink of an eye. When in doubt, I say "pull out". For most traders, the biggest stumbling block to selling is mental.
> 
> *Why do some traders lose so much money?*
> For one simple answer, they fail to sell at the right time. You could call it the "it will come back - faulty thinking syndrome". Some traders don’t understand what causes capital destruction.
> ...



Was in my thought, I cld have cut the loss, Sell n Buy back, when price drop further. Working my Maths out on the paper for this instance, it doesn't work for me.


----------



## Skate (10 December 2022)

Rabbithop said:


> Was in my thought, I cld have cut the loss, Sell n Buy back, when price drop further. Working my Maths out on the paper for this instance, it doesn't work for me.




*We all love hearing & watching train wrecks*
You hear it all the time. "Well, this week didn't go as expected" without giving a second thought as to why. There are traders at the moment holding shares whilst the markets are in free fall. Some have outwardly justified that they are not worried exclaiming they are in it for the long haul so they haven’t sold anything yet "even justifying "that it's too late to sell now" & (that was a week ago) while others have responded by declaring "I've held these positions this long I might as well keep holding them".

*Fear is an emotional weight*
We all tell stories to ourselves thinking it would be better to sell & come back in later, hopefully when the shares have sold down further, purchasing them cheaper sometime in the future, then they go on hold for another week, until the message repeats. Fear makes us indecisive.

Skate.


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## Rabbithop (10 December 2022)

Skate said:


> *We all love hearing & watching train wrecks*
> You hear it all the time. "Well, this week didn't go as expected" without giving a second thought as to why. There are traders at the moment holding shares whilst the markets are in free fall. Some have outwardly justified that they are not worried exclaiming they are in it for the long haul so they haven’t sold anything yet "even justifying "that it's too late to sell now" & (that was a week ago) while others have responded by declaring "I've held these positions this long I might as well keep holding them".
> 
> *Fear is an emotional weight*
> ...



Extremely True to the above. We are only Humans. Do we have logic thinking all the time? 
Its debatable. 

My common comment on smaller or Penny stocks. Hold if you dare. Here today and vanish in another week.


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## rcw1 (10 December 2022)

Rabbithop said:


> Thks for the explanation of Loss of opportunity 2 of 2. I got it. My mind was wrapped up with the last 4 weeks stuffed market environment.
> Suffered heavy paper loss on BHP ( and a couple of other energy stocks)  even with the last couple of good days, still trying to catch up.
> Its a solid company and I am aware it would come good in med to long term.



Good evening Rabbithop,
Having a real chop at the market, you are, well done M8.  Difficult beast to tame, as you would know.   Paper money gain and or alternatively loss, hard one to measure until the chips are turned in and the true value of your trade is revealed... and then the subsequent trading resulting from that initial trading loss or for that matter gain.  In the end we do what the heart says.  Shift the coin around abit or wait for the share to appreciate in value.  Get burnt yep, make better coin, you bet.  Wouldn't be dead for quid's...

Have a safe and happy Christmas and prosperous new year. 

Kind regards
rcw1


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## Rabbithop (10 December 2022)

rcw1 said:


> Good evening Rabbithop,
> Having a real chop at the market, you are, well done M8.  Difficult beast to tame, as you would know.   Paper money gain and or alternatively loss, hard one to measure until the chips are turned in and the true value of your trade is revealed... and then the subsequent trading resulting from that initial trading loss or for that matter gain.  In the end we do what the heart says.  Shift the coin around abit or wait for the share to appreciate in value.  Get burnt yep, make better coin, you bet.  Wouldn't be dead for quid's...
> 
> Have a safe and happy Christmas and prosperous new year.
> ...



Too right mate. We just have to think, weigh it n act. Sometimes we win n sometimes we loss.
 Same to you row1 n all members in the Forum...Wishing Everyone A Happy Christmas and Prosperous Healthy New Year.
 Stay Well n Stay Safe. 
Thank Almighty for each brand new day.


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## Skate (11 December 2022)

*Making assumptions*
It's extremely hard to get a point across so others understand when the topic has any degree of complexity. Making assumptions or jumping to a conclusion never helps. Also, it might take some time to understand what is being presented. Alternative views are always welcomed.




Skate.


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## Skate (11 December 2022)

*Forming an opinion is important*
Our expectations, assumptions & perceptions shape the way we trade in ways that some will never understand. Our brain is constantly assessing & re-assessing only information that matches our (beliefs) & blocks out the rest. This is why when experienced traders take the time to express an idea from their own trading experience, it's worthy of a second read. 

*Our perception *
Shapes what we want to read & what we want to hear or learn. Our expectations, assumptions & perceptions shape our views on many things & just not trading. 

Skate.


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## ducati916 (11 December 2022)

Skate said:


> *Making assumptions*
> It's extremely hard to get a point across so others understand when the topic has any degree of complexity. Making assumptions or jumping to a conclusion never helps. Also, it might take some time to understand what is being presented. Alternative views are always welcomed.
> 
> View attachment 150329
> ...




If markets are complex systems, which they are, then traders/investors tend toward 'dimension reduction'. More plainly, causality and narrativity, which both lead to chronology and a perception of events in the flow of time. Often, wildly inaccurate.

This disease, leads to many pathologies in the market. One example is the interpretation (of let's say a price chart) and projecting it forward in time. The expectation (absent any quantitative assessment) that price will perform in 'X' manner. If successful, a causality/narrative is assigned as to why this succeeded: bounced off of VWAP, expansion of vol, etc. This can be very dangerous to our intrepid trader/investor.

Of course this narrative/causality or dimension reduction is present in many different forms, depending on who or what you are paying attention to. Consumption of information must be (preferably) limited or subjected to very stringent cynicism, lest something dirty get through.

A quantitative approach, while not always successful to the highest positive expectancy, nevertheless, is positive or profitable over time, assuming of course that the trader/investor follows their own set of rules and calculations.

I'm not conversant with how Mr Skate runs his strategies, but they have been demonstrated to be successful in real time. I run 2 strategies: (i) is based on simple arithmetic, (ii) is based on calculus. The third is not a quantitative strategy at all, more based on history. Which makes this strategy the most subjective of all. The first 2 are simply based on and executed on, numbers that are generated via market prices and time. There is no attempt to interpret, understand, or apply causality to those numbers. Strategy 3 is all about trying to apply causality and an understanding of the macro-environment.



jog on
duc


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## Skate (11 December 2022)

ducati916 said:


> a perception of events in the flow of time. Often, wildly inaccurate.




@ducati916 *combining the two makes a perfect statement of fact*
_"A perception of events in the flow of time [are] often wildly inaccurate"._

*Traders are risk managers & decision-makers*
The point of the previous series of posts was to explain why the level of risk you choose can determine how long it can take to blow up a trading account.

* The psychological side of risk*
Trading with a lower risk will keep emotions in check by keeping losses limited, as a larger drawdown might influence a future trading decision. In reality, mathematics becomes less relevant when emotions are involved. The more risk you take on the quicker your trading account can be destroyed.

*Dollars do have an emotional pull*
When you find yourself with a big dollar loss, you could be tempted to start risking more to win some of those losing dollars back, which in turn "could kill" an account over time. So it's better, in the long run, to concentrate on capital preservation by managing a losing streak before it hurts more than a few percentage points.

Skate.


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## Skate (11 December 2022)

*As traders we all make mistakes*
So don’t make taking “excess risk” one of them. If you think a large drawdown in the range of 20-30% is normal, then at what point do you start to think something's wrong? Take it from me, you’ll buckle to "emotional pressures" when a large chunk of your trading funds are gone. (that's a given) I’m trying to promote a realistic approach for new traders to understand the importance of risk when they are just starting out on their trading journey.

*There are a few old sayings *
I'm paraphrasing these from memory, so forgive me if they are wrong.

1. New traders focus on what they "can make" whereas seasoned traders focus on what they "could lose.”.
2. There are old traders & there are bold traders, but there are no "old bold traders".

Skate.


----------



## Skate (11 December 2022)

Skate said:


> *Self praise*
> "Self praise is no recommendation"







*Two-year equity curve*
An equity curve that's gone nowhere in 2 years indicates how hard trading has been, even for those who are considered to be the best.




Skate.


----------



## Skate (11 December 2022)

*Trading has been tough*
It's pleasing when other members make a post. When @ducati916 makes a post I take notice, as he is one member whose views are always "on the money" giving us a window into his thoughts.

*When you get the exit strategy wrong*
A shoddy exit means you will accumulate a large dollar drawdown, the dread of all traders. Getting the exit just right baffles even the best of traders & it's still the hardest part of trading. Looking at an equity curve for the last few years raises the questions (a) when is it safe to enter the markets & (b) why the timing of the exit is critical to the "profitability" of any trading plan.

Skate.


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## ducati916 (12 December 2022)

ducati916 said:


> If markets are complex systems, which they are, then traders/investors tend toward 'dimension reduction'. More plainly, causality and narrativity, which both lead to chronology and a perception of events in the flow of time. Often, wildly inaccurate.
> 
> This disease, leads to many pathologies in the market. One example is the interpretation (of let's say a price chart) and projecting it forward in time. The expectation (absent any quantitative assessment) that price will perform in 'X' manner. If successful, a causality/narrative is assigned as to why this succeeded: bounced off of VWAP, expansion of vol, etc. This can be very dangerous to our intrepid trader/investor.
> 
> ...




So a text book example:




Now unless you were willing to spend an inordinate amount of time with the financials, which would likely be subject to all the usual accounting tricks, then what you have left is the 'price' and the 'narrative' which assigns a causation.

jog on
duc


----------



## Rabbithop (12 December 2022)

ducati916 said:


> So a text book example:
> 
> View attachment 150360
> 
> ...



Good morning All and Thank you all posters on this Thread. Its worth re reading to comprehend and learning smart from the Gurus here.
So far, I am impressed how we have shared, trashed out our opinions here in true gentleman manner unlike in another Forum where personal insults n attacks wld have been bombarded by now.

The below I am going to post is from my re reading this Thread n couldn't help myself from laughing while comparing to another matter currently circulating in my head..No insult intended just trying to find the right answers to help others in trouble time

*We all love hearing & watching train wrecks*
You hear it all the time. "Well, this week didn't go as expected" without giving a second thought as to why. There are traders at the moment holding shares whilst the markets are in free fall. Some have outwardly justified that they are not worried exclaiming they are in it for the long haul so they haven’t sold anything yet "even justifying "that it's too late to sell now" & (that was a week ago) while others have responded by declaring "I've held these positions this long I might as well keep holding them".

Its similar to victims of spouse abusers in marriage voicing it loud...we hear it all the time...this week didn't go as expected..married couples holding on to marriage whilst the marriage in free fall...some have outwardly justified that they are not worried exclaiming that are in for the long haul so they haven't divorce yet....even justifying...that it's too late to get out now...while others have responded by declaring...I've held this marriage this long I might as well keep holding it...

Ah...as Skate posted ...it's what in our mind n how we perceived it..

The answer I discovered..Get Out Before You Are Dead...For Traders n Others in Trouble Marriages.

Gotta get ready for Urologist appt, pray he will decide to blast that urtheral stone out before the year end instead of putting a stent, delaying until next year.


----------



## Skate (12 December 2022)

*Nature at its very best*
My proud son just snapped this from a tree in his yard. I'm absolutely flabbergasted at its beauty.




Skate.


----------



## Rabbithop (12 December 2022)

Skate said:


> *Nature at its very best*
> My proud son just snapped this from a tree in his yard. I'm absolutely flabbergasted at its beauty.
> 
> View attachment 150372
> ...



  Beautiful Fragipani flower


----------



## farmerge (12 December 2022)

Rabbithop said:


> Good morning All and Thank you all posters on this Thread. Its worth re reading to comprehend and learning smart from the Gurus here.
> So far, I am impressed how we have shared, trashed out our opinions here in true gentleman manner unlike in another Forum where personal insults n attacks wld have been bombarded by now.
> 
> The below I am going to post is from my re reading this Thread n couldn't help myself from laughing while comparing to another matter currently circulating in my head..No insult intended just trying to find the right answers to help others in trouble time
> ...



Arvo to you Rabbito. Best of luck with the medical procedure, hope that it goes to your perceived plan


----------



## Rabbithop (12 December 2022)

farmerge said:


> Arvo to you Rabbito. Best of luck with the medical procedure, hope that Arvo to you Rabbito. Best of luck with the medical procedure, hope that it goes to your perceived plan



Good day farmerge. Prayer answered. He is going to do my surgery next Mon even though he is fully booked. Had been running around today doing blood, urine n CT scan update for surgery.


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## rcw1 (12 December 2022)

Rabbithop said:


> Good day farmerge. Prayer answered. He is going to do my surgery next Mon even though he is fully booked. Had been running around today doing blood, urine n CT scan update for surgery.



Great news Rabbithop
Kind regards
rcw1


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## farmerge (12 December 2022)

Rabbithop said:


> Good day farmerge. Prayer answered. He is going to do my surgery next Mon even though he is fully booked. Had been running around today doing blood, urine n CT scan update for surgery






Rabbithop said:


> Good day farmerge. Prayer answered. He is going to do my surgery next Mon even though he is fully booked. Had been running around today doing blood, urine n CT scan update for surgery.



Rabbito I concur with rcw1


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## Skate (13 December 2022)

*I'm feeling the pressure*
Being the custodian of $20k & having that money sitting on the sidelines waiting to time the market has put a lot of pressure on my shoulders. Unless you are retired, everyone else is time-poor. Being time-poor & trading such a low dollar amount of $20k is a challenge for everyone.

*Not everyone "knows" the risk of trading with small amounts*
Waiting is one of the hardest parts of trading & it's even harder when you are just starting out, being eager to have a go. I'm always on the lookout for new ideas to post about that may be helpful to others. This gives me an opportunity to make a series of posts about "how you go about trading with small amounts of money".

Skate.


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## farmerge (13 December 2022)

Skate said:


> *I'm feeling the pressure*
> Being the custodian of $20k & having that money sitting on the sidelines waiting to time the market has put a lot of pressure on my shoulders. Unless you are retired, everyone else is time-poor. Being time-poor & trading such a low dollar amount of $20k is a challenge for everyone.
> 
> *Not everyone "knows" the risk of trading with small amounts*
> ...



Good morning Skate Very true your thoughts on trading. Though I don't have the time I did from a couple of years ago, I have found that my tried and true method works for me now. Just running with 3-5 stocks on a day trading basis with a maximum of 15k for each. When I was injured my portfolio was somewhat larger and the dollar amounts also. But I had the time to sit and gaze. It is certainly a challenge to find the stock that suits and to make that wallet filler.


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## farmerge (13 December 2022)

Skate said:


> *I'm feeling the pressure*
> Being the custodian of $20k & having that money sitting on the sidelines waiting to time the market has put a lot of pressure on my shoulders. Unless you are retired, everyone else is time-poor. Being time-poor & trading such a low dollar amount of $20k is a challenge for everyone.
> 
> *Not everyone "knows" the risk of trading with small amounts*
> ...



Just as an add on this morning I picked up some ZIP not everyones cup of tea I know, but a couple of cents up and it's a good gain for little effort


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## farmerge (13 December 2022)

farmerge said:


> Just as an add on this morning I picked up some ZIP not everyones cup of tea I know, but a couple of cents up and it's a good gain for little effort



And as a further add on to my day trading ZIP bought and sold this morning for a tidy profit. Sometimes the opportunities just land in your lap. For me ZIP has been a good one for the past couple of months.
As always DYOR


----------



## Skate (13 December 2022)

Skate said:


> *I'm feeling the pressure*
> Being the custodian of $20k & having that money sitting on the sidelines waiting to time the market has put a lot of pressure on my shoulders. Unless you are retired, everyone else is time-poor. Being time-poor & trading such a low dollar amount of $20k is a challenge for everyone.
> 
> *Not everyone "knows" the risk of trading with small amounts*
> ...




*How do I start trading with little money?*
Deciding to enter the markets, is where the soul searching starts & where financial education should begin. It’s an indisputable fact that we all need to start somewhere. The secret to financial freedom is taking the first step to get started.

*Fear paralyses everyone*
Unfortunately, the fear of losing money is the biggest stumbling block that keeps us from getting started. This is where gaining the right amount of knowledge will help overcome these anxieties & fears. In fact, you don't have to know everything all at once as you will learn on the job. As you go along you will gain the knowledge that will build confidence. The more effort you put in, the better off you will be.

Skate.


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## Skate (13 December 2022)

*Challenges are an anchor*
Many young traders face a range of similar challenges. With the increases in the cost of living, while wages are still flat-lining making it more difficult to save. Having said that, trading a small portfolio is still the best way for those just starting out as it allows money to grow & compound over time.

*Your future hasn't been written yet*
Taking steps now will make it possible to reach your financial goals much sooner rather than later. Trading allows the freedom to supplement your income or save to buy a home. Trading offers endless possibilities.

Skate.


----------



## Skate (13 December 2022)

*How can you start trading with little money?*
Now we have come full circle, back to where we started, asking the same question. Simply, there is only one answer & that is, you need to start with "savings" to bankroll this new trading endeavour. It's important to understand that trading funds need to sit outside of your general living expenses. This money (savings) can’t be used for any other purpose other than trading or it will defeat the purpose.

*Without an education*
It’s highly likely you will lose your money very quickly, as many new traders have without firstly educating themselves about trading. In the early stages, it is not the size of your bankroll or the returns you'll achieve what’s important. However, what is important is that you develop the correct trading habits from the get-go.

Skate.


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## Skate (13 December 2022)

*The first investment you should make is in yourself*
A trading education removes the fear & risk associated with trading to some degree. Without an education, trading can be a very expensive experience.

*Once you have gained an education*
You will be confident in having the knowledge of how to achieve very rewarding results. Brokerage costs affect your returns as each time you buy & sell shares there is a hefty commission fee. So, each bet needs to be larger enough to offset this fee.

Skate.


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## Skate (13 December 2022)

*Is $20k enough to start trading?*
Well, yes & no. Let’s start with “Yes” first. $20,000 is a lot of money for some & an unreachable savings amount for others. 

*$20k at least does two things*
(1) It allows you to dip your toe in  as a trader
(2) it gives you an amount to save for, prior to trading

*Also, a $20k bankroll with $5k positions*
Allows you to have bet sizes large enough to negate the hefty commission fee that’s charged both ways. (Buy & Sell)

*Now for the "No" case*
If you spread $20k too thinly, meaning having 10 or 20 positions in the portfolio, the commission "wouldn't just be an anchor around your neck" but rather a "bullet to the head" killing the strategy, no matter how good it appears.

Skate.


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## Skate (13 December 2022)

*Once you have $20k *
Do you hold four or five positions? Well, my choice would be to go for "four" (4 X $5k) positions as the commission drag will be lighter. 

*Capital protection*
This includes picking the right positions & then knowing when to buy & when to sell helps in the development of a trading plan, a plan you can stick with. The secret to profitable trading comes from having a solid repeatable process.

*So, there you have it*
On how you could start trading with very little money. Don’t get me wrong, $20k is not chicken feed but it’s the least amount I consider that will give you a fighting chance of survival in this game of probabilities.

*In Summary*
I'm just saying, "if you can pull this off" you will be on your way to financial freedom. Financial freedom should be the aim of every trader. Living life on your terms is what it's all about. The only person who can make sure you’re able to live the life you "desire" is you.

Skate.


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## Rabbithop (13 December 2022)

Skate said:


> *Challenges are an anchor*
> Many young traders face a range of similar challenges. With the increases in the cost of living, while wages are still flat-lining making it more difficult to save. Having said that, trading a small portfolio is still the best way for those just starting out as it allows money to grow & compound over time.
> 
> *Your future hasn't been written yet*
> ...



I like it...

*Your future hasn't been written yet*
Taking steps now will make it possible to reach your financial goals much sooner rather than later. Trading allows the freedom to supplement your income or save to buy a home. Trading offers endless possibilities.

 I have 2 grandkids 5yrs n 3yrs, I choose to buy 1k worth of share for their portfolio on their birthdays. Their bday fell on the same month. To prevent complication, I buy both the same numbers, maxi 1k on the same stock.
Currently the 5 yr old portfolio comes just par with capital spend. The 3yr old portfolio comes well above mid 3k.
It is a small portfolio for them but when they are 18 or 21yr old, hopefully, they can put it to good use.


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## Rabbithop (13 December 2022)

Skate said:


> *How can you start trading with little money?*
> Now we have come full circle, back to where we started, asking the same question. Simply, there is only one answer & that is, you need to start with "savings" to bankroll this new trading endeavour. It's important to understand that trading funds need to sit outside of your general living expenses. This money (savings) can’t be used for any other purpose other than trading or it will defeat the purpose.
> 
> *Without an education*
> ...



The first paragraph of the purpose or aim is extremely imp to bear in mind. Sadly, our Australia Superannuation purpose has been compromised. Reitrement funds target may not be achieved.

The second paragraph...Without an education....when the hard earned saving evaporated fast, one will wake up. 
Some thing you can learn while you trade. The sky is blue when you made a profit and cry bucket of tears when the sky turns black.
Good to have Time n be able to learn n practice on paper before committing real money into the game.


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## Skate (13 December 2022)

Rabbithop said:


> Without an education....when the hard earned saving evaporated fast, one will wake up.




@Rabbithop, I have three sons, two are traders & both are time-poor as their young families come first. What's pleasing is that both are teaching their children the value of money early.

*Birthday presents*
Birthday shares instead of money is a novel idea that will not only be appreciated over the long term but may also be the catalyst to set them up for life.

*The biggest challenges we face in life are all money-related*
Most marriage breakup normally stems from money, a fester for most arguments. I can also tell you, it's never about having too much money. It's a real shame the education system neglects the importance of money management as part of its curriculum.

Skate.


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## Skate (13 December 2022)

*Thinking*
Thinking & curiosity has been pulled out from under us & as a dad & grandfather, it's our responsibility to reclaim this area for our children & grandchildren. Critical thinking is important but not as important as discovering new ways of thinking about the world as we see it. When you practice critical thinking it demonstrates why personal responsibility is so important.

*The law of least effort*
Many receive advice "only the wise profit from it". People, in general, will think as little as possible because most of our lives, we spend our time listening to someone else "feed us information".  Taking responsibility for all of our decisions sets us on a journey of self-discovery. Today, we are constantly waiting for someone else to tell us what to do or checking to see what others are doing so we can do the same making us conformists at best.

Skate.


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## Skate (13 December 2022)

@Rabbithop, I've made a series of posts today when I could have made one post with bullet points instead. But I believe the filler between the points is just as important.

*Freedom at Stake*
Trading isn’t about getting rich, I've posted this many times, it's more about financial independence supporting yourself without an income & being able to choose to live your life on your terms.

*Who decides*
The only person who can make sure you’re able to do it on your terms is you...

*The measure*
Living life on your terms is what life is all about.

Skate.


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## Rabbithop (13 December 2022)

Skate said:


> @Rabbithop, I've made a series of posts today when I could have made one post with bullet points instead. But I believe the filler between the points is just as important.
> 
> *Freedom at Stake*
> Trading isn’t about getting rich, I've posted this many times, it's more about financial independence supporting yourself without an income & being able to choose to live your life on your terms.
> ...



The difference of opinions or views will depend on your stage in life. 

*Freedom at Stake*...if a trader is in the 20 to 30 age grp, Trading is about getting rich to own a debt free house and provide a good family life. 30 to 50 age grp, Trading is about getting rich to plan for early Retirement, away from the Rat race. 

50 to 70 age grp, Trading  isn't about getting rich, it's about sanity n self elation in beating the market. The satisfaction of making a profit n interaction with others with same interest. 

 70s and above age grp, happy to have a healthy life, Trading to get that little extra money able to treat friends for cuppa/ drinks, lunch or dinner to cheer each other up. 
Reminiscencing of the good old days.

*Who Decides*
Fully agree...YOU....

*The Measure*
Here Today, Gone Tomorrow. 
Life is about Planning.
Be Happy. 
Enjoy God's Creation each day.
Spread Happiness.


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## ducati916 (14 December 2022)

Skate said:


> *Once you have $20k *
> Do you hold four or five positions? Well, my choice would be to go for "four" (4 X $5k) positions as the commission drag will be lighter.
> 
> *Capital protection*
> ...







jog on
duc


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## Skate (14 December 2022)

*I've been thinking*
@ducati916 trading such a low amount of $20k (4 X $5k bets) might make an interesting series of ongoing weekly posts. I hate it when I'm trading someone else's money as the pressure is enormous. I'm sure there will be distractors who absolutely know that "Skate's 20Kay Strategy" will crash & burn. But, I'll be hoping it doesn't.

*But on the flip side *
No matter how the strategy performs in "real-time" others who have a low starting balance might be interested when someone else's money is at risk. When the "Percentage Index Filter" gets to 50%, signals will be generated. At the end of trade today it's sitting at 47%. Sitting in cash & waiting for buy signals can test the best of traders.




*There is always an upside*
"Skate's 20Kay Strategy" started its trading journey on the 1st of December 2022 & I'm pleased to report, the strategy has not lost one cent. (yet)

*Skate's 20Kay strategy*
There might be a few signals this week, here's hoping, as sitting on your hands & doing nothing is very hard to do.




Skate.


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## Skate (15 December 2022)

*Let's not try to make trading complicated*
I've said a few times over the years that the odds are stacked against you when you want to trade a small account profitably, but in saying this, it's not impossible. When it comes to trading you need to be clinical in everything you do. Trading small accounts require strict risk control & money management. At times, you'll even struggle to cover the transactional cost of buying & selling but that's trading.

*There is no buffer to fall back on*
Trading a small four-position portfolio has simply no buffer against a losing streak, unexpected losses, or trading mistakes. But in saying this, the process is still exciting.  Even trading small amounts allows you the opportunity to build a larger amount over the longer term. Trading small accounts may be more difficult to trade successfully, but if they are traded correctly, there is no reason why small trading accounts cannot be profitable.

*There's never a good time to start trading *
As far as I'm concerned when you are trading you'll need to play the waiting game no matter the dollar size or the position size of your portfolio. This means, that you need to time your purchases precisely when the odds of success appear to be in your favour.

Skate.


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## Willzy (15 December 2022)

Hi everyone, I've been playing with amibroker rotational strategies this last week. Playing with the concept of dual momentum.

I came across this youtube tutorial, where the presenter uses python to run a backtest on a rotational strategy. Python is not ideal for this type of analysis but I am struggling to work out how to replicate the strategy is Amibroker.

Strategy:

Watchlist = NASDAQ 100

First Rank all tickers by their 200 day ROC and take the top 50 stocks from this ranked list

Rank these top 50 stocks by their 100 day ROC and take the top 25 from this 2nd ranked list

From this final list of 25 stocks, Rank them by their 50 day ROC and take the top 10 stocks

Buy all 10 tickers with equal weighting, ie 10% each.

Rotate Monthly.

I found a tutorial by Matt Radtke, also worth a look for those interested:


I've transcribed the amibroker AFL in his video. I think the secret will lie in a nested for loop where we generate separate static variables for each ROC... ie ROC200, ROC100 and ROC50.

ROC100 = iif( rankROC200 > 50, -1e9, ROC(C,100) );

Below is Radtke's code:


```
#include_once "Formulas\Norgate Data\Norgate Data Functions.afl"
doTrace = False;
tkIndex = "$SPX";

// Perform opeations that only need to be done once at the start of the analysis
if (Status("stocknum") == 0 AND Status("actionex") != actionPortfolio AND Status("actionex") != actionExAAParameters){
   
    // Find the most oversold members fof the S&P500 index by rankinn in order fo the lowest rsi(2)
    StaticVarRemove("RSI2*");
    StaticVarRemove("RankRSI2*");
   
    SymList = CategoryGetSymbols(categoryWatchlist, GetOption("FilterIncludeWatchlist"));
    for (i = 0; (tkSym = StrExtract(SymList, i) ) != ""; ++i){
   
        if (doTrace) _TRACE("Setting ranking info for symbol "+tkSym);
        if (SetForeign(tkSym)){
            rsi2 = RSI(2);
           
            // Only rank stocks when they are in the index
            inIndex = NorgateIndexConstituentTimeSeries(tkIndex);
            RestorePriceArrays();
           
            StaticVarSet("RSI2"+tkSym, IIf(inIndex,100-rsi2,-1e9));
           
        }
    }
    StaticVarGenerateRanks("Rank","RSI2",0,1224);
}

// Get the relative rank for the current symbol
// Highest ranking value will have a rank of 1

rsi2Rank = StaticVarGet("RankRSI2" + Name());

// Retrieve the original value used for ranking if needed?
rsi2 = StaticVarGet("RSI2" + Name());

// Use the rank as part of your entry code
```

I'm just wondering if anyone has already experimented with this concept? All thoughts welcome


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## Captain_Chaza (15 December 2022)

Surely the FIRST step in designing a $20K Portfolio is designing a
 A Good Set of Sheets and Masts to the Maximum $Value of $20,000?

You could start with a Design of 4 low masted sails and a couple of Storm sails 
 ie:  4 x $4000 and 2 x $2000  =  $20,000
(Pictured Below)

and hoist your sheets as they  get signaled to be Presented to the Wind

*ONE BY ONE!!*
JUST do it ! ONE By ONE 

NB; There is no prize in hoisting 2 or 3 sails at the same time
All you need is  one or two 10 fold winners  in the medium/ long term

YES! This is not easy  
But it is possible
One ONLY  needs to know How to Hold Them Tight when represented to the wind  
and then  Fold Them up and store them down below for another day

Sailing is not Rocket Science
It's as Easy as that!

Bon Voyage Captain Skate on your Greatest of all Challenges
I am looking forward to it and I am prepared to help in any way I can
You can always PM me for anything


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## Gringotts Bank (15 December 2022)

Willzy said:


> Hi everyone, I've been playing with amibroker rotational strategies this last week. Playing with the concept of dual momentum.
> 
> I came across this youtube tutorial, where the presenter uses python to run a backtest on a rotational strategy. Python is not ideal for this type of analysis but I am struggling to work out how to replicate the strategy is Amibroker.
> 
> ...




What sort of results do you get running that code on ASX?  Or, would you share your AB code please, so we can try it?


Instead of this:

_First Rank all tickers by their 200 day ROC and take the top 50 stocks from this ranked list_

Rank these top 50 stocks by their 100 day ROC and take the top 25 from this 2nd ranked list

From this final list of 25 stocks, Rank them by their 50 day ROC and take the top 10 stocks

could you *weight* them in a single line?

eg.

rank = *2**ROC(c,200) + *10**ROC(c,100) + *20**ROC(c,50)

or whatever weighting you like.  This would obviously give more weighting to recent performance.


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## qldfrog (15 December 2022)

Gringotts Bank said:


> What sort of results do you get running that code on ASX?  Or, would you share your AB code please, so we can try it?
> 
> 
> Instead of this:
> ...



Was thinking exactly the same, you do need to do a realm search, buy all and just set ranking (score) based on the roc of the stocks as the above or similar..
Only position score has to be code complex
Interesting challenge


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## Willzy (16 December 2022)

qldfrog and gringotts, 

Thanks for your suggestions  

Using something like:

rank = *2**ROC(c,200) + *10**ROC(c,100) + *20**ROC(c,50) along with rotational backtest and setting positionScore  = rank etc, is the way I've been doing it in the past, I'll post up a generic example of this. Though I'm yet to find a solution I'm actually happy with...

The conundrum of the suggested system is that it requires multiple rounds of sorting and then discarding, TBH I think when I get it sorted the results of both methods will be quite similar.

I'll post up an example ami .afl tomorrow.

Cheers


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## Skate (16 December 2022)

*Christmas*
I asked what my wife would like for Christmas.

“A divorce”

I had to tell her that “I wasn’t planning on spending that much”

Skate.


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## Willzy (16 December 2022)

Gringotts Bank said:


> What sort of results do you get running that code on ASX?  Or, would you share your AB code please, so we can try it?
> 
> 
> Instead of this:
> ...




As promised, this is my basic dual momentum rotational code, please let me know if you spot any errors.

I'm still working on a system that conducts multiple sorting runs to see if I can get it to work... debugging amibroker can be a real pain tbh...


```
//==================================
//     Basic Dual Momentum System   ===
//     AFL By Willzy                 ===
//==================================

// Be sure to set your trade settings in the settings window because for Rotational Trading Mode, the script code will not work.
// ie BuyPrice = Open, SellPrice = Open.

//     --- Include Files --- //
#include_once "Formulas\Norgate Data\Norgate Data Functions.afl"

// --- Functions --- //

//OptimizerSetEngine("cmae");
SetBacktestMode( backtestRotational );

//--- Rotation settings
nPos = 10;//Optimize("nPos",5,3,20,1);
worstRankHeld = 10;//Optimize("worstRankHeld",15,5,20,1);
SetOption("BuyDelay",1);
SetOption("MaxOpenPositions", nPos);
SetOption("WorstRankHeld",worstRankHeld);

//--- account Settings
SetOption( "CommissionMode", 2 );
SetOption( "CommissionAmount", 0 );

//--- All Positions Use Max Available Equity - Compounded Returns
posSize = 100/(nPos);
SetOption("InitialEquity",100000);
SetPositionSize(posSize,spsPercentOfEquity);

// Set Price Arrays for price and vol filters
CloseArray = NorgateOriginalCloseTimeSeries();
VolumeArray = NorgateOriginalVolumeTimeSeries();
priceFilter = CloseArray >= 10;   
                        
//--- Set foreign symbol for the indexFilter and Constituents
indexSymbol = "$NDX";

//--- Symbol exists within index at the time
canTrade = NorgateIndexConstituentTimeSeries(indexSymbol);

//--- index Filter
index = Foreign( "$NDX", "Close" );
indexPeriod = 200;
indexFilter = index > MA(index,indexPeriod);

//--- rankingScore
symScore = 0.4 * ROC(C,63) + 0.2*ROC(C,126) +  0.2*ROC(C,189) + 0.2*ROC(C,252);

//---symbol moving up
symbolFilter = C>MA(C,200) AND symScore > 0;

//--- Final Score Function
posScore =     Max(0,
                canTrade *
                priceFilter *
                indexFilter *
                symbolFilter *
                symScore
                ) ;


//--- rotate only at beginning of the month
Monthly = TimeFrameExpand(1, inMonthly, expandPoint);

PositionScore = IIf(monthly, Ref(posScore,-1), scoreNoRotate);

Filter = 1;
AddColumn( ROC(C,63), "ROC 50",1.4, colorBlack);
AddColumn( ROC(C,126), "ROC 100",1.4, colorBlack);
AddColumn( ROC(C,189), "ROC 250",1.4, colorBlack);
AddColumn( ROC(C,252), "ROC 500",1.4, colorBlack);
AddColumn( indexFilter, "indexFilter",1.4, colorBlack);
AddColumn( symScore, "symScore",1.4, colorBlack);
AddColumn( posScore, "posScore",1.4, colorBlack);
AddColumn( Close, "Close",1.4, colorBlack);
AddColumn( DayOfWeek(), "dayOfWeek",1.1, colorBlack);
```


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## AlgoZero (16 December 2022)

Willzy,
this is my version of rotational trading (actually, I've found it somewhere). It's very primitive compared to yours.
I've backtested it on ASX100 historical constituents since 2010, 13 years.

//////////

SetBacktestMode( backtestRotational );

SetOption("InitialEquity", 100000);
SetOption("CommissionMode", 2);
SetOption("CommissionAmount", 9.5);        // SelfWealth

SetTradeDelays( 1, 1, 1, 1);

Totalpositions = 10;

SetOption("WorstRankHeld", 20);
SetOption("MaxOpenPositions", Totalpositions );
PositionSize = -100 / Totalpositions ;

LastDayOfMonth = IIf( (Month() == Ref( Month(), 1) AND (Month() != Ref( Month(), 2)) ), 1, 0);
TradeDay = LastDayOfMonth ;

Rank = ROC(C, 250) * [ this contains the code for historical ASX100 constituents ];    // not using Norgate

PScore = IIf(Rank < 0, 0, Rank );
PositionScore = IIf(TradeDay , PScore , scoreNoRotate);

/////////

I don't trust it although I can't find any mistake in the code. The results are too good to be true.
But these things are highly parameter-sensitive, and you are using a lot of them. There is another worry. Try starting a few months either way and you double or halve the returns. I haven't made it trade on different days, e.g. 1st day or middle of the month and that's even more degrees of freedom.
Try it with 8 or 12 positions instead of 10, never mind your finessing of the ROC() lookback period.

If I'm wrong about this, I'll be ecstatic and be trading it right away.


----------



## Willzy (16 December 2022)

AlgoZero said:


> Willzy,
> this is my version of rotational trading (actually, I've found it somewhere). It's very primitive compared to yours.
> I've backtested it on ASX100 historical constituents since 2010, 13 years.
> 
> ...



Hi Algo,

I may be wrong but I think you have a future leak with your posScore, you might be okay but I think with the rotational trading mode, the set trade delays fn will not work. 

U need to set it in the settings window, a quick way to test is to use ref(Rank,-1) as your pScore

Let me know if that helps!

Cheers


----------



## debtfree (17 December 2022)

Happy 4th Birthday @Skate with your "Dump it Here" thread 🎂.
It's a cracker of a thread with lots of great content for lots of different traders and at the same time at different levels of experience. If you can't pick up something here that's beneficial to you I'd be very surprised. Thank you for your many posts of information, it's much appreciated by many .
Also before it's too late, Merry Christmas to you, your family and all the ASF members that follow, support and comment in your thread .


----------



## Skate (17 December 2022)

debtfree said:


> Happy 4th Birthday @Skate with your "Dump it Here" thread 🎂.
> It's a cracker of a thread with lots of great content for lots of different traders and at the same time at different levels of experience. If you can't pick up something here that's beneficial to you I'd be very surprised. Thank you for your many posts of information, it's much appreciated by many .
> Also before it's too late, Merry Christmas to you, your family and all the ASF members that follow, support and comment in your thread .




@debtfree, thank you for your ongoing kind words. I have appreciated each & every one of your birthday wishes for each of the last 4 years. 

*Merry Christmas *
It goes without saying, I wish you & the many contributors to this thread a Merry Christmas & a very prosperous New Year.




Skate.


----------



## eskys (17 December 2022)

Thank you, Skate. Merry Christmas and to all forum members.


----------



## AlgoZero (17 December 2022)

Willzy said:


> Hi Algo,
> 
> I may be wrong but I think you have a future leak with your posScore, you might be okay but I think with the rotational trading mode, the set trade delays fn will not work.
> 
> ...




Willzy, you're right, there must be a future leak, only I haven't found it yet. Ref -1) in the PositionScore doesn't fix it. Neither does ROC(Open) instead of Close. In fact, everything I've tried so far seems to confirm that this system is quite profitable. I know intuitively that this must be wrong.

It's important that you, yes, you should find out what's wrong with this code. You want to use a much more complicated strategy based on the same basic code to trade or invest real money.

If I have some spare time this weekend I'll have another go at it. But in my opinion trading *systematically* with holding times of months is trading randomly. You will not have enough trades in an entire lifetime to prove statistically that it's not just luck that produced your profits.

Discretionary trading with skill and good judgement is an entirely different proposition and a talented trader can be very profitable.

The original code was found here:








						Momentum Rotation System AmiBroker Code
					

AmiBroker momentum rotation system AFL code




					dtr-trading.blogspot.com
				




For anyone else using AmiBroker this could be a good learning experience. My flawed code is very simple. Just imagine trying to find a mistake in hundreds of lines with several indicators and dozens of parameters.

AmiBroker is full of traps for young players.


----------



## Skate (17 December 2022)

*Daily rituals*
There is nothing like routine to keep you active & above what's happening in the world of trading. Each morning I enjoy reading @bigdog's "nyse-dow-jones-finished-today-at" thread, @barney's "price-sensitive-announcements" & @ducati916's worldly posts. There is always a section of Duc's daily posts that I particularly enjoy reading & that's the musing of "Flippe Flye". (a skilled trader by any measure)

*This year has been tough*
You only have to read the Twitter posts of one of our ASF members who reported today that his YTD PnL: was down (*-$983,811) *(yikes!!) whilst at the same time posting charts confirming others are doing poorly as well. I guess surrounding yourself with similar poor performancers makes you feel somewhat better about your own trading.

*Trading has not been all "Doom & Gloom" for everyone*
Dr. Fly has achieved good trading results this year that's worthy of a post in itself.

Skate.


----------



## Skate (17 December 2022)

*Not everyone has traded poorly *
See, it's not all gloom & doom as Mr "Flippe Flye" is one trader who has performed extremely well this year. I should also point out that Dr. Fly is a licensed professional & by law has the right to offer investment advice.

*Dr. Fly remarked: Trading requires skill*
"_I closed at another RECORD HIGH not because of luck or due to some sort of fluke — but skill. Markets are broken — but I am no longer concerned. It seems everything I do now works and I cannot lose money — even if I tried. Ergo, smooth sailing for House Fly from here until the end of the year. I’d be remiss if I did not boast about my market exploits. After all, if I didn’t — how else would you come to realize your skills are in fact INFERIOR to mine?_

*Dr. Fly's equity curve*
YTD gains are approaching 60%, a remarkable difference from what's being reported elsewhere.

*

*


Skate.


----------



## Skate (17 December 2022)

Skate.


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## Skate (17 December 2022)

*No "Buy Signals" this week*
The "Percentage Index Indicator" is still below 50%, currently sitting at 38%. The "Moving Average" Index Filter is on (the bottom of the two ribbons) but until both ribbons are green the strategy is restricted in generating buy signals.




Skate.


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## Gringotts Bank (17 December 2022)

Skate said:


> *Not everyone has traded poorly *
> See, it's not all gloom & doom as Mr "Flippe Flye" is one trader who has performed extremely well this year. I should also point out that Dr. Fly is a licensed professional & by law has the right to offer investment advice.
> 
> *Dr. Fly remarked: Trading requires skill*
> ...



_"It seems everything I do now works and I cannot lose money — even if I tried"._

This....

is a belief.

I've been in that place.  Probably most experienced traders have been in that place where everything you touch turns to gold.  It's an amazing feeling.  But purple patches are *mind-generated*.  Money is created with the mind, not a system.  It looks very much like it's the system that's creating the endless flow of profits, but it's an illusion.

It's only because I have not mastered my own mind that I still rely so heavily on my system.  But 100% discretion is the ultimate form of trading, imo. Most others here will disagree, but I'm very confident about this!


----------



## Skate (17 December 2022)

Gringotts Bank said:


> *It looks very much like it's the system* that's creating the endless flow of profits,* but that's an illusion*.




@Gringotts Bank, you may be correct. I've often said whilst watching sports "that's got to be a fluke" but they seem to fluke it 100% of the time. I believe some traders are better than others & I don't believe there is enough thinking "about" why they are. 

*I've put my trading success down to the strategies I trade*
I find using metrics as part of my "buy condition" to be beneficial. Over the years I've made my share of indicators. Those indicators may not be perfect but they tend to fluke the results that I'm after more times than they don't. 

*My "Percentage Position Up" indicator & my "Ulcer Up" indicator *
Both these indicators go a long way in helping me achieve profitability. My "Percentage Up Indicator" & the relationship it creates is shown on the chart below.




*The "Percentage Indicator"*
When the "percentage indicator" is above 50% there is a corresponding rise in the ASX All Ordinaries Index. Restricting the "buy condition" to only when the "Percentage Up Indicator" is above 50% helps avoid the nasties created by using an "Index Filter" in isolation. (which, by-the-way IMHO is better than none)

*I believe there is a correlation*
The "Percentage Up Index Filter" above 50% & the All Ordinaries pops at the same time. I don't believe this is a "fluke" or an "illusion" but a defined "correlation". Restricting trading during these periods (above 50%) gives you a fighting chance of profitably, which is basically "the name of the game".




Skate.


----------



## Gringotts Bank (17 December 2022)

Skate said:


> @Gringotts Bank, you may be correct. I've often said whilst watching sports "that's got to be a fluke" but they seem to fluke it 100% of the time. I believe some traders are better than others & I don't believe there is enough thinking "about" why they are.
> 
> *I've put my trading success down to the strategies I trade*
> I find using metrics as part of my "buy condition" to be beneficial. Over the years I've made my share of indicators. Those indicators may not be perfect but they tend to fluke the results that I'm after more times than they don't.
> ...



Say someone ran a research project.  100 people with a similiar level of experience/knowledge, and gave them each $100k to trade in whichever way they choose for 3 months, and they get to keep the profits.  I reckon I'd be able to tell you who will be in the top ten by the end of the project before it starts.  And I think others could do it too, just that most people don't think this way.


----------



## qldfrog (17 December 2022)

Gringotts Bank said:


> Say someone ran a research project.  100 people with a similiar level of experience/knowledge, and gave them each $100k to trade in whichever way they choose for 3 months, and they get to keep the profits.  I reckon I'd be able to tell you who will be in the top ten by the end of the project before it starts.  And I think others could do it too, just that most people don't think this way.



First, let's be clean, i know what you  ean.but not sure about your scenario
->If they keep the profits but not pay the losses, it is a very different behaviour /trading to an investor/trader using his her own money.
Whereas i am nearly out of the market and in cash today, in that scenario i would be 100% invested; all on for a xmas rally with specs and 1c shares.
This is also the difference between investing/trading your money vs a trader working for a bank or fund which will gain from profit but at worst will be sacked on losses..most probably not even .


----------



## Gringotts Bank (17 December 2022)

qldfrog said:


> First, let's be clean, i know what you  ean.but not sure about your scenario
> ->If they keep the profits but not pay the losses, it is a very different behaviour /trading to an investor/trader using his her own money.
> Whereas i am nearly out of the market and in cash today, in that scenario i would be 100% invested; all on for a xmas rally with specs and 1c shares.
> This is also the difference between investing/trading your money vs a trader working for a bank or fund which will gain from profit but at worst will be sacked on losses..most probably not even .



Either way would work.  Even if they used their own money or had to pay for losses.


----------



## Skate (17 December 2022)

ducati916 said:


> The Turtle experiment resulted in a number of the group breaking the rules. A breach of discipline. Had they all traded 100% to the rules, then allowing for slippage in execution, their results would have been the same. Random events in this context are extrinsic to the individual. Thus must affect the entire group.
> 
> An intrinsic variation [random event] in a failure to execute to instructions, is a breach of discipline. The reason that they breached instructions may well be that they did not 'believe' but that is irrelevant to the question in this case: their belief or disbelief, had no direct impact on the profitability of the system [or not as the case maybe]. Their belief was that they could out-trade the system. This was proven to be false.




@ducati916 *made a great post about why trading results vary between traders *
Giving the traders the same strategy, the results will vary for a variety of reasons as Duc details. I've even posted that having "Peter Brock's" car wouldn't mean you would win a race at Bathurst back in the days when he was unbeatable.






						Dump it Here
					

Or do what the Turtles did, but take it up a notch.  Give the exact same system to a few thousand people, sit back and watch as some make it profitable and others make it fail.  The returns will form a nice bell curve.  Interview those at each tail of the curve and you'll see what's happening...




					www.aussiestockforums.com
				




Skate.


----------



## Gringotts Bank (17 December 2022)

Skate said:


> @ducati916 *made a great post about why trading results vary between traders *
> Giving the traders the same strategy, the results will vary for a variety of reasons as Duc details. I've even posted that having "Peter Brock's" car wouldn't mean you would win a race at Bathurst back in the days when he was unbeatable.
> 
> 
> ...



That second part was actually my quote, not ducati's.


----------



## Skate (18 December 2022)

Skate.


----------



## farmerge (18 December 2022)

Skate said:


> View attachment 150614
> 
> 
> Skate.



If BRN and ZIP move just 1/2 a cent each upwards then I will start the week on a "successful" note. Of course if the opening SP is even higher then the "success" rate  will be excellent. !!!!!!!


----------



## Skate (20 December 2022)

Skate.


----------



## DaveTrade (20 December 2022)

Skate said:


> View attachment 150695
> 
> 
> Skate.



It's OK as long as you refer to yourself in the third person.


----------



## Skate (20 December 2022)

DaveTrade said:


> It's OK as long as you refer to yourself in the third person.




*“Hard To Be Humble” *
The lyrics of this song never go stale & only Willie Nelson could sing the song perfectly.



_"Oh Lord, it's hard to be humble
When you're perfect in every way
I can't wait to look in the mirror
'Cause I get better lookin' each day
To know me is to love me
I must be a hell of a man
Oh Lord, it's hard to be humble
But I'm doing the best that I can"_

Skate.


----------



## Rabbithop (20 December 2022)

Skate said:


> *“Hard To Be Humble” *
> The lyrics of this song never go stale & only Willie Nelson could sing the song perfectly.
> 
> 
> ...




The 3rs line suited Farmer very well....He always look into the mirror for that bloke to direct him.....Buy or Sell...🤷‍♂️🧟‍♂️🌬


----------



## DaveTrade (20 December 2022)

Most markets going down, it's wait and see time. That is, see if if stops or keeps on going.


----------



## Skate (20 December 2022)

*Trading with uncertain data every trade has a definite probability of loss*
Trading is a game of mathematics, a game of probabilities making it a probabilistic endeavour at best. This means for any given trade that sets up, there is a probability that it will be a winner. Trading is a risky endeavour that offers good long-term returns if you can nail it consistently. Anyone can buy & sell shares, but it's all in the timing of when to buy & sell that puts the probability of success on your side. This timing can ultimately dictate how successful we will be as a trader.

*This short YouTube video should be an interest to most*
Good decision-making really does put the odds in your favour.



Skate.


----------



## Willzy (20 December 2022)

Willzy said:


> Hi everyone, I've been playing with amibroker rotational strategies this last week. Playing with the concept of dual momentum.
> 
> I came across this youtube tutorial, where the presenter uses python to run a backtest on a rotational strategy. Python is not ideal for this type of analysis but I am struggling to work out how to replicate the strategy is Amibroker.
> 
> ...




Hi all,

I just wanted to give some follow up to this post I put up a while back.

A very kind chap sent me an private message suggesting that what I was trying to do (with difficulty!), could be done quite easily in a program called REALTEST or RT, I had not heard of it and was dubious as always... I've been using Amibroker for 10+ years now but intrigued I found the youtube channel mhp trading which demonstrates the program and I have to say... (WOW)

I'll be purchasing the software as soon as my free trial (30 days) is up...

My summary of the software is quite simple. Its Amibroker but without all the annoying stuff...
- want to backtest over current and past symbols - no worries, one line of code
- need to make sure you have no future leaks with entry prices, exit price sequence for limit orders etc - no worries, the backtest engine does that automatically
- documentation - great
- examples and tutorials - great
- support forum - had a quiery - was answered with example scripts with hours (was not belittled in the help forum - a nice change)
- backtest speed --> gives amibroker more than a run for its money.
- cost --> roughly same as amibroker for a single license.

I've attached a RT script which I think does what I was trying to do in ambroker... I'll leave it to you to decide which looks simpler! 

Hope this helps... I am in no way affilliated with RT, just wanted to give this software and the developer the credit which I think is thoroughly deserved.

Horses for courses, I'll still use Amibroker and Python when they are the best suited for the job.

Cheers

```
Notes:    Three Ranks idea: From youtube channel
    
Import:    // assumes Platinum subscription level
    DataSource:    Norgate
    IncludeList:    .NASDAQ 100 Current & Past
    IncludeList:    SPY // for bull market indicator
    Constituency:    $NDX // include Nasdaq 100 index constituency data
    StartDate:    1/1/04
    EndDate:    Latest
    SaveAs:    ndx_rotate.rtd

Settings:    DataFile:    ndx_rotate.rtd
    StartDate:    Earliest
    EndDate:    Latest
    BarSize:    Daily
    UseAvailableBars:    False
    AccountSize:    100000
    
Data:    uptrend:    c > Avg(C,200)
    bullmkt:    Extern($SPY, uptrend)
    roc252:    ROC(C,252)
    roc126:    ROC(C,126)
    roc63:    ROC(C,63)
    canhold:    InNDX and bullmkt and C > 10 and uptrend
    rank1:    #rank (canhold * roc252)
    rank2:    #rank ((rank1 < 50) * roc126)
    rank3:    #rank ((rank2 < 25) * roc63)

    posrank:    rank3

Parameters:    positions:    10
    worstrank:    10 // set to > 10 to hold positions longer, set to 0 for monthly rebalance
    
Strategy:    ndx_rotate
    Side:    Long
    Quantity:    100 / positions
    QtyType:    Percent
    MaxPositions:    positions
    EntrySetup:    EndOfMonth and  canhold and posrank <= positions
    EntryScore:    roc63
    ExitRule:    EndOfMonth and (posrank > worstrank or not canhold)
```


----------



## Rabbithop (21 December 2022)

Hon







DaveTrade said:


> Most markets going down, it's wait and see time. That is, see if if stops or keeps on going.



Honestly, most of us have an opinion of the Market but non of us dare to voice it loud. 
50% of experts claim this is one hell of a fall.
The other 50% claim that everyone in the Stock market will be Standing naked except with our underwears.


----------



## farmerge (21 December 2022)

Rabbithop said:


> Hon
> Honestly, most of us have an opinion of the Market but non of us dare to voice it loud.
> 50% of experts claim this is one hell of a fall.
> The other 50% claim that everyone in the Stock market will be Standing naked except with our underwears.



Good evening Rabbito some half right and some half wrong !!!!


----------



## Gringotts Bank (21 December 2022)

Willzy said:


> Hi all,
> 
> I just wanted to give some follow up to this post I put up a while back.
> 
> ...



Impressive, thanks for posting.

How does it go on the ASX 20, 100, 200, All Ords, entire market with say turnover of $40mill/month?


----------



## Roller_1 (21 December 2022)

Willzy said:


> Hi all,
> 
> I just wanted to give some follow up to this post I put up a while back.
> 
> ...



Good Job Willzy.

I've been using RT for a number of years, I was a beta user so it has evolved ALOT since it went live. Feel free to post in this thread to spread the word about the awesome piece of software.






						RealTest - Portfolio Level backtesting software
					

He's very good at accommodating suggestions and solving people's problems that may arise.




					www.aussiestockforums.com


----------



## qldfrog (21 December 2022)

Roller_1 said:


> Good Job Willzy.
> 
> I've been using RT for a number of years, I was a beta user so it has evolved ALOT since it went live. Feel free to post in this thread to spread the word about the awesome piece of software.
> 
> ...



all my legacy and knowledge is with AB but all I ever read about RT is flattering..I need to bite the bullet and give it a fair go.
If I wait..to have time, I will never do it


----------



## Roller_1 (21 December 2022)

i would say the learning curve is 1/10 of AB. Hard to make mistakes too. You could study all the example scripts and have most things worked out


----------



## Willzy (21 December 2022)

Gringotts Bank said:


> Impressive, thanks for posting.
> 
> How does it go on the ASX 20, 100, 200, All Ords, entire market with say turnover of $40mill/month?




Hi Gringotts, I wasnt sure how to set the max turnover to 40mil/month.... (I'll keep searching) here are the results for the ASX100 200 and 300, surprisingly the 300 was best.

Very early days for me with RT but I don't think I've made any shocking errors!


----------



## Gringotts Bank (21 December 2022)

Willzy said:


> Hi Gringotts, I wasnt sure how to set the max turnover to 40mil/month.... (I'll keep searching) here are the results for the ASX100 200 and 300, surprisingly the 300 was best.
> 
> Very early days for me with RT but I don't think I've made any shocking errors!



Very nice presentation.  Thanks for sharing the code with us.

Is survivorship accounted for?  Was there any optimization used?


----------



## Willzy (21 December 2022)

Gringotts Bank said:


> Very nice presentation.  Thanks for sharing the code with us.
> 
> Is survivorship accounted for?  Was there any optimization used?



Survivorship bias is accounted for.

See the lines
- inIndex: inXJO
- ASX current and past etc

I played around with the indexFilter period - 75 was the best, and I also played with numPositions and worstRankHeld, check the code at the bottom of each report to see what I used for each.

I was just playing with the concept and trying to learn a bit of RT whilst at it.

This isnt tradeable for me in its current form. Whilst there were some good results the average CARMDD was pretty stable around 0.5, to assume more than that from this system would be curve fitting/data mining.

I do like the concept of ranking and sorting multiple times, I'll play around with volatilityScores ie C/ATR or something similar in the sorting to see if I can find a better edge.

Cheers!


----------



## Skate (21 December 2022)

*Interest Rates & Debt*
Self-responsible & personal accountability for the choices we make form the solution.




Skate.


----------



## farmerge (21 December 2022)

Skate said:


> *Interest Rates & Debt*
> Self-responsible & personal accountability for the choices we make form the solution.
> 
> View attachment 150748
> ...



Skate this latest post is so true. It is something the late scumbag Alan Bond told me many years ago when I was working on his daughter's place in Brigadoon. Never borrow a peanut, always go for a bag full and let the lender have the headache


----------



## AlgoZero (21 December 2022)

Willzy said:


> This isnt tradeable for me in its current form.




Willzy, thanks for the backtest results. I wouldn't look for a better edge. The one you've got right there is quite impressive already.

But here are some troubling concerns:
- most of the profit happened before 2010
- 2003-2007 was the "genius-maker-market" when anything would have worked
- notice that the entire gains in 2008 came in one month, May, and the system was conveniently out of the market the rest of the year. You might say that the index filter kept you out but the XJO was decisively below the 200-day MA during all of 2008 and until June 2009
- the Sharpe Ratio is suspiciously high (the drawdowns are unbelievably low)

Other than that, there are no obvious red flags. The returns since 2010 are plausible, just that I would expect much bigger drawdowns.

Is it even possible that such a simple and obvious scheme could produce double the buy-and-hold returns with a fraction of the drawdown?

Let's assume that it works. A position size of $20,000 for ASX100 stocks would be appropriate with minimal market impact. This requires a $200,000 portfolio.
Now, it would be reasonable to expect the rebalancing to work not only on the last day of each month but on the first and the second, the third, etc., any of the 21 trading days. It would be a very bad sign if it didn't.
So, we could manage 21 tranches of $200,000 making a $4,200,000 portfolio, 
Not only that, but we don't have to only trade at the Open or the Close; why not every hour? Even every 15 minutes. Why not? Liquidity shouldn't be too much of an issue as we invest in ASX100 stocks only.
It's going to be a full-time-job but we could manage a $50 million or even a $200 million portfolio.

Why hasn't anyone thought of this?

Oh, I know, they haven't got $200,000,000. Of course.

BTW, do you know about the MarketIndex Top 5 system? Maybe that was your inspiration. Worth checking out.









						ASX Top 5 Portfolio - Market Index
					

ASX Top 5 Portfolio




					www.marketindex.com.au


----------



## Roller_1 (21 December 2022)

AlgoZero said:


> Willzy, thanks for the backtest results. I wouldn't look for a better edge. The one you've got right there is quite impressive already.
> 
> But here are some troubling concerns:
> - most of the profit happened before 2010
> ...




I added the following line
Allocation: S.StartEquity
this basically means only calculate position size based on the initial equity. So in this case it is 10% of $100,000 for every new position. Like I said these things are so easy in real test.






It is actually interesting how much of the edge disappears if you test entering or exiting on any day besides the first day of the month in these systems

Also as you have pointed out there is a lot of luck involved, such as when an index filter will take it in or out of the market. Why it is important to test a number of variables on these major parts of the system.


----------



## Willzy (21 December 2022)

Roller_1 said:


> I added the following line
> Allocation: S.StartEquity
> this basically means only calculate position size based on the initial equity. So in this case it is 10% of $100,000 for every new position. Like I said these things are so easy in real test.
> View attachment 150758
> ...



Thanks Roller,

I look at the LogScale equity to achieve the same result.

Yeh as it stands I dont think its a viable system but there may be potential under the hood, I've found that often the difference between an average system and an amazing system is often quite small, but its hard to find lol


----------



## Willzy (22 December 2022)

AlgoZero said:


> Willzy, thanks for the backtest results. I wouldn't look for a better edge. The one you've got right there is quite impressive already.
> 
> But here are some troubling concerns:
> - most of the profit happened before 2010
> ...



Thanks for the marketinex link.  

I hadnt seen it before, sadly they're holding onto their momentum indicator as "proprietary", but all other rules seem to be disclosed. I'll code up what they've given then play with the secret sauce to see what I can concoct...

Interesting that they dont use an index filter. I'm intrigued by that as the index filter period I found at 75 is not very stable... 

Food for thought!

Cheers


----------



## Skate (22 December 2022)

*"Everything Is Beautiful" by Ray Stevens*
With lyrics such as these, it's no wonder it was a Grammy award-winning song in 1970.







Skate.


----------



## Skate (24 December 2022)

Skate.


----------



## rcw1 (24 December 2022)

Skate said:


> View attachment 150892
> 
> 
> Skate.



_Trade the market in accordance with what it is telling you, listen to the markets tunes without deaf ears...._

Most nostalgic of rcw1 ... ahhh beer o'clock.  Have a very nice and happy Christmas Skate.

Kind regards
rcw1


----------



## Skate (24 December 2022)

rcw1 said:


> Trade the market in accordance with what it is telling you, listen to the markets tunes without deaf ears....




@rcw1 *that reminds me of this quote.*
Listening to the markets will let you know when it's not conducive to trading. Doing nothing at times by "not trading" is really smart trading.




Skate.


----------



## Newt (24 December 2022)

That one really resonates with me Skate.  If I could time travel back and tell myself one thing, that would be up there in at least the top 3.  Don't kid yourself that your system will ever churn out X percent per week or month, or year.  EXPECT there are periods where you should duck for cover, and conversely there will be somewhat unpredicatable bullish trending periods when trend trading will work best - and those are the periods you optimise your trend conditions to detect.  Likewise, try and ensure you have robust methods to pick the bad times.

Which reminds me of this nugget - worth listening to for at least the next 3 minutes from this point - part of a BST interview with Lawrence Chan:


----------



## Skate (24 December 2022)

Newt said:


> If I could time travel back and tell myself one thing,




*We all live & learn*
@Newt when you have a multitude of trades under your belt you start to think on a deeper level, well I do. I had a gnawing in the gut that wouldn't go away. 

*Buying dud positions*
This issue of buying a large number of dud positions has haunted me for a few years now. I was accepting of this being a nuance of weekly trend trading but I knew there would be a much better way to qualify each move the market made. 

*Precisely timing your entry*
At this stage, I believe I have something useful but I'm first to admit it's nowhere near perfect. Now thinking about what I'll be saying to myself in 5 years' time recanvassing this timing method.




Skate.


----------



## Skate (24 December 2022)

Newt said:


> worth listening to




@Newt, thank you for the YouTube video that couldn't have come at any better time. It was interesting to hear Lawrence Chan answering a question at the 9:43 minute mark when Andres Swanscott asked about he goes about formulating a strategy when it's backtested over everything. 

*Dropping one's microphone at the end of a speech signals triumph*
His simple answer was for the strategy to know "when it shouldn't engage". (That's a Mic drop moment for me)

Skate.


----------



## Skate (24 December 2022)

*Another *
"Mic drop moment"




Skate.


----------



## peter2 (24 December 2022)

I chuckle whenever I read the opinion that traders shouldn't try to "time the markets". There were three market rallies during 2022. Three opportunities to trade with the market sentiment. 




I reckon @Skate's indicator nailed all three rallies. 



I'll be keeping an eye on it during 2023.


----------



## Gringotts Bank (24 December 2022)

peter2 said:


> I chuckle whenever I read the opinion that traders shouldn't try to "time the markets". There were three market rallies during 2022. Three opportunities to trade with the market sentiment.
> 
> View attachment 150906
> 
> ...



I agree.  The whole idea of trading is to predict the future using historical ptterns, hoping they repeat.  TA typically references only 3 variables - price, volume and time.   Time can be referenced through fib extensions, trendlines, announcements, phases of the moon.  You can also take it out of the equation if you think it's a confounding factor, using point and figure or range bars.


----------



## farmerge (26 December 2022)

Gringotts Bank said:


> I agree.  The whole idea of trading is to predict the future using historical ptterns, hoping they repeat.  TA typically references only 3 variables - price, volume and time.   Time can be referenced through fib extensions, trendlines, announcements, phases of the moon.  You can also take it out of the equation if you think it's a confounding factor, using point and figure or range bars.



Or,  you can take the advice of that extremely wise sage "the bloke in the mirror"
Hmm after a heartly lunch and not so weak cordial the eyes are starting to droop. Tis good night from me him and them  adios


----------



## Rabbithop (26 December 2022)

Skate said:


> *Interest Rates & Debt*
> Self-responsible & personal accountability for the choices we make form the solution.
> 
> View attachment 150748
> ...



Read Skate's quote n Farmer 's reply..got me pondering  n thinking on both last sentence...
Two days ago, a late night car trip with son, he casually hinting, may be seeking our financial help in 2023 if interest rate keeps going up.
They had emptied 100k of their savings to take first step starting property investment. I remained silent. Should I warn better half, not to further erode our money (220k down to 170k) put aside to pay for Capital Gain Tax incase we become a non profit lender. 
We had pulled some money out to renovate this investment property of near 20yrs, looking for at least 10yrs or more to live in or until they inherit it.
As a add on...Had loaned older son years ago to purchase a apartment with his then partner, it ended couple of yrs later. I had to loan him more to buy her out n bank refinancing ...it took him thrice the time to pay me off monthly capital set amt, interest free. Luckily, it's written n signed in black n white. This time round, if younger son need it, would this interest free loan lenders be able to survive with old age n retired.

Debtors massive problem.....lender's headache....Ouch...
Fingers cross that loan is not needed.


----------



## rcw1 (26 December 2022)

Good morning
Hoping everybody had a really nice family orientated Christmas and that a large bloke with a white flowing beard getting pulled around in a sleigh by reindeers called in.... 

Man did rcw1 eat ...  and still eating... for Boxing Day breakfast nice ham off the bone, with soft googie eggs times two, smothered with holbrook sauce and toast and butter.... and and and (two too many ands ha ha ha ha) ...  lychees picked from a paddock fresh as...  to finish up...  hummooooooooooo

Back to business, rcw1 thoughts:
Traders should be equipped and resilient enough to trade in good times and in bad, in other words, all conditions.  Just need to be more careful and studious when options are limited, could make for an interesting passage in time.   rcw1 is talking about trading only... This does not mean a trader is obligated to trade... at all times, it means, for mine, still trade if there is something happening that meets self-threshold with real time considerations along with knowledge of both the external and internal environments, re that company, as best you can.

The other big important consideration, proceed in accordance with your budget.  How much coin do you want to spend on any particular trade?  For mine there is no hard and fast rule, other than don't overspend getting all excited following ... and down a path into 'self-destruction' that deep hole of oblivion ..  clouding your judgement... where there 'ain't' no going back!!

Normally 'spend' could well be reliant upon risk.  Spend could be reliant upon what's left in the kitty ... frustrating component is a trader may well want to spend more on a particular stock but has all their coin already tied up with other stocks, oh the dilemma.  Fast traders don't normally have this problem, but, nevertheless, does happen from time to time.  The name of game is making coin.  

So, if applying this mind set, then any circumstance whereby the trader believes is going to make more money, then execute that option (s) accordingly, don't procrastinate, never (try not to  ); miss an opportunity or kiss your arse goodbye ha ha ha ha, and learn from errors in judgement and the why's... how comes ... Self-assessment, always conduct an honest appreciation of what happened with that particular transaction.  rcw1 has mentioned this before if one cannot be honest with self, may as well give the game away....

Have a very nice day today and have a prosperous new year.

Kind regards
rcw1


----------



## rcw1 (26 December 2022)

Rabbithop said:


> Read Skate's quote n Farmer 's reply..got me pondering  n thinking on both last sentence...
> Two days ago, a late night car trip with son, he casually hinting, may be seeking our financial help in 2023 if interest rate keeps going up.
> They had emptied 100k of their savings to take first step starting property investment. I remained silent. Should I warn better half, not to further erode our money (220k down to 170k) put aside to pay for Capital Gain Tax incase we become a non profit lender.
> We had pulled some money out to renovate this investment property of near 20yrs, looking for at least 10yrs or more to live in or until they inherit it.
> ...



Good morning Rabbithop
Yeah certainly a 'pickle' of a situation.  Go with your heart mate, headaches and all

Kind regards
rcw1


----------



## DaveTrade (26 December 2022)

Rabbithop said:


> Read Skate's quote n Farmer 's reply..got me pondering  n thinking on both last sentence...
> Two days ago, a late night car trip with son, he casually hinting, may be seeking our financial help in 2023 if interest rate keeps going up.
> They had emptied 100k of their savings to take first step starting property investment. I remained silent. Should I warn better half, not to further erode our money (220k down to 170k) put aside to pay for Capital Gain Tax incase we become a non profit lender.
> We had pulled some money out to renovate this investment property of near 20yrs, looking for at least 10yrs or more to live in or until they inherit it.
> ...



@Rabbithop I feel for you, a very uncomfortable situation. My 2cents, it's a family problem so let everyone in the family carry their share of the load, do it together and share the pain so all doesn't fall on one member of the family.


----------



## DaveTrade (26 December 2022)

I have a question bouncing around in my head related to drawdown. I’m trying to put together a very systematic method of trading using a weekly timeframe. The type of trading that I’m thinking about would be very systematic but not mechanical because I’m thinking of a discretionary system. So I’m asking for feedback from people that have more experience trading in a systematic manner, if they think that system drawdown is likely to be less trading a weekly discretionary system or a fully mechanical weekly system?


----------



## Skate (26 December 2022)

DaveTrade said:


> So I’m asking for feedback from people that have more experience trading in a systematic manner, if they think that system drawdown is likely to be less trading a weekly discretionary system or a fully mechanical weekly system?




*Drawdowns - Discretionary or rules-based trading?*
Having a low drawdown when trading lowers the anxiety & emotional pull that causes faulty thinking. The answer might depend on your understanding & definition of "discretionary" as opposed to "rule-based trading". For me, it’s really simple, because "technical analysis" can be backtested to decide if rule-based trading has an edge. Discretionary trading is subjective trading whereas mechanical "rule-based" is objective trading. In saying that, there are those who possess a high level of discretionary skill that shouldn't be discounted. In my opinion, with a mechanical system, exits can be precisely coded according to your risk tolerance. 

Skate.


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## Skate (26 December 2022)

@Rabbithop, *I feel for you. *
The bank of mum & dad shouldn't be canvasses but in saying this "wisdom should be freely given" when help is needed.

*To quote Willy *(our 1984 LA Olympic Mascot)
"Where there's a will, there's a way"




Skate.


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## DaveTrade (26 December 2022)

*The main advantage of a mechanical trading system over a discretionary system that can result in you gaining more money from the system;*

There is less for a trader to think about when trading the system so you don't have to think too deeply about what the market is doing at the time you are placing orders.


*The main disadvantage of a mechanical trading system over a discretionary system that can result in you losing more money from the system;*

There is less for a trader to think about when trading the system so you don't have to think too deeply about what the market is doing at the time you are placing orders.


----------



## farmerge (26 December 2022)

DaveTrade said:


> @Rabbithop I feel for you, a very uncomfortable situation. My 2cents, it's a family problem so let everyone in the family carry their share of the load, do it together and share the pain so all doesn't fall on one member of the family.



Morning Rabbito Davetrade is right share the problem with all  Don't overburden the grey matter especially at the moment


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## ducati916 (26 December 2022)

DaveTrade said:


> *(a) The main advantage of a mechanical trading system over a discretionary system that can result in you gaining more money from the system;*
> 
> There is less for a trader to think about when trading the system so you don't have to think too deeply about what the market is doing at the time you are placing orders.
> 
> ...





So I would disagree simply on the basis of falsifiability.

I trade a system that is designed to provide a maximum loss ( your (b) ) prior to trading the system. That does not mean if a loss occurs it will be the maximum, just that there is a maximum.

With regard to (a) this is purely opinion.

The point of a mechanical system is that prior to entering the market, you have thought deeply about what it is you wish to accomplish and have developed your best foot forward via a system. There is no more magic than that involved.

The future, currently, is still an unknown factor that can rubbish your best efforts.

jog on
duc


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## Skate (26 December 2022)

@ducati916 I believe @DaveTrade was referencing the best & worst to have the same value. It's similar when we speak about the advantage & disadvantages of "Laptops". As an example:

*The best thing about a laptop*
It's portable.

*The worst thing about a laptop*
It's portable.

*The advantages & disadvantages of an exit *
This can be the same as to which side of the fence you are on, discretionary or mechanical system trading. 

Skate.


----------



## Skate (26 December 2022)

ducati916 said:


> The point of a mechanical system is that prior to entering the market, you have thought deeply about what it is you wish to accomplish and have developed your best foot forward via a system. There is no more magic than that involved.




I'm with @ducati916, a mechanical system affords you the privilege of exiting on your terms, "most of the time". I don't care how good a trader you think you are but if you stuff up the exit, your strategy is doomed to fail.

Skate.


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## Skate (26 December 2022)

ducati916 said:


> have thought deeply about what it is you wish to accomplish




*Without a trading background*
Allowed me to have a clean slate to work with. When you have time on your hands it allows you to think clearly without interruptions. I've often said trading is not hard, making money from trading is where it becomes complicated.

*When do I buy & when do I sell*
In retrospect looking at charts is easy but when you are trading the next bar or series of bars not knowing what they will do next, requires skill rather than luck. "What to buy" becomes irrelevant, as "when to buy" makes more sense as @divs4ever has pointed out in a recent post that you "have to be picky" with stock selection. The rest of a mechanical strategy is filler but important.

Skate.


----------



## farmerge (26 December 2022)

ducati916 said:


> So I would disagree simply on the basis of falsifiability.
> 
> I trade a system that is designed to provide a maximum loss ( your (b) ) prior to trading the system. That does not mean if a loss occurs it will be the maximum, just that there is a maximum.
> 
> ...



Everyone to their own What might work for one may not for another. I have mine way of trading and it works for me most of the time, not making mega bucks but enough to make me  happy and if No 1 is happy then all is good


----------



## ducati916 (26 December 2022)

Skate said:


> @ducati916 I believe @DaveTrade was referencing the best & worst to have the same value. It's similar when we speak about the advantage & disadvantages of "Laptops". As an example:
> 
> *The best thing about a laptop*
> It's portable.
> ...





Which is where the 'error' lies.

A mechanical system is no different from a discretionary system in this respect: the reward to risk ratio needs to be unbalanced.

That is to say, a reward: risk ratio should be: greater:lesser. The number 3:1, 1.4:1 is of course your choice or down to competence, but a balanced 1:1 is a waste of time (after trading costs, you lose).

jog on
duc


----------



## peter2 (26 December 2022)

DaveTrade said:


> So I’m asking for feedback from people that have more experience trading in a systematic manner, if they think that system drawdown is likely to be less trading a weekly discretionary system or a fully mechanical weekly system?



One of my favourite thought bubbles. There will be periods when a discretionary input beats the mechanical system. Unfortunately there'll also be periods when the discretionary input provides worse results that the mech system. Over the longer term frequent discretionary involvement will lessen the mechanical edge. Disc involvement generally lessens drawdowns but it also reduces overall profit in most cases. 

If the disc involvement is mainly emotional then it's going to make things much worse than the mech system. DDs will be larger and profits will be smaller. The aim then is to make the disc involvement more rule based (mechanical). 

An example of this would be discretionary selling after news of an accounting irregularity rather than waiting for the EOW signal. This news is likely to cause further selling and a quick exit may save money over the mechanical EOW signal. So long as the discretionary involvement is rule based it can be tested to ensure it adds to the edge of a mechanical system.


----------



## Skate (27 December 2022)

*Making sure the metric tells a story*
When we evaluate a strategy we should take a keen interest in the "Sharpe Ratio" & the "Net Risk-Adjusted Return %" & in both cases, the higher the better. Taking note of both metrics can help improve your decision-making of how you can improve the performance of your portfolio. Risk is an inherent part of trading, which is why the risk-adjusted returns & the Sharpe ratio are two important metrics when analysing any strategies.

*A risk-adjusted return *
There are so many ways to measure a* "*risk-adjusted return" but with Amibroker the formula is simple, straightforward & inbuilt. A higher risk-adjusted return & a higher Sharpe Ration means that the return is worth the risk taken. There is an argument to be had about whether it's better to have lower returns with less drawdown than to have a high return with a huge drawdown as in all things trading "it's a compromise". I personally believe these two metrics are not given the respect they deserve until you find yourself on a long losing streak. 

*It pays to remember*
Backtesting is a test of the past & the future will always hold surprises that tend to play out differently. Calculating the risk-adjusted returns & Sharpe ratio lets you know whether the strategies are making proportional returns to the risk involved, that's it in a nutshell.

Skate.


----------



## Skate (27 December 2022)

peter2 said:


> There will be periods when a discretionary input beats the mechanical system




*System Trading versus Discretionary Trading*
There is an argument to be had about whether one form of trading is better than the other but with system trading personal skills are removed from the argument. With system trading, the decision to make a trade & when to exit is based solely upon the trading strategy. Mixing system trading with discretionary trading in my opinion never seems to work well in the long run. In essence, it is better to be one or the other. The stories you read of how to intertwine both forms of trading are just that, stories.

*The Discretionary Trader*
Discretionary trading is best for traders who want to be in control of every trading decision. This method of trading is best suited to those well-versed in market movements. Discretionary traders appear that they no longer need to follow a set trading system, but they do. These traders have a set plan & execute it with precision, patiently waiting for the right setup, & then take the trade without hesitation. These traders are "competent". They appear to trade using their so-called 'intuition', but are in fact, they are applying their vast knowledge & skill to recognise low-risk, high-profit potential, trades.

Skate.


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## rcw1 (27 December 2022)

Enjoy 
ha ha ha ha ha



Kind regards
rcw1


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## BoNeZ (27 December 2022)

Roller_1 said:


> I've been using RT for a number of years, I was a beta user so it has evolved ALOT since it went live. Feel free to post in this thread to spread the word about the awesome piece of software.



I'm another RealTest convert.

Great software which continues to get better with every update plus VERY helpful and friendly support. 

I converting my AB AFL code to RT scripts and for a while kept them in sync to make sure they gave the same results but eventually gave up. My confidence in RT grew but I also started making changes which I found difficult to copy in AB. 

The best purchase I've made in ages.


----------



## qldfrog (27 December 2022)

BoNeZ said:


> I'm another RealTest convert.
> 
> Great software which continues to get better with every update plus VERY helpful and friendly support.
> 
> ...



FWIW, started the trial edition of RT yesterday😊 and moving some of my systems from AB to RT as part of my educational path.
Still early and learning phase , but indeed my request for access to forum was well above what could be expected at this time of the year, personal, friendly and tool neat and finished.
It is a huge step going from AB where i am quite comfortable to a new script and thinking process but so far so good 
Will keep you posted on my thread or the RT one


----------



## DaveTrade (28 December 2022)

DaveTrade said:


> *The main advantage of a mechanical trading system over a discretionary system that can result in you gaining more money from the system;*
> 
> There is less for a trader to think about when trading the system so you don't have to think too deeply about what the market is doing at the time you are placing orders.
> 
> ...





ducati916 said:


> So I would disagree simply on the basis of falsifiability.
> 
> I trade a system that is designed to provide a maximum loss ( your (b) ) prior to trading the system. That does not mean if a loss occurs it will be the maximum, just that there is a maximum.
> 
> ...





Skate said:


> @ducati916 I believe @DaveTrade was referencing the best & worst to have the same value. It's similar when we speak about the advantage & disadvantages of "Laptops". As an example:
> 
> *The best thing about a laptop*
> It's portable.
> ...




@ducati916 falsifiability is a word I haven't come across before, I had to look up the definition, and yes I think my statement would be falsifiability but I was making a statement as @Skate described. Thinking further on Drawdown between Discretionary & Mechanical systems I'm now wondering if there may be a difference not based on the type of system but on the type of structural money management that is employed. Money management will have an extra layer of complexity for me as I'm planning on using options to trade this system. If you have thought about this aspect of systems I would appreciate your feedback.


----------



## Skate (28 December 2022)

DaveTrade said:


> Thinking further on Drawdown between Discretionary & Mechanical systems I'm now wondering if there may be a difference not based on the type of system but on the type of structural money management that is employed.




I'm sure @ducati916 will answer your question in good time but in the meantime, I'll make a comment about system trading.

*It is always compromise*
It's the age-old dilemma of whether it's better to have lower returns with less drawdown than to have a high return with a huge drawdown as they go hand in glove. Money management is only the start of the discussion & oh, I wish it was that easy. As with baking a cake, it's never left to one ingredient to decide how delicious the eating is.

*Strategy Construction*
To me, it's very complex & it would be exhausting to discuss the small nuances needed to make any strategy profitable. No matter how you trade, it all boils down to trend trading & that is where the journey should begin. Money Management, filters & parameter are just bread & butter ingredients. 

*The market is fascinating*
One of the reasons that the market is so fascinating is that it combines elements of psychology, business, mathematics, & numerous other disciplines. Like most worthwhile things in life, if it were extremely easy to learn & do well, it wouldn’t be so potentially lucrative.

Skate.


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## Skate (28 December 2022)

*Backtesting is a test of the past *
The future will always hold surprises that tend to play out differently. The Backtest below is one of my trading strategies. I've renamed it to "Skate's 200k Strategy" for clarity. The backtest period is from the 1st of January 2022. This strategy is robust having a decent return with a low drawdown. At times with system trading, "good enough is good enough". I'm just saying don't overstretch & don't shoot for the moon.

*P.H.D.*
With *P*ersistence, *H*ard work & *D*etermination most things are possible.





*Portfolio Equity*
Realistically, how many traders "could" sit out of the markets for "extended periods" waiting for the next move up?




Skate.


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## DaveTrade (28 December 2022)

Skate said:


> *Backtesting is a test of the past *
> The future will always hold surprises that tend to play out differently. The Backtest below is one of my trading strategies. I've renamed it to "Skate's 200k Strategy" for clarity. The backtest period is from the 1st of January 2022. This strategy is robust having a decent return with a low drawdown. At times with system trading, "good enough is good enough". I'm just saying don't overstretch & don't shoot for the moon.
> 
> *P.H.D.*
> ...



I'm liking the 'Max system % drawdown' on this of -7.33%. I think that most if not all would be happy with that.


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## Skate (28 December 2022)

DaveTrade said:


> I'm liking the 'Max system % drawdown' on this of -7.33%. I think that most if not all would be happy with that.




@DaveTrade, coding a system with half-decent returns with a low drawdown is hard to achieve. There is a lot of mathematical gymnastics involved to achieve this.

Skate.


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## Trendnomics (28 December 2022)

Skate said:


> @DaveTrade, coding a system with half-decent returns with a low drawdown is hard to achieve. There is a lot of mathematical gymnastics involved to achieve this.
> 
> Skate.




....and also involves curve fitting (so many system traders have "re-fitted" their index filters this year 🚮🤣).

Skate, what MA period are you using now for your index filter?


----------



## Skate (28 December 2022)

Trendnomics said:


> ....and also curve fitting (so many system traders have "re-fitted" their index filters this year 🚮🤣).
> 
> Skate, what MA period are you using now for your index filter?




@Trendnomics, I have a buy filter.
*
Why do some traders do better than others?*
I've often said whilst watching sports "that's got to be a fluke" but they seem to fluke it 100% of the time. I believe some traders are better than others & I don't believe there is enough thinking "about" why they are.

*I've put my trading success down to the strategies I trade*
I find using metrics as part of my "buy condition" to be beneficial. Over the years I've made my share of indicators. Those indicators may not be perfect but they tend to fluke the results that I'm after more times than they don't.

*My "Percentage Position Up" indicator & my "Ulcer Up" indicator*
Both these indicators go a long way in helping me achieve profitability. My "Percentage Up Indicator" & the relationship it creates is shown on the chart below.

*The "Percentage Indicator"*
When the "percentage indicator" is above 50% there is a corresponding rise in the ASX All Ordinaries Index. Restricting the "buy condition" to only when the "Percentage Up Indicator" is above 50% helps avoid the nasties created by using an "Index Filter" in isolation. (which, by-the-way IMHO is better than none)

*I believe there is a correlation*
The "Percentage Up Index Filter" above 50% & the All Ordinaries pops at the same time. I don't believe this is a "fluke" or an "illusion" but a defined "correlation". Restricting trading during these periods (above 50%) gives you a fighting chance of profitably, which is basically "the name of the game".




*Have a read here*
@peter2 gave a practical example of why my "Buy Filter" is effective.






						Dump it Here
					

I added the following line Allocation: S.StartEquity this basically means only calculate position size based on the initial equity. So in this case it is 10% of $100,000 for every new position. Like I said these things are so easy in real test.     It is actually interesting how much of the edge...




					www.aussiestockforums.com
				




Skate.


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## rcw1 (28 December 2022)

Skate said:


> @DaveTrade, coding a system with half-decent returns with a low drawdown is hard to achieve. There is a lot of mathematical gymnastics involved to achieve this.
> 
> Skate.



Good afternoon Skate
Yes that is true.

There are some trading constructs that opt out of drawdown methodologies.  Best explained in this manner:
An economic cycle:
*recovery and subsequent expansion;*
the peak ...
contraction and subsequent recession ...;
and trough. 

Peak to peak!!!   
Some fast traders tend to stick with the top two, certainly never the 4th.  That would be an abstract failure.  rcw1 will not entertain the 3rd one either.  That too is a trader's failure and skill tester, a long hard road towards perfection ha ha ha ha ha.


Kind regards
rcw1


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## ducati916 (29 December 2022)

DaveTrade said:


> @ducati916 falsifiability is a word I haven't come across before, I had to look up the definition, and yes I think my statement would be falsifiability but I was making a statement as @Skate described. Thinking further on Drawdown between Discretionary & Mechanical systems I'm now wondering if there may be a difference not based on the type of system but on the type of structural money management that is employed. Money management will have an extra layer of complexity for me as I'm planning on using options to trade this system. If you have thought about this aspect of systems I would appreciate your feedback.




Yes I use Options combined with a stock position. There are however a number of ways to structure this: Futures/Options, Options/Options or Stock/Options.

I use them in a way that market direction is not a variable. Up or down, you show a profit. The risk is going sideways for an extended period of time, although a trading range is fine and very profitable.

Decisions that you need to pay attention to in setting up any new position:

(i) Duration (Expiry),
(ii) ITM, ATM or OTM,
(iii) IV/HV
(iv) Rebalancing timeframe (more based on commissions than anything else).

Once you have set up the trade correctly (or your best estimation) you have a guaranteed max. loss (barring total loss if the brokerage implodes or the market closes, but that is another topic) and an unlimited upside/downside (downside is limited to 100% x leverage so still high).

This is stress free trading. I'm indifferent to market direction. All rebalancing is simply a calculation based on Black Scholes Model.

jog on
duc


----------



## DaveTrade (29 December 2022)

I have previously posted in this thread about a weekly system that I want to start trading in the future. The type of system that I want is relative conservative with the focus on minimizing the drawdown of the system. With this in mind I've drafted the potential money management for this system and I'd like feedback from all who wish to give it, don't hold back, give me the good and the bad. I thought that I may as well take advantage of being a member of this forum and draw on the experience and the diversity of the viewpoints of it's members. The way I see it is that any other opinions on this can only help me end up with a better money management system.

*First draft of a plan to manage system risk*

Maximum 10% of a/c allocated to each trade; e.g. a/c $100,000 would be $10,000 per trade. Therefore the number of options purchased for each trade will be equal to ‘$10,000’ divided by the ‘Option Premium’

Potential maximum number of trades would be 100000/10000 = 10. If this is halved to a maximum of 5 trades then the maximum amount of the a/c in the market at one time would be 50%. A 50% reduction in a/c risk.

If the initial stop-loss for each trade is 25% of the premium then amount at risk on each trade would be 10000/4 = $2,500. This would mean that 2500 x 5 = $12,500 would be the max risk on all 5 trades. This means that 12500x100/100000 = 12.5% of the total a/c would be at risk at any one time. This would be the percentage a/c loss if all 5 trades in the market were stopped out for a maximum loss at the same time.


----------



## Skate (29 December 2022)

DaveTrade said:


> I have previously posted in this thread about a weekly system that I want to start trading in the future. The type of system that I want is relative conservative with the focus on minimizing the drawdown of the system. With this in mind I've drafted the potential money management for this system and I'd like feedback from all who wish to give it, don't hold back, give me the good and the bad. I thought that I may as well take advantage of being a member of this forum and draw on the experience and the diversity of the viewpoints of it's members. The way I see it is that any other opinions on this can only help me end up with a better money management system.
> 
> *First draft of a plan to manage system risk*
> 
> ...




*Response*
@DaveTrade, it seems like you have a plan in place to manage the risk of your trading system. It's important to have a clear understanding of the potential risks and how to manage them in order to trade effectively and minimize potential losses.

*Market events*
One thing to consider is the potential for the market conditions to change, which could impact the performance of your trades and the effectiveness of your risk management strategy. It's important to be prepared for the possibility of unexpected market events and to be flexible in your approach to risk management.

*Allocation*
Another thing to consider is the potential for the option premiums to change. If the option premiums increase significantly, it may not be possible to allocate the maximum of 10% of your account to each trade, as you have planned. This could potentially limit the number of trades you can make and the potential profit from your system.

*Risk management*
Overall, it's important to continuously review and evaluate your risk management strategy and make adjustments as needed in order to ensure that it is effective in minimizing potential losses and maximizing potential profits.

Skate.


----------



## Skate (29 December 2022)

ducati916 said:


> Yes I use Options combined with a stock position. There are however a number of ways to structure this: Futures/Options, Options/Options or Stock/Options.
> 
> I use them in a way that market direction is not a variable. Up or down, you show a profit. The risk is going sideways for an extended period of time, although a trading range is fine and very profitable.
> 
> ...




*Response to option trading*
It sounds like @ducati916 has a solid understanding of the various factors that can impact the performance of options trades, such as the duration, whether the option is in-the-money (ITM), at-the-money (ATM) or out-of-the-money (OTM), and the implied volatility (IV) or historical volatility (HV) of the underlying asset. These are all important factors to consider when setting up options trades.

*Clear understanding*
It's also good to have a clear understanding of the potential risks and rewards of each trade, as well as a plan in place for rebalancing your portfolio. By using the Black-Scholes model or other pricing models, you can help ensure that your trades are structured in a way that minimizes potential losses and maximizes potential profits.

*It could all go pear shape*
However, it's important to remember that even with a well-structured trade, there is always the potential for unexpected market events or changes in the underlying asset's price or volatility that could impact the performance of your trade. It's important to continuously monitor your trades and be prepared to make adjustments as needed to manage risk and optimize your portfolio.

Skate.


----------



## Skate (29 December 2022)

rcw1 said:


> Good afternoon Skate
> Yes that is true.
> 
> There are some trading constructs that opt out of drawdown methodologies.  Best explained in this manner:
> ...




*Response to  economic cycles*
@rcw1, It's important to understand the economic cycle and how it can impact the performance of your trades. The recovery and expansion phases of the cycle can be favorable times to trade, while the contraction and recession phases may be more challenging. However, it's important to remember that the economic cycle is not the only factor that can impact the performance of your trades. Market conditions, the performance of individual assets, and other factors can also play a role.

*Manage Risk*
It's important to continuously monitor the market and your trades and make adjustments as needed to manage risk and optimize your portfolio. This may involve adjusting your risk management strategy, adjusting your positions, or taking other actions as needed. By being proactive and adapting to changing market conditions, you can increase your chances of success as a trader.

Skate.


----------



## Skate (29 December 2022)

peter2 said:


> One of my favourite thought bubbles. There will be periods when a discretionary input beats the mechanical system. Unfortunately there'll also be periods when the discretionary input provides worse results that the mech system. Over the longer term frequent discretionary involvement will lessen the mechanical edge. Disc involvement generally lessens drawdowns but it also reduces overall profit in most cases.
> 
> If the disc involvement is mainly emotional then it's going to make things much worse than the mech system. DDs will be larger and profits will be smaller. The aim then is to make the disc involvement more rule based (mechanical).
> 
> An example of this would be discretionary selling after news of an accounting irregularity rather than waiting for the EOW signal. This news is likely to cause further selling and a quick exit may save money over the mechanical EOW signal. So long as the discretionary involvement is rule based it can be tested to ensure it adds to the edge of a mechanical system.




*Response to mechanical trading system and making discretionary decisions*
@peter2, it's important to consider the potential trade-offs between using a mechanical trading system and making discretionary decisions. While a mechanical system can be effective in executing a predetermined set of rules consistently, it may not be able to adapt to changing market conditions as quickly as a trader using discretionary decision-making, such as yourself. On the other hand, discretionary decision-making can allow for greater flexibility and adaptability, but it also has the potential to introduce bias or emotion into the decision-making process, which can negatively impact performance.

*Combine the best of both*
One way to potentially combine the benefits of both approaches is to use a mechanical system as a foundation but to also make discretionary decisions based on specific rules or criteria that have been tested and shown to be effective. By doing this, you can potentially take advantage of the consistent execution and risk management provided by a mechanical system, while also being able to adapt to changing market conditions and make decisions based on specific, rule-based criteria. It's important to continuously monitor and test your discretionary decision-making rules to ensure that they are adding value to your overall trading strategy.

Skate.


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## Skate (29 December 2022)

BoNeZ said:


> I'm another RealTest convert.
> 
> Great software which continues to get better with every update plus VERY helpful and friendly support.
> 
> ...




*Software platforms*
It's good for others to understand "RealTest" is a software platform that allows traders to test and optimize trading strategies using historical market data just as Amibroker does. Both have useful tools for developing and fine-tuning trading strategies, as well as for evaluating the potential performance of different approaches.

*It's all about making informed decisions*
@BoNeZ it's good to hear that you have had a positive experience using RealTest and that the software continues to improve with updates. It's also good to see that you were able to develop a level of confidence in the software, which can be important for traders who are looking to optimize their strategies and make informed decisions about their trades.

*Strategy Development*
It's important to remember that no software can guarantee success in the markets and that it's always important to do your own research and analysis when making trading decisions. However, tools like RealTest & Amibroker can be a useful addition to a trader's toolkit and can help traders develop and test strategies in a risk-free environment.

Skate.


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## Skate (29 December 2022)

Trendnomics said:


> curve fitting




*What is "Curve fitting"?*
For those who don't know "Curve fitting" is a common issue that can arise when developing trading systems. It refers to the process of creating a system that is optimized for a specific set of data, but that may not perform well when applied to other data sets or in real-world conditions.

*In-sample & Out-of-Sample*
One way that curve fitting can occur is when a system is optimized using a specific set of data, such as a particular time period or market environment, and then applied to different data or conditions. This can lead to the system underperforming or producing results that are not representative of the real-world performance of the strategy.

*To avoid curve fitting*
It's important to use a robust and representative sample of data when developing and testing a trading system. This can help ensure that the system is generalizable and can perform well under a range of market conditions. It's also important to continuously monitor and test the system to ensure that it is performing as expected and to make any necessary adjustments as needed.

Skate.


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## qldfrog (29 December 2022)

DaveTrade said:


> I have previously posted in this thread about a weekly system that I want to start trading in the future. The type of system that I want is relative conservative with the focus on minimizing the drawdown of the system. With this in mind I've drafted the potential money management for this system and I'd like feedback from all who wish to give it, don't hold back, give me the good and the bad. I thought that I may as well take advantage of being a member of this forum and draw on the experience and the diversity of the viewpoints of it's members. The way I see it is that any other opinions on this can only help me end up with a better money management system.
> 
> *First draft of a plan to manage system risk*
> 
> ...



You are aware of the costs of purchasing options to protect yourself, and the need to cycle these as they approach expiry;
To be honest, using option to protect my portfolio has cost me heaps and I gave up: between the fees from my broker, the decay, the low liquidity it has been a one way to burn money for me.
just be aware


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## Skate (29 December 2022)

qldfrog said:


> You are aware of the costs of purchasing options to protect yourself, and the need to cycle these as they approach expiry;
> To be honest, using option to protect my portfolio has cost me heaps and I gave up: between the fees from my broker, the decay, the low liquidity it has been a one way to burn money for me.
> just be aware




I'm with you @qldfrog, trading options is harder than it appears. I believe trading options belong in the specialized trading category that takes ages to master.

Skate.


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## Skate (29 December 2022)

*Strategy development is serious work *
Curve Fitting is a common mistake & taking steps to avoid common coding mistakes can improve your chances of success as a trader. When starting out every one is over-eager to start trading forgetting to keep track of their trades and performance. It's important to keep records of your trades so you can learn from your successes and mistakes.

*A trading plan trumps a trading strategy*
It's important to have a clear trading plan to manage risk as this will keep you in the game. Sticking to a trading plan helps you stay disciplined and make informed decisions, rather than relying on emotions or reacting impulsively to market movements.

*Trading requires discipline*
Trading requires discipline to stick to your trading plan and not let emotions guide your decisions. It's more important not to get greedy and try to make a quick profit. Good trades take time to develop, so be patient and stick to your plan. It's also important to take profits when they are available and be willing to sell when the time is right.

Skate.


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## Skate (29 December 2022)

*ASF is a good place to hang out*
It's a pity that most of the old posters have moved on. The important thing is that they have left their footprint. Until you read some of those old posts you don't fully appreciate how little has changed. Basically what was useful back then is still current today. Yes, I'm first to admit, this forum has a wonderful community feel about it.

Skate.


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## ducati916 (30 December 2022)

DaveTrade said:


> I have previously posted in this thread about a weekly system that I want to start trading in the future. The type of system that I want is relative conservative with the focus on minimizing the drawdown of the system. With this in mind I've drafted the potential money management for this system and I'd like feedback from all who wish to give it, don't hold back, give me the good and the bad. I thought that I may as well take advantage of being a member of this forum and draw on the experience and the diversity of the viewpoints of it's members. The way I see it is that any other opinions on this can only help me end up with a better money management system.
> 
> *First draft of a plan to manage system risk*
> 
> ...




Without knowing more detail any advice could be somewhat inaccurate. However there are some very broad generic risks that you would need to manage.

(a) Volatility risk: as in IV crush. Think of it this way: the underlying does not change in price but for whatever reason, people are buying the option. The Option is a derivative (price) of the underlying but, the price of the Option still rises. This is the IV. When/if the underlying does move higher, the Option resets as against the underlying. This can however be LESS than the earlier price. This is the air coming out of the inflated Option price: the IV. What we have now is the HV as measured by the move in the underlying.

(b) theta risk: this depends on the duration (expiry date) of the Option purchased (sold) and the acceleration of theta decay into the last 30 days of life. Generally speaking, you do not want to hold a bought Option (unless it has moved DITM) to expiry. theta decay really accelerates into this time period, enough potentially to trigger a stop loss sale as indicated in your MM plan.

(c) gamma/delta risk changes quite dramatically as Options move in/out of the money. This can work for you if you are buying Options. So obviously, this should be a consideration when setting up your positions. 







You are bullish on silver with a 17 March 2023 expiry: current price is $22 +/-

What is the better play: ITM, ATM or OTM? (I have no idea currently I just picked a random ticker). This feeds directly into your options for setting up a trade, particularly in your stop losses for closing a position.

jog on
duc


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## Skate (30 December 2022)

Skate said:


> *Christmas*
> I asked what my wife would like for Christmas.
> 
> “A divorce”
> ...




*You can't win with some women*
After Christmas when I didn't give my wife a divorce she packed my bags & told me to leave. 
As I was heading out the door, she said "I hope you die a long, slow, painful death" 
I said, "so now you want me to stay?"

Skate.


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## DaveTrade (30 December 2022)

qldfrog said:


> You are aware of the costs of purchasing options to protect yourself, and the need to cycle these as they approach expiry;
> To be honest, using option to protect my portfolio has cost me heaps and I gave up: between the fees from my broker, the decay, the low liquidity it has been a one way to burn money for me.
> just be aware



@qldfrog thank you for responding, I appreciate all responses. In my case for this system I'll be using option trades as the only type of trade to be used within the system, for protection I'll be using stop-loss option orders to exit a trade. These are the same as a standard stop-loss order, it's just an order to exit at a certain price.

In the case of portfolio protection, there are a number of ways to do it and this is dependant on many factors including the markets that you are trading. You mentioned the cost involved and in certain market environments the potential cost to your portfolio if you don't do it may outway the cost. Something that I like is protecting profit, if your portfolio is up say 30% then buying a Put or two will lock in profit to your portfolio, let you sleep easy knowing that you can't lose, and if the market tanks you stand to gain even more profit than you had before.


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## DaveTrade (30 December 2022)

ducati916 said:


> Without knowing more detail any advice could be somewhat inaccurate. However there are some very broad generic risks that you would need to manage.
> 
> (a) Volatility risk: as in IV crush. Think of it this way: the underlying does not change in price but for whatever reason, people are buying the option. The Option is a derivative (price) of the underlying but, the price of the Option still rises. This is the IV. When/if the underlying does move higher, the Option resets as against the underlying. This can however be LESS than the earlier price. This is the air coming out of the inflated Option price: the IV. What we have now is the HV as measured by the move in the underlying.
> 
> ...



@ducati916 thank you for the time and effort you put into your responses. In my recent journey learning about options I have become aware of these things that you have mentioned. I've been taking option trades alone the way as I've been learning and early on I experienced the situation where the market went up and my Call option value went down, at time my mind's voice shouted 'what the fu*k', but I've come to understand options to a point now that I feel like I can really make them work for me.
I was hoping for feedback on the money management aspect of system trading, I know that options come with their own inherent risks and I fell that I have a handle on addressing these, in saying that I'm sure that I will stuff something up and learn another lesson. You post did directly reference my mm plan though,


ducati916 said:


> theta decay really accelerates into this time period, enough potentially to trigger a stop loss sale as indicated in your MM plan.



and it's always worthwhile to describe the various risks involved in trading, new information for some and a useful reminder to others.


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## peter2 (30 December 2022)

@DaveTrade  Good luck with this activity, hope it goes well and keep us posted please. 

(i) 12.5% risk is a lot unless you're prepared for it. I'd use this risk level in a smaller account but would be too much for me in a large one. I hope your worse case isn't losing 12.5% in one week. 
(ii) Correlation between your underlying markets needs to be considered carefully to manage total risk.
(iii) Total directional risk needs to be considered. Are you going all one type of option or a mixture? 
(iv) I'd be careful placing exit stops in the options market. They have a habit of being hit when liquidity thins suddenly.


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## DaveTrade (30 December 2022)

peter2 said:


> @DaveTrade  Good luck with this activity, hope it goes well and keep us posted please.
> 
> (i) 12.5% risk is a lot unless you're prepared for it. I'd use this risk level in a smaller account but would be too much for me in a large one. I hope your worse case isn't losing 12.5% in one week.
> (ii) Correlation between your underlying markets needs to be considered carefully to manage total risk.
> ...



@peter2 you have made all good points here, a helpful check list;
(i) It would be smarter to lower my risk further especially in the early stages of trading the system.
(ii) I have been thinking about this but I haven't worked it out yet.
(iii) I'm planning to trade long and short (Calls & Puts), maybe other configurations as well, not sure yet, I have learnt about some other trades that I like the idea of but haven't traded yet.
(iv) Liquidity is one element of my market selection process but I haven't made final decisions about keeping stop orders in the market or manually placing orders after a daily or weekly close. I haven't traded the weekly time frame yet only daily time frame trades, the 25% stop-loss that I mentioned comes from a certain type of short term option trade that I been using, this level has worked well for these trades.


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## Skate (31 December 2022)

*Another year is done & dusted*
Another year has come & gone. Now we have a chance to look back on all that has happened & consider what we want to do in the year ahead. It's a good opportunity to set goals, make plans & think about what we want to achieve going forward. It's always helpful to take a moment to reflect & think about the future. May 2023 be everything you desire.




Skate.


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## DaveTrade (31 December 2022)

peter2 said:


> (i) 12.5% risk is a lot unless you're prepared for it. I'd use this risk level in a smaller account but would be too much for me in a large one. I hope your worse case isn't losing 12.5% in one week.



@peter2 's words have eventually permeated my thick skull and touched the peanut size organ that resides inside. What was I thinking, this is supposed to be a conservative system so it needs to have a conservative bone structure. I will still have my smaller sports car account that I've been training myself with but this vehicle should be designed for the longer more comfortable ride.


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## cynic (31 December 2022)

DaveTrade said:


> @peter2 's words have eventually permeated my thick skull and touched the peanut size organ that resides inside. What was I thinking, this is supposed to be a conservative system so it needs to have a conservative bone structure. I will still have my smaller sports car account that I've been training myself with but this vehicle should be designed for the longer more comfortable ride.



Your receptivity to constructive criticism, particularly regarding risk, is commendable.

An important thing to note, is, that, options allow, the possibility of temporarily acquiring a greater amount of exposure to price movements in the underlying, than might otherwise be gained, from directly trading the underlying instrument.

Such leverage typically amplifies both, potential risk, and reward. 

And, as has already been noted, the extrinsic value, of options brings additional risks i.e. fluctuations in implied volatility, time decay etcetera.

Some months ago, I happened to deploy an options strategy that required me to cross an approximately 10% spread in order to ensure the opening of the initial positions!

The reason I was willing to accept, such a hefty initial drawdown, was primarily based, upon my confidence in the prospects for that particular strategy.

The upshot of what I am attempting to convey here, is, that, whilst it is wise to, as far as practicable, minimise one's initial forays, particularly whilst still attempting proof of concept, it is also important, not to become so risk averse, as to exclude, what might otherwise be, viable strategies.


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## DaveTrade (31 December 2022)

cynic said:


> The upshot of what I am attempting to convey here, is, that, whilst it is wise to, as far as practicable, minimise one's initial forays, particularly whilst still attempting proof of concept, it is also important, not to become so risk averse, as to exclude, what might otherwise be, viable strategies.



@cynic I hear what you're saying, thanks for the feedback. Any individual strategy is fine as long as it's risk/reward is in balance and is in harmony with the system where it is used. It may seem like I'm giving too much relevance to one thing, ie. drawdown, but I am aware that a balance has to achieved in any system. I always welcome reminders about things that I already know, every time I hear one it just reinforces it's relevance for me.


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## DaveTrade (1 January 2023)

Skate said:


> *Backtesting is a test of the past *
> The future will always hold surprises that tend to play out differently. The Backtest below is one of my trading strategies. I've renamed it to "Skate's 200k Strategy" for clarity. The backtest period is from the 1st of January 2022. This strategy is robust having a decent return with a low drawdown. At times with system trading, "good enough is good enough". I'm just saying don't overstretch & don't shoot for the moon.
> 
> *P.H.D.*
> ...



It's obvious that I'm still at the concept stage of my planned weekly system and I'm at a point where I feel that I should set or at least first draft the goals of the system. @Skate 's example above is impressive in many ways and for now I'm looking at the relationship of 'Net Profit %' and 'Max System % Drawdown', this is 25.51/7.33 = 3.48 which would be a dream come true if I could achieve this. One of my goals for the system is to return a profit each and every year, easy to say but how hard is to do, is this even possible. Another goal is to have the annual net system profit to exceed the annual max system drawdown, @Skate has exceeded it by three and half times in the above example (wow that's good). @Skate or any other experienced system traders, is it possible for this figure to remain positive on an annual basis?


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## DaveTrade (5 January 2023)

peter2 said:


> @DaveTrade Good luck with this activity, hope it goes well and keep us posted please.
> 
> (i) 12.5% risk is a lot unless you're prepared for it. I'd use this risk level in a smaller account but would be too much for me in a large one. I hope your worse case isn't losing 12.5% in one week.




*Second draft of a plan to manage system risk*

This second draft of the plan recognises the conservative nature of my planned system. The system’s annual profit target is 6-10% and I want my annual drawdown to be less than this.

Maximum 2% of a/c allocated to each trade; e.g. a/c $100,000 would be $2,000 per trade. Therefore the number of options purchased for each trade will be equal to ‘$2,000’ divided by the ‘Option Premium’

Potential maximum number of trades would be 100000/2000 = 50 if the entire a/c was exposed to the market. If the proportion of the a/c exposed to the market was reduced to a maximum of 4 trades then the maximum amount of the a/c in the market at one time would be 8%, so the maximum a/c risk is 8%.

If the initial stop-loss for each trade is 50% of the premium then amount at risk on each trade would be 2000/2 = $1,000. This would mean that 1000 x 4 = $4,000 would be the max risk on all 4 trades. This means that 4000x100/100000 = 4% of the total a/c would be at risk at any one time. This would be the a/c loss if all 4 trades in the market were stopped out for a 50% loss at the same time.

In summary;

Trade risk: 1% (stop-loss) Max trade risk: 2% (total premium)

A/C risk: 4% (stop-loss) Max A/C risk: 8% (total premium)


The word ‘risk’ as used above can be replaced with the phrase ‘exposure to drawdown’, so initially I would have up to 4% exposure to drawdown with up to four trades but if stop-loss levels were raised due to favourable movement of positions then more trades could be added as long as the 4% exposure to drawdown amount was not exceeded.


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## peter2 (5 January 2023)

@DaveTrade  It's important to manage risk but we shouldn't let the potential risk strangle the potential profit. The 2nd draft seems to me to  strangle your system. 

The system produces a set of results each year. Your back tests would have indicated the potential "normal" draw down, a possible max DD and the potential profit. If the DD is too high then reducing the outlay of all trades will reduce the potential DD *and* the potential profit. This will leave a portion of the starting capital unused. Your 2nd draft leaves a lot of unused capital. 

If you want a DD < 10% then the system must be capable of producing low DDs. Does yours do this? 

2nd draft outlays $2K/trade. Previously you mentioned that each trade has a stop loss of 25%. 25% of 2K is only 500.
You're only risking 0.5% /trade.  I suggest you reconsider the outlay and start at $4K which would risk 1% each trade. 



DaveTrade said:


> The word ‘risk’ as used above can be replaced with the phrase ‘exposure to drawdown’, so initially I would have up to 4% exposure to drawdown with up to four trades but if stop-loss levels were raised due to favourable movement of positions then more trades could be added as long as the 4% exposure to drawdown amount was not exceeded.




With options, the downside exposure is 100% of the premium paid. Hopefully your trade management will prevent this from happening more than once a year and your average loss will be much <25%. 

Yes, I like that you're thinking about adding trades (positions) as the risk in the open trades reduces.  However if you're trading a weekly system your trades may not have the time to grow bigger and more profitable. (_Idea_: Maybe some of the unused capital can be used in monthly trades if your system can be adapted to the monthly time frame.) It's very satisfying holding a portfolio of winning positions.


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## DaveTrade (5 January 2023)

@peter2 thank you for your feedback, not everyone is willing to give it. I'll run through the your comments and add some of my own to better describe what I'm trying to do with this system.



DaveTrade said:


> This second draft of the plan recognises the conservative nature of my planned system. The system’s annual profit target is 6-10% and I want my annual drawdown to be less than this.





peter2 said:


> @DaveTrade It's important to manage risk but we shouldn't let the potential risk strangle the potential profit. The 2nd draft seems to me to strangle your system.




The goal of the system is to make a minimum 6% net profit annually on a consistent basis, this is the minimum amount that I need to make on this money in order to have enough to fund retirement for my wife and I. I feel that I will be able to exceed this amount of profit but the system should be designed to handle the worst case situation. If I can build a system that can consistently produce profit every year with minimal drawdown then that would be the hard part done, it would then be easy to let the system out a bit to produce more profit knowing that I had a reliable and consistent fallback.



peter2 said:


> The system produces a set of results each year. Your back tests would have indicated the potential "normal" draw down, a possible max DD and the potential profit.




I haven’t done back tests for this, I can’t really do them using options. I’m planning on using a slight modification of a type of trade that I’ve been trading on a daily time frame chart. I will be doing some manual back testing using the underlying price data and some forward live market testing to get a feel for the option stop-loss setting.



DaveTrade said:


> If the initial stop-loss for each trade is 50% of the premium then amount at risk on each trade would be 2000/2 = $1,000. This would mean that 1000 x 4 = $4,000 would be the max risk on all 4 trades. This means that 4000x100/100000 = 4% of the total a/c would be at risk at any one time. This would be the a/c loss if all 4 trades in the market were stopped out for a 50% loss at the same time.
> 
> In summary;
> 
> ...






peter2 said:


> 2nd draft outlays $2K/trade. Previously you mentioned that each trade has a stop loss of 25%. 25% of 2K is only 500.
> You're only risking 0.5% /trade. I suggest you reconsider the outlay and start at $4K which would risk 1% each trade.




It looks like you may have gotten confused between the 1st and 2nd drafts here. In the 1st draft I mentioned that I’ve been trading daily charts using a 25% options stop-loss, I’ve increased it to 50% in the this 2nd draft to allow for the weekly time frame of the system. This initial stop-loss may change with feedback from forward testing.



peter2 said:


> Yes, I like that you're thinking about adding trades (positions) as the risk in the open trades reduces. However if you're trading a weekly system your trades may not have the time to grow bigger and more profitable. (_Idea_: Maybe some of the unused capital can be used in monthly trades if your system can be adapted to the monthly time frame.) It's very satisfying holding a portfolio of winning positions.




Not too sure about the monthly time frame, but I always keep an open mind. I’m planning to vary the trade exits to suit the current market conditions, so the system will take advantage when markets are trending. Also I plan to use options to lock in system profit went the system profit reaches a predefined level.


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## ducati916 (Saturday at 2:10 PM)

DaveTrade said:


> @peter2 thank you for your feedback, not everyone is willing to give it. I'll run through the your comments and add some of my own to better describe what I'm trying to do with this system.
> 
> 
> 
> ...




So an important area that you haven't mentioned is the expectancy of your winners.

If it is say 50%, then in 150 trades there is a 31% chance that you will experience 7 straight losses. How does that play into your risk plan?

jog on
duc


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## DaveTrade (Saturday at 3:43 PM)

ducati916 said:


> So an important area that you haven't mentioned is the expectancy of your winners.
> 
> If it is say 50%, then in 150 trades there is a 31% chance that you will experience 7 straight losses. How does that play into your risk plan?
> 
> ...



Thanks @ducati916 that's important for me to monitor, I will include this into my trade documentation. I will get some idea from my live forward testing (can't do back testing with options), but this will be much shorter that any normal back test. The fact that I won't be able to do comprehensive back testing makes it even more important to monitor the system very closely when I start trading it.
Consecutive losses would be the nemesis of the type of system that I'm trying to build, your post has highlighted this in my thoughts. I need to review all aspects of the system with this in mind. I know that I can't control the market conditions that the system may encounter but I can determine what the system will do when it encounters them.

Thank you for bringing this to my attention.


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## frugal.rock (Saturday at 3:58 PM)

DaveTrade said:


> I know that I can't control the market conditions that the system may encounter






DaveTrade said:


> Consecutive losses would be the nemesis of the type of system that I'm trying to build,



How would the system handle the scenario mentioned if it occurred very early on or even the first lot of trades ?
Need to survive.
Monte Carlo effect and Murphy's Law often go hand in hand.
 (in life has plagued me relentlessly....)


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## DaveTrade (Saturday at 4:24 PM)

frugal.rock said:


> How would the system handle the scenario mentioned if it occurred very early on or even the first lot of trades ?
> Need to survive.
> Monte Carlo effect and Murphy's Law often go hand in hand.
> (in life has plagued me relentlessly....)



This would the worst possible thing that could happen, thanks for pointing it out. I say that sincerely @frugal.rock , it's also something that I need to be ready for, and ready for the reaction from my wife.
'How would the system handle that', well when doing my review I'll adjust each aspect of the system to be most conservative from trade selection through to trade exit.
It may be possible to rate the trade selection part so the system takes only the most conservative rated trades when it's in drawdown.

Thanks for the feedback, every comment that I get makes me think more about what I can do with this system.


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## frugal.rock (Saturday at 4:39 PM)

@Skate has been remarkably absent since last year... 🧐
Coooeeee


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## farmerge (Saturday at 4:43 PM)

frugal.rock said:


> @Skate has been remarkably absent since last year... 🧐
> Coooeeee



Perhaps taking annual leave to lesser known parts of the great beyond


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## debtfree (Saturday at 5:23 PM)

ducati916 said:


> So an important area that you haven't mentioned is the expectancy of your winners.
> 
> If it is say 50%, then in 150 trades there is a 31% chance that you will experience 7 straight losses. How does that play into your risk plan?
> 
> ...



 Hi @ducati916, the formula I have in my cells below shows what you say is correct but how do you work out the % chance of it happening for each scenario?


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## ducati916 (Saturday at 6:17 PM)

DaveTrade said:


> This would the worst possible thing that could happen, thanks for pointing it out. I say that sincerely @frugal.rock , it's also something that I need to be ready for, and ready for the reaction from my wife.
> 'How would the system handle that', well when doing my review I'll adjust each aspect of the system to be most conservative from trade selection through to trade exit.
> It may be possible to rate the trade selection part so the system takes only the most conservative rated trades when it's in drawdown.
> 
> Thanks for the feedback, every comment that I get makes me think more about what I can do with this system.










A little neurological biochemistry for you to consider.

jog on
duc


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## Nick Radge (Sunday at 9:34 AM)

The formula is for losing streaks is:

LS = Ln(N) / Ln(1-Win%)

Where,
LS = Losing Streak
Ln = Natural Logarithm
N = Number of Trades
Win% = Win Rate


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## debtfree (Sunday at 11:12 AM)

Nick Radge said:


> The formula is for losing streaks is:
> 
> LS = Ln(N) / Ln(1-Win%)
> 
> ...



Nick, I did originally get the the formula out of your book 'Adaptive Analysis for Australian Stocks' Page 42, so once again thanks for that.  

What caught my eye in @ducati916's post was the 31% chance of it happening, it was a genuine question on how to come to that conclusion, not for one minute doubting him. 
Is there a  formula I can insert in the next column that works out the % chance of that Probable Streak happening?




Thanks for your time Nick, appreciate it.


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